Airport System Development

August 1984

NTIS order #PB85-127793
Recommended Citation:

Airport System Development (Washington, D. C.: U.S. Congress, Office of Technology

Assessment, OTA-STI-231, August 1984).

Library of Congress Catalog Card Number 84-601101

For sale by the Superintendent of Documents

U.S. Government Printing Office, Washington, D.C. 20402
Foreword

The United States has the largest and most technologically advanced system of airports in the world. These airports support an air transportation network that links all

parts of the Nation to the rest of the world and enables over 300 million passengers

each year to undertake journeys—many of great length—with ease, comfort, and safety.

One measure of the excellence of this system is that over 98 percent of all airline flights

arrive within 15 minutes of schedule.

Still, there is cause for concern about the future adequacy of the airport system.

On one hand, there is need to accommodate expected growth in air travel demand at

major airports, several of which are now experiencing severe congestion at periods of

peak use. On the other, there is also need to assure access to airport facilities by private

and business aircraft operators, who are fast becoming the predominant users of airports and the most active sector of civil aviation. Community concern about noise and

land use limit the ability of airport planners and managers to provide additional facilities or, in some cases, to accommodate more traffic at existing facilities.

Undertaken at the request of the House Committee on Public Works and Transportation, this study examines present conditions and future needs of the Nation’s airports, with emphasis on possible solutions to problems of operational capacity and air

travel delay. The range of remedial actions considered includes improved airport and

air traffic control technology, revised procedures for airport and airspace use, economic

and regulatory measures to reduce demand during peak periods, and managerial approaches to make more efficient use of existing airport facilities. Special attention is

given to issues of airport planning and funding methods at Federal, State, and local levels.

OTA was assisted in this assessment by an advisory panel reflecting a broad range

of interests and expertise, ably chaired by Dr. Don E. Kash of the University of Oklahoma. OTA is greatly indebted to the advisory panel and to many others in the aviation community for their generous contributions. Their participation does not necessarily constitute consensus or endorsement of the content of the report, for which OTA

bears sole responsibility.

One notable feature of this assessment is that it is a cooperative effort by the Office of Technology Assessment and the Congressional Budget Office, in which CBO

provided detailed analysis of airport financial management, funding methods, and capital

investment.

Director

. . .

Ill
OTA Airport System Development Advisory Panel

Director,

Don E. Kash, Chairman

Science and Public Policy Program

University of Oklahoma

James H. Anderson

Director, Office Building Division

General Services Department

I.E. Dupont DeNemours

Joseph Blatt

Consultant

Clifford W. Carpenter

Manager, Airport Development

Boeing Commercial Aircraft Company

Pierre Champagne

Director of Airport Planning

Transport Canada

H. McKinley Conway

President

Conway Publications

Charilyn Cowan

Staff Director, Committee on Transportation,

Commerce and Technology

National Governors’ Association

Thomas J. Deane

Vice President, Operating Facilities

Avis Rent-A-Car, Inc.

John W. Drake

Professor

Purdue University

William Garrison

Professor

University of California, Berkeley

Aaron Gellman

President

Gellman Research

John Glover

Supervisor, Transportation Planning

Port of Oakland

Leonard Griggs

Airport Director

Lambert St. Louis International Airport

Richard L. Harris

Vice President, Public Finance

First Boston Corporation

John Hoyt*

Principal Project Manager

Ralph M. Parsons Company

Jack R. Hunt**

President

Embry-Riddle Aeronautical University

Richard Judy

Director of Aviation

Dade County, Florida

Alfred Kahn

Professor

Cornell University

Leonard Martin

Vice President, Passenger Services

Piedmont Airlines

Dorn McGrath

Professor, Department of Urban and Regional

Planning

George Washington University

Sonny Najera

Director, Division of Aeronautics

State of Arizona

Edmund Nelle, Jr.

President

Butler Aviation International

Jan Roskam

Ackers Distinguished Professor of Aerospace

Engineering

University of Kansas

William Supak

Aviation Director

Port of Portland

William Wilson

Vice President, Properties and Facilities

Federal Express Corporation

● Replaced Forrest C. Six, Vice President, Ralph M. Parsons Co., who was transferred overseas.

● *Deceased.

iv
OTA Airport System Development Assessment Staff

John Andelin, Assistant Director, OTA

Science, Information and Natural Resources Division

William F. Mills* and Nancy Carson Naismith, ** Program Manager

Science, Transportation and Innovation Program

Larry L. Jenney, Project Director

M. Karen Gamble, Analyst

Jameson R. Miller, Research Assistant

Marsha Fenn, Administrative Assistant

R. Bryan Harrison, Office Automation Systems Analyst

Betty Jo Tatum, Secretary

Consultants

David W. Bluestone

Jonathan L. Gifford

Richard P. Krinsky

Peter Schauffler

Jac D. Watson

Contractors

C. A. C. I., Inc.–Federal

Gilbert Murray and Jac D. Watson

Landrum & Brown

Mark D. Conway and Stuart S. Holder

Simat, Helliesen & Eichner, Inc.

Lois Kramer and William C. Spaeth

Congressional Budget Office

This assessment is a cooperative effort by the Office of Technology Assessment and the

Congressional Budget Office. CBO’S work, which forms an integral part of this study has also

been published by them in Financing U.S. Airports in the 1980s, April 1984. OTA is particularly indebted to David Lewis, Richard R. Mudge, and Suzanne Schneider of CBO for their participation in this assessment.

‘Through September ]983

* ‘After September 1983
Acknowledgements

During this assessment, OTA consulted with Federal, State, and local airport officials and many others in

the aviation community. We appreciate their advice and comment, which broadened

and strengthened our thinking on airport issues.

Gary Adams

Arizona Department of Transportation

Bonnie Allin

Tucson Airport Authority

John Auer

Nebraska Department of Aeronautics

Johannes G. Augustinus

Port Authority of New York and New Jersey

H. A. Bertholf, Jr.

Phoenix, Sky Harbor

Walter Burg

Tucson Airport Authority

Glenn Cate

Scottsdale Municipal Airport

Richard J. Cirre

Kentucky Department of Transportation

Kim Clemans

California Department of Transportation

John J. Corbett

Airport Operators Council International

William Cousins III

Georgia Department of Transportation

Norman Crabtree

Ohio Department of Transportation

Robert M. Cusumano

City of Chicago, Division of Aviation

George F. Doughty

Cleveland Hopkins International Airport

Ed Dunn

Phoenix, Sky Harbor

George H. Edmondson

Truckee Tahoe Airport District

Arnold D. Feener

San Francisco International Airport

Sheldon R. Fein

San Francisco International Airport

Lawrence Goldman

Southern California Association of Governments

J. L. Graham

City of Los Angeles, Department of Airports

Ronald Greer

Omaha Airport Authority

George Gundersen

Wisconsin Department of Transportation

Dan G. Haney

Peat, Marwick, Mitchell & Co.

Robert F. Holscher

Greater Cincinnati Airport

Al Hoover

Iowa Department of Transportation

Shelton Jackson

U.S. Department of Transportation

Carl Johnson

Federal Aviation Administration

Great Lakes Region

Thomas Kapsalis

City of Chicago, Division of Aviation

Henry A. Kazimier

Indiana Department of Transportation

Richard B. Keinz

Minnesota Department of Transportation

Laurence J. Kiernan

Federal Aviation Administration

James D. Kitchel

Phoenix, Sky Harbor

Harold R. Lagasse

Stellar Executive Air Services

F, G. Lemke

California Department of Transportation

Joseph G. Mason

National Association of State Aviation Officials

H. C. McClure

Federal Aviation Administration

Western-Pacific Region

Burdsall D. Miller

California Department of Transportation

Mark F. Mispagel

California Department of Transportation

Owen Miyamoto

Hawaii Department of Transportation

vi
Robert Monroe

Aircraft Owners and Pilots Association

Clifton A. Moore

City of Los Angeles, Department of Airports

James V. Mottley

Federal Aviation Administration

Byron Osterloh

Phoenix, Sky Harbor

Willard G. Plentl, Sr.

Department of Aviation

Commonwealth of Virginia

Willard G. Plentl, Jr.

North Carolina Department of Transportation

Siegbert B. Poritzky

Federal Aviation Administration

J. Donald Reilly

Airport Operators Council Internat

Allan Samuels

ona

Arizona Department of Transportation

Roy Samuels

San Francisco International Airport

Spyridon N. Sideris

California Department

Fred Stewart

California Department

Henry M. Streb

of Transportation

of Transportation

Merrill C. Meigs Airport, Chicago

Jack L. Tippie

Los Angeles County, Airports Division

T. James Truby

Maryland State Aviation Administration

Earl Tucker

California Department of Transportation

Vincent Volpicelli

Port Authority of New York and New Jersey

George H. Watson

Oakland International Airport

Clay A. Wilkins

Texas Aeronautics Commission

James R. Wood

Dayton International Airport

vii
Contents

Chapter Page

I. The Airport System . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

2. organizations and Institutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

3. The Problem of Capacity and Delay . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45

4. Technology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59

5. Other Approaches to Reducing Delay . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109

6. Airport Financial Management and Pricing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125

7. Airport Funding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139

8. Forecasting and Trends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 159

9. Airport System Planning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 189

10, Policy Considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 209

Appendix Page

A. Acronyms and Abbreviations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 235

B. Survey of Current Airport Financial Management Practices . . . . . . . . . . . . . . . 237

C. Impact of Management Approach and Airport Size on Airport

Financial Performance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 247

D. Factors Affecting Airport Costs of Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 249

E. Airports in the Municipal Bond Market: A Regional Analysis . . . . . . . . . . . . . 250

Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 255

ix

Chapter 1

THE AIRPORT SYSTEM
Contents

Page

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Primary Airports. . . . . . . . . . . . . . . . . . . . . . . . . . . .

Commercial Service Airports . . . . . . . . . . . . . . . . .

General Aviation Airports . . . . . . . . . . . . . . . . . . .

Reliever Airports. . . . . . . . . . . . . . . . . . . . . . . . . . . .

The Airport Capacity Problem . . . . . . . . . . . . . . . . .

Origin of the Study . . . . . . . . . . . . . . . . . . . . . . . . . . .

Areas of Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Issues and Factors in Airport System Development

Federal Policy and Strategy . . . . . . . . . . . . . . . . . .

Funding Issues. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Airport Management Issues . . . . . . . . . . . . . . . . . .

Noise and Environmental Issues . . . . . . . . . . . . . . .

Planning Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

List of Tables

Table

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3

4

4

5

7

8

11

11

12

12

13

15

16

18

l. U.S. AirPort and Air Transportation Activity, 1982 . . . . . . . . . . . . . . . . . . . . . . 3

Z. Federal-Aid Airports by Se&ice Level .. ...:...

3. FAA Classification of Air Traffic Hubs . . . . . . . .

4. The 10 Most Active General Aviation Airports .

S. Airports Forecasted to Have Airside Congestion

List of Figures

Figure

l. Distribution of Passenger Enplanements byHub

2. Profile of General Aviation Fleet, 1982 . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . 4

. . . . . . . . . . . . . . . . . . . . . . . . . . 5

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Page

Size, 1982 . . . . . . . . . . . . . . . . 5

. . . . . . . . . . . . . . . . . . . . . . . . . . 6
Chapter 1

THE AIRPORT SYSTEM

INTRODUCTION

The system of airports in the United States is

the largest and most complex in the world. As of

the end of 1982, there were 15,831 airports on record with the Federal Aviation Administration

(FAA) -4,805 publicly owned airports, 1,970 privately owned fields open to public use, and 9,056

reserved for private use only. This constitutes

almost half of the world’s total. These airports

range in size from small unpaved strips used by

a handful of private flyers to gigantic air transportation hubs such as Chicago O’Hare and Atlanta Hartsfield, each handling more than 500,000

operations (takeoffs and landings) per year.

The number of airports alone, however, does

not adequately reflect the extent and volume of

aviation activity in this country in comparison

with other parts of the world. The United States

has half of the world’s airports, but two-thirds

of the world’s 400 busiest airports (in terms of

passenger enplanements). Collectively, U.S. airports handled over 309 million passenger enplanements (domestic and international) and 3.6 million tons of mail and cargo in 1982—over threequarters of the world totals, outside the Soviet

bloc. ’ Table 1 presents additional data on the size

of the U.S. airport and air transportation system.

Because of the sheer number of airports and the

variety of size and function, the term “airport system” has little meaning when applied to all the

airports and landing fields in the United States as

a whole. Many—in fact, most—of these airports

exist only for the convenience of a few aircraft

owners and operators and play no substantial part

in public air transportation. For this reason, FAA

has identified a smaller group of airports that

serve public air transportation either directly or

indirectly and can be deemed of national importance and eligible for Federal aid.

— . -—

‘Airport Operators Council International, Worldwide Airport

Traffic Report, Calendar Year 1982 (Washington, DC: AOC1, May

1983).

Since 1970, FAA has published a list of such

airports, classified by size and function, in a planning document known as the National Airport

System Plan (NASP). Under the Airport and AirTable 1 .—U.S. Airport and Air Transportation

Activity, 1982

Aircraft facilities:a

Airports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Heliports ... , . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

STOLports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Seaplane bases . . . . . . . . . . . . . . . . . . . . . . . . . . .

Airport ownership and use:a

Publicly owned . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Private, open to public . . . . . . . . . . . . . . . . . . . . .

Private . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Domestic passenger enplanements (millions):

Air carrier:

Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

International . . . . . . . . . . . . . . . . . . . . . . . . . . .

Commuter. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Domestic revenue passenger miles (billions):

Air carrier . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Commuter. ., . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Civil aircraft fleet:

Air carrierb 

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

General aviation . . . . . . . . . . . . . . . . . . . . . . . . . .

Aircraft operations (millions):

Air carrier . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Commuter and air taxi . . . . . . . . . . . . . . . . . . . .

General aviation . . . . . . . . . . . . . . . . . . . . . . . . .

Military . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Hours flown (millions):

Air carrier . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Commuter. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

General aviation . . . . . . . . . . . . . . . . . . . . . . . . .

Air cargo (million tons):c

Mail . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Freight. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

12,596

2,712

65

458

15,831

4,805

1,970

9,056

15,831

272.8

19.7

17.1

309.6

207.8

2.3

210.1

4,074

209,799

213,873

9.1

5.1

34.1

2.3

50.6

6.7

1.7

36.4

44.8

1.2

2.4

3.6

3
# ● Airport System Development —-—— .

way Improvement Act of 1982 (Public Law 97-

248), FAA was charged with preparing a new version of this plan, to be called the National Plan

of Integrated Airport Systems (NPIAS), which is

scheduled for issue in September 1984. As part

of this planning effort, FAA has recently revised

the method of classifying airports and now lists

them in four major categories:2

1,

2.

3.

4.

Primary. -Public-use commercial service

airports enplaning at least 0.01 percent of

all passengers enplaned annually at U.S.

airports.3

Commercial service. —Other public-use airports receiving scheduled passenger service

and enplaning at least 2,500 passengers annually.

General aviation. —Those airports with

fewer than 2,500 annual enplaned passengers and those used exclusively by private

and business aircraft not providing common-carrier passenger service.

Reliever.—A subset of general aviation airports, which have the function of relieving

congestion at primary commercial service

airports and providing more access for general aviation to the overall community.

Table 2 lists the number of airports in each category as of the beginning of 1984 and those projected for inclusion in the NPIAS in 1994.4

Primary Airports

This category of airports, comprising 281 locations or less than 2 percent of all airports in the

United States, handles virtually all of the airline

passengers. Even within this small group, however, the range of airport size and activity level

is very wide, and the distribution of passenger

Table 2.— Federal-Aid Airports by Service Level

Existinga Projectedb

Service level (1984) (1994)

Primary . . . . . . . . . . . . . . . . . . . . . . . 281 284

Commercial service. . . . . . . . . . . . . 279 346

General aviation . . . . . . . . . . . . . . . . 2,424 2,723

Reliever . . . . . . . . . . . . . . . . . . . . . . . 219 286

Total . . . . . . . . . . . . . . . . . . . . . . . . 3,203 3,639

enplanements is highly skewed. About half of the

primary airports (130) handle very little traffic,

and collectively they account for only 3 percent

of annual enplanements. At the larger primary airports, which handle the preponderance of passengers, there is a pattern of progressively higher concentration of traffic at fewer and fewer airports.

For instance, the top 24 airports account for

almost two-thirds of all enplanements, and the top

10 account for 40 percent. Perhaps the most telling fact is that one-quarter of all airline passengers

board their flights at one of just five airports

(Atlanta Hartsfield, Chicago O’Hare, New York

Kennedy, Los Angeles, and Dallas-Fort Worth).5

Because several metropolitan areas are served

by more than one primary airport, FAA measures aviation traffic by standard metropolitan statistical area (SMSA) as well as by individual airport. These metropolitan areas, called hubs by

FAA, are divided into four classes according to

percentage of total passenger enplanements: large,

medium, small, and nonhub (table 3).

As with individual airports, the distribution of

passenger enplanements is highly concentrated in

a relatively few air traffic hubs. Figure 1 shows,

for example, that 24 large hubs handle 70 percent

of all traffic and, of these, the top 10 handle

almost half.

Commercial Service Airports

Excluding primary airports, the remaining commercial service airports are typically small and located in communities with a population of under

5

Statistical Handbook of Aviation, Calendar Year 1982

(Washington, DC: Federal Aviation Administration, December

1982).
Ch. l—The Airport System ● 5

Table 3.-FAA Classification of Air Traffic Hubs

Hub Percent of total Number of hubs

classification enplaned passengers (1981)

Large . . . . . . . . 1,00 or more 24

Medium . . . . . . 0.25 to 0.99 39

Small . . . . . . . . 0.05 to 0.24 61

Nonhub . . . . . . less than 0.05 425a

SOURCE: Statistical Handbook of Aviation, Calendar Year 1982 (lVashington, DC

Federal Aviation Administration, December 1982).

the activity at these airports is general aviation

(GA), privately owned aircraft used for business

and personal flying. The major concern of airports

in this category is not adequate capacity but keeping the airport in operation so as to provide essential air service for the community and a base for

general aviation.

General Aviation Airports

100,000. They handle a low volume of passenger Over 90 percent of the airports available to the

traffic, 2,500 to 5,000 enplanements per year. public are used exclusively by GA aircraft. GenService is usually provided by commuter airlines, eral aviation is a broad and disparate category

offering a few flights per day to nearby major that includes aircraft used for business purposes,

hubs, and by air taxi operators. A large share of various types of aerial work, and flight instrucFigure l.— Distribution of Passenger Enplanements by Hub Size, 1982

All other commercial service

/ ’

(415 apts.)

30/0

SOURCE: FAA Statistical Handbook of Aviation, Calendar Year 1982
6 ● Airport System Development

— —.

tion, as well as those used for purely personal and

recreational purposes (see fig. 2). The types of

aircraft operated cover a wide spectrum: small

piston-engine aircraft, advanced turboprops and

turbojets, rotorcraft, gliders, balloons, and dirigibles.

The airports serving general aviation are likewise varied. Typically, they are small, usually

with a single runway and only minimal navigation aids. They serve primarily as a base for a few

aircraft. There are notable exceptions, however.

A few GA airports located in major metropolitan

areas handle extremely high volumes of traffic

(particularly business and executive aircraft) and

are busier and more congested than all but the

largest commercial airports. Table 4 lists the Nation’s 10 busiest general aviation airports.

For comparison, the busiest GA airport, Van

Nuys, CA, handled about 7 percent more operations in 1982 than Los Angeles International, the

third-ranking air carrier airport in the United

States (509,758 v. 478,892). Melbourne, FL, the

10th-ranking GA airport, had 229,138 operations—only slightly fewer than Boston Logan

(244,748), the 10th-ranking air carrier airport. As

additional perspective, the 301,363 annual operations at Tamiami Airport in Florida, the sixthranking GA airport, are equivalent to about so

takeoffs or landings per hour (assuming the airport is open 16 hours per day), which is about

the same as Washington National.

An important aspect of general aviation airports is that they serve many functions for a wide

variety of aircraft. Some GA airports provide

isolated communities with valuable links to other

population centers. This is particularly true in

areas of northern Alaska where communities are

often unreachable except by air, but many parts

of the Western United States also depend heavily

on air transportation. In such areas, the GA airport is sometimes the only means of supplying

communities with necessities and is vitally important in emergency situations.

The principal function of general aviation airports, however, is to provide facilities for privately owned aircraft used for business and personal activities. The role of GA airports in

providing facilities for business aircraft is of growFigure 2.- Profile of General Aviation Fleet, 1982

Primary use Other

2?40

Hours flown

Other

SOURCE: FAA Statistical Handbook of Aviation, Calendar Year 1982.

ing importance. The business aircraft fleet is

largely made up of twin-engine propeller or jet

aircraft, typically equipped with sophisticated

avionic devices comparable to those of commer-
Ch. l—The Airport System . 7

Table 4.—The 10 Most Active General Aviation

Airportsa

Airport Annual operations

1. Van Nuys, CA . . . . . . . . . . . . . . . . .

2. Long Beach, CA . . . . . . . . . . . . . . .

3. Santa Ana, CA . . . . . . . . . . . . . . . . .

4. Seattle-Boeing Field, WA. . . . . . . .

5. Oakland, CAb 

. . . . . . . . . . . . . . . . . .

6. Tamiami, FL . . . . . . . . . . . . . . . . . . .

7. Opa Locka, FL . . . . . . . . . . . . . . . . .

8. San Jose, CAb 

. . . . . . . . . . . . . . . . .

9. Pontiac, MI . . . . . . . . . . . . . . . . . . . .

10. Melbourne, FLb 

. . . . . . . . . . . . . . . .

590,758

461,287

396,029

362,524

334,557

301,363

295,215

264,936

238,532

229,138

cial airliners. General aviation airports serving

business aviation play an important role by providing facilities comparable to those at major air

carrier airports, thereby permitting diversion of

some GA traffic from congested hubs.

Reliever Airports

Reliever airports are a special category of general aviation airports. They are located in the

vicinity of major air carrier airports and are specifically designated by FAA as “general aviation

type airports which provide relief to congested

major airports. ” To be classified by FAA as a reliever, an airport must handle 25,000 itinerant

operations or 35,000 local operations annually,

either at present or within the last 2 years. b The

reliever airport must also be located in an SMSA

with a population of at least 500,000 or where

passenger enplanements reach at least 250,000 annually. As the name suggests, reliever airports are

intended to draw traffic away from crowded air

carrier airports by providing facilities of similar

quality and convenience to those available at air

carrier airports.

In recent years, FAA and Congress have encouraged development of reliever airports as a

means of reducing delays at the larger hub airports. This is reflected in the Airport and Airway

Improvement Act of 1982 (Public Law 97-248),

which specifies that 10 percent of airport aid funds

be used for development of reliever airports.

b

Local operations are aircraft flights that originate and terminate

at the same airport. An itinerant operation originates at one airport and terminates at another.

Photo credit” Federal Aviation Administration

Reliever airport for general aviation

25-420 0 - 84 - 2
8 Airport System Development — — —

THE AIRPORT CAPACITY PROBLEM

The term “capacity” refers to the overall ability

of an airport to accommodate demand for service. Often, this is expressed as the number of aircraft operations (takeoffs and landings) that can

be handled on an hourly, daily, or annual basis.

In the broadest sense, however, aircraft operations

are not the only aspect of demand that must be

considered. This ability of the terminal building

to handle passenger flow and the volume of vehicular traffic that can be accommodated on airport

circulation and access roads are also important.

For aircraft operations, this rate of service is determined by several factors—chiefly the layout of

runways, taxiways, and aprons, the paths through

the airspace leading to and from the airport, the

rules and procedures for controlling air traffic, the

conditions of wind and weather, and the mix of

aircraft using the airport. Within the terminal

building and on the landside approaches to the

airport, the service rate (throughput) is similarly

affected by the basic design of facilities and by

the characteristics of passenger traffic (ratio of

origin-destination passengers to transfers, mode

of surface access, etc.). Restrictions of vehicle

movement on access roads and at the curbside and

bottlenecks at ticket counters, check-in points,

baggage handling facilities, and gates all create

passenger delay and impinge on the efficiency of

airport operation. Since all of these factors vary

over time at a given airport, capacity is not a

single, fixed amount but an average figure that

represents the typical rate at which demand can

be accommodated.

Since demand for airport service is not uniform

and constant but highly variable from time to time

and place to place, the root of the airport capacity

problem is how to handle fluctuations in demand

without unacceptable delay. This is not a general

systemwide problem, it occurs at only a few airports at periods of peak demand. Most airports,

including many large and busy airports in major

Photo credit’ US. Department of Transportation

Airside and landside
Ch. l—The Airport System . 9

metropolitan areas, have the capacity to handle

present demand and projected growth for many

years to come. Nor is the lack of capacity necessarily related to the size of the airport or the absolute volume of traffic. Some of the airports experiencing congestion and delay (or expected to

in the future) are rather small, but they have high

traffic density at certain times.

In general, however, delay tends to occur at

those few airports serving the majority of airline

passengers and so inconveniences a large number

of travelers. Further, delay has a ripple effect

throughout the system. Congestion at a few hub

airports causes delay in connecting flights to and

from other airports and, in the extreme, can affect the air traffic of a major region or the entire

country.

FAA estimates that 14 airports (10 commercial

and 4 general aviation) now experience significant

problems of capacity and delay. If demand grows

as FAA projects and if no remedial action is taken,

the number of airports affected might reach 61

commercial airports—almost all large and many

medium hubs—and 44 general aviation airports

by the end of the century (see table 5).

The consequences of such congestion could be

severe. Recent FAA estimates have placed the cost

of delay for airlines in 1980 at $1.0 billion to $1.4

billion in extra crew time and wasted fuel, primarily the latter. This also represents an aggregate

loss of 60 million hours of time for airline passengers. 7 8 9 If FAA’s growth projections are realized, the delay costs to airlines could reach $2.7

billion by 1991 and perhaps twice that figure by

2000.

A number of alternatives have been suggested

to alleviate airport capacity problems and to reduce delay. Very few of these solutions, however,

are universally applicable, and none is a panacea. These alternatives can be divided into four

categories. The first is to build new airports, although it is widely recognized that finding suitable

large tracts of land and developing them as airport sites are becoming increasingly difficult. FAA

has speculated that no more than one or two major air carrier airports will be built in the next decade. 10 A second alternative is to expand existing

airport facilities. This has been done at several

airports, but growing community resistance, particularly because of noise, may make expansion

more difficult in the future. Application of new

technology, however, has led to quieter aircraft

that may make airport expansion less objectionable to those concerned about noise.

A third alternative is to make more efficient use

of existing airport capacity. This includes improvements in technologies that would facilitate

the movement of aircraft, both in the air and on

the ground, and procedural changes such as reducing the longitudinal spacing between aircraft

on final approach. A fourth alternative is to manage airport demand so that aircraft activity is

more evenly distributed by time of day and

among airports. The two most commonly mentioned demand-management techniques are economic measures, such as marginal-cost pricing,

and regulatory actions, such as slot restrictions.

Because of the difficulties in building or expanding airports, there appears to be growing sentiment that other solutions should be explored.

FAA has suggested that the “high capital costs and

local resistance to large-scale airport construction

in metropolitan areas-mandate that a critical need

for additional capacity be evident before new major airport proposals are advanced.’”]
10 ● Airport System Development ——. .—.. — -.—....——-—————— —.——— . ---——-———. -..———— —— —

Table 5.—Airports Forecasted to Have Airside Congestiona

Commercial service

1981

Chicago O’Hare (IL)

Denver Stapleton (CO)

Detroit Metro (Ml)

Los Angeles International (CA)

Philadelphia International (PA)

San Francisco International (CA)

St. Louis Lambert (MO)

Washington National (DC)

By 1985

Long Beach Dougherty (CA)

Santa Ana John Wayne (CA)

Palm Beach International (FL)

By 1990

Anchorage International (AK)

Atlanta Hartsfield (GA)

Baltimore-Washington International (MD)

Birmingham Municipal (AL)

Boston Logan (MA)

Dallas-Fort Worth (TX)

Houston Hobby (TX)

Houston Intercontinental (TX)

Las Vegas McCarran (NV)

New York Kennedy (NY)

New York La Guardia (NY)

Prescott Municipal (AZ)

Raleigh-Durham (NC)

By 2000

Burbank Glendale Pasadena (CA)

General aviation

1981

Fort Worth Meachum (TX)

Teterboro (NJ)

Van Nuys (CA)

By 1985

Baltimore Glenn L. Martin (MD)

Farmingdale Republic (NY)

Kansas City Downtown (MO)

Scottsdale Municipal (AZ)

By 1990

Anchorage Lake Hood (AK)

Everett Snohomish County (WA)

Houston Lakeside (TX)

Killeen Municipal (TX)

Manassas Municipal (VA)

Mesa Falon (AZ)

Morristown Municipal (NJ)

Novato Gnoss (CA)

Torrance Municipal (CA)

Vero Beach Municipal (FL)

By 2000

Anchorage Merrill (AK)

Aurora State (OR)

Beverly Municipal (MA)

Carlsbad Palomar (CA)

Chicago Palwaukee (IL)

Dallas Addison (TX)

Denver Arapahoe County

El Monte (CA)

(co)
Ch. I—The Airport System . 11

—————. —

ORIGIN OF

Concern about the future adequacy of the airport system and possible strategies that might be

adopted to deal with capacity and delay problems

led the House Public Works and Transportation

Committee to request that OTA assess future airport capacity and its implications in terms of public policy. The committee asked that four major

subjects be examined in the study:

1,

2.

the present and future extent of airport

capacity problems, their causes, and geographic distribution;

the extent to which these capacity problems

will act as a critical constraint on aviation

demand and the impact the capacity problems could have on the various aviation user

groups, related industries, and local

economies;

THE

3.

4.

STUDY

prospective technological solutions to airport capacity problems, including analysis

of the extent to which future capacity problems are solvable by application of advanced technologies; and

past and current financing mechanisms

(local or State funding, bonding, Federal

grants, and various airport rents and user

fees), the extent to which they have been

relied on at various airport sizes and types,

and the extent to which they can be depended on in the near future, including analysis of the extent to which future capacity

problems are solvable by financial means.

This assessment addresses these questions by

describing the existing state of the airport system

and outlining technological and economic measures for dealing with airport capacity problems.

AREAS OF INTEREST

Various aviation organizations have called for

increased Federal effort to provide technological

improvements to increase capacity or to make

more effective use of existing capacity. Chief

among these are wake vortex detection and avoidance systems, improved air traffic control, and

advanced landing systems. These groups have also

advocated procedural changes to make more efficient use of airspace and runways, e.g., reduced

longitudinal separation on final approach and

closer lateral spacing for aircraft using parallel

runways. Finally, they seek added facilities at

some sites, notably separate runways for commuter and general aviation aircraft. The Industry Task Force on Airport Capacity Improvement

and Delay Reduction, for instance, recently recommended accelerating the development and implementation of these and other technological and

procedural changes aimed at reducing delay. ’2

FAA has been studying developments along similar lines for several years and is proceeding with

selective implementation in the National Airspace

System Plan and the National Airspace Review.

OTA has examined these technological measures,

supplementing the Task Force Report and FAA

studies with independent analysis. This is reported

in chapter 4.

The question of funding is also crucial. Airport

operators, while they seek technological improvements, also maintain that the major benefit will

come from expansion of existing airports. The key

issues are the amount of capital required, the

sources of funds, and the financing mechanisms.

The airport financing question is of particular interest because of the effects of airline deregulation. In cooperation with the Congressional

Budget Office, OTA studied these questions,

which are discussed in chapters 6 and 7.

The organizations and institutions concerned

with airport planning and operation play an important role in how the system presently works

and in the ability to plan, fund, and implement

needed improvements. Roles and relationships are

changing because of deregulation, long-term structural changes in the airline industry, Federal policy toward airport aid, and public concern about

airport noise and land use. Of particular impor-
12 . Airport System Development

——.— — .

tance is whether airports will be able to control

operations and future development in a way that

optimizes individual airports and yet assures compatibility with overall system needs. Chapters 2

and 5 address these matters.

Finally, there is the question of Federal policy.

The Airport and Airway Improvement Act of

1982 calls for a new approach to airport system

planning, called the “National Plan of Integrated

Airport Systems.” The NPIAS is to be issued in

September 1984, and at present its scope and

direction are not entirely clear. OTA has examined two aspects of the problem: 1) forecasting

and its influence on determining airport needs,

and 2) uncertainties that will affect the planning

process. These subjects are treated in chapter 8.

OTA has also considered features that could be

incorporated in the NPIAS to make it an effective planning document. Planning issues are discussed in chapter 9.

ISSUES AND FACTORS IN AIRPORT SYSTEM DEVELOPMENT

Intertwined with these basic questions are issues

where the interests of several parties have come

into sharp conflict. One such group of issues

relates to the strategic policy of the Federal Government in development of the airport system.

Some have suggested that past Federal policy has

placed too much emphasis on capital investment

in new facilities and not enough on methods to

make more effective use of existing facilities. A

second set of issues involves funding. Some

observers have suggested that the Federal role has

become too large and pervasive and that responsibility for airport development should devolve

either on the airports and their local sponsors or

on State governments. Other issues arise from the

legal and contractual arrangements traditionally

concluded between airports and airlines. These

arrangements have evolved over several decades,

during a period of extensive Federal regulation of

the airlines. There is some concern that these

airport-airline agreements may be inappropriate

in a deregulated era, either because they may be

too rigid to allow airports and airlines to meet

new challenges or because they may have anticompetitive features that do not allow the market to operate freely. Another issue is the problem of aircraft noise, which has been a growing

environmental and political problem for many airports despite technological advances in reducing

noise of jet aircraft. Finally, there are issues surrounding the planning of future airport development, particularly the timing and location of

demand growth and the role that the Federal Government will play in defining and meeting airport

needs.

Federal Policy and Strategy

Historically, Federal airport development policy has sought to promote the aviation industry

and to accommodate growth of traffic demand.

Where forecasts of future traffic demand have exceeded existing airport capacity, the solution has

generally been to provide capital aid to build new

facilities. The Airport Development Aid Program

(ADAP), funded with user fees earmarked for the

Airport and Airway Trust Fund, was established

in 1970 as a response to the congestion and delay

problems that plagued airports in the late 1960s.

ADAP provided Federal matching grants to airports to pay for certain types of capital improvements, principally construction of new runways,

taxiways, and aprons to relieve airside congestion.

Federal assistance for capital improvements continues through the Airport Improvement Program

(AIP), created by the Airport and Airway Improvement Act of 1982.

FAA projections of future traffic demand indicate that there could be severe airside congestion at a number of major airports over the next

20 years. Although some of the delays might be

eased by improved air traffic control technology,

the FAA view is that the primary constraint on

the growth of the system will be “a lack of concrete” and that there is a need for more runways,

taxiways, and ramps.

Thus, basic strategy has been challenged on the

grounds that it biases the outcome toward capitalintensive solutions, Critics argue that Federal development grants have, in some cases, encouraged
Ch. l—The Airport System 13

airport operators to overbuild. In other cases, the

facilities built with Federal support are substantially different in form and more expensive than

needed to accomplish their intended function. But

more fundamentally, the existence of a Federal

program providing aid for only certain types of

capital improvements at airports has distorted investment decisions and led airport operators to

build not necessarily what they need but what the

Government is willing to help pay for. By accommodating demand wherever and whenever it occurs through increasingly large and complex new

capital facilities, more growth is encouraged at

precisely those locations where it will be most difficult and expensive to absorb.

Other critics have suggested that projections of

traffic growth are too high. Recent changes in the

airline industry, such as deregulation, the growth

of commuter air carriers, sharp rises in fuel costs,

and escalating operating costs, may have caused

permanent structural changes in the airline industry such that the great traffic growth of the 1960s

and 1970s will not continue. Thus, policies aimed

at accommodating high projected levels of growth

may lead to overbuilding and excess capacity, and

misallocation of resources within the system.

Congestion and delay in the airport system are

not evenly distributed. They are concentrated at

a few airports, while many others operate far

below their design capacity. Thus, an alternative

strategic response might be to manage or direct

growth of air activity in ways that make more

productive use of existing, uncrowded airport facilities.

Some observers believe that growth can be

managed through administrative or economic

means requiring only limited new capital investments. Administrative responses to growth include rules adopted by airport operators or various levels of government to divert traffic from

congested airports to places or times where it can

be handled more easily. Economic responses rely

on market competition to determine access to airport services and facilities. To some extent, both

administrative and economic measures for managing demand are already in use at a number of

busy airports. However, there are legal, contractual, and even constitutional barriers that might

preclude wider use of such techniques. Some of

these barriers could be lowered through Federal

Government action. A discussion of possible

administrative and economic options is presented

in chapter 5.

Funding Issues

Before World War II, the Federal Government

was inclined to the view that airports, like ocean

and river ports, were a local responsibility, and

the Federal role was confined to maintaining the

navigable airways and waterways connecting

those ports. At the onset of World War II, the

Federal Government began to develop airports on

land leased from municipalities. Federal investment was justified on the grounds that a strong

system of airports was vital to national defense.

After the war, many of these improved airports

were declared surplus and turned over to municipalities. Federal assistance to airports continued

throughout the 1950s and 1960s at a low level and

was aimed primarily at improving surplus airports

and adapting them to civil use. Major Federal support of airport development resumed in 1970 with

the passage of the Airport and Airway Development Act, which was in large part a response to

the congestion and delay then being experienced

at major airports. This act established the usersupported Airport and Airway Trust Fund and

ADAP.

Federal assistance to airports under ADAP was

distributed as matching grants for capital improvement projects. There were several formulas

for allocation—entitlement (calculated from the

number of passengers enplaned at the airport),

block grant (based on State area and population),

and need (discretionary funds). Over the 10-year

life of ADAP, outlays from the Trust Fund

amounted to approximately $4 billion. ADAP expired in 1980, but a similar program of airport

development assistance, AIP, was established in

1982. Before AIP was enacted there was extensive debate about the future direction of Federal

airport aid, sparked by proposals to withdraw

assistance for (“to defederalize”) major air carrier

airports.

Supporters of defederalization advanced two

arguments: that the Federal Government is overin-
14 ● Airport System Development

Photo credit’ Golden West

Commuter air service, a link to small communities

volved in financing airport development and that

Federal assistance is not necessary for large airports because they are capable of financing their

own capital development. By excluding large airports from eligibility for Federal grants, the

Government could reduce the overall cost of the

aid program and at the same time provide more

aid to small air carrier and general aviation airports. Under various proposals, the top 40 to 69

airports (in terms of enplaned passengers) would

have lost eligibility for Federal aid. ’3 The advantage to large airports, as pointed out by supporters

of defederalization, would be freedom from many

legal and administrative requirements involved in

accepting Federal assistance.

Opponents of defederalization contended that

the proposal was unwise for several reasons. First,

it would eliminate Federal assistance for the very

airports that provide the bulk of passenger service and have the greatest problems of congestion

and delay. It is at these airports, the backbone

of the national system, where a Federal presence

can most easily be justified. Further, passengers

using large airports pay about three-quarters of

the taxes supporting the Airport and Airway Trust

Fund. Thus, defederalization would lead to subsidy of smaller airports by larger ones. Some

observers also questioned the ability of many airports to carry out necessary capital improvements

without Federal participation. While agreeing that

Federal grants form only a small percentage of

total capital budgets at large airports, they argued

that it was a needed revenue source for all but

the very largest 5 or 10 airports.

Some proponents held that defederalized airports should be allowed to charge a “passenger

facility charge” or “head tax” to make up for the

loss of Federal funds. Federal law now prohibits
Ch. l—The Airport System ● 1 5

.

airports from taxing passengers. Others objected

to the head tax while supporting the concept of

defederalization, holding that airports could raise

sufficient funds through retained earnings or

through the private bond market to cover their

capital needs. One major objection to the head

tax was that passengers would have to bear a double tax when using a defederalized airport. They

would have to pay both a ticket tax supporting

the Airport and Airway Trust Fund and a head

tax at the arrival or departure airport.

The major airlines, as represented by the Air

Transport Association, were indifferent on the

question of defederalization but opposed to the

head tax. They held that the tax would impose

unnecessary administrative burdens on them and

would be unfair to passengers. Other observers

noted that the underlying reason for the air carriers’ objection was that head taxes would give

airports an independent source of revenue and

weaken the voice that airlines now have in airport investment decisions.

Airport operators were divided. Some very

large airports, such as Chicago O’Hare, supported

defederalization on the condition that it be accompanied by the freedom to impose a head tax. The

Airport Operators Council International, an organization representing airports of all sizes, expressed qualified support of the concept of “optional defederalization” where airports could

choose whether or not they wished to receive Federal aid, rather than having the decision made for

them on the basis of size and passenger volume.

Many airports opposed both defederalization and

the head tax.

The question of defederalization is still open.

Although the Airport and Airway Improvement

Act of 1982 passed without a defederalization provision, it directed the Department of Transportation to study the effects of defederalization and

to prepare a report to Congress.

Another approach to airport financing was also

raised during the debate over AIP, although it was

not introduced into legislation. Under the general

concept of “new federalism, ” it was proposed to

turn increased responsibility for decisions on airport funding and programming over to State aviation agencies and departments of transportation.

Supporters contended that State agencies are in

a better position to determine the needs of local

airports and could distribute grants with less red

tape than the Federal Government. They pointed

out that some States already have active aviation

agencies that evaluate airport improvement projects and approve all applications for Federal assistance. In these cases, the needs of the airports and

the State might better be served by allowing State

agencies more latitude in distributing airport

grants.

A stronger role for State agencies could reduce

the Federal role to basically that of a tax collector. Because of the interstate nature of air transportation, it would probably be more efficient to

continue to collect ticket taxes, fuel taxes, or other

aviation taxes at the national level. However, the

funds could be passed through to the States on

a formula basis, and the actual decisions on how

funds were spent could be made at the State level.

There were several objections to the concept

of new federalism. First, State agencies vary in

strength. Many do not have the staff or the expertise to take on the responsibilities of evaluating

airport development projects or administering

grants. A period of transition would be necessary

while these States prepared to accept new responsibilities. Others argued that setting up 50 separate agencies to do the work of FAA would add

an additional layer of bureaucracy, since FAA involvement could not be completely eliminated.

Still others saw interstate or multistate cooperation as a major stumbling block. For example, a

State government, perhaps lacking perspective of

the airport system as a whole, might find little

incentive to aid development of an airport outside its borders or to enter into regional compacts

to compensate citizens of adjacent States for airport noise impacts.

The policy implications of the questions of

defederalization and State administration are examined further in chapter 10 of this report.

Airport Management Issues

Deregulation has led to changes in the relationship between airports and airlines. Airports traditionally maintained long-term use agreements (of

20 to 30 years) with the airlines that served them.
16 Airport System Development

These agreements covered such arrangements as

landing fees and the leasing of terminal space. As

a result of these agreements, airlines have had a

strong influence on the creditworthiness of airports in the revenue bond market since their financial stability and continued presence was a

guarantee of the long-term economic viability of

the airport. In some instances, airlines have been

party to airport revenue bonds, agreeing to be

jointly and severally liable for payment of debt

and interest. In return for such guarantees, airlines have gained approval rights for capital

improvement projects to be undertaken at the

airport.

Since deregulation, however, air carriers’ routes

and service points are not as stable, and the airlines themselves have experienced financial difficulties. Long-term contracts written in the era

of regulation may now inhibit the carriers’ freedom to change routes. Conversely, they may also

make it difficult for airports to accommodate new

carriers. In some cases, carriers with long-term

agreements whose service to the airport has declined may be occupying gate and counter space

that a new entrant might be able to use more effectively.

Some observers have questioned whether longterm agreements, especially majority-in-interest

clauses, may not have anticompetitive effects in

the deregulated environment. They point out that

incumbent carriers might make use of their agreements to deny new entrants access to the airport,

or at least to place them at a competitive disadvantage with respect to terminal space and facilities. They also point out that carriers often negotiate with airport management as a group in

a “negotiating committee” or “top committee” and

question whether group negotiations involving

competing firms are appropriate in a deregulated

market.

It has also been pointed out that a capacity limit

at a major airport has the effect of reducing free

competition among carriers and works as a form

of “reregulation” of the industry. Airport operators must be careful that actions taken to manage or control the growth of traffic at individual

airports do not have anticompetitive effects. This

issue was raised in connection with two recent

events, the 1981 air traffic controllers’ strike and

the Braniff bankruptcy, which brought attention

to the question of who owns airport operating

“slots. ”14

During the strike, FAA imposed quotas on 22

airports, limiting the number of operations that

could be performed each hour. Several methods

of allocation were tried—administrative assignment, exchanges among incumbent carriers, and,

briefly, auction. New entrant airlines complained

that all of these methods were unfair.

When Braniff stopped operating, FAA redistributed its slots among other carriers, despite

Braniff’s claims that the slots were the airline’s

property for which it should be paid. Throughout this period there was controversy over whether

or not a slot should be considered property, and

whether the proceeds from a slot sale should go

to the airline, the airport, or the Federal Government. This issue has arisen again in connection

with proposed slot auctions at Washington National Airport.ls

This question may become particularly acute

if problems of delay and congestion spread to

more airports, and airport operators seek to

employ traffic management techniques. If an airport imposes a quota, it must devise some method

for allocating slots to present users and for accommodating new entrants. Until the question of

slot ownership is resolved, any attempt to use sale

or auction as an allocation method is likely to

reignite this controversy.

Noise and Environmental Issues

Noise has been a major problem at airports

since the introduction of the commercial jet aircraft. Recent technological advances in airframe

and jet engine design have made new aircraft

much quieter, but many industry experts believe

that further large-scale reductions in aircraft noise

will not be possible.

The public is very sensitive to noise, which has

become an emotionally charged political issue.

14A slot is a block of time allocated to an airport user to Perform

an aircraft operation (takeoff or landing).

Aviation Week and Space Technology, Aug. 15, 1983, pp. 32-33.
Ch. l—The Airport System “ 17 — —

Noise, an emotionally charged issue

Noise is probably the single most important constraint on the expansion of airports or the building of new ones. The problem is in large part one

of land use, and land use decisions are usually

beyond the control of FAA and the airport proprietor. Zoning and land use planning are the

responsibility of local jurisdictions, and many

jurisdictions have not applied land use controls

to prevent residential communities from growing

up near airports. Often, intergovernmental cooperation is needed because major airports may be

surrounded by several municipalities, each with

different zoning policies. The Federal Government

Photo credit” Los Angeles Times

has sometimes . complicated the issue by financing and approving residential development projects in high-noise areas.

At present, citizens with complaints about airport noise have recourse only to the airport proprietor. While FAA and air carriers have some

responsibility for abating aircraft noise, only the

airport operator is legally liable. In many cases,

airports have had to pay nuisance and damage

claims for noise. To reduce their liability and to

protect themselves, airports have instituted noise

abatement programs that involve restricting air-
 . Airport System Development

craft flight paths or hours of operation so as to

reduce noise impact on residential areas. Noise

abatement procedures can have a detrimental effect on airport capacity, and many airports with

serious congestion and delay have found that the

need to control noise restricts their freedom of action. In some cases, airports have had to purchase

surrounding land or install noise-absorbing insulation in buildings under flight paths.

Some States and localities have enacted special

regulations to limit aircraft noise at airports under

their jurisdiction. There are several concerns

about the proliferation of local noise standards.

First, the standards vary from one location to

another, adding confusion and complexity to the

system. Second, the standards may act as a restraint on interstate commerce. Airlines may have

to accelerate their purchases of quiet aircraft in

order to serve many points with stringent noise

standards. If they are not financially able to make

these purchases, the only alternative may be to

curtail operations at some locations.

Some argue that the Federal Government

should set and enforce a uniform national standard for airport noise. However, FAA has been

reluctant to embark on such a policy, in part because the Federal Government might then have

to assume liability for violations of the standard.

Planning Issues

Many of the difficulties in planning a national

airport system arise from its size and diversity.

Each airport has unique problems, and each airport operator—although constrained by laws, regulations, and custom—is essentially an independent decisionmaker. While airports collectively

form a “system, “ it is not a system that is comprehensively planned and centrally managed.

FAA’s role in planning the system has traditionally

been one of gathering and reporting information

on individual airport decisions and discouraging

redundant development.

Since 1970, the National Airport System Plan

has been prepared by FAA regional offices, working in conjunction with local airport authorities.

The NASP presents an inventory of the projected

capital needs of almost 3,200 airports “in which

there is a potential Federal interest and on which

Federal funds may be spent .“16 Because the funds

available from Federal and private local sources

are sufficient to complete only a fraction of the

eligible projects, many of the airport improvements included in the NASP are never undertaken.

The NASP has been criticized on three principal

points. First, it is not really a plan, in the sense

that it does not present time phasing or assign

priorities to projects. FAA has attempted to meet

this criticism in the latest edition by categorizing

projects and needs according to three levels of program objectives: Level I—maintain the existing

system, Level II—bring airports up to standards,

and Level III—expand the system. Some, however, see this categorization as inadequate.

Second, the criteria for the selection of the airports and projects to be included in the plan have

come under criticism. Some have argued that most

of the 3,200 airports in the NASP are not truly

of national interest and that criteria should be

made more stringent to reduce the number to a

more manageable set. On the other hand, there

are those who contend that the plan cannot be

of national scope unless it contains all publicly

owned airports. It is argued that, since the NASP

lists only development projects eligible for Federal aid and not those that would be financed

solely by State, local, and private sources, the

total airport development needs are understated

by the plan.

A final criticism is that the NASP deals strictly

with the development needs of individual airports,

without regard to regional and intermodal coordination. This deficiency was addressed by Congress in the 1982 Airport and Airway Improvement Act, which directed FAA to develop a National

Plan of Integrated Airport Systems. FAA has

begun work on the plan, which is to be completed

by September 1984. There is still uncertainty

about the form that NPIAS will take and how

many airports will be included. Some approaches

to developing an integrated national airport system plan are discussed in chapter 9.

Revised Stutistlcs, 1980-1989

Administration, 1980), p. iii.
Chapter 2

ORGANIZATIONS AND

INSTITUTIONS

---

D

.

Photo credit Federal Aviation Adrnfrtfsfraftoi, 1
Contents

Airport Ownership and Operation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Airport-Air Carrier Relations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Airport-Concessionaire Relations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Airport-General Aviation Relations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Planning and Development Responsibilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Airport Users.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Federal Government . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

State Aviation Agencies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Regional Planning Agencies . . . .

Other Parties ..,......

Capital Improvement . . . .

Aircraft Noise . . . . . . . . . .

Federal Responsibilities

Measurement of Noise.

Noise and Land Use. . .

Local Noise Abatement

List of Tables

Table No.

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Programs

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6.

7.

8.

Public Operation of Commercial Airports by Size, 1983.

State Funding of Airport and Aviation Programs . . . . . . .

Land Use Compatibility With Yearly Day-Night Average

List of Figures

Figure No,

3. Effects of Curfewson Transcontinental

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Chapter 2

ORGANIZATIONS AND INSTITUTIONS

A major commercial airport is a huge public

enterprise. Some are literally cities in their own

right, with their own fire and police departments,

road systems, powerplants, hotels, restaurants,

and even factories, schools, and churches located

on the property. Administration of these facilities

is the responsibility of the airport operator, usually a public entity such as a department of city

government or a special aviation or port authority. Airports, however, also have a private character in that they must be operated in conjunction with airlines that provide air transportation

service and with concessionaires and other firms

doing business on airport property. This combination of public management and private enterprise

distinguishes the operation of commercial airports

from that of wholly public or wholly private

. . .——.——.—

‘Portions of this chapter are based on work performed by the Congressional Budget Office and published in financing U.S. Airports

in the 1980s, April 1984.

enterprises. In addition, operation of an airport

entails interaction with several other parties: general aviation, the public at large, agencies of local,

regional, and State government, the Federal Aviation Administration (FAA), and other agencies of

the Federal Government. Each of these parties approaches airport operation and development with

a different set of concerns, responsibilities, and

expectations.

This chapter surveys common types of airport

ownership in the United States and reviews relationships between the airport operator and air carriers, general aviation, concessionaires, and other

airport users. The roles of airport users and Federal, State, and regional agencies in airport planning and development are also examined, with

special emphasis on the intergovernmental and institutional relations involved in building or expanding airports. The issue of aircraft noise and

its effects on airport operation is also addressed.

AIRPORT OWNERSHIP AND OPERATION

Public airports in the United States are owned

and operated under a variety of organizational

and jurisdictional arrangements. Usually, ownership and operation coincide: commercial airports

may be owned and run by a city, county, or State,

by the Federal Government, or by more than one

jurisdiction (e.g., a city and a county). In some

instances, however, a commercial airport is owned

by one or more of these governmental entities but

operated by a separate public body, such as an

airport authority specifically created for the purpose of managing the airport. Regardless of ownership, legal responsibility for day-to-day operation and administration can be vested in any of

five kinds of governmental or public entities:

● a municipal or county government,

● a multipurpose port authority,

● an airport authority,

● a State government, or

• the Federal Government.

More than half of the Nation’s large and medium commercial airports, and a greater percentage of small commercial airports, are operated by

municipal or county governments (see table 6).

A typical municipally operated airport is cityowned and run as a department of the city, with

policy direction by the city council and, in some

cases, by a separate airport commission or advisory board. County-run airports are similarly

organized. Under this type of public operation,

airport investment decisions are generally made

in the broader context of city- or countywide public investment needs, budgetary constraints, and

development goals. To raise investment capital,

these airports usually rely on one of the two major forms of tax-exempt municipal bonding: general obligation bonds, which are backed by the

full faith, credit, and taxing power of the issuing

government; and revenue bonds, for which debt

service is paid entirely out of revenues generated

by the airport.z

‘These financing mechanisms are discussed further in ch. 7.

21
22 ● Airport System Development

Table 6.—Public Operation of Commercial Airports by Size, 1983

Large Medium Small a

Airport operator Number Percent Number Percent Number Percent

Municipality or county. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 58 23 49 NIA 61

Port authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 21 6 13 N/A 3

Airport authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 13 12 26 NIA 31

State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .’. 1 4 5 11 NIA 5

Federal Government . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 4 1 2 NIA o

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 100 47 100 489 100

Some commercial airports in the United States

arerun byport authorities—legally chartered institutions with the status of public corporations

that operate a variety of publicly owned facilities,

such as harbors, airports, toll roads, and bridges.

Multipurpose port authorities run about 21 percent of the large commercial airports and 13 percent of the medium-size airports. In managing the

properties under their jurisdiction, port authorities

have extensive independence from State and local

governments. Their financial independence rests

largely on the power to issue their own debt, in

the form of revenue bonds, and on the breadth

of their revenue bases, which may include fees and

charges from marine terminals and airports as well

as proceeds (e.g., bridge or tunnel tolls) from

other port authority properties. In addition, some

port authorities have the power to tax within the

port district, although it is rarely exercised.

About one-eighth of all large, and one-fourth

of medium-size commercial airports are operated

by airport or aviation authorities. Similar in structure and in legal charter to port authorities, these

single-purpose authorities also have considerable

independence from the State or local governments, which often retain ownership of the airport or airports operated by the authority. Like

multipurpose port authorities, airport authorities

have the power to issue their own debt for financing capital development, and in a few cases, the

power to tax. Compared to port authorities, however, they must rely on a much narrower base

of revenues to run a financially self-sustaining

enterprise.

State-run airports are typically managed by the

State’s department of transportation. Either general obligation or revenue bonding may be used

to raise investment capital, and State taxes on

aviation fuel may be applied to capital improvement projects. Although several States run their

own commercial airports, only a handful of large

and medium-size commercial airports are operated in this way—those in Alaska, Connecticut,

Hawaii, and Maryland.

The Federal Government owns and operates

two commercial airports serving the District of

Columbia and environs—Washington National

and Dunes International. FAA manages these

two facilities, with capital development financed

through congressional appropriations and project

costs recouped by airport landing fees and terminal charges. The Federal Government also

levies user taxes and disburses funds for the capital development of other airports through FAA’s

Airport Improvement Program, as discussed later

in this chapter.

Publicly owned general aviation airports may

be owned by a municipality, county, or State, or

they may be the property of one or more of these

jurisdictions but run by a separate public body

as part of a multiairport system. Over 40 percent

of all general aviation airports open to the public are privately owned. Most publicly owned general aviation airports (219 FAA-designated relievers and 2,424 other genera] aviation airports)

are managed either by public operators—municipalities, counties, States, or independent authorities—or by private operators who charge for their

services and remit a portion of their revenues to

the airport owners. Reliever airports often are run

as part of local or regional multiairport systems.
Ch. 2—Organizations and Institutions ● 2 3 —

Airport-Air Carrier Relations

From the airlines’ perspective, each airport is

a node in a route system, a point for the pickup

and transfer of passengers and freight. In order

to operate efficiently, air carriers need certain facilities at each airport. These requirements, however, are not static; they change with traffic demand, economic conditions, and the competitive

climate. Before airline deregulation in 1978, response to changes of this sort was slow and mediated by the regulatory process. Carriers had to

apply to the Civil Aeronautics Board (CAB) for

permission to add or to drop routes or to change

fares. CAB deliberations involved published notices,

comments from opposing parties, and sometimes

hearings. Deliberations could take months, even

years, and all members of the airline-airport community were aware of a carrier’s intention to make

a change long before the CAB gave permission.

Since the Airline Deregulation Act of 1978, however, air carriers can change their routes without

permission and on very short notice. With these

route changes, airline requirements at airports can

change with equal rapidity.

In contrast to airlines, which operate over a

route system connecting many cities, airport operators must focus on accommodating the interests

of a number of users at a single location. Changes

in the way individual airlines operate may put

pressures on the airport’s resources, requiring major capital expenditures or making obsolete a facility already constructed. Further, because airports are multimodal hubs, airport operators must

accommodate many users and tenants other than

the airlines and must be concerned with efficient

use of terminal and landside facilities that are of

little concern to the carriers, even though carriers’

activities can severely affect (or be affected by)

them.

Despite their different perspectives, air carriers

and the airport management have a common interest in making the airport a stable and successful

economic enterprise. Traditionally, airports and

carriers have formalized their relationship through

use agreements that establish the conditions and

methods for setting fees and charges associated

with use of the airport by air carriers. Most agreements also include formulas for adjusting those

fees from year to year. The terms of a use agreement can vary widely, from short-term monthly

or yearly arrangements to long-term leases of 25

years or more. Within the context of these use

agreements, carriers negotiate with the airport to

get the specific airport resources they need for

day-to-day operations. For example, under the

basic use agreement, the carrier may conduct subsidiary negotiations for the lease of terminal space

for offices, passenger lounges, ticket counters, and

other necessities.

Photo credit” Federal Aviation Adrninisfraf/on

Convergence and competition for airport access

25-420 0 - 84 - 3
24 ● Airport System Development —.

Long-term agreements between airports and

major airlines have traditionally been the rule.

One reason is the long-lived nature of the investments involved. A runway may have an economic life of a decade or more, a terminal even

longer. When an airport undertakes such an improvement for the benefit of the airlines, the airport may want long-term leases to help ensure that

carriers will continue to use the facility and help

pay for it. At some airports the use agreements

and leases may hold all signatory carriers jointly

and severally responsible for payments; at others

airlines may be individually responsible for improvements made for their benefit.

As described in chapter 7, which deals with airport financing, revenue bond buyers lend money

to the airport to construct a facility, and the airport authority applies the revenues from operation of the facility to repaying the principal and

interest. To reduce the risk to bond buyers, and

thus lower the interest rate, air carriers may agree

to guarantee the airport sufficient revenue to pay

the debt. For example, the use agreement may give

the airport the right to charge landing fees to generate sufficient funds to cover operating costs and

debt service.

In the past, investors perceived the major airlines, who operated as virtual regulated monopolies with clearly defined markets, as stronger

firms and better credit risks than individual airports. In recent years, the perception of airlines

as stable and the airports as risky has begun to

change. Since deregulation, airlines are no longer

under an obligation to serve a particular city, nor

are they protected from competition by other carriers. They are free to compete, to change their

routes, and to go out of business. On the other

hand, certain airports have demonstrated that

they are creditworthy and have strong travel markets. Regardless of what happens to an individual

airline, these strong airports will continue to be

served. In these locations, long-term agreements

with individual carriers have become less important for airports seeking financing than the underlying economic strength of the community.

Due to the frequent route changes since deregulation, short-term use agreements and leases are

becoming more common. Although the cost to

the carrier of a short-term lease may be higher,

it has the advantage of allowing greater flexibility

for both the carrier and the airport. A carrier

testing a new market may not be able or willing

to enter a long-term agreement or to assume

responsibility for capital improvements until it is

sure that the market will be profitable. At the

same time, an airport may not want to enter into

a long-term agreement with a new carrier that has

not yet established a reputation for reliability. At

some airports, several different kinds of use agreements may be in effect simultaneously.

In exchange for guaranteeing sufficient revenues

to service long-term debt, airlines have traditionally assumed some control of, or at least major participation in, important decisions affecting airport operation and capital improvement,

especially the latter. In many cases, airports are

bound by “majority-in-interest” clauses in their

lease agreements whereby they are contractually

required to consult with the carriers on major capital improvements and must abide by decisions

of the majority of the carriers with whom they

have long-term agreements. The recent report of

the Airport Access Task Force, chaired by CAB

Chairman Dan McKinnon, raised the question of

whether majority-in-interest clauses are anticompetitive since they might be used by incumbent

carriers to veto airport operator’s plans to build

facilities for new entrants.3

As with major airport planning decisions, negotiations related to the day-to-day needs of the

carriers have traditionally been carried out between the airport management and a negotiating

committee, called a “top committee, ” made up of

representatives of the scheduled airlines that are

signatories to use agreements with the airport.

Top committees have been an effective means of

bringing the collective influence of the airlines to

bear on airport management.

The nature of negotiations at some airports has

changed radically since deregulation. Under reg3“Report and Recommendations of the Airport Access Task Force, ”

March 1983, p. 59. The Task Force was directed by Congress, in

the Airport and Airway Improvement Act of 1982, to take a comprehensive look at airport access problems. Members included

leaders from all segments of the aviation industry.
Ch. 2—Organizations and Institutions 25

ulation, the major carriers-though competitors—

had reasonably similar interests and needs. They

did not really compete on the basis of price, and

the regulatory process guaranteed that no member of the community could surprise the others

with sudden changes in operating strategy. The

carriers’ representatives were a small group of people who sat on the same side of the negotiating

table at many different airports. Carriers generally worked with one another in an atmosphere

of cooperation and presented a common position

in negotiating with the management of an individual airport.

Since deregulation, however, the environment

has been characterized by competition rather than

cooperation. Carriers may radically alter their

routes, service levels, or prices on very short

notice. They are reluctant to share information

about their plans for fear of giving an advantage

to a competitor. These factors make group negotiations more difficult. Some airport proprietors

have complained that, in this competitive atmosphere, carriers no longer give adequate advance

warning of changes that might directly affect the

operation of the airport. Nevertheless, negotiating committees continue to operate, principally

because it is essential that there be some mechanism for communication between air carriers and

airport management. The CAB Task Force noted

that negotiating committees still exert great influence on all aspects of airport operation.4

The days when most major airports are dominated by a few large airlines with long-term agreements may be passing away. One reason is the

proliferation of air carriers since deregulation. The

wide variation in aircraft size and performance,

number of passengers, and markets served means

that different classes of carriers require somewhat

different facilities. Commuter carriers, with their

smaller aircraft, usually do not need the same gate

and apron facilities as major carriers. While there

were commuters before deregulation, they are

coming to constitute a larger fraction of users at

many airports. Other new entrants, including “no

frills” carriers, may also have different needs from

those of conventional air carriers—for example,

4

1bid., p. 61.

they may want more frequent gate access, but less

baggage handling. These minority carriers may

come to wield more power in negotiating with the

airport for what they need and may challenge major carriers for a voice in investment decisions at

an airport,

Not all aviation experts agree with this analysis, at least as an indication of long-term trends.

They point out that half of the top 35 hub airports owe a majority of their traffic to no more

than two airlines—a near monopoly dominance

that is increasing since deregulation. This leads

them to foresee that the ultimate effect of deregulation will be more, not less, concentration of the

airline industry—major carriers and commuters

alike, As the weaker competitors drop out or are

absorbed by the stronger, the remaining airlines

may exercise even greater dominance of certain

large or medium-size airports that serve as home

base or principal hubs.

Airport-Concessionaire Relations

Services such as restaurants, book stores, gift

shops, parking facilities, car rental companies,

and hotels are often operated under concession

agreements or management contracts with the airport. These agreements vary greatly; but in the

typical concession agreement, the airport extends

to a firm the privilege of conducting business on

airport property in exchange for payment of a

minimum annual fee or a percentage of the revenues, whichever is greater. Some airports prefer

to retain a larger share of revenues for themselves

and employ an alternative arrangement called a

management contract, under which a firm is hired

to operate a particular service on behalf of the

airport. The gross revenues are collected by the

airport management, which pays the firm for

operating expenses plus either a flat management

fee or a percentage of revenues.

Revenues from concessions are very important

to an airport. At some, concessionaires and their

customers yield more revenue to the airport than

airline fees and leases, resulting—in effect—in

cross-subsidy of air carriers by nonaviation service concessions.

Parking and automobile rentals are typically

large and important concessions at airports. De-
26 ● Airport System Development

spite growth in the use of buses and other highoccupancy vehicles, the continued importance of

parking and car rental revenues is indicative of

the symbiotic relationship between the airport and

the automobile. An analysis of revenue sources

at seven major airports found that public parking facilities were the largest nonairline source of

revenues and that car rental revenues were the second largest. At two of these airports, the airport

operator’s share of parking and car rental fees

(after concession or management fees were paid)

constituted a larger revenue source than air carrier landing fees. 5 At many locations, the park-

‘Peat, Marwick, Mitchell & Co., “Comparative Rate Analysis,

Dade County Aviation and Seaport Departments, ” August 1982.

ing and car rental firms operating on the airport

are complemented by (or are in competition with)

similar services operating off the airport property.

Another important type of concessionaire is the

fixed base operator (FBO), who provides services

for airport users lacking facilities of their own,

primarily general aviation. Typically, the FBO

sells fuel and operates facilities for aircraft service, repair, and maintenance. The FBO may also

handle the leasing of hangars and rental of shortterm aircraft parking facilities. Agreements between airports and FBOS vary. In some cases the

FBO constructs and develops his own facilities on

airport property; in other cases the FBO manages

facilities belonging to the airport. FBOs also provide service to some commuter and startup carriers, especially those that have just entered a particular market and have not yet established (or

have chosen not to set up) their own ground operations. The presence of an FBO capable of servicing small transport aircraft can sometimes be instrumental in a new carrier’s decision to serve a

particular airport.

In addition to concessionaires, some airport

authorities serve as landlord to other tenants such

as industrial parks, freight forwarders, and warehouses, all of which can provide significant revenue. These firms may lease space from the airport

operator, or they may build their own facilities

on the airport property.

Airport-General Aviation Relations

The relationship between airport operators and

general aviation is seldom governed by the complex of use agreements and leases that characterize

relationships with air carriers or concessionaires.

General aviation (GA) is a diverse group. At

any given airport, the GA aircraft will be owned

and operated by a variety of individuals and organizations for a number of personal, business, or

instructional purposes. Because of the variety of

ownership and the diversity of aircraft type and

use, long-term agreements between the airport

and GA users are not customary. GA users often

lease airport facilities, especially storage space

such as hangars and tie-downs, but the relationship is usually that of landlord and tenant. There

are instances where owners and operators of GA
Ch. 2—Organizations and Institutions ● 2 7

aircraft assume direct responsibility for capital development of an airport, but this is not common,

even at airports where general aviation is a majority user.

It must be remembered that while GA activities make up about half of the aircraft operations

at FAA towered airports, the average utilization

of each aircraft is much lower than that of commercial aircraft. There are approximately 210,000

GA aircraft, compared to about 4,000 commercial aircraft. Most GA aircraft spend most of the

time parked on the ground. Only a small number, usually those operated by large corporations

as a sort of private airline for employees and high

value goods, are used as intensively as commercial aircraft.

Thus, at the airport, the chief needs of GA are

parking and storage space, along with facilities

for fuel, maintenance, and repair. While an airliner may occupy a gate for an hour to load

passengers and fuel, a GA user may need to park

an aircraft for a day or a week while the passenger

conducts business in town. At the user’s home

base, long-term storage facilities are needed, and

the aircraft owner may own or lease a hangar or

tie-down spot. In most parts of the country, the

chief airport capacity problem for GA is a shortage of parking and storage space at popular airports. At some airports in the Southwest and in

California waiting lists for GA parking spaces are

several years long.

Some airport operators deal directly with their

general aviation customers. The airport management may operate a GA terminal, collect landing fees, and lease tie-downs or hangars to users.

At some airports condominium hangars are available for sale to individual users. It is not uncommon for corporations with aircraft fleets to own

hangar space at their base airport. Often, however, at least some of this responsibility is

delegated to the FBO, who thus stands as a proxy

for the airport operator in negotiating with the

individual aircraft owners for use of airport facilities and collecting fees.

PLANNING AND DEVELOPMENT RESPONSIBILITIES

The airport operator is principally responsible

for planning and development of airport improvements, but as in the case of daily operating decisions, that responsibility is shared with many

other parties. The airlines and other users, concessionaires, FAA, the regional planning authority, and the surrounding communities may all

have an influence on planning decisions and

subsequent development.

Airport Users

The users with the strongest voice in airport

planning decisions, especially at large operational

hubs, are the air carriers, who negotiate individually and collectively for short- and long-term improvements that they believe will facilitate their

use of the airport. Because carriers often underwrite the bonds to pay for capital improvements,

they have great influence, and their support is

crucial.

At airports where one or two carriers account

for the majority of operations, decisions about airport development are sometimes dominated by

the needs and interests of those carriers. For example, there can be little doubt that Atlanta

Hartsfield was designed to serve the route structures of Delta and Eastern Airlines—hub-andspoke systems with a high volume of transfer

passengers. On the other hand, the design of

Dallas-Fort Worth was greatly influenced by the

type of service Braniff and American Airlines expected to provide there—long-haul origin-destination service, with little need for transfers within

the airport. This design has been the source of

landside congestion in recent years as carriers have

made greater use of hub-and-spoke route structures that require passengers to change planes.

Major improvements are being undertaken at the

airport to enlarge passenger waiting areas and improve internal traffic circulation.

Some “minority” carriers, even though they are

signatories to the long-term agreements, may not

have strong negotiating positions. For example,

most airports are dominated by passenger carriers,

even though revenues from cargo carriers may
28 . Aiport System Development

Photo credt: McDonne// Douglas

Air cargo moves mainly at night

make a significant contribution to the airport

budget. Air cargo carriers have different facility

needs, e.g., they need ramp space and room for

sorting cargo rather than gate space and terminal

lounges. In some cases, cargo carriers have been

unable to interest the majority of carriers in underwriting airport bonds to build cargo facilities, and

they have been forced to undertake development

projects on their own, even though they are also

paying landing fees that are used to underwrite

development of passenger facilities.

General aviation, because of its disaggregate

nature, is another group that often has little to

say in the airport planning process. However,

aviation interest groups, trade associations, and

fixed base operators may sometimes help to present the position of GA users to the airport operator.

