APPENDIX B AVIATION DEMAND FORECAST Index B1: Aviation Activity Forecasts Report B2: A Comparative Analysis of the NY/NJ/PHL Forecast and 2005 Actual Traffic B.1 Aviation Activity Forecasts Report NY/NJ/PHL Airspace Redesign EIS Aviation Activity Forecasts Report APPENDIX B AVIATION ACTIVITY FORECASTS REPORT Landrum & Brown Appendix B September, 2005 NY/NJ/PHL Airspace Redesign EIS Aviation Activity Forecasts Report Table of Contents I. Purpose and Context........................................................................................................B-1 II. Key Assumptions.............................................................................................................B-3 III. Sources.............................................................................................................................B-5 IV. Passenger and Operations Forecast..................................................................................B-7 V. Forecast Results – IFR Operations................................................................................B-14 VI. The Impact of the Events of September 11 on Forecast Task.......................................B-17 Tables Table 1 - Airports Included in Forecast Analysis.....................................................................B-1 Table 2 - Sample Add & Drop Matrix......................................................................................B-6 Table 3 - Forecast Analysis – Airport Profiles.........................................................................B-9 Table 4 - Passenger Forecast Summary & TAF Comparison.................................................B-11 Table 5 - Forecast Summary – Study Area Annual IFR Flight Operations............................B-14 Table 6 - Generalized Fleet Mix Summary – Existing & Forecast.........................................B-16 Exhibits Exhibit 1 – Airports Within the Study Area...................................................................After B-2 Exhibit 2 - General Forecasting Methodology..........................................................................B-8 Attachments Attachment A – Study Area Airport Evaluation Summary.....................................................A-1 Attachment B - Forecast Fleet Mix Data Tables......................................................................B-1 Landrum & Brown Appendix B September, 2005 TOC B-1 NY/NJ/PHL Airspace Redesign EIS Aviation Activity Forecasts Report Aviation Activity Forecasts Report I. Purpose and Context As a part of the FAA’s ongoing National Airspace Redesign (NAR) effort, the NY/NJ/PHL Metropolitan Airspace Redesign study is investigating various alternative designs for the air traffic routes and airspace in the New York and Philadelphia Metropolitan and surrounding areas. In order to thoroughly evaluate these alternatives and meet NEPA requirements it is necessary to conduct both operational and environmental modeling of the future baseline conditions as well as each alternative. A key element in the development of accurate modeling for these conditions is the forecasting of future air traffic operational levels expected in the area and at the airports of interest. Although the FAA’s office of Aviation Policy and Plans (APO) develops and regularly updates the Terminal Area Forecasts (TAF) for some 3,400 airports throughout the country, these forecasts may not undergo a rigorous forecast update for several years for a given airport. Furthermore, the TAF forecasts generally do not provide sufficient detail (aircraft type, destination, etc.) for environmental modeling. Accordingly, it was determined that an independent forecasting effort be undertaken for each of the airports evaluated in this study. The area of interest for this study is geographically designated as the Greater New York/New Jersey/Philadelphia Metropolitan region (the “Region”) including the City of New York, Long Island, New Jersey, Southern Connecticut, Eastern Pennsylvania, Philadelphia, and the northern portion of Delaware. Exhibit 1 presents a map of the Study Area identified for this project. Because there are a large number of public and private airports that are located within this area it was necessary to undertake an evaluation process to determine the airports that would require full environmental analysis and modeling. This effort is discussed in Section 1.6 of Chapter 1 of the EIS document. Attachment A, located at the end of this report, presents a listing of the airports evaluated along with some key statistics and a brief summary of the rational for inclusion or exclusion from the study analysis. The evaluation resulted in the identification of 21 airports to be included in the study modeling. In order to provide data for the operational and environmental impacts analysis, a forecast for IFR