1

 MEMORANDUM

Eastern Research Group, Inc. 

110 Hartwell Avenue

Lexington, MA 02421

Date: February 8, 2012 

To: James Covington, EPA 

From: Cal Franz, ERG 

Re: Extrapolation of Airport Impact Analysis Through 2009 

EPA extended the economic impact analysis of the Airport Deicing Operations Effluent Limitations 

Guidelines to cover the years following the 2004-2005 baseline. A primary motivation for extending the 

analysis is that the air transportation industry has continually been subject to negative economic shocks. 

EPA initially believed the 2004-2005 season would reflect a “worst-case scenario” due to the sequence of 

events affecting the industry starting with the economic downturn in 2001. Because it was anticipated the 

industry would return to a more normal financial environment in the years following 2004, EPA expected 

if the rule was economically achievable in 2004, it would be achievable in the following years. However, 

as documented in the memorandum: Airport Deicing Operations Effluent Guideline Economic Analysis: 

Economic Profile Update, significant negative economic shocks continued to affect the industry. 

Therefore, in this memorandum, EPA extrapolates estimated compliance costs through 2009, and projects 

the potential economic impacts associated with those costs based on publicly available data. 

1. Method for Extrapolating Compliance Costs 

For Options 1 and 2, EPA extrapolated 2004 average annualized compliance costs to extend the analysis 

beyond the 2004-2005 deicing season. In this extrapolation, capital costs were treated differently from 

operating and maintenance (O&M) costs. EPA held annualized capital costs constant in all years. Once 

construction is completed and equipment purchased, they become a fixed cost for the purposes of future 

deicing; neither the number of aircraft deiced in years 2005 through 2009, nor the price of the same 

capital equipment in those years affects capital expenditures (or their annualized value) that were made in 

2004. Airports pay the amortized value of those costs over time, but those do not change from year to 

year, even due to inflation. 

The operating and maintenance (O&M) costs of performing airfield deicing and collecting and treating 

ADF, however, are likely to vary over time. First, operating costs will vary from year-to-year as wages, 

gas, potassium acetate and other component prices change from year-to-year. In addition, the number of 

aircraft departures and thus the number of aircraft deiced will vary from year to year. To model this, EPA 

calculated an airport-specific O&M cost per aircraft deiced in the 2004 baseline, and inflated those costs 

to represent unit deicing costs for 2005 through 2009. To estimate annual O&M costs for those years, the 

unit deicing costs were multiplied by the number of airport-specific departures for those years. In 

summary, Option 1 and Option 2 airport-specific compliance costs for year 200x, were calculated as: 

















 



x

x

x

x Airport Departures PPI

PPI

Airport Departures

Annual O & M Costs

Compliance Costs Annualized Capital Costs

200

2004

200

2004

2004

200 2004
2

Under Option 3, the capital costs associated with airfield deicing product substitution are treated 

identically as for Options 1 and 2. That is, once construction is performed and equipment purchased, they 

become a fixed cost for the purposes of future airfield deicing. Airports pay the amortized value of those 

costs over time, but those do not change from year to year, even due to inflation. 

O&M costs under Option 3, however, are treated differently than O&M costs for Options 1 and 2. Under 

Options 1 and 2, O&M costs will vary with aircraft operations; more departures during the deicing season 

would, other things constant, increase the amount of ADF used, and thus the cost of collecting and 

treating that ADF. Under Option 3, weather will be the primary driver of the amount of potassium acetate 

used to deice the airfield. EPA assumes the weather for the 2004-2005 baseline deicing season is 

representative of each in-scope airport’s winter weather. The demand for airfield deicing will vary 

around that baseline, but the baseline represents the typical weather, and therefore the typical amount of 

airfield deicing required. Thus, average airfield deicing O&M costs under Option 3 will increase with the 

cost of potassium acetate, labor, fuel, and other necessities for performing airfield deicing, but, in general, 

not the number of aircraft departures. Thus, estimated Option 3 costs are extrapolated as: 















   

2004

200

200 2004 2004 PPI

PPI Compliance Costs Annualized Capital Costs Annual O & M Costs x

x

Table 1 presents the price deflators used to account for inflation when projecting 2004 unit compliance 

costs through 2009 (i.e., PPI200x/PPI2004 in equation above). 