Federal Government

The Federal Government is a major participant

in airport planning and development. FAA administers Federal grants to airports for planning

and for capital improvements. Since 1970, these

funds have come from the user-supported Airport

and Airway Trust Fund. In 1983, planning grant

funds authorized under the Airport Improvement

Program amounted to about $8.8 million, and

capital development grants to almost $800 million. b

Federal funds may be spent only for certain

classes of projects. In general, eligible projects are

those for construction or improvement of facilities directly related to the use of aircraft—i.e.,

runways, taxiways, and ramps. In recent years,

b

Second Annual Report of Accomplishments Under the Airport

Improvement Program, Fiscal Year 1982 (Washington, DC: Federal

Aviation Administration, May 1984).
Ch. 2—Organizations and Institutions 29

eligibility has also been extended to include common-use areas of passenger terminals and other

airport buildings related to the safety of persons

or the provision of services to airport users. Federal funds cannot be used for the construction of

revenue-producing facilities such as hangars and

automobile parking areas or for building access

roads off the airport property.7

It has been suggested that the availability of

Federal funds at a favorable matching ratio has

encouraged airports to concentrate on those types

of improvements which are eligible for Federal

aid. The Federal share for eligible improvements

ranges from 70 to 90 percent depending on type

of project; but since airports make many improvements without Federal aid, the Federal share of

all capital investment at airports constitutes less

than 40 percent. g This percentage is even less at

large airports, where Federal monies often make

up less than 10 percent of the capital improvement budget. However, many operators of large

airports believe that Federal funding is important

for financing improvements that they feel are

needed, but which the air carriers are reluctant

to pay for.

FAA also influences airport operational decisions because it owns and operates the air traffic

control system, including the air traffic control

tower, navigational equipment, and landing aids

at the airport itself. Airport improvements which

require installing, moving, or upgrading this

equipment have to be approved and carried out

by FAA. Safety and operational standards for airports are also established by FAA. Airport facilities built with Federal funds must be designed in

accordance with these standards, which are published in the Federal Aviation Regulations or in

FAA Advisory Circulars, manuals, and handbooks.

Finally, FAA does airport system planning. The

National Airport System Plan (NASP), a 10-year

plan which was published in 1977 and updated

in 1980, includes those airports that meet FAA’s

criteria of “national importance. ” In 1982 there

were 3,203 such airports. The NASP is not a compilation of individual airport development plans.

7

14 CFR 151.

8Public Works Infrastructure: Policy Considerations for the 1980s

(Washington, DC: Congressional Budget Office, April 1983), p. 106.

Rather, it is a summary of projected improvements for each airport eligible for Federal aid, prepared by FAA based on information provided by

individual airports, state agencies, and FAA regional offices.

State Aviation Agencies

Forty-seven States have aviation agencies. Most

are within State departments of transportation,

although eight are independent agencies or commissions. State authority and activity vary widely. All the States with aviation agencies provide

some State financial assistance to airports. In most

cases this aid is primarily for capital improvements, although a few States make funds available for high-cost operations and maintenance

items such as snow removal equipment.9 In addition, many State agencies provide some technical and planning assistance, particularly to

smaller airports. Some States carry out ongoing

planning programs for a statewide airport system,

complete with year-by-year scheduling for improvements at individual airports, In many cases,

States also install and maintain navigation equipment and landing aids.

Some State governments have planning and development responsibilities as owners and operators of airports. Baltimore-Washington International is owned by the State of Maryland, for

example, and Honolulu International is owned by

the State of Hawaii. In general, however, most

of the State-owned airports are general aviation

rather than commercial service airports.

States provide much less airport development

money than either the Federal Government or the

local airport operators. As shown in table 7, State

spending in 1982 for airport construction and improvement projects totaled $276 million. This

averages $5.5 million per State, but the actual distribution is highly skewed. Table 7 shows that 25

States spent less than $1 million each; 12 States

spent between $1 million and $5 million, and 5

spent between $5 million and $10 million. Five

States—Alaska, Connecticut, Hawaii, Illinois,

and New York—spent over $10 million for air-

‘National Association of State Aviation officials, DataBank 1983

(Washington, DC: NASAO, 1983), p. 2.
30 ● Airport System Development

Table 7.-State Funding of Airport and Aviation Programs

.,

AL-IW82 - ‘ -- ‘

-- — $ 200,750

60,355,700

57,752—

—

100,700,000

—

—

—

15,581,268

50,000

—

—

—

—

—

156,729

303,434

3,008,291—

5,9&l —

—

20,000

134,531

—

131,607

—

—

—

20,000

250,000

—

115,000

255,800

90,000

2,657,255

—

—

—

—

—

538,199

—

—

—

—

—

$164,632,216

—

—

311,838

—

—

500,000

—

—

—

77,313,810

50,000

—

—

—

—

32,000

344,000

19,684,127

—

—

—

—

—

10,000

223,760

27,000

—

—

25,000

—

—

407,728

3,981,983

49,937

—

5 , G

—

10,000

366,000

22,500

40,647

—

—

103,405.330

402,721

—

2,455,248

750,000

2,200,000

780,000

300,000

5,030,500

700,000

—

454,000

10,269,229

1,757,445

635,600

—

610,000

3,102,549

799,539

375,000

225,549

1,874,000

3,983,500

70,000

327,973

220,000

424,031

—

—

—

889,500

27,700,00d

7,275,967

1,479,000

550,000

500,000

150,000

1,365,000

—

1,133,215

143,182

1,600,000

2,500,000

230,000

8,300

428,000

784,745

330,951

982,900

5,505,137

91,302.781

—

—

—

1,000,000

—

1,000,000—

—

—

—

—

—

—

—

—

1,117,200—

228,471—

—

—

18,000—

—

—

—

—

—

—

—

—

885,004—

100,000—

—

72,600

—

—

—

4.421.275

—

—

50,000

—

25,000

—

300,000

—

30,000

9,000

—

60,000

—

100,900

196,000

27,000

26,618

22,000

600,000

598,000

—

—

44,000

266,292

—

35,000

—

—

—

75,000

20,000

—

—

—

59,221

22,749

30,466

60,000

2,000,06

12,200

37,000

—

—

25,000

—

4.751.446

603,471

60,355,700

2,844,838

800,000

4,200,000

101,980,000

325,000

5,030,000

2,000,000

92,895,078

624,000

10,278,229

1,757,445

720,600

0

710,900

3,487,278

1,797,973

23,214,520

247,549

2,534,000

6,003,600

70,000

556,444

294,000

1,048,614

0

211,607

0

889,500

27,700,000

7,570,967

1,774,000

550,000

615,000

813,528

5,436,983

2,963,696

2,040,968

173,648

1,785,000

2,500,000

2,240,000

924,699

560,100

825,392

330,951

1,227,950

5,505,137

—

1,255,200

60,000

—

—

100,000

—

250,000

20,000

160,289

—

31,000

—

—

9,444

—

180,000

18,237

102,876

18,522

145,000

—

10,000

—

26,000

7,757

—

30,000

—

—

33,000

(191 ,Ooo)t

25,000

—

—

—

68,338

225,000

124,020

—

13,000

—

45,000

15,500

51,700

—

(64,20;t

—

391,018,775 3,017,883

SOURCE: National Association of State Aviation Officials, DataBank 1983 (Washington, DC: NASAO, 1983), pp. 9-10,
Ch. 2—Organizations and Institutions ● 3 1

port development; all of these except New York

and Illinois used these funds primarily for Stateowned airports. The 28 States that made planning

assistance funds available in 1982 spent a combined sum of about $3 million. However, about

40 percent of this amount was spent by Alaska

alone.

Total State capita] assistance in 1982 for airports not owned by the State totaled $91 million.l”

Often, these funds provided the State share of federally funded projects. In other cases, State funds

were used where Federal grants were not available for a project.

Despite the small amount overall, the State role

is a vital one, especially for smaller airports. Few

GA airports or small commercial service airports

have the in-house staff to make traffic forecasts

or to plan facility improvements. In addition, because small airport operators often do not have

the technical expertise to complete an application

for Federal assistance, State agencies are active

in helping them through this process. Most State

aviation agencies concentrate their resources on

helping small commercial service and GA airports

because they have found that large commercial

airports can take care of themselves. Indeed, most

State aviation agencies do not have the staff and

expertise to deal with the details of planning and

carrying out projects at major commercial service airports. In the case of major airports, the State

role may simply be to keep informed of development activities and perhaps to provide some State

matching funds.

State control over the distribution of Federal

airport development funds varies widely with

State law. In most cases, grants from FAA to airports for federally approved projects completely

bypass the State agency, Some States, however,

have channeling acts which give them some control over Federal funds. In these cases, projects

must have State, as well as Federal, approval

before the grant can be awarded to the airport.

In some cases, too, State law requires that the

State act as agent for Federal grant recipients, so

that the State receives the funds and passes them

through to the airport.

I

O

Ibid., pp. 9-10.

Regional Planning Agencies

Many States have created regional planning

authorities that combine planning and development functions. Regional planning responsibilities

are sometimes assumed by Councils of Governments or similar associations of municipalities in

a metropolitan area. Some regional agencies conduct extensive transportation and land use planning in their areas of jurisdiction and may be involved in plans for siting new airports or for

expanding existing facilities.

Regional agencies are seldom involved in the

actual project execution, but they can have great

influence over the availability of funds. In some

States, their approval of a master plan or of individual projects is required for the release of State

grant funds. Often these same agencies are also

responsible for approving the release of Federal

funds. Rules for the release of Federal funds for

major projects was formerly governed by Office

of Management and Budget Circular A-9s, under

which regional agencies were required to review

major projects to certify that they met Federal

guidelines on the use of grant moneys by State

and local governments and to ensure that sufficient planning had gone into the project.

This procedure has changed somewhat since the

release of Executive Order 12372. Under the new

procedure, Federal agencies, such as FAA, are still

required to consult and cooperate with State and

local governments in the administration of Federal assistance and development programs, but

the intent is to give the States more latitude in

determining criteria for acceptable projects. Although Executive Order 12372 places more emphasis on State priorities, the effect is still to require Federal, State, and local agreement before

funds are released for major projects. In many

cases, the approval power remains in the hands

of the same regional planning agencies which handled the A-9s review process.

Other Parties

A commercial airport serves thousands, often

millions, of airline passengers Despite their large

number, however, passengers typically have no

formal way to voice opinion on the service being

offered or to influence future airport plans. How-
32 ● Airport System Development

Photo credit: Federal Aviation Administration

The wait begins

ever, the passengers’ behavior—in terms of the

preferred hours of travel and the preferred mode

for arriving at the airport-will greatly affect how

the airport operates, and passenger behavior is

a frequent subject of study by airport planners.

Moreover, passengers do have the ability to “vote

with their feet” in areas where there is a choice

of airports. Passenger preference is often among

the reasons that one airport in a region is underutilized. If utilization of the airport is to be increased, the operator or the carriers must improve

those features that passengers object to—e.g., inadequate groundside access, infrequent flights, or

inconvenient parking.

The actions of concessionaires and off-airport

firms offering services on the airport property can

greatly affect airport development. Often these

firms have little say in the long-range planning

decisions. Where airport facilities do not accommodate their needs, improvised solutions may

contribute to congestion and delay. For example,

the use of high-occupancy vehicles, such as shuttle buses, for airport access and circulation should

tend to reduce curbside congestion. However,

ground access delays at some airports have actually been worsened by the uncontrolled proliferation of private shuttle bus services offered

by car rental firms, hotels, and others to carry

passengers from the terminal to remote locations.

In some cases, inviting these firms to participate

in an earlier stage of the planning process and designing facilities to match the needs of shuttle

buses rather than automobiles might have resulted

in better coordination of airport circulation and

less curbside congestion.

Nearly all commercial service airports are publicly owned, most by municipal governments. The

city government which is also an airport sponsor must balance the economic benefits of the airport against any direct and indirect costs the airport may impose. The city government is responsible for a number of services which are vital

to the airport but beyond the control of the airport manager—e.g., highway construction and

mass transit access. Elected officials must choose

to allocate funds between projects that might benefit the airport and those related to other municipal services such as hospitals, schools, and housing. The airport is seldom the first priority of the

city government.

Other local governments may be involved in,

or affected by, the airport planning process. Many

major airports are surrounded by several municipalities. Some of these communities may be

bothered by noise, automobile traffic, or other

problems generated by the airport. Other communities may control services necessary to operation of the airport. In addition, the interests of

individuals surrounding the airport may be represented not only by local governments but by

public interest groups organized around a particular issue. These groups and individuals may be

brought into the airport planning process through

public hearings and other means, but their effectiveness and degree of participation vary widely

as a function of the receptiveness of airport operators and the aggressiveness with which these

groups pursue their interests.

CAPITAL IMPROVEMENT

The most obvious solution to the problem of isting one through construction of new runways,

airside delay at a busy airport is to increase ca- gates, terminals, or whatever is needed. Nearly

pacity through capital improvements—either by all the major airports in the United States have

building another airport or by expanding the ex- gone through at least one period of major capital
Ch. 2—Organizations and Institutions ● 3 3

improvement, many of them in the late 1960s and

early 1970s to accommodate jet aircraft. As a solution to delay problems, however, construction of

new airport facilities is not without problems, and

airport operators can run into a number of difficulties in attempting major airport construction

or expansion.

First of all, an airport is a system of interdependent parts. Major expansion of one part may necessitate expansion of another. For example, adding new runways and increasing the number of

airside operations will result in the need for new

gates and more terminal waiting areas for passengers, and possibly larger automobile parking areas

and access roads with higher capacity. Because

of the piecemeal way in which these different

types of development may be handled, a bottleneck is often not eliminated, but simply moved

to another point.

Another problem often encountered in expansion is the lack of suitable land. Many airports

are closely surrounded by urbanized areas, land

that would be extremely expensive to acquire. Although most airports were originally located on

the edge of metropolitan areas, cities have expanded over the years to surround many of them.

Some of this development, especially commercial

and industrial uses, was actually drawn to the area

by the proximity to air transportation. Residential uses often spring up if land use controls are

inadequate. Once communities become established in the vicinity, the airport is often perceived

as a poor neighbor—generating noise, traffic congestion, and other annoyances for the surrounding communities. Residents may oppose plans for

airport expansion that would increase any of these

problems.

This is not to say that expansion of a major airport is impossible. St. Louis Lambert, for instance,

greatly increased airside and terminal capacity

over a period of 5 years through development of

an existing location. Improvements included

lengthening existing runways and taxiways, terminal expansion, and construction of new gates.

A major factor was the Environs Plan, a program

to mitigate noise problems by installing sound insulation in residential buildings and purchasing

property to serve as a noise buffer zone.

Chicago O’Hare is beginning a major expansion of terminal facilities, which will include constructing new loading gates and ramp areas and

rebuilding parts of the taxiway system. At one

time, construction of an additional runway was

also considered, but then dropped in later planning stages. Studies indicated that an additional

parallel runway would not provide a capacity increase great enough to justify the high cost. Historically, congestion problems at O’Hare have primarily been due to lack of gate space. The new

runway would have required land acquisition and

relocation of buildings. It would also have generated additional noise and led inevitably to conflicts with airport neighbors.

Expansion is expensive. At St. Louis, the noise

abatement program alone (without which the expansion probably would not have been possible)

is expected to cost about $50 million over a 20-

year period. The expansion of Chicago O’Hare

is expected to cost about $1 billion. Adding the

new runway would have increased the cost by 25

percent.

Building a new airport far enough from populous areas to avoid noise problems and to take

advantage of lower land prices is a desirable alternative. Ideally, the new airport site should be large

enough to provide both room for growth and extensive buffer zones to protect it from encroaching

urban development—a tract of many thousands

of acres. The Dallas-Fort Worth airport covers an

area of 17,600 acres and has agreements protecting an additional 4,000 acres; but, even there,

noise is an issue as incompatible urban development moves closer to the airport.

In many metropolitan areas, a suitable tract of

land might be distant from the city center, making ground access a problem. In selecting a distant site, several questions arise. If a new airport

is a supplement to, rather than a substitute for,

the existing airport, would passengers be willing

to travel that far to use it? Would air carriers be

willing to serve an airport that might attract fewer

passengers than the old airport? That the answer

to these questions can sometimes be “no” is demonstrated in the case of Dunes and National airports in Washington, DC.
34 . Airport System Development

Because of the increasing public concern about

aircraft noise, community reaction against the

possible siting of an airport has presented problems even in relatively underpopulated areas. The

expansion of Lambert airport was made necessary

because of the collapse of plans to build another

airport outside of St. Louis. The vigorous opposition by citizen groups and local governments surrounding the proposed new site was a major factor in the decision not to build a new airport. This

concern affects not only sites for commercial airports but also for GA and relievers airports.

Difficult as it is to find land for new airports,

the task is becoming increasingly imperative in

some cities. Many observers are pessimistic about

the likelihood of constructing new major airports.

The FAA, in the 1981 National Airspace System

Plan, states that: “few new air carrier airports are

anticipated and most major airports have limited

AIRCRAFT NOISE

Aviation noise is a fact of life at today’s airports and a major, perhaps the major, constraint

on airport expansion and development. Citizens

living around airports have complained that aviation noise is annoying, disturbs sleep, interferes

with conversation, and generally detracts from

the enjoyable use of property. There is increasing evidence that high exposure to noise has

adverse psychological and physiological effects.

People repeatedly exposed to loud noises may exhibit high stress levels, nervous tension, and inability to concentrate.

Conflicts between airports and their neighbors

have occurred since the early days of aviation,

but airport noise became a more serious issue with

the introduction of commercial jet aircraft in the

1960’s. FAA estimates that the land area affected

by aviation noise increased about sevenfold between 1960 and 1970. Even with this increase, the

actual number of people affected by aviation noise

is relatively small. It has been estimated that 6

million to 7 million people in the United States

(under 5 percent of the population) experience significant annoyance due to aviation noise; about

10 percent of these people live in areas of severe

noise impact .13

become a major

nities.

Nevertheless,

political issue

airport noise has

in certain commuNew aircraft are much quieter than earlier jets,

and the noise levels at the busiest large airports

have been reduced to the point that community

opposition has abated in some instances, Denver,

Atlanta, Houston, and Dallas-Fort Worth have

been able to secure community agreement to proceed with airport expansion projects, including

new runways. Expansion of terminal buildings,

which implies an increase in air traffic, has also

been accepted in New York and Chicago. On the

other hand, noise levels threaten to increase as

jet traffic is introduced at secondary airports

in some metropolitan areas. Santa Ana (John

Wayne) and Westchester County are notable examples of airports where the surrounding communities are pressing for curfews and other airport use restrictions.

Another trend that may intensify the noise

issue is continuation of residential encroachment

around airports. As more people come to live in

13Norman Ahford and Paul H. Wright, Airport Engineering (New

York: John Wiley & Sons, 1979).
Ch. 2—Organizations and Institutions ● 3 5

Photo credit: EPA-Documerica, Michael Philip Manheim

Homes under the approach path to Boston Logan

noise impact areas, the opportunities for annoyance increase. Equally important, the public has

become more sensitive to the issue, and it has

become highly politicized. Airport neighbors have

sued airports for mental anguish as well as the

reduced property values related to noise exposure.

Airport operators have begun to adopt noise

abatement and mitigation measures so as to reduce their liability and protect themselves in legal

proceedings. The noise issue has been instrumental

in slowing or stopping several airport expansion

programs.

Federal Responsibilities

FAA’s role is defined in a 1968 amendment to

the Federal Aviation Act of 1958.14 The amendment charges the FAA Administrator to “prescribe

and amend such rules and regulations as he may

find necessary to provide for the control and

abatement of aircraft noise and the sonic boom. ”

FAA has worked to alleviate noise by controlling

the source—i. e., quieting the aircraft and its engine. Federal Aviation Regulations (FAR) Part 36

establishes noise standards for newly manufactured aircraft engines. Air carriers are replacing

noisy aircraft with new ones meeting these standards, so that noncomplying commercial aircraft

1449 LJ. S.C. 1301 et. seq.

will eventually be phased out of the fleet. FAA

has controlled sonic boom by prohibiting supersonic operations over land by civil aircraft. Military supersonic flights continue, but in a carefully

controlled manner.

FAA has established guidelines for measurement of noise and suggested a procedure for carrying out local noise studies and abatement programs. Because FAA also has the authority and

responsibility to control aircraft in flight and to

prescribe flight paths, it assists local airport operators in developing noise mitigation procedures

to suit their area.

FAA has been reluctant to impose a specific

Federal standard for airport noise, as this might

expose the Federal Government to liability for

damages if the standard were to be exceeded. Current policy is that FAA shares responsibility for

noise abatement, but does not bear liability. Recent statements by the FAA Administrator and

the Secretary of Transportation have reemphasized that local governments and airport operators must take the lead in reducing airport noise.

On the other hand, FAA discourages the proliferation of stringent local rules which may have a constraining effect on airport capacity or on interstate

commerce.

Measurement of Noise

There are several methods for measuring aircraft noise and its effect on a community. The

level of sound can be measured objectively; but

noise—unwanted sound—is a very subjective

matter, both because the human ear is more sensitive to some frequencies than others and because

the degree of annoyance associated with a noise

can be influenced by psychological factors such

as the hearer’s attitude or the type of activity in

which engaged. Techniques have been developed

to measure single events measured in units such

as dBA (A-weighted sound level in decibels) or

EPNdB (Effective Perceived Noise Decibels).

These measure the level of noise in objective

terms, giving extra weight to those sound frequencies that are most annoying to the human ear.

In some cases, annoyance is due not only to

intensity of a single event, but to the cumulative

effects of exposure to noise throughout the day.
36 ● Airport System Development

Methods to measure this effect objectively include

aggregating single event measures to give a cumulative noise profile by means of such techniques

as the Noise Exposure Forecast (NEF), the Community Noise Equivalent Level (CNEL), and the

Day-Night Average Sound Level (Ldn). FM uses

EPNdB to measure single event aircraft noise as

part of its aircraft certification process. FAA has

established dbA as the single event unit and the

Ldn system as the standard measure of cumulative noise exposure to be used by airports in the

preparation of noise abatement studies.

FAA has suggested, but not mandated, guidelines for determining land uses that are compatible with a given Ldn level. Ideally, residential uses

should be located in areas below 65 Ldn. In the

high noise impact areas (Ldn 80 to 85 or more)

FAA suggests that parking, transportation facilities, mining and extraction, and similar activities are the most compatible (see table 8).

Noise and Land Use

The problem of aviation noise is intimately connected with the question of land use since one of

the most effective insulators against annoying

sound is distance. If possible, an airport should

be surrounded by a noise buffer area of vacant

or forested land, and the private property near

the high noise impact area (e.g., under approach

and departure paths and near aeronautical surfaces) should be used for activities that are less

sensitive to noise—agriculture, highway interchanges, manufacturing, and other activities

where a high level of ambient noise does not detract from performance. Unfortunately, many airports are surrounded by buildings devoted to incompatible activities—e.g., residences, schools,

and auditoriums.

Zoning and land use planning are responsibilities of local governments. In many cases these

governments have been unable or unwilling to

provide mutual protection for airports and residential development. Land is a scarce resource in

urban areas; and where there is great demand for

housing and shopping centers, underutilized land

around airports becomes extremely valuable.

Even where local governments have enacted zoning ordinances to prevent encroachment, developers have been able to gain waivers. The tax

revenues generated by the higher land uses may

seem more important to city governments than

the long-range need to protect the airport and the

residential areas from one another. In some cases,

local governments trying to enforce zoning rules

have had them overturned when developers contested them in court.

At least part of the problem is ineffective intergovernmental cooperation. Few airports are located entirely within the borders of the municipality that owns and operates the facility.

Surrounding municipalities may have conflicting

practices, priorities, and philosophies of government; and each has separate zoning authority. For

instance, St. Louis-Lambert Airport is surrounded

by 29 municipalities, and Dallas-Fort Worth by

10. A municipality that owns an airport perceives

advantages and disadvantages, and it must weigh

the economic benefits of the airport against the

problems of noise. A municipality that merely

borders on an airport may see only disadvantages.

Further, because the airport operator has sole

liability for damage due to airport noise, some

surrounding municipalities have felt little need to

enforce zoning rules when complaints will not be

directed to them but to the municipality that owns

and operates the airport.

Even where sound intergovernmental agreements on zoning have been developed, time can

erode them. When Dallas-Fort Worth airport was

being planned and built, the surrounding municipalities developed agreements on zoning that

were viewed as models of intergovernmental cooperation and coordination. Over the intervening years, there have been changes in local government, in priorities, and in the local economy.

There is now encroaching development such that

Dallas-Fort Worth now has noise problems, despite its huge 17,600-acre size.

Local Noise Abatement Programs

While aircraft are the source of noise at airports, aircraft operators are not liable for damage caused by noise. The courts have determined

that the sole legal liability for aircraft noise rests

with the airport operator. The Federal Government, by law and administrative action, has
Ch. 2—Organizations and Institutions ● 3 7

Table 8.—Land Use Compatibility With Yearly Day-Night Average Sound Levels

Yearly day-night average sound level (Ldn) in decibels

Land use <65 65-70 70-75 75-80 80-85 >85

Residential:

Residential, other than mobile homes and transient lodgings . . . . . . . .

Mobile home parks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Transient lodgings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . , . . . . . . . . .

Public use:

Schools, hospitals and nursing homes . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Churches, auditoriums, and concert halls . . . . . . . . . . . . . . . . . . . . ., . . .

Governmental services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Transportation . . . . . . . . . . . . . . . . . . . . , . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Parking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Commercial use:

Offices, business and professional . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Wholesale and retail—building materials, hardware and farm

equipment, . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..., . . . . . .

Retail trade—general . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Utilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Communication . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Manufacturing and production:

Manufacturing, general . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Photographic and optical . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Agriculture (except Livestock) and forestry . . . . . . . . . . . . . . . . . . . . . . . . .

Livestock farming and breeding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Mining and fishing, resource production and extraction . . . . . . . . . . . . .

Recreational:

Outdoor sports arenas and spectator sports . . . . . . . . . . . . . . . . . . . . . . .

Outdoor music shells, amphitheaters . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Nature exhibits and zoos . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Amusements, parks, resorts and camps . . . . . . . . . . . . . . . . . . . . . . . . . . .

Golf courses, riding stables and water recreation . . . . . . . . . . . . . . . . . . .

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

N

a

N

N

a

25

25

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Yf

Y’

Y

Y

e

N

Y

Y

Y

N

a

N

N

a

30

30

25

Y

b

Y

b

25

Y

b

25

Yb

25

Y

b

25

yLl

y~

Y

Y

e

N

N

Y

25

N

N

N

a

N

N

30

Y

c

Y

c

30

Y

c

30

Y

c

30

Y

c

30

Y

e

N

Y

N

N

N

N

30

N

N

N

N

N

N

Y

d

Y

d

N

Y

d

N

Y

d

N

Y

d

N

Y

h

N

Y

N

N

N

N

N

N

N

N

N

N

N

Y

d

N

N

N

N

N

N

N

N

Y

h

N

Y

N

N

N

N

N

preempted control of aircraft in flight. Because

the Federal Government is immune from suit

(without its consent) and because the aircraft operate under Federal regulation, litigants with complaints about aircraft noise have no recourse but

to the airport operator. Courts have consistently

held that the airport proprietor has the authority

to control the location, orientation, and size of

the airport and from that authority flows the

liability for the consequences of its operation, including the responsibility to protect citizens from

residual noise. Litigants have used various ap-
38 Airport System Development

preaches in suing airports and have collected

damages on the grounds of trespass, nuisance, and

inverse condemnation.

Balancing their extensive exposure to liability

claims, airport operators have some authority—

albeit limited—to control the use of their airports

in order to reduce noise. Basically, any restriction of operations at the airport must be nondiscriminatory. Further, no airport may impose

a restriction that unduly burdens interstate commerce. The definition of “undue burden” is not

precise, and restrictions at individual airports

must be reviewed on a case-by-case basis. RestricPhoto credt: Oorn McGr8fh, Jr.

Noise contour map

tions must be meaningful and reasonable—i.e.,

a restriction adopted to reduce noise should actually have the effect of reducing noise. Finally,

local restrictions must not interfere with safety or

the Federal prerogative to control aircraft in the

navigable airspace.

Under FAR Part 150, airport operators can

undertake noise compatibility studies to determine

the extent and nature of the noise problem at a

given airport. They can develop noise exposure

maps indicating the contours within which noise

exposure is greater than a permissible level. They

can identify the noncompatible land uses within

those contours and develop a plan for mitigating

present problems and preventing future ones. Unfortunately, the airport operator’s ability to prevent future problems is usually very limited.

Unless the airport actually owns the land in question, the authority to make sure it is reserved for

a compatible use is usually in the hands of a municipal zoning commission.

Many of these noise abatement programs allowed under current legislation are eligible for

Federal aid. They include:

●

●

●

●

●

●

●

takeoff and landing procedures to abate noise

and preferential runway use to avoid noisesensitive areas (which must be developed in

cooperation with and approved by FAA);

construction of sound barriers and soundproofing of buildings;

acquisition of land and interests therein, such

as easements, air rights, and development

rights to ensure uses compatible with airport

operation;

complete or partial curfews;

denial of airport use to aircraft types or

classes not meeting Federal noise standards;

capacity limitations based on the relative

noisiness of different types of aircraft; and

differential landing fees based on FAA-certificated noise levels or on time of arrival and

departure.ls
Ch. 2—Organizations and /institutions 39

FAA provides assistance to airport operators

and air carriers in establishing or modif ying flight

paths to avoid noise-sensitive areas. In some cases,

aircraft can be directed to use only certain runways, to stay above minimum altitudes, or to approach and depart over lakes, bays, rivers, or industrial areas rather than residential areas.

Procedures may be developed to scatter the noise

over several communities through some “equitable”

rotation program. These noise-abatement procedures can have a negative effect on airport capacity. They may require circuitous routing of aircraft or use of a runway configuration that is less

than optimum with respect to capacity.

Restrictions on airport access or on the number of operations have an even more deleterious

effect on airport capacity. One form of restriction is the night curfew, which effectively shuts

down the airport during certain hours. Only a few

airports have officially instituted curfews. One

such is Washington National Airport, which has

a curfew based on FAA-certificated noise standards. Aircraft with noise ratings over 72 dbA on

takeoff or 85 dbA on approach may not use the

airport between 10:00 p.m. and 7:00 a.m. This

eliminates nearly all jet operations. Some other

airports have reached informal agreements with

carriers to refrain from operations after a certain

hour, and some, like Cleveland, impose a curfew

by not supplying jet fuel at night.

Air carriers are concerned about the spread of

curfews as a noise abatement tool because they

can play havoc with airline scheduling and reduce

the capacity of the entire national airport system.

Imposition of curfews at even two or three major airports on the east and west coast could reduce the “scheduling window” for transcontinental flights to only 4 or 5 hours daily (see fig. 3)

and would also affect flights within each region.

Curfews are especially threatening to air cargo

operators, whose business is typically conducted

at night. Some see widespread imposition of curfews as a burden on interstate commerce, and

hence unconstitutional.

Other types of airport access restrictions—

excluding certain aircraft types, instituting special

Photo credit: Dorn McGrath, Jr

Land bought and cleared of houses at Playa del Rey, west of Los Angeles

25-420 0 - 84 - 4
40 ● Airport System Development

Figure 3.—Effects of Curfews on Scheduling Transcontinental Service

Departure time Eastbound nonstop ~ Arrival tim e

west coast 5+ hours and 3 time zones east coast

8

f i

4

Open for 10 scheduling nonstops 6

Noon 8

Curfew

10 pm—7 am

west coast

airports

Midn

10

Midnight

2

4

6

Curfew

10 pm—7 am

east coast

airports

8

10

Noon

2

3

fees for noncomplying aircraft, or establishing

hourly limits based on a “noise budget’’—are subject to the legal tests of nondiscrimination and

reasonableness. For example, the ban on jet aircraft instituted at Santa Monica airport was struck

down by the court in 1979 because many newtechnology jet aircraft that would have been

banned by such a rule are quieter than the propeller-driven aircraft that would have been allowed to operate. A later ordinance by the city,

banning operations by aircraft with a single-event

noise rating of 76 dBA, was upheld. The court

rejected the argument that enforcement of a local

standard violates Federal preemption .16 On the

other hand, a Federal court struck down in 1983

the curfew-quota system in effect at Westchester

County airport in New York. Under that system,

an average of only six aircraft with noise ratings

above 76 dBA were permitted to land between the

hours of midnight and 6:30 a.m.
Ch. 2—Organizations and Institutions 41

ing those markets. According to

mates, such acceleration would be

nancial means of many airlines.

Federal funds are available to

Boeing’s estibeyond the fiassist airport

operators in soundproofing buildings or buying

noise-impacted land. Usually, these are extremely

expensive remedial measures, but a number of airports have been forced to undertake them. St.

Louis Lambert Airport expects to spend about $50

million over the next 20 years under its Environs

Plan. The airport has soundproofed some buildings and returned them to public use. In other

cases, it has purchased land and resold it for more

compatible use. In some cases, the land was

“sterilized,” that is, the buildings were torn down

and the land left vacant as a noise buffer zone.
Chapter 3

THE PROBLEM OF

CAPACITY AND DELAY

 -

1 Photo credlf Federal Avlatlon Admlnfsfratfon I
Contents

Page

Capacity, Demand, and Delay . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4S

Capacity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46

Delay . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46

Factors Affecting Capacity and Delay . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48

Airfield Characteristics. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48

Airspace Characteristics. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48

Air Traffic Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48

Meteorological Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

Demand Characteristics. , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

Measurement of Delay . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50

Cost of Delay . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54

List of Tables

Table No. Page

9. Air Carrier Delays Reported to NASCOM, 1976-83 . . . . . . . . . . . . . . . . . . . . . . 51

10. SDRS Trends, 1976-82 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52

11. Distribution of SDRS Delay Time by Flight Phase, September 1982.. . . . . . . 52

12. Delay at Selected Airports, 1982 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53

List of Figures

Figure No. Page

4. Theoretical Relationship of Capacity and Delay . . . . . . . . . . . . . . . . . . . . . . . . . . 46

5. Relationship Between Throughput and Practical Capacity . . . . . . . . . . . . . . . . . . 47

6. Typical Probability Distribution of Aircraft Delay . . . . . . . . . . . . . . . . . . . . . . . . 47
Chapter 3

THE PROBLEM OF

CAPACITY AND DELAY

A major concern of airport users and operators is delay. Flights cannot be started or completed on schedule because of the queue of aircraft awaiting their turn for takeoff, landing, or

use of taxiways and gates at terminal buildings.

These delays translate into increased operating

costs for airport users and wasted time for passengers. The cause for this delay is commonly referred to as a “lack of capacity,” meaning that the

airport does not have facilities such as runways,

taxiways, or gates in sufficient number to accommodate all those who want to use the airport at

peak periods of demand.

The solutions generally advocated by airport

operators, airlines, and the Federal Aviation

Administration (FAA) are to build additional facilities at crowded airports or to find ways to

make more efficient use of existing facilities. The

latter course is viewed as attractive because it requires less capital investment and avoids many

of the problems associated with increasing the size

of the airport and infringing on the surrounding

communities. A third course advocated by some

is not to increase capacity but to manage demand

by channeling it to offpeak times or to alternate

sites. The rationale underlying all these approaches

is that capacity and demand must somehow be

brought into equilibrium in order to prevent or

reduce delay.

The relationship of capacity, demand, and delay is considerably more complex than the foregoing suggests. Before addressing solutions, it is necessary to look more closely at matters of definition

and to examine how and where delays occur. It

is also necessary to look at specific airports where

delays are now being encountered to obtain a

clearer picture of the severity of the problem and

the points at which it could be attacked.

CAPACITY, DEMAND, AND DELAY

Capacity generally refers to the ability of an

airport to handle a given volume of traffic (demand)—i.e., it is a limit that cannot be exceeded

without incurring an operational penalty.1 As demand for the use of an airport approaches this

limit, queues of users awaiting service begin to

develop, and they experience delay. Generally

speaking, the higher the demand in relation to

capacity, the longer the queues and the greater

the delay.

De Neufville explains the relationship of capacity, demand, and delay thus:

The performance of a service system is, indeed,

sensitive to the pattern of loads especially when

they approach its capacity. The capacity of a service facility is, thus, not at all similar to our notion of capacity in everyday life, that is, the volume that a bottle or other vessel can hold. A

bottle will accommodate any amount of liquid up

to its capacity equally well; and after that, it can

hold no more. A service facility, on the other

hand, does not provide equal service at all times;

its service rapidly deteriorates as traffic nears

capacity. A service facility, can, furthermore,

eventually handle more than its immediate capacity by delaying traffic until an opportunity for

service exists. z

The illustration of this theoretical relationship

in figure 4 shows that delay is not a phenomenon

occurring only at the limit of capacity. Some

amount of delay will be experienced long before

capacity is reached, and it grows exponentially

as demand increases.3

‘R. De Neufville, Airport Systems Planning (London: Macmillan,

1976), p. 135.

3The term congestion, referring to the condition where demand

approaches or exceeds capacity, is not commonly defined in the

technical literature and is used in this report only as a qualitative

descriptor of a situation where demand is high in relation to capacity.

45
46 . Airport System Development

Figure 4.—Theoretical Relationship of Capacity

and Delay

Demand (number of operations)

SOURCE: Office of Technology Assessment,

Capacity

There are two commonly used definitions of

airfield capacity: “throughput” and “practical

capacity. ” The throughput definition of capacity

is the rate at which aircraft can be handled—i. e.,

brought into or out of the airfield, without regard

to any delay they might incur. This definition

assumes that aircraft will always be present waiting to take off or land, and capacity is measured

in terms of the number of such operations that

can be accomplished in a given period of time.

Practical capacity is the number of operations

(takeoffs and landings) that can be accommodated

with no more than a given amount of delay,

usually expressed in terms of maximum acceptable average delay. Practical Hourly Capacity

(PHOCAP) and Practical Annual Capacity (PANCAP) are two commonly used measures based on

this definition.4 PANCAP, for example, is defined

as that level of operations which results in not

more than 4 minutes average delay per aircraft

in the normal peak 2-hour operating period.5

4Airfield and Airspace Capacity/Delay Policy Analysis, FAAAPO-81-14 (Washington, DC: Federal Aviation Administration, Office of Aviation Policy and Plans, December 1981).

5Airside Capacity Criteria Used in Preparing the National Airport pLAN, AC 150/5060-lA (Washington, DC: Federal Aviation Administration, July 1968).

Delay

Delays occur on the airfield whenever two or

more aircraft seek to use a runway, taxiway, gate,

or any other airside facility at the same time. One

must wait while the other is accommodated. If

all users of the airfield sought service at evenly

spaced intervals, the airfield could accommodate

them at a rate determined solely by the time required to move them through the facility.

Aircraft, however, arrive and leave not at a uniform rate but somewhat randomly, which means

that delay can occur even when demand is low

in relation to capacity. Further, the probability

of simultaneous need for service increases rapidly

with traffic density, so that the average delay per

aircraft increases exponentially as demand approaches throughput capacity. When demand exceeds capacity, there is an accumulation of aircraft awaiting service that is directly proportional

to the excess of demand over capacity. For example, if the throughput capacity of an airfield

is 60 operations per hour and the demand rate is

running at 70 operations per hour, each hour will

add 10 aircraft to the queue awaiting service and

10 minutes to the delay for any subsequent aircraft seeking service. Even if demand later drops

to 40 operations per hour, delays will persist for

some time since the queues can be depleted at a

rate of only 20 aircraft per hour.

Figures indicates the relationship between practical and throughput capacity. As demand approaches the limit of throughput capacity, delays

increase sharply and, theoretically, become infinite when demand equals or exceeds throughput capacity. Practical capacity, which is always

less than throughput capacity, is that level of airfield utilization which can be attained with no

more than some acceptable amount of delay.

The acceptability of delay is the key to the concept of practical capacity. Unlike throughput

capacity, which can be objectively determined by

analysis of airfield components and traffic patterns, practical capacity is value judgment-a consensus among airport users and operators—about

how much delay they can tolerate.

Although practical capacity is usually stated in

terms of an average figure, the acceptability of
Ch. 3—The Problem of Capacity and Delay . 47

As demand approaches

delay is actually determined not so much by the

average but by the probability that the delay for

a given aircraft will be greater than some amount.

Just as demand tends to be nonuniformly distributed, so, too, is delay. Figure 6 shows a typical

distribution of delays encountered by aircraft at

a particular level of demand. Note that most delays are of short duration and that, even though

Figure 5.— Relationship Between Throughput and

Practical Capacity

/

I

I

I

Maximum acceptable

delay -———- -- —---- ---

Demand (number of operations)

SOURCE: Office of Technology Assessment,

r-,

Photo credif Federa/ Aviation Administration

capacity, queues develop

the average delay is low (5 minutes), there are a

few aircraft encountering relatively long delays

of 15 minutes or more. Thus, while practical

capacity is usually specified as that level of operations which—on average—will result in a given

amount of delay, it is understood that the average implies that some percentage of delays will

be considerably longer.

Figure 6.–Typical Probability

Aircraft Delay

Distribution of

Average delay per

~ aircraft (5 min.)

I c s I v

Delay per aircraft (minutes)

SOURCE: Office of Technology Assessment
 . Airport System Development

How much delay is acceptable? This is a judgment involving three factors. First, it must be recognized that some delay is unavoidable since it

occurs for reasons beyond anyone’s control—

wind direction, weather, aircraft performance

characteristics, the randomness of demand for

service. Second, some delay, though avoidable,

might be too expensive to eliminate—i.e., the cost

of remedial measures might exceed the potential

benefit. Third, even with the most vigorous and

successful effort, the random nature of delay

means that there will always be some aircraft encountering delay greater than some “acceptable”

length. Thus, acceptable delay is essentially a policy decision about the tolerability of delay being

longer than some specified amount, taking into

account the technical feasibility and economic

practicality of available remedies. b

bAirfie/d and Airspace Capacity/Delay Policy Analysis, op. cit.

FACTORS AFFECTING CAPACITY AND DELAY

The capacity of an airfield is not constant over

time; it may vary considerably during the day or

the year as a result of physical and operational

factors such as airfield and airspace geometry,

air traffic control rules and procedures, weather,

and traffic mix. When a figure is given for airfield capacity, it is usually an average based either

on some assumed range of conditions or on actual operating experience.

In fact, it is the variability of capacity, rather

than its average value, that is more detrimental

to the overall operation of an airfield. Much of

the strategy for successful management of an airfield involves devising ways to compensate for

factors that, individually or in combination, act

to lower capacity or to induce delay. These factors can be grouped in five categories.

Airfield Characteristics

The physical characteristics and layout of runways, taxiways, and aprons are basic determinants of the ability to accommodate various types

of aircraft and the rate at which they can be handled. Also important is the type of equipment

(lighting, navigation aids, radar, and the like) installed on the airfield as a whole or on particular

segments. For any given configuration of runways

and taxiways in use, capacity is constant. Capacity varies, however, as configurations change,

Airspace Characteristics

The situation of the airfield in relation to other

nearby airports and in relation to natural obstacles

and features of the built environment determines

the paths through the airspace that can be taken

to and from the airport. Basically, the airspace

geometry for a given airfield does not change over

time. However, when there are two or more airports in proximity, operations at one airport can

interfere with operations at another, causing the

acceptance rate of one or both airports to suffer

or requiring aircraft to fly circuitous routes to

avoid conflict. In some cases, the interdependence

of approach and departure paths for nearby airports can force one to hold departures until arrivals at the other have cleared the airspace or necessitate that each leave gaps in the arrival or

departure streams to accommodate traffic at the

other.

Air Traffic Control

The rules and procedures of air traffic control,

intended primarily to assure safety of flight, are

basic determinants of airfield capacity and delay.

The rules governing aircraft separation, runway

occupancy, spacing of arrivals and departures,

and the use of parallel or converging runways can

have an overall effect on throughput or can induce delays between successive operations. ATC

rules and procedures have an especially important influence on capacity and delay at airfields

where two or three runways may be in use at the

same time or where there may be several arrival

streams that must be merged on one final approach path.

A related factor affecting delay is the noiseabatement procedures adopted by FAA and by

local airport authorities. These usually take the

form of restrictions on flight paths over noise-
Ch. 3—The Problem of Capacity and Delay 49

sensitive areas or reduction (or outright prohibition) of operations during certain hours. These

noise-control measures can have an adverse effect on capacity. For example, the runway configuration with the highest capacity may not be

usable at certain times because it leads to unacceptably high noise levels in surrounding areas.

Similarly, some noise-abatement procedures involve circuitous flight paths that may increase delays. The airport must thus make a tradeoff between usable capacity and noise control, with the

usual result being some loss of capacity or increase

of delay.

Meteorological Conditions

Airport capacity is usually highest in clear

weather, when visibility is at its best. Fog, low

ceilings, precipitation, strong winds, or accumulations of snow or ice on the runway can cut capacity severely or close the airport altogether.

Even a common occurrence like a wind shift can

disrupt operations while traffic is rerouted to a

different pattern; if the new pattern is not optimum, capacity can be reduced for as long as the

wind prevails. A large airport with multiple runways might have 30 or more possible patterns of

use, some of which might have a substantially

lower capacity than the others.

For most airports, it is the combined effect of

weather, runway configuration, and ATC rules

and procedures that results in the most severe loss

of capacity or the longest delay queues. In fact,

much of the effort to reduce delays at these airports, through airfield management strategy and

installation of improved technology, is aimed at

minimizing the disparity between VMC and IMC

capacity. 7

Demand Characteristics

Demand—not only the number of aircraft seeking service, but also their performance character7Visual Meteorological Conditions (VMC) are those in which atmospheric conditions permit pilots to approach, land, or take off

by visual reference and to see and avoid other aircraft. Instrument

Meteorological Conditions (IMC) are those in which other aircraft

cannot be seen and safe separation must be assured solely by ATC

rules and procedures. Under IMC, pilots must also rely on instruments for navigation and guidance to the runway.

istics and the manner in which they use the airport—has an important effect on capacity and

delay. The basic relationship among demand,

capacity, and delay described earlier is that as

demand approaches capacity, delays increase

sharply. But, for any given level of demand, the

mix of aircraft with respect to speed, size, flight

characteristics, and pilot proficiency will also determine the rate at which they can be handled and

the delays that might result. Mismatches of speed

or size between successive aircraft in the arrival

stream, for example, can force air traffic controllers to increase separation, thus reducing the

rate at which aircraft can be cleared over the runway threshold or off the runway.

For any given level of demand, the distribution

of arrivals and departures and the extent to which

they are bunched rather than uniformly spaced

also determines the delay that will be encountered.

In part, this tendency of traffic to peak at certain

times is a function of the nature of the flights using

the airport. For example, at airports with a high

proportion of hub-and-spoke operations, where

passengers land at the airport only to transfer to

another flight, the traffic pattern is characterized

by closely spaced blocks of arrivals and departures. Accommodating this pattern can cause

much greater delays than if arriving and departing flights are spread and more uniformly intermixed.

Photo credit Federal Av/a//on Administration

Much delay is in the terminal
50 ● Airport System Development

MEASUREMENT OF DELAY

FAA regularly collects and analyzes data on

delay, which are maintained in four data bases.8

The most extensive data base is that maintained

by the National Airspace Command Center

(NASCOM). It is made up of daily reports from

controllers at about 60 major airports and contains information on the number of delays, the

time of beginning and end, and judgments by controllers about the primary and secondary causes.

The principal value of NASCOM is that it allows

FAA to monitor general trends of delay at major

airports on a continuous basis. The subjective

nature of controller reports limits the value of

NASCOM data in analyzing the causes of delay.

The Standard Air Carrier Delay Reporting System (SDRS) contains reports from American,

Eastern, and United Air Lines on their entire systems and at 32 specific airports (about 13 percent

of all air carrier operations). SDRS provides data

on the flight phase where delays are incurred (taxiout, taxi-in, at gate, and airborne), measured

against a standard ground time and a computerprojected flight time. The cause of delay is not

reported. Like NASCOM, SDRS is used principally to monitor trends in delay on a daily basis.

The Performance Measurement System (PMS)

is similar in structure to NASCOM, except that

it is maintained manually rather than on a computer. Delays of 15 minutes or longer are reported

by controllers at about 20 airports. A fourth delay monitoring system, developed by the FAA Office of Systems Engineering Management (OSEM),

uses data from the Civil Aeronautics Board on

operational times actually experienced by air carrier flights. Delay is measured by OSEM as the

difference between an arbitrary standard flight

time and the actual time reported for each flight.

All of these delay measurement and reporting

systems suffer from basic faults. NASCOM and

PMS are based on controller reports, and the

quality and completeness of reporting vary considerably with controller workload. Further,

NASCOM and PMS include only the longer delays (30 minutes or more for NASCOM, 15 min-

‘Airfield and Airspace Capacity/Delay Policy Analysis, op. cit.,

pp. 32-35.

utes or more for PMS).9 Since delay is a highly

skewed distribution, measuring only the “tail” of

the distribution produces a distorted picture of the

incidence and magnitude of delay. It is impossible to infer the true value of average delay from

such extreme statistics, and both NASCOM and

PMS probably exaggerate mean delay by a substantial margin.

All four FAA data bases measure delay against

the standard of flight times published in the Official Airline Guide. This, too, probably results in

an overestimation of delay since there is wide

variation in the “no-delay” time from airport to

airport and, at a given airport, among various

runway configurations. Many operations, when

measured against a single nominal standard, are

counted as delays but are, in fact, within the normal expectancy for a given airport under given

circumstances. There may also be a distortion in

the opposite direction. Most airline schedules—

especially for flights into and out of busy airports—have a built-in allowance for delay. In part

this is simply realistic planning, but there is also

a tendency to inflate published flight times so as

to maintain a public image of on-time operation,

Finally, all the delay measuring systems incorporate whatever delay may be experienced en

route. Delays en route may not be attributable

to conditions at the airport; and including them

in the total for airports probably leads to overestimation.

While it is clear from the data that delays do

occur at many airports, it is probably true also

that actual delay is not as great as FAA data bases

indicate, either in terms of the number of aircraft

delayed or the average length of delay. The following estimates, based on FAA data, should

therefore be interpreted with caution. They afford

the best available picture of the pattern of delay,

‘At the beginning of 1982, the threshold for reporting delay in

the NASCOM system was lowered to 15 minutes. While this makes

the NASCOM and PMS data bases more compatible, it prevents

direct comparison with NASCOM data from previous years when

only delays of 30 minutes or more were reported. As a rule of thumb,

FAA estimates that changing the definition of reportable delay from

30 to 15 minutes increased the number of recorded delays by a factor of between 2 and 3.
Ch. 3—The Problem of Capacity and Delay ● 5 1

but they almost certainly overstate the length of

average delay and the number of air carrier operations affected. It may also be that, because some

are based on subjective reports, the cause of delay is not correctly attributed. ’”

NASCOM data for 1976 through 1983 (table

9) indicate that, through the first half of 1981,

roughly 80 percent of all delays were due to

weather, which either forced temporary closing

of the airport or required that operations be conducted under Instrument Flight Rules (which usually entail greater separation than under Visual

Flight Rules) in order to assure safety. The next

largest category of delay was also weather-related

(weather and equipment failures), typically occurring when landing aids required for instrument

operations malfunction or are otherwise unavailable at a time when visibility is reduced by rain,

fog, or snow. Delays caused by traffic volume in

excess of throughput capacity typically accounted

for about 6 percent of all delays reported by

NASCOM. Nearly all volume-related delays (over

95 percent) were at the departure airport.

Since 1981, the pattern of causality suggested

by NASCOM data is somewhat confused by two

factors. First, the requirement for reporting delays to NASCOM was lowered from 30 to 15

minutes. Thus, part of the sharp increase in the

number of delays in the past 2 years is simply an

artifact of the reporting procedure. FAA estimates

that this factor alone has led to as much as a threefold increase in the number of reported delays.

A second factor contributing to more reported delays is the imposition of flow control procedures

by FAA, initially to cope with the effects of the

strike by air traffic controllers in August 1981 and

now to prevent overloading of certain airports at

peak periods. Flow control delays (which are

volume-related delays) accounted for over half of

all delays in 1982 and were running at slightly less

than one-quarter of all delays for the first 6

months of 1983, Flow control shifts the phase of

flight where delays occur, under the rationale that

Table 9.–Air Carrier Delays Reported to NASCOM, 1976-83

Jan.-July Jan.-June

1976 1977 1978 1979 1980 1981 a1981 b

1982’ 1983C

Total delays. . . . . . . . . . . . .

Percent due to:

Weather . . . . . . . . . . . . . .

Equipment failures. . . . .

Weather and

equipment failures . . .

Runway closed for

construction . . . . . . .

Traffic volumed 

. . . . . . . .

Other causes. . . . . . . . . .

Flow controle 

. . . . . . . . .

Total air carrier

operations (millions) . . .

Delays (per 1,000

operations) . . . . . . . . . . .

36,196

76

4

11

1

5

3

—

9.57

3.8

39,063

83

2

5

3

2

4

—

9.88

3.9

52,239

79

7

3

3

5

3

—

10.21

5.6

61,598

84

3

4

3

4

2

—

10.33

6.0

57,544

78

4

6

3

4

5

—

9.96

5.8

-- - .- -- --- --- -- . -- -- 39,24/

80

4

5

1

6

3

—

4.94f

7.9

95,352 322,321

46 35

3 1

3 1

1 1

3 4

45 1 — 57

9.34 9.16

10.3 35.2

IUY, [81

63

1

3

2

8

0

23

4.85f

22.7
52 . Airport System Development —

it is less wasteful of fuel and less burdensome on

the ATC system to have delays on the ground at

the departure gate than in the air at the arrival

airport. Despite the high incidence of flow control delays, the NASCOM data for 1983 indicate

that weather-related delays still accounted for

about two-thirds of all delay.ll

Table 10, based on SDRS data, shows the distribution of delays by the phase of flight where

they occur. While the average delay per flight has

remained surprisingly constant over the 7-year

period, the effects of flow control in 1981 and 1982

are evident. Airborne arrival delays have been cut

nearly in half compared with 1976-80, and taxiout (departure) delays have been correspondingly

increased.

Table 11, also drawn from SDRS, shows the

distribution of delay times by flight phase for a

typical month in 1982. Average departure delays

(gate-hold plus taxi-out) were 6.7 minutes, and

average arrival delays (airborne plus taxi-in) were

4.5 minutes. Since roughly 96 percent of all flights

encountered no delay at the gate, it can be inferred that the principal point of delay was in the

taxi-out phase, where about one flight in five encountered delay of 10 minutes or longer. Similarly, about 55 percent of delayed arrivals were

at the gate within 10 minutes of scheduled time

and 93 percent were no more than 20 minutes late,

with the delay about equally distributed between

the airborne and taxi-in phases.

*’Some of these weather delays occur at airports where the runway configuration is inefficient for certain combinations of wind,

visibility, and precipitation. This is an airport design problem, and

at certain locations it may be possible to lessen weather delays by

building new runways or otherwise changing the runway layout so

that the airport is less vulnerable to meteorological conditions.

Table 11 .—Distribution of SDRS Delay Time by

Flight Phase, September 1982

Minutes of Percent of operations delayed by flight phase

delay Gate-hold Taxi-out Airborne Taxi-in

o . . . . . 95.7 8.7 55.8 18.2

1 . . . . . 0.3 8.9 7.9 27.5

2 0.2 11.8 7.0 22.8

3-4 : ; : : : 0.5 23.2 11.4 21.9

5-9 . . . . . 1.0 29.2 12.5 7.5

10-14 . . . . . 0.7 10.6 3.7 1.2

15-19 . . . . . 0.5 4.1 1.0 0.5

20-24 . . . . . 0.3 1.7 0.4 0.2

25-29 . . . . . 0.3 0.8 0.1 0.1

30-44 . . . . . 0.4 0.7 0.2 0.1

45-59 0.1 0.2 0.1 0

60+ . : : : : : 0.1 0.1 0 0

Average delay

(min.) 0.7 6.0 2.3 2.3

SOURCE: FAA Standard Delay Reporting System (SDRS)

Table 12 shows the mean delay at a sample of

busy airports in 1982, when the average delay

systemwide was slightly less than 6 minutes per

operation. Delays at the 27 airports in the sample ranged from 3.5 to 9.9 minutes per operation.

The average delay at most airports was of short

duration, 7 minutes or less, as measured against

the published schedule. Further, table 12 shows

that mean delay is roughly correlated to the level

of operations; the airports with the greatest mean

delays tend to be those with the highest ratio of

actual operations to PANCAP. Thus, while delay affects a large number of flights at the busier

airports, the average delay at these airports is relatively short—7 minutes or less at all but seven airports, which is less than 10 percent of the average operating time of a flight from gate to gate.

Delay averaging, however, can be deceptive,

in that it may diminish the apparent severity of

the problem. Combining data for peak and slack

Table 10.–SDRS Trends, 1976-82

. Average delay per flight (minutes)

1976 1977 1978 1979 1980 1981 1982-

Flight phase:

Gate-hold. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.06 0.12 0.12 0.12 0.17 0.57 0.84

Taxi-out . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.46 4.51 4.78 5.06 5.10 6.00 6.25

Airborne. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.28 4.27 4.36 4.40 4.13 3.17 2.50

Taxi-in . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.16 2.23 2.41 2.57 2.43 2.25 2.23

Average per flight . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.96 11.13 11.67 12.15 11.83 11.99 11.91

Average per operation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.48 5.57 5.84 6.08 5.92 6.00 5.96

SOURCE: FAA Standard Delay Reporting System (SDRS).
Ch. 3—The Problem of Capacity and Delay . 53
54 ● Airport System Development

Photo credit: U.S. Department of Transportation

Airport access is another source of delay

A related, and more general, observation is that

the present methods of measuring capacity and

delay are not adequate. The absolute capacity of

an airport, or its parts, cannot be determined except by computer simulation or measurement of

an asymptote on a graph. The extreme condition

of unlimited demand and infinite delay can be

assumed theoretically, but never observed. The

data bases themselves are partial and highly selective at best. There are virtually no published empirical studies of delay for all types of flights,

much less delay encountered by passengers in all

segments of an air trip (travel to and from the airport, in the terminal, and during the flight). Thus,

it is difficult to quantify, except in the most general and inexact terms, the extent and severity of

airport capacity and delay problems.

Cost of Delay

A 1981 FAA study attempted to estimate the

cost of delay to air carriers and the extent to which

this cost could be avoided. ]2 FAA calculated the

total delay cost in 1980 to be about $1.4 billion,

based on 5.9 minutes average delay per operation

systemwide, at a cost of $1,398 per hour. Of

this delay, FAA estimated that about one-third

was attributable either to weather or to unavoidable queuing delays at peak operating times. Subtracting these delays left about $904 million in potentially avoidable delay costs for airline operations

in 1980, or about $89 per flight.

The FAA study also calculated future delay

costs that would result if air traffic continues to

grow and no remedial actions to reduce delay

were undertaken. FAA estimated that by 1991

average systemwide delay would increase to 8.7

minutes, with annual delay costs to airlines

reaching $2.7 billion (1980 dollars). Deducting

unavoidable delays due to severe weather and

queuing, FAA estimated that $1.7 billion per year

might be subject to control. For the average flight,

the cost of unavoidable delays would rise from

$89 to $125, an increase of 40 percent, but still

not much more than the average price of one airline ticket.

OTA finds these estimates to be reasonable, but

probably near the high end of the range. For the
Ch. 3—The Problem of Capacity and Delay ● 5 5

reasons cited above, FAA data bases tend to overestimate delay. Because of the skewed distribution of delay and the inaccuracies in the various

reporting systems used by FAA, it is difficult to

fix the magnitude of the overestimate, but it may

be on the order of 25 to 50 percent. Thus, actual

systemwide 1980 delay costs may have been between $0.7 billion and $1.4 billion, with the

avoidable costs ranging from $0.5 billion to $0.9

billion.

A second reason for treating the FAA estimates

with caution has to do with the tolerability of delay costs–either total costs or those defined by

FAA as subject to control. The FAA report rightly

points out that much of the avoidable delay results

from airline scheduling practices. Airlines operations peak in part because of public demand to

travel at certain times of day. However, another

equally important cause of peaking is airline competitive practice and concern about losing market share to other airlines offering service at

popular times. Airlines also concentrate arrivals

and departures of flights to capture connecting

passengers for their own airline. Presumably airlines find the delays caused by such practices

tolerable since they continue to schedule operations in this way despite the cost. (Recall that all

measures of practical capacity involve some judgment about what constitutes acceptable delay. )

If, for the sake of illustration, delay of more than

15 minutes is assumed to be “unacceptable,” the

NASCOM data for 1982 show that only about

3.5 percent of flights were so delayed.

From this, one should not draw the conclusion

that delay is an insignificant problem and that

measures to increase airport capacity would be

unwarranted. Delay is an important source of additional cost to airlines and passengers at the Nation’s airports, and there is legitimate reason for

concern about the future capability of airports to

serve the expected increase of demand. The point

is that there is not now a systemwide capacity

crisis, nor perhaps even a crisis at the busiest air

carrier airports, if crisis means intolerable delays.

FAA data show that about 98 percent of all flights

depart or arrive within 15 minutes of schedule.

Certainly, delays are being experienced, and

they could increase as economic recovery leads

to resumption of demand growth. If this increase

cannot be accommodated, the air transportation

system will suffer. But these problems are to some

extent foreseeable and they can be managed,

though not entirely eliminated, by a combination

of the technological and administrative means

which will be examined in later chapters.

25-420 0 - 84 - 5
Chapter 4

TECHNOLOGY

Photo credit: Federa/ Aviation Administration 1
Contents

The Airport and its Components . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Airport and Airspace Technology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Guidance, Surveillance, and Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Microwave Landing System. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Surveillance Radar. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Traffic Management Techniques . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Supporting Technologies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Airspace Use Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Reduced Lateral Separation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Reduced Longitudinial Separation on Final Approach . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Separate Short Runways for Small Aircraft. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Weather and Atmospheric Effects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Wake Vortex . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Wind Shear . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Noise Control and Abatement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Aircraft Noise.... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Aircraft Operating Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Airport Surface Uilization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Surveillance and Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Taxiways . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Apron and Gate Facilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Terminal Facilities and Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Terminal Building Design.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Terminal Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Landside Access . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Terminal Curbfront . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Airport Ground Access.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Applications of Technology to Airport Problems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

60

60

62

62

66

68

7 0

71

71

74

76

76

7 7

7 7

79

8 0

81

8 3

8 3

8 4

8 6

8 6

88

9 0

9 3

9 5

9 6

9 7

Capacity and Delay Problems at Selected Airports . ..............................100

Prospective Technological Solutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .,. ...........101

List of Tables

Table Page

13. Technology To Increase Airport Capacity and Reduce Delay . . . . . . . . . . . . . . . . . . . . . 63

14. Summary of NAS Plan Benefits and Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69

IS. Airport Capacity Survey . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..............102

16. Airport Technology Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .................104

List of Figures

Figure Page

y. Airport Components . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61

8. Comparison of Microwave Landing System and Instrument Landing System . . . . . . . 65

9. Arrival and Departure Separations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75

10, Effects of Low-Altitude Wind Shear . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78

11. Airport Landside Functional Flow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87

12. Airport Terminal Design Concepts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89

3.3. Federal Capital Funding of Airports and Related Facilities . . . . . . . . . . . . . . . . . . . . . . . . 95

14. Zurich Airport and Rail Terminal Complex . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98

15. Off-Site passenger Terminal Concepts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
Chapter 4

TECHNOLOGY’

The airport system in place in the United States

today is extensive and highly developed; in general, it serves the Nation well. Still, there are

problems of congestion and delay at the busiest

airports, where facilities are not adequate to accommodate demand at all times and in all conditions of weather and visibility. The Federal Aviation Administration (FAA) forecasts that growth

of commercial and private aviation could be constrained by lack of airport capacity, which it considers to be the most serious problem facing civil

aviation through the remainder of this century. z

Recent policy statements by FAA acknowledge

that, with a few exceptions, the direct solution

of building new airports and expanding existing

ones may not be practical due to lack of suitable

new airport sites, physical limitations of present

facilities, and concerns about environmental impacts of aviation on surrounding communities.3

Similar views have been expressed in two recent

studies of airport capacity,4 5 and there is a widely

held opinion that, while the airport system is expandable in the broad sense, there is little hope

of creating major new facilities in those key metropolitan areas where air travel demand and aviation activity continue to outstrip available airport

capacity unless airport planners can persuade surrounding communities that airports can be good

neighbors.

For this reason, the aviation community and

FAA have sought technological solutions that will

IThis chapter is based on material prepared for OTA by Landrum

& Brown, Inc.

‘National Airspace System Plan, revised edition (Washington, DC:

Federal Aviation Administration, April 1983), p. 11-10.

3

1bid., p. I-5.

4Report of the Industry Task Force on Airport Capacity Improvernent and Delay Reduction (Washington, DC: Airport Operators

Council International, September 1982).

5Report and Recommendations of the Airport Access Task Force

(Washington, DC: Civil Aeronautics Board, March 1983).

ease congestion by allowing fuller and more efficient use of the airports we already have. This

technology includes new equipment for surveillance, navigation, and communication and revised

procedures for using the airspace and airport facilities. In this way, it is hoped that additional demand can be absorbed within the infrastructure

now in place, without adversely affecting surrounding communities.

This chapter examines technological measures,

either currently available or under development,

that could be employed to relieve congestion and

delay. It consists of a survey of possible improvements in airport technology, with emphasis on the

circumstances in which this technology would be

applicable, the extent to which it could increase

the amount of traffic handled, and the prospects

for development and deployment over the coming years.

In aviation, the term technology typically brings

to mind sophisticated electronic and mechanical

devices used for navigation, surveillance, communication, and flight control. Such devices are

clearly of interest, but for the purposes of this report, technology is interpreted in a broader sense.

As used here, technology refers not only to new

devices and equipment but also to new operational concepts and procedures that they make

possible. Also, many in the aviation community

draw a distinction between technology (meaning

equipment and sometimes procedures) and civil

engineering (referring to the design and construction of physical components of the airport—the

concrete, so to speak). While recognizing that different engineering disciplines and techniques are

involved, this report does not make such a ciistinction and considers the design and construction of

improved physical components such as runways,

taxiways, and terminal buildings as simply one

more form of technology that will add to airport

capacity or permit more effective and economical use of the airport as a whole.

59
60 . Airport System Development — — . —

THE AIRPORT AND ITS COMPONENTS

The airport is a complex transportation hub

serving aircraft, passengers, cargo, and surface

vehicles. It is customary to classify the several

components of an airport in three major categories: airside facilities; landside facilities; and the

terminal building, which serves as the interchange

between the two’ (see fig. 7).

Airside components, sometimes called the aeronautical surfaces, or more simply the airfield, are

those on which aircraft operate. Principally, they

are the runways where aircraft take off and land,

the taxiways used for movement between the runway and the terminal, and the apron and gate

areas where passengers embark and debark and

where aircraft are parked. Because the airspace

containing the approach and departure paths for

the airfield has an important effect on runway utilization, it is also customary to include terminal

area airspace as part of the airside.

The terminal consists primarily of the buildings

serving passengers and is made up of passenger

loading and waiting areas, ticket counters, bag- — — —

6 Some experts do not employ this tripartite classification. For example, R. Horonjeff and F. X. McKelvey, Planning and Design of

Airports (New York: McGraw Hill, 3d cd., 1983), distinguish only

between the airside and the landside, making the division at the

passenger loading gates and including the terminal as part of the

landside.

gage handling facilities, restaurants, shops, car

rental facilities, and the like. Loading, handling,

and storage areas for air cargo and mail, often

separately located, are also part of the terminal

complex.

The landside is essentially that part of the airport devoted to surface transportation. It begins

at the curbside of the terminal building and includes roadways, parking facilities, and—in some

cases—rail rapid transit lines and stations that are

part of a larger urban mass transit system. Customarily, only roadways and transportation facilities on the airport property are considered part

of the landside, even though they are actually extensions of, and integral with, the urban and regional transportation network.

In the discussion that follows, attention is focused initially on those airside components where

capacity and delay problems tend to be severe.

The landside and terminal areas are not troublefree, however, and congestion of these facilities

can have an important effect on the overall capacity of the airport. An examination of possible technological improvements in terminals and

landside access is included at the end of this

chapter.

AIRPORT AND AIRSPACE TECHNOLOGY

Technological approaches to expanding airport

capacity or reducing delay fall into three broad

categories. First, there are improved devices and

procedures that will expedite the flow of air traffic into and out of the airport—i.e., techniques

that will augment airside capacity or mitigate aircraft delay by increasing the runway operation

rate. The second category includes techniques to

facilitate movement of aircraft on the airport surface. The purpose of these technologies is to move

aircraft from the runway to the passenger loading

gates and back again as expeditiously as possible, thereby shortening the taxi-in and taxi-out

components of delay and easing congestion on

taxiways, aprons, and loading ramps. The third

category embraces techniques that can be used to

aid the transit of passengers through the terminal

building and the flow of vehicles on airport circulation and access roads. In contrast with the first

two categories, where the aim is to alleviate aircraft delay, the third category is intended to facilitate the movement of people and to reduce that

part of delay incurred in getting to and from

aircraft.

Thus, the survey that follows addresses the

broad question of airport capacity, not just airside capacity or aircraft delay. The intent is to

examine ways to improve the overall adequacy

and efficiency of the airport as a transportation

hub. The underlying proposition is that delay–

any form of delay—ultimately affects the passenger through loss of time and increased cost of air

transportation service. In this sense, it is parochial
Ch. 4—Techno/ogy ● 61

/

/

/

/

/

/

/

/

/

/

/

t

Figure 7.—Airport Components

SOURCE Federal Avlatlon Admlnlstratlon
62 Airport System Development

to speak only of aircraft delay since the basic purpose of the air transportation system is to move

people from origin to destination, in safety, with

minimum expenditure of time and money. All

measures taken at airports to shorten travel time,

to lower travel cost, or to lessen inconvenience

are of equal importance, regardless of whether

they apply to the airside, the landside, or passage

through the terminal.

The scheme of organization for this survey is

outlined in table 13, which lists various forms of

technological improvements and identifies the

area of the airport where they could be applied

and the purpose they could achieve. Discussion

of specific technologies listed in table 13 is presented in the sections that follow, which make up

the bulk of this chapter. In the concluding part

of the chapter is a survey of the capacity and delay problems at a representative sample of airports

and a tabulation of possible forms of technological relief.

GUIDANCE, SURVEILLANCE, AND CONTROL

The position and spacing of aircraft in the airborne traffic stream is a key factor in determining airfield capacity. For the pilot, it is vital to

know where the aircraft is in relation to the runway and the airspace corridors around the airport. This is accomplished by ground-based navigation equipment and airborne receivers. The air

traffic controller uses surveillance radar to monitor the position of the aircraft on approach and

departure paths and in relation to other aircraft

using the airport. The success of these activities—

navigation by the pilot and surveillance by the

controller—is affected by the inherent accuracy

of the equipment used. (Is the aircraft in fact

where the pilot and controller think it is?) The

data update rate is also important. (How recent

is this information and what may have happened

since the last position reading?)7

In conditions of good visibility, when visual

cues can be used by the pilot to confirm the position of the aircraft and to supplement guidance

systems, the spacing between aircraft can be reduced to the minimum permitted by safe operating procedures. When visibility is lessened by

darkness, rain, or fog, the pilot must rely on instruments and the controller on radar. In such circumstances, a margin of safety must be added to

the interval between aircraft, in effect increasing

the time that must be allowed for each to use

—.. —

‘To appreciate the magnitude of this uncertainty, consider that

at typical jet approach speeds, an aircraft can travel almost 1,000

ft horizontally and descend 50 to 60 ft in the 4 seconds between successive scans of the radar presently used for air traffic control at

airports.

an assigned portion of the airspace or to occupy

the runway, and correspondingly lowering the

throughput rate. If the accuracy of navigation and

surveillance devices could be improved, the capacity of the airfield under Instrument Meteorological Conditions (IMC) could be closer to that

attainable under Visual Meteorological Conditions (VMC).

Three technologies that could improve aircraft

guidance, surveillance, and control are planned

for deployment in the next few years. They are

the Microwave Landing System, improved surveillance radar, and automated traffic-management systems for the air traffic controller.

Microwave Landing System

The guidance system for approach and landing now in use is the Instrument Landing System

(ILS), which has been the standard system in this

country since 1941 and is widely used by civil

aviation throughout the world. ILS provides guidance by radio beams that define a straight-line

path to the runway at a fixed slope of approximately 30 and extending 5 to 7 miles from the

runway threshold. All aircraft approaching the

airport under ILS guidance must follow this path

in single file, spaced at intervals dictated by standards for safe longitudinal separation and the need

to avoid wake vortex. This long, straight-in approach is a bottleneck that reduces the runway

utilization rate, especially when fast and slow aircraft are mixed in the approach stream or when

arrivals from different directions must be merged
Ch. 4—Technology . 63

Table 13.–Technology To Increase Airport Capacity and Reduce Delay

Area of

Technology application

Aircraft guidance, surveillance, and control:

Microwave Landing System . . . . . . . . . . . . . . . .

Purpose Benefit

Improve precision of

navigation; make more

flexible use of airspace

Improve surveillance; reduce

separation

Improve traffic flow

Increased capacity; reduced

delay; less noise impact

Airspace

Surveillance radar . . . . . . . . . . . . . . . . . . . . . . . . Airspace

Airspace

Improved safety; increased

capacity

Traffic management techniques . . . . . . . . . . . . Reduced delay

Airspace use procedures:

Reduced lateral separation for parallel and

converging runways Airspace

Airspace

Airspace

Increase utilization of multiple

runways in IMC

Reduce in-trail separation

Segregate air traffic by size

and speed

Increased capacity

Reduced longitudinal separation . . . . . . . . . . .

Separate short runways for small aircraft . . . .

Increased capacity

Increased capacity; reduced

delay

Weather and atmospheric effects:

Wake vortex detection . . . . . . . . . . . . . . . . . . . .

Wind shear detection . . . . . . . . . . . . . . . . . . . . .

Airspace

Airspace

Reduce in-trail separation

Alert pilots to wind shear

Increased capacity

Improved safety; reduced

delay

Noise control and abatement:

Control of aircraft noise . . . . . . . . . . . . . . . . . . . Reduce aircraft noise Increased capacity; reduced

delay

Increased capacity: reduced

delay

Airspace

Aircraft operating procedures . . . . . . . . . . . . . . Airspace Lessen or distribute noise

impacts

Airport surface utilization:

Surveillance and control . . . . . . . . . . . . . . . . . . . Taxi ways Improve surveillance, control,

and guidance of aircraft

on ground

Reduce runway occupancy

time

Increase efficiency of taxiway

use

Improve docking at gate;

improve aircraft

maintenance and servicing

Increased capacity; reduced

delav; improved safety

High-speed turnoffs and improved taxiways. .

Taxiway marking and lighting . . . . . . . . . . . . . .

Apron and gate facilities . . . . . . . . . . . . . . . . . .

Runway

Taxi ways

Ramps and

aprons

Increased capacity

Reduced delay

Increased capacity; reduced

delay

Terminal facilities and services:

Terminal building design . . . . . . . . . . . . . . . . . . Terminal

Terminal

Increase utility and efficiency

of terminal building

Improve circulation in

terminal; reduce walking

distance

Expedite ticket purchase and

passenger check-in

Expedite baggage check-in,

transfer, and pickup

Make screening faster and

more reliable

Expedite customs and

immigration clearance

Increased capacity; reduced

delay

Reduced delay; greater

passenger convenience

Passenger movers . . . . . . . . . . . . . . . . . . . . . . . .

Ticketing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Terminal

Terminal

Terminal

Terminal

Reduced delay

Reduced delay

Reduced delay;

security

Reduced delay

Reduced delay

Reduced delay

Reduced delay

Baggage handling . . . . . . . . . . . . . . . . . . . . . . . .

Passenger security screening . . . . . . . . . . . . . . improved

Federal Inspection Service . . . . . . . . . . . . . . . .

Airport access:

Terminal curbfront design . . . . . . . . . . . . . . . . . Terminal;

landside

Landside

Land side

Facilitate airport entrance

and exit

Facilitate automobile traffic

flow

Reduce access time; lessen

Airport circulation roads . . . . . . . . . . . . . . . . . .

Airport ground access . . . . . . . . . . . . . . . . . . . .

road congestion

SOURCE Office of Technology Assessment
64 ● Airport System Development — . . — . — ——— .

on the common final approach path. As a result,

the capacity of the airfield under IMC, when the

long ILS common approach path must be used,

is usually less than under VMC.

The runway utilization rate under IMC could

come closer to that attainable under VMC if aircraft could follow multiple approach paths, descend at different approach angles, or aim at different touchdown points on the runway—none

of which is practical with ILS. If this flexibility

were possible, as it is under VMC, airfield capacity would be less affected by weather conditions,

and throughput would be governed almost exclusively by runway geometry and aircraft performance characteristics.

The Microwave Landing System (MLS), which

has been under development by FAA for over a

decade, would overcome some of the disadvantages inherent in the ILS. Because MLS uses a

beam that scans a wide volume of airspace, rather

than the pencil beam of ILS, it permits aircraft

to fly any of several approach angles (including

two-step glide slopes) and, in the horizontal plane,

to approach along curving paths that intersect the

extension of the runway centerline at any chosen

point. In effect, MLS offers a degree of freedom

in using the airspace that is closer to that enjoyed

under conditions of good visibility (see fig. 8).

The chief motive for FAA in seeking to develop

and deploy the MLS is not the potential capacity

benefits, however, but its operational advantages

—more precise guidance, ease of installation, improved reliability, less susceptibility to electromagnetic interference, and greater number of

transmission channels. The capacity benefits are

secondary but still of great importance at some

airports where the present ILS acts to constrain

capacity in adverse weather conditions. In terms

of its effect on capacity, the chief advantage of

MLS is that, in IMC, it allows pilots and controllers greater flexibility in selecting an approach

path so as to shorten the approach time, to avoid

air turbulence generated in the wake of preceding

aircraft, or to avoid noise-sensitive areas. Another

advantage is that MLS can provide guidance for

the aircraft during missed approach, allowing a

safe exit from the terminal airspace and smooth

reentry into the approach pattern. The availability of missed approach guidance could have a significant capacity benefit at those airports with parallel or converging runways that cannot now be

used in IMC. A third advantage is that MLS can

be installed on runways where ILS is not possible due to siting problems and on short auxiliary

runways reserved for commuter and small general aviation (GA) aircraft.8 On some runways,

MLS can increase capacity during IMC by providing lower landing minimums than ILS and

thereby allowing the airport to remain open in

marginal weather conditions. A fourth advantage

of MLS is its capability to provide nonconflicting

routes into closely situated airports, where approach or departure paths may mutually interfere

and limit capacity utilization.

The capacity benefits of MLS are highly sitespecific—depending on the runway configuration,

the prevalence of adverse weather, the mix of aircraft using the airport, and the extent to which

these aircraft are equipped with MLS receivers.

Estimates by FAA indicate that the benefits could

range up to 10 or 15 percent greater capacity at

some airports under IMC. The overall effects on

capacity at these airports would be somewhat

smaller since they depend on how often Instrument Meteorological Conditions occur. The net

economic benefits are estimated by FAA to be

$500 million over a 20-year period (1976 dollars),

principally to air carriers and commuter airlines

in the form of reduced delay costs and savings

of passenger time.9

This estimate has been challenged in a recent

report by the Industry Task Force on Airport Capacity Improvement and Delay Reduction. The

Task Force found that the chief advantages were

at small or remote airports served by helicopters

and commuter airlines and in high-density traffic areas where MLS could permit commuter aircraft to approach and land on separate short run6

For a further discussion of MLS technology and its benefits, see

Airport and Air Traffic Control System (Washington, DC: U.S. Congress, Office of Technology Assessment, OTA-STI-175, January

1982), pp. 92-96, 117; and Improving the Air Traffic Control System:

An Assessment of the National Airspace System Plan (Washington,

DC: Congressional Budget Office, August 1983), pp. 9-18.

‘An Analysis of the Requirements for, and the Benefits and Costs

of the National Microwave Landing System (MLS), FAA-EM-80-7

(Washington, DC: Federal Aviation Administration, June 1980).
Ch. 4—Technology ● 6 5

Figure 8.—Comparison of Microwave Landing System and Instrument Landing System

4 0

- wide t W “

(

Instrument landing system

No continuous distance

measurement two discrete range A

indications provided by fan markers A

\

* .

Outer

k ~

marker

Middle

Extended

I

— — \

SOURCE: Federal Aviation Administration

ways. 10 The direct benefits to major air carriers procedures that have not yet been tested and

are much less clear, according to the Task Force, proven in an operational environment .11

because they depend on use of curved or seg- -

FAA is now proceeding with MLS implemen- mented approaches and multiple glide paths— tation. A contract for production and installation

of 172 units was let in late 1983, with follow-on
66 . Airport System Development

procurements planned for 1985-95 (900 units) and

1996-2000 (350 units), making a total of approximately 1,425 installations by the beginning of the

next century. Priority will be given to large and

medium hub airports and to those airports now

lacking ILS because of siting restrictions or lack

of available transmission channels.12 FAA estimates the total cost of ground equipment to be

$1.33 billion. User costs for MLS receivers are estimated to be an additional $1.63 billion, bringing

the total cost for full deployment of MLS to nearly

$3 billion over the coming 20 years.13 14

Replacement of the existing ILS poses two problems that may complicate the transition to MLS

and delay realization of the full benefits. There

are at present about 650 ILS units in commission

at some 460 airports and another 150 or so units

in various stages of procurement—some as replacements for existing units, others as new installations. The MLS transition plan calls for these

ILS units to remain in service for many years to

come, until at least 60 percent of the aircraft

routinely using the ILS/MLS runway are equipped

with MLS. While ILS and MLS can be colocated

and operated simultaneously without signal interference, there may be procedural difficulties in

blending aircraft equipped with ILS (and therefore capable of only straight-in approaches) into

a traffic stream with MLS-equipped aircraft flying curved or segmented approaches. Thus, the

full capacity benefits of MLS may not be attainable at a given airport until all or nearly all aircraft are MLS-equipped and the ILS can be decommissioned.

A second factor that may delay taking full

advantage of MLS at specific sites is the agreement with the International Civil Aviation Organization whereby the United States is committed

to retaining ILS service at international gateway

airports until 1995. There are 75 such airports,

——. —

12 The aviation industry has voiced strong opposition to the Proposal for installing MLS at large and medium airports first, and in

May 1984 FAA agreed to a complete review of the deployment

strategy. Depending on the outcome of this review, the early stages

of the MLS program schedule might be set back a year or more.

13 Microwave Landing System Transition Plan, APO-81-1 (Washington, DC: Federal Aviation Administration, May 1981).

14 Preliminary Analysis of the Benefits and Costs TO Implement

the National Airspace System Plan, DO~/~AAIEM-82-2?2

(Washington, DC: Federal Aviation Administration, June 1982).

generally the busiest U.S. airports and those most

prone to capacity and delay problems. Retaining

ILS service at these airports may influence some

users to defer purchasing MLS equipment for

another 10 years or more.

While the capacity gains attributable to MLS

may be rather small for the airport system as a

whole, MLS does appear to offer promise at those

airports where it could be used to create a more

flexible traffic pattern or to provide commuter and

small GA aircraft access to an alternate runway

in IMC, thereby relieving pressure on the main

runway used by large air carrier aircraft. Beyond

these direct benefits, moreover, MLS may permit

procedural changes that could also increase capacity or reduce delay. These potential benefits

of MLS are discussed in a later section on airspace

use procedures.

Surveillance Radar

Surveillance is accomplished by radar and associated electronic and computer systems that locate,

identify, and display the position of aircraft in the

airspace. In terminal areas, two types of radar are

presently used for this purpose: search radar

(technically termed “primary radar”) and the radar beacon system (sometimes called “secondary

radar”). Search radar emits signals and displays

the returns reflected from the body of the aircraft,

objects on the ground, and precipitation or weather

fronts, thereby providing a basic two-dimensional

map of the airspace. The beacon system, known

as the Air Traffic Control Radar Beacon System

or ATCRBS, displays only replies from aircraft

equipped with electronic devices, called transponders, that send out a coded signal when interrogated by the radar beacon. This signal indicates not only the position of the aircraft but

also its identity (flight number) and altitude (if

the aircraft is equipped with an altitude-encoding

transponder). The beacon system is presently the

main source of surveillance information for air

traffic control (ATC).

This radar-derived information is correlated

and presented to the air traffic controller on one

of four different types of display systems: TPX42, ARTS II, ARTS III, or ARTS 111A. The TPX42 is the least sophisticated equipment. It is a non-
Ch. 4—Technology ● 6 7

programmable device that correlates and displays

search radar data and beacon returns on each successive sweep of the antenna. The TPX-42 is used

at airports with little traffic. The Automated Radar Terminal System (ARTS II) is a programmable data processor that displays primary and

secondary radar data on the controller’s scope but

does not track aircraft or predict their position.

It is used at airports with low to medium levels

of activity.

ARTS III detects, tracks, and predicts the position of aircraft. This information is presented on

the controller’s display as computer-generated

symbols (denoting altitude, ground speed, and

identity) positioned alongside the secondary radar return. ARTS 111 also incorporates features

that alert the controller when aircraft descend

below minimum safe altitude or when two aircraft are approaching too closely and require action to assure safe separation—a feature known

as conflict alert. ARTS 111A is a refinement of

ARTS 111 that is capable of tracking aircraft detected by search radar alone—i.e., aircraft not

equipped with an ATCRBS transponder. ARTS

111 and ARTS 111A equipment is installed at the

62 busiest air traffic hubs.

FAA is now in the process of replacing much

of the primary radar and display equipment. The

existing primary surveillance radars used at airports (ASR-4, ASR-5, and ASR-6) are based on

vacuum tube technology that suffers from reliability problems and maintenance difficulties.

Newer solid-state equipment (ASR-7 and ASR8) has been installed at some locations, but these

radars, like earlier versions of ASR, are adversely

affected by ground clutter, false targets generated

by flocks of birds, propagation anomalies, and

masking of aircraft returns by weather. Of these

shortcomings, weather masking is perhaps the

most severe operational problem. The strong return from storms conceals the weaker return from

aircraft detected on primary radar alone. To compensate, controllers alter the polarization of the

radar to reduce weather echoes and make the aircraft return stand out more clearly, but this lessens

the apparent severity of weather fronts and precipitation.

Between 1986 and 1990, FAA plans to install

a new primary radar system (ASR-9) which will

have a separate weather channel allowing the controller to assess the severity of storms while retaining the ability to detect small aircraft without transponders. The ASR-9 will also incorporate

an improvement called Moving Target Detection

to overcome the problems of ground clutter and

spurious targets. These improvements in primary

radar information, when coupled with the present radar beacon display, will provide the controller with a clearer and more accurate picture

of the airspace—thereby lessening workload and

creating a better basis for decisionmaking about

aircraft movement around the airport. The estimated cost of installing 105 ASR-9 systems is $480

million, with the option of adding 35 more in the

1990s at a cost of roughly $125 million.ls

As radar systems are being upgraded, FAA also

plans to improve the data processing and display

equipment used by air traffic controllers. Initially,

the TP)(-42 system will be replaced by a new version of ARTS II, designated ARTS 11A, which will

incorporate minimum safe altitude warning and

conflict alert features like the present ARTS III.

The ARTS III equipment will also be enhanced

with greater memory to handle heavier traffic

loads and improved software that will reduce the

number of false conflict alerts. In the period 1990-

95, ARTS II and III will be replaced by new data

processing and display consoles, called sector

suites, that will provide improved presentation

of surveillance and weather data, display of traffic management and planning information, and

automated assistance to the controller in separating and routing traffic in terminal airspace.lb

The immediate capacity benefit of the ASR-9

radars will be surveillance information of improved reliability and accuracy, which will provide the controller with a better picture of the

airspace situation. Of even greater importance,

the improved ASR-9 radar, the upgraded ARTS

II and III, and the eventual installation of new sector suites will support changes in traffic management techniques that will help the controller make
68 . Airport System Development

more efficient use of the airspace. These prospects

are discussed next.

Traffic Management Techniques

A major task of the air traffic controller is management of traffic so as to maintain a smooth flow

of aircraft to and from the airport with minimum

delay. This is done by the techniques of metering, sequencing, and spacing.17 With current technology, these are largely matters of controller art

that depend heavily on the individual’s skill and

experience. On a typical day, the controller must

make literally hundreds of related decisions about

the order and timing of aircraft movements in the

traffic pattern under the prevailing conditions of

wind and weather. The chief problems that the

controller must deal with in performing these

activities are randomness in the arrival and departure streams and differences in the speed and flight

characteristics of successive aircraft using the

airspace. The extent to which the controller is successful in applying the techniques of traffic management has a significant influence on delay and

efficient use of airport capacity.

It has long been recognized by ATC experts that

the key to more effective traffic management,

especially in circumstances of heavy demand, is

to involve computers in the decisionmaking process. In some instances, this means providing the

controller with computerized aids to decisionmaking—devices to collect, integrate, and display

information that will give a better picture of the

traffic situation and help in executing a control

strategy. In other instances—particularly where

decisionmaking is routine, repetitive, and reducible to unambiguous rules—the approach is to

substitute the computer for the human operator,

thus relieving him of workload and guarding

against human error and inconsistency.

As part of the planned modernization of the

ATC system, FAA is developing new software

packages that will assist in traffic management

17’ Metering is regulating the arrival time of aircraft in the terminal

area so as not to exceed a given acceptance rate. Sequencing entails

specifying the exact order in which aircraft will take off or land.

Spacing involves establishing and maintaining the appropriate interval between successive aircraft, as dictated by considerations of

safety, uniformity of traffic flow, and efficiency of runway use.

at and around airports. Known under the collective designation of Traffic Management System

(TMS),1

8 this new software will perform several

important functions to increase the efficiency of

airport and airspace utilization: airspace configuration management, dynamic planning and

computation of acceptance rate, tactical execution of control strategy, runway configuration

management, and departure flow metering.

For incoming flights, TMS will establish an

acceptance rate and order of landing based on estimated arrival time and predetermined flight paths.

As aircraft progress toward the runway, TMS will

adjust landing time and spacing between aircraft

as necessary to eliminate gaps or surges in the traffic stream and to make efficient use of airspace

and runways. In the earlier stages of implementation, the computer will generate recommended

instructions and command messages for the controller to relay to pilots by voice radio. In later

stages, the computer will transmit commands

directly to individual aircraft by the Mode S data

link.19

Photo credit: Federal Aviation Administration

Traffic management can smooth the flow
Ch. 4—Techno/ogy ● 6 9

Other components of TMS will contribute to

more efficient traffic management in other ways.

Runway configuration management, a software

program that has been under development at Chicago O’Hare since 1980, will assist controllers in

establishing the most efficient combination of arrival and departure runways for given conditions

of weather and demand. Departure flow metering will help assure an appropriate blend of takeoffs and landings and will feed aircraft out of the

terminal area and into en route airspace.

FAA plans do not call for implementation of

TMS all at once, nor at all airports. The components are being developed separately and will be

tested and put in place as ready and where needed.

The overall timetable is contingent on the development and installation of new computers and

sector suites in terminal area control centers and

on the development of companion software packages for the en route ATC system—the Advanced

En Route Automation (AERA) program. Full implementation of TMS, AERA, and related technological changes will not occur until 1995 or

later.

TMS and AERA are tied together because FAA’s

long-term response to air traffic growth involves

a general application of the flow management concept so as to provide strategic and tactical planning, continuous performance monitoring, and

flexible and adaptive exercise of control for the

airspace as a whole. For example, en route metering—which is a feature of AERA-will contribute to efficient runway use by treating all arrivals

along all routes as a single traffic pattern and adjusting in-trail separation so as to achieve a steady

rate of delivery into the terminal area. The present method of flow management, which uses uniform, preestablished in-trail separation, can result in inefficient runway utilization (surges and

gaps in the traffic flow) because it cannot adapt

readily when flow along arrival routes does not

exactly match the nominal rate used as the basis

for selecting in-trail spacing.

The capacity benefits of TMS are difficult to

estimate on a systemwide basis. The anticipated

benefits are highly specific to conditions at the airport site and particular patterns of demand. Further, it is not always possible to distinguish between the benefits of TMS and those that would

result from other planned improvements in the

ATC system. Estimates published by FAA as part

of an analysis of overall benefits and costs of the

National Airspace System Plan (NAS Plan) suggest that the benefits arising from improved traffic management and flow planning in terminal

areas could be fuel savings on the order of 0.75

to 1.25 percent. FAA calculates the value of these

savings to be between $165 million and $280 million per year (1982 dollars) for the period 1993-

2005. Of these savings, about 60 percent would

accrue to air carriers, with the remainder about

equally distributed between business and private

general aviation.20

The FAA report does not provide a projected

cost for TMS alone, but lumps these costs with

those of AERA and other airport and airspace

programs in the NAS Plan (see table 14). The total

Table 14.-Summary of NAS Plan Benefits and Costs (billions, 1982 dollars)

20-year totals Present (discounted) valuesa

Benefits costs Net Benefits costs Net
70 Airport System Development

costs are estimated to be $12 billion ($4 billion

to aviation users and $8 billion to FAA) over the

next 20 years; the associated 20-year benefits are

calculated to be $24.7 billion to users, primarily

in fuel savings attributable to AERA and $24.3

billion to FAA in operating cost savings. (All estimates in 1982 dollars. )

Supporting Technologies

In addition to programs aimed specifically at

reducing delay and increasing the throughput of

major airports, FAA is pursuing other technological developments that will either facilitate the

ATC process or provide greater assurance of

safety. Three particularly important developments

of this sort are the Mode S data link, the Cockpit

Display of Terminal Information (CDTI), and the

Traffic Alert and Collision Avoidance System

(TCAS). These technologies will not, by themselves, provide relief to the problems of congestion and delay in terminal areas, but they could

make possible other technological improvements

or procedural changes to improve the flow of

traffic.21

The addition of Mode S to the present ATCRBS

transponder has perhaps the most far-reaching implications for air traffic control. Mode S will allow

the air traffic controller to interrogate aircraft individually and will make possible direct and selective two-way digital communication between air

and ground. Mode S thus will form the basis for

the more automated forms of air traffic control

envisioned in the TMS and AERA programs.

Equally important, Mode S will open up a new,

high-capacity channel of communication that will

provide more complete and rapid exchange of information and greatly reduce controller and aircrew workload by relieving them of the timeconsuming process of transmitting, receiving, and

acknowledging messages by voice radio. A third

benefit of Mode S is that it can enhance the surveillance function by reducing interference among

transponder replies of aircraft operating close together in terminal airspace.

An important potential application of the Mode

S data link is that it could be used to improve the ——. —

“See Airport and Air Traffic Control System, op. cit., for more

detailed discussion of these technologies.

quantity and quality of information available in

the cockpit by providing a display of traffic in

the surrounding airspace. This display, CDTI, has

been under development for several years and has

been recommended by pilots and ATC experts as

a valuable new tool to enhance safety and to aid

maneuver in terminal airspace. The CDTI, by

showing the location and path of nearby aircraft,

could give the pilot an overall view of the traffic

pattern and could provide an additional source

of information under conditions of reduced visibility.

The CDTI is not envisioned as a substitute for

ground-based air traffic control nor as the basis

for independent maneuver to avoid collision or

to assure safe separation. Rather, it is intended

as a supplemental display that will allow the pilot

to “read” the air traffic pattern and to cooperate

more effectively and confidently with the groundbased controller in congested airspace. FAA, in

cooperation with the National Aeronautics and

Space Administration (NASA), is currently exploring roles for a CDTI. The focus of this effort

is to develop CDTI system requirements and to

determine the compatibility of these requirements

with Mode S and TCAS data sources.

The overriding concern in seeking ways to increase airport throughput and runway acceptance

rates is maintaining safe separation among aircraft. Basic separation assurance is provided in

two ways: by application of the “see-and-avoid”

principle in Visual Flight Rules (VFR) and by ATC

procedures and ground-based surveillance in Instrument Flight Rules (IFR). Pilots and others concerned with aviation safety have long advocated

additional assurance in the form of an airborne

(i.e., ground-independent) collision avoidance

system. The system currently proposed by F&l—

Traffic Alert and Collision Avoidance System—is

an independent airborne device designed to use

ATCRBS (or Mode S) transponder information

for generating a warning to the pilot that an approaching aircraft is a threat and that evasive maneuver may be called for.

TCAS is in the development stage at present

and may not be ready for operational use until

the late 1980s. The availability of TCAS, or an

equivalent system of airborne collision avoidance,
Ch. 4—Techno/ogy . 71

will be an important factor in the decision to

adopt revised procedures for increasing the efficiency of airspace use. Without assurance that safe

separation can be maintained and that there is a

backup to ground-based air traffic control, neither airspace users nor FAA are likely to have the

confidence to proceed with revision of present

longitudinal and horizontal separation standards.

AIRSPACE USE PROCEDURES

Procedures governing the use of terminal airspace and airport runways, which are designed

primarily to assure safety, sometimes slow or

disrupt the flow of traffic. In general, these procedures consist of rules and standards pertaining

to the permissible distances between aircraft in

various weather conditions and approach patterns. Actually, there are two sets of procedures:

one for use in Visual Meteorological Conditions

(VMC) and another, more stringent, set for use

in Instrument Meteorological Conditions (IMC).

Instrument Flight Rules—which are largely determined by available navigation, communication,

and surveillance technology—often cause delays

at busy airports because of the increased separation standards and special safeguards that must

be applied in restricted visibility.

There is a widely held, but not unanimous,

view among airspace users that revisions of the

existing instrument flight procedures are practical

and that they would be warranted in the interest

of reducing delay. While these revisions are sometimes spoken of as capacity improvements, they

would not in most cases actually increase the capacity of airports. Instead, they would allow existing capacity to be used more fully or with

greater efficiency and would bring the throughput attainable under IMC closer to that which

prevails under VMC.

In response to urging from airspace users, FAA

instituted a comprehensive examination of airspace use procedures in October 1981. This effort, known as the National Airspace Review

(NAR) is a 42-month joint undertaking by FAA

and the aviation industry “to identify and implement changes which will promote greater efficiency for all airspace users and simplify [the

ATC] system. Additionally, the NAR will match

airspace allocations and air traffic procedures to

technological improvements and fuel efficiency

programs.”22 The portion of NAR concerned specifically with terminal area ATC procedures was

completed in July 1984.

Many of the procedural changes sought by

airspace users and under study by FAA in NAR

were also examined by a special aviation industry task force convened at the request of FAA

under the auspices of the Airport Operators Council International. The task force report, issued in

September 1982, strongly urged FAA to revise

present airspace use procedures, especially those

pertaining to the use of multiple runways under

Instrument Meteorological Conditions.23

Reduced Lateral Separation

Several of the proposed revisions would permit changes in the standards for lateral separation of aircraft under instrument flight conditions.

The present standards often severely restrict

throughput because they preclude use of all the

available runways when visibility is reduced. If

the airport could continue to operate these runways, the disparity between IMC and VMC acceptance rates could be substantially narrowed.

The following are the major capacity-related

changes under consideration.

Converging Runways

Converging runways are those whose extended

centerlines meet at a point beyond the runways

themselves. Simultaneous approaches to converging runways are presently authorized only

during VMC. The proposed procedure would ex25-420 0 - 84 _ 6
72 . Airport System Development

tend this authorization to IMC in certain circumstances. The major problem to be overcome in

using converging runways under instrument conditions is development of procedures to assure

separation in the event of a blunder by one of the

aircraft during the approach or in case both aircraft must execute a missed approach at the same

time. These procedures, in turn, depend on the

availability of improved surveillance radar, MLS

to provide missed approach guidance, and perhaps automated aids for the controller to coordinate simultaneous approaches to two runways.

In time, it maybe possible to extend these procedures to the case of intersecting runways-those

whose surfaces actually cross at some point. In

addition to the problems of blunder protection

and separation assurance during missed approaches,

this configuration poses the risk of collision between two aircraft on the ground, and there must

be adequate safeguards that aircraft on both runways can stop or turn off before reaching the intersection. Because of the inherent safety problems, most observers are skeptical about the

feasibility of using this type of runway layout for

instrument operations.

Dependent Parallel Runways

At present, instrument approaches maybe conducted on parallel runways that are as close as

3000 ft apart so long as a diagonal separation of

2 nautical miles (nmi) is maintained between adjacent aircraft. For parallel runways separated by

2,500 ft, the diagonal spacing requirement is 2.5

nmi. In addition, aircraft must be separated by

1,000 ft vertically or 3 nmi horizontally as they

turn onto their parallel approach paths. These

runways are termed dependent because the approaches to each must be coordinated to maintain the prescribed diagonal spacing. Hence, the

operational rate attainable on either is constrained

by the movement of aircraft on the other.

FAA studies suggest that the diagonal spacing

requirements for IFR operation on dependent parallel runways could be reduced. For runways

separated by 2,500 ft, the standard could be reduced from the present 2.5 nmi to 2 nmi with current technology and no other changes in existing

procedures. 24 Reducing the spacing requirements

for approaches to parallel runways less than 2,500

ft apart requires: 1) that the pilot be able to confirm that he is, in fact, on approach to the proper

runway since radar surveillance would no longer

be sufficient; and 2) that wake vortices from aircraft approaching one runway do not interfere

with operations on the other. Because of wake

vortex, current procedures require that aircraft

approaches to closely spaced parallel runways

(less than 2,500 ft apart) be treated as approaches

to a single runway and separated accordingly.

An operational solution to the wake vortex

problem on closely spaced parallel runways entails that the following additional conditions be

met:

●

●

●

●

●

there must be a steady crosswind to diminish

the effects of wake vortex, but the wind

velocity must be less than maximum crosswind limitation;

small aircraft that are vulnerable to wake

vortices must use the upwind runway of the

closely spaced pair;

the threshold of the upwind runway must

be displaced from that of the downwind

runway;

the upwind runway must have a high-angle

glide slope to allow for a steeper descent by

vulnerable aircraft so that they can remain

above, and hence avoid, wake vortices; and

wind monitors must be set up along the approach path to ascertain that conditions

are favorable for the dissipation of wake

vortices.

Satisfying these requirements may be difficult

at airports that do not have runways with suitably

staggered thresholds and a sufficiently large number of aircraft that can approach at a steeper than

normal glide slope to avoid wake turbulence. In

addition, there are operational difficulties that

may limit the applicability or the capacity benefits

of this procedure. First, the wake vortex generated by a heavy aircraft carrying out a missed
Ch. 4—Techno/ogy . 73

approach could interfere with operations on the

other runway. One possible solution would be to

require that both the leading and trailing aircraft

execute missed approaches along diverging paths

whenever the leading heavy aircraft misses the approach. Second, interference from departures

could limit capacity gains since it may be necessary to retain present longitudinal separation

standards between heavy aircraft departing on

one runway and small aircraft landing on the

other in order to avoid wake turbulence. Finally,

as the distance between parallel approaches is reduced, there will be a need for more accurate surveillance to verify that aircraft are on approach

to the proper runway. The radar now in use,

which has a 5-milliradian accuracy and a 4-second

update rate, is probably not adequate for this purpose and may have to be replaced with new radar capable of l-milliradian accuracy and 1-

second update .25 Such radar performance has been

achieved in the Precision Approach Radar system

formerly installed at some airports but now decommissioned. Military radar also has this capability but would have to be adapted and tested

before use in civil aviation.

Independent Parallel Runways

Independent instrument approaches to parallel runways separated by at least 4,300 ft are

presently authorized under the following conditions: 1) when aircraft are turned onto the approach path, they must be separated vertically by

at least 1,000 ft or laterally by 3 nmi from aircraft turning on approach to the other runway;

and 2) a “No Transgression Zone, ” at least 2,000

ft wide, must be maintained between the approaches, with a separate controller assigned to

monitor this zone. A study by FAA indicates that,

as with dependent parallel runways, reducing

lateral spacing for independent parallel runways

from 4,300 to 3000 ft would require installation

of more accurate radar but no other changes in

current procedures. 26 

251bid.

‘

b Ibid.

Triple Parallel Runways

Demand at some of the busier airports, such

as O’Hare, Atlanta, Dallas/Fort Worth, Pittsburgh, and Detroit, sometimes exceeds the capacity of the runway system in IMC, and addition

of a third approach stream would be desirable.

Current ATC procedures allow approaches to triple parallel runways only during VMC. Revision

of separation standards to permit their use during IMC would significantly expand the time that

maximum airfield capacity is available at these

few very busy airports.

While the requirements for three parallel approaches are similar to those for two parallel approaches, the addition of a third runway complicates the approach procedures and limits possible

gains in capacity utilization. To be most effective,

at least the outside pair of approaches should be

independent from each other, although both may

be dependent on the middle runway. If all three

parallel runways were dependent, there would be

only a minor increase in throughput compared to

that attainable with two dependent runways.

Also, since a blunder on one of the outside approaches could affect more than one other aircraft, establishment of triple independent parallel approaches necessitates two “No Transgression

Zones, ” with a separate controller assigned to

monitor each. Because the l, 000-ft vertical separation rule for aircraft turning onto parallel approach paths still apply, final approach courses,

particularly for the center runway, would be

longer–thereby diminishing somewhat the throughput gain attainable with the triple parallel configuration.

A few airports have runway layouts that allow

a converging approach to be added to two existing

parallel approaches. This third approach is used

during VMC, but in IMC the converging runway

must be closed because separation between aircraft executing missed approaches cannot be

assured visually.

The requirements for three approaches, one of

which is converging, are similar to those for two

converging approaches. However, establishing the

third converging approach for use with a parallel pair involves additional safeguards because a

blunder by an aircraft on one of the outside ap-
preaches affects more than one other aircraft. The

missed approach path for the converging runway

must be coordinated with those of the other two

runways—a procedure that is quite complex and

cannot be implemented without further research

and evaluation. In particular, FAA is studying

whether MLS will be required to provide nonconflicting missed approach paths .27

Reduced Longitudinal Separation

on Final Approach

Current procedures require longitudinal (intrail) separation of 3 nmi between aircraft conducting instrument approaches to the same runway In VMC, in-trail separations of 2.5 nmi
Ch. 4—Technology ● 7 5

For those airports where runway occupancy time

averages so seconds or less, FAA studies indicate

that minimum in-trail separation of 2.5 nmi could

be allowed in circumstances where wake vortex

and ATC workload permit. Flight tests conducted

by the U.S. Air Force have demonstrated the feasibility of 2.5-mile separation for military use.

However, safety standards for commercial operations are different than those for military operations, and analysis of radar accuracy and update

rates, controller and pilot response times, and aircraft performance characteristics will be needed

to determine whether 2.5-mile separation during

IMC is safe for civil aviation. Since there is a direct relationship between in-trail separation and

throughput, this procedural change would be a

very effective method to reduce delay under instrument flight conditions.

Present ATC procedures specify that the nominal longitudinal separation standards for VMC

or IMC be adjusted to compensate for the possible effects of wake turbulence. These separation

standards, shown in figure 9, are based on a threeway classification of aircraft according to gross

takeoff weight and attempt to account for the

wake-turbulence characteristics of aircraft and

their vulnerability to wake vortex encounters:

●

●

●

heavy ah-craft—maximum gross takeoff

weight (GTW) in excess of 300,000 lb,

large aircraft—maximum GTW between

12,500 and 300,000 lb, and

small aircraft—maximum GTW less than

12,500 lb.

Definition of aircraft categories based on GTW

alone is not an accurate index of of wake vortex

generation for all aircraft, notably those aircraft

whose GTW is slightly over 300,000 lb such as

the DC-8 and B-767. As the number of B-767 aircraft in the fleet grows and as the re-engining program for DC-8S proceeds, aircraft whose GTW

is roughly 300,000 lb will become an increasingly

large proportion of the commercial aircraft fleet.

If these aircraft continue to be classified as “heavy,”

greater arrival separations will be required, with

adverse effects on capacity and delay.

If aircraft were classified on the basis of more

precise analytical or empirical data concerning

their specific aerodynamic and wake-vortex characteristics, it might be possible to reduce the intrail separation rules for some types. As a minimum, the use of approach weight rather than

maximum GTW as the basis for separation criteria could be considered. To be even more preFigure 9.—Arrival and Departure Separations

utical Miles

Instrument Flight Rules

Lead

s 3 3 3

L 4 3 3

H 6 5 4

Minimum Departure Separations—Seconds

Visual Flight Rules* Instrument Flight Rules

K —., I [ I f l-. -: l I I [

1

s

I 35 I 45 [ 50

H I 120 I

120 I 90

KEY: S = Small, L = Large, H = Heavy (see text.)
76 ● Airport System Development

cise, wingspan, approach speed, and engine and

flap configurations should also be taken into account. A recommendation to this effect was made

in the report of the Industry Task Force on Airport Capacity Improvement and Delay Reduction

and is now under consideration by FAA.31

Separate Short Runways for

Small Aircraft

The current practice in air traffic control is to

organize aircraft on approach according to time

of arrival, not type of aircraft. So long as the traffic mix is reasonably uniform, this practice has

a minor effect on throughput. At many airports,

however, small aircraft represent a significant portion of traffic. To avoid wake turbulence generated by the heavy and large classes of transports,

these small aircraft are required to follow in trail

at distances of 4 to 6 nmi from the larger aircraft.

Since many of these small aircraft operate at slow

speeds, safety requires that larger and faster aircraft be spaced more than 3 nmi behind so that

the leading small aircraft are not overtaken on approach. One way to overcome these operational

penalties would be to segregate small general aviation and some commuter aircraft into a separate

traffic stream using a different (short) runway. At

some airports such a runway is already available

but not usable for instrument approaches because

of inadequate instrumentation; at others, new

runways would have to be built and equipped

with MLS.

There is some disadvantage to separate short

runways in that they do not provide as much

operational flexibility as a full-length additional

air carrier runway. However, the separate short

runway can be built at a fraction of the cost of

an air carrier runway, and runway siting problems as well as local environmental issues may

be easier to resolve.

Ideally, the separate short runways for small

aircraft should be parallel to and operate independently from the main runway used by large

air carrier traffic. A short runway that is not parallel to the main runway would not be available

for use in IMC unless revised procedures for converging instrument approaches are also implemented; but even so, dependency on the main

runway would limit the throughput gain because

of the need to coordinate the two traffic streams.

If the procedures described above to reduce spacing requirements for independent and dependent

parallel approaches prove feasible, the siting of

these short secondary runways could become

easier. Another development that would facilitate

siting of short runways and broaden the applicability of the concept would be installation of

MLS to allow curved approaches and steeper glide

slopes by small aircraft, not only to alleviate wake

turbulence problems but also to achieve a greater

rate of runway use.

WEATHER AND ATMOSPHERIC EFFECTS

Perhaps the single greatest technological need scribed above is a better method to detect or to

in relieving delay at airports, aside from improved predict the occurrence of wake turbulence.

radar to monitor aircraft more closely spaced in

terminal airspace, is development of techniques Beyond this, improvement in the ability to preto improve the detection and prediction of weather diet weather and atmospheric phenomena could

and atmospheric effects. Weather-related technol- lead to general reductions in delay. Present techogies are typically viewed as safety improvements nology does not always permit sufficiently acrather than capacity improvements, but there are curate prediction of the time and magnitude of

significant exceptions—notably methods to pro- adverse weather conditions, making it necessary

tect from wake vortices. Current aircraft arrival to increase safety margins and thereby reduce

and departure separations are predicated in large throughput. The ability to foresee disruptions due

part on avoidance of wake vortices, and the key to weather would permit planning to compensate

to many of the revised approach procedures de- fer the impacts on traffic flow.
Ch. 4—Technology 77

Wake Vortex

Wake vortex is an aerodynamic disturbance

that originates at the wingtips and trails in corkscrew fashion behind the aircraft. Since the strength

of the turbulence increases with lift, the strongest

vortices occur behind heavy aircraft. These vortices spread downward and outward in the wake

of the aircraft and may persist along the flight path

for as long as 2 or 3 minutes in still air. When

the aircraft is within 300 ft of the ground, the vortices can bounce off terrain and rise back toward

the flight path, creating even more disturbance.

Wake turbulence can be of such strength and

duration that it poses a hazard to following aircraft (especially smaller aircraft), and present procedures require separation of 3 to 6 nmi depending on the size of the leading and following aircraft

and the movement of the airmass.32

Alternatives to the present procedural method

of avoiding wake turbulence are being sought

both in the interest of safety and for the capacity

benefits that could be realized through closer spacing of aircraft in the approach zone. Two avenues

are being taken. FAA has concentrated on development of techniques to detect wake vortex and

to predict its movement and persistence. NASA

has focused on aerodynamic research to provide

better understanding of the mechanics and causes

of wake vortex and to develop designs to alleviate

it at the source. NASA research indicates that certain combinations of flaps, spoilers, and protrusions on wing surfaces can reduce turbulence or

cause it to dissipate more quickly. Unfortunately,

many of these techniques also tend to increase

noise and reduce energy efficiency. Work is continuing on ways to minimize wake vortex at an

acceptable price in terms of noise and fuel consumption, but no ready solution is in sight. This

is an important area of research and development

since the alternative—wake vortex detection and

avoidance—has not been perfected to the point

that pilots have confidence in its reliability.

FAA has sought to develop equipment and a

concept of operation that provide real-time vortex

32J. N. Barrer, “Operational Concepts for Reducing Vortex Spacings on Closely Spaced Parallel IFR Approaches, ” The MITRE Corp.,

WP-81W520, September 1981.

sensing capability and to devise a predictive

algorithm that will warn pilots and controllers.

An experimental device, known as Vortex Advisory System (VAS), was installed and tested at

O’Hare in 1978. VAS is made up of wind sensors

mounted on towers along the approach path, a

central computer to process wind data and predict the strength and movement of wake turbulence, and a display to alert the controller when

a hazardous condition exists. VAS has not yet

proven operationally acceptable, and FAA plans

further development and test.

The disadvantage of VAS is that it does not

detect wake vortices; it only measures wind direction and velocity, from which an inference can

be made about the presence and strength of wake

turbulence. This deficiency is particularly evident

further out on the approach path (beyond the

middle marker) and in crosswind conditions

where turbulence on one approach path may

migrate to a parallel approach. To overcome these

limitations, FAA is also investigating other technological approaches such as short-wave radar,

lasers, and infrared devices that could provide better long-range sensing and wider coverage.

No practical solution is now in view, and it

seems likely that procedural methods to avoid

wake turbulence will continue to be employed.

So long as wake vortices cannot be reliably detected and predicted, the present separation standards (perhaps with some modification to account

for the aerodynamic characteristics of specific

types of aircraft) will remain in force and preclude

any throughput gains that might be achieved

through reduced in-trail spacing.

Wind Shear

Wind shear is any sudden change in wind velocity or direction. It may be associated with warm

and cold fronts, low-level jet streams, or mountainous terrain. One of the most dangerous types

of wind shear is a downward surge of air striking the ground and spreading out in all directions.

This kind of wind shear is often associated with

thunderstorms, but it may occur in other weather

conditions. These downdrafts, called microbursts,

are difficult to predict because they are small and
78 . Airport System Development

localized, extending only 2 or 3 miles and often

lasting less than 5 minutes .

For the pilot of an aircraft, wind shear is experienced as an abrupt increase or decrease of lift

(or often one rapidly followed by the other)

caused by a sudden shift in the relative wind. I n

this condition, the aircraft may gain or lose altitude unexpectedly and become difficult to control in angle of attack and flight path (see fig. 10).

If this occurs near the ground on takeoff or landing, there can be extreme hazard.33 While the primary concern is safety of flight, wind shear also

disrupts airport activities and can cause suspension of operations until the condition abates.

In 1982, The Federal Government undertook

a project known as Joint Airport Weather Studies

(JAWS) to provide a better understanding of wind

shear, thunderstorms, and related weather hazards

and to identify weather conditions that could be

warning signs to pilots. A multi-agency effort involving the National Science Foundation, the National Aeronautics and Space Administration, the

National Oceanic and Atmospheric Administration, and the Federal Aviation Administration,

JAWS collected data on downbursts at Denver

Stapleton airport during a 3-month period in the

summer of 1982. The knowledge of wind shear

Figure 10.—Effects of Low=Aititude Wind Shear

<

Base of

thunderstorm

~ // // I I

\ Projected flight path of aircraft ~..

— w

a ,

if no intervention by pilot .:

. . $-=”a

-. “.

-g

k. ‘r

,1.

.-~;

,<

,, =,.

The downburst spreads out as it nears the ground. The aircraft, instead of following a straight path to the runway, encounters first an abrupt

increase in headwind which lifts the nose, and then a sudden strong tailwind, which forces the nose down. If the pilot cannot compensate

for these wind changes at low altitude, the aircraft may crash.

SOURCE: ICAO Bulletin
Ch. 4—Technology ● 7 9

gained through JAWS will contribute to the Low

Level Wind Shear Alert System (LLWSAS) which

provides the air traffic control tower with information on wind conditions near the runway.

LLWSAS consists of an array of anemometers that

read wind velocity and direction around the airport and signal the sudden changes that indicate

wind shear. LLWSAS is now installed at 60 airports, and FAA plans to deploy 50 more by 1985.

Over the longer term, FAA is developing other

systems intended to provide better and more

timely weather information at airports, both to

improve safety and to help in traffic management.

The Automated Weather Observing System

(AWOS) will gather weather data from urtrnanned

sensors, automatically formulate weather reports,

and distribute them to airport control towers.

AWOS will also broadcast this information to

pilots as voice synthesized messages over VHF

radio. Implementation of the system, scheduled

for the period 1983-90, began with a l-year

demonstration program in June 1983, when 21

units were put into operation at towered and nontowered airports in various locations. Full deployment at 745 airports is scheduled to begin i n

1986 .

34 A similar system, Joint Automated Weather

“Several GA user groups have argued that the AWOS timetable

could be accelerated by a year or more and have asked FAA to reconsider the deployment schedule.

Observation System (JAWOS), is planned for installation at some medium and large hub airports.

JAWOS will automatically gather local weather

data and distribute it to other air traffic control

facilities and to the National Weather Service.

In cooperation with the Department of Defense

and the National Oceanic and Atmospheric Administration, FAA is also developing a next generation nationwide weather network based on

pulsed Doppler radar (NEXRAD). This network

will provide more accurate information on precipitation, reflectivity, wind velocity, and turbulence. NEXRAD will probably not provide the

minute-to-minute observations needed to detect

small localized downbursts that produce wind

shear, nor will it be able to detect wind shear in

the absence of precipitation. Still, NEXRAD will

greatly improve the quality and comprehensiveness of the weather information available to air

traffic controllers and will be a significant aid in

managing traffic to compensate for adverse weather

conditions. A total procurement of 160 units is

planned, with the last scheduled to be in place and

the system fully operational by 1992.

NOISE CONTROL AND ABATEMENT

Aircraft noise, especially the noise of jet aircraft, is one of the greatest barriers to airport utilization and expansion, and it is the most common subject of complaint by airport neighbors.

The areas of severest noise impact are just beyond

the ends of runways, but noise levels can be unacceptably high elsewhere along approach and departure paths where aircraft are close to the

ground. In legal actions brought by airport neighbors, the courts have generally found that the airport operator is responsible for injury due to reduced property value or nuisance and have awarded

damages to property owners and others affected

by noise.

There are two ways to reduce noise. One is to

quiet the aircraft themselves, notably the engines,

and FAA has imposed progressively stricter noise

standards for aircraft in FAR 36 and FAR 91E.35

As a result, new aircraft entering service are much

quieter than earlier models, and some older aircraft have been equipped with new, quieter engines. While research is continuing on aircraft

noise, airframe and engine manufacturers tend to

the view that large-scale and cost-effective advances in the technology of noise suppression will

be increasingly difficult to find.

35FAR part 36 defines noise requirements for certification of new

aircraft and engines. FAR Part 91 Subpart E sets the timetable for

compliance and calls for retirement or retrofit of aircraft (both foreign

and domestic) that do not comply with FAR Part 36 by 1985. To

protect air service to small communities, FAR Part 91 Subpart E

allows three additional years (until 1988) for twin-engine aircraft

with 100 or fewer seats to achieve compliance.
80 ● Airport System Development

The other approach has been to impose operational restrictions on airports—principally in the

form of limits on the hours of use, frequency of

flights, and the approach and departure routes

that may be taken. Airport operators and airlines

have resisted these measures since they reduce the

capacity of the airport overall or at peak times

and because noise abatement flight procedures

often result in lengthier, less fuel-efficient paths

to and from the airport. Two studies of airport

capacity published recently have stressed the need

to lessen some of these restrictions in the interest

of increasing airport capacity and making more

efficient utilization of aircraft.3b 37

The discussion that follows addresses first prospective improvements in aircraft technology that

might lessen noise, and then procedural solutions

to alleviate the noise problem.

Aircraft Noise

Aircraft noise has two components: engine

noise produced by moving engine parts and by

air flow through the engine, and airframe noise

caused by the passage of air over aircraft surfaces.

In early jet aircraft, the engine was the predominant noise source. Advances in engine technology over the past 20 years have reduced engine

noise to the point where the engine and the airframe are now about equal contributors to aircraft noise on landing. The engine is still the major noise source on takeoff.

Engine Noise

The principal sources of noise in a jet engine

are: 1) the fan, 2) the compressor and turbine, and

3) the exhaust. The relative importance of these

sources varies somewhat with the design of the

engine and the operating regime, but exhaust noise

is generally the greatest of the three.

Efforts to reduce fan noise have centered on

altering the design of the fan blades and incorporating sound absorbing material in the fan case

and the inlet and discharge ducts. Typically, this

36 Report and Recommendations of the Airport Access Tskk Force

(Washington, DC: Civil Aeronautics Board, March 1983).

37 Report of the Industry Task Force on Airport Capacity Improvement and Delay Reduction, op. cit.

sound absorption is accomplished by a liner of

porous material backed by cavities to trap sound.

The newer aircraft engines now in service incorporate these design concepts, but further, small

noise reductions may still be achieved.

Compressor and turbine noise are generated inside the engine by the compression, heating, and

expansion of the air passing through. Methods for

reducing compressor and turbine noise have included redesign of compressor parts and turbine

blades to modify their sound characteristics, and

use of sound absorbing material. Since the ability

to alter the design or configuration of the compressor or turbine is limited by mechanical and

aerodynamic considerations and engine load requirements, it is expected that the principal method

to attain further reductions in compressor and turbine noise will be acoustic treatment in the intake

ducts. Research is now aimed at development of

improved acoustic material capable of withstanding the hot and cold environment of the compressor and turbine, and at reducing the cost of

these noise suppression treatments.

Exhaust noise results from the turbulent mixing of hot, high-speed exhaust gases with the ambient air. The way to reduce this noise is through

techniques that lower the temperature and velocity differential between the exhaust and the outside air, but without loss of engine efficiency and

thrust. In the early, pure turbojet engines, all of

the intake air was passed through the hot section

of the engine, from which it exited at high velocity. These engines were very noisy. A later development diverted some of the air from the compressor around the combustion chamber and

turbine and merged it with the exhaust stream—

thus shielding the high-velocity exhaust with a

cooler, slower moving sheath of air from the compressor. These low bypass ratio engines were more

efficient and proved, on average, to be about 8

decibels (dB) quieter than pure turbojets.38 Engines

introduced in the 1970s made use of an even

higher bypass ratio to achieve both greater fuel

efficiency and a further 8- to 10-dB reduction of

noise .39

38 The bypass ratio is the amount of air diverted around the combustor relative to that which passes through it.

39 For reference, a change of 3 dB is just perceptible to the human

ear. A reduction of about 10 dB is perceived as halving the amoyance

of a sound source.
Ch. 4—Technology ● 8 1 — .

Engine manufacturers are continuing to explore

techniques such as high-pressure turbines, exhaust

diffusers, and improved internal cooling methods–

principally to increase engine efficiency but also

for their potential to reduce noise. They are also

evaluating internal flow mixers to combine lowvelocity bypass air with higher velocity engine

flow to produce an exhaust stream with less turbulence and a more uniform exit velocity. These

efforts are yielding diminishing returns since further noise reduction involves very tightly coupled

tradeoffs with fuel efficiency, production techniques, and maintenance costs. Attainment of

noise levels significantly lower than those of FAR

Part 36 appears to be very difficult without a sacrifice of fuel efficiency or a large cost penalty.

Airframe Noise

Airframe noise stems primarily from turbulent

air flow past the undercarriage, leading and trailing edges of high-lift devices, aircraft cavities, and

projections from the aircraft surface. For an aircraft in flight, these noises intermingle and are not

usually distinguishable as to source. The principal

methods available to reduce aerodynamic noise

are wing design, high lift systems, and aircraft

streamlining.

Recent exploratory development in aircraft

wing design has included supercritical airfoil sections and winglets. Aircraft using these wing design features are currently being flight tested. Fundamentally, the supercritical airfoil and winglets

would reduce drag and provide additional lift, but

they also serve to reduce aerodynamic noise somewhat. Drag is exhibited as turbulence in the wake

of aircraft, and turbulence produces noise. Further, insofar as reduced drag and increased lift permit the aircraft to be operated at lower power settings on takeoff and landing, these aerodynamic

improvements might provide a secondary benefit of reduced engine noise.

Advanced high-lift systems make use of twosegment trailing edge flaps and a variable camber

on the leading edge of the wing. High-lift devices

of this sort are currently used on Short Takeoff

and Landing (STOL) aircraft such as the deHavilland

DHC 7. They have also been incorporated in some

large transport aircraft. The 747 and later model

727 aircraft have triple-slotted flaps, and the 767

has both variable camber leading-edge flaps and

double-slotted trailing edge flaps. These systems

do not necessarily produce quieter aircraft; in fact,

they may be noisier. However, high-lift devices

permit steeper approach and takeoff paths, thereby

reducing the size and severity of the aircraft noise

footprint on the ground and leading—in effect—to

less aircraft noise overall.

Techniques to streamline aircraft include placement of fairings around extended landing gear and

other projections from the aircraft surface and

enclosure of wing and body cavities. Such features

are intended primarily to improve the aerodynamic performance of the aircraft, but they could

also lessen aerodynamic noise. Another streamlining technique involves strategic placement of the

engines at locations where the airframe can act

as a shield for engine noise. There are critical

tradeoffs between engine placement and aircraft

performance and safety that need to be treated

carefully. There is also a need for additional research to improve the understanding of how the

engines and airframe interact in the production

and suppression of noise.

Many of the techniques described above might

lessen aerodynamic noise, but the overall reduction would probably be rather small. There is a

widely held view among aircraft designers that

the newest aircraft are close to the practical lower

limit of aerodynamic noise and that further reductions will be technically difficult, prohibitively

costly, and perhaps disadvantageous for other

aspects of aircraft performance. While some of

these techniques will be pursued and might be incorporated in future aircraft, the general opinion

is that there are no aerodynamic solutions that

will lead to large-scale reductions in aircraft noise.

Aircraft Operating Procedures

In addition to technological measures to reduce

noise at the source, there is the the procedural

solution of operating aircraft in a way that alleviates the effect on noise-sensitive areas. Many

such measures have already been adopted—some

locally, some more generally—and work is continuing to improve these procedures, to devise
82 . Airport System Development

new ones, or to extend their application more

widely.

Procedures in use today are limited, in some

cases, by safety and capacity considerations and

by the capabilities of the ATC system. The ability

to apply these procedures is also affected by conditions of wind, weather, and visibility. Perhaps

the greatest deficiency, however, is that restrictions are applied airport by airport—often as a

result of local ordinance—in a fashion that is

fragmentary, confusing, and inefficient. Aircraft

operators complain that both airport capacity and

aircraft utility are wasted and that market opportunities are lost. The Airport Access Task Force

of the Civil Aeronautics Board (CAB) devoted

major attention to the question of noise abatement

procedures and urged the Federal Government to

reduce the number of locally imposed aircraft

operating restrictions and to develop nationally

applicable procedures that would appropriately

balance public concerns about noise with the interests of air commerce.40

Prospective advances in technology might make

some of the procedures in use today more effective or less onerous to aircraft operators. One such

procedure is departure thrust management, which

necessitates adjustments in power settings during

climbout and exit from the terminal area. As

newer aircraft with better performance characteristics and quieter engines come to predominate in

the fleet, these departure practices may be easier

to implement, or—in some instances—they may

not be required as often. The CAB Airport Access Task Force estimated that phasing out aircraft with low bypass engines (from 94 percent

of the fleet in 1980-81 to 10 percent by 2000)

would produce an average noise reduction of

almost 6 dB systemwide, even if operations were

to increase by 50 percent.41

Preferential runway use is another method for

reducing the extent or severity of noise impact on

the surrounding community. This involves using,

whenever possible, those runways that minimize

the number of people or the area exposed to aircraft noise. The effectiveness of preferential runway use is site-specific since it depends on the runway layout in relation to land use patterns, the

prevailing wind and weather, and the installation

of navigation and landing aids. Implementation

of the Traffic Management System and deployment of MLS might make it possible to extend this

practice to other airports or allow it to be used

in a wider spectrum of weather conditions.

On the other hand, preferential runway use has

the effect of exposing the unfortunate few who

live or work in affected areas to more unremitting noise than might be considered their “fair

share.” For this reason, it may be more equitable

to temper preferential runway use with some

variation of runway use patterns. Distributing

noise more uniformly among areas surrounding

the airport would lessen the impact on some, but

at the risk of antagonizing perhaps far more who

are not presently exposed to aircraft noise.42

Preferential flight paths are prescribed routings

for arriving and departing aircraft to avoid overflight of noise-sensitive areas. This procedure is

frequently combined with preferential runway

use, but may be used even where the airport has

only a simple runway layout. At some airports

Photo credit: Dom McGrath, Jr.

Houses under the approach path to San Diego airport
Ch. 4—Technology ● 8 3

the use of preferential flight paths is limited by

the availability or capability of the installed landing and navigation aids. It is expected that MLS

will enhance the ability to use noise-avoidance

flight paths since it provides more precise and flexible approach guidance with a wider range of coverage than the existing ILS. MLS would permit

multiple final approach paths, including curved

approaches. The ability to fly curved approach

paths will enable aircraft to avoid noise-sensitive

areas in IMC much as they do now in VMC and

will aid in the reduction of noise levels for airports with noise-sensitive land uses located under

the straight-in approach path. MLS would also

allow some aircraft to fly steeper approach paths,

which—by keeping aircraft higher as they pass

over development around the airport-will reduce

the area of high noise impact. In FAA studies of

the application of MLS to specific sites, it was

found that the use of curved and segmented IMC

approaches made possible by installation of MLS

at airports such as La Guardia, Minneapolis, San

Francisco, Seattle, and Washington National

could lead to significant noise reductions.

AIRPORT SURFACE UTILIZATION

An airport is an interconnected set of physical

facilities and components. For it to function efficiently, the capacities of each of these elements

must be matched. Relief of a bottleneck in one

part of the airport will not have the desired effect on overall throughput unless other parts are

capable of absorbing a greater influx of traffic.

Indeed, a common experience is that enlargement

of one part of the airport complex simply shifts

the delay elsewhere, to the next most constraining element.

Nowhere is this more evident than on the airport surface. Measures to augment runway capacity or to increase the flow of traffic through the

airspace may be of little practical benefit unless

aircraft are able to move expeditiously on and off

runways and to and from the terminal building.

It is on airport taxiways and aprons that aircraft

are closest together and that their speed is lowest.

If the movement of aircraft on the airport surface

is constrained by runway and taxiway design and

layout, by operational procedures, or by poor visibility, the effect ripples throughout the airport

and airspace, and delays accumulate.

This section examines three types of technology deployed on the airport surface: surveillance

and control systems, taxiway design and lighting,

and equipment used at parking aprons and gates.

In general, new airport surface utilization technologies will not lead to major increases of airside capacity, which is largely determined by

available runways and airspace use procedures.

The primary capacity benefits are indirect—increased safety, especially during inclement weather,

and relief of operational impediments to making

efficient use of the airside.

Surveillance and Control

Surveillance and control of aircraft movement

on the airport surface is accomplished largely by

visual means. In darkness or fog—and even in

good visibility at large, complex airports-Airport

Surface Detection Equipment (ASDE) is used by

air traffic controllers to augment and confirm information obtained from visual surveillance of the

airport surface. Used primarily at high activity

airports, ASDE allows controllers to locate and

monitor the movement of aircraft and ground

equipment on runways, taxiways, and apron areas.

The existing equipment, designated ASDE-2,

utilizes tube technology, which presents reliability

and maintenance problems. In addition, utility of

ASDE-2 is limited by display resolution, brightness, airport map definition, and poor weather

penetration capability. The last is particularly significant under conditions of precipitation or fog,

when the system is needed the most. Under these

conditions, visual surveillance is virtually impossible, and ASDE is the controller’s primary means

to obtain the necessary information.

A new system utilizing solid state technology

is programmed for deployment by 1986-89. This

system, ASDE-3, is expected to increase reliability

and reduce system maintenance, in addition to improving display resolution and weather penetra-
84 Airport System Development

tion. More accurate information on the specific

location and movement of aircraft and ground

equipment on the airport surface provided by

ASDE-3 might allow reductions in safety-dictated

separation of aircraft and promote more efficient

utilization of runways and taxiways. Ultimately,

small gains in airfield capacity could result.

Research and development on more advanced

systems will be needed since even ASDE-3 cannot identify aircraft and surface vehicles under all

weather conditions or be used by the controller

to guide them to their destinations. At present,

the capability of navigation systems to help aircraft land in very low visibility (Category IIIC

operations) exceeds that of surveillance and control systems to guide them after they are on the

airport surface.

The Tower Automated Ground Surveillance

System (TAGS) is a display enhancement intended

for use in conjunction with ASDE at major airports. The ASDE-3 search radar provides a map

of the airport and the location of aircraft on the

airport surface, which are shown graphically on

the ASDE display. TAGS will provide, for transponder-equipped aircraft, a flight identification

label alongside the position indicator on the ASDE

display. Since TAGS operates by receiving a

signal transmitted directly by aircraft equipment,

the system would be virtually immune to weather.

Presentation of flight identity by TAGS would

also improve ground control capability in good

visibility. TAGS is presently in the exploratory

phase of development and probably will not be

ready for deployment until the 1990s.

Taxiways

The design and layout of taxiways, particularly

those that provide egress from runways, have an

important effect on runway occupancy time

(ROT) .43 The placement of exit taxiways, where

landing aircraft turn off the runways, and the

angle at which these taxiways intersect the runways can be crucial. Poorly placed exit taxiways

prolong runway occupancy by forcing incoming

aircraft to taxi at low speed for some distance

before clearing the runway. Taxiways that leave

the runway at right angles force the aircraft to

come almost to a complete stop before turning.

Since the runway occupancy rule (with a few exceptions in VMC) does not allow an approaching

aircraft to cross the runway threshold while the

preceding aircraft remains on the runway, longer

runway occupancy either forces the air traffic controller to increase arrival spacing or causes some

approaching aircraft to execute a go-around—

both of which are disruptive of throughput.

At some airports, relocating taxiways so that

aircraft with shorter stopping distances can leave

the runway sooner would lower ROT by as much

as 20 to 30 percent. At others, providing a driftoff area alongside the runway or redesigning taxiways so that they diverge from the runway gradually and allow aircraft to turn off at higher speeds

(i.e., sooner after landing) would have much the

same effect. However, translating reduced ROT

into a corresponding throughput gain is not

straightforward since it depends on whether the

runway layout, the airspace geometry, and the

ATC procedures will permit closer arrival spacing to take advantage of the shorter runway occupancy. Still, it is an avenue to be explored, and

among the recommendations of the Industry Task

Force on Airport Capacity Increase and Delay Reduction were several that urged FAA and airport

operators to adopt measures that would assist

faster exit from runways.44 One of these was to

adopt procedures and rules that would increase

the motivation of pilots to use specified rapid exits

and improve the coordination between controllers

and pilots in minimizing ROT.

Marking and lighting of taxiways can be as important as their design and physical layout in expediting ground movement of aircraft. For runway exits to be used to their full potential, pilots

must be able to detect their location and identify

the one they are to use with ample Ieadtime. This

is especially critical at night and during periods

of poor visibility. A taxiway marking and lighting

system that conveys the necessary information to

44Report of the Industry~ Task Force on Airport Capacity Improvement and Delay Reduction, op. cit., pp. 11-14.
Ch. 4—Technology ● 8 5

pilots in a clearly understandable fashion will

promote more efficient utilization of airfield

pavements.

Research and development are in progress on

several aspects of marking and lighting. For exit

taxiways, the major efforts are to improve the

lighting pattern and the configuration, spacing,

and orientation of components in a way that promotes ready identification of the exit and provides

visual guidance for safe and prompt transition

from the runway to the taxiway. Among the areas

under study are improved lighting and signing for

taxiway intersections, traffic control signals and

lighting systems for ground guidance, and methods for controlling lighting patterns and intensity

from the tower. Development is also proceeding

on new lighting techniques such as lights that use

low voltage electricity, light-emitting diodes, and

electroluminescent components to relieve some of

the deficiencies of present lighting, which pilots

characterize as “the blueberry pie maze. ”

To optimize the use of airport pavements and

to make proper decisions related to safety, pilots

and controllers must have accurate and up-to-date

information on surface conditions that affect aircraft ground movement and stopping characteristics. Perhaps the most noticeable changes in

these characteristics are aircraft braking and stopping distance on wet or icy pavement, which are

important not only from a safety standpoint but

also because of the effect on capacity.

One major effort is to devise pavement designs

and surface treatments that will improve traction.

Research is also being conducted on means to provide information that will allow pilots and controllers to predict aircraft stopping capability and

skid risk more accurately under various runway

surface conditions. Items such as pavement sensors that continuously monitor pavement condition and coefficients of friction are being examined. Attention is also directed at development

of better methods to convey this information to

the pilot and, ideally, to provide braking guidance

or warning of specific hazardous conditions and

locations. The primary concern is safety, but better information about pavement condition and

aircraft performance when traction is reduced

would also yield a capacity benefit in that a more

accurate delineation of safety limits might make

Photo credit’ Federal Aviation Administration

Night life at Chicago O’Hare
86 . Airport System Development

— . — —

it possible to relax some of the present conservative rules governing aircraft movement on the

surface in slippery conditions.

Apron and Gate Facilities

Opportunities to relieve airport surface congestion extend up to the parking spaces at the gates.

Aircraft docking is typically accomplished by a

ramp agent with flashlights and hand signals

guiding the flight crew for proper parking of the

aircraft and assuring that the wing tips have safe

clearance from buildings, ground equipment, and

other aircraft. New optical, electrical, electronic,

and mechanical devices are being developed to

provide flight crews with positive visual guidance

that will permit more rapid and accurate docking. This technology will allow apron space to be

used more efficiently and help prevent the delays

that arise when aircraft must be repositioned in

order to mate with fixed ground support systems

and passenger loading bridges.

While needs and procedures vary by airline and

by airport, the aircraft servicing functions commonly performed at an airport include fueling,

engine start, galley and cabin service, electrical

ground power, towing, passenger stair or loading

bridge operation, and handling of baggage, mail,

and cargo. In addition, various routine or special

aircraft maintenance functions are conducted.

Several technological advances offer reductions

in servicing time and cost. At some airports,

ground power is now being provided by fixed systems mounted on the passenger loading bridge or

in underground pits. Similarly, fixed pneumatic

systems are being developed to provide ground

power and aircraft engine start. These installations

ease the congestion caused by mobile units clustered around aircraft on the ramp and provide for

a more efficient servicing operation. Auxiliary

power units now provided on most newer aircraft

alleviate congestion by replacing ground equipment needed for electric service, air start, and airconditioning. These self-contained units also assist

in quick turnaround, thereby reducing gate occupancy time. Special pallets and handling equipment provide for efficient transfer and loading of

bags and cargo. While use of this technology saves

time at the gate, the loading and unloading of the

pallets themselves can sometimes be time-consuming due to mechanical problems and alignment difficulties.

These improvements in technology help ease

surface congestion in two ways, Those that speed

turnaround lessen gate delays and enhance throughput. Those that reduce the apron space needed

for service vehicles and equipment allow more aircraft to be parked in a given area, thereby directly

increasing apron capacity and helping to ease airport surface congestion in general.

Terminal Facilities and Services

The airport terminal-the building itself and the

paved areas surrounding it on the airside and the

landside—is the zone of transition for passengers,

providing the link between surface and air transportation. Design and operation of the terminal

have an influence on both airside capacity and

ground access and on overall throughput of the

airport complex. This basic relationship, illustrated in figure 11, dictates that the design of the

terminal complex must reconcile the requirements

of three operational areas:

●

●

●

airside—where aircraft are serviced and

passengers board,

terminal building—the collection point containing facilities for passenger processing and

services during transfer between airside and

landside, and

landside—the area accommodating ground

transportation (roadways, parking areas,

etc.).

Basically, the terminal and associated landside

facilities are long-term installations with relatively

stable patterns of use. They are largely independent of the specialized aircraft and airline passenger

processing functions that occur on the airside. In

contrast, the airside is characterized by shortterm, impermanent use which is closely tied to

changing aircraft technology with a useful life of

about 10 to 15 years. The essence of airport terminal design is to strike an appropriate balance
Ch. 4—Techno/ogy . 87

AIRPORT PARKING

Spec!al Report 159, 1975”

between these somewhat contradictory requirements.45

The principal effect of the terminal on the airside is through the design of aprons and gates,

which determines the number of aircraft that can

be accommodated at one time and the turnaround

time for passenger boarding and aircraft servicing. As seen in the previous section, gate and

apron operations can also have a wider—though

not major—effect on airside throughput. The impacts of terminal design usually do not extend

beyond the apron and gate area, and terminal

building characteristics have scant influence on

the design of other airside components such as

taxiways and runways.

Overall, the influence of the terminal on the

functional requirements and performance of airside facilities is relatively small compared with the

inverse effect that the airside exerts on the terminal.4b The primary purpose of the terminal is

to transfer passengers and their baggage between

surface and air transportation with minimum

time, confusion, and inconvenience. The func4

’Horn and Orman, op. cit.

25-420 0 - 84 - 7
gg . Airport System Development

tional requirements and choice of design for a terminal complex must take into account the passenger and baggage flows resulting from aircraft

size, traffic mix, schedules of operation, and type

of service provided (origin-destination or connecting flights). As a design task, this involves the integration of three major parts of the terminal: airside gates, passenger collection and service areas,

and landside access and egress. Since these parts

are highly interactive, it is important that the

separation between them be kept to a minimum

and that traffic flow smoothly among the parts.

This would be a fairly straightforward task

were it not for the need to design the airside interface so that it can be adapted to accommodate

continually changing aircraft technology, airline

service patterns, and traffic volumes. At some

large hubs, the steadily increasing size of aircraft

and their fixed-point servicing requirements, when

coupled with growing passenger and automobile

traffic, have led to terminal complexes of a size

that imposes inconvenience and delay on passengers. In response, airport designers have been

forced to add an intermediate transportation

mode within the terminal itself (moving sidewalks,

transport buses, fixed rail systems, and other such

people movers) to aid passengers in transferring

between the airside and the landside.47

The discussion that follows touches first on general questions of terminal building design and then

on technology of specific features that might be

improved to facilitate passenger movement or to

reduce passenger inconvenience and delay. It

should be recognized that these aspects of design

and operation will have little, if any, effect on airside capacity and throughput even though they

might lead to substantial reductions in the overall trip time for air travel. It should also be recognized that such matters have been of little interest to FAA or to policymakers in the Federal

Government. They are, of course, keenly important to airport operators and—to a lesser extent—

airlines because they constitute investment needs

that must be balanced against airside capacity expansion in the overall program of capital improve-

“M. Brink and D. Maddison, “Identification and Measurement

of Capacity and Levels of Service of Landside Elements of the Airport,” in Airport Landside Capacity, op. cit.

ment for airports. Recent estimates indicate that

over half of the large hub airports are experiencing congestion and delay within terminal buildings

and that over 30 large and medium hubs are contemplating investments in terminal expansion or

improvement, with a total cost of $4 billion. 48 49

Terminal Building Design

Airport terminals can be grouped into four categories according to their basic design concept:

●

●

●

●

centralized with finger piers—a common hall

with branching corridors leading to aircraft

gates;

centralized with satellites—a central concourse surrounded by small, separate clusters

of gates and waiting areas, each connected

to the concourse by walkways or people

movers;

linear or gate arrival—usually semicircular

buildings with ground access on one side and

aircraft gates on the other, designed so as to

minimize walking distance through the terminal; and

transporter—a compact passenger facility

with buses or special vehicles used for transport to a remote aircraft parking apron.