Table 1. Deflators to Convert 

Compliance Costs from 2004 Dollars 

to Specified Year’s Dollars [a] 

Year Deflator 

2004 1.000 

2005 1.037 

2006 1.074 

2007 1.084 

2008 1.111 

2009 1.166 

[a] Derived from Bureau of Labor Statistics 

Producer Price Index for Airport Operations 

(Series ID 48811). 

This approach accounts for both changes in the price of materials, equipment, and labor necessary to 

collect and treat Aircraft Deicing Fluid (ADF)-contaminated stormwater, as well as airport flight 

operations that affect the demand for those services. This approach implicitly assumes that the winter 

weather conditions reflected in the Airport Deicing Questionnaire are representative of long-term average 

conditions at each airport. Also implicit in this approach is that EPA makes no assumptions concerning 

the source of financing the capital portion of projected compliance costs, but instead assumes costs are 

discounted using a 7 percent real rate to account for the opportunity cost of capital, and for the purposes 

of amortization, the project is evaluated over an assumed 20 year service life. 

2. Projected Compliance Costs through 2009 

Table 2 presents the projected annualized deicing compliance costs for the 2004 to 2009 period. Under 

the option selected as the basis for the promulgation rule, Option 3, total annualized compliance costs in 
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nominal dollars (i.e., the value of the dollar in that year) for the 198 in-scope airports range from $3.3 

million in 2004 to $3.8 million in 2009. Table 2 also provides estimated compliance costs converted to 

constant 2006 dollars. The indices used to convert nominal to constant 2006 dollars are listed in Table 3. 

Under Option 3, projected compliance costs peak in 2005 ($3.52 million), but reach their low point in 

2009 ($3.47 million). As shown by the percent change in annualized compliance costs, projected costs 

decrease in years 2006 through 2009 (in constant 2006 dollars). 

Table 2. Projected Annualized Compliance Costs, 2004 – 2009 (millions)

Option 

In-scope 

Airports 

Year 

2004 2005 2006 2007 2008 2009 

Nominal Dollars (millions) 

Option 1

Total 

198 

$73.6 $76.6 $77.4 $80.0 $79.6 $78.2 

Capital $24.8 $24.8 $24.8 $24.8 $24.8 $24.8 

O&M $48.8 $51.8 $52.6 $55.2 $54.8 $53.4 

Option 2

Total 

198 

$46.4 $48.4 $50.1 $51.7 $51.9 $51.9 

Capital $19.7 $19.7 $19.7 $19.7 $19.7 $19.7 

O&M $26.7 $28.7 $30.4 $32.0 $32.2 $32.2 

Option 3

Total 

198 

$3.29 $3.39 $3.50 $3.53 $3.60 $3.76 

Capital $0.44 $0.44 $0.44 $0.44 $0.44 $0.44 

O&M $2.85 $2.96 $3.06 $3.09 $3.17 $3.53 

Constant 2006 Dollars (millions)

Option 1

Total 

198 

$78.4 $79.3 $77.4 $79.3 $77.0 $72.0 

Capital $26.4 $25.7 $24.8 $24.6 $24.0 $22.8 

O&M $52.0 $53.7 $52.6 $54.7 $53.0 $49.2 

Option 2

Total 

198 

$49.4 $50.1 $50.1 $51.3 $50.2 $47.8 

Capital $21.0 $20.4 $19.7 $19.5 $19.0 $18.1 

O&M $28.4 $29.7 $30.4 $31.7 $31.1 $29.7 

Option 3

Total 

198 

$3.50 $3.52 $3.50 $3.50 $3.49 $3.47 

Capital $0.46 $0.45 $0.44 $0.43 $0.42 $0.40 

O&M $3.04 $3.06 $3.06 $3.06 $3.06 $3.06 

Percent Change in Projected Costs (Constant 2006 $) 