These concepts are embodied in pure form only

at a few airports which have been built on entirely

new sites. At most airports the design of the terminal building has evolved and been modified in

response to traffic growth and local conditions,

giving rise to a hybrid that incorporates features

of two or more of the basic concepts (fig. 12). At

airports with land available adjacent to the existing facility, the design has tended to evolve into

a finger pier arrangement, sometimes with separate unit terminals for commuter airlines or groups

of new air carriers for whom there is not room

in the main terminal. At airports where the terminal has grown to the limits of available land

area, satellite terminals and remote hardstand

parking have typically developed. Transporter

and satellite terminal concepts utilizing people-
Ch. 4—Technology ● 8 9

[ I

I J

[ 1

ii)

r

0

n.

(n

cm

1=
SW ● Airport System Development

moving equipment have been adopted at some airports to enhance the attractiveness of the terminal

for passengers since they eliminate the extreme

walking distances associated with long piers extending from central terminals. The transporter

concept has the additional advantage of allowing a small terminal building, free of the constraints imposed by aircraft parking gates.

At a new site, the choice of terminal design is

largely dependent on the volume and type of traffic expected. Centralized terminals are best for airports with a high proportion of transferring passengers, especially those changing from one airline

to another. The gate-arrival design works well for

origin-destination passengers and commuter airlines since it shortens the transit from the curbfront to the aircraft gate. The unit terminal with

passenger transporters can handle peaks of traffic efficiently, but only if the traffic is made up

largely of origin-destination passengers. In the expansion of existing terminals, these same considerations come into play, but the choice may

be constrained by the design of the existing structure, the available land, and the on-airport road

net.

Misestimation of traffic volume or the type of

service to be provided can sometimes render even

a well-conceived design inefficient or inappropriate. Dallas-Fort Worth Airport, for example,

was planned with the expectation that origindestination traffic would predominate. Since airline deregulation, the growth of hubbing—which

typically requires passengers to change planes at

the airport—has thwarted the effectiveness and

convenience of the design. At O’Hare, the need

to adapt the concourses for passenger security

screening has created long and circuitous routes

for transferring passengers. Efforts to encourage

greater use of Dunes Airport for short and medium-length domestic flights have been hindered by

the design of the terminal since the need to go

from apron to terminal and back again by mobile

lounges greatly increases the time and inconvenience of interline connection. Kennedy Airport,

planned with separate terminals for major airlines,

is well-suited for origin-destination passengers and

for transfers to flights on the same airline, but very

inconvenient for interlining domestic passengers

and those coming in on international flights and

continuing to other U.S. destinations.

Clearly, no single design is best for all circumstances. Traffic patterns, traffic volume and flow

characteristics (e.g., peaking), the policies of individual carriers using the airport, and local considerations (e.g., esthetics and civic pride) dictate

different choices from airport to airport and from

one time to another. The airport planner, who

is required to anticipate conditions 10 to 15 years

in the future, must often resort to guesswork.

Even if the guess is right initially, conditions

change—as the above examples illustrate—and result in a mismatch between terminal architecture

and the traffic to be served. To guard against this,

airport planners now tend to favor flexible designs

that can be expanded modularly or offer the opportunity for low-cost, simple modification as

future circumstances may demand.

Terminal Services

These precautions, of course, are of little help

in terminals that have already been built for one

type of traffic but forced to accommodate another,

or where demand outstrips capacity. Many airports will continue to suffer from inappropriate

or outdated designs that lead to congestion and

delay in passenger areas and diminish the overall utility of the airport as a transportation hub.

For such airports, an alternative to a new or expanded terminal as an avenue of relief from congestion is to correct specific features that cause

bottlenecks by applying improved technology that

will compensate for design inadequacies. Some

of these partial technological remedies are discussed next.

Passenger Movers

To speed passenger movement through the terminal and to lessen the inconvenience of walking long distances to board flights or to reach

landside exits, some airports have turned to passenger movers. so Several technologies are available, covering a broad spectrum of cost. They in-
Ch. 4—Technology . 91

elude buses, mobile lounges, moving sidewalks,

and automated guideway systems. The choice of

any of these involves a tradeoff between their

service characteristics and cost (capital and operating) against those of adding new gates or terminal wings. This tradeoff is very sensitive to the

rate of use, the specific vehicle chosen, and the

cost of gate construction. Passenger movers tend

to be more cost effective than gates if the rate of

use is high. Variation in traffic load is also important, and analysis indicates that passenger

movers are best suited to serving those locations

and intraterrninal trips where there is a great fluctuation in demand. 5l

Buses and mobile lounges add to airside surface traffic; they are also labor-intensive and

therefore costly to operate. For these reasons, airports with finger piers or satellite terminals have

sometimes opted for automated vehicles such as

moving sidewalks or guideway transit systems.

Moving sidewalks are not an entirely satisfactory

option. They are costly to operate and maintain,

and their speed must be slow to allow passengers

to board and descend safely. Thus, they provide

only a marginal decrease in passenger movement

time, although they greatly reduce the effort of

long passages through the terminal complex.

There is some experimentation with accelerating

devices and transition techniques that would permit greater line speeds and still afford comfortable

and safe boarding and descent. If these experiments are successful, the utility of moving sidewalks will be greatly increased.

For longer distances or where the volume of

traffic is large, automated guideway systems are

sometimes practical. Several different types are

available, varying principally in terms of propulsion, vehicle size, and complexity of the guideway

network and control system. Reliability and train

control system design were problems in the first

systems installed at airports (Dallas-Fort Worth,

for example), but the technology has improved

rapidly and now appears to give good service at

airports such as Atlanta and Orlando. Capital

costs of vehicles and guideway construction remain high, and they are still difficult and expen51 R. De Neufville, Airport Systems Planning (London: Macmillan,

1976); pp. 118 ff.

sive to maintain. The view of airport designers

is that these systems are cost effective only at a

few very large airports, and there is reluctance

to utilize this technology except as a last resort.

Ticketing

The ticket counter serves three major functions:

ticket transactions, baggage check-in, and flight

information. Of these, the most time-consuming

are ticket transactions (which often include baggage check-in for the individual passenger). Technologies to speed ticket counter operations or to

eliminate them altogether are being explored, both

to reduce delays in the terminal and to cut airline personnel costs. Computerized ticket systems

available today offer passengers advance reservations and sales, preassignment of seats, and

automatic tagging of baggage. They will probably

be used more widely by the major air carriers,

some of whom may also offer them to small carriers under a service contract. A companion development is the computerized aircraft manifest

that has been implemented by some airlines. These

systems typically produce aircraft load sheets,

passenger manifests, and automatic telex reservations. They greatly reduce the administrative

work at the counter and expedite airline dispatch

from the gate.

Ticket dispensing machines similar to those

used for banking are now in limited use by some

airlines at a few locations and for selected routes.

Improvement of these machines so that they can

handle a larger number of routes and fare structures could promote wider use, with corresponding reduction in the amount of activity that must

be conducted at the ticket counter. This technology could also be extended to sale of tickets off

the airport property. With the deregulation of

travel agencies, the range of services provided by

these firms has expanded, offering passengers an

alternative to purchasing tickets at the airport.

Travel agents now account for more than 60 percent of airline ticket sales in the United States. The

entry of mass-marketing firms such as Sears and

Ticketron into the air travel field may further decrease the need for ticketing at airport terminals,

reducing airline personnel and equipment requirements, and alleviating congestion at terminal

ticket counters.
92 . Airport System Development

Baggage Handling

The handling of baggage, especially baggage

claim at the end of a flight, is a common and=

for passengers—particularly onerous form of delay in terminals. At most airports, baggage handling is the responsibility of the individual air carriers, but some airports operate a consolidated

baggage service—either with airport personnel or

on a contract basis—in the interest of speeding

the process and reducing the cost. Reduction of

the delays and passenger inconvenience associated

with baggage handling has been approached in

three ways: more efficient procedures for checkin and claim, automated handling and sorting,

and elimination of some baggage handling by encouraging carry-on luggage.

One of the simplest and most widely applied

methods to expedite baggage handling is curbside

check-in. This separates baggage handling from

other ticket counter and gate activities, thereby

disencumbering those locations and allowing baggage to be consolidated and moved to aircraft

more directly. Another method is replacement of

the baggage claim carrousel with loop conveyor

belts that allow passengers greater access to their

luggage without increasing the size of the claim

area.

Sorting baggage, moving it to and from the

apron, and aircraft loading and unloading are

time-critical and labor-intensive operations. Technologies to improve this process include highspeed conveyors to transport baggage between the

terminal and the flight line, often used in conjunction with pallets or containers that can be put on

and taken off aircraft with labor-saving equipment. Computerized sorting equipment, capable

“ of distributing bags with machine-readable tags,

has been installed at some airports. These devices

are not yet fully satisfactory since the encoding

and reading of tags are time-consuming and somewhat unreliable.

To handle peak loads, automated systems must

have a larger capacity because they are less flexible than manual systems. Redundancy is a must

with an automated system, which increases the

capital cost. As these automated systems improve

and come into wider use, a further step is to install self-service systems that allow passengers to

check and claim luggage either in the terminal,

at the curbside, or at remote locations on or off

the airport property. While such a development

would be primarily a labor-saving measure by airlines and airport operators, it might also speed

transit through the airport for many passengers.

The functional equivalent of automated, selfservice baggage handling systems—and one that

may be cheaper and more reliable—is expanded

capacity within the aircraft for carry-on luggage.

With the advent of stronger and lighter materials,

aircraft designers have been able to reconfigure

cabins to provide larger and more secure storage

space on board. New aircraft universally contain

such overhead storage bins, and many airlines

have converted older aircraft to incorporate similar enclosed overhead storage. A further development might be provision of a common baggage

space either within the cabin or in a special module that could be transferred to the cargo bay.

Passengers entering and leaving the aircraft would

pass through this space and handle their own

baggage.

Passenger Security Screening

To deter aircraft hijacking, the Federal Government has established regulations to ensure safe

passage for the traveling public. These regulations, implemented in January 1973, require security screening of passengers and carry-on articles.

Over the past decade, security screening has become an accepted fact of life for air travelers and

a problem for airport designers and operators

since the security checkpoints tend to disrupt

passenger flow and—in some instances—force

remodeling of the terminal.

The equipment used today consists of X-ray

machines with moving belts and magnetometers

for metal detection. This system, which replaced

manual search, significantly increased the capacity

and capability of the screening process. The chief

drawback of the existing equipment is that, while

effective in detecting metal, it has limited capability to detect explosives and volatile substances.

New technology for screening cargo and baggage is being investigated. The aim is both to

speed the screening process and to increase the

thoroughness and reliability of detection. The new
Ch. 4—Technology ● 9 3

Photo credit’ Los Angeles Department of Airpofls

Customs and immigration: once gracious . . .

systems under development make use of improved

bomb and explosive sensing techniques such as

vapor detection, bulk detection, and computerized

tomography.

Federal Inspection Service

The United States has 24 airports of foreign

entry where Federal Inspection Service (FIS) for

clearing passengers and cargo is provided by

Customs, Immigration, and Agriculture officials.

Clearance procedures are rigid and time-consuming, and FIS processing has been a major cause

of delay at high-volume ports of entry.

The U.S. Department of State is now issuing

machine-readable passports that may help expedite FIS clearance. Additional procedures and

technologies are being investigated to achieve

greater capacity, reduced clearance time, and

higher agent productivity. Alternative procedures

and physical arrangement of facilities are the principal areas of concentration.

The system employed at most airports of entry today is the Customs Accelerated Passenger

Inspection Service (CAPIS), which provides separate immigration and customs checkpoints.

CAPIS is highly time-consuming for passengers

and labor-intensive to operate. A new system, referred to as One Stop, combines immigration and

customs functions at a single station. Although

promising, this system has not yet achieved its

expected capacity in tests and demonstrations.

Chicago O’Hare and Houston Intercontinental

Airport are experimenting with another approach

that uses a modified version of the standard European system known as “Red-Green,” where travelers who do not have goods to declare are separated from those who do, with only the latter

passing through a secondary inspection station.

Also under study are hybrid systems that combine features of CAPIS, One-Stop, and the “RedGreen” concepts.

LANDSIDE ACCESS

Photo credit: U.S. Depatiment of Transportation

. . . now streamlined

It is a truism that nearly every airplane trip the figures vary among airports, it is generally

begins and ends with an automobile ride, and estimated that over 90 percent of all airline pasthere is no clearer manifestation of our depend- senger trips to and from airports are by private

ence on the automobile than at the terminal curb- automobile or taxi. At medium and small airports,

side and on the access roads to the airport. While the figure is probably close to 100 percent since
 ● Airport System Development

these communities tend not to have well-developed public transit providing a practical alternative to the automobile.

A further indication of the symbiosis between

the airplane and the automobile is the emergence

and growth of the car rental industry. This business has its origin in the need for air travelers to

have transportation to and from airports in cities away from home. While many car rental firms

have since branched out into other markets, the

bulk of their business is still rentals to airline

passengers, and revenues from this activity are

a major source of income for airport operators.

Not all trips to the airport are made by airline

passengers or those who come to meet travelers

or drop them off. For airport workers (accounting for perhaps one-third of all access trips) and

calls by delivery vans, service representatives, and

others with business on the airport property (also

about one-third of all access trips), the automobile

likewise predominates. Some (especially airport

workers) come at times when public transit is not

available or when service is infrequent, and they

have almost no alternative but to drive to the airport and park.

At many airports, automobile traffic is a principal source of landside congestion and delay. Of

the 33 major airports surveyed by the Industry

Task Force on Airport Capacity Improvement and

Delay Reduction, the most common problem

areas were at the curbside (20 airports) and on

airport circulation and access roads (11 airports) .52

Similar findings were obtained in a survey of airports performed for this assessment. Of the 39

large, medium, and small hubs and commuter airports sampled, 23 indicated present or anticipated

problems with parking, curbfront circulation, onairport roads, or access routes. A recent review

of airport problems by FAA found that 23 of 41

major metropolitan area airports are suffering

from capacity constraints imposed by landside

congestion or lack of adequate access.53

Perhaps the best known example of the effect

that landside access can have on airport opera52 Report of the Industry Task Force on Airport Capacity Improvement and Delay Reduction, op. cit.

53 Metropolitan Area Assessment Report, op. cit.

tions is at Los Angeles International Airport

(LAX). Because of limited capacity of airport circulation roads and the inability of the freeways

and city streets near the airport to absorb a greater

volume of automobile traffic, regional transportation authorities imposed a capon aircraft operations and annual passenger volume permitted at

the airport. Much of the impetus for the recent

expansion at LAX was to relieve this landside constraint, and a large share of the $700 million modernization program now nearing completion there

was expended to double-deck roads leading to and

from the terminal and to remodel the terminal

complex so as to segregate arriving and departing automobile traffic .54

LAX is not an isolated example. Chicago O’Hare

is proposing a $1 billion program of airport modernization, a large share of which will be to “bring

aging and congested terminal and roadway facilities into balance with underutilized airside capacity. “55 St. Louis spent $78 million of the total $273

million in funds programmed through 1983 on

highways and airport frontage roads on or adjacent to the airport property.sb The Port Authority of New York and New Jersey has launched a

$1.5 billion modernization plan for the three New

York airports. Important parts of this plan are

new roadways and local transportation to improve airport access and additional parking space

around the terminals. s’

Only a few landside improvements and airport

access projects are eligible for Federal aid from

the Airport and Airway Trust Fund. The Federal

Highway Administration (FHWA) and the Urban

Mass Transportation Administration (UMTA)

also provide funds for landside development, and

the airport operator or local airport authority contributes an important share through retained earnings and revenue bonds. Funding of landside

investments is a complex multijurisdictional arrangement with wide variation from airport to air54B. Sweetman, "The New LAX Prepares 1984, ” hteravia, JUIY

1983, pp. 724-725.

55 J. Ott, “$1 Billion Upgrade Planned at O’Hare,” Aviation Week

& Space Technology, Aug. 8, 1983, pp. 35-36.

“J. Ott, “Expansion Eases St. Louis Congestion,” Aviation Week

& Space Technology, May 23, 1983, pp. 35-36.

“E. Kozicharow, “New York Port Authority Boosting Airport

Capacity,” Aviation Week & Space Technology, May 9, 1983, pp.

33-34.
Ch. 4—Technology ● 9 5

port. The capital improvements sponsored by

FAA are limited to on-airport roadways, guideways, and walkways. Off the airport property,

projects to improve landside access may receive

FHWA and UMTA grants or be supported by

State and local fundss8 (see fig. 13).

In general, the solution to landside problems

does not appear to be new technology, but application of management techniques to make better use of the facilities available and construction

of new facilities (based on existing technology) to

add to landside capacity. In a larger sense, there

is also a need to look at the question of airport

access from the perspective of the regional trans-

— —

58A. J. Negrette, “Airport Landside and Off-Airport Interaction, ”

in Airport Landside Capacity, op. cit.

portation system and to find ways to integrate the

airport more effectively into the urban area it

serves. The sections that follow focus on approaches

that can be taken or applied more widely to

alleviate the problems of traffic flow on the airport property and to reduce the cost and inconvenience of access from the surrounding metropolitan area.

Terminal Curbfront

The terminal curbfront provides temporary

vehicle storage during passengers’ transition between the terminal and the landside, and it is at

the curbside that all passengers, except those using

nearby parking or transit facilities, either enter

or leave some form of ground transportation.

Figure 13.—Federal Capital Funding of Airports and Related Facilities

J Bus facilities I

—

o1

Nonurban

busway

Airport boundary

I

Parking

i

Qff?akpop ‘Mxi “$,,+

Interstate and

Federal-aid roads

b

❑ Funded by FHWA/UMTA

❑ Funded by FHWA

❑

1—Off-ajrport segment

Funded by FAA 2—On-airport segment

(1) except for parking and terminals 3—Terminal segment

Parking (1

)

1 #

1-

Z

On-airport road uJ—cm~ .5

: E

Busway ~ ~

t

Cargo

truck lane terminal

SOURCE: Transportation Research Board, Airporf Landslde Capacity, Special Report 159, 1975.
 ● Airport System Development

Curbfront congestion is a particularly difficult

problem to solve because the facilities there are

intimately tied to the design of the terminal building and airport characteristics such as activity

level (peak passenger volume), user characteristics (mode of transportation, mix of passengers

and well-wishers, and number of bags), and vehicle characteristics (type, number of passengers,

and dwell time at the curb). The most practical

approaches are physical expansion or modification of facilities and procedural changes to improve passenger and vehicle flow.

The most common forms of physical improvement are additional curbfrontage, bypass lanes,

multiple entry and exit points in the terminal

building, remote park and ride facilities, and

pedestrian overpasses or underpasses. These improvements are intended to increase the utilization of curbfrontage by vehicular traffic or, in the

case of park and ride, to reduce demand on the

curbfront by diverting passengers from private

cars to high-volume vehicles. Walkways to segregate foot and vehicular traffic promote pedestrian safety and facilitate roadway traffic by eliminating conflicts between pedestrians and vehicles.

In some cases, procedural changes—either alone

or in conjunction with low-cost physical modifications such as signing or lane dividers—are an effective alternative to expensive construction or

remodeling of the curbfront. For example, parking restrictions combined with strict enforcement

will reduce curbside congestion and dwell time in

discharging and boarding passengers. Short-term

parking islands or reserved sections along the

curbfront, defined by roadway marking or simple dividers, may segregate vehicles picking up

or discharging passengers from those that must

handle baggage or enter the terminal for brief errands. Similarly, separation of private cars from

taxis, buses, and limousines can diminish conflicts

among these kinds of traffic and improve the flow

to and from the curbfront. An effective approach

at some airports has been provision of bus service from remote parking to the terminal and regulations to discourage bringing private automobiles

to the terminal building. None of these measures

is a substitute for adequate curbside capacity, but

they can lead to more efficient use of the facilities available and perhaps compensate for deficiencies in terminal and curbfront design.

Airport Ground Access

Aside from expansion or improvement of the

road network leading to the airport, most effort

to facilitate airport ground access has focused on

substitutes for the automobile. Bus or airline

limousine service has proved workable in some

cities, but patronage is generally low because of

the infrequency of service or the inconvenience

of getting between origin or destination and a centrally located bus terminal. Helicopter shuttle between the airport and city center has been tried;

but it is expensive, unreliable because of weather,

and objectionable to the community because of

noise.

A solution that has been advocated by many

planners is a rail rapid transit system, either operated exclusively to and from the airport or as part

of a regional network. Cleveland, for example,

built a rapid transit extension to Hopkins International Airport in 1968; and the Washington,

DC, Metro system includes a station near, but not

at, the main terminal at National Airport. Proposals to provide such service-either by construction of a new line to the airport or by linking an existing line to the airport by a feeder

bus—have been advanced for several other cities. 59

In part, this interest has been stimulated by examples in foreign countries, which either have or

are planning rail service to airports. Paris Charles

de Gaulle Airport has a rail station a little over

a mile from the terminal with connection provided

by shuttle bus. Amsterdam (Schiphol), Birmingham, Dusseldorf, Frankfurt, Gatwick, Heathrow,

Orly, Vienna, and Zurich already have rail stations in or immediately adjacent to the airport terminal. Cologne and Munich 2 will have such service by 1985. Haneda Airport in Japan has a monorail

. . . . . . . . . .

59 A survey by the U.S. Aviation lndustry Working Group in 1979

found that eight U.S. airports-AtIanta, Baltimore-Washington International, Kennedy, Los Angeles International, Oakland, Miami,

Ontario (California), and San Francisco—were considering some

form of rail link. Of these, Kennedy and Oakland have established

such service, but in both cases it is by a bus connection with transit

station off the airport property.
Ch. 4—Technology ● 9 7

line from the center of Tokyo to the terminal,

which brings passengers to within 300 ft of checkin counters. Toronto and Montreal (Dorval) in

Canada have rail lines that are close by but not

integral with the terminal (a connecting bus or

taxi trip is needed to complete the link), and Montreal International (Mirabel) will soon have direct

service from the airport to the downtown area

with 13 intermediate stops. Figure 14, a cutaway

drawing of the Zurich airport, illustrates the concept of the integrated airport-rail complex.

De Neufville points out that rail transit is not

a universal solution to the airport access problem. ’” In most major U.S. cities, there is not a regional rail network to be tied into the airport; and,

without it, there is little prospect that an exclusive

line between downtown and the airport would be

viable. Few passengers want to travel between the

airport and the central business district, and even

fewer want to go during rush hour. Rail transit,

with its fixed routes and corridor structure, does

not serve well in the U.S. setting, where there is

wide dispersion of origins and destinations for airport passengers. The capital costs of such systems

are likely to be high, and it is doubtful that operating expenses could be covered from the fare box,

necessitating subsidy from the municipality or the

airport. There may be public resistance to building a system to serve airport users exclusively

when other parts of the metropolitan area could

profit perhaps more from rail rapid transit service. Finally, the service characteristics of rail transit do not lend themselves particularly well to airport trips. Passengers encumbered by baggage

find rail transit inconvenient because there is no

storage space on trains and narrow aisles may be

difficult to negotiate with luggage in hand. If there

are intermediate stops—as there almost certainly

60 De Neufville, op. cit., p. 7.

would be if the rail line attempts to serve more

than a few who want to travel from city center

to the airport—the trip is prolonged, and trains

may be crowded with passengers riding for other

purposes.

These arguments do not necessarily deny the

validity of foreign experience, but they raise

doubts about the viability of rail transit access to

airports in this country—where we do not have

the population densities, the existing urban rail

network, and the tradition of public transit that

are characteristic of Europe and Japan.

An alternative to rail transit, which accomplishes the same purpose but with greater flexibility and somewhat lower cost, is the remote

airline terminal (fig. 15). This is a facility for processing arriving and departing passengers at a site

off the airport property and transferring them to

the terminal by group transportation. The offairport terminal may include facilities for ticketing, baggage handling, and parking. Connection

with the airport can be provided by public transit, special airport bus, or helicopter shuttle. The

technology to implement this concept exists, and

it has been tried in several cities.

The popularity of the remote terminal concept

has waned in recent years, largely because indirect

costs tend to offset the benefits. Trip origins and

destinations are becoming more and more scattered throughout the urban area, to the extent that

trips to and from the city center now account for

less than a quarter of airport patronage. On the

other hand, the increasingly tighter restrictions

on airport terminal and landside expansion may

make this concept worth reexamining, particularly

if a way can be found to build and operate a network of small dispersed facilities adapted to the

urban-suburban pattern of business and residence

in major metropolitan areas.

APPLICATIONS OF TECHNOLOGY

In the search for solutions to capacity and de- ●

lay problems, the value of new technology is ●

typically measured by its ability to achieve one ●

or more of the following results: ●

TO AIRPORT PROBLEMS

increased capacity,

higher efficiency (or throughput),

greater safety,

improved reliability,
98 ● Airport System Development
Ch. 4—Technology . 99

Figure 15.—Off-Site Passenger Terminal Concepts

Airporf terminal

Airport terminal

Exclusive

airport transport

Helicopter

access

Off site terminal

Processing

I

Airport terminal

#

Connecting

passengers only

SOURCE: Airpoti Landside Capacity, Transportation Research Board, Special Report 159, 1975.

● greater accuracy, tance, but it has little relationship to capacity and

● lower cost, and delay unless—as is often the case with procedures

• greater convenience. and rules—the requirement for safety precludes

some measure for increasing capacity or throughThe first two are direct benefits; they constitute put. Thus, if some new method of assuring safety

relief of the problem of how to accommodate a is found and it also allows a subsequent change

higher level of demand. Safety is of prime impor- in procedures or utilization of airport facilities,
 . Airport System Development

safety improvements may give rise to a secondary capacity-related benefit. Reliability, accuracy,

cost, and convenience are operational benefits.

They are worth seeking in and of themselves, but

they have little direct relation to capacity except

insofar as they are attributes that lead to adoption of new technology or hasten its implementation.

The description of airside, terminal, and landside technologies presented in the first part of this

chapter has touched on all of these prospective

benefits. The emphasis has been on their potential to relieve capacity and delay problems, but

other attributes have been cited where they appear relevant either to the future use of the technology or to the choice of one form of technology over another.

To provide additional perspective on the value

of new and emerging technologies from the standpoint of capacity and efficiency, OTA surveyed

a sample of 54 airports to determine the nature

of the capacity and delay problems they now face

or expect to face within 10 years. The survey also

examined specific technological remedies that

might be applied at each airport. The results of

this survey, presented below, should not be interpreted as a prescription for planning and implementation of new technology at these airports

or for the airport system as a whole. Rather, the

survey attempts to show the general extent to

which technology can improve the capabilities of

the airport system and relieve congestion and

delay.

No attempt is made to quantify the systemwide

capacity increase or delay reduction that might

result from application of new technology. These

benefits are highly dependent on the operational

conditions and physical characteristics of the individual airport. Although certain airports may

be similar in some respects, there is little basis for

concluding that what works at one will necessarily

be of the same benefit to others. Thus, the tabulation of technological measures considered appropriate to the airports surveyed should be viewed

simply as a general map of the forms of relief

available and their possible application to the

problems at representative airports.

Capacity and Delay Problems at

Selected Airports

The airports surveyed consist primarily of

large, medium, and small hubs, cross-categorized

by the predominant type of traffic—long-, medium-, and short-haul. Also included are a few commuter service, reliever, and general aviation airports. The sample was not scientifically drawn

and stratified to represent the airport system as

a whole. In choosing these 54 airports, the intent

was to include as many types as possible so as

to indicate the general problems that airports face,

but the focus was on those where congestion and

delay tend to be greatest and have the more pronounced effect on air transportation—hence, the

predominance of large and medium hubs in the

sample.

Another consideration governing the choice of

airports was other recent studies of airport capacity and delay. The report of the Industry Task

Force on Airport Capacity Improvement and Delay Reduction contained a survey of 33 major airports; 19 of these are included in the OTA sample. A study of capacity and delay performed by

FAA in 1981, examined 19 large airports, of which

the OTA ‘sample includes 13.61 Another FAA

study described airport problems in 41 metropolitan areas.b2 The OTA sample includes airports

in 27 of these metropolitan areas, although not

always the major airport or all the airports that

FAA examined in their survey of the region. By

overlapping the OTA sample with these other

studies, the intent was to provide a cross-reference

to these reports and an indication of the similarity

of findings.

Table 15 indicates the nature of the capacity

and delay problems found in the OTA survey.

For each of the airports, deficiencies and bottlenecks in the following areas were identified:

● airspace,

● airfield,

● taxiway,

● apron,
Ch. 4—Techt?ology ● 101

●

●

●

●

●

●

●

gates,

terminal building,

parking,

curbfront,

on-airport roads,

off-airport roads, and

environment and noise.

Entries in the table indicate whether problems

or limitations exist now (E) or are expected in the

future (F). The most severe problem area is identified by a dagger. In all cases, this information

was obtained from published sources (FAA reports,

airport master plans, regional transportation

studies, and the like), supplemented with telephone interviews to confirm the findings or to resolve differences among the source documents.

One of the highlights of this survey is that

airspace and airfield problems are widespread and

affect airports of all sizes. Of the 30 large and

medium hub airports, 23 reported existing or

future airside limitations. So, too, did 17 of the

24 smaller airports—an indication that this form

of capacity limitation is not solely a function of

the size of the airport. Gate and terminal problems, not surprisingly, are confined almost exclusively to larger airports served by major air

carriers.

Perhaps the most striking result of the survey

is that landside congestion and delay at the curbfront, in parking areas, and on circulation and

access roads are of equal rank with airside problems at large and medium hub airports. The same

number of airports—23 large and medium hubs—

cited the landside and the airside as problem areas.

For 10 of these airports, the airside is or will be

the most severe problem; for 8 it is the landside.

This suggests that efforts to relieve congestion and

delay should not focus entirely on the airfield and

airspace. Landside access is also a pressing concern. The point is even stronger if the terminal

building is grouped with the landside. The airside

is the most severe problem area at 10 large and

medium airports, while at 15 the problem is in

nonaeronautical areas.

Prospective Technological Solutions

To complete the analysis, an assessment was

made of the various forms of technology that

might be applied to remedy problems at the sample airports. Table 16 lists the results. The specific problem areas cited earlier in table 15 have

been combined into four general categories: airside, airport terminal, surface access, and environment and noise. Listed under these headings

are technologies that have the potential to relieve

or mitigate capacity and delay problems at the

54 sample airports.

Table 16 does not constitute a comprehensive

list of all technologies that might be applied, only

OTA’S estimate of those that offer the greatest

promise or would be the most practical to implement. Identification of a technology as applicable to a given airport does not necessarily imply

that FAA or the airport operator plans to implement it, nor that capacity and delay problems

would thereby be “solved. ” In some cases, the capacity gains provided by these technologies will

be small, or they may provide benefits only in

certain weather conditions or for a small part of

the day. Thus, table 16 should be interpreted

simply as a general indication of how the technologies described here can be related to a set of

typical airports. For those familiar with conditions

at these particular airports, table 16 may also provide insights on the relationships among various

measures to increase capacity or to reduce delay

and on the dynamics of airside, terminal, and

landside interactions.
102 ● Airport System Development

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Table 15.—Airport Capacity Survey (continued)

Auto On-airport Off-airport Environ/

Airport Airspace Airfield Taxiway Apron Gates Terminal parking Curbfront roads roads noise Comment s

Hartford Brainard, CT . . . . . . . . E,F

Kansas City Downtown, MO. . . —

Mesa Falcon, AZ . . . . . . . . . . . . —

E,F – E,F – – – –

— — — — — — —

Et – E – E E –

—

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—

E,F

— E,Ft

—

Severe noise problems; landlocked

Ample capacity

New runway to be built; hangar

facilities and fixed base

operator space needed

Landlocked; adjacent land is too

expensive; wetlands laws may

preclude further expansion

Airport saturated; no further

growth is projected; 74 dBA

noise limit

—

—

Novato, CA . . . . . . . . . . . . . . . . . E,F E,F E,F E,Ft – – – – E,F

Van Nuys, CA . . . . . . . . . . . . . . . — — — — — — — — — E

General aviation:

Aurora, OR. . . . . . . . . . . . . . . . . . —

Carlsbad, CA . . . . . . . . . . . . . . . . E,F

— — — — — —

E,F E,F E,Ft = – – –

—

— E,F

—

Landlocked; local ordinance

prohibits airport expansion

Landlocked

Needs parallel runway and

additional land; constrained by

two other airports

Maior expansion ~roaram needed

Cincinnati Lunken, OH . . . . . . . —

Greeley-Weld County, CO . . . . . E,F

F E E,F – – E,Ft –

E,Ft – E,F – – E,F –

—

. —

Vero Beach, FL. . . . . . . . . . . . . . — E,Ft E,F E,F – E,F E,F E,F ——E,F E,F

tMost severe problem.

E = Problems or limitations are now being experienced in this area.

F = Problems or limitations are anticipated for the future in this area.

SOURCE: Office of Technology Assessment.

Table 16.—Airport Technology Summary

Rank order

Airport by operatlonsa Airside Airport termmal Surface access Environmental/no6e

— — E,F Departure thrust management,

preferential flight paths

Departure thrust management,

preferential runway use,

preferential fllght paths

Et Curbfront improvements, E,F Roadways, mass transportation, E,F

termmal conftguratlon, FIS helicopter shuttle

procedures

E Curbfront Improvements, E Roadways, mass transportahon E,F

termmal configuration

Preferenhal runway use,

departure thrust management,

preferenhal flight paths

Departure thrust management,

preferential runway use,

preferential flight paths

E,F Curbfront Improvements, E,Ft Roadways, mass transportation E,F

terminal configuration

—.
Ch. 4—Technology . 105

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Chapter 5

OTHER APPROACHES TO

REDUCING DELAY

.

----- . -. . . . . ..+=== - 

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Photo credit’ Federal Aviation Admmistralion
Administrative

Diversion of

Options . . . . . . . . . . . . . . . . . . . . . . . .

Traffic . . . . . . . . . . . . . . . . . . . . . . . . .

Balanced Use of Large Airports.. . . . . . . . . . . . . .

Restriction of Access by Aircraft Type.. . . . . . . .

Quotas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Rehubbing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Economic Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Differential Airport Pricing . . . . . . . . . . . . . . . . . . .

Slot Auctions.

Factors Affecting

Table

Table No.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

the Use of Demand-Management

17. Application of Demand

and Delay

Figure

Figure No.

16. Activity at

operations,

. . . . . . . . . . .

Management to

. . . . . . . . . . . . . . .

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Solving Problems of Capacity

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

the Top so Commercial Airports (ranked by air carrier

fiscal vear 1982) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . d

l’age

109

109

112

113

114

115

116

116

119

120

Page

122

111
Chapter 5

OTHER APPROACHES TO

REDUCING DELAY

Airport congestion and delay are at least partly

amenable to technological solutions, but there are

other approaches to dealing with the problem.

Chronic delay is limited to a very few specific

times and places, and one of the principal causes

is the “peakiness” of traffic flow. Most travel is

between a few major airports and at certain times

of day. While technological improvements and

construction of new facilities can help airports absorb growing traffic demand and lessen delay,

these solutions are capital-intensive and may entail prohibitive costs. An alternative approach is

to manage the demand to fit within existing capacity.

There are two basic approaches to managing

demand, both with the same objective: to ease

congestion by diverting some traffic to times and

places where it can be handled more promptly or

efficiently. This may be done through administrative means; the airport authority or another

governmental body may allocate airport access

by setting quotas on passenger enplanements or

on the number and type of aircraft operations that

will be accommodated during a specific period.

The alternative approach is economic—to structure the pricing system so that market forces

allocate scarce airport facilities among competing

users. Thus, demand management does not add

capacity; it promotes more effective or economically efficient use of existing facilities.

Any scheme of demand management denies

some users free or complete access to the airport

of their choice. This denial is often decried as a

violation of the traditional Federal policy of freedom of the airways and the traditional “firstcome, first-served” approach to allocating the use

of airport facilities. Economists reject this argument on the grounds that it is a distortion of the

concept of freedom to accord unrestricted access

to any and all users without regard to the societal

costs of providing airport facilities. Attempts to

manage demand are also criticized for adversely

affecting the growth of the aviation industry and

the level of service to the traveling public. Nevertheless, as growth in traffic has outstripped the

ability to expand and build airports, some forms

of demand management have already come into

use, and many industry observers, including the

Task Force on Airport Access, have taken the

position that some form of airport use restriction

will become increasingly important in dealing with

delay and in utilizing existing airport capacity efficiently.1

‘Report and Recommendations of the Airport Access Task Force

(Washington, DC: Civil Aeronautics Board, March 1983), p. 21.

ADMINISTRATIVE OPTIONS

Several administrative measures could be adopted

to manage demand at individual airports or for

a metropolitan region. Among these are: required

diversion of some traffic to reliever airports, more

balanced use of metropolitan air carrier airports,

restriction of airport access by aircraft type or use,

and establishment of quotas (either on the number of operations or on passenger enplanements).

At the national level, demand might be managed

by administrative actions to encourage “rehubbing” or redistributing transfer traffic from busy

airports to underused airports.

Diversion of Traffic

In some metropolitan areas, the shortage of airport capacity may not be general, but confined

to one overcrowded airport. There may be other

airports in the region that could absorb some of

the demand. The Federal Aviation Administration (FAA) lists 27 airports in the Chicago area,

51 in the Los Angeles basin, and 52 in the DallasFort Worth region. The vast majority of these airports are small and suited only for general aviation (GA) aircraft, but in some cases there is also

an underutilized commercial service airport.

109
110 ● Airport System Development

The best regionwide solution to the problem of

delay at a major airport may be to divert some

traffic away from the busy airport to either a general aviation reliever airport or a lightly used commercial airport. To some extent, this can occur

as a result of natural market forces. When delays

become intolerable at the busy airport, users begin

to divert of their own accord. While those who

choose to move to a less crowded facility do so

for their own benefit, they also reduce somewhat

delays incurred by users that continue to operate

at the crowded airport. Public policy might encourage this diversion through administrative action or economic incentives before traffic growth

makes conditions intolerable or necessitates capital investment to accommodate peaks of demand

at the busy airport.

Diversion of general aviation from busy air carrier airports is often an attractive solution. GA

traffic, because it consists mostly of small, slowmoving aircraft, does not mix well with faster,

heavier air carrier traffic. GA operators, themselves, especially those flying for recreational or

training purposes, want to avoid the delays and

inconveniences (and sometimes the hazards) of

operating at a major airport. These fliers are

often willing to make use of GA airports located

elsewhere in the region if suitable facilities are

available.

Diversion of GA traffic from commercial air

carrier airports has been taking place for many

years. As air carrier traffic grows at a particular

location, it almost always tends to displace GA

traffic. FAA has encouraged this trend by designating 219 airports as “relievers” or “satellites” to

air carrier airports, and earmarking funds especially for developing and upgrading these airports. 2 Many other airports, although not specifically designated as relievers, serve the same

function; they provide an alternative operating

site for GA aircraft well removed from the main

commercial airport of the region.

‘Over the 10 years of the Airport Development Aid Program,

about $140 million was designated for relievers. ‘The Airport Improvement Fund sets aside almost $480 million for the period

1983-87.

To be attractive to a broad spectrum of GA

users, a reliever airport should be equipped with

instrument approaches and provide runways capable of handling the larger, more sophisticated

GA aircraft. In addition, users need facilities for

aircraft servicing, repair, and maintenance as well

as suitable ground access to the metropolitan area.

Not all GA aircraft can make use of reliever

airports. Some may be delivering passengers or

freight to connect with commercial flights at the

air carrier airport. Others may be large business

jets that require the longer runways of a major

airport. Even at the busiest air carrier airports,

GA traffic accounts for about 10 percent of total

operations (see fig. 16).

In general, airport authorities do not have the

power to exclude GA as a class, although this has

been attempted on occasion. For example, in the

late 1970s the airport management and city government of St. Louis attempted to exclude all

private aircraft from Lambert Airport. This ordinance was overturned by the courts as discriminatory.

Where they have had any policy on the matter, local airport authorities have attempted to

make GA airports attractive to users by offering

good facilities or by differential pricing schemes,

This approach is most effective where the commercial airport and the principal reliever are operated by the same entity. The State of Maryland,

owner of Baltimore-Washington International

Airport, operates a separate GA airport, Glenn

L. Martin Field, and has a specific policy of encouraging GA traffic to use it rather than the main

airport. The master plan for Cleveland Hopkins

International Airport depends on the availability of the city-owned Lakefront Airport as a reliever. If that airport should for some reason cease

operation as a GA reliever, Hopkins would experience a great increase in traffic which might

necessitate additional construction that is not now

planned.

Most local airport authorities, however, do not

operate their own GA relievers. Some large airport authorities plan and coordinate activities

with nearby reliever airports operated by other

municipalities or private individuals, but this has

not been the general case. The system of relievers
Ch. 5—0ther Approaches to Reducing Delay ● 171

Figure 16.-Activity at the Top 50 Commercial Airports (ranked by air carrier operations, fiscal year 1982)

600

500 -1- 1

400

M

300

200

100

I

1-5

I I I I 1 1 I I J

6-10 11-15 16-20 21-25 26-30 31-35 36-40 41-45 46-50

Airport rank

in each region has tended to grow up without any

specific planning or coordination on the regional

level.

Development of GA relievers is not without

problems. These airports are also subject to complaints about noise, and they experience the same

difficulties as commercial airports in expanding

their facilities or in developing a new airport site.

Further, because many GA airports are small and

function just on the ragged edge of profitability,

problems of noise or competing land use can actually threaten the airport’s existence. The number of airports available for public use in the

United States has been declining. Between 1980

and 1983, for example, the number of public-use

airports declined from 6,519 to 5,897. Although

most of the airports that closed were small, privately owned facilities, some industry observers

worry that the Nation is irrevocably losing many
112 ● Airport System Development

potential reliever airports, just as it has become

clear that they are vital.

Balanced Use of Large Airports

At the largest commercial service airports, GA

activity consists primarily of flights by large business and executive aircraft. This type of GA traffic

accounts for about 10 to 20 percent of the use of

major airports, a figure that many consider the

“irreducible minimum. ” The delays that persist

at these airports are primarily the result of air carrier demand which can be satisfied only by another

commercial service airport. In several metropolitan areas, it is clear that the commercial airports

are not used in a balanced manner. For example,

San Francisco International is experiencing delay

problems while nearby Oakland Airport is underutilized. Washington National is overcrowded

while Dunes International and Baltimore-Washington International are looking for business.

Newark is underutilized compared with busy La

Guardia and Kennedy. Similar pairs exist in Chicago (O’Hare and Midway), Dallas (Dallas-Fort

Worth and Love Field), and Houston (Houston

Intercontinental and Hobby). A policy designed

to divert traffic from busy to underutilized airports would have a generally positive effect on

the ability of metropolitan areas to accommodate

air traffic. Further, it might obviate the need

for expansion or expensive technological improvements designed to reduce delays at the busy

airport.

Photo credit: Aviation Division, County of Los Angeles

A threatened reliever airport
Ch. 5—0ther Approaches to Reducing Delay ● 113

Diverting air carrier traffic to alternate airports

is not a simple solution; there are a number of

problems. One is simply the habits of the traveling public. People are accustomed to using the

busier airport. They may prefer the better ground

access, the larger choice of flight times and destinations, the greater variety of carriers, and other

advantages that the busy airport offers.

Air carriers, sensitive to public preferences, tend

to concentrate their service at the busier airport,

where they perceive a larger market. It is in the

carriers’ economic interest to serve the airport

where passengers want to go. The busier airport

is a known and viable enterprise, while the underutilized alternate airport is a risk. Air carriers are

justifiably reluctant to isolate themselves from the

major market by moving all their service to the

less popular airport. On the other hand, serving

both airports imposes an economic burden that

carriers seldom choose to bear, as they would incur the additional expense of setting up and operating duplicate ground services. In addition, splitting their passengers between two airports might

make scheduling of flights more complicated and

lead to inefficient utilization of aircraft.

These obstacles have sometimes been overcome

in locations where airport operators have the

authority to encourage a diversion of traffic from

one airport to another. For example, in the New

York area the Port Authority of New York and

New Jersey operates all three air carrier airports.

In theory, this gives the Port Authority the ability

to establish regulatory policies or economic incentives to encourage the diversion of some traffic to Newark. In practice, however, measures

adopted to promote traffic redistribution have not

been fully effective. The recent growth of traffic

at Newark has been due primarily to new carriers

entering the New York market and not diversion

of established carriers.

In contrast, San Francisco and Oakland airports

are operated by separate sponsors. San Francisco,

despite severe problems of delay, would rightly

be reluctant to encourage passengers and air carriers to move to Oakland. Even though more

balanced regional airport use might be achieved

and the long-range need for expansion at San

Francisco reduced, the short-range effect would

be that San Francisco would lose revenues to a

competitor. There is no regional authority with

the power to promote this reallocation of traffic.

Restriction of Access by Aircraft Type

One means of diverting certain traffic from a

busy airport to one with unused capacity is to restrict access to the busy airport on the basis of

aircraft type or use. Restriction of aircraft access

to airports by size or performance characteristics

might affect airport capacity and delay in several

ways. First, the mix of aircraft using a runway

system helps to determine capacity. When aircraft

are of similar size, speed, and operating characteristics, runway acceptance rate is greater than

when performance characteristics vary widely.

Similar aircraft can be more uniformly and accurately spaced on approach and departure, thereby

smoothing out irregularities in the traffic stream,

which is a major factor causing delay. Thus, at

airports where the bottleneck is in the runway sys- “

tern, restrictions which narrow the range of aircraft using that system might have a beneficial effect. Diversion of small GA or commuter aircraft

to other airports or construction of a separate

short runway dedicated to their use could improve

the ability of the airport to handle larger transports or the overall traffic mix.

A second implication of limiting access to specific aircraft types is that it might reduce the need

for capital improvements required to accommodate a larger variety of aircraft. For example,

Washington National Airport does not accept

jumbo jet aircraft or long-range flights (nonstop

flights in excess of 1,000 miles). FAA’s policy is

to divert these flights to Dunes. Allowing larger

aircraft into National would probably necessitate

changes in runways, taxiways, aprons, and gates.

In addition, the larger number of passengers per

aircraft would put additional strain on National’s

already congested terminal and landside facilities,

making a number of collateral improvements necessary.

Access restrictions at Washington National are

combined with a cap on passenger enplanements.

Although the cap is still under debate, it is currently set at 16 million passengers annually. (National currently handles 13 million. ) FAA consid-
114 . Airport System Development

ers the cap necessary because limiting aircraft size,

without also setting a ceiling on the number of

passengers, might lead to more aircraft operations

than the airport can handle safely or efficiently

and worsen the congestion that already exists at

National.

The purpose of the access restrictions, the cap

on passengers, and the quota system (discussed

below) is to divert traffic from National Airport

to Dunes. Most local airport managers would not

be able to adopt such measures unless there were

a nearby underutilized airport, also under their

control, to handle the diverted traffic. To forbid

some portion of the traffic to use an airport without an available alternative would most likely be

construed as a restriction of interstate commerce

or discriminatory practice.

Quotas

One technique of demand management now in

use at a few airports is the quota system—an administratively established limit on the number of

operations per hour. Because delay increases exponentially as demand approaches capacity, a

small reduction in the number of hourly operations may have a significant effect on delay. This

makes the quota an attractive measure for dealing promptly (and inexpensively) with airport

congestion.

Examples of airports with quotas are O’Hare,

La Guardia, JFK, and Washington National—

airports covered by the FAA high-density rule.

The quotas at these airports were established by

FAA in 1973 based on estimated limits of the air

traffic control (ATC) system and airport runways

at that time. FAA is currently considering lifting

the rule at some of these locations because of improvements made to airport facilities and slower

than expected growth in air traffic. An example

of a locally imposed quota is John Wayne Airport in Orange County, CA, which limits scheduled air carrier operations to an annual average

of 41 operations per day. This quota is based on

noise considerations as well as limitations on the

size of the terminal and gate areas.

During busy hours, demand for operational

“slots” typically exceeds the quota. At the airports

covered by the high-density rule, the slots are

allocated among different user classes. For example, at National, where there are 60 slots available per hour, 37 are allotted to air carriers, 11

to commuter carriers, and 12 to general aviation.

During Visual Meteorological Conditions, more

than 60 operations can be handled, and aircraft

without assigned slots may be accommodated at

the discretion of air traffic controllers and the airport manager.

At airports where the quota system is in force,

slots may be allocated in various ways—through

a reservation system, by negotiation, or by administrative determination. The GA slots are generally distributed through a reservation system—

the first user to call in for a reservation gets the

slot. However, for commuters and air carriers,

the slots at the high-density-rule airports are

allocated by negotiation. Two scheduling committees, one made up of carrier representatives

and one of commuter representatives, meet under

antitrust immunity to negotiate the flights to be

allotted to each user. If the negotiators fail to

reach agreement (“default”), FAA reserves the

right to allocate slots.

Under airline regulation, when the number of

carriers and routes were fairly stable, the work

of the scheduling committee was easy—merely

allocating the existing number of slots to the incumbent carriers. Since 1979, however, the committees have had to accommodate new entrants

and the changing market strategies of incumbent

carriers. On several occasions since 1979, the

negotiators at Washington National have been

close to defaulting, and FAA had to consider seriously using administrative means to distribute

slots.

One objection to quota systems is that they tend

to favor incumbents over new entrants. Another

is that quotas allocate scarce slots without any

price signals to show whether capacity is being

used efficiently; there is no long-range guide provided by the market to show what improvements

might be economically justified or which users

most value their operating rights. These problems

can be partly overcome through selling or auctioning slots as discussed below.
Ch. 5—Other Approaches to Reducing Delay ● 115

Rehubbing

A systemwide response to alleviate delays at

busy airports is redistribution of operations to

other, less busy airports in other regions. Some

air carriers, especially those with a high proportion of interconnecting flights, may voluntarily

move their operations to underutilized airports

located at some distance from the congested hub.

Transfer passengers account for a large percentage of traffic at some large airports. About threefourths of passengers at Atlanta, and nearly half

of passengers at Chicago, Denver, and Dallas-Fort

Worth arrive at those airports merely to change

planes for some other destination. here is an

advantage for carriers in choosing a busy airport

as a transfer “hub’ ’-they can offer passengers a

wide variety of possible connections. However,

when the airport becomes too crowded, the costs

of delay may begin to outweigh the advantages

of the large airport, and carriers may find it attractive to establish new hubs at smaller, less busy

airports.

This “rehubbing” of the airport system is already a trend (a subject to be examined further

in ch. 8). Redistribution of operations has certainly been facilitated by the deregulation of the

airline industry, which allowed carriers greater

freedom in restructuring their routes. Mediumsize airports appear to be receiving increased air

carrier activity since deregulation, and some carriers are shifting their transfer operations to these

less congested facilities. For example, Piedmont

has developed Charlotte (North Carolina), Dayton (Ohio), and Baltimore-Washington (Maryland) as regional hubs. Western has developed

Salt Lake City (Utah) as its principal hub. In addition to relief from congestion, carriers who have

moved to less busy airports find another, perhaps

more compelling, advantage. Because there is

often little service by competing carriers at those

locations, the hubbing carrier has greater control

of passengers, who can transfer only to departing flights of the airline that brought them, not

to a competitors.

While it is doubtful that rehubbing has actually

reduced delay problems at major airports, it does

seem clear that development of transfer hubs at

medium airports has allowed for growth that

might not have been possible had the carriers

sought to concentrate their activities at the major hubs. Further, rehubbing has taken advantage

of a certain “overcapacity” in the national airport

system by making greater use of the facilities

available at medium airports.
116 ● Airport System Development

ECONOMIC OPTIONS

Administrative limits on airport use—whether

by restricted access for certain types of aircraft,

by demand balancing among metropolitan area

airports, or by selection imposition of quotas—

offer the promise of immediate and relatively lowcost relief of airport congestion. As long-term

measures, they may not be as attractive. Administrative limits tend to bias the outcome toward

maintenance of the status quo when applied over

a long period of time. Since the economic value

of airport access is not fully considered in setting

administrative limits, incumbents cannot be displaced by others who would place a higher value

on use of the airport. Further, incumbents and potential new entrants alike have no way to indicate

the true economic value they would place on increased capacity. Economists contend that a vital

market signal is missing and that airport operators and the Federal Government cannot obtain

a true picture of future capacity needs. Administratively limiting demand, they say, creates an

artificial market equilibrium that—over the long

term-distorts appreciation of the nature, quality,

and costs of air transportation service that the

public requires. Economists, therefore, favor a

scheme of allocating airport access that relies on

the mechanism of price.

At present, price plays a rather weak role in

determining airport access or in modulating demand. Access to public use airports, except for

the few large airports where quotas are imposed,

is generally unrestricted so long as one is willing

to pay landing fees and endure the costs of congestion and delay. Landing fees, most often based

solely on aircraft weight and invariant by time

of day, make up a very small fraction of operational cost—typically 2 to 3 percent for air carriers and even less for GA. Further, landing fees

are not uniform from airport to airport. In many

cases, landing fees are set so that—in the aggregate—they make up the difference between the

cost of operating the airport and the revenues received from other sources such as concessions,

leases, and automobile parking fees.3

3See ch. 6 for a more detailed examination of airport pricing

methods.

This leads economists to the conclusion that

landing fees are somewhat arbitrary and do not

reflect the costs imposed on the airport by an aircraft operation.4 Economists suggest that, by including airport costs and demand as determinants

of user fees, delay could be significantly reduced.

The two most commonly advocated methods of

achieving this are differential pricing and auctioning of landing rights.

Differential Airport Pricing

Many economists argue that weight-based landing fees are counterproductive because they do

not vary with demand and, consequently, provide no incentive to utilize airport facilities during offpeak hours. Further, they do not reflect the

high capital costs of facilities used only during

peak hours. Thus, economists contend, a more

effective pricing method would be to charge

higher user fees during peak hours and lower fees

during offpeak hours. Theoretically, the net effect of such a pricing policy would be a more uniform level of demand.

Much of the traffic moved away from peak

hours by higher landing fees would probably be

GA. Correspondingly, the benefits of peak-hour

fees would be greater at airports with a high proportion of GA activity. But, peak-hour fees could

also be structured so as to affect the pattern of

air carrier activity. These charges would have to

be fairly high because landing fees represent only

a small fraction of air carrier operating costs and

because increases can be passed on to passengers.

Despite increases in landing fees, carriers would

want to continue to use the airport at peak times,

either to have access to a large number of passengers or because long-haul scheduling problems

4The following, based on a survey conducted by Peat, Marwick,

Mitchell & Co, in July 1982, is a sampling of aircraft landing fees

at six airports:

1. Miami International—79a per 1,000 lb.

2. Boston Logan International-$1.246 per 1,000 lb.

3. Chicago O’Hare International-$1.095 per 1,000 lb.

4. Denver Stapleton International–34c per 1,000 lb.

5. Honolulu Internationa145c per 1,000 lb.

6. Houston Intercontinental-85 .7~ per 1,000 lb.
Ch. 5—0ther Approaches to Reducing Delay ● 117

require them to serve a particular airport during

certain hours. Thus, they would absorb some increase in landing fees, just as they absorb the cost

of delays, as part of the cost of doing business.

However, some flights might be moved to offpeak

hours if the charges were high enough. In fact,

it is possible that properly structured peak-hour

prices, if they were reflected in fares, could have

an effect not only on the airlines’ scheduling patterns but on passengers’ travel habits as well. If

significant savings were possible, some passengers

would choose to travel during offpeak hours.

It it is difficult to project accurately the changes

in patterns of airport use that might be brought

about by peak-hour surcharges. FAA has estimated that peak-hour surcharges, along with improvement of the ATC system, would reduce anticipated air carrier delay costs by approximately

80 percent at the Nation’s 25 busiest airports over

the next 25 years.

5 A recent Congressional Budget

Office (CBO) report suggests that, although expansion may be inevitable at many airports, peakhour surcharges could significantly delay the need

for expansion and reduce financial pressure at a

number of airports. b Another important aspect

of peak-hour surcharges noted by CBO is that,

even if they do not reduce traffic levels at peak

hours to the desired levels, they could provide airports with increased revenues to expand facilities

and, consequently, to reduce delays.

Some observers reject this line of reasoning.

They contend that, to be effective in shifting demand to slack periods, peak-hour charges would

have to be set so high that they would be politically unacceptable. Further, there is no assurance

that airlines would not average the higher costs

of peak-hour access at certain airports with the

lower cost at other times and places and pass this

along to all passengers as a general fare increase.

Airlines would thus create an internal cross-subsidy in their fare structure to cover the higher costs

of access to some airports. Since the average fare

increase would likely be small, the economic

5

Policy Analysis of the Upgraded Third Generation Air Traffic

Control System (Washington, DC: Federal Aviation Administration, January 1977), p. 71.

bPublic Works Infrastructure: Policy Considerations for the 1980s

(Washington, DC: Congressional Budget Office, April 1983), p. 113.

Photo credit; Federa/ Aviation Administration

Competition

signal to the public would be diminished such that

it would have scant effect on travel behavior.

A major problem with the concept of peak-hour

surcharges is how to determine the level of surcharge. One widely advocated method is to charge

the airport user the full marginal costs of airport

facilities. In other words, each airport user pays

a share of the additional capital and operating

costs to the airport authority of providing service at the time demanded. For example, if a user

lands at an airport during a period of peak demand where two or more runways are necessary

to handle the traffic, the charge should include

a contribution to the cost of building, operating,

and maintaining those additional runways. On

the other hand, if the user lands during an offpeak hour when the one runway in use is not

sought by others, there would be no additional

charge. While both onpeak and offpeak users

would pay fees to cover maintenance, wear and

tear, or other costs, only peak-hour users would

pay the additional costs associated with the time

of use. The resulting user fees would be directly

related to the levels of airport activity, producing the desired effect of higher fees during peak

hours and a strong price signal to use the airport

at offpeak hours.

Some contend that a system of marginal cost

pricing should be based on the delay costs which

each peak-hour user imposes on other users. For

example, during peak hours, airport users would
118 ● Airport System Development

be charged a fee based on the delay costs associated with their operations. This creates a system

of user fees where the fees become progressively

larger as delays increase. Proponents contend that

using marginal delay costs as the basis for pricing airport access provides a stronger incentive

for off-peak airport use than a scheme based on

marginal facility costs alone.

Implementing a policy of differential pricing—

whether based on marginal facility cost, marginal

delay cost, or some purely arbitrary scheme—is

difficult. It is likely that a significant increase in

airport user fees will raise questions of equity.

Higher fees might be more burdensome for small

airlines and new entrants than for established carriers. There are a number of examples where airport operators have attempted to increase user fees

and been challenged by air carriers and general

aviation. In some cases, air carrier landing fees

are established in long-term contracts that cannot be easily changed.7

GA users often contend that differential pricing is discriminatory because it favors those with

the ability to pay and illegal because it denies the

right to use a publicly funded facility. Economists

rebut this argument by pointing out that time-ofuse price is neither discriminatory nor illegal so

long as price differences reflect cost differences and

that it is fair and just to set prices based on the

costs that each user imposes on others and on

society generally.

Despite the difficulties inherent in increasing airport user fees, there are two well-documented examples of differential pricing policies that have

been in effect for several years. In the early 1970s,

the British Airport Authority implemented peakhour surcharges at London’s Heathrow Airport.

In the late 1960s, the Port Authority of New York

and New Jersey began imposing peak-hour surcharges on general aviation. Both differential pricing policies sought to move traffic to offpeak

hours, even though the pricing methods employed

were considerably different.

7

1n 1981, the Indianapolis Airport Authorities brought suit against

six airlines for refusing to pay new landing fee rates. The court, eventuaI1y, decided in favor of the airlines, ruling that the rate increase

was unreasonable. In 1976, a court in North Carolina ruled that

the Raleigh-Durham Airport couId only raise its landing fees to 22.3a

per 1,000 lb instead of the proposed 33 to 35¢ per lb.

Because of the large volume of international

traffic, activity at Heathrow increases significantly

during the summer months, compounding delay

problems. As a result, the surcharges imposed at

Heathrow in 1972 were set on both an hourly and

seasonal basis. The hours of greatest delay were

from 8:00 a.m. to 1:00 p.m. During the summer,

surcharges were applied for the entire S-hour

period each day. During the remaining months,

surcharges were levied only for the period between 9:00 and 11:00 a.m., Monday through

Friday. The effects of peak-hour surcharges at

Heathrow were not clear cut. During 1972 and

1973, there was an apparently steady movement

of traffic away from peak periods. This trend,

however, was reversed in the following year and

fluctuated thereafter, leaving some doubt as to the

effectiveness of the surcharges.

The surcharges imposed by the Port Authority of New York and New Jersey were aimed specifically at general aviation using of the three

major commercial airports in the New York metropolitan area. During July 1968, 17 percent of

all aircraft operations at the three commercial airports were delayed by more than 30. minutes.8

During that same month, GA traffic constituted

25 percent of the airport traffic—30 percent during peak hours. In an effort to shift this GA traffic away from peak hours, the Port Authority increased the landing fee for aircraft with fewer than

25 seats to $25 during peak hours—a fivefold increase. The fee remained at the $5 level during

offpeak hours.

Peak-hour surcharges produced significant results at all three New York airports. Following

the imposition of the surcharges, GA activity during August and September decreased 19 percent

overall and 30 percent during peak periods. More

important, delays—in terms of the percentage of

aircraft operations experiencing delays of over 30

minutes—declined markedly.

To be sure, there are factors other than surcharges that affect airport use; and, undoubtedly,

some could have influenced the outcomes in both

New York and London. For example, the fuel

8

Port Authority of New York and New Jersey Memorandum,

Aviation Department, “Effects of FAA Allocations, Summer 1969,”

Nov. 20, 1969.
Ch. 5—Other Approaches to Reducing Delay ● 119

crisis of 1973 unquestionably influenced the traffic at Heathrow and masked somewhat the effects

of the surcharge. A controller slowdown at New

York’s airports during the summer of 1968 intensified delay problems and could have accounted

for some of the traffic diversion attributed to the

surcharges.

In general, peak-hour surcharges represent an

attempt to manage demand by charging costbased landing fees. Access to airports is not limited except by the user’s willingness to bear the

additional cost imposed during peak hours.

Another method of reducing peak-hour airport

activity involves limiting airport access through

a process by which landing rights (slots) are auctioned to the highest bidder. The auction is a hybrid process—partly administrative, partly economic—in which access is regulated, but the right

of access is distributed through a market-oriented

mechanism.

Slot Auctions

Slot auctions have been advocated as the best

method of allocating scarce airport landing rights

on the grounds that, if airport access must be

limited, it should be treated as a scarce resource

and priced accordingly. The method to accomplish this is a system whereby the price of airport

access is determined by demand. Slot auctions

allow peak-hour access only to those users willing to pay a-market-determined price.

Slot auctions are particularly unpopular with

new air carriers, who feel that they would be inhibited in serving new markets or perhaps excluded altogether. These earners contend that auctions would place them at a disadvantage with

incumbent airlines, which could hoard slots and,

potentially, limit competition.

There are several practical problems in implementing slot auctions. First, there is the question

of who should actually organize the auction—

the local airport authority or the Federal Government. Local authorities are probably in the best

position to determine accurately the number of

available slots, but some experts argue that the

Federal Government has a systemwide perspective that is better suited to determining the overPhoto credit: Federal Aviation Administration

slots

all effects of slot allocations on airport traffic nationally.

A related problem is who should receive the

proceeds of the auction. Some contend that the

proceeds should be turned over to the airport

authority, which bears the burden of operating

the facility and making necessary capital improvements and maintenance outlays. Others argue

that, like other user fees, funds raised by auctions

should be placed in the Airport and Airway Trust

Fund and distributed as needed for airport capital projects. A novel approach, advanced by the

Port Authority of New York and New Jersey, is

that funds obtained from peak-hour slot auctions

should be distributed to airlines operating offpeak

thereby providing them an incentive to offer service at such times. g

‘J. Ott, “U.S. Reviews Airport Slot Policy," Aviation Week &

Space Technology, Apr. 16, 1984, pp. 32-33.

25-420 0 - 8 4
120 . Airport System Development

Another problem is the status of the slots once

they have been auctioned. One view is that they

become the property of the airlines, to be bought

and sold at will. Another is that they should remain the property of either the local airport authority or the Federal Government, which could

retain control over the transferal of slots through

another auction.

Finally, there is the special problem of international users who need to gain access to Federal

immigration and customs facilities, which are

available only at certain airports. If an aircraft

entering the United States is required to clear

customs and immigration and can do so conveniently only at an airport with slot restrictions,

equity would appear to dictate that access be afforded, and at no additional cost. On the other

hand, such aircraft are using a valuable commodity for which others must compete and pay,

and there is little economic justification in distinguishing between domestic and foreign flights

since both impose equal cost on the airport at the

time of use.

FACTORS AFFECTING THE USE OF

DEMAND= MANAGEMENT ALTERNATIVES

The demand-management techniques enumerated above could, in theory, reduce delay. Some

have actually been tried, with mixed results. However, there are factors that may affect the ability

of airport operators or the Federal Government

to implement them on a wide scale.

Some argue that regulations restricting airport

access are unconstitutional because they interfere

with interstate commerce and abridge the right

of access for some users. Many industry observers

shudder to think that the kinds of access restrictions in effect at National Airport might become

common at major airports. Determination of

whether they would be an undue burden is a

delicate matter which must be decided on a caseby-case basis, depending on the parties involved,

the location of the airport, and its importance to

the national system. FAA itself does not appear

to encourage the spread of quotas and other

restrictions imposed by airports, operators, even

though they are in use at federally owned Washington National Airport. For example, FM contested the imposition by John Wayne Airport of

a perimeter rule forbidding the operation of longrange flights.

Deregulation has made the allocation of slots

through negotiation a more difficult process, as

the scheduling committees must constantly accommodate new entrants or changes in incumbent

carriers’ levels of service. The Civil Aeronautics

Board’s Task Force on Airport Access has noted

that scheduling committees are capable of discriminating against new entrants and cautioned that

the whole negotiation process might be anticompetitive.l”

Policies to encourage development of reliever

airports or more balanced utilization of airports

in metropolitan regions are unlikely to be implemented in locales where airports are competitors

and not operated by the same sponsor. Congress

has attempted to address the regional implications

of airport development in its mandate for FAA

to develop a National Plan of Integrated Airport

Systems. It remains to be seen whether this planning document, or any other action at the Federal level, can improve regional coordination of

airport facilities.

The basic theory of demand-related airport access fees and the general principle that fees should

be proportional to marginal delay costs are well

understood. It is also commonly acknowledged

that the present scheme of pricing services, especially at congested airports, is far from economically efficient. However, market-related approaches,

such as peak-hour pricing and congestion surcharges, may be difficult to implement, and they

are likely to encounter stiff opposition from some

classes of users, especially GA. Despite the

theoretical attractiveness of marginal-cost pricing,

it maybe difficult in practice to determine the true

marginal cost of a landing or a takeoff. There are
Ch. 5—Other Approaches to Reducing Delay ● 121

analytic problems and policy issues to be resolved,

as well as the underlying question of whether economic efficiency should be a primary goal of airport management. Several years of experimentation might be needed to establish the most effective

fee structure for controlling delay and covering

airport costs.

There are some dangers inherent in these experiments. It is possible that, in a deregulated

environment where carriers are frequently changing routes and levels of service, airports would

be unable to determine the effects of their experiments or to guard against unpredictable (and

undesirable) side effects on the airline industry or

on other airports. The process of diverting air carrier operations to offpeak might be self-defeating

for some airports. Rather than schedule operations

in slack hours at airports that they perceive as

marginal, carriers might prefer to move out of the

airport altogether. While this might be a desirable

effect from the system perspective, it would be

the opposite for the airport operator, who would

lose revenue.

Further, in order to be effective in shifting air

carrier traffic to offpeak hours, landing fees during peak hours might have to be raised substantially. In many cases, use agreements between air

carriers and airports would prevent such radical

changes in fees. If it were determined to be in the

national interest for airport operators to make

such changes in their fee structures, the Federal

Government might have to take action to abrogate or modify existing use agreements. On the

other hand, some believe it is unwise for the Federal Government to become so directly involved

in the pricing decisions of individual airports.

Economic policies or administrative actions to

reduce GA traffic at congested major airports

could have two effects. The intended effect would

be diversion of some GA traffic to other nearby

landing places. However, for some types of aircraft and for some GA users, there will be no other

facility as suitable as the main air carrier airport;

and they would have to pay the cost if they wish

to continue using it. Alternatively, some users

might find the monetary cost or inconvenience too

high and choose to use commercial flights rather

than continuing to operate their own aircraft.

The sale or auction of slots is controversial with

regard to ownership and the right of sale. The confusion over slots following the Braniff bankruptcy

is a case in point .11 At that time, FAA’s post-strike

cap on operations was in effect at 22 airports, and

Braniff argued that their assigned slots were assets

that had monetary value which should accrue to

the airline. FAA’s position was that the slots were

under FAA control. (FAA did in fact reassign

those slots to other carriers on an emergency basis

after Braniff stopped flying. ) From the airport

operator’s point of view, however, slots represent

the essential attributes of the airport, namely runway time and space. If they are determined to be

property at all, the airport operator would argue

that they belong to neither FAA nor the carriers,

but to the airport.

A 1981 FAA report illustrates the general benefits of demand management.’2 The report examined projected demand and traffic mix at the 39

busiest air carrier airports to determine those with

future capacity problems and to identify remedial

measures that could be applied to alleviate delay.

About half (19 of the 39 airports studied) were

expected to face serious delay problems by 1991.

Analysis of the traffic mix at these airports identified seven with a high proportion of GA traffic, and FAA concluded that demand-management techniques aimed at diverting GA to offpeak

hours or to reliever airports could obviate the need

for new construction to expand capacity.

At four other airports, a different form of demand management offered potential relief. Each

of the four (San Francisco, Dallas-Fort Worth,

Chicago O’Hare, and Washington National) has

another nearby airport with underutilized capacity. By shifting some peak-period traffic (air carrier and GA) to these alternate airports, capital

improvements at the overcrowded airport could

be avoided. The results of this analysis, summarized in table 17, indicate that demand management could eliminate or substantially reduce

capital expenditures for new capacity at 11 of the
122 Airport System Development

Table 17.—Application of Demand Management to Soiving Probiems of Capacity and Deiay

Airports where diversion of GA could relieve congestion

Operations forecast, Percent 1991 (Xl,ooo) PANCAPa Air-carrier/ operations in

Airport Air carrier GA (Xl,ooo) PANCAP ratio 3“ peak hours

Houston . . . . . . . . . . . . . . . . . . . 316 185 300 1.05 24

Las Vegas . . . . . . . . . . . . . . . . . 254 296 330 0.77 28

Memphis . . . . . . . . . . . . . . . . . . 288 287 355 0.81 30

Oakland . . . . . . . . . . . . . . . . . . . 201 585 595 0.34 NAb

Phoenix . . . . . . . . . . . . . . . . . . . 195 276 330 0.59 27

San Diego . . . . . . . . . . . . . . . . . 137 98 180 0.76

Santa Ana . . . . . . . . . . . . . . . . . 353 565 385 0.92 l % ’

Ahports when? dlverslon of traffic to another iocai airport couid relieve congestion

Operations forecast,

1991 (Xl,ooo) Percent

PANCAPa Air-carried operations in Alternate

Airport Air carrier GA (Xl,ooo) PANCAP ratio 3 peak hours airport

Chicago O’Hare. . . . . . . . . . . . . 965 60 616 1.57 24 Chicago Midway

Dallas Fort Worth . . . . . . . . . . . 620 20 340 1.82 26 Dallas Love Field

San Francisco . . . . . . . . . . . . . . 478 29 400 1.20 24 Oakland

Washington National . . . . . . . . 399 117 275 1.45 21 Dunes, BaltimoreWashington

International

Airports requiring additional capacity by 1991

Operations forecast,

1991 (Xl,ooo) Percent

PANCAPa Air-carrier/ operations in

19 major airports expected to have high levels of

demand by 1991.

The FAA findings lend credence to the general

notion that demand management, either by administrative or economic means, is worthy of consideration as an alternative to capital investment

in new capacity and to technological approaches

to reduce delay. The attractiveness of the concept

stems in part from the fact that demand management can be implemented in far less time than it

takes to construct new facilities or to install new

technology. On the other hand, it must be recognized that demand management would be controversial. Administrative measures to redistribute

demand would be viewed by many in the aviation community as an arbitrary and unwarranted

exercise of government power, either Federal or

local. Pricing schemes such as marginal-cost pricing or slot auctions would be scarcely more palatable to users accustomed to low-cost and unrestricted access to airports. Either approach would

be such a sweeping departure from traditional policy that aircraft operators forced to shift their

activities to other airports or times of day would

be likely to resist on the grounds of discrimination or undue hardship. Airport operators, themselves, would also be reluctant to venture into an

area where there is so little experience to guide

them and where analysts and economic theoreticians cannot predict the benefits and risks except

in general and carefully qualified terms. Still, from

the standpoint of efficient use of existing resources

and avoidance of large new capital investment,

demand management is an option worthy of serious consideration and experimentation.
Chapter 6

AIRPORT FINANCIAL

MANAGEMENT AND PRICING

Photo credit: Federal Aviation Administration
Contents

Page

Approaches to Financial Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . , . 125

The Residual-Cost Approach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125

The Compensatory Approach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126

Comparison of Residual-Cost and Compensatory Approaches . . . . . . . . . . . . . 127

Pricing of Airport Facilities and Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129

Structure and Control of Airport Charges. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131

Variation in the Source of Operating Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . 133

Trends in Airport Management Since Deregulation . . . . . . . . . . . . . . . . . . . . . . . . . 135

Shorter Term Contracts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135

Modifications of Residual-Cost Approach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 136

Maximization of Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 136

List of Tables

Table No. Page

18.

19.

20.

21.

22.

23.

Financial Management of Commercial Airports, 1983 . . . . . . . . . . . . . . . . . . . 126

Comparison of Residual-Cost and Compensatory Methods of

Calculating Airport Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127

Role of Airlines in Approving Capital Projects at

Commercial Airports, 1983 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128

Term of Airport Use Agreements at Commercial Airports, 1983 . . . . . . . . . . 130

Profile of Landing Fees at Four Major Airports, 1982 . . . . . . . . . . . . . . . . . . . 132

Average Operating Revenue by Revenue Source, Commercial and

General Aviation Airports, 1975-76 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 134
Chapter 6

AIRPORT FINANCIAL

MANAGEMENT AND PRICING1

Unlike airports in other countries, many of

which are owned and run by national governments, U.S. commercial airports are typically

owned and managed by local governments or

other non-Federal public authorities. Although the

management approach varies, major U.S. commercial airports function as mature enterprises,

applying up-to-date techniques of financial management and administration. These publicly owned

and managed facilities are operated in conjunction with private industry-the commercial airlines, which are the airports’ link to their patrons.

This peculiar public-private character distinguishes

the financial operation of commercial airports

from that of wholly public or private enterprises,

distinctly shaping airport management practices,

the pricing of facilities and services, and the investment planning process.

On the basis of a survey conducted by the Congressional Budget Office (CBO) in 1983 (app. B),

this chapter develops a profile of financial policies and practices now followed at 60 of the Nation’s larger commercial airports and assesses

trends in airport financial management since Federal deregulation of the airline industry in 1978.

Brief attention is also given to management and

financing practices of smaller airports, including

publicly owned general aviation (GA) airports.

APPROACHES TO FINANCIAL MANAGEMENT

At most commercial airports, the financial and

operational relationship between the airport operator and the airlines is defined in legally binding

agreements that specify how the risks and responsibilities of running the airport are to be shared.

These contracts, commonly termed “airport use

agreements, ” establish the terms and conditions

governing the airlines’ use of the airport.2 They

also specify the methods for calculating rates airlines must pay for use of airport facilities and services; and they identify the airlines’ rights and

privileges, sometimes including the right to approve or disapprove any major proposed airport

capital development projects.

Although financial management practices differ greatly among commercial airports, the air-

— —

IThis chapter was prepared by the Congressional Budget Office

and appears in unabridged form in Financing U.S. Airports in the

1980s, April 1984. The version here has been condensed and edited

to conform to the OTA report format.

“’Airport use agreement” is used generically hereto include both

legal contracts for the airlines’ use of airfield facilities and leases

for use of terminal facilities. At many airports, both are combined

in a single document. A few commercial airports do not negotiate

airport use agreements with the airlines, but instead charge rates

and fees set by local ordinance.

port-airline relationship at major airports typically

takes one of two very different forms, with important implications for airport pricing and investment:

The residual-cost approach, under which the

airlines collectively assume significant financial risk by agreeing to pay any costs of running the airport that are not allocated to

other users or covered by nonairline sources

of revenue.

The compensatory approach, under which

the airport operator assumes the major financial risk of running the airport and charges

the airlines fees and rental rates set so as to

recover the actual costs of the facilities and

services that they use.

The Residual-Cost Approach

A majority of the Nation’s major commercial

airports surveyed by CBO—14 out of 24 large airports and 21 of 36 medium airports—have some

form of residual-cost approach to financial management (see box A and table 18). Under this approach, the airlines collectively assume significant

125.
126 . Airport System Development

financial risk. They agree to keep the airport

financially self-sustaining by making up any deficit—the residual cost—remaining after the costs

identified for all airport users have been offset by

nonairline sources of revenue (automobile parking and terminal concessions such as restaurants,

newsstands, snack bars, and the like).

Although applications of the residual-cost approach vary widely, a simplified example can ilTable 18.—Financial Management of

Commercial Airports, 1983

Large Medium

Approach Number Percent Number Percent

SOURCE: Congressional Budget Office, 1963 Survey.

lustrate the basic approach (see table 19). Most

airports have a number of different cost centers,

such as terminal buildings, the airfield, roads and

grounds, and the air freight area. At a residualcost airport, the total annual costs—including

administration, maintenance, operations, and

debt service (including coverage) —could be calculated for each cost center, and offset by all

nonairline revenues anticipated for that center.3

The residual between costs and revenues would

then provide the basis for calculating the rates

charged the airlines for their use of facilities within

the cost center. Any surplus revenues would be

credited to the airlines and any deficit charged to

them in calculating airline landing fees or other

rates for the following year.4

The Compensatory Approach

Under a compensatory approach, the airport

operator assumes the financial risk of airport operation, and airlines pay rates and charges equal to

the costs of the facilities they use as determined

by cost accounting. In contrast to the situation

at residual-cost airports, the airlines at a compensatory airport provide no guarantee that fees and

3Debt service coverage is the requirement that the airport’s revenues, net of operating and maintenance expenses, be equal to a

specified percentage in excess of the annual debt service (principal

and interest payments) for revenue bond issues. The coverage required is generally from 1.25 to 1.40 times debt service, thereby providing a substantial cushion that enhances the security of the bonds.

This is discussed further in ch. 7.

4Haro1d B. Kluckholn, “Security for Tax-Exempt Airport Revenue

Bonds,” summary of remarks presented at the New York Law Journal

Seminar on Tax-exempt Financing for Airports, 1980.
Ch. 6—Airport Financial Management and Pricing . 127

rents will suffice to allow the airport to meet its

annual operating and debt service requirements.

A compensatory approach is currently in use at

10 of the 24 large commercial airports and 15 of

the 36 medium airports surveyed by CBO.

Although individual airports have adopted

many versions of the compensatory approach, the

simplified example set out in table 19 illustrates

the basics. First, for each cost center a calculation would be made of the total annual expense

of running the center, including administration,

maintenance, operations, and debt service (with

coverage). The airlines’ shares of these costs would

then be based on the extent of their actual use of

facilities within each cost center. The airlines

would not be charged for the costs of public space,

such as terminal lobbies. Nor would they receive

any credit for nonairline revenues, which offset

expenses in the residual-cost approach but are disregarded under a compensatory approach in calculating rates and charges to the airlines.

Comparison of Residual-Cost and

Compensatory Approaches

These two major approaches to financial management of major commercial airports have significantly different implications for pricing and

investment practices. In particular, they help determine:

●

●

●

an airport’s potentiaI for accumulating retained earnings usable for capital development;

the nature and extent of the airlines’ role in

making airport capital investment decisions,

which may be formally defined in majorityin-interest clauses included in airport use

agreements with the airlines; and

the length of term of the use agreement between the airlines and the airport operator.

These differences, examined below, can have

an important bearing on an airport’s performance

in the municipal bond market, as will be discussed

in chapter 7.

Retention of Earnings

Although large and medium commercial airports generally must rely on the issuance of debt

to finance major capital development projects, the

availability of substantial revenues generated in

excess of costs can strengthen the performance of

an airport in the municipal bond market. It can

also provide an alternative to issuing debt for the
128 Airport System Development

financing of some portion of capital development.

Residual-cost financing guarantees that an airport

will always break even—thereby assuring service without resort to supplemental local tax support—but it precludes the airport from generating earnings substantially in excess of costs.5

By contrast, an airport using a compensatory

approach lacks the built-in security afforded by

the airlines’ guarantee that the airport will break

even every year. The public operator undertakes

the risk that revenues generated by airport fees

and charges may not be adequate to allow the airport to meet its annual operating costs and debt

service obligations. On the other hand, because

total revenues are not constrained to the amount

needed to break even, and because surplus revenues are not used to reduce airline rates and

charges, compensatory airports may earn and retain a substantial surplus, which can later be used

for capital development. Since the pricing of airport concessions and consumer services need not

be limited to the recovery of actual costs, the

extent of such retained earnings generally depends

on the magnitude of the airport’s nonairline

revenues. b

Because the residual-cost approach is not designed to yield substantial revenues in excess of

. . --

‘Peat, Marwick, Mitchell & Co., “Comparative Rate Analysis:

Dade County Aviation and Seaport Departments, ” August 1982,

p. 3.

‘Market pricing of concessions and other nonairline sources of

revenue is a feature of both residualcost and compensatory airports.

costs, residual-cost airports, as a group, tend to

retain considerably smaller percentages of their

gross revenues than do compensatory airports.

A few residual-cost airports, however, have modified the approach to permit accumulation of sizable retained earnings for use in capital projects.

At Miami and Reno International Airports, for

example, certain airport-generated revenues are

excluded from the revenue base used in calculating the residual cost payable by the airlines; the

revenues flow instead into a discretionary fund

that can finance capital development projects.

Majority=in-interest

In exchange for the guarantee of solvency, airlines that are signatory to a residual-cost use

agreement often exercise a significant measure of

control over airport investment decisions and

related pricing policy. These powers are embodied

in so-called majority-in-interest clauses, which are

a much more common feature of airport use

agreements at residual-cost airports than at airports using a compensatory approach (see table

20). At present, more than three-quarters of the

large commercial airports using a residual cost approach have some form of majority-in-interest

clause in their use agreements with the airlines,

and two-thirds of the medium residual-cost airports have such clauses. Of the airports surveyed,

only one-tenth of the large and one-third of medium commercial airports that use a compensatory approach to financial management have

majority-in-interest clauses in their use agreements.

Table 20.—Role of Airlines in Approving Capitai Projects at

Commercial Airports, 1983°

Large Medium

Airline role Number Percent Number Percent

Residual cost

Majority-in-Interest clause . . . . . . . . . . . . 11 79 14 67

No formal requirement of

airline approval . . . . . . . . . . . . . . . . . . . 3 21 7 33

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 100 21 100

Compensatory

Majority-in-Interest clause . . . . . . . . . . . . 1 10 5 33

No formal requirement of

airline approval . . . . . . . . . . . . . . . . . . . 9 90 10 67

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 100 15 100

Grand total . . . . . . . . . . . . . . . . . . . . . 24 — 36 —
Ch. 6—Airport Financial Management and Pricing 129

Majority-in-interest clauses give the airlines

accounting for a majority of traffic at an airport

the opportunity to review and approve or veto

capital projects that would entail significant increases in the rates and fees they pay for the use

of airport facilities. 7 This arrangement provides

protection for the airlines that have assumed financial risk under a residual-cost agreement by

guaranteeing payment of all airport costs not covered by nonairline sources of revenue. For instance, without some form of majority-in-interest

clause, the airlines at a residual-cost airport could

be obligating themselves to pay the costs of asyet-undefined facilities that might be proposed in

the 15th or 20th year of a 30-year use agreement.

Under a compensatory approach, where the airport operator assumes the major financial risk of

running the facility, the operator is generally freer

to undertake capital development projects without consent of the airlines that account for a majority of the traffic. Even so, airport operators

rarely embark on major projects without consulting the airlines that serve the airport. Potential investors in airport revenue bonds would be

wary of a bond issue for a project lacking the airlines’ approval.

Specific provisions of majority-in-interest clauses

vary considerably. At some airports, the airlines

that account for a majority of traffic can approve

or disapprove all major capital development

projects—e.g., any project costing more than

$100,000. At others, projects can only be deferred

for a certain period of time (generally 6 months

to 2 years). Although most airports have at least

a small discretionary fund for capital improvements that is not subject to majority-in-interest

approval, the general effect of majority-in-interest

provisions is to limit the ability of the public airport owner to proceed with any major project opposed by the airlines. Sometimes, a group of just

two or three major carriers can exercise such

control.

The combination of airlines that can exercise majority-in-interest

powers varies. A typical formulation would give majority-in-interest

powers to any combination of “more than so percent of the scheduled

airlines that landed more than 50 percent of the aggregate revenue

aircraft weight during the preceding fiscal year” (standard document

wording).

Term of Use Agreement

At the airports examined in the CBO study,

residual-cost airports typically have longer term

use agreements than do compensatory airports.

This is because residual-cost agreements historically have been drawn up to provide security for

long-term airport revenue bond issues; and the

term of the use agreement, with its airline guarantee of debt service, has generally coincided with

the term of the revenue bonds. More than 90 percent of the large and 75 percent of the medium

residual-cost airports surveyed by CBO have use

agreements with terms of 20 or more years (see

table 21). Terms of 30 years or longer are not uncommon.

By contrast, about 60 percent of the large and

40 percent of the medium compensatory airports

surveyed have use agreements running for 20

years or more. Four of the compensatory airports

surveyed have no contractual agreements whatever with the airlines. At these airports, rates and

charges are established by local ordinance or

resolution. This arrangement gives airport operators maximum flexibility to adjust their pricing

and investment practices unilaterally, without the

constraints imposed by a formal agreement negotiated with the airlines, but it lacks the security provided by contractual agreements.

Pricing of Airport Facilities

and Services

Major commercial airports are diversified enterprises- that provide a wide range of facilities and

services for which fees, rents, or other user charges

are assessed. Most commercial airports, regardless

of size, type, or locale, offer four major types of

facilities and services:

• airfield facilities, made up of runways, taxiways, aprons, and parking ramps for use by

commercial and general aviation;

● terminal area facilities and services provided

to concessionaires and consumers, including

auto parking and ground transportation,

restaurants and snack bars, specialty stores

(e.g., newsstands and duty-free shops), car

rental companies, passenger convenience facilities (e.g., porter service, restrooms, telephones, and vending machines), personal
130 . Airport System Development

Table 21.–Term of Airport Use Agreements at Commercial Airports, 1983

Large Medium

Length of term Number Percent Number Percent

Residual cost

20 years or more. . . . . . . . . . . . . . . . . . . . 13 93 16 76

11-19 years. . . . . . . . . . . . . . . . . . . . . . . . . 0 0 2 10

6-10 years . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0 5

5 years or less. . . . . . . . . . . . . . . . . . . . . . 1 7 : o

Negotiations in process . . . . . . . . . . . . . 0 0 2 10

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 100 21 100

compensatory

20 years or more . . . . . . . . . . . . . . . . . . . . 6 60 6 40

11-19 years.... . . . . . . . . . . . . . . . . . . . . . o 0 2 13

6-10 years . . . . . . . . . . . . . . . . . . . . . . . . . . 1 10 2 13

5 years or less..... . . . . . . . . . . . . . . . . . 0 0 3 20

No use agreements . . . . . . . . . . . . . . . . . 3 30 1 7

Negotiations in process . . . . . . . . . . . . . 0 0 1 7

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 100 15 100

Grand total . . . . . . . . . . . . . . . . . . . . . 24a — 36b —

‘Ground rentals are leases of land in which the lessee pays the

cost of constructing any facilities, such as terminals, upon it.

9

Fixed base operators are private concerns that lease aircraft and

offer aviation services, such as fuel sale, flight instruction, and aircraft maintenance.

ports decrease in size, and many of the smallest

do not generate sufficient revenue to cover their

operating costs, much less capital investment.

Among GA airports, those that lease land or facilities for industrial use generally have a better

chance of covering their costs of operation than

do those providing only aviation-related services

and facilities.l”

The combination of public management an d

private enterprise uniquely characteristic of the

financial operation of commercial airports i s

reflected in the divergent pricing of airport facilities and services. The private enterprise aspects

of airport operation—the services and facilities

furnished for nonaeronautical use—generally are

priced on a market pricing basis. On the other

hand, the pricing of facilities and services for airlines and other aeronautical users is on a costrecovery basis, either recovery of the actual costs

of the facilities and services provided (the compensatory approach) or recovery of the residual

costs of airport operation not covered by nonairIine sources of revenue. This mix of market pric-

‘

O

See Joel Crenshaw and Edmund Dickinson, “Investment Needs

and Self-Financing Capabilities: U.S. Airports, Fiscal Years 1981-

1990,” report prepared for the U.S. Department of Transportation,

July 1978, pp. 12, 45; and Laurence E. Gesell, The Administration

of Public Airports, Coast Aire Publications, 1981, pp. VI 6-13.
Ch. 6—Airport Financial Management and Pricing 131

ing and cost-recovery pricing has important implications for airport financing, especially with

regard to the structure and control of airport

charges and the distribution of operating revenues,

Structure and Control of

Airport Charges

At major commercial airports, the structure and

control of fees, rents, and other charges for facilities and services are governed largely by a variety of long- and short-term contracts, including

airport use agreements with the airlines, leases,

and concession and management contracts. For

each of the four major groups of facilities and

services outlined above, the basic kinds of charges

assessed at residual-cost and compensatory airports can be compared in terms of:

● method of calculation,

● term of agreement, and

● frequency of adjustment.

Airfield Area

The major fees assessed for use of airfield facilities are landing or flight fees for commercial

airlines and GA aircraft. Some airports also levy

other airfield fees such as charges for the use of

aircraft parking ramps or aprons. In lieu of landing fees, many smaller airports, especially GA airports, collect fuel “flowage” fees, which are levied

per gallon of aviation gasoline and jet fuel sold

at the airport.

At residual-cost airports, the landing fee for airlines is typically the item that balances the budget,

making up the projected difference between all

other anticipated revenues and the total annual

costs of administration, operations and maintenance, and debt service (including coverage).

Landing fees differ widely among residual-cost airports, depending on the extent of the revenues

derived from airline terminal rentals and concessions such as restaurants, car rental companies,

and automobile parking lots. If the nonairline

revenues are high in a given year, the landing fee

for the airlines may be quite low. In recent years,

several airports—including Los Angeles and Honolulu International—have approached a “negative” landing fee. At some residual-cost airports,

the landing fee is the budget-balancing item for

the airfield cost center only. At such airports, the

surplus or deficit in the terminal cost center has

no influence on airline landing fees, and terminal

rental rates for the airlines may be set on a residual-cost or a compensatory basis.

The method of calculating landing fees at residual-cost airports is established in the airport

use agreement and continues for the full term of

the agreement. To reflect changes in operating

costs or revenues, landing fees are typically adjusted at specified intervals ranging from 6 months

to 3 years. At some airports, fees maybe adjusted

more often if revenues are significantly lower or

higher than anticipated. Often, the nonsignatory

airlines (those not party to the basic use agreement) pay higher landing fees than the signatory

carriers. General aviation landing fees vary greatly

from airport to airport, ranging from charges

equal to those paid by the commercial airlines to

none at all. Most landing fees are assessed on the

basis of certificated gross landing weight. ”

At compensatory airports, airline landing fees

are based on calculation of the average actual

costs of airfield facilities used by the airlines (see

table 22). As in the case of residual-cost airports,

each airline’s share of these costs is based on

its share of total projected airline gross landing

weights (or, in a few cases, gross takeoff weight).

In addition to fees determined by this weightbased measure, three compensatory airports—

Boston Logan International and John F. Kennedy

and La Guardia airports in New York—assess a

surcharge on GA aircraft during hours of peak

demand. At present, however, no major airports

“This practice of basing landing fees on aircraft weight tends to

promote use of commercial airports by general aviation. Since most

GA aircraft are relatively light (under 10,000 lb), they pay very low

landing fees at most commercial airports-typically $10 or less. The

smallest GA aircraft (under 2,500 lb) often pay no fee. Among the

airports surveyed by CBO there is no clear indication that landing

fees for GA differ systematically as a function of pricing policy.

Residual-cost and compensatory airports alike have landing fees for

GA that are so small as to be a negligible, either as a source of

revenue to the airport or as a deterrent to use of congested facilities.
132 Airporf System Development

Table 22.–Profiie of Landing Fees at Four Major Airports, 1982

Airline Iandina fee

Basis of fee Method of calculation Feea General aviation landing fee

Fee = public aircraft facilities costs

divided by total projected scheduled

airline landing weights; adjusted

annually

Fee = airfield cost center expenses

divided by total projected airline

landing weights; adjusted annually

Fee = residual cost divided by

estimated total landing weights of

all airlines; adjusted semiannually

Fee = residual cost divided by

estimated total landing weights of

all airlines; adjusted every 3 years

$1.24

$0.34

$0.75’

$0.23

Depafiments, August 1982.

impose such peak-hour surcharges on commercial airlines to help ease congestion problems.12

Landing fees at compensatory airports are established either in airport use agreements with the

airlines or by local ordinance or resolution. The

frequency of adjustment of the fees is comparable to that at residual-cost airports.

Terminal Area

The structure of terminal concession and service contract fees is similar under both pricing approaches. Concession contracts typically provide

the airport operator with a guaranteed annual

minimum payment or a specified percentage of

the concessionaire’s gross revenues, whichever is

greater. Restaurants, snack bars, gift shops, newsstands, duty-free shops, hotels, and rental car

operations usually have contracts of this type.

Terminal concession contracts are often bid competitively, and they range in term from monthto-month agreements to contracts of 10 to 15

years’ duration. (Hotel agreements generally have

much longer terms, often running for 40 years or

more. ) Airport parking facilities may be operated

as concessions; they may be run by the airport

directly; or they may be managed by a contractor for either a flat fee or a percentage of revenues.

Airline Leased Areas

At both residual-cost and compensatory airports, airlines pay rent to the airport operator for

the right to occupy various facilities (terminal

space, hangars, cargo terminals, and land). Rental

rates are established in the airport use agreements,

in separate leases, or by local ordinance or resolution. Terminal space may be assigned on an exclusive-use basis (to a single airline), a preferential-
Ch. 6—Airport Financial Management and Pricing ● 133

use basis (if a certain level of activity is not maintained, the airline must share the space), or on

a joint-use basis (space used in common by several airlines). Most major commercial airports use

a combination of these methods. In addition, airports may charge the airlines a fee for use of any

airport-controlled gate space and for the provision of Federal inspection facilities required at airports serving international traffic. Some airports

have long-term ground leases with individual airlines that allow the airlines to finance and construct their own passenger terminal facilities on

land leased from the airport.

Among residual-cost airports, the method of

calculating airline terminal rental rates varies considerably. If airline fees and charges are calculated

on a residual-cost basis within each cost center,

the method of calculating rental rates resembles

that of the simplified example shown in table 19.

To arrive at the airline fee, total nonairline revenues generated within the terminal cost center

are subtracted from the total costs of the center

(administration, operations and maintenance, and

debt service). Each airline’s share is based on the

square footage it occupies, with proration of

jointly used space.

On the other hand, at residual-cost airports

where receipts from airline landing fees alone are

used to balance the airport budget, the terminal

rental rates for the airlines may be set in various

ways—on a compensatory basis (recovering the

average actual costs of the facilities used), by an

outside appraisal of the property value, or by negotiation with the airlines. In all cases, each airline’s share of costs is based on its proportionate

use of the facilities. Rental rates may be uniform

for all types of space leased to the airlines, or they

may differ according to the type of space provided—for example, they may be significantly

higher for leases of ticket counters or office space

than for rental of gate or baggage claim areas.

At residual-cost airports, the rental term for airline leased areas generally coincides with the term

of the airport use agreement with the airlines. The

frequency of adjustment of terminal rental rates

ranges considerably—annually at many airports,

but up to 3 to 5 years at others.

At compensatory airports, the method of calculating terminal rental rates for the airlines is

based on recovery of the average actual costs of

the space occupied. Each airline’s share of the total

costs is based on the square footage leased. Typically, rates differ according to the type of space

and whether it is leased on an exclusive, preferential, or joint-use basis. The rental term for airline leased areas often coincides with that of the

airport use agreement. (It is set by ordinance at

airports that operate without agreements. ) Rates

are typically adjusted annually at compensatory

airports.

Other Leased Areas

A wide variety of arrangements are employed

for other leased areas at an airport, which may

include agricultural land, fixed base operations,

cargo terminals, and industrial parks. The methods of calculating rental rates and the frequency

of adjustment differ according to the type of facility and the nature of use. What these disparate

rentals have in common is that, like terminal concessions and services, they are generally priced

on a market basis; and the airport managers have

considerable flexibility in setting rates and charges

in the context of market constraints and their own

policy objectives.

Variation in the Source of

Operating Revenues

1n general, revenue diversification enhances the

financial stability of an airport. In addition, the

specific mix of revenues may influence year-toyear financial performance. Some of the major

sources of airport revenue (notably landing fees

and terminal concessions) are affected by changes

in the volume of air passenger traffic, while others

(e.g., airline terminal rentals and ground leases)

are essentially immune to fluctuations in air

traffic.

The distribution of operating revenues differs

widely according to factors such as passenger

enplanements, the nature of the market served,

and the specific objectives and features of the airport’s approach to pricing and financial management. Airport size generally has a strong influence on the distribution of revenues. The larger
134 ● Airport System Development

commercial airports typically have a more diversified revenue base than smaller airports. For example, they tend to have a wider array of incomeproducing facilities and services in the passenger

terminal complex. In general, terminal concessions

can be expected to generate a greater percentage

of total operating revenues as passenger enplanements increase. On average, concessions account

for at least one-third of total operating revenues

at large, medium, and small commercial airports,

compared to about one-fifth at very small (nonhub)

commercial airports and a smaller fraction still

at GA airports (see table 23).

Factors other than airport size also affect distribution of operating revenues. At commercial

airports, for example, parking facilities generally

provide the largest single source of nonairline

revenues in the terminal area. Airports that have

a high proportion of connecting traffic may, however, derive a smaller percentage of their operating income from parking revenues than do socalled “origin and destination” airports. Other factors that may affect parking revenues include

availability of space for parking, the volume of

air passenger traffic, the airport pricing policy,

availability and cost of alternatives to driving to

the airport (e.g., mass transit and taxicab service), and the presence of private competitors providing parking facilities at nearby locations off

the airport property.

The approach to financial management, because it governs the pricing of facilities and services provided to airlines, significantly affects the

distribution of operating revenues. Since so many

other factors play an important role in determining revenue distribution, however, the mix of

operating revenues at an airport cannot be predicted on the basis of whether the airport employs

a residual-cost or a compensatory approach. The

mix of revenues varies widely among residual-cost

airports. With airline landing fees characteristically picking up the difference between airport

costs and other revenues at residual-cost airports,

airfield area income differs markedly according

to the extent of the airport’s financial obligations,

the magnitude of terminal concession income and

other nonairline revenues, and the volume of air

traffic. In 1982, for example, airfield area revenues

provided anywhere from 10 percent (Tampa International) to more than 50 percent (Chicago

O’Hare International) of total operating revenues

at residual-cost airports. By contrast, compensatory airports show a considerably smaller range

of variation in the distribution of revenues.

Table 23.–Average Operating Revenue by Revenue Source, Commercial and Generai Aviation Airports, 1975-76
Ch. 6—Airport Financial Management and Pricing 135

TRENDS IN AIRPORT MANAGEMENT SINCE DEREGULATION

FederaI deregulation of the airline industry has

radically changed the market in which airlines—

and airports—operate. Once subject to strict regulation of routes and fares, commercial air carriers are now free to revise routes, adjust fares,

and introduce or terminate service to particular

airports as market conditions seem to warrant.

This new freedom from Federal intervention has

had pronounced effects on the airline industry.

It has spurred intense competition and even price

wars among the airlines, led to reconfiguration

of the route system, and encouraged the startup

of new carriers. For some of the established airlines, serious financial difficulties have ensued. Although deregulation has not caused radical changes

in the financial management of airports, recent

trends do reflect the uncertainties of a new, open

market. Deregulation also appears to have accelerated certain shifts in management policy and

practice that were under way before deregulation.

Since the early days of commercial air travel,

would-be investors in airport revenue bonds have

held long-term use agreements in high regard, considering them evidence of the airlines’ commitment

to serve an airport for long periods—spans usually coincident with the terms of bond issues. As

the industry has matured, however, investors and

analysts have increasingly recognized that an airport’s financial stability—hence its capacity to

generate a stream of revenue adequate to secure

revenue bond issues—depends more on the underlying strength of the local air travel market than

on long-term use agreements.

Deregulation has reinforced this shift, as the

strength of the airlines’ financial commitment to

an airport is significantly diluted by their new flexibility to withdraw from a market virtually at will.

Confidence has also been shaken by the financial

problems now plaguing many airlines. Although

changes in airport financial management occur

very slowly (many standing use agreements run

through the 1990s or later), three important trends

in financial management are now emerging at major commercial airports:

● shorter term contracts—shorter terms for airport use agreements, nonairline leases, and

●

●

concessionaires’ contracts, and more frequent

adjustment of rates and charges;

modification of residual-cost approach—

modification of residual-cost ratemaking and

majority-in-interest provisions, with movement in the direction of more compensatory

forms of financial management; and

maximization of revenues—concerted effort

by airport managers to maximize revenues

by means of a variety of strategies intended

to strengthen and diversify the revenue base

of the airport.

Shorter Term Contracts

Deregulation appears to have hastened a trend

toward shorter term airport use agreements that

was already under way prior to 1978. Shorter

term contracts give airport operators greater flexibility to adjust pricing, investment policies, and

space allocation to meet shifting needs in a deregulated environment. For example, several airports with long-term use agreements in force have

given much shorter term agreements to air carriers that have begun serving the airport since

1978. Contracts for such recent entrants often run

for 5 years or less, and they may take the form

of yearly or even month-to-month operating

agreements (similar to those used for air taxi and

commuter operators). At least 15 percent of the

large and medium airports surveyed by CBO have

granted new carriers such relatively short-term

terminal leases and/or use agreements. Moreover,

as existing long-term use agreements expire, many

airport operators indicate an intention to negotiate shorter term use agreements with all carriers

serving the airport. At least a dozen of the airports surveyed by CBO either have recently concluded shorter term agreements or anticipate that

new use agreements (planned or in negotiation)

will be significantly shorter than ones now standing. In part, this reflects the fact that many postderegulation agreements have not involved major capital development programs requiring longterm bond financing.

Many airports also report that, as old contracts

expire, they are routinely shortening the terms of

nonairline leases and contracts with concession25-420 0 - 8 4
136 ● Airport System Development

aires. Some are also moving to more frequent adjustment of rates and charges under existing agreements to meet the escalating costs of airport

operation.

Modifications of Residual=

better able to assume the financial risks of airport

operation without relying on “break-even” guarantees by the airlines, and they may maximize

revenues by adopting a compensatory approach.

Maximization of Revenues

No matter how they approach financial management, many commercial airports are now seeking to increase and diversify their revenues by a

variety of strategies. These include raising existing

fees and rental rates, seeking more frequent adjustment of charges, using competitive bidding for

concessionaires’ contracts, increasing the airport’s

percentage of gross profits, and exploiting new

or untapped sources of revenue—e.g., videogame

rooms, industrial park development, and leasing

of unused airport property. Some airports are

looking to future possibilities, as well. For example, two large airports that recently renegotiated

airport use agreements—Chicago O’Hare and

Greater Pittsburgh International-included clauses

in the new contracts protecting the airport’s right

to levy a passenger facility charge (or head tax)

if and when Federal law permits. In general, this

effort to diversify and expand revenue sources

reflects the paramount importance of a guaranteed

stream of income to assure an airport’s financial

success.
Chapter 7

AIRPORT FUNDING

Photo credit cederal Awarlon Administration I
Contents

Page

Federal Airport Development Aid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139

Investment Trends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139

Demand for Airport Investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141

Financial Condition of U.S. Airports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143

Measures of Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143

Recent Trends in the Financial Strength of Airports . . . . . . . . . . . . . . . . . . . . . . 143

Effects of Airport Characteristics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 144

Effects of Airline Deregulation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 146

Airports in the Municipal Bond Market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 147

Role of the Municipal Bond Market in Airport Development . . . . . . . . . . . . . . 147

The Market for Airport Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 151

List of Tables

Table No, Page

24. Projected Federal Capital Expenditures on Airports Undercurrent Policy,

1984-89 (in millions of 1982 dollars) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139

25. Projected Annual Demand for Airport Capital, by Airport Type,

1984-93 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141

26. Financial Performance of Commercial Airports, 1975-82 . . . . . . . . . . . . . . . . . 144

27. Financial Performance of Commercial Airports, Compared by

Management Approach, 1975-82 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 145

28. Financial Performance of Commercial Airports, by Airport Size, 1975-82. . 146

29. Airport Bond Issues, 1978-82 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 147

30. Airport Bond Issues, By Type of Issue and Security, 1978-82 . . . . . . . . . . . . 148

31. Use of Bond Market to Raise Capital, By Airport Size and Type,

1978-82 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 148

32. Contribution of Federal Grants and Bond Issues to Airport Investment,

1978-82 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 149

33. Airport Bond Issues, By Type of Security, 1978-82 . . . . . . . . . . . . . . . . . . . . . 150

34. Average Size of Airport Bond Issues, 1978-82 . . . . . . . . . . . . . . . . . . . . . . . . . . 151

35. Airport Bond Ratings, 1978-82 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 152

36. Comparison of Interest Rates for Airport Bonds and

Other Municipal Bonds, 1978-82. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 155

37. Influence of Financial Management Approach on

Airport Bond Interest Rates, 1978-82 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 156

List of Figures

Figure No. Page

17. Federal, State, and Local Shares of Public Spending on Airports,

1960-80 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 140

18. Federal Capital Spending on Airports, By Type of Airport, 1960-87 . . . . . . 142
Chapter 7

AIRPORT FUNDING’

This chapter examines the financial condition

of U.S. airports and their ability to compete for

private capital. It begins with a brief outline of

the evolution of Federal airport funding programs

and summarizes the demand for airport investment under current policy. This is followed by

analysis of the financial performance of airports

in recent years compared to other municipal enterprises, with special attention to the effects of airline deregulation. Since tax-exempt municipal

bonds are a primary source of capital for commercial airports, extended treatment is given to

the ability of airports of different kinds and sizes

to compete in the bond market.

FEDERAL AIRPORT DEVELOPMENT AID

Federal capital spending on airports is financed

by user fees, levied chiefly as excise taxes on domestic airline tickets and general aviation (GA)

fuel. These taxes, which originated in 1933 and

1941, were not formally linked to airport expenditures until 1970, when the Airport and Airway

Revenue Act established the Airport and Airway

Trust Fund. Most of the Trust Fund income (over

80 percent) derives from an 8 percent tax on domestic passenger tickets. A tax of 14 cents per

gallon on GA jet fuel (12 cents for gasoline) contributes about 5 percent of Trust Fund revenues.

Funds are disbursed to major airports in the form

of matching grants determined by a formula based

on passenger volume and through discretionary

grants to meet special needs. Federal grants can

be used for a wide range of airport development

projects, including new construction and upgrading of runways, taxiways, and aprons, construction or improvement of public-use terminal areas,

and projects related to safety and noise reduction.

Over the next few years, Federal aid to airports

is projected to increase from the average of $600

million per year for the period 1970-82 to $800

million by 1986 (all in 1982 dollars, see table 24).

Investment Trends

Between 1960 and 1982, cumulative public and

private investment in the Nation’s airports totaled

$25.1 billion (in 1982 dollars), of which the Federal share accounted for $9 billion, or just above

one-third. 2 These overall figures, however, mask

wide year-to-year fluctuations in the Federal share

.— -

2This excludes the value of tax expenditures stemming from taxexempt bonds issued by municipal and airport authorities.

Table 24.–Projected Federal Capital Expenditures on Airports Under Current Policy, 1984-89

(in millions of 1982 dollars)

1984 ● 1985 1966 1967 1988 1989

Commercial:

Large . . . . . . . . . . . . . . . . . . . 194 188 200 207 196 200

Medium . . . . . . . . . . . . . . . . . 101 98 104 108 102 104

Small . . . . . . . . . . . . . . . . . . . 248 240 256 265 251 256

Subtotal . . . . . . . . . . . . . . 543 526 560 580 549 560

General aviation:

Reliever. . . . . . . . . . . . . . . . . 81 79 64 87 82 84

Other . . . . . . . . . . . . . . . . . . . 143 139 148 153 145 148

Subtotal . . . . . . . . . . . . . . 224 218 232 240 227 232

Total . . . . . . . . . . . . . . . 775 751 601 827 785 800

NOTES: Projections assume that currently authorized funding is continued through 1989 and that obligations equal new authorizations in each year. Allocation among

airports is based on data supplied by FAA.

Totals may not add because of rounding and because they include 1 percent of funding used for planning.

SOURCE: Congressional Budget Office.

139
140 ● Airport System Development

of total airport investment. Between 1973 and mix and total volume of airport investment. Peak

1977, the Federal share swung from a post-1970 investment in 1973, for example, was the result

low of 20 percent to a high of 85 percent (see fig. of very large capital outlays by some of the largest

17). Such swings have resulted not from shifts in commercial airports, which rely more on debt

Federal outlays, which have remained relatively financing than on Federal aid for investment capstable since 1970, but from extreme changes in the ital. On the other hand, many small airports, parFigure 17.–Federal, State, and Local Shares of Public Spending on Airports, 1960.80

2.2

2.0

1.8

1.6

1.4

1.2

1.0

0.8

0.6

0.4

0.2

0

I

Total

1960 1965 1970 1975 1980

Fiscal years

SOURCES: Congressional Budget Office based on data provided by Federal Aviation Adminlstratlon (Federal outlays) and U.S. Department of

Commerce, Bureau of the Census (State and local outlays).
Ch. 7—Airport Funding ● 141

ticularly general aviation airports, earn revenues

insufficient to cover debt service; these airports

tend to rely much more heavily on Federal money.

In 1977, a year of low overall airport outlays in

which much spending probably reflected GA airport improvements, the Federal share exceeded

80 percent. The States’ share of airport investment

has remained fairly stable since 1970, at about 11

percent.3

The Airport Improvement Program currently

targets Federal funds both to commercial airports

and to 2,643 general aviation facilities. Of the latter, 219 “reliever” airports are eligible for specially

targeted funds that will amount to $80 million per

year by 1986—a dramatic increase over the average of about $25 million per year for such airports

in the period 1976-82 (see fig. 18). Federal investment in other general aviation airports also grew

steadily throughout the 1970s, and under current

policies, outlays in constant dollars would triple

by 1987, compared to the 1980-82 level.

Demand for Airport Investment

As a result of national economic development

and a general pattern of public sector subsidization of aviation activity, growth in both commercial airlines and general aviation has led to mounting airport investment needs. Since 1970, the

3

From data supplied by the National Association of State Aviation Officials.

number of GA aircraft in use grew by 63 percent

(to 213,000 in 1982), and the number of hours

flown increased by 67 percent. At the same time,

with the introduction of wide-body jets, the number of commercial aircraft in service actually

declined by 7.7 percent, from 2,690 to 2,483. As

a result, general aviation now exerts particular

pressure on the runways, taxiways, and other airfield components of a number of major commercial airports, often accounting for more than half

of all takeoffs and landings. More frequent commercial flights at the major airports put pressure

on terminals and other buildings, parking lots,

and access roads.

The resulting congestion has led the Federal

Aviation Administration (FAA) to project a need

for substantial investment in upgrading, maintenance, and expansion. Annual airport investment

demand, including work not eligible for Federal

grants, will be $1.5 billion to $2 billion between

1984 and 1993, of which the Federal share—under

currently defined programs—would be about $0.8

billion. This sum represents an estimated 3.3 percent of the Federal share of all public works infrastructure needs.’ Of the $1.5 billion to $2 billion, roughly one-third would be needed to correct

all present and expected deficiencies at commercial airports; two-thirds would pay for new capacity (see table 25).

4

Public Works Infrastructure: Policy Considerations for the 1980s,

(Washington, DC: Congressional Budget Office, April 1983).

Table 25.–Projected Annual Demand for Airport Capital, by Airport Type, 1984=93

Percent of demand

Estimated total demand Expanded

(millions of 1982 dollars) capacity Upgrading Maintenance

Commercial:

Large. . . . . . . . . . . . . . . . . . . . . . 450-650 20 4 5

Medium . . . . . . . . . . . . . . . . . . . 200-350 10 2 1

Small. . . . . . . . . . . . . . . . . . . . . . 400-500 15 5 5

Subtotal . . . . . . . . . . . . . . . . . 1,050-1,450 45 11 11

General aviation:

Reliever . . . . . . . . . . . . . . . . . . . 100-150 5 2 1

Other. . . . . . . . . . . . . . . . . . . . . . 400-450 15 6 4

Subtotal . . . . . . . . . . . . . . . . . 500-600 20 8 5

Total . . . . . . . . . . . . . . . . . . 1,550-2,050 65 19 16
142 . Airport System Development

1.0

0.9

0.8

0.7

0.6

0.5

0.4

0.3

0.2

0.1

0

Figure 18.–Federal Capital Spending on Airports, By Type of Airport, 1960.87

All airports A

L

I

I

I

I

I

I

I

I

I

New

budget

authority

1960 1965 1970 1975 1980 1985

Fiscal years

NOTE: Outlays for 19S3-87 are based on authorizations in the Airport and Airway Improvement Act of 1982. Typically, appropriations and thus actual

outlays are somewhat below authorized Ieveis.

SOURCE: Congressional Budget Office based on data provided by the Federal Aviation Administration.
Ch. 7—Airport Funding ● 143

FINANCIAL CONDITION OF U.S. AIRPORTS

As in any enterprise, the ability of an airport

to survive without public support hinges on its

financial strength. This section examines recent

trends in the financial performance of major commercial airports—those with earning power sufficient to issue revenue-backed bonds. It also compares the performance of these airports with that

of the other municipal enterprises competing with

airports in capital markets-electric utilities, water

supply and wastewater treatment projects, and

turnpike, bridge, tunnel, and expressway authorities. s This section also assesses how the shifts

resulting from Federal deregulation of the airlines

might affect the financial condition of airports of

various sizes.

Measures of Performance

Analysis of key financial ratios is a widely accepted method of evaluating the financial condition and performance of a single enterprise or an

entire industry. b Many different financial ratios

can be constructed, each revealing a particular

aspect of business performance.

Four indicators often used by investment advisors to judge the value of a municipal enterprise

to potential bondholders are: operating ratio, net

take-down ratio, debt-to-asset ratio, and debt

service safety margin. The first two indicate the

availability of revenues beyond those needed to

meet regular operating expenses:

● Operating Ratio —Derived by dividing operating and maintenance expenses by operating revenue, this ratio measures the share of

revenues absorbed by operating and maintenance costs. A relatively low operating

ratio indicates financial strength, since it

signifies that only a small share of revenue

is required to satisfy operating requirements.

A high ratio (close to 1) indicates that rela5The data used here, including information from airports’ balance

sheets and income statements, were provided by Moody’s Investors

Service Inc. and by the Public Securities Association. The Congressional Budget Office is alone responsible for the analysis and interpretation of these data.

6

J. F. Weston, and E. F. Brigham, Manageti/ Finance (New York:

Dryden, 5th ed. 1975), pp. 19-53.

tive]y little additional revenue is available for

capital spending.

● Net Take-Down Ratio —Calculated as gross

revenue minus operating and maintenance

expenses, divided by gross revenues, the net

take-down is similar to the operating ratio,

but it also includes nonoperating revenues

(e.g., interest income). It is a slightly broader

measure of the share of airport revenues remaining after payment of operating expenses.

The second two indicators measure the ability

of an airport to support existing and new borrowing for capital investment:

● Debt-to-Asset Ratio—Calculated as gross

debt minus bond principal reserves, divided

by net fixed assets plus working capital, an

enterprise’s debt-to-asset ratio measures the

fraction of total assets provided by creditors.

Creditors prefer low debt ratios because each

dollar of debt is secured by more dollars of

assets. This can be important if assets have

to be sold to pay off bondholders.

● Debt Service Safety Margin —Defined as

gross revenues less operating and maintenance expenses and annual debt service divided by gross revenues, this ratio measures

both the percentage of revenues available to

service new debt and the financial cushion

to protect against unexpectedly low revenues.

Recent Trends in the

Financial Strength of Airports

Overall, examination of these measures shows

a trend toward improved strength in the finances

of major commercial airports. Compared to the

1975-’78 period, when the operating ratio for these

airports averaged 55 percent, this measure improved significantly over the subsequent 4 years,

declining to 50 percent (see table 26).7 The net

7Although most credit analysts (including Moody’s) use medians

rather than averages in analyzing industry groups, CBO has found

that averages give an equally meaningful measure of relative performance. This conclusion is based on an analysis of the statistical

distribution of each financial ratio across individual airports. In

statistical terminology, these distributions are “normal” for the in-

(continued)
144 ● Airporl System Development

take-down ratio has also improved, increasing

from 48 to 54 percent. This indicates a steady increase in the ability of commercial airports to service new debt from available net revenues. Indeed,

major commercial airports today appear to perform on a par with other financially self-sufficient

municipal enterprises, such as electric utilities, water supply systems, and sewage treatment authorities (see Box B).

Purchasers of airport revenue bonds look for

assurances that an airport can generate net revenue (i.e., gross revenues net of operating and

maintenance costs and debt service requirements)

sufficient to pay interest over the term of the

bonds and to repay the principal. Though, in

comparison to other financially mature municipal enterprises, airports appear to carry high levels

of debt relative to the value of their assets, net

airport revenues appear relatively strong. Indeed,

as shown in table 26, the debt service safety margin for major commercial airports has grown

substantially since 1978, despite the increase in

debt-to-asset ratios. Thus, while only 20 percent

of airport revenues were available to cover the

cost of new investment over the 1975-78 period,

the safety margin grew to 32 percent over the

years 1979-82. Moreover, in 1982, airports had

a substantially higher debt service safety margin

than other major municipal enterprises except perhaps highway toll facilities, for which no information is available.

Effects of Airport Characteristics

Although major commercial airports as a group

appear financially strong, important differences

are apparent among them. These variations stem

primarily from the approach to financial management and the size and economic strength of the

airport service area.

Financial Management

Differences in earning power may hinge on

whether an airport uses a compensatory or a

residual-cost approach to financial management.

While gross revenue at a compensatory airport

depends largely on the volume of passenger traffic, gross revenue at a residual-cost airport may

be constrained to the minimum amount needed

for operations, debt service, and reserve funds

established in the airport’s bond resolutions. In

fact, the three ratios that reflect gross revenues—

operating ratio, net take-down ratio, and debt

service safety margin—all show substantial differences between airports using a residual-cost approach and those using a compensatory approach.

Operating and net take-down ratios are substantially stronger at airports using the compen-
Ch. 7—Airport Funding ● 145

satory approach (see table 27). Over the 1979-82

period, for example, operating and maintenance

costs at compensatory airports absorbed only 44

percent of operating revenues, while residual-cost

airports needed more than half their gross revenue just to cover such expenses. Net take-down

ratios reflect the same pattern; residual-cost airports retained roughly half of their gross revenues

after paying operating and maintenance costs,

while compensatory airports retained 61 percent.

Compensatory airports also exhibited substantially higher debt service safety margins—48 percent, as opposed to 25 percent for residual-cost

airports. This indicates that compensatory airports have greater ability to finance development

with retained earnings or through bond sales.

Table 27.–Financial Performance of Commercial Airports, Compared by Management Approach, 1975-82

Averages of all Airports in category (in percent)

Residual cost Compensatory All airportsb

Performance measurea1975-78 1979-82 1975-78 1979-82 1975-78 1979-82

Operating ratio . . . . . . . . . . . . . 56.2 52.9 52.5 44.3 54,5 50.2

Net take-down ratio . . . . . . . . . 46.5 51.5 53.2 60.8 48.5 54.2

Debt-to-asset ratio . . . . . . . . . . 40.4 55.3 47.3 40.5 39.0 48.1

Debt service safety margin . . . 16.0 24.6 33.1 48.3 19.9 31.6

SOURCE: Congressional Budget Office, based on financial performance data provided by Moody’s Investors Service, Inc., for 13 large, 10 medium, and 2 small commercial airports.
146 ● Airport System Development

Airport Size

Airport size (measured in passenger enplanements) has historically been an important determinant of financial performance. Larger airports

show relatively stronger performance than smaller

ones. Operating ratios at large airports were 15

percentage points better than those at medium airports during the 1975-78 period and 18 percentage points better over the 1979-82 period (see table

28). Net take-down ratios and debt service safety

margins reflect the same spread, while only debtto-asset ratios are better at medium airports.

Effects of Airline Deregulation

Since deregulation of the airlines in 1978, the

financial performance of large and medium airports has improved. Indeed, except for the debtto-asset ratio at medium airports, large and medium airports show improvement on all four

ratios. One plausible explanation is that many major airlines curtailed service to smaller cities, electing instead to concentrate operations on the more

profitable routes serving large and medium airTable 28.—Financial Performance of Commercial

Airports, by Airport Size, 1975-82

ports. On balance, each 10-percent increase in

traffic volume translates into a 2-percent improvement in operating and net take-down ratios and

debt service safety margin (see app. C). Increased

traffic volume at many large and medium airports

since deregulation appears therefore to have improved gross revenues, yielding improvements in

those indicators that turn on changes in gross

revenue.

Prospective investors in airport revenue bonds

look beyond financial indicators based on gross

revenues, however. In particular, they seek low

debt-to-asset ratios as good cushions against possible defaults. Though gross revenues grow with

increased business, so do capital needs as airports

may need to expand terminals and other facilities

to handle additional passengers and aircraft. Some

airports, of course, have sufficient capacity to absorb significant increases in traffic with no expansion. At medium airports, however, debt-to-asset

ratios have indeed increased by more than 14 percentage points between the 1975-78 and 1979-82

periods. As a result, the difference between the

debt-to-asset ratios at large and medium airports

has declined from 27 percentage points during the

1975-78 period to 10 percentage points between

1979-82. At the same time, the debt-to-asset ratio

at large airports actually improved somewhat,

from 57 percent (1975-78) to 54 percent (1979-82).

Although the debt-to-asset ratio of medium airports is still better than at large airports, investors

tend to be wary of worsening conditions because

of the speculative factor that they introduce into

a prospective investment. Whether these trends

have actually diminished the investment value of

medium airports is dealt with more closely later

in this chapter.

The picture of small airport performance is extremely uncertain. The CBO analysis includes

only two small airports, and performance indicators are available only for the 1977-80 span,

rather than for the full 1975-82 period at other

airports. The two small airports examined are

close in size to some medium airports, indicating

that they probably represent the financially stronger

airports in their class. Indeed, their financial ratios

are better than those of the average medium airport—perhaps an indication that smaller airports
Ch. 7—Airport Funding ● 147

require better finances to offset the greater risks

associated with their size.

Financial ratios are unavailable for the remaining 489 small commercial airports and for publicly owned GA airports. In general, it appears

that the income of these airports is inadequate to

support the issuance of revenue-backed bonds. Instead, to help finance capital development, many

of these airports depend on government-issued

general obligation bonds, local taxpayer support,

and Federal grants. Revenues at some of the

smaller airports are so low that they fail to cover

even operating costs. However, some of these

airports—especially GA airports with low user

fees and aircraft parking charges—could strengthen

their financial performance by introducing new

or increased charges for the use of airport facilities.8

AIRPORTS IN THE MUNICIPAL BOND MARKET

Perhaps the stiffest test of an airport’s financial strength is its success in competing with other

municipal enterprises for private investment capital in the bond market. The analysis presented

below points to two conclusions. First, while the

financially stronger airports are the ones most active in the bond market, even financially weaker

airports can attract private capital—though often

they must use the taxing power of the local government as security for bond financing. Second,

by comparing the cost of capital (the interest that

must be paid to attract bond buyers) for airports

with that of other public enterprises, it is clear

that airports are generally viewed as good investments.

Role of the Municipal Bond Market in

Airport Development

Between 1978 and 1982, airports raised a total

of $5 billion (in 1982 dollars) in new bond financing to pay for capital improvements (see table

29).9 Most municipal bonds are exempt from Federal income tax, a key feature that makes this

financing less expensive than most other sources

of private money. Predictably, therefore, the vast

majority of airport debt capital is raised in the

tax-exempt bond market. In 1982 alone, airports

raised $1.4 billion in tax-exempt bond sales, or

about 2 percent of the total volume of $79 billion in long-term tax-exempt securities sold in that

year.

The 235 bond issues sold partly or wholly for

airport development between 1975 and 1982 were

divided more or less equally between county and

municipal governments (45 percent) and port or

airport authorities (43 percent). Only a small proportion (about 6 percent) of all bonds sold were

issued by State governments, and about 6 percent

9 These are new bond issues only; refinancing issues are excluded.

Table 29.—Airport Bond Issues, 1978.82

Airport bond issues (millions of 1982 dollars)a

Airports by size and category 1978 1979 1980 1981 1982 1978-82 Percent of total

Commercial:

Large . . . . . . . . . . . . . . . . . . . 955 672 186 547 1,036 3,396 67.3

Medium . . . . . . . . . . . . . . . . . 280 109 246 188 296 1,119 22.2

Small . . . . . . . . . . . . . . . . . . . 25 134 172 70 63 464 9.2

Subtotal . . . . . . . . . . . . . . 1,260 915 604 805 1,395 4,979 98.6

General aviation:

Reliever. . . . . . . . . . . . . . . . . 17 1 13 0 8 39 0.8

Other . . . . . . . . . . . . . . . . . . . 3 5 2 14 7 31 0.6

Subtotal . . . . . . . . . . . . . . 20 6 15 14 15 70 1.4

Total . . . . . . . . . . . . . . . 1,280 921 619 819 1,410 5,049 100.0
148 ● Airport System Development

(14 issues) were sold by special districts and other

jurisdictions (see table 30).

Effects of Airport Size and Type of Traffic

Although airports of all sizes and types participate in the bond market, larger airports do so to

a greater extent than smaller ones. Among the

large and medium commercial airports-together

serving about nineteenths of all passenger traffic—

41 (58 percent) used bond financing for capital

development over the 1978-82 period (see table

31). Moreover, according to Moody’s Investors

Service, all large and medium airports have issued

bonds at some time in the past. Although many

small commercial airports also use bond financing, this group of airports participates in the bond

market in only a small way, with just 50 of 489

airports (10 percent) issuing bonds over the past

5 years. The same is true of general aviation airports. Although 43 used bond financing over the

past 5 years, this represents only 2 percent of all

facilities in this class. However, GA reliever airports—those identified by the FAA as important

in relieving congestion at major commercial airports—appear more likely than other GA airports

to draw on the debt markets to finance capital

improvements.

In terms of total dollar volume of bond sales,

large and medium airports are by far the most prominent in the bond market. Of the total amount of

municipal debt sold for airport purposes over the

1978-82 period, 90 percent was for large and

medium airports, in contrast to only 9 percent for

small commercial airports. GA airports accounted

for a little more than 1 percent of total airport

bond sales.

Table 31.—Use of Bond Market to Raise Capitai,

By Airport Size and Type, 1978=82

Number of airports Percent

Issuing issuing

Airports by size Total bonds bonds

and category existing 1978-82 1978-82

Commercial:

Large . . . . . . . . . . . 24 19 79

Medium . . . . . . . . . 47 22 47

Small . . . . . . . . . . . 489 50 10

Subtotal . . . . . . 560 91 16

General aviation:

Reliever. . . . . . . . . 219 9 4

Other. . . . . . . . . . . 2,424 34 1

Subtotal . . . . . . 2,643 43 2

Total . . . . . . . 3,203 134 4

SOURCES: Bond data adapted by Congressional Budget Office from Public

Securities Assoclatlon, Long-Term Municipal Bond File. The numbers

of existing airports by size from the Federal Aviation Administration,

as of February 1984.

The role of bond finance in overall investment

also varies greatly according to an airport’s size

and type of air traffic served. Over the 1978-82

period, investment dollars raised through the

bond market for large airports were three times

greater than the Federal grants awarded these airports. At small airports, in contrast, Federal

grants were more than double bond proceeds (see

table 32). Not surprisingly, debt finance plays the

smallest role at GA airports, where it has accounted for only about 10 percent of total Federalplus-private investment over the past 5 years.l”

Although smaller commercial airports rely

more heavily on Federal grants than do larger airports, they nonetheless undertake a sizable amount

Tabie 30.–Airport Bond issues, By Type of issue and Security, 1978.82

Number of issues
Ch. 7—Airport Funding ● 149

Table 32.-Contribution of Federal Grants and Bond

Issues to Airport Investment, 1978-82

Percent of investment

Airports by size Federal Bond

and catagory grants issues

Commercial:

Large . . . . . . . . . . . . . . . . 18 82

Medium . . . . . . . . . . . . . . 27 73

Small . . . . . . . . . . . . . . . . 69 31

Subtotal . . . . . . . . . . . . 31 69

General aviation:

Reliever . . . . . . . . . . . . . . 80 20

Other . . . . . . . . . . . . . . . . 92 8

Subtotal . . . . . . . . . . . . 87 13

Total . . . . . . . . . . . . . 35 65

SOURCE: Congressional Budget Office.

of investment through the bond market. For example, while Federal matching grants to small

commercial airports totaled about $1 billion (in

1982 dollars) between 1978 and 1982—requiring

$100 million in local matching funds–small airports issued more than $460 million in tax-exempt

bonds during the same period, more than four

times the amount necessary to match Federal

grants. This means that small airports as a group

used more than three-quarters of their bond proceeds for investments with no Federal financial

involvement. In contrast, GA airports as a group

appear to raise debt capital only to the extent that,

when it is combined with moneys from nonFederal sources, they can meet their Federal

matching requirement.

Underlying Security of Airport Bonds

For most municipal bonds, including bonds for

airport development, the bond issuer’s pledge to

pay interest and to repay principal is generally

provided in one of two ways:

● general obligation bonds pledge the unlimited

taxing power and the full faith and credit of

the State, municipality, or other generalpurpose government, while

. revenue bonds pledge the user fee or lessee

revenues generated by the facility to be developed.

General obligation bonds are issued only by

States and other general-purpose governments.

Most States limit the amount of general obligation debt that a municipality may issue to a specified fraction of the taxable value of all property

within its jurisdiction. In addition, many States

require voter approval before issuing general obligation debt. By contrast, the volume of debt

issued through revenue bonds is not included in

the amount of total indebtedness subject to State

debt limits, and voter approval is usually not required. Revenue bonds generally bear higher interest than general obligation bonds because they

are not backed by the full faith, credit and taxing power of a governmental unit, and because

the receipts from user charges are less certain than

tax revenues.

In recent years, there has been a dramatic increase in the use of tax-exempt revenue bond

financing. In 1982, for example, revenue bonds

accounted for three-quarters of all tax-exempt

bond sales, compared to about one-third in 1970.

With the increasing financial pressures on local

governments to reserve general obligation funding for nonrevenue-producing facilities, revenue

bonds represented the vast majority—over 90

percent— of the total dollar volume of airport

bond sales over the 1978-82 period (see table 33).

During this period, the use of general obligation

bonds for airport development was most prominent among muniapalities and counties, accounting for over half of their airport development

issues—though a much smaller fraction of total

proceeds. Revenue bonds predominated, however, accounting for nearly 60 percent of bonds

sold by all levels of government for airport development during this period.

In addition to these two basic forms of bondholder security, a few bond issues combine sources

of security to produce a hybrid bond. This device offers certain advantages, such as improved

ratings and lower interest costs, without placing

undue pressure on the municipal debt ceiling. In

Florida, for example, the City of Tampa and

Hillsborough County lent their credit to the revenue bond program undertaken to finance a new

terminal at Tampa International Airport by executing standby agreements with the Hillsborough

County Aviation Authority, pledging tax revenues to replenish the debt service reserve fund in

the event it had to be drawn down for any reason. As further examples, the cities of Charlotte,

NC, and Austin, TX, built or expanded terminal
150 ● Airport System Development

Table 33.-Airport Bond Issues, By Type of Security, 1978-82

Airport category and Airport bond issues (millions of 1982 dollars)

bond type 1978 1979 1980 1981 1982 1978-82 Percent of totalCommercial airports:

Large:

General obligation . . . . . . . . . . 30 0 33 10 2 75 2

Revenue . . . . . . . . . . . . . . . . . . . 925 672 152 538 1,034 3,321 98

Subtotal . . . . . . . . . . . . . . . . . 955 672 186 548 1,036 3,396 100

Medium:

General obligation . . . . . . . . . . 34 7 55 56 5 157

Revenue . . . . . . . . . . . . . . . . . . . 246 103 190 132 290 961 :

Subtotal . . . . . . . . . . . . . . . . . 280 109 246 188 296 1,118 100

Small:

General obligation . . . . . . . . . . 11 38 42 16 30 137 30

Revenue . . . . . . . . . . . . . . . . . . . 14 96 131 54 32 327 70

Subtotal . . . . . . . . . . . . . . . . . 25 134 172 70 63 464 100

All:

General obligation . . . . . . . . . . 75 45 130 81 38 370 7

Revenue . . . . . . . . . . . . . . . . . . . 1,185 871 473 724 1,357 4,609 93

Total . . . . . . . . . . . . . . . . . . . . 1,260 916 603 805 1,394 4,978 100

Gemeral aviation airports:

Reliever

General obligation . . . . . . . . . . 8 1 4 0 6 19 49

Revenue . . . . . . . . . . . . . . . . . . . 9 a 9 0 2 20 52

Subtotal . . . . . . . . . . . . . . . . . 17 1 13 0 8 39 100

Other

General obligation . . . . . . . . . . 2 4 1 13 4 25 83

Revenue . . . . . . . . . . . . . . . . . . . a a a 1 3 5 17

Subtotal . . . . . . . . . . . . . . . . . 2 5 2 14 7 30 100

All airports:

General obligation . . . . . . . . . . 86 136 94 47 413 8

Revenue . . . . . . . . . . . . . . . . . . . 1,194 8 % 482 725 1,361 4,634 92

Grand total . . . . . . . . . . . . . 1,280 921 618 819 1,409 5,047 100

capital has general obligation backing. And at

other GA airports, more than 83 percent of debt

finance is secured in this way.

The larger airports use relatively little general

obligation financing because local governments

tend to reserve such bonds for public services and

facilities that cannot generate sufficient revenues

to cover the costs of debt capital. Similarly, since

a substantial general obligation bond issue can

place enormous pressure on the debt limit and,

ultimately, on the credit rating of a municipality,

airport operators generally must rely on revenue

bonds to finance large-scale airport improvements. During the 1978-82 period, the average size

of bonds issued by large commercial airports was

$49 million, compared to $26 million at medium

airports, $6 million at small commercial airports,
Ch. 7—Airport Funding 151

$2.8 million at GA reliever airports, and $0.9 million at other GA airports (see table 34). Over the

same period, the average size of revenue bonds

issued by commercial airports was three to five

times greater than the average proceeds of general obligation bonds used for commercial airports

of the same size category.

Thus, revenue bonds are the dominant form of

debt financing where investments are large and

where revenues from airport fees and charges are

sufficient to cover debt service requirements. On

the other hand, at GA airports, where the average size of a bond issue is small (about $1 million), general obligation bonds far outweigh revenue bonds as a means of financing airport

improvements.

The Market for Airport Bonds

The competitiveness of airports in the municipal bond market can be gauged by three conventional indicators of investment quality:

●

●

bond ratings—a simple system used by major investor services to grade bonds according to investment quality (see Box C);

interest costs—the interest paid by airports

to attract investors relative to what other municipal enterprises pay; and

Table 34.—Average Size of Airport Bond Issues,

1978-82

Commercial:

Large . . . . . . . . . . . . . . . . .

Medium . . . . . . . . . . . . . . .

Small . . . . . . . . . . . . . . . . .

Category average . . . . .

General aviation:

Reliever . . . . . . . . . . . . . . .

Other . . . . . . . . . . . . . . . . .

Category average . . . . .

10.7 53.6 49.2

12.1 32.0 26.0

3.2 9.3 6.0

5.9 36.3 26.2

3.8 2.2 2.8

1.0 0.5 0.9

1.5 1.3 1.4

All-airport average . . 4.5 31.7 21.2

. defaults—the frequency with which a given

type of enterprise has defaulted on a bond

SOURCE: Congressional Budget Office. issue.

25-420 0 - 84 - 11
152 ● Airport System Development

Bond Ratings

For the 134 airports where new airport bonds

were issued over the pasts years (including general obligation bonds used at least in part for airport development), every rated bond has received

an “investment grade” from the two major investment rating services, Moody’s Investors Service,

Inc., and Standard & Poor’s Corp. (See table 35

for ratings of the most recent airport issues.)” One

explanation for these consistently good ratings is

that airports expecting poor ratings do not enter

the bond market.

Although investors clearly have considerable

confidence in airport bonds, ratings vary between

the top and medium grades. A medium grade

means that rating firms see the investment as carrying a measure of speculative risk. As shown in

table 35, general obligation bonds draw the best

ratings. Under this form of security, ratings are

determined by the economic vigor of the municipality or the entire State, and airports have little

or no influence on the rating. Revenue bonds, on

the other hand, draw ratings according to the

fiscal vitality of the airport itself. Since more than

90 percent of all airport bonds (in terms of dollar

volume) are secured with airport revenues, the cri-

(continued)

nonreliever GA airport revenue bonds were sold privately and

without ratings. This is a reflection of the smaller average size of

bond issues for small airports. For such airports, rating costs represent a greater percentage of the total bond sale.

Table 35.–Airport Bond Ratings, 1978=82

Rating received (percent)

33

0

67

6

0

89

0

0

50

0

0

0

50

65

0

18

0

18

11

0

36

4

21

14

7

7

25

75

19

0

32

3

24

49

5

8

19

40

General aviation

Reliever:

General obligation. . . . . . . .

Revenue . . . . . . . . . . . . . . . .

Other:

General obligation. . . . . . . .

Revenue . . . . . . . . . . . . . . . .

All:

General obligation. . . . . . . .

Revenue . . . . . . . . . . . . . . . .

0

0

20

0

20

20

0

0

60

80

0

0

8

0

35

0

4

0

63

100

0

0

10

0

24

7

3

0

62

93

NOTE: Data reflect ratings of the most recent issue of each bond type by all airports represented. The few airports that used both types in this period appear twice,

No airport bonds rated below Baa by Moody’s Investors Service were issued during 1978-82.

SOURCE: Congressional Budget Office.
Ch. 7—Airport Funding 153

teria used by investor services to rate such bonds

are central to the marketability of such bonds.

Credit analysts at the major investor services

rate an airport revenue bond according to a variety of factors, including the financial performance of the airport, the strength of passenger

demand, and use agreements with the airlines

serving the airport .13 Financial strength is viewed

as a direct function of passenger demand at the

airport, and credit analysts review both financial

indicators and underlying patterns of passenger

traffic. *4

Airline deregulation, which has freed air carriers from virtually all obligation to serve particular airports, has caused some shift in the relative

weight credit analysts give to these different factors. In response to deregulation, the investor

services today place greater emphasis on local economic strength than on airport use agreements

and the financial stability of the airlines serving

an airport. The rationale is that, if one airline

withdraws service, a strong local economy would

attract other airlines to pick up the travel business.

In view of the methods adopted by the investor

services, it is not surprising that large airports—

with their comparatively stronger financial showings—tend to draw the best revenue bond ratings.

Over the 1978-82 period, credit analysts were far

more likely to assign medium-grade revenue bond

ratings to issues for medium and small airports

than for large airports. In fact, over that period,

not a single large airport issuing debt was rated

below the upper-medium category.

Since deregulation, bond rating organizations

have emphasized that passengers are an airport’s

true customers and that sufficient passenger demand will provide financial incentives for some

airline to offer service over the long term. In particular, for origin-destination airports (those at

which most passengers either begin or end their

journeys) in strong travel markets, the financial

failure of one carrier might have no influence on

the airport bond rating. For example, when DallasFort Worth Airport sold $157 million of revenue

bonds in November 1982, it retained its A rating

from both Moody’s and Standard & Poor’s despite the collapse of Braniff Airways earlier that

year. Braniff had held a significant share of the

Dallas-Fort Worth market and, under a residualcost use agreement, had agreed to pay a substantial portion of the total airline share of airport

costs. Moody’s municipal credit report on the

issue cited the bond’s security provisions, the adequacy and diversity of pledged revenues, and the

airport’s role as one of the major facilities serving a strong Southwestern economy. The report

concluded that this “combination of the sufficient

revenues for all requirements and increases in

scheduled commercial airline service offset the potentially adverse effects following cessation of

operations this past spring of the former dominant airline serving the area. ”l5

For hub airports serving large numbers of connecting flights, however, the poor financial outlook for a major airline could mean a permanent

loss of patronage, with important implications for

bond ratings. In May 1983, for example, Moody’s

revised the rating of Atlanta Hartsfield on approximately $86 million “third-lien” revenue bonds

downward from A to Baal, citing as the primary

reasons Eastern Airline’s financial problems (reflected in a net loss of $113.8 million in fiscal year

1982), a trend of declining traffic, and reduced

debt service coverage. Likewise, for the Salt Lake

City Airport, Moody’s downgraded its rating in
154 . Airport System Development

connection with the sale of $26 million in revenue bonds, stating that the long-term security of

the bonds must be viewed with uncertainty in light

of the airport’s growing reliance on connecting

passengers carried by the financially troubled

Western Airlines.lb In addition, while strengthening and expansion of hub-and-spoke networks by

major airlines since deregulation has improved

gross revenues at some airports, the added volume of connecting traffic has also prompted the

need for airport expansion programs.

In the view of the bond rating analysts, the financial picture has not improved significantly for

those airports that have experienced the greatest

growth in operations—and dramatic increases in

debt financing requirements-since deregulation .1’

For example, Standard & Poor’s published credit

rating on the December 1982 issue of $185 million of revenue bonds at Denver Stapleton stated

that the issue is not rated higher than A “ . . . because of current uncertainties surrounding future

airport expansion and the substantial cost associated with whichever alternative is pursued. ”

Similarly, Standard & Poor’s published report on

the recent sale of $175 million revenue bonds for

Chicago O’Hare stated that “ . . . the primary

concern is the magnitude of the capital program

being undertaken at the airport, which is expected

to cost $1.2 billion by 1990. ” For this reason, the

Chicago-O’Hare bond issue was also denied better than art A rating.18

Interest Costs

The difference between interest costs paid by

airports and by other public enterprises indicates

that airports generally hold a strongly competitive position in the municipal bond market. As

shown in table 36, airport interest costs for revenue bonds over the 1978-82 period were 70 “basis

..—

16 Moody's Investors Service, Inc., Municipal Credit Report, for 

Salt Lake City, UT, Airport System, May 23, 1984. Moody’s also

cited the uncertainty caused by a dispute among carriers serving

Salt Lake City concerning the allocation of costs for new terminal

facilities at the airport-a dispute that now appears settled.