Option 1

Total 

198 

-- 1.3% -2.5% 2.4% -2.8% -6.5% 

Capital -- -2.7% -3.5% -0.9% -2.4% -4.7% 

O&M -- 3.3% -2.0% 4.0% -3.0% -7.3% 

Option 2

Total 

198 

-- 1.5% -0.1% 2.4% -2.1% -4.7% 

Capital -- -2.7% -3.5% -0.9% -2.4% -4.7% 

O&M -- 4.6% 2.2% 4.5% -2.0% -4.7% 

Option 3

Total 198 -- 0.4% -0.5% -0.1% -0.3% -0.6% 

Capital -- -2.7% -3.5% -0.9% -2.4% -4.7% 
4

O&M -- 0.9% 0.0% 0.0% 0.0% 0.0% 

Source: EPA estimates. 

Table 3. Deflators to Convert Compliance 

Costs from 2004 Specified Year’s Dollars 

to 2006 Dollars [a] 

Year Deflator 

2004 1.074 

2005 1.036 

2006 1.000 

2007 0.991 

2008 0.967 

2009 0.921 

[a] Derived from Bureau of Labor Statistics 

Producer Price Index for Airport Operations 

(Series ID 48811). 

For comparison with changes in projected compliance costs, Table 4 shows the number and percent 

change in departures and passenger enplanements at in-scope airports from 2004 through 2009. 

Table 4. Commercial Airline Departures and Passenger Enplanements at In-scope Airports by 

Year 

Year 

2004 2005 2006 2007 2008 2009 

Commercial Aircraft Departures (thousands) 

Total 9,353 9,408 9,115 9,207 8,867 8,240 

Percent change -- 0.6% -3.1% 1.0% -3.7% -7.1% 

Passenger Enplanements (millions) 

Total 602.3 628.8 631.2 651.2 628.5 594.0 

Percent change -- 4.4% 0.4% 3.2% -3.5% -5.5% 

Source: EPA analysis of BTS T-100 database. 

Figure 1 compares the percent change in enplanements, departures, and projected compliance costs by 

year. Because the method used to project compliance costs for Options 1 and 2 is a function of aircraft 

departures, there is a close parallel between the percent change in departures and the percent change in 

Option 1 and 2 costs. Because Option 3 costs are primarily a function of weather, and because we 

assumed 2004 weather was representative of weather in the following years, Option 3 costs show a slow 

decline as inflation reduces the real value of amortized capital costs, but otherwise show little variation. 
5

3. Revenue Test Analysis 

After projecting compliance costs for in-scope airports for the 2005 through 2009 time frame, EPA 

performed an impact analysis for each year comparing airport-specific nominal year costs with airportspecific revenues. As was the case for the analysis presented in the Economic Analysis (EA) document, 

EPA considered that compliance costs exceeding 3 percent of airport operating revenues is not 

economically sustainable for that airport. 

The results of the revenue test are presented in Table 5. The impacts under the Option 3, the basis for the 

promulgated standards, are consistent over time with only one airport projected to incur costs exceeding 3 

percent of total operating revenues in each of the 6 years analyzed. 
6

Table 5. Number of In-scope Airports with Compliance Costs greater than/less than 3 Percent of 

Airport Operating Revenues

Year 

2004 2005 2006 2007 2008 2009 

In-scope Airports with Projected Average Annualized Compliance Costs greater than/less than 3 Percent of 

Airport Operating Revenues 

Option 1

< 3% Number 184 185 185 185 185 185 

Percent 92.9% 93.4% 93.4% 93.4% 93.4% 93.4% 

≥ 3% Number 9 9 9 9 9 9 

Percent 4.5% 4.5% 4.5% 4.5% 4.5% 4.5% 

Not 

Analyzable[a]

Number 5 4 4 4 4 4 

Percent 2.5% 2.5% 2.0% 2.0% 2.0% 2.0% 

Option 2

< 3% Number 188 189 189 190 190 190 

Percent 95.0% 95.5% 95.5% 96.0% 96.0% 96.0% 

≥ 3% Number 5 5 5 4 4 4 

Percent 2.5% 2.5% 2.5% 2.0% 2.0% 2.0% 

Not 

Analyzable[a]