17 Cited by Ann Sowder, Smith Barney Harris Upham & Co.

(formerly with Standard & Poor’s), in a presentation at the 55th

Annual Confenmce of the American Association of Airport Executives, Orlando, FL, June 1983.

18 Another factor in the revisionof the revision of the rating for Chicago O’Hare

was evidently the reduced level of coverage on the new bonds compared to that for the airport’s older revenue bond issues.

points” below the interest cost index for all revenue bonds. (A basis point is one one-hundredth

of a percentage point. ) Even general obligation

bonds issued in whole or in part for airport development brought below-average interest costs

over that period-perhaps reflecting that municipalities with airports tend to be economically

stronger than other places.19

Like municipal bonds in general, airport bonds

are sold and traded at prices that reflect both general economic conditions and the credit quality

of the airport or (in the case of general obligation bonds) the creditworthiness of the issuing

government. Rated revenue bonds are offered for

sale in one of two ways. Under competitive bidding, the airport selects the lowest bid and thus

obtains funds at the lowest cost of borrowing.

Under a negotiated sale, the bond purchaser consents at the outset to purchase the bonds at an

agreed price. 20 In either case, the entire bond issue

is usually purchased by an underwriter (commonly, an investment brokerage company) or an

underwriter team who, in turn, markets the bonds

to institutional and individual investors.

In deciding the price of a particular bond issue,

underwriters identify a “ballpark” interest rate on

the basis of general market conditions and then

refine this estimate according to the credit standing of the airport in question. General market conditions represent by far the most important determinant of interest costs on airport revenue bonds,
Ch. 7–Airport Funding ● 1 5 5

Table 36.—Comparison of Interest Rates for Airport Bonds and Other Municipal Bonds, 1978-82

Airports by size and Difference (in basis points)a

category and bond type 1978 1979b 1980 1981 1982 1978-82

Commercial

Large:

General obligation. . . . . . . .

Revenue . . . . . . . . . . . . . . . .

Medium:

General obligation. . . . . . . .

Revenue . . . . . . . . . . . . . . . .

Small:

General obligation. . . . . . . .

Revenue . . . . . . . . . . . . . . . .

All:

General obligation. . . . . . . .

Revenue . . . . . . . . . . . . . . . .

General aviation

Reliever:

General obligation. . . . . . . .

Revenue . . . . . . . . . . . . . . . .

Other:

General obligation. . . . . . . .

Revenue . . . . . . . . . . . . . . . .

All:

General obligation. . . . . . . .

Revenue . . . . . . . . . . . . . . . .

All airports:

General obligation. . . . . . . .

Revenue . . . . . . . . . . . . . . . .

– 6 4

N/Ad

c

19

– 109

–66

– 115

– 166

– 138

–12

–95

–55

–80

NIA

– 4 5

– 117

–73

–46

6

–13

–34

–29

4

11

–71

N/A

– 4 6

– 8 4

–50

– 189

– 183

– 133

– 101

– 132

–82

– 153

–71

NIA

–46

–29

–70

–98

– 102

– 124

–85

–28

– 7 3

– 6 8

76

N/A

– 106

c

–32

–47

c

c

c

–64

3

–55

–89

NIA

–37

c

– 138

–243

–46

–113

39

–60

–53

– 107

–48

NIA

– 4 7

c

–85

– 145

–46

–113

39

–61

–43

–92

–63

NIA

–46

–29

–73

– 103

–89

– 123

–66

–32

–65

–70

SOURCE: Congressional Budget Office.

and in this respect airports have little control over

the cost of capital. Airport revenue and general

obligation bonds issued over the 1978-82 period

followed quite closely the interest cost indicators

of revenue or general obligation bonds as a whole,

going from a low of 5 percent in 1978 to a high

of nearly 15 percent in 1982. In fact, statistical

analysis indicates that each 1 percent change in

the overall market rate of interest for tax-exempt

municipal bonds leads to roughly a 1 percent

change in interest rates for airport bonds (see app.

D). Of course, interest costs differ depending on

the type of underlying security and the number

of years until the bonds mature. CBO’S analysis

indicates that, other things being equal, general

obligation bonds for airport purposes draw interest costs that fall about 9 percent below the interest paid on revenue bonds.

Within the range of interest costs dictated by

market conditions, underwriters refine their bids

on airport revenue bonds on the basis of the credit

standing of the individual airport. Two factors

have greatest importance here: the airport’s basic

fiscal condition (including its prospects for traffic growth and the strength of the local economic

base) and the presence of special pressures on the

airport to expand capacity, thereby necessitating

extensive capital development.

In general, an airport’s basic fiscal condition appears to be more important than long-term airline use agreements. For example, airports using

a compensatory approach to financial management—which tend to have stronger overall financial performance and shorter term use agreements

than residual-cost airports—drew revenue bond

interest costs that were 95 basis points below other

revenue bonds over the 1979-82 period (see table
156. Airport System Development

37).21 In contrast, residual-cost airports paid only

4 basis points below other municipal revenue

bonds.

On average, larger airports pay lower interest

costs than smaller airports, allowing for differences in types of security and average maturities

of issues.22 However, there is considerable variation in the interest costs paid by airports of different size in the 5 years since airline deregulation. Compared to small airports, large commercial

airports have generally incurred somewhat higher

interest costs for new bond issues, despite their

history of more favorable bond ratings. For example, in the period 1978-82, the interest on revenue bonds paid by large airports was 55 basis

points less than the market average, compared to

153 basis points less for small airports. Medium

airports drew higher interest costs, on average,

than either large or small commercial airports-29

basis points below the market average for revenue bonds.

This pattern appears to reflect two factors. First,

the market is wary of increasing expansion needs

at the Nation’s major hub airports and of the pressure that future investments could exert on the

availability of airport revenues to service outstanding debt. Indeed, from table 36, it appears

that medium airports have incurred the greatest

increase in interest costs, a pattern that goes along

with their mounting debt-to-asset ratios. Second,

the size of the average bond issued by large airports far exceeds that of smaller ones, and underwriters’ bids usually reflect an interest premium

in such cases to cover the added risks of marketing such a large volume of bonds. In the determination of interest rates, such premiums alone

21 Part of this difference is attributable to revenue bonds issued

by the Port Authority of New York and New Jersey. These bonds

are backed by revenues from all Port Authority operations and not

just airport revenues. Even excluding these bonds, however, compensatory airports had interest costs 47 basis points lower than other

revenue bonds.

22 In technical terms, the elasticity of interest cost with respect to

airport size averaged about –0,013 over the 1978432 period. This

means that an airport with 10 percent more passenger boardings

than another airport would draw about a 0.13 percent lower interest rate on its bonds.

Table 37.—influence of Financial Management

Approach on Airport Bond Interest Rates, 1978-82

Difference (in basis points)a

Residual-cost Compensatory

airports airports Total b

General obligation. . . . –37 –83 –65

Revenue c . . . . . . . . . . . –4 –95 –70

could offset the moderately higher bond ratings

achieved by larger airports.

Defaults

The history of an enterprise, or of an entire industry, with regard to the number of defaults is

an important index of investment value. By this

measure, the record of airports is particularly

strong. The airport industry has never suffered

a single default, a fact noted by several credit

analysts in citing the premium quality of airports

as credit risks. One analyst has put it as follows:

Airport revenue bonds have a remarkable track

record. In spite of recessions, inflation, oil embargoes, fare wars, deregulation, astronomical increases in the price of aviation fuel, increasingly

difficult community-airport relationships, costly

noise mitigation programs, slot restrictions, a controllers’ strike, curfews, threats about antitrust exposure, and the like, the Nation’s airports have

shown that they can meet the challenges, cope

with change, and consistently make payments on

their outstanding debt. The industry has survived

without a single default. The investment community has had its “seasoning” with airport revenue

bonds. As a result of the positive experience, there

is a great deal of “comfort” in airports as credit

risks today .23

“R. H. Bates, “Airport Financing: Whither (or Wither?) the

Market?” presented at Airport Operators Council International

Economic Specialty Conference, Sacramento, CA, Mar. 31, 1982.
Chapter 8

FORECASTING AND TRENDS

Photo cradt: Dorn McGrath, Jr.
Contents

Page

Aviation Demand Forecasting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 159

Methods of Forecasting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 159

The FAA Aviation Forecasting System. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 163

Limitations of Aviation Demand Models.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 166

Recent Trends in the Airline Industry. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 169

Changes in Airline Industry Composition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 170

Changes in Route Networks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 172

Formation of New Hubs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 174

Aircraft Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 178

Implications for Airport Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 184

List of Tables

Table No. Page

38. FAA Forecasts of Aviation Activity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 164

39. Summary of FAA Forecasts, 1959-83 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 165

40. Domestic Airlines by Class of Carrier . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 171

41. Changes in Stations Served by Air Carriers, 1978-81 . . . . . . . . . . . . . . . . . . . . 173

42. Comparison of Hubs Served by Selected Carriers, 1978 v. 1982 . . . . . . . . . . 173

43. Aircraft Departures by Hub Size. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 174

44. Weekly Departures and Seats, by Hub Size, 1978-83 . . . . . . . . . . . . . . . . . . . . 175

45. Changes in Weekly Departures Between Major Categories of Airports . . . . . 176

46. Present and Future Commercial Jet Aircraft . . . . . . . . . . . . . . . . . . . . . . . . . . . 182

47. Aircraft Operated by Commuter and Regional Airlines, 1970-81 . . . . . . . . . . 184

List of Figures

Figure No. Page

19. Hub and Spoke Route System . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 177

20. Western Airlines Activity at Salt Lake City . . . . . . . . . . . . . . . . . . . . . . . . . . . . 179

21. Composition of U.S. Commercial Jet Fleet, 1982 . . . . . . . . . . . . . . . . . . . . . . . . 180

22. Age of Aircraft in Service in U.S. Commercial Jet Fleet . . . . . . . . . . . . . . . . . 181

23. Composition of Commuter Aircraft Fleet, 1981 . . . . . . . . . . . . . . . . . . . . . . . . . 183
Chapter 8

FORECASTING AND TRENDS

Prudent management must take into account

future events and conditions. Often their nature

can be anticipated by analyzing events of the recent past and applying techniques to project the

effects of these trends into the future. The first

part of this chapter reviews forecasting techniques

commonly used in aviation planning and describes

their use by airport operators, air carriers, and

AVIATION

Methods of Forecasting

government agencies. The second part discusses

recent events and emerging trends in the aviation

industry that will color future forecasts. These include the effects of deregulation, changes in route

and service patterns, and the lingering effects of

the air traffic controllers’ strike. The final part of

the chapter speculates on how these trends may

affect the future needs of airports.

DEMAND FORECASTING’

An aviation demand forecast is, in essence, a

carefully formed opinion about future air traffic.

Its primary use is in determining future needs or

estimating when they must be met. Any of several methods may be used, with results that will

vary widely in terms of scope, time scale, structure, and detail; but they have certain common

features. Chiefly, forecasts are derived from assumptions about the relationship of the past and

the future in that they postulate that certain measurable historical events or conditions have a

causal or predictive relationship with events or

conditions that will be of interest in the future,

Analysis of these historical factors—usually by

some sort of mathematical manipulation of data—

allows the forecaster to express expectations in

terms of some measure or index of aviation activity. From this initial product (e. g., expected passenger travel, cargo volume, or aircraft operations) the forecaster can derive further estimates

of the nature, magnitude and timing of future

needs for equipment, facilities, manpower, funding, and the like. Even though the method used

may be quite rigorous and mathematically complex, forecasting is inherently a judgmental process where uncertainty abounds. The best that the

forecaster can achieve is to be aware of his biases,

to identify the sources of uncertainty, and to estimate the probable magnitude of error.

‘This section is based in part on a paper prepared for OTA by

David W. Bluestone, John Glover, Dorn McGrath, Jr., and Peter

Schauffler.

In setting out to prepare a forecast, the forecaster has at his disposal two basic types of input data. He may choose data on aviation activity itself and use historical performance trends to

project future activity. In effect, this approach

assumes that the best predictor of future aviation

demand is past aviation demand. Alternatively,

the forecaster may choose data related to underlying economic, social, and technological factors

that are presumed to influence aviation demand,

treating them as independent variables that can

be used to predict demand as a dependent variable. Among the factors that may be so used are:

●

●

●

basic quantitative indicators, such as population, gross national product (GNP), activity

of certain sectors of the economy, personal

consumption expenditures, or retail sales;

derived socioeconomic and psychological indexes, such as propensity to travel, income

classifications, employment categories, educational levels, or family lifestyles; and

supply factors, such as fare levels, aircraft

characteristics (size, speed, and operating

costs), schedule frequency, or structure of the

air carrier industry.

The outputs of the forecast are measures of

aviation activity—passenger enplanements, revenue passenger-miles, freight ton-miles, number

of aircraft in the fleet, or number of aircraft operations. Other output measures, such as air carrier revenue, air traffic control (ATC) workload,

and demand for airport facilities can be derived

from these estimates.

159
I&I . Airport System Development

The range and scope of forecasts can vary

greatly, depending on the purpose they are to

serve. They might include all aviation or be limited to a particular type of traffic (passenger or

cargo) or a particular type of operator (scheduled

air carrier, charter, or general aviation). The geographical scope may be international, nationwide,

regional, or limited to a particular market or

airport.

The forecasting horizon may range from a few

months to 20 years, again depending on the purpose of the forecast. Airlines, for example, tend

to use very short-term projections of traffic in order to estimate their financial or staffing needs on

a quarterly or semiamual basis. Airport planners,

on the other hand, use very long-range forecasts,

on the order of 20 years, as a basis for major decisions relating to land acquisition and airport development. Between these extremes, forecasting

horizons of 1,5, or 10 years are common for planning changes and improvements of airport facilities, estimating ATC workload, projecting air

earner fleet requirements, and financial planning.

There are two basic approaches to aviation demand forecasting—“top-down” or “bottom-up.”

The top-down approach begins with the largest

aggregates of economic and statistical data (usually national totals) and seeks to provide a general picture of aviation demand spanning the

country and the entire system of air travel routes

and facilities. Once the aggregate forecast has been

developed, portions of the total volume of traffic can be allocated to specific industry segments

or geographical regions based on historical shares

or assumed growth rates.

The bottom-up approach, in contrast, begins

with data for a specific geographic area and develops a forecast of aviation demand at a particular airport or in a metropolitan region, typically

as an indicator of need for building or expanding

local facilities. Where good data are available and

the economy of the region is developing in an orderly way, this approach can closely approximate

the reality of the area under study. In some cases,

a number of such bottom-up forecasts may be

combined to make a composite forecast for a

larger area, but this approach of building up a

regional or national aggregate from many local

forecasts can lead to difficulties. For example,

forecasts for some areas may be overly optimistic

—often a defensive strategy designed to assure

adequate future capacity. It is not unusual to find

that the sum of many such bottom-up forecasts

exceeds the top-down forecast for the region by

a wide margin.

Whether “top-down” or “bottom-up,” aviation

demand forecasting as practiced today uses a wide

variety of methods. The attributes, limitations,

and typical applications of these methods are discussed below.

Time Trends

A simple forecasting method is the extrapolation from the past, where the forecaster assumes

that major trends, such as traffic growth or market share, will continue uninterrupted and that

the future will be like the recent past. Historical

data for some base period are gathered and analyzed to determine a trend line, which is then extended to some point in the future, using either

sophisticated mathematical procedures or simple

estimation of the most likely course. This method

is often used for short-term projections (1 or 2

years) where basic conditions are unlikely to

change much. It is also better than no forecast at

all in cases where a data base suitable for more

sophisticated methods is not available. However,

a basic shortcoming of trend extrapolation is that

it does not take into account underlying economic,

social, and technological factors that affect aviation and that are themselves subject to change.

Econometric Models

The econometric model is by far the most frequently used method for forecasting aviation demand. It is a mathematical representation of air

traffic or its constituent parts and those independent variables of the national economy which are

thought to influence traffic growth. Econometrics

is the statistical technique used to quantify these

relationships. The mathematical equations of the

model relate economic factors to the level of aviation activity, based on observation of past behavior of both the economy and the aviation industry. The equations may also be constructed

so as to reflect the effects of specific factors within
Ch. 8—Forecasting and Trends “ 161

* 4--.., “-’

Photo credit: Federal Aviation Administration

Newark: the alternative to La Guardia and Kennedy

the air transportation industry itself, such as fare

levels, route configurations, fuel costs, etc.

Among Federal Government agencies, both the

Federal Aviation Administration (FAA) and the

Civil Aeronautics Board make extensive use of

econometric forecasting methods. Econometric

models are also used by airlines, industry associations, and aircraft manufacturers. TWA, for

example, employs a set of econometric models to

forecast passenger travel industrywide and, from

that, TWA’s prospective market share. The Association of European Airlines uses a mathematical

model in which traffic varies directly with gross

domestic product and inversely with average revenue per passenger. McDonnell Douglas, Boeing,

and Lockheed all have their own versions of

econometric models to project future sales of aircraft. The equations for the McDonnell Douglas

model, for instance, include the ratio of long- to

short-term interest rates since the cost of borrowing money has an effect on the ability of airlines

to purchase aircraft.

Gravity Models

The gravity model was first developed in the

sociological and marketing fields to describe various forms of human interaction. The technique

was later adapted by traffic engineers to describe

travel behavior. It is predicated on the assumption that travel behavior obeys a law analogous

to the law of gravity, in that attraction between

cities varies directly with population and inversely

with distance. Thus, two large cities located near

one another have a strong mutual attraction and

form a very dense transportation market; small

cities located far apart have little travel between

them. The gravity model uses socioeconomic data

for each pair of metropolitan areas to predict the

level of transportation activity between them. The

equations often contain terms to describe the

special attractiveness of each city for different

types of personal and business trips.

Although gravity models have been used extensively in highway planning, their use for aviation forecasting is limited. The State of Califor-
162 . Airport System Development

nia uses a gravity model in its State Airport

System Plan in an effort to give a statewide “system view” of air transportation. The California

gravity model takes into account changes in population, employment level, and income of major

metropolitan areas to produce estimates of the

travel that will be generated between various parts

of the State. To provide consistency among plans

for all transportation modes, a similar gravity

model incorporating the same socioeconomic

variables is used for other transportation forecasting within the State.

Scenarios

The scenario method is

strate the variation due to

often used to demondiffering assumptions

about future conditions, thus bracketing the-range

of uncertainty. The values of input variables in

an econometric model, for example, are in themselves simply guesses about the future behavior

of the economy. Rather than depend on a single

“best” estimate of GNP in future years, the forecaster may elect to construct several scenarios to

predict the behavior of the aviation industry under

a range of likely economic conditions. FAA began

using this method in 1976 in an attempt to describe

conditions that could affect the future of air transportation, and most FAA forecasts since that time

have included different scenarios incorporating

divergent assumptions about the economy and the

airline industry.

One of the drawbacks of the scenario method

is that the range between high and low estimates

can be so large that the forecast loses practical

value as a guide to planning. For example, in the

initial 1976 FAA study, where five scenarios were

used, the high estimate of revenue passenger-miles

was 2.3 times the low estimate, and the ratio of

high to low forecasts of aircraft operations was

2.9.

Ratios

Some local aviation authorities and industry

groups make forecasts by the relatively simple expedient of assuming a ratio between national “topdown” traffic forecasts and their own segment of

traffic. This method is often used by airports that

lack the funds or expertise to make independent

econometric forecasts. A notable application was

in 1969, when the major U.S. air carriers developed a national forecast on a consensus basis and

then allocated portions of the traffic to each of

22 major air transportation hubs. The allocation,

based on the historical share of national traffic

captured by each hub, was adjusted by expert

judgment to account for shifting patterns of airport use.

Market Surveys

This method has been used extensively by the

Port Authority of New York and New Jersey for

the past 25 years. The Port Authority uses in-flight

passenger surveys to gather information on point

of origin, choice of airport in the metropolitan

area, choice of ground access mode, ground access travel time, destination, purpose of trip, and

other factors that can be used to predict travel

behavior and consequent demands on aviation facilities. These data are classified in a travel market model made up of over 100 socioeconomic

“cells” defined by age, occupation, income, and

trip purpose. The growth rate for each cell is projected by straightforward econometric ”techniques.

The market survey method, while it produces

a highly detailed forecast of travel, has some significant drawbacks. Data collection is complicated, time-consuming, and expensive. Since the

sample is collected in a relatively brief period, it

may not be truly reflective of long-term travel patterns and preferences. Airlines, which serve as collectors of the data, are reluctant for competitive

reasons to relinquish control of survey results

which they consider proprietary.

Judgment

To some degree, judgment enters into all forecasting. Even the most formal and scientific forecasting methods require that assumptions be made

about future conditions and events. These assumptions, which represent the forecaster’s basic

outlook, are simply informed judgments, and they

can have a powerful effect on the outcomes. Judgment also enters into the forecasting process in

other ways: on the methodology to be employed,

on the trends to be assumed, on the selection of

years to use as a base period, on the choice of data
Ch. 8—Forecasting and Trends ● 163

Photo credit: federal Aviation Administration

Commuter airline in Alaska

sources, and on likely changes in specific factors

such as fuel availability, cost, and technology. At

the completion of a forecast it is not uncommon

to subject the results to the test of expert judgment and to adjust them in the light of what seems

“reasonable. ”

Application of judgment has, in at least two

cases, become institutionalized as part of the forecasting process. U.S. airlines generally use econometric models for traffic forecasts and fleet planning; but since they do not agree on method and

initial assumptions, the Air Transport Association (ATA) develops a consensus forecast based

on the judgment and practical experience of airline personnel and the ATA forecasting working

group. The International Air Transportation

Association (IATA) uses a modified “Delphi” technique to produce forecasts for international passenger and freight traffic. Delphi is a method for

attaining consensus among experts, in this case

the forecasters from participating IATA member

airlines. Using this technique, initial estimates are

obtained from each expert. These estimates are

arranged in a composite that shows each participant how his forecast compares to the group as

a whole, and each is invited to submit another

forecast based on this information. After one or

more rounds of comparison and feedback, judgments begin to converge, and a consensus forecast is reached.

The FAA Aviation Forecasting System

The most elaborate aviation demand forecasts

produced in this country are those of the Federal

Aviation Administration. They consist of national, regional, and individual airport forecasts

that typically cover a 12-year period, although

20-year forecasts are sometimes prepared. These

forecasts, updated and issued annually, provide

the basic context for aviation demand forecasting in the United States. They are used, with a

variety of specialized interpretations, by all elements of the aviation community.

In addition to the basic annual forecasts, FAA

also publishes special studies and forecasts from

time to time. Subjects covered recently have included air cargo activity (1979), commuter airline activity (1977 and 1981), and forecasting

needs at the State level (1979). FAA has also published special “profile” reports on hourly airport

activity, air carrier operations, and international

passengers. In 1978, FAA began a series of individual forecasts for 24 large hub airports. These

are adaptations of other FAA forecasts, with

special sections on local economic growth, passenger enplanements, cargo and mail enplaned,

general aviation (GA) and air carrier aircraft operations, and traffic handled by FAA towers.

FAA National Forecasts

Each year FAA publishes a national forecast entitled FAA Aviation Forecasts. The most recent

edition (released in February 1984) includes detailed year-by-year forecasts from 1984 to 1995

for air carriers, air taxis and commuters, GA, and

military aviation. It also contains workload forecasts for airports with FAA control towers, air

route control centers, and flight service stations.

The 1984 forecasts anticipate that enplanements

by major airlines will grow at an average annual

rate of 4.6 percent. Larger aircraft and higher load

factors will minimize actual increases in operations to accommodate this growth, with the result that FAA projects air carrier operations to

grow by no more than 1.7 percent per year. Larger

gains are expected for commuter carriers, whose

enplanements are expected to increase by 7.4 percent per year and operations by 4.7 percent per

year. GA operations are expected to increase by

6.0 percent annually. The current FAA forecasts

are summarized in table 38.
164 Airport System Development

. . .

. . .

. . .

. . .

. . .

. . .

. . .

. . .

. . .

. . .

. . .

. . .

. . .

. . .

. . .

. . .

. . .

. . .

.

. .

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. .

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Ch. 8—Forecasting and Trends 165

As part of the documentation for these annual

forecasts, FAA sets forth the basic assumptions

concerning the industry, government, and economic environment for the forecast period. The

principal indicators—gross national product,

Consumer Price Index, and fuel price index—are

composites of estimates obtained from four leading nongovernmental economic forecasting organizations: Chase Econometrics, Data Resources,

Evans Economics, and Wharton Econometrics

Associates. FAA believes that this consensus approach to formulating input assumptions lends

greater credibility to the forecasts.

The air carrier portion of the forecast is developed in several steps. For airline travel, FAA first

forecasts passenger yield (cost per passenger-mile)

based on estimates of three independent variables:

jet fuel prices, average airline wages, and available seat-miles per aircraft. The next step is to

forecast passenger demand, based on GNP and

yield. Third, FAA develops forecasts of aircraft

operations based on load factor, average seats per

aircraft, and passenger trip length, all of which

are estimated in consultation with industry experts. Forecasts for itinerant operations, instrument operations, and other FAA workload measures are developed from the basic forecast of total

aircraft operations, using empirically derived relationships.

Past FAA forecasts have often been criticized

for inaccuracy or unrealistic assumptions about

future growth of aviation. An examination of this

question was made in a recent Congressional

Budget Office study of FAA forecasts since 1959.2

CBO divided the forecasts into three distinct periods (see table 39). CBO found that the forecasts

performed between 1959 and 1965 were consistently low by an average of almost 19 percent.

From 1966 to 1973 the forecasts swung sharply

the other way and consistently overestimated the

growth of aviation activity by nearly a third.

From 1974 on, which coincides with the time that

FAA has been using more sophisticated econometric modeling techniques, the results have been

mixed, sometimes too high and sometimes too

low. Overall error has averaged about 21 percent,

somewhat smaller than in the previous period but

still rather large for this type of forecasting. FAA

forecasts for the GA sector have been especially

unreliable and consistently high, sometimes by as

much as 50 percent. On balance, CBO concludes

that FAA’s forecasts have improved substantially

in the past 10 years, showing a reasonably small

random error instead of the constant high or low

bias that characterized forecasts of the earlier two

periods.

Table 39.–Summary of FAA Forecasts, 1959-83

Periods in which

forecasts made Method Performance 5 years ahead Market environment

1959-65 Trend forecasting: unspecified Average error – 18.7 percent Expanding, prosperous economy.

links to economy, business Worst year –32.5 percent Rapidly growing population.

cycle, population, fares, Declining first-class and coach

competition from other modes fares, (declining unit costs

because of increasing use of

jets).

1966-73 Trend forecasting: unspecified Average error +32.5 percent Softening trends in aviation

links to economy, business Worst year +58.4 percent activity. Increasing ticket taxes,

cycle, population, fares, rising fares. Forecasts made in

competition from other modes 1969 (published January 1970)

assumed 4.25 percent growth

rate in 1973, to continue at that

rate through decade. Inflation 2

percent per year from 1973.

From 1974 Linear econometric models Average error +21.2 percent Airline deregulation, economic

Worst year +34.7 percent recession, fare wars, and
166 ● Airport System Development

Terminal Area Forecasts

FAA Terminal Area Forecasts (TAFs), like FAA

national forecasts, are developed annually. The

TAF data base contains descriptive information

and forecasts for about 4,000 airports-the 3,200

eligible for Federal aid and about 800 other publicuse airports. Each airport record includes at least

5 years of historical data and a 12-year forecast

of aircraft operations, broken down into air carrier, commuter, GA, and military categories. The

projections for individual airports can also be aggregated to form State and regional forecasts.

The TAFs constitute a subroutine of the basic

FAA “top-down” forecasts of national aviation

demand. The process for developing TAFs has

been refined in recent years, and they now serve

as the basic frame of reference for other types of

“bottom-up” forecasts undertaken by many local

airport authorities and State and regional agencies. Not all local airport authorities, however,

accept the validity of TAFs, which they believe

do not adequately take into account the factors

affecting aviation demand at the local and regional

level and which are not, in their view, developed

through appropriate consultation with local authorities.

The Special Problem of GA Forecasting

FAA forecasts GA demand in two segments—

business aviation and personal flying. For business aircraft, the forecast is based on the real price

of aircraft, interest rates, and measures of business activity such as manufacturing and retail

sales. For personal flying, the factors used are aircraft price, interest rates, and GNP as a measure

of income. Itinerant operations are forecast as a

function of the size of the fleet and the real cost

of fuel. Instrument operations are a function of

fleet size. Local operations, predominantly training operations, are a function of the number of

student pilots and the number of aircraft in the

fleet. FAA has concluded that because of large and

somewhat unpredictable oscillations in all these

variables, econometric models do not produce

reliable forecasts of general aviation. As a pragmatic approach, FAA uses modeling only as a

point of departure to produce first approximations

that are subsequently adjusted with data from

periodic surveys and estimates from FU regional

offices and industry representatives.

Some observers are of the opinion that FAA’s

general aviation forecasts are unrealistically high.

For example, recent FAA forecasts estimate that

the GA fleet will grow at a rate of 3.3 percent per

year for the remainder of this century.3 This

means an expansion of the GA fleet from about

210,000 aircraft in 1983 to 269,000 in 1990 and

385,000 in 2000. Such a growth rate is extremely

optimistic, and realizing it would require an unprecedented level of manufacture and sale in the

GA aircraft industry. An increase of 175,000 aircraft in the GA fleet by the end of the century

is equivalent to adding 10,000 new aircraft per

year—13,000 if allowance is made for replacement

of existing aircraft at the rate of 1 percent annually. When foreign aircraft sales are taken into

account, the FAl forecast implies that U.S. firms

would manufacture and sell about 16,000 aircraft

per year between now and 2000. This seems unlikely

in light of performance over the past 15 years in

the GA aircraft manufacturing industry where

sales (including exports) have averaged only twothirds of this amount. A

Limitations of Aviation

Demand Models

Aviation demand models can be very useful

forecasting tools, but it is important to recognize

their limitations. First, all models are necessarily

incomplete. They attempt to reduce a large and

complex system to a relatively few mathematical

equations that describe the most important interactions. Many factors must be left out, either

because they are difficult to formulate mathematically or because including them would make

the model cumbersome and too complicated to

use. There are other factors excluded not by design but by inadvertence because, with the present state of knowledge about the relationship between aviation and underlying economic and

social forces, we are simply unaware of all the

factors that drive demand for air transportation.

3National Airspace System Plan (Washington, DC: Federal Aviation Administration, April 1983, revised edition), p. II-2.

4Aerospace Facts and Figures, 2983/84 (Washington, DC: Aerospace Industries Association, 1984), p. 33.
Ch. 8—Forecasting and Trends 167

To guard against such structural weakness, the

model builder calibrates and tests the model by

inserting data from past years to see if the historical record can be accurately reproduced. If the

model is well constructed and its mathematical

relationships are a good representation of reality,

using data from some past year in the equatiorls

will yield a forecast of the aviation activity that

actually occurred. Such testing gives the forecaster

confidence that for some future year the model

will correctly predict aviation activity if the correct values of input variables are used. Unfortunately, the correct values of input variables such

as GNP or interest rates for any future year are

themselves unknown, and uncertainty is simply

transferred from the behavior of the aviation industry to behavior of the economy at large.

Models tend to assume that the future will be

very much like the past. If the real world situation changes substantially, the model is correspondingly less accurate. Such changes might include sudden economic perturbations, such as the

fuel crisis of 1973, or longer term restructuring

of the market or the economy. For example, aviation models constructed to predict the behavior

of a regulated industry with stable fares and routes

tend to be less accurate now that price competition and freer entry into new markets are permitted. Further, because models are, at best, only

partial representations of the world, it is not easy

to predict which changes in travel behavior or economic conditions will be important in the future

or how they should be incorporated in a model.

A major problem among forecasters is discriminating among relationships that will persist and

those that will not.

From this, it is clear that aviation demand

models are highly influenced by underlying assumptions about economic and social trends and

future conditions. The model itself may accurately

depict relationships between air transportation

and the state of the economy or the structure of

the aviation industry, but if the assumed states

of these variables at some future time are too optimistic, too pessimistic, or simply inconsistent

with the course of events, the resulting forecasts

can go far astray. It is probably fair to conclude

that, even with the present limitations of the

model builder’s art, the inaccuracies due to the

structure of forecasting models are generally

smaller than those induced by erroneous input

assumptions. An aviation demand model is no

more robust than the assumptions on which it

rests, and assumptions (usually a matter of expert judgment) are the most fragile part of the

process.

The limitations, biases, and characteristics of

a forecast may depend as much on who is doing

the forecast as on the particular method being

used. Airport authorities, aviation agencies, airlines, and industry associations all make forecasts

to help them plan for the future and to help them

justify plans and programs. There is, in many

cases, a natural inclination to err on the side of

optimism in order to protect the future interests

of the agency producing the forecast. Thus, local

airport authorities planning an expansion project

may tend toward an unduly high appraisal of the

overall growth prospects in the local economy

and, hence, future passenger and cargo traffic. As

a consequence, basing decisions to construct or

expand facilities on these forecasts may lead to

excess capacity or premature investment of capital. However, this may be less detrimental than

relying on a forecast which is too low. Slight overcapacity and anticipation of demand is viewed by

most airport planners as preferable to congestion,

delay, and perhaps deterioration of service and

safety.

Local forecasting may not take into account

broader regional trends and conditions. The current shifts in population and economic activity

Photo credit: Federal Express

Air cargo hub

25-420 0 - 84 - 12
168 ● Airport System Development

from the “Frost Belt” to the “Sun Belt” area case

in point. States in the South and West are expected

to experience much greater growth in aviation

activity in the next few decades while communities in the North and East will tend to decline.

However, this trend—with its consequences for

airport planning and development—is not yet generally recognized in the forecasts prepared by

“Frost Belt” communities, perhaps because they

are unwilling (or find it politically unwise) to go

on public record as predicting their own decline.

The tendency of the aviation community to

organize categorically—air carriers, commuters,

general aviation, helicopters, etc.—also influences

aviation demand forecasting, both the forecasts

prepared by such groups themselves and those

prepared by others who seek to anticipate the

demands that each sector will place on the airport and air traffic control system. All of these

groups compete in some measure for the scarce

resources of airspace and airport facilities, and

none is prepared to concede that its own requirements are less pressing than those of others or to

admit any scenario other than continued growth.

As a result, each sector tends to publicize its own

aspirations lest it lose out in the general competition and find its access foreclosed. With sufficient

repetition and vigorous advocacy, such declarations become accepted as the reality of future

demand.

For example, the President of the National Business Aircraft Association, Inc., asserted in mid1982 that “a great pent up demand for aircraft is

building all the while the recession continues.

Once the general economic climate begins to improve and the price of borrowing money declines

even modestly on a long-term basis, we will

witness marketplace activity on a scale never

before known.”s While this bold prediction may

be arguable, it reflects a natural defensive strategy. If the forecast turns out to be true, general

aviation, especially business aviation, will soon

become the majority user of the airport and ATC

system. In this event, business aircraft operators

would be unwise to allow air carriers to preempt

landing slots or to accept restriction or diversion

of their activities to accommodate air carriers. On

the other hand, if the forecast proves too optimistic, decisions based on it could result in serious overcapacity or misallocation of resources.

No forecast is any better than its input data,

and a little foreseen consequence of deregulation

is that forecasting may become more difficult and

less accurate in the future because of the lack of

a detailed and adequately maintained data base.

The Airline Deregulation Act of 1978 calls for a

gradual phaseout of the Civil Aeronautics Board

(CAB) by 1985. At that time, all functions of the

CAB will either be eliminated or transferred to

other agencies. It is still not clear how much of

CAB’s extensive data collecting activities will be

transferred and continued. Since nearly everyone

in the aviation community makes use of CAB data

for forecasting purposes, the prospective loss of

this resource is now the focus of extreme concern

in industry and government. Not all parties agree

on which parts of the CAB data base should be

maintained and who should be responsible, but

there is apparent consensus on at least four major points:

●

●

●

●

CAB data have become a crucial part of the

aviation forecasting process.

Continued collection of at least the basic data

on air carrier and commuter operations is

vital to intelligent analysis, interpretation,

and forecasting of regional and local aviation demand.

Without such data, the reliability of forecasting for air carrier and commuter activity

could decline, perhaps to a level no better

than current general aviation forecasting.

Forecasting aviation demand could become

much more difficult after 1985.

The prospective loss or drastic reduction of the

widely used and respected CAB data base looms

as only the latest example of an unexpected major event in the uncertain world of aviation demand forecasting.
Ch. 8—Forecasting and Trends 169

RECENT TRENDS IN THE AIRLINE INDUSTRY6

Of all the forces acting on civil aviation at the

present time, that which has the most profound

effect—and which is perhaps the least understood

in all its ramifications—is the recent deregulation

of the airline industry. For 40 years, from 1938

to 1978, CAB exercised broad powers over the

airline industry, controlling entry and exit of carriers, markets served, and fare structures. Although this was a period of great growth in the

airline industry, the pace of change in patterns

of service and airline route structure was slow because it was tempered by the regulatory process.

CAB proceedings on route awards or fare changes

took months or years to complete. The CAB often

interpreted “public convenience and necessity” in

light of the need to maintain financial stability

among existing carriers. Although CAB progressively increased the level of competition, this process was usually accomplished by extending the

overlap of routes and services among existing

carriers.

The Airline Deregulation Act set a timetable for

phasing out CAB statutory authority over a 4-year

period. The major provisions of the act, effective

immediately, relaxed CAB authority over routes and

fares and made it easier for carriers to enter new

markets or to reactivate dormant routes. Except in

localities qualifying for essential air service, airlines

became free to terminate service to a community

by means of a simplified notice procedure. In addition, carriers were allowed to change fares within

a broad “zone of reasonableness” determined by airline costs. Deregulation thus set the stage for a wide

variety of changes in the way air services are offered.

While some of the effects of deregulation are

now apparent, the full impact of these regulatory

changes on the market cannot yet be evaluated.

Air carriers have been operating in a deregulated

environment for only a little over 5 years, and

they are still in a “shake-down” period of adjusting

to new freedoms and competitive pressures. At

the same time, other major factors—escalating

fuel prices, the recession, and the Professional Air

Traffic Controllers Organization (PATCO) strike–

bThis section is based in part on a report prepared for OTA by

Simat, Helliesen & Eichner.

have had their own effects on the airline industry, thus distorting the view of what deregulation

has actually produced.

In general, the period 1978-81 marked a sharp

increase in all airline costs, but no other cost

escalated as much as fuel, which rose from $0.39

per gallon in 1978 to $1.04 in 1981. Fare flexibility

provided by deregulation enabled some carriers

to blunt the effects of increased fuel costs by

quickly passing on the resulting higher costs to

consumers. However, the deep recession, beginning with the first quarter of 1980, compounded

the problem as the industry was caught in the

position of needing to raise fares at a time of general economic decline.

The full effects of airline deregulation were

muted if not altered by the recession, which began

about 15 months after deregulation and has continued to disturb the U.S. economy. The recession has had a major effect on the airline industry, whose health has always been closely linked

to GNP. In the period 1976-78, before the recession, real GNP increased by 6.7 percent per annum. During the period immediately following

deregulation, GNP grew at less than 1 percent and

Photo credit: Federal Aviation Administration

Controller’s view of a hub
170 Airport System Development

actually declined during 1982. The overall economic performance of the airlines showed a corresponding slump, although some airlines fared

better than others and a few even managed to increase their profitability.

Some analysts argue that service and fare stimulation following deregulation, combined with the

ability to drop unprofitable routes, cushioned the

effects of the recession on the air carriers. High

interest rates and poor business conditions clearly

blocked the start of several new carriers and indirectly provided a measure of protection for existing carriers.

In effect, the air traffic controllers’ strike in

August 1981 reintroduced regulatory limits on the

industry. The strike led FAA to close 58 ATC

towers at small airports and to impose a cap on

operations at the 22 busiest airports. To allocate

the hardship equitably, FAA required each airline to reduce operations proportionately at those

22 airports. An airline could exercise full latitude

to select routes, so long as it had operating rights

(slots) at the capped airports. Slots could be traded

and, for a limited time, even sold. But if an airline did not use a slot, it was forfeited. These

strike-related restrictions have since been lifted,

but their effects linger. Because operating rights

had considerable value in a depressed, strikeridden market, FAA restrictions forced many carriers to hold on to slots and postpone or cancel

planned route changes. Equally important, the cap

on operations limited opportunities for new carriers to enter many of the major markets.

In many respects, the strike slowed the process of deregulation, but it also stimulated formation of new hub-and-spoke patterns of operation

as air carriers sought to increase the number of

passengers handled by using larger aircraft at the

constrained airports or by transferring operations

to new regional hubs at less crowded airports.

The ultimate outcome of deregulation is not

yet clear. The effects apparent so far—although

blurred by the impacts of increased airline costs,

the recession, and the air traffic controllers’ strike—

suggest that profound changes are taking place

in the structure and economics of the airline industry, with repercussions that may persist for

several years.

Changes in Airline Industry Composition

Since deregulation, the number of airlines holding CAB operating certificates has increased tenfold. At the end of 1978, there were only 36

certificated carriers; now there are 355. To accommodate these changes, CAB has devised a new

classification system that categorizes airlines as

major carriers, national carriers, and large or

medium regional carriers on the basis of their

operating revenue. This system is not wholly compatible with two-way classification of trunk and

local service carrier in use before 1978. (Table 40

compares the new and old classification systems. )

For purposes of this discussion, it is more convenient to use the pre-1978 categories, augmented by two additional groups (startup jet carriers

and commuter airlines) in order to show the

changes that have taken place in air carrier routes

and services since deregulation.

Before deregulation, the 10 trunk carriers dominated major domestic U.S. air service markets.

Even today, these airlines account for about 60

percent of total domestic enplanements and an

even greater proportion of revenue passengermiles, revenue, and fleet capacity. The trunk airlines operate large fleets of jet aircraft, of which

nearly 20 percent are widebody. Trunk carriers

are equipped to serve primarily the long-haul markets, emphasizing direct service between most major domestic markets.

Six local service airlines operate short-haul jet

service in domestic markets. In 1982, these carriers enplaned 19 percent of all domestic air passengers. Through expansion and mergers, locals

have grown substantially in size and now three

of these—USAir, Republic, and Frontier—are

larger than some trunk carriers. Still, there are

substantial differences between local service and

trunk carriers. Local service carriers operate predominantly narrowbody jet aircraft, typically

with 100 to 125 seats. The average stage length

and passenger trip length for local service airlines

is less than half that of trunk carriers.

The “startup jet carriers” include former intrastate carriers that have expanded to nationwide

service since deregulation, as well as new firms

that began operation since 1978. Previously, there

were four intrastate carriers that provided short-
Ch. 8—Forecasting and Trends 171

Table 40.—Domestic Airlines by Class of Carrier

Muse -

New York Air

Air Midwes t

Air Illinois

Air Wisconsin

People Expres s

Medium regionais

Aspen

Cascade

Empire

(sampie):

Golden West

Mississippi Valley

Wright

Charter carriers (sample):

Capitol

World

Midway

Muse

New York Air

Pacific Southwest

Southwest

People Express

Commuters (sampie):

Air Midwestb

Aspenb

Wright b

Empire

Air “Illinois

Air Wisconsinb

Golden West

Mississippi Valley

%Iassifications are based on carriers’ annual operating revenues.

bceflificated before deregulation.

SOURCE: Federal Aviation Administration.

haul jet services entirely within the boundaries of

California, Texas, or Florida. After deregulation,

these airlines obtained CAB certification and now

fly interstate routes. Even though they have expanded their operations to new out-of-State markets, they retain certain pre-1978 characteristics

in that they continue to serve highly competitive

short-haul markets with emphasis on frequency

of flights and low fares.

Several other new jet airlines have begun operation since deregulation. Some—e. g., New York

Air, Midway, People Express, and Muse—are

new ventures. One—Empire Airlines—is a former

commuter airline that has successfully introduced

jet service. Capitol Air and World Airlines are

former charter operations that have inaugurated

scheduled service. Typically, the startup carriers

serve high-density, long-haul markets where they

compete with trunk carriers, principally on the

basis of low fares.

Commuter airlines usually do not operate jets,

but propellor-driven aircraft with up to 30 seats.

Before 1978, most commuter airlines were exempt

from CAB fare and route regulation, but they
172 . Airport System Development

were restricted to the use of aircraft no larger than

30 seats. A few—e.g., Air Midwest, Air New

England, and Wright-obtained CAB certification

in order to use larger aircraft or to receive subsidies for air service to small communities. As

local service and trunk carriers have withdrawn

from smaller markets, commuters have moved in

to fill the gap. One of the earliest and most successful examples is Allegheny Airlines (now USAir),

which transferred certain of its services to 12

smaller independent airlines (known collectively

under the name “Allegheny Commuter”) that

operate under contract to USAir.

Since 1978, over 300 commuters have obtained

CAB certification. They are becoming progressively integrated into the national air transportation system, providing local point-to-point service and linking small communities with the larger

airport hubs. Passenger enplanements on commuters have grown rapidly, from 4.2 percent of

passenger enplanements in 1979 to 6.3 percent in

1983. 7

Changes in Route Networks

Airline deregulation has changed the national

air service network from a stable system of routes

served by established carriers to a fluid marketplace where carriers frequently adjust routes, level

of service, and fares. The older airlines have abandoned some markets and begun service to others.

New entrants have taken over some of these abandoned routes and established themselves in the

dense markets where they see a competitive opportunity.

The course of the industry since deregulation

has been one of uneven expansion and contraction. The principal effect on airports is that sudden and less predictable changes have taken place

in the air carriers serving the airport, the level of

service provided, and the facilities needed to accommodate them. Some communities have experienced a general improvement in air service

since deregulation, but not all have benefited from

an unregulated environment, and some have suffered almost complete loss of air service.

‘FAA Aviation Forecasts, Fiscal Years 1984-1995 (Washington,

DC: Federal Aviation Administration, FAA-APO-84-1, February

1984).

Table 41 shows changes in points served by a

sample of carriers between 1978 and 1981; table

42 shows the changes in service by size of city.

The designations large, medium, small, and nonhub are FAA and CAB classifications based on

number of passengers enplaned. Large hubs are

the top 24 cities, medium hubs the next 39. There

are 61 small hubs and 461 nonhubs. s

Most of the established carriers added and

deleted service points frequently during this period.

Air California and Air Florida, no longer restricted to intrastate traffic, expanded the number of points served. The Allegheny Commuter

system of USAir abandoned 23 stations and added

30. American Airlines moved into Braniff’s market, adding 12 stations in the Texas, Louisiana,

and Alabama markets. Frontier Airlines discontinued service to 28 nonhubs and small hubs and

branched out to other small cities and a few large

hubs. Piedmont pursued the same strategy, adding seven large cities and two high growth areas

in Florida, while deleting 16 small hubs and

nonhubs.

Competition has been intense in certain high

growth markets. For example, cities like Phoenix

with substantial population growth have attracted

new carriers. Traffic growth at Orlando, which

is now served by 10 carriers as opposed to 4 before

deregulation, is a product of both economic development (Disney World and Epcot) and a surge

of discretionary travel stimulated by lower fares.

For the most part, trunks and local service carriers dropped short-haul markets. Between 1978

and 1981, the number of trunk airline flights to

markets with stage lengths under 200 miles dropped

by 44 percent. Local carriers followed suit by reducing short-haul departures by 35 percent and

more than doubling flights in the range of 500 to

1,000 miles. Some of the short-haul market has

been picked up by the commuter carriers.

The emerging pattern is one of increased activity at large and medium airports and eroding service at the smallest nonhub airports, as shown in

table 43. Confirmation of this pattern can be

found in data on changes in aircraft departures

8

FAA Statistical Handbook of Aviation, Calendar Year 1982

(Washington, DC: Federal Aviation Administration, December

1982).
Ch. 8–Forecasting and Trends ● 173

Table 41.—Changes in Stations Served by Air Carriers, 1978-81

Stations served in: Stations

Carrier 1978 1981 Added Deleted

Air California . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Air Florida . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Allegheny Commuter.. . . . . . . . . . . . . . . . . . . . . . . . . . . . .

American Airlines . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Braniff Airways . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Capitol International Airways. . . . . . . . . . . . . . . . . . . . . . .

Continental Airlines. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Delta Air Lines . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Eastern Airlines . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Frontier Airlines . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Jet America Airlines . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Midway Airlines . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Muse Air . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

New York Air . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Northwest Airlines. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Ozark Airlines . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Pacific Southwest Airlines . . . . . . . . . . . . . . . . . . . . . . . . .

Pan American . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

People Express Airlines . . . . . . . . . . . . . . . . . . . . . . . . . . .

Piedmont Airlines . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Republic Airlines . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Republic Airlines West . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Southwest Airlines . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Texas International Airlines . . . . . . . . . . . . . . . . . . . . . . . .

Trans World Airlines . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

United Airlines . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

USAir . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Western Airlines . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

World Airways . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

10

11

49

45

37

0

30

71

66

87

0

0

0

0

31

47

13

34

0

48

114

46

9

34

37

83

54

31

0

14

18

56

61

34

4

46

71

70

78

2

12

2

13

36

48

15

21

10

40

104

37

14

32

50

77

58

27

5

7

9

30

24

5

4

17

10

15

19

2

12

2

13

5

11

5

2

10

9

15

4

5

12

17

10

16

5

5

3

2

23

8

8

0

1

10

11

28

0

0

0

0

0

10

3

15

0

17

25

13

0

14

4

16

12

9

0
174 ● Airport System Development

Table 43.—Aircraft Departures by Hub Size (June 1, 1978, and June 1, 1982)

Number of Departures per weekb

Increase Percent

Hub sizea

communities June 1978 June 1982 or decrease change

Departures by hub size:

Large. . . . . . . . . . . . . . . . . . . . . . 1923 60,384 63,825 3,441 5.7

Medium . . . . . . . . . . . . . . . . . . . 36 23,076 25,480 2,404 10.4

Small. . . . . . . . . . . . . . . . . . . . . . 66 13,788 14,115 327

Nonhub. . . . . . . . . . . . . . . . . . . . 504 28,575 25,239 (3,336) (1::;)

Total . . . . . . . . . . . . . . . . . . . . 629 125,823 128,659 2,836 2.3

Distribution of departure changes by hub size:

Number of hubs

Change Large Medium Small Nonhub Total

Increase . . . . . . . . . . . . . . . . . . . 18 23 30 200 271

No change . . . . . . . . . . . . . . . . . 0 0 1 12 13

Decrease . . . . . . . . . . . . . . . . . . 5 13 35 292 345

for all commercial service airports, shown in table

44. According to CAB, over 292 nonhub cities lost

service from 1978 to 1982.9 In some instances,

localities dropped by larger carriers have received

replacement service from commuter airlines. As

a result, the average size of aircraft serving these

points is smaller, and the number of seats available per departure has declined.

Medium hubs appear to be the main beneficiaries of increased air carrier activity. Two factors

appear to account for this trend: the air traffic

controllers’ strike, which limited access to many

large airports, and the growth of regional hubbing.

As shown in table 45, departures from medium

hubs to other medium hubs increased by 30 percent between 1978 and 1982. Departures from

medium hubs to small or large hubs have also increased. By contrast, flights between large hubs

have declined.

Formation of New Hubs

Air traffic has increased at airports in several

medium-size cities as a result of moves by trunk

airlines and local service carriers to consolidate

their operations in hub-and-spoke route systems.

(A diagram of a typical hub-and-spoke structure

is shown in fig. 19. ) The basic strategy is to establish one airport as the hub into which traffic from

other cities is fed along radial routes. Flights by

a carrier into and out of the hub are closely scheduled in “complexes” or “connecting blocks” of approximately 30 to 45 minutes so as to facilitate

transfers and minimize passengers’ waiting time.

For the air carrier, the chief advantage is that service can be provided between smaller cities and

along thinly traveled routes more economically

than if they were connected by direct flights.

Hubbing is not new. Delta established a hub

at Atlanta long before deregulation, and hubbing

has been the core of Delta’s operating and marketing philosophy for years. The same principle

of tight control of traffic feed through a single

point was applied over 20 years ago by United

in Chicago and USAir in Pittsburgh.

Deregulation, however, has added impetus to

the practice of hubbing by allowing airlines almost

complete freedom to set up new routes and service points. Many local carriers, no longer satisfied

to feed traffic to the trunk carriers, have taken

the opportunity to establish their own regional

hubs—e.g., Piedmont at Charlotte, Dayton and,

most recently, Baltimore; Republic at Memphis;

and Western at Salt Lake City.

By setting up a hub at an underutilized airport

(usually in a medium-size city), a carrier can avoid

the congestion encountered at major airports and

reduce operating costs, while at the same time creating markets in surrounding cities where it might
Ch. 8—Forecasting and Trends ● 175

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176 “ Airport System Development

Table 45.—Changes in Weekly Departures

Between Major Categories of Airports

Percent change

Item (June 1978 to June 1982)

Between large hubs and:

Large hubs . . . . . . . . . . . . . . . . . . . . . . (11.5)

Between medium hubs and:

Large hubs . . . . . . . . . . . . . . . . . . . . . . 6.5

Medium hubs . . . . . . . . . . . . . . . . . . . . 30.4

Between small hubs and:

Large hubs . . . . . . . . . . . . . . . . . . . . . . (5.8)

Medium hubs . . . . . . . . . . . . . . . . . . . . 11.2

Small hubs . . . . . . . . . . . . . . . . . . . . . . (12.0)

Between nonhubs and:

Large hubs . . . . . . . . . . . . . . . . . . . . . . (9.4)

Medium hubs.. . . . . . . . . . . . . . . . . . . (12.1)

Small hubs . . . . . . . . . . . . . . . . . . . . . . (25.5)

Nonhubs . . . . . . . . . . . . . . . . . . . . . . . . (28.4)

not otherwise be practical to offer frequent air

service, or any service at all. Further, by choosing an airport that is not extensively served by

competing carriers, the hubbing carrier maintains

control over traffic; passengers who arrive on the

carrier’s flights will depart on one of its connecting flights, not on a competitor’s.l0 In general, carriers setting up new regional hubs have concentrated on serving the traveler flying less than 1,000

miles, a group which may represent as much as

two-thirds of the domestic market.

Hub-and-spoke operations seem to be increasing even at large airports, such as Chicago, Atlanta, Denver, and St. Louis. Since deregulation,

most of the trunk carriers have increased the number of markets served nonstop from large hubs.

Ninety-nine percent of Continental’s departures

(before the airline filed for bankruptcy) fed the

Houston and Denver hubs. In 1979, Delta operated nonstop flights from Atlanta to 59 cities;

today it is serving 72, having added routes to the

Caribbean as well as stations in the West and

South. United’s schedule shows a net gain of 16

points served nonstop from its Denver hub. In

1981, TWA dropped direct service from its St.

Louis hub to Atlanta, Toledo, and Knoxville but

added direct service to Des Moines, Houston, Little Rock, San Diego, San Antonio, and Chicago.

However, some observers believe that this type

of route experimentation and readjustment may

not signal a long-term trend. They expect that,

as air traffic increases generally, the disadvantages

of hub-and-spoke operation at the largest airports

will outweigh the advantages, and some air carriers will divert their activity to medium hubs.

Air cargo carriers are also turning to hubbing.

In 1972, Federal Express adopted the hub-andspoke strategy for fast delivery of air cargo under

70 pounds. The site selected, Memphis, is centrally

located with a modern airport that is relatively

uncrowded and practically never shut down by

weather. Between 11:00 p.m. and 4:00 a.m. each

day, Federal Express flights converge on Memphis

from all over the country, unloading as many as

80,000 packages, which are sorted and reloaded

on flights to destination cities within a 4-hour

period.

Other cargo carriers have likewise adopted the

hubbing concept, especially for the overnight delivery and small package segments of their business. For example, Flying Tigers has converted its

Chicago storage facility into an overnight sorting

center. Emery Air Freight, a large freight forwarder that now operates an aircraft fleet, has

built an overnight sorting center in Dayton.

Selection as the site of a new hub can be a boon

to the local airport in terms of growth in traffic

and revenue. For example, since Piedmont established a hub at Charlotte, the increased traffic volume has made it possible for the airport management to reduce landing fees for all airport users

and still enjoy higher revenues. Other aspects of

airport operation at Charlotte have benefited as

well. Income from parking and concessions is now

20 percent ahead of forecasts, and the airport has

recently built a new 10,000-ft runway and a $64

million terminal. Similarly, Piedmont’s Midwestern hub in Dayton appears to be revitalizing an

airport which had lost service after deregulation.

Western Airlines embarked on development of

a major hub in Salt Lake City in direct competition with carriers serving regional and transcontinental markets through Denver and Dallas/Fort

Worth. Western currently offers nonstop service
Ch. 8—Forecasting and Trends ● 177

‘ .

/

= 0 u)

/

/

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\
178 Airport System Development

to 33 cities, with approximately 86 flights per

weekday. Largely as a result of Western’s hubbing, traffic through Salt Lake City has increased

dramatically. Domestic enplanements are up 13

percent from 1981, and departures have increased

. by 25 percent. Salt Lake City Airport has responded by raising $30 million in bonds to expand the terminal and to build Western a new

eight-gate concourse.

On the other hand, becoming a new hub may

prove a mixed blessing for an airport. The pattern of operations associated with hubbing—

many closely spaced arrivals and departures—

means that the airport is extremely busy for brief

periods but practically idle the rest of the time.

This peaking effect is illustrated in figure 20,

which is a partial listing of Western Airlines’ arrivals and departures at Salt Lake City. In fact,

peaking is even more severe than the figure shows

since there are other airlines that rely on connections with Western or that operate flights at the

same time as one of Western’s connecting banks.

These extreme traffic surges strain airport capacity and may create the need for construction of

additional facilities that are needed for only a

small part of the day.

Where the hubbing carrier dominates airport

use, the airport management may find itself at the

mercy of that carrier’s operating and expansion

plans. For example, while Piedmont’s establishment of a hub at Dayton has led to a doubling

of air carrier operations there, it also made the

airport management dependent on one carrier for

half its revenues. Construction of new facilities,

needed solely to accommodate the highly peaked

pattern of service of a single carrier, increases that

dependency and leaves the airport operator open

to great financial risk should the carrier decide

to move elsewhere.

Other adjustments may lie ahead for airports

that serve as national or regional hubs. It is not

yet known if there are minimum requirements for

a hub to operate successfully or whether the operation of several hubs in the same region will lead

to an oversupply of air services in certain markets. The pattern of hubbing will probably endure, but the fluidity of a deregulated market,

especially one that continues to be distorted by

the recession and the lingering effects of the air

traffic controllers’ strike, makes the future difficult to predict.

Aircraft Equipment

The key to economic efficiency for an aircraft

is operation on a route to which it is well suited

in terms of size, range, and performance characteristics. Air carriers strive to use their equipment

in this way; but because aircraft are expensive and

long-lived investments, available equipment cannot always be matched to routes and traffic volume as well as one would like. It is especially difficult now, when service patterns and markets are

in flux. The efficiencies attainable through the use

of larger aircraft may not be available if the

economics of hub-and-spoke operation and increased competition among carriers argue for the

use of smaller aircraft. As carriers begin to replace

their present fleets with aircraft that are better

suited to current market conditions, aircraft size

becomes an important factor in assessing future

airport capacity needs.

The aircraft that now make up the U.S. jet fleet

are of three major types. Narrowbody short- and

medium-range aircraft, like the DC-9, B-727, and

B-737, constitute about 75 percent of the fleet.

These aircraft, which seat 100 to 150 passengers,

are used primarily for flights with stage lengths

under 1,000 miles or those with several intermediate stops. Medium- and long-range widebody

aircraft such as the DC-10, L-1011, or B-747 make

up about 18 percent of the jet fleet. These aircraft,

seating 250 to 400 passengers, are most efficiently

operated on heavily traveled long routes of more

than 1,500 miles, but they can be (and have been)

used effectively on shorter routes of sufficiently

high density. Long-range narrowbody aircraft like

the DC-8 and B-707, with 140 to 180 seats, make

up only about 7 percent of the fleet and are usually operated on routes over 1,500 miles which

are not densely traveled enough to warrant use

of a widebody (see fig. 21 and table 46).

The short- and medium-range aircraft which

make up three-quarters of the fleet vary widely

in age (see fig. 22). About 60 percent are over 10

years old, and 40 percent are over 15 years old.

Many will be replaced in the next few years,
Ch. 8—Forecasting and Trends “ 179

;
180 . Airport System Development

Figure 21.–Composition of U.S. Commercial Jet Fleet, 1982

Medium/

long range

narrowbodv

7.OVO -

Short/medium range narrowbody aircraft:

B-727 . . . . . . . . . . . . . . . . . . . . . . . . . 1,012

B-737 . . . . . . . . . . . . . . . . . . . . . . . . . 238

BAC-111 . . . . . . . . . . . . . . . . . . . . . . 26

DC-9 . . . . . . . . . . . . . . . . . . . . . . . . . 473

1,749

Medium/long range widebody aircraft:

A-300 . . . . . . . . . . . . . . . . . . . . . . . . . . 25

B-747 . . . . . . . . . . . . . . . . . . . . . . . . . .128

DC-10 . . . . . . . . . . . . . . . . . . . . . . . . . . 159

L1011 . . . . . . . . . . . . . . . . . . . . . . . . . . ~

429

Medium/long range narrowbody aircraft:

6-707 . . . . . . . . . . . . . . . . . . . . . . . . ...71

DC-8 . . . . . . . . . . . . . . . . . . . 90

161
Ch. 8—Forecasting and Trends . 181

Figure 22.—Age of Aircraft in Service in U.S.

600~

Commercial Jet Fleet (different scales)

Short/medium range

160F

80

60

40

2C

o

Long-range widebody

Long-range narrowbody

Before

1963 1965-67 1968-70 1971-73 1974-76 1977-79 1980-82

Year placed in service

SOURCE: Commercial Aircraft Fleet Databank, Lockheed-Georgia Co., July 1982.
182 Airport System Development

Table 46.—Present and Future Commercial Jet Aircraft

Current generation Next Generation

Manufacturer Designation Seats a Manufacturer Designation Seats a

Short/medium-range narrowbody

Boeing B-727-1OO

Boeing B-727-200

Boeing B-737-200

Fokker F-28

McDonnell Douglas DC-9-1O

McDonnell Douglas DC-9-30

McDonnell Douglas DC-9-50

Medium/long-range widebody

Aribus industrie A-300

Boeing B-747-1OO

Boeing B-747-200

Lockheed L-101 1

McDonnell Douglas DC-10-IO

McDonnell Douglas DC-10-4O

Medium/longwange narrowbody

Boeing B-707-120

Boeing B-707-320

McDonnell Doualas DC-8-62

70-131

120-175

115-130

65-85

90

115

139

220-300

374-452

374-500

256-400

250-380

250-380

125

120-189

189

Airbus Industrie

Boeing

Boeing

British Aerospace

Fokker

McDonnell Douglas

Airbus Industrie

Boeing

Boeing

Boeing

A-320

B-737-300

B-757

BAE-146-200

P-332

MD-80

A-31O

B-747-300

B-767-200

B-767-300

150

132-148

186-220

82-109

110

167

205-265

530

210-255

270

largely with aircraft like the B-757 (195 seats), DC9-80 (155 seats), and the B-737-300 (140 seats)—

all of which are bigger than equivalent models in

common use today (see table 46). Although some

manufacturers are considering production of new

short- and medium-range aircraft with about 100

seats, they are generally viewed as replacements

for aircraft of yet smaller size, like the DC-9-1O.

A somewhat opposite trend is expected in the

long-haul segment of the fleet. The long-range

narrowbody jets are 13 to 20 years old. They are

technologically obsolete, fuel-inefficient, and

noisy by present FAA standards. Most will be

retired from service within the next 5 years, although it is possible that some could be refitted

with new engines to extend their economic lifetime

a bit longer. There is no new narrowbody aircraft

in design or production which is an exact equivalent. Instead they will be replaced either with current generation widebodies or new models like the

B-767 or the A-31O.

Most long-range widebody aircraft now in the

fleet are expected to remain in service for several

more years, but they too will eventually be replaced. Except for a stretched version of the B747, which Boeing expects to produce for use on

heavily traveled long-haul routes, most new widebodies for domestic use will be smaller than existing models. Aircraft such as the B-767 and A310, which seat between 230 and 270, are typical

of this new generation of long-range aircraft.

Overall, the average size of the jet fleet may

remain about the same, or perhaps decrease slightly,

but there will be a greater range of sizes. Today’s

fleet averages 150 seats within a range of 85 to

400; the future fleet might be as much as 10 percent smaller and made up mostly of aircraft in

the 100- to 250-seat range, but with some much

larger aircraft with 500 seats (or even 700 to 800

seats for a full upper deck 747) operating on dense

routes.

To the extent that the demand for air travel increases over the coming years, airports will clearly

bear an additional burden. However, this burden

may not be as onerous as it would first appear.

For example, the average load factor in commercial aviation has been rising over the past 5 years

in response to higher operating cost and lower

fares. To the extent that the average load factor

continues to increase in the future, fewer aircraft

operations will be needed to handle a given number of passengers. Or, viewed another way, the

growth of aircraft operations will not be as rapid

as the growth in passenger enplanements. If, how-
Ch. 8—Forecasting and Trends 183

ever, the number of competitors increases in certain high-density markets, the average number of

passengers attracted by each competitor will thereby

be reduced. In this case, the total number of flight

operations would be likely to increase as carriers

favored smaller aircraft and placed emphasis on

frequency of service and price competition.

The next generation of short- and mediumrange aircraft—workhorses of the current jet

fleet—are likely to have an additional 20 to 30

seats per aircraft. This should translate into a reduction of 20 percent or so in the number of operations needed to carry a given volume of passengers. On the other hand, the average size of

aircraft on long-haul routes will probably decrease

over the next decade as more carriers compete

for the market. While this might lead to an increase in the number of operations, there is reason to believe that reduction in aircraft size could

also augur a change in the structure of airline

networks.

The present generation of widebodies proved

economical only in service between major hubs.

Many passengers had to be routed through these

hubs in order to take advantage of the attractive

Figure 23.—Composition of

economics afforded by widebodies. Bringing these

people into and out of large hubs often created

additional and unnecessary aircraft operations

that contributed to the delay and congestion at

these airports. If airlines choose to utilize the new

generation of smaller (but economical) long-range

aircraft to provide direct service in lower volume

markets or in connecting flights to smaller hubs,

the burden of increased passenger enplanements

will be shifted away from presently congested major hubs.

The aircraft used by commuter carriers are

almost entirely propellor-driven, with either piston or turbine engines. Although they range in

size from 6 to 60 seats, over 80 percent seat 19

or fewer passengers (fig. 23). Federal regulations—

which limited the size of commuter aircraft to a

maximum of 19 seats before 1972, 30 seats in 1972,

and 60 seats since 1978—dampened the interest

of U.S. manufacturers in building small transport

aircraft.11 Consequently, few U.S. firms now proCommuter Aircraft Fleet, 1981a

All single engine

Multiengine (seating capacity)

1-9

10-20

21-30

>31

Otherb

Percent

P

13.3

37.0

32.1

7.4

7.9

❑ Piston powered

Turbine powered

Other

2.3

aPassenger aircraft only

bHellcopter and let.

SOURCE: Regional Airlines Association Annual Survey, 1981.

25-420 0 - 84 - 13
184 ● Airport System Development

duce small transport aircraft, most of which are

imported from Canada, Brazil, and the Netherlands. With the progressive lifting of restrictions

on the size of aircraft that commuters may operate, the average size of aircraft in the commuter

fleet has increased from about 10 seats in 1970

to about 15 in 1980. This growth trend is likely

to continue, and many of the new commuter aircraft entering the fleet over the next decade will

be in the 30- to 60-seat range.

The growth of commuter airlines will have important implications for future airport needs. The

commuter airline fleet tripled between 1970 and

1981, with much of the growth occurring since

deregulation (table 47). FAA forecasts that by

2000 the commuter fleet will triple again, reaching

about 4,500 aircraft .12 While many of these will

be used in air service to small communities, where

major air carriers do not find it profitable to operate, a large number will also converge at hub airports to feed passengers to larger carriers. Many

of these operations will be at busy airports where

it will be hardest to accommodate them at gates

and in terminal facilities. Further, the mixing of

12 National Airspace System Plan (Washington, DC: Federal Aviation Administration, April 1983, revised edition), p. II-2.

Table 47.—Aircraft Operated by Commuter and

Regional Airlines, 1970-81

Aircraft Percent

Yeara

in service annual change

1970 . . . . . . . . . . . . . .

1971 . . . . . . . . . . . . . .

1972 . . . . . . . . . . . . . .

1973 . . . . . . . . . . . . . .

1974 . . . . . . . . . . . . . .

1975 . . . . . . . . . . . . . .

1976 . . . . . . . . . . . . . .

1977 . . . . . . . . . . . . . .

1978 . . . . . . . . . . . . . .

1979 (est) . . . . . . . . . .

1980b 

. . . . . . . . . . . . . .

1981b 

. . . . . . . . . . . . . .

687

782

791

885

997

1,073

1,009

1,119

1,200

1,350

1,606

1,743

14

1

12

13

8

– 6

11

7

12

19

8

large jet and small propellor-driven aircraft in the

same traffic stream will add a burden to air traffic control and could aggravate congestion and

delay both in the airspace and on the airport surface. A partially offsetting factor is that the average size of commuter aircraft will probably increase. Thus, while commuter operations will

grow, they will not be as great as they would be

if aircraft size were still restricted by a regulatory

ceiling of 19 or 30 seats.

IMPLICATIONS FOR AIRPORT DEVELOPMENT

There is almost universal agreement that air

traffic will continue to increase throughout the rest

of this century and that some forms of growth

could lead to serious congestion and delay in the

national airport system. There is considerably less

agreement about how much traffic will grow and

how it will be distributed across airports and

among sectors of civil aviation. Of the two questions, distribution is probably the more important, since it will determine which airports are affected and what measures can be taken to deal

with the congestion and delay that could result.

If, for example, traffic continues to concentrate

at airports that are already severely congested or

at those now approaching capacity limits, there

is a legitimate fear that major hubs will be caught

in a form of “gridlock” that will spread throughout the national airport system. On the other

hand, if traffic patterns change and new growth

occurs not at the airports now saturated but at

other airports with adequate reserve capacity, the

system can absorb a large amount of new traffic

without an appreciable increase in local or general congestion and delay. Between these extremes

are other possibilities, each with differing consequences for various types of airports and classes

of airport users.

If aviation demand grows at the rate foreseen

by FAA, delay will increase at high-density airports—perhaps intolerably—and could even spread

to other airports that are now relatively free of

congestion. Congestion would be especially severe

if traffic were to concentrate at a few large hubs,

so severe that air carriers would probably seek

to avoid escalating delay costs by shifting their

centers of operation to other airports. Some carriers might shift to other suitable large hubs, but
Ch. 8—Forecasting and Trends 185

more likely the move would be to medium airports with adequate facilities and ample surplus

capacity—in effect breaking the pattern that now

exists at airports such as Atlanta or Chicago and

selecting a site where the rehubbing carrier would

be the principal, if not the only, major airline at

the site. The current trend toward hub-and-spoke

route structure and the present inclination of airlines to purchase short- and medium-range narrowbody aircraft seem to indicate the likelihood

of rehubbing. If so, the area of greatest interest

over the next decade or so could be medium hubs,

where the influx of traffic may necessitate rapid,

but selective, expansion of airport facilities.

The prospect of extensive rehubbing at medium

airports does not necessarily imply that these airports will face a capacity crisis like that of some

major hubs today. If the medium airports that are

to serve as new hubs are chosen wisely and if the

practice does not lead to abuse,13 they offer a large

capacity reserve. The key is how the airlines respond in a deregulated environment where they

may compete in a variety of ways, some of which

might offer a short-term advantage but at the cost

of an unbalanced use of the airport system as a

whole. The full implications of rehubbing are by

no means clear. On one hand, rehubbing seems

to be an attractive way to absorb growth in demand and provide air transportation service while

avoiding the delay costs of a large multi-airline

hub. On the other hand, we have too little experience with the dynamics of an unregulated air

travel market to know how many new, smaller,

single-airline hubs are economically practical.

h this setting, the reliever concept is of great

potential value. By shifting GA traffic away from

centers of air carrier operation while still allowing GA adequate access to major metropolitan

areas, relievers offer important advantages. There

is the advantage of allowing each sector of civil

aviation to grow without impediment to the other.

This would not only reduce delay and its associated costs for all users of metropolitan airports,

it would also have important collateral effects on

airport efficiency (through segregation of dissimilar types of traffic) and on airport expansion

costs. It may be less costly to upgrade one or two

reliever airports to handle more traffic than to expand the major air carrier airport to absorb the

same amount. If general aviation—especially business aviation—grows as much as FAA projects,

it is clear that some way will have to be found

to serve this segment of civil aviation.

For the reliever concept to work, however, it

will not be sufficient simply to push GA traffic

off to some other airport in the metropolitan area.

For GA to accept this diversion and to embrace

the reliever concept, the alternate airports must

provide facilities and services appropriate to GA

needs and of quality comparable to that of the

major airport. This implies not only adequate runways, aprons, navigation aids, and ATC services,

but also facilities for aircraft storage and maintenance and landside connections to activity centers

in the metropolitan area. The reliever thus needs

to be a mirror of the air carrier airport, not just

another place to land.

Both these observations suggest the need to

think of airports as a system, not as separate parts.

The recently enacted Airport Improvement Program makes it clear that such a broad view is

needed in order to determine how to make good

use of the infrastructure already in place and how

to fit new demand into an existing system that

has large unused capacity overall, even though

it is congested at a few points. This implies that

a strategy of restructuring airport use through adjustment of operational patterns and judicious improvement of existing airports may be a less expensive and more manageable alternative than

continuing to build new facilities in response to

demand wherever and whenever it occurs.
Chapter 9

AIRPORT SYSTEM PLANNING

.

Photo credit Dorn McGrath, Jr
Contents

Page

The Planning Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 189

Airport Master Planning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 189

Regional Airport Planning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 191

State Airport Planning. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 193

National Airport Planning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 196

General Problems in Airport System Planning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 199

Demand as an Independent Variable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 199

Plans as Advocacy Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 201

Lack of Integration Among Plans . . . . . . . . . . . . . . . . . ............+.. . . . . . . 202

National Plan of Integrated Airport Systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 203

The Congressional Mandate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 203

Desirable Features of NPIAS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 204

List of Tables

Table No.

48. State Funding of Airport Planning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

49. Review of State Aviation Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

50. Estimated Cost of Improvements by General Categories . . . . . . . . . . . . . . . . .

51. National Airport System Plan: System Needs by Program Objectives,

1980-89 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

52. Comparison of National and State Airport System Plans, 1982 . . . . . . . . . . .

Page

1 9 4

1 9 5

1 9 7

1 9 8

2 0 0
Chapter 9

AIRPORT SYSTEM PLANNING

Given the high cost and long leadtime for building or improving airports, planning is key in

determining what facilities will be needed and in

creating programs for providing them in a timely

manner, while making wise use of resources. Planning for airport development requires more than

simply scheduling the capital improvements to be

made. Airports are public entities, whose managers interact with many other public and private

stakeholders. Airport development plans affect

other aspects of community life—e.g., through

the land dedicated to aviation use or the noise or

automobile traffic that the airport generates. The

need for aviation development must thus be weighed

against other societal needs and plans. Further,

planning cannot be done for one airport in isolation; each airport is part of a network which is

itself part of the national transportation system.

For these reasons, airport planning involves government at all levels, as well as other public and

private organizations.

Determining need and programming development at individual airports has become formalized

in a process called airport master planning. While

master planning in the full sense is practiced primarily by large airports, even the smallest must

make use of some elements of the process to prepare for future change. At a level above airport

master planning is regional system planning,

which is concerned with development of all airports in a metropolitan area. It often involves difficult political decisions on development priorities

among competing airports. In some cases, this

responsibility is assumed by a regional or metropolitan planning agency, but many State governments have also taken on the task of developing

a coordinated system plan for airports serving not

only major metropolitan regions but also outlying small communities and rural areas within the

State. In some cases, State agencies prepare these

plans themselves; in others, they provide technical assistance and review for local planning bodies.

The role of the Federal Government in airport

planning includes a broad range of activities. The

most comprehensive activity is the National Airport System Plan of the Federal Aviation Administration (FAA), which summarizes the development needs of roughly 3,200 airports across the

country. At the other extreme, FAA has responsibility to approve, on a project-by-project basis,

specific development projects for which airport

sponsors are seeking Federal funds.

This chapter describes airport planning at various levels, with emphasis on the planning process and the problems facing airport planners in

general. The final part of the chapter looks more

closely at airport system planning from a national

perspective and addresses issues that FAA will

need to consider in preparing a new comprehensive planning document—National Plan of Integrated Airport Systems—called for in the Airport and Airway Improvement Act of 1982.

THE PLANNING PROCESS

Airport Master Planning

At the local level, the centerpiece of airport

planning is the master plan—a document that

charts the proposed evolution of the airport to

meet future needs. The magnitude and sophistication of the master planning effort depends on

the size of the airport. At major airports, planning may be in the hands of a large department

capable of producing its own forecasts and supporting technical studies. At such airports, master planning is a formal and complex process that

has evolved to coordinate large construction projects (or perhaps several such projects simultaneously) that may be carried out over a period

of 5 years or more. At smaller airports, master

planning may be the responsibility of a few staff

members with other responsibilities who depend

on outside consultants for expertise and support.

At very small airports, where capital improvements are minimal or are made infrequently, the

master plan may be a very simple document, perhaps prepared locally but usually with the help

of consultants.

189
190 . Airport System Development

While there is considerable variation in the content of the master plan and how it is used, its basic

products are a description of the desired future

configuration of the airport, a description of the

steps needed to achieve it, and a financial plan

to fund development. The master planning process consists of four basic phases: 1) airport requirements analysis, 2) site selection, 3) airport

layout, and 4) financial planning.’

The first phase, requirements analysis, specifies

new or expanded facilities that will be needed during the planning period. This involves cataloging existing facilities and forecasting future traffic demand. The planner compares the capacity

of existing facilities with future demand, identifying where demand will exceed capacity and

what new facilities will be necessary.

The process of relating future demand to existing facilities and estimating the nature and size

of needed improvements is complex. It requires

detailed forecasts, since sizing depends not only

on the number of passengers and aircraft in future

years but also on the type of the traffic. For example, traffic consisting mainly of transfer passengers imposes requirements that are different

from those where the majority of traffic is origin

and destination passengers. Sizing of facilities is

also affected by the distribution of activities throughout the day and by the size and operating characteristics of aircraft serving the airport. This

process is simplified by the use of standard relationships between general measures, such as annual enplanements, and specific measures, such

as peak-hour passenger demand.

The second phase, site selection, is most important in the construction of a new airport. When

considering the expansion of an existing airport,

there is usually less choice about where to locate

new facilities. Requirements for safety areas and

clear zones around existing runways and taxiways, for example, mean that much apparently

“vacant” land at airports cannot be used for other

purposes. New facilities can be located only in

places where they, and the traffic they generate,

will not interfere with existing facilities. The site

selection phase for a new airport requires an indepth analysis of alternative sites, looking closely

at such factors as physical characteristics of the

site, the nature of surrounding development, land

cost and availability, ground access, and the adequacy of surrounding airspace. The final choice

of one site over others is often quite subjective.

For example, there is probably no objective way

to compare the disadvantages of increased noise

in some part of the community with the advantages of improved air service for the metropolitan

area as a whole. The “right” choice depends on

how decisionmakers weigh various criteria, and

it is often a political, rather than a technical,

choice.

In the third phase, airport layout, the locations

of planned new facilities are mapped on the airport site. In this phase, the planner also looks at

how the airport will fit into the surrounding community. A land use plan is usually prepared at

this point to show existing and proposed residential, business, and industrial development around

the airport and expected levels of aircraft noise.

It shows areas which must have protected airspace

and those where building height limitations will

have to be imposed. In addition, the effect of the

airport on highway and public transportation systems transit is analyzed. This step is important

not only for the safety and operational efficiency

of the airport and its compatibility with the surrounding community, but for the effect on the

level and structure of airport operating costs. Failure to recognize the relationships between airport

configuration and ongoing costs can have lasting

effects on the economy of the airport and its

revenue-earning potential.

The fourth and final phase, financial planning,

is an economic evaluation of the entire plan of

development. It looks at the activity forecasts of

the first phase from the point of view of revenues

and expenditures, analyzing the airport’s balance

sheet over the planning period to ensure that the

airport sponsor can afford to proceed. A corollary

activity in this phase is preparation of a financial

plan, which specifies the funding sources and
Ch. 9–Airport System Planning 191

financing methods for the proposed development—

the portions that will be funded through Federal

grants-in-aid, the size and timing of bond issues,

the revenue from concessionaire rents, parking

fees, landing fees, and so on.

The steps outlined above often require several

years to complete, and at most airports, master

planning is an ongoing and continuous process.

By the time the master plan has been drawn up,

much of the information may be outdated, and

compilation must begin again. Thus, it is common for master plans to be wholly or partly updated on a cycle of 3 to 5 years.

The master plan is most applicable to a rather

narrow planning problem, the development of a

single airport. Planning of a regional airport system, which addresses problems of a broader

scope, contains many elements in common with

the master planning process. However, regional

planning is usually less concerned with the details

of siting facilities at a particular airport than with

the adequacy of service in a given geographic area

and the roles of different airports in meeting future

needs. While the master planning process is fairly

standardized, at least at larger airports, regional

planning procedures vary widely among local, regional, State, and Federal agencies.

Regional Airport Planning

Regional airport planning takes as its basic unit

of analysis the airport hub, roughly coincident

with the boundaries of a metropolitan area. The

planner is concerned with air transportation for

the region as a whole and must consider traffic

at all the airports in the region, both large and

small. The practice of regional planning is relatively new and has been instituted to deal with

questions of resource allocation and use which

often arise when the airports in a region have been

planned and developed individually and without

coordination among affected jurisdictions. Regional planning seeks to overcome the rivalries

and the jurisdictional overlaps of the various local

agencies involved in airport development and

operation. The goal is to produce an airport system that is optimum with respect to regionwide

benefits and costs.

Thus, regional airport planning addresses one

critical issue usually not dealt with in an airport

master plan: the allocation of traffic among the

airports in a region. This can be a sensitive subject. Questions of traffic distribution involve political as well as technical and economic issues,

and they can greatly affect the future growth of

the airports involved. One airport may be quite

busy while another is underutilized. If traffic were

to continue growing at the busy airport, new facilities would have to be constructed to accommodate that growth. On the other hand, if some

of the new traffic were diverted to an underutilized

airport, the need for new construction might be

reduced and service to the region as a whole might

be improved.

Although a planning agency may decide that

such a diversion is in the interest of a metropolitan

region and might prepare forecasts and plans

showing how it could be accomplished, it may

not necessarily have power to implement these

plans. Where airports are competitors, it is probably not reasonable to expect that the stronger

will voluntarily divert traffic and revenues to the

other. The planning agency would likely have to

influence the planning and development process

at individual airports so that they will make decisions reflecting the regional agency’s assessment

of regional needs.

One way to influence planning decisions is

through control over distribution of Federal and

State development grants. Before 1982, regional

agencies served as clearing houses for Federal

funds under the review process required by Office of Management and Budget Circular A-95.

While the award of Federal airport development

funds depended mainly on FAA approval of the

airport sponsor’s application, the A-95 process

required that designated regional agencies review

projects before the grants were awarded. In particular, the regional agencies were required to

certify that the planned improvement was consistent with Federal regulations-for example, environmental regulations.

In July 1982, the President issued Executive Order 12372, outlining a new policy for intergovernmental review of direct Federal grant programs.

The purpose of the new policy is to “strengthen
192 ● Airport System Development

1939

1949

1959

1969

1979

Photo credit: Dorn McGrath, Jr.

50 years of development at Los Angeles International Airport
Ch. 9—Airport System Planning ● 193

federalism by relying on State and local processes

for the State and local government coordination

and review of proposed financial assistance and

direct Federal development. . . .“ The intent is to

give additional weight to the concerns of State and

local officials with respect to federally funded development. State and local governments are encouraged to develop their own procedures (or

refine existing procedures) for reviewing development plans and grant applications. Under the

new policy, agencies are to certify that Federal

spending is consistent with State and local objectives and priorities, instead of certifying that State

and local projects comply with Federal guidelines,

as they did formerly. Federal agencies, such as

FAA, are expected to accommodate recommendations communicated through the State review

process or to justify refusal to do so.

Some States may choose to continue using the

same regional planning organizations as review

agencies, while others may create new procedures

and new agencies. The Executive order discourages “the reauthorization of any planning organization which is federally funded, which has a

federally prescribed membership, which is established for a limited purpose, and which is not adequately representative of, or accountable to, State

or local elected officials. ” However, States may

choose to retain the same regional agencies-they

were established under State law in the first place

—but to change their function to reflect accountability to State and local rather than Federal officials. It is still too early to tell how these changes

in the review procedure will affect the ability of

regional agencies to influence airport planning

decisions.

Much of the regional agency’s success may depend as much on negotiation and persuasion as

on legal or budgetary authority. Often compromises can be reached on a voluntary basis. For

example, the Regional Airport Planning Commission has been working with the three San Francisco area airports to help each develop a “noise

budget” to comply with California’s strict environmental laws. Because noise is directly related

to the level of aviation activity, the noise budget

plan, when completed, will affect future traffic

allocation among the airports. Its implementation

will most likely require some diversion of new

traffic growth from busy San Francisco International to the other bay area airports.

Even where airports in a region are operated

by the same authority, allocation of traffic between airports may still be difficult. For example, the Port Authority of New York and New

Jersey can implement its planning decision to increase activity at Newark by instituting differential pricing, improved ground access, or other

measures to increase use of that airport. Implementation of the policy, however, depends not

just on control of airport development expenditures but also on the ability to influence the activities of private parties —the air carriers and passengers.

Regional airport planning authorities may also,

if they have planning responsibility for other

transportation modes, plan for the airport as part

of the regional transportation system. When

multimodal planning responsibility resides in one

organization, there is greater likelihood that the

planning agency will consider airport needs in

relation to other forms of transportation in the

region. Also, the regional agency may undertake

to improve coordination between the various

modes, so that, for example, airport developments

do not impose an undue burden on surrounding

highway facilities or so that advantage can be

taken of opportunities for mass transit. For this

to happen, however, two conditions are necessary: regionwide authority and multimodal jurisdiction.

State Airport Planning

According to the National Association of State

Aviation Officials (NASAO), there are 47 State

aviation agencies that carry out some form of airport planning. In 39 States, these agencies are subdivisions of the State Department of Transportation (DOT); in the others, they are independent

agencies. Several States have an aviation commission in addition to an aviation agency. The commissions are usually appointed by the Governor

and serve as policymaking bodies. State involvement in airport planning and development takes

several forms: preparation of State airport system plans, funding of local master planning, and

technical assistance for local planning. Table 48
194 . Airport System Development

Table 48.—State Funding of Airport Planning

State Fiscal year Amount

Arizona . . . . . . . . . . . . . . . . .

Arkansas . . . . . . . . . . . . . . . .

Connecticut . . . . . . . . . . . . .

Florida. . . . . . . . . . . . . . . . . .

Georgia . . . . . . . . . . . . . . . . .

Hawaii . . . . . . . . . . . . . . . . . .

Illinois . . . . . . . . . . . . . . . . . .

Kansas . . . . . . . . . . . . . . . . .

Louisiana . . . . . . . . . . . . . . .

Maine . . . . . . . . . . . . . . . . . .

Maryland . . . . . . . . . . . . . . . .

Massachusetts. . . . . . . . . . .

Michigan . . . . . . . . . . . . . . . .

Mississippi . . . . . . . . . . . . . .

Montana . . . . . . . . . . . . . . . .

Nebraska . . . . . . . . . . . . . . . .

New Hampshire . . . . . . . . . .

New York . . . . . . . . . . . . . . .

North Dakota . . . . . . . . . . . .

Pennsylvania . . . . . . . . . . . .

Rhode Island . . . . . . . . . . . .

South Carolina. . . . . . . . . . .

Tennessee . . . . . . . . . . . . . .

Utah . . . . . . . . . . . . . . . . . . . .

Vermont . . . . . . . . . . . . . . . .

Virginia . . . . . . . . . . . . . . . . .

1983

1982

1982

1982

1982

1982

1983

1982

1982

1982-83a

1982

1982

1982

1983

1982

1982

1982-83a

1983

1982~

1982

1981-82b

1982

1982

1982

1982

1982

$ 60,000

1,255,200

100,00

250,000

20,000

160,290

31,000

9,445

180,000

18,240

102,875

18,525

145,000

10,000

26,000

7,750

30,000

33,000

25,000

68,340

225,000

124,000

13,000

45,000

15,500

51,700

TotalC . . . . . . . . . . . . . . . . . .. .. .. .. .. .. .$3,024,865
- . . -

1978

1971

1975

1973

1974

1974

1978

1975

1979

1979

(based on

1975 data)

1974

1980

1979

1975

1977

1976

d

3 years

2 years

4 years

2 years

1 year

2 years

d

6 years

2 years

d

3 years

4 years

d

3 years

d

1983

1981

1983

None

1982

None

(forecasts

revised m

1981 )

d

None

None

d

None

None

None

1981

Update now

m progress

d

Yes

Yes

Yes

Yes

1974-yes

1982-no

Yes

d

Yes

Yes

d

Yes

Yes

Yes

Yes

Yes

1979-2000

1981-2000

1975-2000

1983-2000

1975-95

1982-2000

1978-2000

1975-95

1979-2000

1979-2000

1975-90

1980-2000

1977-97

1975-1995

1981-2000

1975-95

Funding

No State

funding

Funding

None

None

None

No State

funding

None

None

None

None

None

None

None

None

None

351

600

144

83

685

365

40

344

420

163

73

259

80

251

430

333

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

d

d

d

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

d

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes
196 . Airport System Development

dition of airfield capacity to accommodate growth

in demand.

While there are surface similarities, SASPs vary

greatly in scope, detail, expertise, and planning

philosophy. One State agency director freely admitted that the State system plan was basically

a wish list, prepared primarily because planning

funds were available and the State DOT required

it. He indicated that the plan was out of date and

would not be updated in the foreseeable future

because it has little relevance to the agency’s actual activities. On the other hand, several State

agencies regard the SASP as a valuable working

document that is kept current and serves as a

guide in programming and distribution of State

funds.

In many States, programming of funds is somewhat separate from the system planning process.

While the SASP may have a long planning horizon of 20 years or more, the actual award of

grants to complete particular projects is on a much

shorter time scale. Some State agencies have developed methods for keeping current files on local

airport projects planned for the near term (say 3

years). When airports apply for State aid (or request State assistance in applying for Federal aid)

the SASP is used to assign priority for grant award

as funds become available. As a rule, only a fraction of the projects outlined in the SASP are

undertaken.

Each State plan reviewed by OTA tabulated

estimated costs of recommended improvements

and identified funding sources. Funding is almost

universally identified as the primary constraint

on implementation of the SASP, and nearly all

contain a caveat about the availability of funds.

While other factors (e.g., noise or availability of

land) may have been considered in the planning

process, they are seldom cited in the documents

themselves.

In all States, some sort of consultation, coordination, or review by persons outside the State

aviation agency, is part of the planning process.

Often these are regional economic development

or planning agencies created by State government.

In many cases, airport planning is part of a general transportation planning process, but methods of interaction and feedback among the modal

agencies and between the State and regional agencies are described only vaguely.

Some State agencies are involved in master

planning activities for local airports, especially rural or small community airports that do not have

the staff to carry out master planning on their

own. State agencies may provide technical assistance or actually develop local master plans. Some

States also participate in airport planning for major metropolitan areas, although most leave this

responsibility with the local airport authority or

a regional body. In recent years, State participation in planning at the larger airports has shown

some increase, a trend that may be bolstered by

current Federal policy that earmarks a share of

annual Trust Fund outlays for State aviation

planning.

National Airport Planning

Airport planning at the national level is the

responsibility of FAA, whose interests are to provide guidance for development of the vast network of publicly owned airports and to establish

a frame of reference for investment of Federal

funds. These interests are set forth in the National

Airspace System Plan (NASP), a document required under the Airport and Airway Development Act of 1970. The NASP is a lo-year plan

that is periodically updated by FAA, most recently in 1980.

The NASP is not a plan in the fullest sense. It

does not establish priorities, lay out a timetable,

propose a level of funding, or commit the Federal Government to a specific course of action.

Instead, it is merely an inventory of the type and

cost of airport developments which might take

place during the planning period at airports eligible for Federal assistance. It is a tabular, Stateby-State presentation of data for individual airports, listed in a common format, indicating location, role, type of service, and level of activity

(enplanements and operations) currently and for

5 and 10 years in the future. Projected costs of

airport needs in five categories-land, pavinglighting, approach aids, terminal, and other—

are shown, also at intervals of 5 and 10 years.

Estimates of need contained in the NASP are

developed by comparing FAA national and ter-
Ch. 9—Airport System Planning . 197

minal area forecasts to the present capacity of each

airport. Much of the initial determination of need

and the regular updating is performed by FAA

regional offices, which monitor changes and developments being carried out at the airports. The

NASP is not a simple compilation of local master plans or State Airport System Plans, although

FAA does draw on these documents as sources

in forming judgments about future needs and prospective airport improvements.

The NASP is not a complete inventory of airport needs. The plan contains only “airport development in which there is a potential Federal

interest and on which Federal funds may be spent

under the Airport Development Aid Program

(ADAP) and the Planning Grant Program.’”

There are two necessary conditions in the test of

potential Federal interest. First, the airport must

meet certain minimum criteria as an eligible recipient for Federal aid, and second, the planned

improvement at that airport must be of a type that

is eligible for Federal aid. Eligible projects include

such projects as land acquisition for expansion of

‘National Airport System Plan, Revised Statistics, 1980-1989

(Washington, DC: Federal Aviation Administration, n.d. ), p. iii.

an airfield, paving for runways and taxiways, installation of lighting or approach aids, and expansion of public terminal areas. Improvements ineligible for Federal aid are not included in the

NASP—e.g., construction of hangars, parking

areas, and revenue-producing terminal areas that

airports are expected to build with private, local,

or State funds. Thus, the total of $12.67 billion

in estimated airport needs listed in the NASP for

the 1980-89 period may somewhat underestimate

total airport need. The estimated cost of improvements by general categories of eligible project is

shown in table 50.

On the other hand, the NASP probably overstates the amount that will actually be spent on

airport improvements over the 10-year period.

Many of the projects whose costs are included in

the NASP will not receive Federal funds and many

will not be undertaken at all. Inclusion in the

NASP does not necessarily represent Federal

agreement to fund a project or local commitment

to carry it out. It is merely FAA’s best estimate

of likely future need. The goal of the NASP is to

set forth “. . . the type and estimated cost of airport development considered by the Secretary to

be necessary to provide a system of public air-
198 ● Airport System Development

ports adequate to anticipate and meet the needs

of civil aeronautics . . .“ If and when local sponsors are ready to undertake projects, they must

apply for Federal funds.

The 1980 NASP relates airport system improvements to three levels of need: Level I—maintain

the airport system in its current condition, Level

II—bring the system up to current design standards, and Level III—expand the system.3 In 1980,

the estimated cost of completing the NASP was

$12.67 billion between 1980 and 1989. Of this

amount 16 percent was for maintaining the system, 18 percent for bringing the system up to

standards, and 66 percent for expanding the system. The distribution of the projected needs for

different classes of airports is shown in table 51.

The classification by three levels of need is a

refinement added to the latest version of the

NASP. It moves in the direction of assigning

priorities to different types of projects instead of

the earlier practice of presenting needs as a single

sum. FW selected this presentation because previous lump sum projections “often did not lend

— - — 3Maintaining the system includes such projects as repaving airfields and replacing lighting systems; bringing the system up to standards involves such projects as installing new light systems and

widening runways; expanding the system includes construction

of new airports or lengthening runways to accommodate larger

aircraft.

themselves well for use in establishing the funding levels of programs intended to implement their

broad findings.” The three-level system was developed as a guide to Congress, illustrating how

“alternative levels of funding . . . can be based

on relating NASP development needs to three

levels of program objectives.”4

The classification system is somewhat misleading because it is not as hierarchical as it might appear, and the placement of a type of improvement

at a particular program level does not necessarily

reflect the priority that will be given a given project. High-priority projects—i.e., those which

FAA and a local sponsor agree must be carried

out as soon as possible—may not necessarily correspond with “Level I“ needs in the NASP. An

expansion project (Level III) at an extremely congested and important airport might be more urgent than bringing a little-used airport up to standards (Level II). Thus, if available funds were

limited to 34 percent of total need (the amount

needed to cover Levels I and II) it would not be

possible, nor would FAA intend, to carry out only

Level I and II projects and leave a vital Level III

project unfunded. In any given year, the actual

grants awarded are used for some projects in each

program level.

4National Air-port System Plan, Revised Statistics, 1980-1989, op.

cit., p. 6.

Table 51.— National Airport System Plan: System Needs by Program Objectives, 1980=89

(total costs In 1978=79 billions of dollars)

Level 1: Level 11: Level Ill:

Maintain existing Bring airports up Expand

system to standards system Total

Air carrier . . . . . . . . . . . . $1.28 $1,21 $5.50 $7.99

Commuter service . . . . . 0.11 0.11 0.24 0.46

Reliever . . . . . . . . . . . . . . 0.13 0,25 0.62 1.00

General aviation . . . . . . . 0.52 0.75 1.95 3.22
Ch. Airport System Planning ● 199

The NASP has been criticized for drawing the

Federal interest too broadly and for being more

of a “wish list” than a planning document. Critics

have claimed that it is merely a compilation of

improvements desired by local and State authorities and that it does not represent a careful assessment of airport development projects that truly

serve national airport needs as distinct from those

that are primarily local or regional in character.

It is true that the plan includes many very small

airports of questionable importance to the national system of air transportation. The criteria

for inclusion in the NASP are minimally restrictive. The principal ones are: 1) that the airport

has (or is forecast to have within 5 years) at least

10 based aircraft (or engines), 2) that it be at least

a 3&minute drive from the nearest existing or proposed airport currently in the NASP, and 3) that

there is an eligible sponsor willing to undertake

ownership and development of the airport. Clearly

there are many airports that meet these minimum

criteria. As of the beginning of 1984, there were

3,203 airports qualifying for inclusion in the

NASP—roughly a minimum of one airport per

county.

Paradoxically, the NASP has also been criticized for just the opposite reason: it is too exclusive, in that it reflects only FAA’s interpretation of national importance and not those of State

or regional planning agencies. There are about

1,000 airports, not listed in the NASP, that are

integral parts of State and regional development

plans; and their exclusion means that sponsors or

State planning agencies cannot expect Federal aid

for developing these facilities. Table 52 shows a

comparison of the airports included in NASP and

in State system plans. Only in three cases (Florida,

Iowa, and New York) does the NASP include

more airports than the State plan.

GENERAL PROBLEMS IN AIRPORT SYSTEM PLANNING

Airport planning, as practiced today, is a formalized discipline that combines forecasting, engineering, and economics. Because it is performed

largely by government agencies, it is also a political process, where value judgments and institutional relationships play as much a part as technical expertise. On the whole, airport planners

have been reasonably successful in anticipating

future needs and in devising effective solutions.

Still, mistakes have been made—sometimes because of poor judgment or lack of foresight and

sometimes because of certain characteristics of the

planning process itself. In effect, the process and

the methods employed predispose planners toward solutions that may be “correct” for a single

airport but perhaps not for the community, region, or airport system as a whole. As a result,

airport plans may take on a rigidity that is inappropriate in light of changing conditions or a narrowness of focus that does not make best use of

resources.

Demand as an Independent Variable

A major problem in the planning process at all

levels is the tendency to treat demand as an independent factor. Planners forecast future demand

and then use those forecasts to justify the need

for facilities, to frame their design, and to ascertain whether there will be sufficient revenue to

pay for them.

Basic economics indicates that supply and demand exist in an equilibrium relationship that is

mediated by price. When prices fall, demand increases; when prices rise, demand falls. The system is in equilibrium when price reaches a level

where supply exactly equals demand. This basic

relationship holds for airport supply (capacity)

and demand, as in other market situations. Price

in this case includes not only monetary transactions but also the speed and convenience of air

transportation and the cost of delay. The planning process, however, does not typically approach airport needs from a market perspective.

The predisposition to treat demand as an independent variable in the planning process is illustrated by FAA’s guidelines to airport planners

on how to make forecasts in support of master

plans (written in 1971 but still current). After attributing the then current “airport crisis” to low

forecasts in the past, the guidelines instruct plan25-420 0 - 84 - 14
200 ● Airport System Development

Table 52.-Comparison of National and State Airport System Plans, 1982

Airports in SASPb

Airports in NASP

State Total airports Number Percent Number Percent

193

689

224

105

297

312

28

37

514

125

51

&

365

355

376

115

292

160

49

216

291

597

166

393

; $

128

52

271

156

486

286

555

674

292

410

161

20

82

162

82

89

63

205

322

90

421

105

84

c

94

86

297

83

26

4

105

136d

17

160

113

92

80

111

73

95

47

39

36

166

141

78

131

119

121

46

12

67

60

81

112

85

126

174

89

195d

6

65

84

g l d

292

51

23

77

191

c

111

42

44

—

42

82

100

27

93

11

20

109

33

82

13

25

23

30

63

33

29

60

17

64

24

47

33

63

37

36

23

: :

17

39

15

19

60

22

121

30

79

52

111

58

57

37

38

59

—

26

40

72

275

56

66

220

56

16

4

126

111

16

38

94

82

: ;

54

60

34

31

32

104

83

75

100

72

76

27

12

40

44

91

78

50

105

104

62

91

6

53

55

78

226

39

13

:

30

84

29

37

40

25

63

74

18

57

11

25

89

31

19

; ;

26

24

47

21

21

63

15

36

14

45

25

38

23

21

23

; :

19

27

9

:

15

X

65

z

45

44

21

: ;

33

20

28

Totals . . . . . . . . . . . . . . . . . . . 13.136 4.634 35 3.599 27
Ch. 9—Airport System Planning ● 201

ners not to consider possible constraints on aviation demand in developing forecasts, except in certain limited cases. Rather, it advises the planner

to focus on the “total demand potential” of the

airport:

In the [planner’s] development of [airport activity] forecasts, an unconstrained approach is usually the best approach . . . .

The “unconstrained” forecast represents the potential aviation market in which all of the basic

factors that tend to create aviation demand are

used, without regard to any constraining circumstances . . . that could affect aviation growth at

any specific airport or location. Using this approach, it is possible to determine the theoretical

development needs in accordance with the total

demand potential. For an airport serving an exceptionally high activity metropolitan area, however, potential constraints and alternative methods to reduce them should be considered (emphasis

supplied ).5

It is particularly noteworthy that the document

instructs planners to consider constraints on demand solely for the purpose of finding ways to

reduce them.

Treatment of demand as an independent variable is rooted in the practice of civil engineering

when designers have to plan facilities for events

totally beyond their control. In designing a flood

control project, for example, the demand on the

facility is purely a function of natural forces over

which the planner can exercise no control. Demand on an airport, however, is not an uncontrollable natural phenomenon; it responds to

changes in the price of using the airport. For example, there is presumably some set of market

conditions under which no one would fly between

the hours of 5 and 7 p.m., even though this is currently the period of peak demand. Alternatively,

if adequate facilities are not provided, some demand wiIl be suppressed. No such similar responsiveness exists in the natural demand placed on

flood control facilities.

The costs of sizing the system to serve peakperiod demand are very high. To the extent that

passengers are willing to bear that cost, the in-

‘Airport Muster Plans, Advisory Circular AC 150/5070+5 (Washington, DC: Federal Aviation Administration, 1971), pp. 11, 13.

vestment in facilities to accommodate this demand

is a good use of economic resources. Yet, the

structure of the entire system is based on the premise that the passengers are willing to bear the cost,

and they are rarely given a choice to save money

by altering the time of day at which they choose

to fly. While airlines sometimes provide discounts

to night passengers or to those flying in slack

travel seasons, these are exceptions. Usually, the

price of traveling at the peak period is no more

than at offpeak periods.

The lack of incentives for traveling during offpeak periods is to some extent a problem reaching

beyond airport planning per se. If airport sponsors choose not to institute peak-hour prices, planners have littIe choice but to accommodate that

decision. At the same time, however, the planning process often fails to identify alternatives to

sizing facilities for unconstrained peak load. In

some cases such alternatives may be preferable

or, at the very least, worthy of consideration in

the planning process.

Plans as Advocacy Documents

While the airport planning process may take

into account the desires of the community served

by the airport, the master plan itself often has a

distinctly advocative flavor. This is perhaps best

illustrated in a passage from the introduction to

FAA’s guidelines to airport planners on master

planning:

. . . This advisory circular recommends procedures to be followed in making the master plan

study of the individual airport and suggests methods of coordinating, organizing, and presenting

the master plan document so that it will be a

viable tool for the promotion of airport improvements (emphasis supplied).6

Such use of the master plan raises some disturbing questions about the process. Should the planning process plan be a medium for promoting a

particular plan for airport development, chosen

by the planner or airport operator, who usually

has a vested interest in building or expanding the

airport? Or should it present a set of optional development paths for community decisionmakers?

If advocacy of development is an appropriate use

b

Ibid., p. 3.
202 . Airport System Development

of the master plan, then should not some forum

be available to weigh airport development against

other community needs and to integrate airport

projects with other community plans?

In practice, the political body with jurisdiction

over the airport performs this oversight function,

but it is hampered by planning documents that

presuppose the desirability of airport expansion.

The master plan is often quite thorough in presenting alternative forms of expansion and in arraying the pros and cons of each. It is usually

silent on the more fundamental questions of

whether any improvement should be undertaken

and what options there are besides airport development.

Lack of Integration Among Plans

Airport planning at local, regional, State, and

Federal levels is not well coordinated and integrated. To some extent, this arises naturally

from different areas of concern and expertise. At

the extremes, local planners are attempting to plan

for the development of one airport, while FAA

is trying to codify the needs of several thousand

airports which might request aid. Local planners

are most concerned with details and local conditions that will never be of interest to a national

planning body.

The lack of common goals and mutually consistent approach is also evident between Federal

and State planning. Over 10 years ago, the Federal Government recognized the need to strengthen

State system planning and provided funds for this

purpose under ADAP, and nearly all the State

Airport System Plans have been prepared with

Federal funding. However, it does not seem that

FAA has always made full use of these products

in preparing the NASP. The State plans contain

many more airports than the NASP, and the

priorities assigned to airport projects by States do

— Photo credit: Aviation Division, County of Los Angeles

Urban encroachment at a GA airport
Ch. 9—Airport System Planning ● 203

not always correspond to those of the NASP.

While it is probably not desirable, or even possible, for the NASP to incorporate all elements of

the State plans, greater harmony between these

two levels of planning might lead to more orderly

development of the national airport system.

There is also a lack of coordination between

airport planning and other types of transportation and economic planning. This is particularly

evident in the case of land use, where airport plans

are often in conflict with other local and regional

developments. Even though the airport authority may prepare a thoroughly competent plan,

lack of information about other public or private

development proposed in the community (or failure of municipal authorities to impose and maintain zoning ordinances) allows conflicts to develop

over use of the airport and surrounding land. This

problem can be especially severe where there are

several municipalities or local jurisdictions surrounding the airport property.

An additional problem is the lack of integration of airport planning with that for other modes

of transportation. An airport is an intermodal

transportation center, where goods and people

transfer between the ground and air modes. It

forms an important link in the total transportation system of a region. The ground transportation system providing access to the airport can

be a significant contributor to congestion, delay,

and the cost of airport operation. Yet, airport

operators have little authority or influence over

decisions on transportation beyond the airport

property line.

At the national level, there is also a lack of integrated planning within FAA. There does not

seem to be close coordination between FAA’s National Airport System Plan and the National

Airspace System Plan. While the two plans are

based on the same aviation demand forecasts,

they have not been brought under a common

schedule. Nothing has been published to show

how the airport improvements contained in one

plan will interact with air traffic control (ATC)

improvements proposed in the other.

NATIONAL PLAN OF INTEGRATED AIRPORT SYSTEMS

The Airport and Airway Improvement Act of

1982 (Title V, Public Law 97-248) reflects a

strengthened congressional commitment to airport

planning. At the regional and State levels, the law

dedicates 1 percent of Federal airport development

funds for planning, with availability contingent

on a demonstrable (not demonstrated) ability to

conduct regional planning. As such, the new law

provides an opportunity for State governments

and regional agencies to institute or expand their

planning efforts.

The Congressional Mandate

The act calls for refinement of the national airport planning process by instructing the Department of Transportation to develop a National

Plan of Integrated Airport Systems (NPIAS) by

September 1984. The description of this plan in

the legislation makes it clear that the intent is to

expand and improve planning at the national

level. Specifically, the act calls for “integrated airport system planning,” which it defines as:

. . . the initial as well as continuing development for planning purposes of information and

guidance to determine the extent, type, nature,

location, and timing of airport development

needed in a specific area to establish a viable,

balanced, and integrated system of public-use

airports. 7

Planning includes identification of system needs,

development of estimates of systemwide development costs, and the conduct of such studies,

surveys, and other planning actions, including

those related to airport access, as may be necessary to determine the short-, intermediate-, and

long-range demands that the airport must meet.

The policy declaration points out several ways

in which the planning effort is to be “integrated. ”

It states that:

‘Public Law 97-248, Title V, $503 (a) (7).
204 ● Airport System Development

. . . it is in the national interest to develop in

metropolitan areas an integrated system of airports designed to provide expeditious access and

maximum safety. . . . [and it is in the national interest to] encourage and promote the development

of transportation systems embracing various

modes of transportation in a manner that will

serve the States and local communities efficiently

and effectively.8

From this it is evident that the legislation requires a plan which is “integrated” in two ways:

1) geographically, in the sense that all airports in

a region are to be considered together; and 2) intermodally, in the sense that planning for the aviation should be part of the planning for the regional

transportation system as a whole. The requirements of the act will bring FAA’s airport planning process into closer relation with metropolitan

and regional transportation planning than ever

before.

Desirabie Features of NPIAS

The NPIAS is not scheduled for publication until September 1984, and it is not yet clear how

FAA will respond. Certainly the task will require

either major modifications of the planning process that has produced the NASP or development

of a completely new planning tool to respond to

the intermodal and regional aspects of the congressional mandate. As an aid to Congress in

evaluating the plan when it is released, OTA offers the following general comments about features that would be desirable in an integrated national airport plan.

Comprehensiveness

First of all, the NPIAS should be truly national

in scope. A national plan may not need to include

every airport in the country, but it should explicitly define the interest of the Federal Government with respect to airports of all sizes and purposes. The current NASP has been criticized both

for being too broad and for being too exclusive.

On the one hand, many airports are included in

the NASP are of scant importance to the national

system of air transportation. On the other hand,

the NASP excludes about 1,000 airports that are

‘Public Law 97-248, Title V, $502 (a) (9) and $502 (b).

part of State Airport System Plans or that may

otherwise have some regional importance. The

difficulty might be traced to the fact that airports

are either “in” or “out” of the NASP. A comprehensive system plan may have to define a

hierarchy of Federal interest, specifying different

degrees of importance and eligibility for funding.

A complete plan will thus have to start with

a careful definition of a national airport system

and the airports that make it up. It is entirely possible that the degree of Federal interest will not

be the same for all types of airports, depending

on their size, mission, and locale. In some cases,

airports may be of only local or regional importance and of no direct interest to the Federal

Government. However, if the plan is to be comprehensive, these airports should be identified and

perhaps earmarked for consideration in State or

regional plans.

Comprehensiveness also requires that the NPIAS

address all types of development. Some types of

improvements, particularly those to be made with

Federal funds, will be of chief concern. However,

in the interest of completeness, the plan will have

to assess total airport system costs, not just those

eligible for funding through the Airport Improvement Program. Further, a complete plan will have

to consider, from the viewpoint of total system

costs, where there are more cost-effective alternatives to investment in new or expanded facilities. In addition to projects for accommodating

growth, it will be necessary to consider methods

for directing and managing demand growth to fit

within existing capacity.

Integration

The act specifically calls for integrated regionwide planning, but formulation of the NPIAS affords FAA the opportunity to integrate the planning process even further by developing a cohesive

and hierarchical planning system in which regional or statewide system planning activities are

meshed into airport planning at the national level.

Further, this broader concept offers the opportunity to devise a system for coordinating airport

planning more closely with system planning for

other modes of transportation, at both the regional and national level.
Ch. 9—Airport System Planning ● 205

It is especially important that the NPIAS seek

to integrate airport planning with two other major FAA planning efforts—the National Airspace

System Plan (NAS Plan) and the National Airspace Review (NAR). Initial funding for the NAS

Plan was also approved in the 1982 Airport and

Airway Improvement Act. This plan, published

in early 1982, outlines FAA’s future improvements

to the en route and terminal area ATC systems

over the next 10 years. The NAR is a 42-month

study of air traffic procedures, begun in June 1982

as a joint undertaking of FAA and aviation industry representatives. Its objectives are to improve the efficiency of traffic flow in the airspace

system by revising regulations and instituting new

procedures that reflect technological improvements in aircraft and air traffic control.

The three segments of the aviation system—

airports, ATC facilities, and airspace use procedures—need to be developed in coordination.

Piecemeal development could lead to inefficiencies, bottlenecks, and misdirected investment. For

example, it would probably be a waste of resources to add runway capacity at an airport if

the ATC system cannot be upgraded to handle

the additional traffic in that area until several

years later. Conversely, there is little advantage

in seeking to move traffic more expeditiously between airports only to have it encounter delays

in the terminal areas where improvements have

not yet been scheduled or implemented. Integrated

development of airports, ATC facilities, and air

traffic procedures will be necessary to obtain maximum benefit from any one of the parts and to

ensure cost-effective investment.

Priorities

Another important consideration will be the

identification of priorities for implementation and

Photo cradlt: Faderal Aviation Admlnlstratlon

Recently completed airfield, terminal, and landside expansion at Los Angeles International Airport
206 Airport System Development

funding by class of airport and type of need. FAA

attempted in the latest version of the NASP to

classify needs according to three levels of program

objectives: 1) maintain existing system, 2) bring

airports up to standards, and 3) expand the system. Within these levels, gross estimates of needs

for each class of airport (air carrier, general aviation, etc. ) are made. While this classification system represents a good start, it is still not fully

satisfactory. The NPIAS plan should include a

scheme for relating specific types of airport projects to systemwide objectives and assigning priorities to specific projects. Such priorities could

aid FAA in evaluating the systemwide effects of

specific program actions and serve as a guide in

the distribution of capital development funds.

Multiple Planning Horizons

Another desirable characteristic of the plan

would be the use of multiple planning horizons.

Development of airports is an ongoing process

and a given plan of improvements often takes a

number of years to complete. The large-scale investments are often “lumpy,” and a period of intense development and heavy investment at an

airport may be followed by a lull of several years.

The use of several planning horizons-perhaps of

5, 10, and 20 years—would aid in integrating

short-term improvements into smoother longterm investment paths at each airport. It would

also help to relate improvements at individual airports to broader system goals. Given the uncertainties of forecasting, long-range projections are

subject to greater error and therefore must be

treated more flexibly. Procedures for periodic

revision and updating of the plan would allow for

these longer-range projections and decisions to be

reviewed and adjusted. Use of multiple planning

horizons is already a a characteristic of the NASP,

which sets out airport-by-airport needs on a 5-

and 10-year basis. The horizon might usefully be

extended to 20 years, with the latter 10-year

period intended as no more than an approximation (or “early warning”) of long-range trends and

need.

Time phasing of improvements is an important

feature that has been missing in previous FAA airport system plans. As a general rule, planned airport developments should be related to an overall schedule determined by forecasted growth,

expected leadtime, and relationships with the elements of the NAS Plan and the NAR. The development schedule for all parts of airspace system—

airports, ATC facilities, and air traffic procedures

—should be tied together in a common planning

framework. For example, if under the NAS Plan

an airport is to receive ATC improvements that

will increase airside capacity, this should be reflected in the airport system plan as it may dictate other terminal or landside improvements.

Conversely, in planning ATC improvements to

increase capacity, implementation should be scheduled first at those airports where they will have

the most beneficial effect.

It may be well, insofar as possible, to build

these schedules around “trigger events.” For example, instead of scheduling improvement at

some airport for a particular year, implementation might be made conditional on passenger

enplanements or aircraft operations reaching some

specified level. This approach has two advantages.

It provides protection against the inevitable inaccuracy of forecasts, and it allows flexibility in

matching improvements with need.

Coordination and Review

There will be a need for periodic review and

update. To see that the broadest range of interests

are taken into account, the initial planning and

the review process should be conducted in cooperation with State, regional, and local planning

authorities and with the aviation community at

large. The consultative planning technique recently employed by FM in the National Airspace

Review and the Industry Task Force on Airport

Capacity Improvement and Delay Reduction has

been useful not only in helping FAA recognize and

accommodate diverse interests, but also in enriching the planning process. Involvement of other

planning agencies and private organizations representing airport users in a continuing dialogue

will ensure that improvements contemplated in

the NPIAS are in harmony with user needs and

the objectives of State, regional, and local aviation agencies.
Chapter 10

POLICY CONSIDERATIONS
Contents

Page

Policy History. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 209

Assessment of Federal Airport Policy... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 212

Alternative Federal Airport Policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 216

Funding Undercurrent Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 218

Defederalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 219

Selective Federal Aid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 222

No Federal Aid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 226

State Administration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 229

List of Tables

Table No. Page

53. Sources of Airport Investment Funds, 1978-82 . . . . . . . . . . . . . . . . . . . . . . . . . . 218

54. Projected Airport Capital Needs and Sources of Funds . . . . . . . . . . . . . . . . . . 218

55. Federal Airport Aid (Defederalization Policy) . . . . . . . . . . . . . . . . . . . . . . . . . . 219

56. Federal Airport Aid (Selective Aid Policy) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 224

57. Federal Airport Aid (State Administration Policy) . . . . . . . . . . . . . . . . . . . . . . 230

List of Figures

Figure No. Page

24. Distribution of Airport Aid Funds Under ADAP and AIP . . . . . . . . . . . . . . . 214
Chapter 10

POLICY CONSIDERATIONS

POLICY HISTORY

The Air Commerce Act of 1926 marked the

beginning of Federal regulation of air traffic and

aviation safety. At the time the law was enacted,

aviation was an infant industry. There was a

widely held view that aviation was hazardous,

and some doubted that the airplane would ever

have much commercial importance. There were

others, however, who recognized that benefits,

both commercial and military, might accrue to

the Nation if safety could be improved and the

manufacture and use of aircraft were fostered and

encouraged. Direct subsidy to the aircraft manufacturing and air transportation industries was

thought inappropriate, but Congress did empower

the Department of Commerce to chart the airways, to maintain navigation facilities, and to act

in other ways to promote air commerce. A year

before, in the Airmail Act of 1925, Congress had

authorized the Post Office Department to contract

for domestic mail service, thereby giving impetus

to formation of airlines and providing an important source of operating revenue for the new industry.

The 1926 legislation included no provision for

Federal involvement in airport development. In

the debate leading to passage of the Air Commerce

Act, Congress considered but rejected the idea that

airports were a matter of Federal interest. It was

thought that airport development should be left

to local initiative and that Federal policy toward

airports and airways should be analogous to that

for ports and waterways:

The Federal Government established and maintained lighthouses, dredged channels, and furnished weather forecasts; it left to municipalities,

however, the establishment and control of port

facilities. It followed, therefore, that while the

Government should chart airways, provide airway lights for night flying, maintain emergency

fields, and furnish weather reports to pilots, it

would leave to municipal authorities the control

of airports. In other words, airways were like

channels or harbors; airports were like docks. 1

On this line of reasoning, the 1926 Act contained a specific prohibition against Federal involvement in the construction of airports, thereby

establishing the “dock” concept, which remained

Federal policy until 1940.

2 However, when the

Civil Aviation Act was passed in 1938, Congress

began to reconsider airport policy. The principal

purpose of the 1938 Act was to establish a new

independent agency, the Civil Aeronautics Administration (CAA), to be responsible for economic regulation of air carriers. There was no

authorization of airport aid, but neither was it

prohibited. Instead, the act directed the CAA Administrator to survey airport facilities and to make

a recommendation to Congress about the advisability of Federal Government participation in

airport construction and maintenance. Before this

study and recommendation could be acted upon,

World War II began in Europe; and Congress, taking the view that development of a strong system of airports was vital to national defense,

appropriated $40 million for construction and improvement of 250 airports.

National defense, or national security, became

the major rationale for Federal participation in airport development from that time forward. Federal assistance to airports continued through the

war years; and, after the war, Congress appropriated a total of $500 million over 7 years in the

Federal Airport Act of 1946. The 1946 Act was

the first legislation to deal specifically with civil

airport development, and part of its justification

was that a strong system of municipal airports

would be of vital importance in a war or other

1 U. S. Senate, Report to Accompany H.R. 4209, “Department of

Transportation and Related Agencies Appropriation Bill, 1982,”

Report No. 97-253, p. 10.

‘It was perhaps due to the dock analogy that the term “airport”

came into common use. Before that time, airports were generally

referred to as airfields or aerodromes.

209
210 . Airport System Development

Photo credit: Federal Av/atlon Administration

Then . . .

national emergency. The act provided capital

grants in the form of matching funds to encourage

State and municipal initiative in building and improving publicly owned airports. This program

of aid, financed from the General Fund, continued

until 1969.

During the period 1946-69, Congress took

another significant step when it reorganized the

Federal Government agencies responsible for regulating air transportation and administering aviation programs. The Federal Aviation Act of 1958

transferred responsibility for the technical aspects

of air traffic control (ATC) and aviation safety

to the newly created Federal Aviation Agency—

later Federal Aviation Administration (FAA) leaving economic regulation to the CAA, which was

renamed the Civil Aeronautics Board (CAB). The

act contained a statement of policy indicating that

Congress retained its traditional view that promotion of safe and efficient civil aviation was in

the national interest, and national defense remained a dominant theme. The FAA Administrator was, among other things, charged with:

●

●

●

the regulation of air commerce in such a manner as to best promote its development and

safety and fulfill the requirements of national

defense;

the promotion, encouragement, and development of civil aeronautics; and

the control of the use of the navigable airspace of the United States and the regulation

of both civil and military operations in such

airspace in the interest of the safety and efficiency of both.3

To carry out the responsibilities of managing

the airspace, FAA also received authority to approve the siting of airports and to administer Federal funds for airport development.

FAA came into existence at a time of great

change in the aviation industry. Traffic growth

was placing excessive demands on both the ATC

system and airports. By 1958, the major airlines

were beginning to replace their aging equipment

with jet aircraft, which offered much greater operating efficiency, higher speed, and better service

to the traveling public. The advent of jets, however, placed great pressures on the airport system. Because of speed, size, and weight of jet aircraft, runways, taxiways, and aprons had to be

redesigned, and passenger terminals had to be

modified or rebuilt to handle jet aircraft and the

larger volume of passengers per flight. While

jets were first used only in a few high-density,

long-haul markets, it was apparent after a few

years that they would be economical for use

throughout the system and that hundreds of airports would have to be upgraded or stand in danger of losing air service.

The expansion and modernization of many airports was paid for by local airport sponsors with

help from funds available under the Federal Airport Act. However, the amount of aid available

3

Federal Aviation Act of 1958, Public Law 85-726, Aug. 23, 1958.

Photo credit: Federal Aviat/on Administration

. . . and now
Ch. 10—Policy Considerations ● 211

under the act was small (about $75 million per

year), and Congress was becoming increasingly

uncomfortable with what amounted to direct subsidy of the aviation industry through General

Fund appropriations. Congress responded to these

concerns with the passage of the Airport and Airway Development Act of 1970 and a companion

revenue bill.

The 1970 Act established the Airport and Airway Trust Fund and levied an airline ticket tax,

general aviation (GA) fuel tax, and other user fees

to provide revenue. The user-supported Trust

Fund ended the need for airports and the ATC

system to compete with other national priorities

for appropriations from the General Fund. Part

of the Trust Fund was used to pay for the modernization of the ATC system, a program which

FAA had started in the late 1960s. In addition,

the Trust Fund supported the Airport Development Aid Program (ADAP), which provided

grants to assist airport operators in funding capital projects. Between 1971 and 1980 the Trust

Fund received approximately $13.8 billion, of

which $4.1 billion was invested in the airport system through ADAP grants.

Passage of the Air Cargo Deregulation Act of

1976 and, more importantly, the Airline Deregulation Act of 1978, signaled an end to the 40-year

history of economic regulation of the airline industry. The deregulation of airlines was part of

a general trend gaining momentum in the 1970s

to reduce Government regulation of private industry. By this time, many observers in Congress

and elsewhere had begun to doubt that Federal

regulation was encouraging orderly competition

and had come to suspect that the regulatory process was imposing unnecessary costs and creating

distortions in the marketplace. Even before Congress passed the deregulation acts, CAB itself had

conducted a number of experimental reductions

of certain types of regulation in order to encourage

competition. With the 1978 Act, the market was

opened to new firms, and carriers gained much

greater freedom to enter or leave markets, to

change routes, and to compete on the basis of

price. The 1978 Act also called for the “sunset”

of the CAB by the end of 1984, with transfer of

its few remaining essential functions to other

agencies.

Deregulation has had a profound effect on the

airport system. Once air carriers were permitted

to change routes without CAB approval, they

dropped many unprofitable points, confirming the

fears of some opponents of deregulation that air

service to small communities would suffer. Service to some smaller cities continued under the

“Essential Air Service” provisions of the Deregulation Act, which provides subsidies (through

1988) to the last carrier in a market so as to prevent selected cities from losing service altogether.

In many cases, small commuter carriers entered

the markets abandoned by larger carriers. In addition, the airlines’ new freedom has greatly

changed their relationships with airport operators,

who can no longer depend on the stability of the

earners serving the airport and who must accommodate new entrants.4

One of the major issues affecting airport development, especially since the beginning of the jet

age, has been aircraft noise. FAA has responsibility for regulating aircraft noise—in the Federal Aviation Regulations Part 36 (1969) and Part

91 (1976)—and for establishing procedures for

airspace use. However, the Federal Government

has not taken on the task of directly regulating

the noise level at a given airport; this is considered the province of the airport operator. The

Aviation Safety and Noise Abatement Act, passed

by Congress in 1979, was intended to “provide

assistance to airport operators to prepare and

carry out noise compatibility programs. ” It authorizes FAA to help airport operators develop

noise abatement programs and makes them eligible for grants under ADAP.

The Airport and Airway Development Act expired in 1980 and Congress did not agree on

reauthorizing legislation until passage of the Airport and Airway Improvement Act of 1982. During fiscal years 1981 and 1982 the taxing provisions of the Trust Fund were reduced, and revenues

were deposited in the General Fund and the Highway Trust Fund. However, Congress continued

— —

‘Air Service to Small Communities (Washington, DC: U.S. Congress, Office of Technology Assessment, OTA-T-170, February

1982).
212 ● Airport System Development

. . :.

to appropriate airport aid—$450 million for each

of the 2 years. At least part of the delay in passing new legislation was due to the debate over “defederalization,” an action which would have made

the Nation’s largest airports ineligible for Federal

aid on the grounds that they were capable of supporting themselves financially. Defederalization

was dropped from the final version of the legislation, but Congress directed the Department of

Transportation to study the matter further and

to report at a later date.

The 1982 Act reestablished the operation of the

Airport and Airway Trust Fund (with a revised

schedule of user taxes) and authorized a new capital grant program, called the Airport Improvement Program (AIP). In basic philosophy, AIP

is similar to the previous ADAP. The principal

changes are in the formula for distribution of airport aid and in the criteria of eligibility. Overall,

the Airport and Airway Improvement Act of 1982

authorizes a total of $4.3 billion in airport aid for

fiscal years 1983 through 1987.

Photo cradlt: Federal Av/ation Admlnlstratlon

The continuing problem of noise

ASSESSMENT OF FEDERAL AIRPORT POLICY

In large measure, the system of airports that

we have in the United States today owes its existence to Federal policy, whose express purpose

has been to foster the development of civil aviations In the earliest years of civil aviation, the

Government’s actions were confined to subsidy

of aircraft manufacturers through military purchases and indirect support of aircraft operators

by airmail contracts. Since airports were regarded

as essentially local enterprises, they did not receive Federal aid. But from the beginning, civil

aviation was perceived as an adjunct to military

aviation in providing national defense, and in the

World War II era this became the rationale for

direct Federal Government assistance to civil air-

—

5 For example section 305 of the Federal Aviation Act of 1958,

which established the Federal Aviation Administration, states that

“the Administrator is empowered and directed to encourage and

foster the development of civil aeronautics and air commerce in the

United States and abroad” (emphasis supplied).

ports. In the years after 1945, the Federal Government took an even more important step in sup:

porting the civil airport system when it turned

over to local authorities hundreds of airports that

had been built and operated as military installations but were then deemed surplus. This infusion of capital facilities not only expanded the airport network serving commercial aviation, it also

encouraged the purchase and use of GA aircraft

by assuring ample landing facilities within reach

of nearly everyone in the country.

By 1960, this divestiture of military holdings

had largely run its course, and the emphasis of

Federal policy shifted to upgrading and expansion

of major airports to accommodate jet aircraft and

to alleviate problems of congestion and delay in

airline traffic that were beginning to emerge.

Smaller airports were not neglected, however. Between 1960 and 1970, $510 million—about 20
Ch. 10—Policy Considerations ● 213

percent of all Federal expenditures for airport capital improvements—were directed to small communities and to improving the quality of GA facilities. In addition to construction and improvement

of runways and airfield facilities, the Federal

Government aided general aviation in other ways.

The network of Flight Service Stations was expanded, and the number of airports with FAAoperated control towers grew substantially, with

nearly all of the additions coming at smaller airports. Safety of civil aviation was an important

motivating factor, but so too was the desire to

establish and maintain an extensive system of

well-equipped airports serving all classes of civil

aviation, providing readily available commercial

air transportation and operating bases for aircraft

used for business purposes and private flying.

The passage of the Airport and Airway Development Act of 1970 institutionalized Federal airport aid by establishing the Airport and Airway

Trust Fund, supported by user fees, which provided a dedicated source of revenue for capital

improvement. This act not only committed Federal support to the airport system, it also gave

the Federal Government a strong, perhaps dominant, voice in how that system would develop.

By identifying the kinds of airports eligible for

capital grants, by specifying the types of projects

that would be supported, and by establishing formulas for Federal, State, and local funding, the

Airport Development Aid Program effectively set

the pattern of airport development for the 1970s.

After a brief period of uncertainty in 1980-82,

when Congress allowed the legislative authorization of ADAP to lapse, previous Federal policy

on airport development was reaffirmed in September 1982 with passage of the Airport and Airway Improvement Act of 1982, which established

the Airport Improvement Program. b

AIP preserved the general approach to airport

aid established under ADAP, with certain revisions to correct what were perceived as imbal6 Section 502 of the act finds and declares that “continuation of

airport and airway improvement programs and more effective

management and utilization of the Nation’s airport and airway

system are required to meet the current and projected growth of

aviation and the requirements of interstate commerce, the Postal

Service, and the national defense.” 96 Stat. 671, Title V, sec.

502(a)(2).

ances in the allocation of funds and to adjust the

shares paid into the Trust Fund by various classes

of airport and airspace users through ticket and

fuel taxes. The principal differences between

ADAP and the new AIP are in the proportion of

Federal aid to be allocated to air carrier, reliever,

and GA airports, the earmarking of 8 percent for

noise projects, and extension of Federal aid for

the first time to privately owned GA airports (see

fig. 24).

Investment of $4.1 billion in Federal moneys

for airport capital projects under ADAP between

1971 and 1980 and $7.9 billion more in State and

local funds enabled the airport system to keep

abreast of construction needs, but not to eliminate the chronic delay problems at a dozen or so

major metropolitan airports. The capacity gains

achieved at major airports were largely offset by

growth in passenger traffic, which rose by about

75 percent during the decade. As a result, the situation at these airports now is about the same as

it was in the late 1960s. If FAA forecasts are correct, however, capacity problems may emerge at

more airports in the next 10 to 20 years, possibly

affecting as many as 60 air carrier airports by the

end of the century. There may also be a shortage

of facilities for general aviation in major population centers, notably in the Sun Belt States of the

South and West. It is therefore appropriate to ask

how past policy has contributed to this situation

and whether present policy will be adequate to

deal with emerging needs.

Certainly, the focus of Federal policy since

passage of the Airport and Airway Development

Act of 1970, and continuing with the recently

enacted AIP, has been on building and expanding

airports. Some critics have argued that the bias

toward capital-intensive solutions, with liberal

Federal aid, has distorted the evolution of the airport system. It has favored the costly, and perhaps self-defeating, approach of adding capacity

wherever and whenever needed to accommodate

demand. But new capacity inevitably begets new

demand, which creates need for more capacity,

and so on in an escalating spiral. Limitations on

land available for airport expansion or building

new airports, steady encroachment of urban development around airports, and community opposition to airport noise make adding capacity an
214 . Airport System Development

Figure 24.—Distribution of Airport Aid Funds

Under ADAP and AIP

Airport Development Aid Program

(ADAP)

Historical

(fiscal year 1971-80)

lmuters a

Iing

Airport Improvement Program

(AIP)

Projected

(fiscal year 1983-87)

Planning

increasingly expensive and difficult solution. The

alternative urged by critics of present policy is to

encourage demand-management techniques that

would promote fuller and more efficient use of

the infrastructure already in place. These critics

would redirect policy away from large capital

projects and toward a combination of managerial,

operational, and market-oriented approaches to

channel new growth to fit within the ample capacity now available in the airport system as a

whole.

Another criticism of past and present policy is

that it has concentrated almost exclusively on airside capacity-runways, taxiways, and other such

airfield facilities. Most FAA studies of capacity

have limited their concern to aircraft delay (or

even more narrowly, air carrier delay), and the

calculation of benefits has been confined largely

to air carrier fuel and labor savings and more efficient aircraft utilization. In part, this may be a

methodological limitation. It is considerably more

simple and straightforward to calculate aircraft

delay costs than to quantify the intangibles of terminal and landside delay —e.g., what is the economic value of convenience or passenger time?

On the other hand, FAA has traditionally interpreted aviation policy in such a way that the

agency’s interest is closely circumscribed about

the airfield and aircraft operations, leaving responsibility for other parts of the airport to the

site manager or to other agencies of government.

Delays in terminals and on landside access

roads are widespread and probably account for

more of the increase in passenger travel time than

delays in aircraft departures and arrivals. By concentrating on expanding the airside, the Federal

Government has placed on airports almost the

whole burden of keeping pace with terminal and

landside improvements. A broader targeting of

Federal funds, it is argued, will be needed to deal

with all forms of delay associated with air transportation. An extension of this argument is that

Federal policy should broaden its sphere of concern to encompass the airport as part of the overall urban or regional transportation system. Indeed, the new AIP legislation charges FAA with

responsibility to develop a National Plan of In-
Ch. 10—Policy Considerations ● 215

tegrated Airport Systems, which implies not only

integration of planning and development for all

airports within a region or the Nation but also

integration with other modes of transportation.

Another way in which Federal policy-or at

least FAA interpretation of Federal policy-has

been faulted is that it has led to an overly broad

definition of what constitutes airports of national

importance. The last edition of the National Airport System Plan contains 3,159 airports that are

eligible for Federal aid. Preliminary indications

are that the new National Plan of Integrated Airport Systems now being prepared by FAA will

contain even more—3,203 as of the beginning of

1984 and 3,639 by 1995. Most of these airports

are small general aviation facilities serving only

a relatively few aircraft. While there is a distinction between eligibility for Federal aid and actual

receipt, the existence of a trust fund and a Federal policy that seeks to spread aid broadly to all

classes of airports has created a very large roster

of airports competing for a share of Federal moneys,

with each believing that it can and should receive

support for capital projects. At the national level,

this leads to inflated estimates of “needs,” which

exert pressure for more and more Federal outlays

in a continuing program of airport building and

expansion. A more restrictive definition of the

Federal Government’s interest may be necessary

to clarify the distinction between those airports

that serve a nationwide air transportation function and those that serve purely local and specialized needs that are national only in an aggregate

sense.

A somewhat different criticism that is partially

contradictory to the argument above is that Federal aid has favored air carrier airports while

neglecting the needs of other users of the airspace,

chiefly those who frequent GA and reliever airports. To some extent, the provisions in AIP to

increase that share allocated to general aviation

are a response to this criticism. However, this

argument is not simply a plea for more aid to general aviation. Rather, it is directed to the larger

issue of financial self-sufficiency. Some contend

that Federal aid should be targeted toward those

airports that do not have adequate revenues or

access to debt capital in the private market. The

largest airports, which collectively serve almost

Photo credit: Los Angeles Department of Airports

Mines Field, L.A. Municipal Airport in 1929

90 percent of air travelers, are, or could be, virtually self-supporting. 7 If so, these critics maintain, it is not an appropriate use of Federal moneys

(even perhaps moneys from a dedicated trust

fund) to help those that can help themselves. This

is the argument of those who would defederalize

large and medium airports, and it has found favor both among small airport operators (who see

it as an opportunity to obtain more Federal aid)

and those who seek market-oriented solutions that

would reduce the Federal budget.8

The defederalization argument, however, also

embraces a more fundamental economic concern

—economically efficient pricing of airport facilities and services. Economists contend that Federal policy which supports capital improvements

by grants from a trust fund and which is predicated on unrestricted airport access for all users

on demand, when coupled with local airport practice of residual-cost pricing as a method of setting landing fees, encourages supply-oriented solutions to congestion and delay. The alternative

favored by economists is pricing the use of airport facilities according to the marginal cost that

25-420 0 - 84 - 15
216 ● Airport System Development

such use imposes on the airport operator and on

others who seek to use the airport at the same

time. At the local level, this implies airport use

fees based on the cost incurred to provide a given

amount of capacity. At the national level, the implication is twofold: 1) Federal aid should be given

only to the extent that local resources are insufficient and that it is in the national interest to provide, and 2) local airport authorities should be

given the freedom to impose user fees that are consonant with market forces. Thus, they would

argue that Federal policy-explicitly by the “firstcome, first-served” principle and by prohibition

of facility user charges (head taxes) and implicitly by its silence on the question of efficient pricing as a means to increase airport revenue—

distorts the market in the direction of unnecessary Federal subsidy and capital-intensive approaches to increase supply rather than modulate

demand.

This brief critique of past and present Federal

policy points to a basic issue. In promoting aviation by providing abundant capacity at low cost

to airport and airspace users, has the Federal

Government in effect subsidized airlines, general

aviation, aircraft manufacturers, and local development? The evidence suggests that the answer

is yes. But the more important question is motive,

not effect. In the earliest days of aviation, the aim

of Federal policy seems to have been to foster a

fledgling industry for reasons of national defense

and development of an economically valuable

new mode of transportation. Without this support, aviation might have lagged or withered

altogether. In the years after World War II, the

rationale of civil aviation as a buttress of national

defense became less important, and considerations

of the national economy and regional development came to predominate. They still do. Aircraft

manufacturing and the aviation industry are important contributors to the balance of trade.

Available, efficient, and low-cost air travel stimulates all sectors of the economy. An airport is

an important economic resource to a community,

both in and of itself and because it can be used

to leverage additional highly desirable development. In this sense, aviation is a general boon to

the economy, and it can be argued that the Federal Government’s policy is amply justified.

On the other hand, aviation is no longer immature, underdeveloped, and struggling. Despite

vicissitudes that affect it along with the rest of the

economy, aviation is a robust industry that is capable of supporting itself. Is, therefore, a strong

Federal presence still required? Perhaps yes, perhaps no. But it is certainly not inappropriate to

reexamine the nature of the social and economic

contract between the Government and the aviation community

be better served

ALTERNATIVE FEDERAL AIRPORT

to see if mutual

in other ways.

POLICIES

interests could

While there are many aspects of Federal policy that affect airport system development, there

is perhaps none so powerful as that pertaining to

funding of capital improvements or expansion of

airport facilities. The policy options considered ●

here therefore concentrate on the rationale of the

Federal funding program and the amount of capital aid to be provided. Four policy alternatives

are presented:9

● Defederalization— withdrawal of Federal aid

for those airports capable of self-support

(essentially all large airports and most me- ●

‘The first three of these policy alternatives are also examined by

CBO in Financing U.S. Airports in the 1980s, April 1984.

dium airports) in the expectation that they

will be able to finance their own capital improvements through retained earnings and

issue of revenue bonds.

Selective Federal Aid—based on a more restrictive definition of Federal interest in airport development, aid only to those airports

that provide commercial air service and to

a selected set of GA airports whose function

is to relieve congestion at commercial serv

ice airports in major metropolitan areas.

No Federal Aid—return to the “dock” policy, under which Federal interest in civil aviation would be limited to airways, navigational aids, air traffic control, and safety and

no Federal aid would be provided for airport
Ch. 10—Policy Considerations . 217

development on the grounds that such facilities should be built and maintained by the

municipalities whose economic interests they

serve.

● State Administration—transfer to State governments of responsibility y for administering

a federally funded airport aid program composed of formula grants to commercial service airports based on passenger enplanements

and block grants to be distributed on a discretionary basis by State aviation agencies.

In advancing these options, OTA does not contend that present policy is unsatisfactory or that

it would be an inappropriate course for future

years. The present Airport Improvement Program, tempered by the previous 10 years of experience with ADAP, seeks to provide a balanced

and sufficient program of aid that is consistent

with the approach to fostering civil aviation that

has prevailed since the 1960s. However, as the

foregoing policy assessment has brought out, there

are some fundamental questions that are worth

reexamining.

The rationale of the options presented here is

that, if it is desired to redirect Federal airport policy, there are three basic avenues that might be

taken. The first, embodied in the defederalization

option, is that the primary test to be applied in

the distribution of aid to airports is financial selfsufficiency. The second line of departure from

present policy is that a more restrictive definition

of Federal interest could be applied. Two options

of this sort are considered: selective aid only to

those airports that serve to make up a national

air transportation network and-more restrictive

still—aid for navigation and air traffic control but

not to airports themselves. The third shift of policy, State administration, would not affect the

amount and type of airport aid afforded under

current policy, but it would place responsibility

for distribution of this aid in the hands of State

and local agencies instead of the Federal bureaucracy. None of these options would change the

present method of support for ATC system modernization or for funding FAA operational and

maintenance activities. FAA’s regulatory and

safety functions related to airport operation would

likewise be unaffected.

It should be noted that, while these options are

discussed as though they were independent and

mutually exclusive choices, this is simply an analytical convenience. A revised Federal airport policy might well combine features of two or more

of these options, either in the interest of addressing several perceived shortcomings of present policy or in an attempt to mitigate adverse impacts

that might result from adoption of any one option in pure form.

It should also be noted that not all of the concerns about the adequacy of the airport system

voiced in this report are explicitly addressed in

the policy options. For example, the need for and

application of new technology to alleviate airport

congestion or to reduce delay do not specifically

motivate any of the policy choices. It is assumed

that needed technological improvements or procedural changes in air traffic control would be

made under all options, whether by FAA or by

local airport authorities. However, since the rate

of adoption might be influenced by the availability

of funds and the priorities of the agency responsible for financing, the effect of funding policy on

the adequacy of the airport system is considered

as a possible impact in the discussion of each

option.