Number 5 4 4 4 4 4 

Percent 2.5% 2.0% 2.0% 2.0% 2.0% 2.0% 

Option 3

< 3% Number 195 195 196 196 196 196 

Percent 98.5% 98.5% 99.0% 99.0% 99.0% 99.0% 

≥ 3% Number 1 1 1 1 1 1 

Percent 0.5% 0.5% 0.5% 0.5% 0.5% 0.5% 

Not 

Analyzable[a]

Number 2 2 1 1 1 1 

Percent 1.0% 1.0% 0.5% 0.5% 0.5% 0.5% 

[a] Average annualized compliance as a percent of operating revenues cannot be calculated because revenue data 

are unavailable for these airports. More airports can be analyzed under Option 3 because several airports without 

revenue data are not projected to incur compliance costs. Thus, these airports can be included among those that 

are not impacted by the regulation despite the fact that the ratio cannot be calculated. 

The number of airports for each year and option may not sum to 198 due to rounding; similarly, the percent of 

airports for each year and option may not sum to 100% due to rounding. 

Source: EPA estimates. 

Comparing projected airport compliance costs and operating revenues over time helps explain the 

consistency in the impacts measured over the 2004 through 2009 time frame. Table 6 lists aggregate total 

operating revenues as well as projected compliance costs in both nominal and constant 2006 dollars for 

selected in-scope airports.1

 The fluctuations in revenues and projected compliance costs track closely 

since projected compliance costs and revenues are both functions of departures. This is illustrated in 

Figure 2. Thus, if an airport is not projected to incur costs exceeding 3 percent of revenues in 2004, it is 

unlikely to do so throughout the fluctuations in the following years. 

 

1

 The number of airport with revenue data available varied from year-to-year: 187 in 2009; 193 in 2004 and 2005; and 

194 in 2006 through 2008 (e.g., see the final row in Table 5). To ensure that the percent change in projected costs and 

revenues would be unaffected by this year-to-year variation in data availability, the analysis in Table 6 and Figure 2 

includes only the 187 airports with revenue data available for the entire 6 year period. 
7

Table 6. Airport Revenues and Compliance Costs by Year, Selected Airports [a]

Year 

2004 2005 2006 2007 2008 2009 

Nominal Dollars (millions)

Airport Revenues 

Total Operating Revenues $10,649 $11,262 $12,009 $12,986 $13,195 $13,176 

Projected Compliance Costs 

Option 1 $73.5 $76.5 $77.3 $79.9 $79.5 $78.1 

Option 2 $46.3 $48.3 $50.0 $51.6 $51.8 $51.8 

Option 3 $3.23 $3.33 $3.44 $3.47 $3.54 $3.70 

Constant 2006 Dollars (millions)

Airport Revenues 

Total Operating Revenues $11,336 $11,670 $12,009 $12,868 $12,760 $12,137 

Percent Change -- 2.9% 2.9% 7.1% -0.8% -4.9% 

Projected Compliance Costs 

Option 1 $78.3 $79.3 $77.3 $79.2 $76.9 $71.9 

Percent Change -- 1.3% -2.5% 2.4% -2.8% -6.5% 

Option 2 $49.3 $50.0 $50.0 $51.2 $50.1 $47.7 

Percent Change -- 1.5% -0.1% 2.4% -2.2% -4.7% 

Option 3 $3.44 $3.46 $3.44 $3.44 $3.43 $3.41 

Percent Change -- 0.5% -0.4% -0.1% -0.3% -0.5% 

[a] Includes the 193 airports (of 198) with revenue data available for the entire 6 year period. 
8

4. Cost per Enplaned Passenger 

EPA examined cost per enplaned passenger at each in-scope airport, and cost per passenger as a percent 

of average air fare at that airport. The first measure provides a characterization of how much each 

passenger would need to pay in order to cover the annualized compliance costs of the effluent guideline at 

that airport. The second measure places that increased cost in the context of the typical fare paid on flights 

departing that airport. 