Similarly, the issue of noise is not addressed in

any of the policy options. The responsibility and

liability of various parties in protecting communities from the adverse effects of airport noise is

an important question—perhaps the thorniest facing civil aviation today—but its resolution lies

largely outside the realm of topics treated in this

report. It is a legal issue that will turn mainly on

what the courts determine to be the joint and several responsibilities of airport operators, airspace

users, and Federal, State, and local governments

in dealing with the problem.

Finally, the matter of local airport managerial

practice and pricing policy is not a direct concern

shaping any of the policy choices, although some

might lead to more economically efficient pricing of airport services. Chapters 2, 5, and 6 have

dealt with the importance of the contracts and

working arrangements between airport managers

and and airport users, with the effects of different

approaches to pricing the use of facilities, and with
218 Airport System Developmen t — —

the general issue of economic approaches to managing demand for airport services. These are

thought by OTA to be matters of local policy that

lie somewhat outside the focus of Federal concern,

although it is recognized that the Federal Government has a responsibility to assure that enterprises

receiving grants are properly managed. The extent to which Federal policy on financial aid or

on administration of the airport aid program

might affect local management, pricing, and financing mechanisms is treated as one of the possible effects of each option.

Funding Under Current Policy

In the 5 years from 1978 to 1982, funds from

all sources invested in airport improvements averaged $1.8 billion annually. Of this, about $1 billion was raised through bond sales, mainly revenue bonds issued by large and medium airports.

Federal grants for airports of all sizes amounted

to slightly less than $0.6 billion per year, with

State aid making up the remainder (table 53).

While the Federal Government contributed

about one-third of the total invested, the share

varied considerably in relation to airport size. For

large airports, the Federal contribution typically

made up a little over 15 percent of all investment;

for medium airports, about 25 percent. At small

commercial airports, Federal funds made up twothirds. For GA airports, Federal money was typically 90 percent or more of all investment. In general, the degree of Federal participation in capiTable 53.—Sources of Airport investment Funds,

1978-82 (millions, 1982 dollars)

Percent

Bond Federal Federal

Airport category sales aid aid

Large a . . . . . . . . . . . . . . . . . . . . .$ 689 $144 17

Medium a. . . . . . . . . . . . . . . . . . . 224 75 25

Other commercial servic e

a . . . 93 164 66

Reliever . . . . . . . . . . . . . . . . . . . 8 63 89

General aviation . . . . . . . . . . . . 6 104 95

tal projects reflected the earning power and borrowing capacity of the airports receiving grants.

Table 54 is an estimate of future demand for

airport investment capital over the 10-year period

1984-93. Large and medium airports, which handle about 90 percent of passenger traffic, account

for the bulk of the anticipated investment—$650

million to $1 billion annually, or roughly the same

level as in recent years. An additional investment

of $400 million to $450 million is expected at small

commercial airports. The demand for capital by

reliever and GA facilities is estimated to run between $500 million and $600 million annually.l”

Also presented in table 54 are currently authorized annual outlays under AIP and estimates of

bond sales that could be expected if historic borrowing patterns were to continue. It appears that

this combination of public and private financing

(which is roughly the same as that over the past

few years) would be adequate to cover the projected investments for airports as a whole, but

with considerable variation by airport size and

class.

In general, these figures suggest that current

policy and the funding level authorized in AIP

Tabie 54.—Projected Airport Capitai Needs and

Sources of Funds (millions, 1982 dollars)

Large d. . . . . . . . . . . . . &50-$6&l $260 $ 669

Medium d

. . . . . . . . . . . 200-350 80 224

Other commercial

service d 

. . . . . . . . . 400-450 85 93

Reliever . . . . . . . . . . . 100-150 60 8

General aviation . . . . 400-450 95 6

Other federal aide. . . — 160 –
Ch. 10—Policy Considerations ● 219

Table 55.–Federal Airport Aid (Defederaiization Poiicy)

Average annual expenditures (1985-89)

Number of (millions of 1982 dollars

Airport category airports Present policya Defederalization b

Largec. . . . . . . . . . . . . . . . . . . . . . . . 24 280 —

Medium c . . . . . . . . . . . . . . . . . . . . . 47 80 —

Other commercial servicec . . . . . . 489 85 120

Reliever . . . . . . . . . . . . . . . . . . . . . . 219 80 115

General aviation . . . . . . . . . . . . . . . 2,424 95 130

Other Federal aid . . . . . . . . . . . . . . — 180d 75C

SOURCE: Office of Technology Assessment
220 ● Airport System Development

current policy. It is more likely, however, these

airports would attempt to replace lost Federal

funds through larger or more frequent bond sales.

While it is difficult to determine how much more

the airports would seek to raise, it could be an

additional $100 million to $200 million annually.

Defederalized airports might find that the cost

of borrowing money would increase for two reasons. First, they would be competing more vigorously for larger sums of money. Second, they

would have lost the more or less guaranteed infusion of Federal funds and might therefore appear to investors as more risky investments. However, in light of airports’ strong financial position

and blemish-free record in the bond market, it is

unlikely that their ability to raise capital would

be greatly affected.

Smaller commercial service airports, which

have annual capital needs of about $400 million

to $450 million, could be expected to raise about

$90 million from bond sales (judging from their

performance in 1978-82) and might receive up to

$120 million in Federal grants, depending on how

discretionary funds are allocated. This would

leave an unfunded need of between roughly $200

million and $250 million. It is assumed that GA

and reliever airports would receive the same aid

as under present policy, plus perhaps as much as

an additional $70 million in discretionary moneys.

These airports might be the biggest gainers from

a defederalization policy.

Effects on Airport Users

Defederalization would make large and medium

airports more dependent on revenue-bond financing. One source of income commonly used to

guarantee payment of these bonds is airport use

fees charged the airlines. Thus, one effect of

defederalization might be to change the balance

of power between airlines and airport management in decisions on capital investment. At about

half of the large and medium airports, airlines

now exercise control of investments through

majority-in-interest clauses and other features of

airport-airline use agreements, and airport operators have often found that Federal grants were

almost the only funds that they could use for projects which the airlines were unwilling to support.
Ch. 10—Policy Considerations ● 221

If Federal moneys were unavailable, airport operators might have considerably less latitude in

managing their capital budgets. On the other

hand, defederalization could encourage airport

managers to discontinue or weaken majority-ininterest clauses when airline use agreements come

up for renewal. It is difficult at this point to assess

which way the balance would shift.

If operators of large and medium airports were

to offset the loss of Federal funds by increasing

user charges, the general effect of deregulation on

users of those airports would be higher fees for

landing, leasing of space, and airport services. All

classes of users—business aviation, GA, and airlines—might find it more expensive to operate at

defederalized airports. For airlines, much of this

expense would be passed on to passengers in the

form of higher fares.

Some proponents of defederalization argue that

defederalized airports should be given the power

to levy a passenger facility charge (PFC) or head

tax in order to supplement their present revenues.

Even if permitted, many airports might not choose

to institute a head tax. Others, however, insist

that some such mechanism for raising additional

funds is necessary if they are to give up Federal

assistance. If head taxes were widely adopted, airline passengers would face a second form of increased travel cost.

Serious questions have been raised about the

feasibility and advisability of implementing local

passenger facility charges .14 Four issues are of particular concern: ●●●●

How and by whom should fees be collected

and how could the confusion caused by different rates at different airports be avoided

or managed?

Should diversion of head tax revenues to

nonairport uses be prevented?

How can head taxes be instituted in the face

of such obstacles as long-term use agreements

that prohibit the establishment of new fees?

What can be done about airports where the

head tax may not be feasible?
222 ● Airport System Development

not been the custom in the United States to divert aviation taxes to nonaviation uses, and some

regard the practice as improper. It was, in fact,

the problem of diversion that caused the Federal

Government to forbid airports to impose head

taxes in 1973. The problem might be solved by

Federal legislation requiring that passenger facility charges reflect actual costs and that proceeds

be used only for airport purposes.

A few airports have introduced clauses in newly

negotiated use agreements that specifically protect management’s right to levy a head tax in the

event that such charges become legally permissible. However, Airport Operators Council International estimates that at least 20 of the top 70

airports could not impose a PFC because of their

existing use agreements. Federal legislation could

override these agreements.

Even if the Federal Government grants them the

authority, airport operators will have to decide

for themselves whether the head tax option is a

realistic alternative for financing airport development. Managers of several major airports have

stated publicly that they would not impose a PFC

even if it were allowed. For those unable or unwilling to use head taxes, the most likely alternative would be to increase landing fees and concession rents.

If all large and medium airports were defederalized, and all elected to replace all lost Federal

aid with PFCS, the cost of the average airline ticket

would increase by about $1.50. Since the average ticket now costs about $100, this would not

raise the price of air travel appreciably. If the Federal Government were to reduce the present 8-

percent passenger ticket tax by 1 percentage point,

the added cost of head taxes would be largely

offset.

Effects on Airport System

The defederalization policy could have an effect on demand at large and medium airports.

Higher landing fees charged to raise additional

revenue might discourage use of these airports by

general and business aviation. If so, there could

be some decrease in congestion and delay, but the

effect would be highly localized and it is difficult

t

to gauge what the implication might be for the

airport system as a whole.

Because of the unavailability of supplementary

Federal aid, additional funds for improvements

at large and medium airports would have to be

raised privately. The need to rely entirely on debt

financing might cause airport operators to defer

some projects or to scale them down to essentials.

Overall, defederalization could increase the likelihood that only those investments which are truly

needed and economically justified would be

undertaken. The type of investments most likely

to be eliminated or drastically reduced would be

those that do not generate revenue or provide direct financial benefit to airport users.

Selective Federal Aid

A criticism of present airport funding policy—

at least as reflected in the criteria applied by FAA

in formulating the National Airport System Plan

(NASP),—is that the Federal interest is drawn too

broadly and unselectively. At one extreme, about

three-quarters of all Federal aid under ADAP went

to air carrier airports—many of which appear to

be capable of financing investments from airport

revenues and borrowing in the private money

market. AIP reduces this share to half, but this

amount may still be high.
Ch. 10—Policy Considerations 223

At the other extreme, Federal aid is accorded

to many small GA airports that do not serve a

national transportation function—at least if this

function is defined as contributing directly to commercial air travel. The grants that such airports

receive are typically small—most are under $200,000

and many are $50,000 or less. In the aggregate,

they were about 12 to 15 percent of all Federal

aid under ADAP and would continue at this level

under AIP. 17 The criteria for eligibility applied to

GA airports are such that virtually any publicly

owned aviation facility in the United States could

expect to receive Federal aid.18 Many are very

small, serving a dozen or so based aircraft that

are used either for instruction, aerial work, private business purposes, or recreational flying. As

a rough estimate, these 2,424 GA airports probably serve less than half of the private and business aircraft in this country .19

The rationale of the selective aid policy is that

much more stringent criteria of eligibility should

be applied to airports receiving Federal assistance.

Two tests would be applied: 1) Is the airport incapable of obtaining adequate investment capital through its own means? and 2) Does the airport contribute to a national system of commercial

air transportation? By these standards, only the

560 commercial service airports20 and the 219 GA

airports designated as relievers would receive capital aid, and only to the extent that they were

unable to finance investments from their own

resources. In effect, the Federal Government,

through the Airport and Airway Trust Fund,

would become either the lender of last resort or

an outright grantor in those cases where repayment seemed impractical and it was in the public

interest to sustain the facility as part of the air

transportation network. Airports not meeting

these criteria (virtually all the 2,424 GA airports

in the NASP today) would not be eligible for Federal grants, and it would become the responsibility

of State and local governments and the users of

these airports to provide capital funds. The funds

now earmarked in AIP for noise projects and airport planning grants to States ($64 million and

$8 million per year, respectively) could still be

made available for airports of any size or purpose.

In a sense, the selective aid policy would create

for airports an analog of the present highway system, with a Federal component (airports of national interest akin to the Interstate Highway System) and a State and local component (smaller

airports serving local needs as do State, county,

and city roads). The Federal interest would be centered on those airports deemed essential to interstate transportation; State and local interests

would be similarly defined. While this distinction

is not clear-cut, neither is it in the highway system, and yet it serves as a workable way to differentiate Federal, State, and local responsibilities.

Unlike the highway system, however, there would

still be a very large number of privately owned

airports (over 10,000), about 20 percent of which

are open to public use.

Effects on the Federal Budget

This more restricted definition of the Federal

role in airport development would considerably

reduce the annual expenditures under AIP in 1983-

87. Even if the full $108 million in discretionary

funds were to be added to the amount that small

commercial service and reliever airports now receive under present policy and if noise and planning grants were unchanged, aid would amount

to $345 million per year, slightly over 40 percent

of the presently authorized level (table 56). Small

commercial service airports would receive about

$140 million per year (the $85 million authorized

in AIP for this purpose plus perhaps half of the

$108 million now earmarked for discretionary

grants). Relievers could receive as much as $130

million annualIy (the $80 million or so now available under AIP and up to $50 million of discretionary funds). Noise and planning grants would
224 Airport System Development

Table 56.–Federal Airport Aid (Selective Aid Policy)

Average annual expenditures (1985-89)

(millions, 1982 dollars)

Airport category Number of airports Present policya Selective aidb Defederalization b

Large c . . . . . . . . . . . . . . . . . . . . . . . . . . 24 280

Medium c . . . . . . . . . . . . . . . . . . . . . . . .

— —

47 80

Other commercial servicec . . . . . . . .

— —

489 85 140 120

Reliever . . . . . . . . . . . . . . . . . . . . . . . . . 219 80 130 115

General aviation. . . . . . . . . . . . . . . . . . 2,424 95 — 130

Other Federal aid . . . . . . . . . . . . . . . . — 180d

75e75e

presumably remain at the levels presently authorized.

There would be a substantially increased burden on State and local governments, who would

find themselves pressured to pickup roughly $95

million per year in GA airport funding that would

no longer be available from the Federal Government. In partial recompense, however, the additional $55 million in Federal aid for small commercial service airports available under this policy

might diminish the need for State outlays in this

area.

Further relief to the States might still be necessary, and one way to accomplish this would be

to turn back some portion of Trust Fund revenues

to the States, at least on an interim basis, to ease

their transition to greater funding responsibilities.

Another way would be to transform some of the

Federal taxes on aviation into State taxes. The

aviation fuel tax is such a possibility. The Federal taxes now levied on aviation gasoline and jet

fuel are expected to bring in an average of about

$150 million annually through 1987. A one-third

reduction in these taxes at the Federal level, with

a corresponding increase in State levies would

provide about $50 million more to the States that

could be used for airports no longer receiving Federal support. The impact of this action on the

Trust Fund would be negligible. It would reduce

Trust Fund revenues by about 1.5 percent.21

Effects on Airport Financing

For large and medium airports, the effects of

a selective aid policy would be the same as under .

a defederalization policy. Large and medium airports no longer eligible for Federal aid would be

required to finance capital improvements through

a combination of operating revenues and borrowing from private sources. Also as in the case of

defederalization, the selective aid policy would

not entirely eliminate Federal funds for large and

medium airports. If it is assumed that about $65

million to $70 million per year would still be set

aside for noise-related projects, a substantial share

would probably go to large and medium airports

as it does now under current policy.

Small commercial service and reliever airports

could find their financial situation somewhat

eased. If the present $108 million in discretionary

funds were added to the grants they now receive,

a larger amount of Federal aid would be available to these airports under selective aid than

under either present policy or the defederalization

option. If discretionary funds were split evenly,

commercial service airports would find the $85

million now accorded them under present policy

increased to as much as $140 million under selective aid.

Small commercial service and reliever airports

might also be in a better position to raise more

capital on their own by virtue of their inclusion

in a more selectively defined Federal airport system. This action by the Federal Government,
Ch. 10—Policy Considerations 225

which could be interpreted as a commitment of

continued support, might enhance the creditworthiness of these airports in the eyes of potential investors in bond issues.

General aviation airports excluded from the

Federal system under the selective aid policy

would have to turn to other sources of capital.

Since they are for the most part publicly owned,

their first resort would be to their parent municipal or county government and then to their State.

If aid could not be obtained from these sources

(and perhaps even if it were), GA airports would

have to turn to their users to cover some portion

of capital investments. Higher landing fees, tiedown charges, and hangar rentals would be the

most probable course, both to generate needed

capital and to demonstrate to public or private

parties that the airport operator is making a best

effort to be self-supporting.

In most circumstances, the operator of a GA

airport would probably face higher than average

borrowing costs. In fact, debt financing would

probably be feasible only for the larger GA airports, those with a sufficient number of based aircraft and a high enough level of operations to

assure investors that debt could be serviced from

revenues. Revenue-bond financing for smaller GA

airports would be difficult, and for the very

smallest virtually impossible. For such airports,

the most likely recourse would be financing through

general obligation bonds issued by the municipality or State.

One way to provide assistance to marginally

profitable GA airports would be to establish a

Federal revolving fund, which would make capital improvement loans available at low interest,

or no interest. Some States (e.g., Idaho, Minnesota, and Nebraska) now have such revolving

funds for special purposes such as installation of

lighting and navigation aids or hangar construction. Setting up a revolving fund at the Federal

level would entail a one-time appropriation (perhaps from the current Trust Fund surplus). Thereafter, it would operate at little or no cost to the

Federal Government or to Trust Fund contributors

except for administrative expense and forgone interest (if money were loaned below the prevailing market rate).

Effects on Airport Users

For major, national, and larger commuter airlines, the effects of the selective aid policy would

be like those of defederalization, at least for their

activities at large and medium airports. Landing

fees and other use charges at these airports would

probably rise as managers sought to generate new

revenue to offset the loss of Federal funding. In

some cases, airlines with a majority in interest at

these airports might seek a stronger voice in investment decisions since they would be asked to

underwrite a greater share of capital improvements, either directly through participation in the

financing or indirectly through higher airport use

fees. Small commuter airlines serving a large or

medium airport might find it harder to protect

their interests since they would generate relatively

little revenue for the airport (even though paying higher use fees) and thus could not exert much

influence on decisions related to investment or access to facilities. In contrast, commuter airlines

would probably find their situation at smaller

commercial service airports somewhat improved.

The increased amount of Federal funding available for these airports would, over time, raise the

quality of facilities and services at these sites, but

probably not the cost paid by users in the form

of landing fees or rents.

Business and corporate aircraft operators would

almost certainly encounter higher use fees at airports not receiving Federal funds-either the large

and medium airports expected to be self-supporting or the GA airports excluded from the Federal

system. This would be an incentive for business

and corporate aircraft to use reliever airports—

which are precisely for this purpose-but it could,

in turn, cause pressure on reliever airport operators to upgrade their facilities to be more nearly

on a par with commercial service airports.

Thus, a somewhat unexpected result of the

selective aid policy could be a more marked differentiation among airports and types of users—

with air carriers predominating at large and medium commercial service airports and business

aviation gravitating to relievers in major metropolitan areas. This stratification might also lead

to each class of user paying a share of cost closer

to that which they actually impose on their airports of choice.
226 . Airport System Development

The other major segment of general aviation—

those who operate light aircraft for personal or

recreational purposes—would also be likely to incur higher airport use costs under this policy. At

“off-system” GA airports, they would have to pay

more in order to support these facilities or lose

them. This might cause some GA operators to

gravitate to nearby relievers or medium and small

commercial service airports with capacity to accommodate them. But even at many of these airports, user charges might be higher than they are

today. Since this segment of general aviation is

quite sensitive to factors of cost and convenience,

the longer term result might be a dampening of

personal GA. This type of flying probably would

not diminish absolutely (unless the costs increased

drastically), but the rate of growth might be

substantially slower than it has been in the past

20 years.

Effects on the Airport System

The primary effect of the selective aid policy

on the airport system would be to create a more

coherently organized system—due in part to a

clearer delineation of the Federal interest and a

more tightly focused program of support for public air transportation. The airports receiving federally administered funds would be those serving

virtually all airline passengers and air cargo movement and those private parties with a strong business or personal interest in operating aircraft.

Discretionary use of airports and airways would

not be discouraged, but it would be channeled to

a “second-tier” network of GA airports. The adequacy and health of the GA airport network

would be determined largely by the willingness

of discretionary flyers to pay the costs of maintaining and operating facilities provided for their

use.

From the combination of more narrowly targeted Federal support, user fees more in line with

the cost of providing service, and stratification

of airport use by type of aircraft might come certain operational benefits. To the extent that the

traffic mix became more homogeneous—especially

at large and medium airports-delays due to the

disparity of aircraft performance characteristics

would be reduced.. Adjustment of user fees, if

prompted by the motive of recovering cost in proportion to the burden imposed on the airport to

provide the type and amount of service demanded,

might also help to relieve congestion in several

ways. They could provide capital needed for new

facilities; they could serve to redistribute demand

to offpeak periods; and they could induce diversion of some users to reliever airports or alternative, less congested sites.

The chief negative impact of this policy is its

potential effect on general aviation, particularly

the portion using airports that would be excluded

from the Federal system. The financial condition

of many of these airports is weak today, and they

might become weaker without Federal support.

The loss of adequate and convenient landing sites

or the higher cost of using GA facilities could constrain the growth of personal and recreational flying. On the other hand, some of the past growth

of this sector has been inspired by Federal programs which provided up to 90 percent of the capital investment at GA airports. To this extent, general aviation is a product of a Federal policy that

has subsidized the ownership and operation of aircraft for private purposes. If GA operators prove

unwilling to bear a greater share of the costs at

the airports they patronize, it may be an indication that their demand for facilities is more induced than real.

No Federal Aid

This option represents a return

policy that prevailed in the years

to the “dock”

before World

War II. It postulates that airport owners, principally municipalities or States, would assume full

responsibility for capital improvement of airports.

The Federal Government would provide no grant

funds for this purpose and would concern itself

only with support of air navigation—airways and

air traffic control, including installation and maintenance of control towers and landing aids at

airports.

As described earlier in this chapter, present Federal policy on airport development has evolved

gradually over the past 40 years. The original Federal view was that airports, like water ports,

should be matters of local concern. Municipalities

were expected to build and maintain port or airport facilities because these investments yielded
Ch. 10—Policy Considerations ● 227 —

primarily local or regional economic benefits. The

Federal role was to maintain the waterways and

airways and to provide navigation systems, thereby serving the national interest of facilitating interstate commerce and contributing indirectly to

the well-being of communities linked by the waterway or airway systems.

A return to the dock policy is by no means a

suggestion that the current and past policies of

directly aiding airports have been a mistake. Direct Federal support has been crucially important

to the development of the national airport system. The national defense considerations during

World War II and the need for airport modernization at the beginning of the jet era were pressing problems at the time. In retrospect, the decisions to provide Federal funds for airport development constituted sound public policy for

that time since they served the long-term Federal

interest of fostering and encouraging the growing air commerce and aircraft manufacturing industries.

It is possible, however, that the goals of these

Federal programs have been achieved. An extensive, modern airport infrastructure is now in

place. The aircraft manufacturing industry has

matured. Public transportation by air is no longer

a fledgling industry—it has been the dominant

mode of long-distance travel for many years. If

the goals of the program of Federal assistance to

airports have been achieved, then it might be

argued that the program should be terminated and

that outlays from the Airport and Airway Trust

Fund should be limited to those needed for modernization, operation, and maintenance of the

ATC system.

Photo credit: Federal Aviation Administration

Meeting of modes

25-420 0 - 84 - 16
228 ● Airport System Development

Effects on Federal Budget

This option would eliminate all Trust Fund expenditures for airports, which amounts to $800

million per year under present policy. Aviation

user taxes could be reduced to the level necessary

to cover the capital and operating costs of the airways and ATC system. The passenger ticket tax,

for example, could be reduced from 8 to 5.5

percent.

Effects on Airport Financing

Airport sponsors would have the responsibility

of raising all funds needed for capital projects.

Some improvements would be funded with retained earnings or moneys borrowed from private

investors through revenue bonds or other indentures. Airports might have to increase user fees

to makeup for lost Federal funds. Some less efficient or low-traffic airports could have difficulty

raising capital and might remain unimproved or

close altogether.

Another possible source of funding would be

State or local authorities. Some States, for example, might elect to provide assistance to airports

unable to raise the capital needed for improvements. Local governments might choose to assist

their airports as well. Airports provide many

benefits to the local economy: they provide jobs

and attract industry to a region, in addition to

linking the community to the outside world. To

the extent that a community wished to preserve

these benefits, the local government might choose

to allocate local tax revenues to assist the airport,

or it might use its general obligation bonding

authority to borrow funds for airport use. If the

community were unwilling to provide assistance,

this might be taken as an indication that the economic benefits of the airport were not worth the

cost .

While the return of financing responsibility for

airports to State and local government might pose

hard choices in some communities, it would not

be disastrous in the aggregate. The Federal share

of airport expenditures is $800 million per year,

out of the total of $53.4 billion per year spent by

Federal, State and local governments on major infrastructure programs. 22 Of this annual expenditure, about half (a little over $25 billion) is spent

by States and localities. Even if States and municipalities assumed responsibility for the entire

$800 million formerly provided in Federal grants,

their annual capital expenditure would increase

by only about 3 percent. In fact, however, State

and local governments would probably have to

raise not over half this amount since, under current policy, approximately $400 million of Federal outlays go to large and medium airports

which appear capable of raising adequate capital

without local or State participation.

Effects on Airport Users

A basic effect of this policy might be to bring

the price of airport services more closely into line

with the cost of providing those services. Faced

with the need to generate investment capital, airports of all sizes would have to increase existing

user fees, or perhaps introduce new ones. Air carriers and general aviation, as the primary beneficiaries of airport service would have to pay higher

airport use fees, except perhaps in cases where the

locality chose to provide some sort of subsidy.

With increased dependence on bond financing at

air carrier airports, airlines might be expected to

underwrite a larger share of airport costs.

Effects on Airport System

This policy—like the selective aid policy described earlier—might also lead to a two-tier airport system composed of roughly 500 commercial service and 200 reliever airports supported by

a mixture of private funding and State and local

aid and 2,000 to 3,000 GA facilities that would

have to rely on the patronage of private owners

of based and itinerant aircraft. Some communities might choose to support such GA airports as

a matter of local pride or as a spur to local economic development. Those airports not receiv-
Ch. 10—Policy Considerations ● 229

ing community support might face great difficulty

surviving on user fees and rents alone, which

might be an indication of their marginal economic

value to civil aviation.

Because it would create a situation where airports might have to compete on the basis of price,

this policy could also lead to a “free market” in

airports, with cities vying for business and users

shopping for the best price and service. Airports

have already begun to compete for air carrier service since airline deregulation, and the end of Federal funding for airports might lead to an intensification of this trend.

The effects of this policy would probably vary

greatly by region. The greatest possibility of negative impact would be in sparsely populated States,

where there is not a sufficient base of aviation

activity to support many low-volume airports.

State Administration

The essential feature of this policy is that it

would change the way in which the airport funding program is administered. It differs from present policy in that responsibility for distribution

of Trust Fund moneys and for management of

grant applications and awards would be transferred from the national to the State level. State

aviation agencies or departments of transportation would, in effect, replace FAA as the administrator of airport aid.

The Federal Government would not need to divorce itself entirely from airport capital assistance.

For reasons of efficiency and national uniformity, the Federal Government could continue to collect the present taxes that support the Airport and

Airway Trust Fund, and the congressional process of authorization and appropriation of Trust

Fund outlays for airports would remain unchanged.

However, administration of grants and exercise

of discretionary authority in distributing that part

of the Trust Fund now allotted to airports would

no longer be carried out by a central Federal

agency. Instead, these responsibilities would devolve to the States, much as they now do in the

administration of the Highway Trust Fund.

There are several ways to implement such a policy, and that outlined here is intended only as an

illustration of the concept, not a specific formulation of how a State-administered program should

work. In spirit, this policy is an application of

New Federalism, a concept whose stated purpose

is to “restore the balance of responsibilities within

the Federal system and to reduce decision, management, and fiscal overload on the Federal Government .“23

Simply stated, it would place greater

authority at the State level for decisionmaking on

the delivery of capital funds. This policy option

is prompted by three criticisms of the way in

which the Federal airport program is now administered. First, the present program is encumbered by a growing number of categorical grants,

conditions, and regulations. Second, a central Federal bureaucracy is not always responsive to local

needs and circumstances; and the interests of aid

recipients might be better served by State governments, which are closer to these concerns, more

accessible, and capable of acting more promptly.

Third, the present division of responsibility between Federal and State agencies results in neither being able to deal with airport planning, development, and funding problems as a whole.

In the illustrative example presented here, Trust

Fund outlays for airports would remain at the

level now authorized under AIP—an average of

$800 million per year. Half of this sum would be

distributed directly to individual commercial service airports as pass-through grants based on passenger enplanements. The other half would be distributed to the States in the form of block grants

based on various indicators of aviation activity

(number of airports, aircraft registrations, fuel

sold, area, population, and the like). State aviation agencies or transportation departments would

have full discretionary authority to allocate this

half of Trust Fund outlays among airports in the

State.

The Federal Government might choose to retain some authority to set capability standards for

State agencies and to draw guidelines for the

States in determining eligibility for award, purpose of expenditure, and degree of local participation; but this is not an essential feature of the
230 . Airport System Development

policy. The Federal Government would retain all

functions related to safety, operational procedures, and airport certification. All ATC facilities

(including those at airports) would continue to be

installed and operated by FW.

Effects on the Federal Budget

This policy option would have no effect on the

Federal budget since it would amount to a transfer (or revenue turnback) of Trust Fund tax revenues to the States. It would result in no financial gain or loss either at the Federal level or for

the States individually and collectively.

Since Congress would still exercise control over

Trust Fund outlays through its authorization and

appropriation powers, the amount could be adjusted to any level deemed appropriate. Because

of the responsibility vested in the States, the congressional process might be amended to include

periodic consultation with the States about the

magnitude of needs and the most pressing priorities. FAA might play a role in this, acting either

as a clearinghouse for State assessments of their

needs or as an independent advisor on the condition of the airport system nationwide and on the

total capital investment required over any given

period.

Effects on Airport Financing

Although the total funding for airports would

not change from that available under present policy, the distribution of grants by class of airport

would probably be somewhat different. Table 57

shows the breakdown that would occur if commercial service airports received half of annual

Trust Fund outlays prorated by an enplanement

formula and if the other half were distributed in

equal parts to small commercial service, reliever,

and GA airports. The distribution of the discretionary half could vary considerably from State

to State. The equal three-way split shown in Table

57 is an approximation of how States in the aggregate might choose to act, based on the way

that they have historically supported various

classes of airports.

For commercial service airports, especially large

and medium airports, the principal effect of this

policy would be an assured and essentially predictable source of income that would be entirely

under the control of the airport manager. The

total amount available to large and medium airports might be slightly less than it is under present policy since it would be strictly limited to

enplanement allotments. (These airports receive

about the same enplanement money today plus

a share of discretionary FAA grants for noise projects and other purposes.) Small commercial service airports, on the other hand, would probably

receive more than they do under present policy.

In addition to annual enplanement distributions

amounting to about $45 million, these airports

might receive about one-third of State discretionary awards ($133 million). This total of $178

Table 57.–Federal Airport Aid (State Administration Policy)

Average annual expenditures (1985-89) (millions, 1982 dollars)

Number of Present State administration Selective

Airport category airports policy a Enplanement b Block grantc

aid

d Defederalization d
Ch. 10—Policy Considerations ● 231

proval or in obtaining funds after grants are approved. By distributing these FAA functions to

State agencies, this policy could afford airport

operators more ready access to funding authorities, quicker administrative action, and less delay in the delivery of funds after the decision has

been made.

Effects on Airport Users

For the users of airports now eligible for Federal grants, there would probably be little or no

change under the State administration policy. At

large and medium commercial service airports,

the funds available for capacity-related improvements would be about the same as under present

policy. Users of reliever and small GA airports

could find these facilities improved due to the

greater amount that might be awarded under

State-agency administration. Overall, this policy

would be unlikely to affect airport congestion and

delay, except insofar as increased funding for reliever airports could hasten the expansion or upgrading of these facilities.

Effects on the Airport System

As postulated here, State administration would

not alter the amount of funding available for airport development, but it would radically shift the

present balance by allotting funds in roughly equal

amounts among the five classes of airports. This

would be achieved by reducing slightly the share

for large and medium airports (compared to the

present AIP formula) and reallocating these funds

to the other three classes, along with that portion

of Trust Fund outlays now reserved for FAA

discretionary grants. In effect, this policy would

devote half of annual Trust Fund outlays to airports serving airline passengers and the other half

to those serving general aviation (with some degree of overlap of these two functions at many

commercial service airports). Thus, this policy

reflects the view that air transportation is of two

kinds, with each entitled to more or less equal

Trust Fund support. On one hand, there are common carriers providing public air transportation.

On the other, there are those who use the airspace

and airport system for private business and personal purposes that may also provide public benefit. By providing aid in an evenhanded way, this

policy affirms the importance of both to interstate

commerce and the public welfare.
Appendixes
Appendix A

ACRONYMS AND ABBREVIATIONS

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

Day-Night Average Sound Level

Microwave Landing System

Discrete Address Secondary Radar

System (with data link)

National Airspace Review

National Airspace System

National Aeronautics and Space

Administration

National Association of State

Aviation Officials

National Airspace Command Center

National Airport System Plan

Noise Exposure Forecast

Next Generation Weather Radar

nautical mile

National Plan of Integrated Airport

Systems

FAA Office of System Engineering

Management

Practical Annual Capacity

Professional Air Traffic Controllers

Organization

passenger facility charge

Planning Grant Program

Practical Hourly Capacity

Performance Measurement System

runway occupancy time

State Aviation System Plan

Standard Air Carrier Delay

Reporting System

Standard Metropolitan Statistical

Area

Short Takeoff and Landing (aircraft)

Terminal Area Forecast

Tower Automated Ground

Surveillance System

Traffic Alert and Collision

Avoidance System

Traffic Management System

Military Radar Beacon Decoder

Ultra High Frequency (radio)

Urban Mass Transportation

Administration

(Wake) Vortex Advisory System

Visual Flight Rules

Very High Frequency (radio)

Visual Meteorological Conditions

235
236 Airport System Development

Airport Designators

The Federal Aviation Administration and the

Official Airline Guide employ a standard three-letter

abbreviation to identify commercial service airports.

The identifiers for large airports—those enplaning 1

percent or more of airline passengers in 1982—are

listed below.

Atlanta, William B. Hartsfield

International

Boston, Logan International

Dallas, Love Field

Washington National Airport

Denver, Stapleton International

Dallas-Fort Worth Regional

Detroit, Metropolitan Wayne

County

Newark

Honolulu International

Houston Intercontinental

New York, John F. Kennedy

International

Las Vegas, McCarran International

Los Angeles International

New York, La Guardia

Orlando International

Miami International

Minneapolis-St. Paul

New Orleans International, Moisant

Field

Chicago, O’Hare International

Philadelphia International

Phoenix, Sky Harbor International

Greater Pittsburgh International

Seattle-Tacoma International

San Francisco International

St. Louis (Lambert) International

Tampa International
Appendix B

SURVEY OF CURRENT AIRPORT

FINANCIAL MANAGEMENT PRACTICES

The data on the financial policies and practices of passenger boardings), type of public operator, and fi60 large and medium airports used in this study were nancial management approach (see ch, 6). It also ungathered in a survey conducted by CBO in the sum- dicates whether or not the airport has a use agreement

mer of 1983. These data are summarized in the fol- containing a majority-in-interest clause, the terms and

lowing table, which lists the airports surveyed in rank expiration dates of current use agreements (if any), and

order of passenger boardings (enplanements) in calen- any recent, ongoing, or planned changes in financial

dar year 1982. It gives each airport’s size (in terms of management or related developments.

Table B-1.—CBO Survey Data on Financial Management Practices at 60 Large and Medium Commercial Airports,

1983 (Numbers of enplanements in 1982 in parentheses)

Financial Term and

Management Majority-in - Expiration Date of Recent or Planned

Approach Interest Clause Use Agreement Change s

Residual cost, but

terminal concession

revenues shared by

city and airlines

-------------- -

Residual cost

-------------- -

HARTSFIELD ATLANTA INTERNATIONAL (17,653,400), Run by city

Yes (all capital 30 years Basic landing fee will be renegotiated

projects involving (2010) in 1991

increase in landing

fee)

------------------------------------------------- -

CHICAGO-O’HARE INTERNATIONAL (17,428,127), Run by city

Yes 35 years Allocation of costs,

(2018) majority-in-interest

clause revised in new agreement;

clause protecting right to levy

passenger facility charge included

- - - - - - - - - - - .- — - - - - - - - - - - - - - - - - - - - — - - - — — - - - - - - - - - - — -

LOS ANGELES INTERNATIONAL (15,758,082), Run by semi-autonomous department of the city

Residual cost No, but airlines must 30 years

approve debt financing (1992);

exceeding $515 million 40 years

limit in use agreements (United and

American)

-------------------------------------------- -

Terminal leases of five years or less

where possible, except when airlines

make extensive capital commitments

(terminal modifications by United

and American Airlines); shorterterm, more compensatory agreements

anticipated after 1992

------- - _/-- _--- —— -- -

(Continued)

237
238 ● Airport System Development

Table B-1 .—CBO Survey Data on Financial Management Practices at 80 Large and Medium Commercial Airports,

1983 (Numbers of enplanements in 1982 in parentheses) (continued)

Compensatory

Financial Term and

Management Majority-in - Expiration Date of Recent or Planned

Approach Interest Clause Use Agreement Change s

NEW YORK--JOHN F. KENNEDY INTERNATIONAL (12,490,411), Run by port authority

Non e 25 years JFK and LaGuardia are leased from

(2004) New York City; city’s share of

these airports’ net revenues will

rise from 60 to 75 percent in 1985

--------------------------------------------------- - ---- —- —- —— -- -

DALLAS-FORT WORTH REGIONAL (12,401,626), Run by both cities

Residual Cost Non e 40 Vears None reported

(2014)

-- —----------—------—-—--—---------------—- - — -------- — ---- —--—-- -

DENVER-STAPLETON INTERNATIONAL (1 1,608,458), Run by city/county

Compensator y None 28 years May move to annual adjustment

(1992) of fees and rental rates next year

(currently adjusted biennially)

----------------- — ----- — -------- —---- - ----—---—--------—-----— - — -

SAN FRANCISCO INTERNATIONAL (9,915,042), Run by city/county

Residual cost Yes, but can only defer 30 years

for six months (201 1)

-------------------------------------------- -

MIAMI INTERNATIONAL (9,256,017), Run by county

Residual cost, but Yes (except 25 years

some properties excluded $1 million Discretionary (1987)

from revenue base Fund and projects

in calculating residual supported by revenues

cost not counted in revenue base)

____________________________________________ _

Current revenue may not be used to

fund capital development over $2

million in any one year. City

must exercise best efforts to

issue revenue bonds to finance

capital development

------------------- -

Month-to-month leasing of terminal

space when leases expire or new

space added. Last year, moved

from three-year to annual rent

adjustments

------------------- -

NEW YORK--LAGUARDIA (9,235,150), Run by port authority

Compensatory None

- - - - - - - - - - - . . - - - - - - - - - - - - - - - - _ - - - - -

Being negotiated

(25-year lease

expired in 1980)

------- —-- -

Airport seeking shorter-term

(ten-year) lease. LaGuardia

and JFK are leased from New

York City; city’s share of

net revenues will rise from

60 percent to 75 percent

in 1985

------------------- -

(Continued)
Appendix B: Survey of Current Airport Financial Management Practices ● 239

Table B-1 .—CBO Survey Data on Financial Management Practices at 80 Large and Medium Commercial Airports,

1983 (Numbers of enplanements in 1982 in parentheses) (continued)

Financial Term and

Management Majority–in - Expiration Date of Recent or Planned

Approach Interest Clause Use Agreement Change s

BOSTON LOGAN INTERNATIONAL (7,934,881), Run by port authority

Compensatory None No use agreements Short-term leases will be developed

in an effort to maintain flexibility

in terminal space allocations

---------------------------------------------------------------- -

HONOLULU INTERNATIONAL (7,533,909), Run by state

Residual cost None 30 years Last year, created minimum landing

(1992) fee for airlines and raised interisland carriers’ fee; interest

from bond proceeds now to be used

for capital development rather

than credited to airlines

---------------------------------------------------------------- -

HOUSTON INTERCONTINENTAL (6,371,546), Run by city

Compensatory No 28 years Much future capital development

(1997) planned

---------------------------------------------------------------- -

WASHINGTON NATIONAL (6,333,478), Run by federal government

Compensatory, but FBO No Ten years None reported

revenues credited to (1984)

landing area

---------------------------------------------------------------- -

IAMBERT-ST. LOUIS INTERNATIONAL (5,962,71 8), Run by city

Compensatory Yes 40 years

(2005)

---___ -_---------- _-__ -------- —— — ----------- -

Compensatory

NEWARK (N. J.) (5,817,050), Run by port authority

None 25 years

(1998)

-------------------------------------------- -

Terminal rentals will be adjusted

annually as leases expire (currently

adjusted every two years)

-----——--——-—----—— -

Moving to shorter-term building

leases, as possible. City’s

share of net revenues will rise

from 60 percent to 75 percent

in 1986

---__ ----_---_---—- -

MINNEAPOLIS-ST. PAUL INTERNATIONAL (5,337,845), Run by airport authority

Residual cost (airfield); Yes, for airfield 27 years None reported

terminal, compensatory area only (1989)

---------------------------------------------------------------- -

(Continued)
Financial Term and

Management Majority-in- Expiration Date of Recent or Planned

Approach Interest Clause Use Agreement Changes

county

Majority-in-interest clause deleted in

new agreement; clause added

protecting airport’s right to levy

passenger facility charge if law

permits

------------------- -

authority

Will offer month-to-month tenants

five-year “rollover” leases (five years

with three five-year renewal options)

------------------- -

DETROIT METROPOLITAN WAYNE COUNTY (4,935,203), Run by county

Residual cost Yes (except for airport (2009) None reported

Discretionary Fund

projects)

---------------------------------------------------------------- -

LAS VEGAS--MCCARRAN INTERNATIONAL (4,655,484), Run by county

Compensatory None No use None reported

agreements

(ordinance)

---------------------------------------------------------------- -

PHILADELPHIA INTERNATIONAL (4,403,541), Run by city

Residual cost Yes (can disapprove any 32 years None reported

project with life of (2006)

more than five years,

costing over $100,000)

---------------------------------------------------------------- -

PHOENIX SKY HARBOR INTERNATIONAL (4,007,579), Run by city

Compensatory None No use

agreements

(ordinance)

-------------------------------------------- -

Might move in future to

some form of lease/use

agreement to protect airporl in

post-deregulatory environment

------------------- -

(Continued)
Appendix B: Survey of Current Airport Financial Management Practices ● 241

Table B-1.—CBO Survey Data on Financial Management Practices at 80 Large and Medium Commercial Airports,

1983 (Numbers of enplanements in 1982 in parentheses) (continued)

Financial Term and

Management Majority-in- Expiration Date of Recent or Planned

Approach Interest Clause Use Agreement Changes

TAMPA INTERNATIONAL (3,861,509), Run by airport authority

Residual cost Yes, but no clear direct 30 years None reported

veto power; excludes (1999)

Discretionary Fund and all

projects in Master Plan

---------------------------------------------------------------- -

ORLANDO INTERNATIONAL (3,383,495), Run by airport authority

Residual cost Yes 28 years Developing 1400-acre industrial

(2008) park to maximize revenues

---------------------------------------------------------------- -

NEW ORLEANS INTERNATIONAL (3,020,438), Run by city

Residual cost Yes (except small 20 years None reported

Discretionary Fund) (1992)

---------------------------------------------------------------- -

CHARLOTTE-DOUGLAS INTERNATIONAL (2,860,092), Run by city

Compensatory Yes, airfield only (projects 25 years Revenues have increased since

that will increase (2004) Charlotte became Piedmont’s

airline fees) major hub

---------------------------------------------------------------- -

Compensatory

SAN DIEGO INTERNATIONAL (2,818,374), Run by port authority

None 15 years Term shortened for recent entrants

(1994); monthto-month (new ?

entrants)

---------------------------------------------------------------- -

SALT IAKE CITY INTERNATIONAL (2,703,003),

Run by city (in process of forming airport authority)

Compensatory Yes (approve capital pro- 25 years Revenues have grown because of

jects over $50,000; one (2003) hub operations, but bond rating

signatory airline suf - fell due to Western’s financial

ficient to approve) problems and cost allocation

dispute over terminal development

project (now resolved)

---------------------------------------------------------------- -

Residual cost

CLEVELAND HOPKINS INTERNATIONAL (2,656,252), Run by city

Yes (except Dis- 30 years None reported

cretionary Fund); can dis- (2005)

approve projects over $250,000

(1976 dollars), but city can

override airlines after

projects have been disapproved twice

- - - - - _ - - - - _ - - _ - - _ - - - - - - - - - _ - - — _ _ - - - - _ - _ - . . - _ - - _ - - _ - - _ _ - - - - _ - - - - - - —

(Continued)
242 ● Airport System Development

Table B-1.—CBO Survey Data on Financial Management Practices at 60 Large and Medium Commercial Airports,

1983 (Numbers of enplanements in 1982 in parentheses) (continued)

Financial Term and

Management Majority-in- Expiration Date of Recent or Planned

Approach Interest Clause Use Agreement Changes

Compensatory

-------------- -

Residual cost

-------------- -

Compensatory (modified;

space rentals set too

low to recover costs)

-------------- -

Residual cost

-------------- -

Compensatory

-------------- -

Residual cost

--------------- -

KANSAS CITY INTERNATIONAL (2,623,808), Run by city

Yes, for airfield capital 28 years None reported

projects (except Dis- (1998)

cretionary Fund)

------------------------------------------------- -

MEMPHIS INTERNATIONAL (2,290,930), Run by airport authority

Yes, all projects over 30 or more years Growth of Federal Express has helped

$5,000 (except Discretionary (1999) offset loss in commercial air

Fund) carrier landed weights; landing

fees and rentals reduced recently

------------------------------------------------- -

BALTIMORE-WASHINGTON INTERNATIONAL (2,269,164), Run by state

Yes (projects over $25,000) 15 years (1993) None reported

plus ten-year

renewal (2003)

------------------------------------------------- -

PORTLAND (ORE.) INTERNATIONAL (1,928,054), Run by port authority

Yes (except

Discretionary Fund)

---------- -

SAN ANTONlO

None

---------- -

20 years None repofied

(1991)

-------------------------------------- -

INTERNATIONAL (1,776,650), Run by city

Eight years

(1984)

------------------ -

I(AHULUI (MAUI) (1,670,782), Run by state

None

----------------- -

GREATER CINCINNATI INTERNATIONAL

Residual cost

-------------- -

Yes (all projects over

$50,000, except

Discretionary Fund)

_________________ _

30 years

(1992)

----------- -

New agreement being negotiated

probably will be very similar

to existing one

------------- -

None reported

------------- -

(1,663,686), Run by airport authority

----- -

----- -

30 years

(2002)

----------- -

Concession revenues have

increased since Cincinnati

became a hub for Delta

------------- - ----- -

(Continued)
Appendix B: Survey of Current Airport Financial Management Practices ● 243

Table B-1.—CBO Survey Data on Financial Management Practices at 60 Large and Medium Commercial Airports,

1983 (Numbers of enplanements in 1982 in parentheses) (continued)

Financial Term and

Management Majority-in- Expiration Date of Recent or Planned

Approach Interest Clause Use Agreement Changes

MILWAUKEE--GENERAL MITCHELL FIELD (1,61 1,100), Run by county

Residual cost Yes, but can only defer 25 years Went to long-term residual

projects for 2 years (2010) cost agreement to finance new

(projects over $100,000, terminal, to be completed

or several adding in 1985

up to $200,000)

---------------------------------------------------------------- -

PALM BEACH INTERNATIONAL (1,607,760), Run by county

Residual cost Non e 17 years Airport seeks compensatory

(1984) approach, much shorter term

for new agreement. Major

improvements to begin in 1985

-------------------------------------------------------------- - - -

SAN JOSE MUNICIPAL (1,520,519), Run by city

Residual cost None 30 years (2009); Moving to shorter-term agreements

three to five years for recent entrants and adjusting

(new entrants) terminal rental rates upwards,

as possible

--------------------------------------------------------- - ------ -

I INDIANAPOLIS INTERNATIONAL (1,383,01 1), Run by airport authority

Compensatory None One to five years Ratemaking subject to challenge in

(ordinance); some litigation pending in U.S. Circuit

carriers operating Court of Appeals, Seventh Circuit

without agreement

---------------------------------------------------------------- -

PORT COLUMBUS INTERNATIONAL (1,315,612), Run by city

Residual cost (airfield); Yes, airfield 25 years None reported

terminal--concession only (projects (2000)

revenues go to airport over $25,000)

---------------------------------------------------------------- -

OKLAHOMA CITY--WILL ROGERS WORLD (1,302,459), Run by city

Compensatory (modified; None 30 years (1997); Rates negotiated by supplemental

airlines do not contri - one to five years agreements every five years. New

bute to most capital (new entrants) entrants are offered one-year

development) agreements until expiration of

five-year cycle

---------------------------------------------------------------- -

(Continued)

25-420 0 - 84 - 17
244 . Airport System Development

Table Bo1.—CBO Survey Data on Financial Management Practices at 80 Large and Medium Commercial Airports,

1983 (Numbers of enplanements in 1982 in parentheses) (continued)

Financial Term and

Management Majority-in- Expiration Date of Recent or Planned

Approach Interest Clause Use Agreement Changes

RENO CANNON INTERNATIONAL (1,281,393), Run by airport authority

Residual cost Yes, but airport 17 years Short-term lease and use agreement

can override after (1996) now available

two deferrals

---------------------------------------------------------------- -

TULSA INTERNATIONAL (1,274,199), Run by airport authority

Residual cost Yes (projects over 30 years None reported

$400,000; except (2008)

Discretionary Fund)

---------------------------------------------------------------- -

ALBUQUERQUE INTERNATIONAL (1,269,279), Run by city

Compensatory None Renegotiating; New agreement will resemble

last agreement previous one

two to five

years (1981)

---------------------------------------------------------------- -

WINDSOR LOCKS (CT.) --BRADLEY INTERNATIONAL (1,232,669), Run by state

Compensatory Yes (airfield projects 30 years None reported

over $250,000, terminal (201 1)

projects over $75,000)

------------------------------------------------------- - -------- -

SACRAMENTO METROPOLITAN (1,227,096), Run by county

Residual cost Yes, but can only defer Five years Term, rate-setting practices,

projects for two years (1986) and majority-in-interest clause

(projects over $100,000; altered in new agreement

except Discretionary Fund)

______________________________________________ ------------------ -

Washington, D. C.--DULLES INTERNATIONAL (1,207,343), Run by federal government

Compensatory (but FBO None 10 years None reported

revenues credited ( 1984)

to landing area)

------------------------------------------------- - -------------- -

(Continued)
Appendix B: Survey of Current Airport Financial Management Practices . 245

Table B.1.-CBO Survey Data on Financial Management Practices at 80 Large and Medium Commercial Airports,

1983 (Numbers of enplanements in 1982 in parentheses) (continued)

Financial Term and

Management Majority-in - Expiration Date of Recent or Planned

Approach Interest Clause Use Agreement Change s

Residual cost

- — - — ----- —-----

Residual cost

-_--_—---——-— -

Compensator y

-—--—-—-—-—-

Compensatory (modified)

-------------- -

Residual cost

-------------- -

Residual cost

------------- -

Residual cost

------------- -

NORFOLK INTERNATIONAL (1,1 96,286), Run by port authority

Yes, can request cost 25 years

justification, and (1999)

arbitration if not satisfied, for any item in

capital budget

------------------------ -

NASHVILLE METROPOLITAN (1,1 53,019), Run by

Yes (projects over $20,000) 30 years

(2005)

—- —- — —-—--—---—--—-—--—- -

AUSTIN--MUELLER MUNICIPAL

Not formal, but implied in

lease for projects f o r

which airline rates

amortize airport costs

-----—--—----—-—--— -

(1,1 15,992)

Five years

(1988)

----- -

None

-------- -

reported

. --- — ----------- -

airport authority

None reported

_-_--- —__-- _- ——_-——-_ —- -

Run by City

Term shortened and ratemaking

approach changed in new

agreement (effective

1 March 1983)

--------- —- ——-----—--— —- -

JACKSONVILLE INTERNATIONAL (1,008,891), Run by port authority

None 20 years None reported

(1990)

------------------------------------------------- -

LIHUE (KAUAI) (995,512), Run by state

None 30 years None reported

(1992)

------------------------------------------------- -

EL PASO INTERNATIONAL (994,102), Run by city

None Renegotiating;

last agreement

20 years (1982)

--------------------------- -

ONTARIO (CAL) INTERNATIONAL (989,024),

None reported

--------------------- -

Run by semi-autonomous department of the city of Los Angeles

None Five years Landing fees same as Los Angeles

(1985) International; only Southern California

airport with capacity to expand

------------------------------------------------- -

(Continued)
246 ● Airport System Development

Table B-1 .—CBO Survey Data on Financial Management Practices at 60 Large and Medium Commercial Airports,

1983 (Numbers of enplanements in 1982 in parentheses) (continued)

Financial Term and

Management Majority-in- Expiration Date of Recent or Planned

Approach Interest Clause Use Agreement Changes

RALEIGH-DURHAM (941,005), Run by airport authority

Compensatory None No use agreements None reported

---------------------------------------------------------------- -

LOUISVILLE--STANDIFORD FIELD (922,009), Run by airport

By negotiation None Renegotiating;

(noncompensatory, last agreement

but not residual cost) 30 or more years

(1983)

---------- . ----- — ------------- . ----- —------- -

authority

Airport seeks shorter term, fully

compensatory terminal, residual

cost airfield in new agreement

--____ ----- —— ------ -

TUCSON INTERNATIONAL (900,547), Run by airport authority

Residual cost Yes, projects over $35,000 30 years $60 million terminal expansion

(except Special Reserve Fund) (2006) project under way, to be completed

and next year’s budget in April 1985

---------------------------------------------------------------- -

OMAHA--EPPLEY AIRFIELD (848,257), Run by airport authority

Compensatory No Year-to-year Major terminal expansion project

(1984) will begin in 1984

- - — — - - - - — — — — — - - - - -- - - - — - — — - - - — — - - - - - - - - - - - - — - - - - - - - - - - -

COX DAYTON INTERNATIONAL (806,464), Run by city

Yes, projects over $10,000 23 years (1996) Traffic has increased significantly

(except Discretionary Fund) since Dayton became hub for Pied–

mont. Terminal apron overlay project to begin in 1984; possible

terminal expansion in 1985

Residual cost

SOURCE: Congressional Budget Office
Appendix C

IMPACT OF MANAGEMENT APPROACH

AND AIRPORT SIZE ON AIRPORT

FINANCIAL PERFORMANCE

The analysis in chapters 6 and 7 divides airports into

the three size categories (large, medium, and small)

based on passager enplanements. Such divisions,

though useful, are necessarily arbitrary, and should

be understood to carry the caution that slight changes

in definition can shift conclusions regarding the effect

of airport size on financial performance. A similar caution should be applied in assessing the relative shifts

in financial performance between large and small airports following Federal deregulation of the airlines, at

which time major air carriers curtailed service to some

small airports in favor of the larger facilities serving

more profitable routes.

To overcome the problems created by arbitrary distinctions in airport size, the Congressional Budget Office has related airport financial data to airport size

as a continuous variable. The statistical results are

reported in table C-1 and interpreted numerically in

table C-2. As shown in table C-2, the approach to financial management and the volume of traffic served

by the airport bear significantly on financial performance.

Effect of Management Approach

Airports that use the compensatory approach have

net take-down ratios better, on average, by 24 percent than residual-cost airports, and debt service safety

margins more than twice as good. There are two possible interpretations of this result, however. One is that

the added earning power possible with the compensatory approach improves an airport’s financial performance. A second is that only those airports in the strongest travel markets turn to the compensatory approach

Table C-1 .—Ordinary Least Squares Regression Estimates for Airport Financial Performance,

Pooled Cross-Sections, 1975-82

Log Log Log

Log Net take-down Debt-to-asset Debt-service

Operating ratio ratio ratio safety margin

Constant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Financial management approach

(1 = compensatory. . . . . . . . . . . . . . . . . . . . . . . .

Log of Enplanements:

1975 ratios . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1976 ratios . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1977 ratios . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1978 ratios . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1979 ratios . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1980 ratios . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1981 ratios . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1982 ratios . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

R’ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F value . . . . . . . . . . . . . . . . . . . . , . . . . . . . . . . . . . . .

5.894

(29.22)

–0.101

(- 1.873)

–0.238

(-9.081)

–0.229

(-9.099)

–0.231

(-9.280)

–0.230

(-9.036)

–0.235

(–9.493)

–0.237

(-9.456)

–0.241

(–9.791)

–0.261

(–9.933)

0.588

12.760

1.883

(8.770)

0.218

(3.873)

1.647

(3.192)

–0.145

(– 1.096)

1.334

(3.223)

0.791

(7.575)

0.184

(3.300)

0.124

(2.400)

0.167

(3.277)

0.179

(3.472)

0.206

(4.092)

0.217

(4.271)

0.207

(4.126)

0.173

(3.402)

0.569

12.320

NOTE: “t-ratios” are given in parentheses. Logs are natural logs.

SOURCE: Congressional Budget Office.

247
248 ● Airport System Development

in the first place. Both explanations may apply to some

extent.

Debt-to-asset ratio appears not to be affected by

management approach—i.e., no statistically significant

relationship is apparent. This is not surprising, as management approach itself need not influence the actual

level of investment. There is also no statistically significant relationship between management approach

and operating ratio.

Effect of Airport Size

Airport size has a measurable influence on financial performance. As shown in table C-2, the elasticity

of airport size with respect to an airport’s operating

ratio lies at about –0.24. This means that each 10-

percent increase in the volume of traffic improves the

airport’s operating ratio by 2.4 percent. Conversely,

each lo-percent fall in traffic volume causes an estimated 2.4 percent deterioration in operating ratio.

Similar relationships emerge for the other financial indicators shown in table C-2.

Table C-2.—Estimated Impact of Approach to Financial Management and Airport Size on

Airport Financial Performance (95 percent confidence Intervals In parentheses)
FACTORS AFFECTING Al

Appendix D

RPORT

COSTS OF CAPITAL

The statistical (regression) analysis summarized in

table D-1 attempts to quantify the effects of four factors on interest costs paid by the issuers of airport

bonds: general market conditions, type of security

used to back airport bonds, numbers of years in which

bonds mature, and airport size (in terms of numbers

of passenger enplanements).

The results indicate that interest costs and market

conditions are proportional; a l-percent change in

market interest costs yields roughly a l-percent change

in airport interest costs. Issuers of general obligation

bonds, on average, obtain 8 percent lower interest

Table D-1 .—Ordinary Least Squares Regression

Estimates, Pooled Cross.Section: 1978-82

Log interest cost

Constant. . . . . . . . . . . . . . . . . . . . . . . . . . .

Log of Bond Buyer’s 20 Bond

Market Index . . . . . . . . . . . . . . . . . . . . .

Bond security

(general obligation = 1). . . . . . . . . . . .

Log of average maturity. . . . . . . . . . . . . .

Log of enplanements:

1978 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1979 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1980 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1981 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1982 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

R’ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F value . . . . . . . . . . . . . . . . . . . . . . . . . . . .

–0.174

(–1.105)

0.992

(14.355)

–0.088

(–4.520)

0.111

(6.739)

–0.0146

(-2.844)

–0.0117

(–2.208)

–0.0123

(–2.421)

–0.0113

(–1.988)

–0.0156

(–2.783)

0.896

125.576

NOTE: “t-ratios” are given in parentheses. Logs are natural logs.

SOURCE: Congressional Budget Office.

costs than issuers of revenue bonds (see table D-2). Further, the regression provides statistical confirmation

of the typical bond yield curve, with longer-term issues

requiring higher interest rates. As the average maturity

of the bond increases, so does the average interest paid,

with a lo-percent increase in maturity resulting, on

average, in a 1.1-percent increase in the interest rate

over this period. The analysis also shows that, after

adjustments are made for these other factors, the larger

the airport, the lower the interest rate, On average,

10 percent more enplanements results in a 1- to

I. S-percent decrease in interest.

Table D.2.—Estimated Impact of Market Interest

Rates, Type of Security, Average Maturity, and

Airport Size on Airport Cost of Capital, 1978-82

(95 percent confidence intervals in parentheses)

Interest cost

Elasticity with respect to market interest rates. . . . . . . . . . . . . . . . . . . . . . .

Percentage difference in interest costs

of general obligation versus revenue

bonds . . . . . . . . . . . . . . . . . . . . . . . . . . .

Elasticity with respect to average

maturity of issues . . . . . . . . . . . . . . . . .

Elasticity with respect to number of

enplaned passengers:

1978, ., . . . . . . . . . . . . . . . . . . . . . . . . . .

1979 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1980 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1981 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1981 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

0.99

(*0.14)

–8.4

(+3.8)

0.1115

(*0.0324)

(* O.O11O)

SOURCE: Table D-1.

249
Appendix E

AIRPORTS IN THE MUNICIPAL BOND

MARKET: A REGIONAL ANALYSIS

This appendix summarizes the participation of air- ●

ports in the municipal bond market by FAA region

over the 1978-82 period (see table E-1) and charts

regional differences in interest rates paid on airport ●

bonds relative to other municipal bonds (table E-2).

The FAA breaks down regions as follows:

New England Region: Connecticut, Maine,

Massachusetts, New Hampshire, Rhode Island,

Vermont.

Eastern Region: Delaware, District of Columbia,

Maryland, New Jersey, New York, Pennsylvania,

Virginia, West Virginia.

Table E.l.— Bond Issues for Airports by Region, 1978-82

In millions of 1982 dollars Percent of total

Number Average size Value Number Value

Region of issues of issue of issues of issues of issues

New England:

General obligation . . . . . . . . 3 0.4 1.1 1.3 a

Revenue . . . . . . . . . . . . . . . . . 1 100.2 100.2 0.4 2.0

Subtotal . . . . . . . . . . . . . . . 4 25.3 101.2 1.7 2.0

Eastern:

General obligation . . . . . . . . 7 8.2 57.3 2.9 1.1

Revenue . . . . . . . . . . . . . . . . . 21 14.9 312.4 8.8 6.2

Subtotal . . . . . . . . . . . . . . . 28 13.2 369.7 11.8 7.3

Southern:

General obligation . . . . . . . . 9 9.2 82.4 3.8 1.6

Revenue . . . . . . . . . . . . . . . . . 34 44.0 1,496.8 14.3 29.7

Subtotal . . . . . . . . . . . . . . . 43 36.7 1,579.2 18.1 31.3

Great Lakes:

General obligation . . . . . . . . 43 4.3 185,1 18.1 , 3.7

Revenue . . . . . . . . . . . . . . . . . 17 10.3 174.6 7.1 3.5

Subtotal . . . . . . . . . . . . . . . 60 6.0 359.6 25.2 7.1

Central:

General obligation . . . . . . . . 13 1.9 25.2 5.5 0.5

Revenue . . . . . . . . . . . . . . . . . 8 12.9 103.4 3.4 2.0

Subtotal . . . . . . . . . . . . . . . 21 6.1 128.6 8.8 2,5

Northwest Mountain:

General obligation . . . . . . . . 4 2.3 9.2 1.7 0.2

Revenue . . . . . . . . . . . . . . . . . 15 21.1 315.8 6.3 6.3

Subtotal . . . . . . . . . . . . . . . 19 17.1 325.0 8.0 6.4

Western Pacific:

General obligation . . . . . . . . 5 5.5 27.3 2.1 0.5

Revenue . . . . . . . . . . . . . . . . . 20 52.7 1,053.6 8.4 20.9

Subtotal . . . . . . . . . . . . . . . 25 43.2 1,080.9 10.5 21.4

Southwest:

General obligation . . . . . . . . 7 3.2 22.5 2.9 0.4

Revenue . . . . . . . . . . . . . . . . . 30 35.9 1,077.1 12.6 21.3

Subtotal . . . . . . . . . . . . . . . 37 29.7 1,099.6 15.5 21.8

Alaskab:

General obligation . . . . . . . . 1 3.0 3.0 0.4 0.1

All regions:

General obligation . . . . . . . . 92 4.5 413.0 38.7 8.2

Revenue . . . . . . . . . . . . . . . . . 146 31.7 4,633.8 61.3 91.8

Total . . . . . . . . . . . . . . . . . . 238 21.2 5,046.8 100.0 100.0

250
Appendix E: Airports in the Municipal Bond Market: A Regional Analysis 251

Table E-2.—Differences in Interest Rates Paid on Airport Bonds Relative to

Other Municipal Bonds by Region, 1978-82 (in basis points)

Region 1978 1979 1980 1981 1982 1978-82

New England:

General obligation . . . . . . . .

Revenue . . . . . . . . . . . . . . . . .

Eastern:

General obligation . . . . . . . .

Revenue . . . . . . . . . . . . . . . . .

Southern:

General obligation . . . . . . . .

Revenue . . . . . . . . . . . . . . . . .

Great Lakes:

General obligation . . . . . . . .

Revenue . . . . . . . . . . . . . . . . .

Central:

General obligation . . . . . . . .

Revenue . . . . . . . . . . . . . . . . .

Northwest Mountain:

General obligation . . . . . . . .

Revenue . . . . . . . . . . . . . . . . .

Western Pacific:

General obligation . . . . . . . .

Revenue . . . . . . . . . . . . . . . . .

Southwest:

General obligation . . . . . . . .

Alaska:

General obligation . . . . . . . .

Revenue . . . . . . . . . . . . . . . . .

Total:

General obligation . . . . . . . .

Revenue . . . . . . . . . . . . . . . . .

–58

NIA

a

a

– 122

a

a

a

a

22

–79

22

a

– 4 7

–18

–36

–26

– 137

a

N/A

– 4

a

– 5 7

–469

–51

– 101

– 9 5

– 156

a

– 7 7

a

8

–70

–63

–71

NIA

– 7 5

NIA

– 3 6

a

– 4 3

–223

– 7 5

– 7 4

– 5 4

– 142

– 5 9

– 154

a

a

– 9 4

22

–88

N/A

– 3 2

a

– 153

22

–81

a

a

– 102

a

a

–237

– 3 7

–119

–53

– 102

NIA

– 6 9

N/A

93

NIA

a

64

– 109

17

–115

– 8

– 138

–15

– 3 5

5

–49 a –70 – 4 6

a – 8

a

NIA

a

a

a

a

a

a

– 4 2

a

– 4 2

b

–63

NIA

–46

–29

–73

– 103

–89

– 123

–66

–32

–65

–70

NOTES: Data reflect difference in interest rates between airport bonds and other general obligation and revenue bond issues, in basis points. General obligation issues

are compared with the average value of the Bond Buyer’s Index of 20 municipal bonds during the month of issue. Revenue bonds are compared with the Bond

Buyer’s Revenue Bond Index during the month of June. Revenue bond figures for 1979 based on September-December only. N/A = data not available

aNo issues with this security in this Year.

bNo issues with this security in this region.

SOURCE: Congressional Budget Office.

Southern Region: Alabama, Florida, Georgia, ●

Kentucky, Mississippi, North Carolina, Puerto

Rico, South Carolina, Tennessee, Virgin Islands ●

Great Lakes Region: Illinois, Indiana, Michigan,

Minnesota, North Dakota, Ohio, South Dakota, ●

Wisconsin.

Central Region: Iowa, Kansas, Missouri, ●

Nebraska.

●

●

●
Index
Index

air traffic control (ATC) 66, 68, 69, 70, 75, 84, 114, 210

Air Traffic Control Radar Beacon System (ATCRBSl

66, 67, 70

air traffic hubs, 5

Alaska, 22, 29, 31

Allegheny Airlines, 172

Atlanta, GA, 34

Automated Radar Terminal System (ARTS) 67

Automated Weather Observing System (AWOS), 79

aviation forecasting system, 163

National Airport System Plan (NASP), 3, 11, 18, 29,

34, 69, 189, 196, 197, 198, 199, 222

Office of Systems Engineering Management (OSEM),

50

Federal Highway Administration (FHWA), 94

Federal Inspection Service (FIS), 93

Federal policy and strategy, 12

financial management and pricing, 125-136

255
256 ● Airport System Development

compensatory approach, 125, 127

landing fees, 132

operating revenues, 133

pricing of airport facilities and services, 129

residual-cost approach, 125, 127

structure and control of charges, 131

trends in management since deregulation, 135

fixed based operator (FBO), 26, 27

Florida, 149

forecasting and trends, 159-185

aviation demand forecasting, 159-168

FAA forecasting system, 163-166

limitations of aviation demand models, 166

methods, 159

implications for airport development, 184-185

recent trends in airline industry, 169-184

changes in airline industry composition, 170

changes in route networks, 172

formation of new hubs, 174

Frontier, 170

funding, 139-156

Federal airport development aid, 139-142

demand for investments, 141

investment trends, 139

financial conditions of U.S. airports, 143-147

airline deregulation, effects of, 146

effects of airport characteristics, 144

measures of performance, 143

recent trends, 143

municipal bond market, 147-156

market for airport bonds, 151

role in airport development, 147

gross takeoff weight (GTW), 75

Hawaii, 22, 29

Houston, TX, 34

Illinois, 29, 31

impact of management approach and airport size on airport financial performance, 247-248

Industry Task Force on Airport Capacity Improvement

and Delay Reduction, 11, 64, 84, 94, 100

Instrument Flight Rules, 51, 70.72

Instrument Landing System (ILS), 62, 64, 65, 66

Instrument Meteorological Conditions (IMC), 62, 64, 66,

71, 75

International Civil Aviation Organization, 66

Joint Airport Weather Studies, 78

legislation:

Air Cargo Deregulation Act of 1976, 211

Air Commerce Act of 1926, 209

Airmail Act of 1925, 209

Airline Deregulation Act of 1978, 23, 169

Airport and Airway Development Act, 13, 194, 196,

211, 213

Airport and Airway Improvement Act of 1982, 4, 7,

12, 15, 18, 189, 203, 212

Airport and Airway Revenue Act, 139

Civil Aviation Act, 209

Federal Airport Act of 1946, 209, 210

Federal Aviation Act of 1958, 35, 210

Low Level Wind Shear Alert System (LLWSAS), 79

management issues, 15

Maryland, 22, 29, 110

McKinnon, Dan, Chairman CAB, 24

Microwave Landing System (MLS), 62, 65, 66, 72, 82,

Moody’s

National

National

National

National

National

National

National

83

Investors Service, 148

Aeronautics and Space Administration

(NASA), 70, 77, 78

Airspace Command Center (NASCOM), 50,

51, 52, 55

Airspace Review, 11, 71

Association of State Aviation Officials

(NASAO), 193, 194

Oceanic and Atmospheric Administration, 78

Plan of Integrated Airport Systems (NPIAS), 4,

12, 18, 203

Science Foundation, 78

New York, 29, 31, 34, 40, 118

NEXRAD, 79

Noise Exposure Forecast (NEF), 36

Office of Management and Budget, 31, 191

organizations and institutions, 21-41

aircraft noise, 34

Federal responsibilities, 35

local noise abatement programs, 36

measurement of noise, 35

noise and land use, 36

capital improvement, 32

ownership and operation, 21

airport-air carrier relations, 23

airport-concessionaire relations, 25

airport-general aviation relations, 26

planning and development, 27

airport users, 27

Federal Government, 28

regional planning agencies, 31

State aviation agencies, 29

Performance Measurement System (PMS), 50

Piedmont, 115

policy considerations, 209-231

Federal airport policy, assessment of, 212-231

defederalization, 219

funding under current policy, 218

no Federal aid, 226

selective Federal aid, 222

State administration, 229

history, 209-211

Port Authority of New York and New Jersey, 94,

118, 119, 162, 193

Practical Annual Capacity (PANCAP), 46, 52, 53

Practical Hourly Capacity (PHOCAP), 46

113,
Index ● 2 5 7

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