Table 7 reviews how projected compliance costs per enplaned passenger vary over the 2004 through 2009 

time period. This analysis only examines compliance costs in constant 2006 dollars. If nominal dollars 

are used, cost per enplaned passenger will increase solely due to inflation; this would be misleading 

because airport costs can also be expected to increase at roughly the same rate, leaving the relative burden 

unchanged. 

As demonstrated in Table 7, at least 89 percent of airports (176 of 198) are projected to incur less than 

$0.10 in compliance cost per enplaned passenger in any given year under Option 3. With the exception of 

2009, 189 (95.5 percent) or more airports are projected to incur costs less than $0.25 per passenger; 

because enplanement data were not available for 3 airports in 2009, the figures are not entirely 

comparable. Only one airport (0.5 percent) is projected to incur costs exceeding $0.50 per enplaned 

passenger under Option 3. 
9

Table 7. Compliance Costs per Enplaned Passenger by Year in Constant 2006 Dollars 

$/Epax Range [a] 

Number of Airports with $/Epax in Specified Range by Year 

2004 2005 2006 2007 2008 2009 [b] 

Option 1

$/Epax < $0.10 Number 161 161 157 157 157 156 

Percent 81.2% 81.3% 79.0% 79.0% 79.0% 78.5% 

$0.10 ≤ $/Epax < $0.25 Number 14 14 18 23 20 13 

Percent 7.3% 7.3% 9.2% 11.4% 9.9% 6.7% 

$0.25 ≤ $/Epax < $0.50 Number 11 12 8 7 10 15 

Percent 5.5% 6.0% 4.0% 3.5% 5.0% 7.7% 

$0.50 ≤ $/Epax Number 12 11 15 12 12 11 

Percent 6.1% 5.5% 7.7% 6.1% 6.1% 5.5% 

Option 2

$/Epax < $0.10 Number 164 164 161 161 161 161 

Percent 82.7% 82.7% 81.0% 81.0% 81.0% 81.0% 

$0.10 ≤ $/Epax < $0.25 Number 15 15 17 22 19 11 

Percent 7.8% 7.8% 8.7% 10.9% 9.4% 5.7% 

$0.25 ≤ $/Epax < $0.50 Number 11 12 9 8 11 16 

Percent 5.5% 6.0% 4.5% 4.0% 5.5% 8.2% 

$0.50 ≤ $/Epax Number 8 7 11 8 8 7 

Percent 4.0% 3.5% 5.7% 4.0% 4.0% 3.5% 

Option 3

$/Epax < $0.10 Number 176 178 178 178 176 176 

Percent 88.8% 89.5% 89.5% 89.5% 88.8% 88.8% 

$0.10 ≤ $/Epax < $0.25 Number 13 12 15 15 16 10 

Percent 6.8% 6.0% 7.5% 7.5% 8.2% 5.2% 

$0.25 ≤ $/Epax < $0.50 Number 8 8 5 5 5 8 

Percent 4.0% 4.0% 2.5% 2.5% 2.5% 4.0% 

$0.50 ≤ $/Epax Number 1 1 1 1 1 1 

Percent 0.5% 0.5% 0.5% 0.5% 0.5% 0.5% 

[a] $/Epax: airport-specific annualized compliance costs/airport-specific enplaned passengers. 

[b] Three in-scope airports could not be evaluated in 2009 due to lack of enplanement data. 
10

After calculating nominal annualized compliance cost per enplaned passenger at each airport, EPA then 

divided this value by that airport’s average airfare for that year. Average airfares by airport and year were 

downloaded from the BTS website. BTS calculates the average airfare from a 10 percent sample of all 

airline tickets (the Passenger Origin and Destination (O&D) Survey); the fare includes taxes and fees such 

as PFCs, but excludes other fees such as baggage fees. The sample also does not account for bulk 

discount fares or frequent flier tickets, and therefore does not represent average airline revenue per 

passenger from that airport. However, it is the best representation available of the price paid by 

passengers, and cost as a percentage of the average fare provides a characterization of how much demand 

might decrease as a result of the ELG. 

Table 8 provides the results of these calculations. Under Option 3, which was used as the basis for 

promulgation, compliance costs per passenger compose less than 0.1 percent of the average airfare at all 

but one in-scope airport in 2004 through 2007. Compliance costs per passenger exceed 0.1 percent of 

average airfare at only three to nine airports, but in no case do they exceed 0.35 percent of average 

airfare. 

Table 8. Nominal Compliance Cost per Passenger as Percent of Airport-Specific Average Airfare 

Compliance Cost as % of 

Average Airfare [a] 

Number of Airports with Cost per Passenger as 

% of Average Airfare in Specified Range [b] 

2004 2005 2006 2007 2008 2009 

Option 1 

$/Avg Airfare < 0.10% 173 175 174 174 176 169 

0.10% < $/Avg Airfare < 0.35% 12 15 15 15 12 18 

0.35% < $/Avg Airfare 3 3 3 3 4 5 

Option 2

$/Avg Airfare < 0.10% 177 180 179 179 181 173 

0.10% < $/Avg Airfare < 0.35% 11 13 13 13 11 19 

0.35% < $/Avg Airfare 0 0 0 0 0 0 

Option 3

$/Avg Airfare < 0.10% 187 191 191 191 189 183 

0.10% < $/Avg Airfare < 0.35% 1 1 1 1 3 9 

0.35% < $/Avg Airfare 0 0 0 0 0 0 

[a] Calculated as the total annualized compliance cost per enplaned passenger at each airport divided by that 

airport’s average air fare. 

[b] Average airfare available for 188 airports in 2004, and 192 airports in 2005 through 2009. 

5. Cost per Available Seat-mile 

EPA projected the impact under the promulgated option of nominal annualized compliance costs per 

available seat mile (ASM) on flights departing in-scope airports over the 2004 through 2009 time frame. 

ASM is perhaps the most basic measure of the supply of air transportation passenger service. Thus, the 

analysis approximates the impact of the effluent guideline on the supply of air transportation services. 

Due to data limitations, EPA examined impacts to cost per ASM in two different ways. The Bureau of 

Transportation Statistics provides airport-specific data on ASM on all flights departing that airport. Thus, 

EPA can calculate the absolute value of the increased cost per ASM attributable to the rule on an airport-
11

specific basis. This allows a comparison of impacts between airports. 

However, an economically more significant analysis would examine projected compliance costs per ASM 

relative to airlines’ pre-regulatory operating cost per ASM; this would essentially measure the decrease in 

supply of ASM attributable to the rule. However, airline operating costs for flights departing specific 

airports are not available. Therefore, this analysis can only be performed on a system-wide basis, and 

EPA can estimate an overall impact on the supply of air transportation services, but not the impact on 

supply at any given airport. Hence, EPA chose to present both analyses, neither one of which completely 

characterizes potential impacts, but both of which provide relevant information. To perform these 

analyses, EPA obtained airport-specific ASM, system-wide ASM by airline, and system-wide airline 

operating cost from BTS (2010) for each year in the 2004 through 2009 time frame. 

Because ASM data were not available for all airports, EPA performed the airport-specific analysis on 31 

of the 37 airports projected to incur costs under Option 3 in 2004; these six airports without ASM data 

account for $1.04 million of the $3.29 million (31.6 percent) in total annualized compliance costs. 

However, in 2005 through 2009 only two of these airports do not have ASM data available, and they total 

less than $12,000 per year (0.3 percent) in each of those years. Under Options 1 and 2, EPA evaluated 40 

of 198 airports projected to incur costs; however, these 40 airports account for almost 98 percent of 

annualized compliance costs under those options. 

Table 9 summarizes the results of this analysis. Under Option 3, no airports are projected to incur 

constant dollar compliance costs exceeding 1/10th of one cent per ASM in 2004, or 2007 through 2009. 

In 2005 one airport, and in 2006 three airports are projected to incur constant dollar compliance costs 

exceeding 1/10th of one cent per ASM. 
12

Table 9. Airport Compliance Costs per Available Seat-mile on Airport Departures

Compliance Costs 

per ASM 

Number of Airports With Compliance 

Cost per ASM in Specified Range 

2004 2005 2006 2007 2008 2009 

Nominal Dollar Annualized Compliance Cost per ASM 

Option 1 [a] 

$/ASM < $0.0005 24 24 24 26 26 26 

$0.0005 < $/ASM < $0.001 10 11 8 8 8 7 

$0.001 < $/ASM 6 5 8 6 6 7 

Option 2 [a]

$/ASM < $0.0005 28 28 28 30 30 30 

$0.0005 < $/ASM < $0.001 11 11 9 9 9 8 

$0.001 < $/ASM 1 1 3 1 1 2 

Option 3 [b]

$/ASM < $0.0005 186 186 186 189 189 189 

$0.0005 < $/ASM < $0.001 8 9 7 7 7 6 

$0.001 < $/ASM 0 1 3 0 0 1 

Constant Dollar Annualized Compliance Cost per ASM 

Option 1 [a] 

$/ASM < $0.0005 23 24 24 26 26 26 

$0.0005 < $/ASM < $0.001 11 10 8 8 8 8 

$0.001 < $/ASM 6 6 8 6 6 6 

Option 2 [a]

$/ASM < $0.0005 27 28 28 30 30 30 

$0.0005 < $/ASM < $0.001 12 11 9 9 9 9 

$0.001 < $/ASM 1 1 3 1 1 1 

Option 3 [b]

$/ASM < $0.0005 186 186 186 189 189 189 

$0.0005 < $/ASM < $0.001 8 9 7 7 7 7 

$0.001 < $/ASM 0 1 3 0 0 0 

[a] The 40 airports included in this analysis account for more than 97 percent of projected compliance costs each 

year. 

[b] In addition, six airports in 2004, and two airports in 2005 through 2009 could not be analyzed because ASM 

data were not available. 

Table 10 presents EPA’s estimated baseline airline operating cost per ASM for each year of the 2004 

through 2009 time frame. EPA edited the list of airline included in the analysis to remove those that: 

 operate almost exclusively in Alaska; 

 operate primarily in Hawaii, Caribbean, and Micronesia, 

 predominantly provide cargo services, or are 
13

 niche airlines that offer high cost service to relatively small numbers of passengers. 

Most of these airlines were excluded from the analysis because they are unlikely to be representative of 

airlines operating from in-scope airports (e.g., Continental Micronesia). With the exception of Alaska 

Airlines, Alaskan airports and airlines were excluded from the analysis because their financial operating 

environment differs significantly from that of the 48 continental states; furthermore, most of these airlines 

utilize propeller-driven aircraft with significantly higher operating cost per ASM. Finally, airlines that 

offer primarily cargo services, and niche passenger airlines that operate at a high cost per ASM are not 

representative of most passenger airlines, and were therefore excluded from the analysis. Although a large 

number of airlines are excluded from the analysis, the airlines included in the analysis account for well 

over 95 percent of ASM flown each year by all U.S. airlines. 

EPA estimates that cost per ASM (in nominal dollars) ranges from $0.1131 in 2004, peak at $0.1504 (due 

to the spike in fuel prices) and returns to $0.129 in 2009. Under Option 3, nominal annualized compliance 

costs range from $0.000022 to $0.000026 per domestic ASM on flights departing from in-scope airports. 

Thus, under the promulgated rule, airline cost per ASM is projected to increase on average less than 0.02 

percent on departures from in-scope airports. These departures account for roughly 15 percent of systemwide ASM. Including total departures in the analysis decreases the projected incremental cost per ASM to 

no more than 0.013 percent of baseline airline cost per ASM. However, this incremental cost is incurred 

on about 24 percent of system-wide ASM. 
14

Table 10. Annualized Compliance Cost Impacts on Airline Cost per Available Seat-mile [a, b] 

Metric

Year 

2004 2005 2006 2007 2008 2009 

Average Airline Operating 

Cost per ASM $0.1131 $0.1204 $0.1254 $0.1272 $0.1504 $0.1290 

Option 1 

Annualized compliance costs per 

in-scope airport domestic ASM $0.00050 $0.00050 $0.00051 $0.00051 $0.00052 $0.00054 

Compliance cost per ASM as 

percent of airline cost per ASM 0.44% 0.42% 0.41% 0.40% 0.34% 0.42% 

In-scope airport domestic ASM as 

percent of system-wide ASM 15.0% 15.0% 14.8% 15.2% 15.2% 15.0% 

Annualized compliance costs per 

in-scope airport total ASM $0.00034 $0.00033 $0.00033 $0.00032 $0.00032 $0.00033 

Compliance cost per ASM as 

percent of airline cost per ASM 0.30% 0.28% 0.26% 0.25% 0.21% 0.26% 

In-scope airport total ASM as 

percent of system-wide ASM 22.3% 22.6% 23.0% 24.0% 24.5% 24.6% 

Option 2

Annualized compliance costs per 

in-scope airport domestic ASM $0.00031 $0.00032 $0.00033 $0.00033 $0.00034 $0.00036 

Compliance cost per ASM as 

percent of airline cost per ASM 0.28% 0.26% 0.27% 0.26% 0.22% 0.28% 

In-scope airport domestic ASM as 

percent of system-wide ASM 15.0% 15.0% 14.8% 15.2% 15.2% 15.0% 

Annualized compliance costs per 

in-scope airport total ASM $0.00021 $0.00021 $0.00021 $0.00021 $0.00021 $0.00022 

Compliance cost per ASM as 

percent of airline cost per ASM 0.19% 0.18% 0.17% 0.16% 0.14% 0.17% 

In-scope airport total ASM as 

percent of system-wide ASM 22.3% 22.6% 23.0% 24.0% 24.5% 24.6% 

Option 3

Annualized compliance costs per 

in-scope airport domestic ASM $0.000022 $0.000022 $0.000023 $0.000023 $0.000023 $0.000026 

Compliance cost per ASM as 

percent of airline cost per ASM 0.020% 0.019% 0.019% 0.018% 0.016% 0.020% 

In-scope airport domestic ASM as 

percent of system-wide ASM 15.0% 15.0% 14.8% 15.2% 15.2% 15.0% 

Annualized compliance costs per 

in-scope airport total ASM $0.000015 $0.000015 $0.000015 $0.000014 $0.000015 $0.000016 
15

Compliance cost per ASM as 

percent of airline cost per ASM 0.013% 0.012% 0.012% 0.011% 0.010% 0.012% 

In-scope airport total ASM as 

percent of system-wide ASM 22.3% 22.6% 23.0% 24.0% 24.5% 24.6% 

[a] All compliance costs are included for in-scope airport compliance cost per ASM, although ASM for all in-scope 

airports are not included. With the exception of Alaskan Airlines, airlines and in-scope airports in Alaska are excluded 

from the analysis. 

[b] EPA did not perform a constant dollar analysis of cost per ASM because the cost of airport operations (used as the 

basis for estimating constant dollar compliance costs) most likely grew at a substantially different (and lower) rate than the 

cost of airline operations due to the spike in jet fuel prices. 

6. Conclusion 

The analysis presented in this memorandum demonstrates that the economic impacts projected for the 

2004 – 2005 deicing season remain stable when compliance costs are extrapolated through 2009, despite 

the worsening of the financial conditions of the industry over that time. Although airport financial 

resources declined in some years due to the reduction in air traffic, compliance costs associated with 

airfield deicing product substitution are generally such a small percent of operating revenues that most 

airports have adequate resources relative to the projected cost of the rule. 

In addition, EPA does not draw the conclusion that this effluent guideline is economically achievable 

solely on the basis of the airport revenue test. EPA examined a number of metrics, and concluded that 

because: 

 Total annualized compliance costs exceed 3 percent of operating revenues for a single airport; 

 Compliance costs are low per enplaned passenger, both as an absolute value, and as a percent of 

average air fares, and 

 Compliance costs are low relative to baseline cost per ASM; 

the airport deicing operations effluent guideline is economically achievable.