operations in 2006 and 2011 at each of these Study airports was developed for this project. The airports in this analysis are identified in Table 1. The Region is among the most congested aeronautical sectors in the National Air Space System and is expected to grow throughout the next decade as both commercial and general aviation demands compete for more airport and airspace capacity (See Exhibit 1). Serving as primarily a business corridor, flight frequency as opposed to aircraft gauge expansion will be an issue affecting traffic levels in the region. The purpose of the IFR forecast is to provide data input into the operational and environmental impacts analysis for both existing conditions as well as the projected levels of operations over the next decade. It will also serve as a schedule for the Total Airport and Airspace Modeler (TAAM) simulation to be conducted for the 90th percentile schedule. Landrum & Brown Appendix B September, 2005 Page B-1 NY/NJ/PHL Airspace Redesign EIS Aviation Activity Forecasts Report The FAA sought an independent review of the FAA’s Terminal Area Forecasts (“TAFs”) for the Region’s airports. The Region’s airport forecasts from this study provide considerably more detail than TAFs including gauge and load factor assumptions of the air carriers’ arriving and departing flights for the forecast benchmark years. Considerable analytical attention was also applied to the general aviation sector. In particular, the corporate aviation market is expected to grow at a more robust rate than scheduled airline service given the success and growth profile of fractional ownership programs for corporate/high end leisure aircraft.1 The forecast for overflights or “en route” aircraft operations are also included in this document. Table 1 Airports Included in Forecast Analysis Airport Name Airport Code Type of Service Allentown/Lehigh Valley International ABE Scheduled, GA, Mil, Cargo Atlantic City International ACY Scheduled, GA, MiI, Cargo Bridgeport/Igor I. Sikorsky Memorial BDR GA, Cargo Caldwell/Essex County CDW GA Newark Liberty International EWR Scheduled, GA, Cargo Westhampton Beach/The Francis S. Gabreski FOK GA Republic * FRG Scheduled, GA, Cargo White Plains/Westchester County HPN Scheduled, GA New Haven/Tweed-New Haven HVN Scheduled, GA Wilmington/New Castle County * ILG GA, MiI, Cargo Islip Long Island MacArthur ISP Scheduled, GA, Cargo John F. Kennedy International JFK Scheduled, GA, Cargo Linden LDJ GA LaGuardia LGA Scheduled, GA Morristown Municipal MMU GA, Cargo Philadelphia International PHL Scheduled, GA, Cargo Northeast Philadelphia PNE GA Newburgh/Stewart International SWF Scheduled, GA, MiI, Cargo Teterboro TEB Scheduled, GA, Cargo Trenton/Mercer County TTN Scheduled, GA McGuire AFB WRI MiI * Both Republic and New Castle have limited/occasional scheduled air service. All forecasts are estimates of future activity based upon assumptions about the continuation of, or changes to past air service trends. The accuracy of forecasts depends upon the accuracy of these assumptions. While past activity is not a guarantee of the course of future events, the 1 2000 FAA Aerospace Forecast Landrum & Brown Appendix B September, 2005 Page B-2 N E W YO R K / N E W J E R S E Y / P H I L A D E L P H I A M E T R O P O L I TA N A I R S PAC E R E D E S I G N P R O J E C T WNW2903003N10W320330NNW3403503N601020NNE3040N50E6070ENE 0 10 20 30 40 Statute Miles N270280 8090N 0 10 20 30 40 Nautical Miles WSW0620520420W3S2022012WSS0020910N81071061ESS0510410E3S1021011001ESE S Otsego TU DY Albany A Schoharie RE A B O U N D A RY Greene Columbia Delaware MASSACHUSETTS CONNECTICUT Ulster T U C Tolland Dutchess RK TILitchfield Wayne Sullivan O EC Hartford W Y NN E O N C New P Lackawanna ENN SWF New Middlesex London S YL SWF Putnam Haven VA Orange NI Pike A NENEW Y Fairfield Monroe SusseWx JERSEOYR PKa ssaic Rockland WestcHhPNe HstePr N BDR BDLORNHVGN HISVLANND SOUND Bergen CDW TEB Carbon Warren CDW Bronx Suffolk FOKFOK Morris TEB LGA MMU Essex ISP ISP Northampton LGA FRG Schuylkill MMU Queens FRG ABE ABE Union EWR EWR JFK Nassau Lehigh LDJ JFK Hunterdon LDJ New York Somerset Hudson Kings Berks Bucks Middlesex Richmond TTN TTN Mercer Monmouth Montgomery Y PNE AR D Lancaster PNE WRI O U N Chester Philadelphia WRI A B E R Ocean A Delaware PHL U DY PHL Burlington ST PENNSYLVANIA ILG Camden Gloucester MARYLAND ILG E Salem RA ATLANTIC W ALE Atlantic ACY OCEAN D New ACY Castle Cumberland Cape May D E L A W A R E B A Y La Guardia ABE Allentown/Lehigh Valley Intl. PNE Northeast Philadelphia County intersected by Study Area Boundary John F. Kennedy Intl. ACY Atlantic City Intl FRG Republic Airport Newark Liberty Intl. BDR Bridgeport/Igor I. Sikorsky Memorial TTN Trenton/Mercer County Major Waterway Teterboro CDW Caldwell/Essex County ILG Wilmington/New Castle County State Boundary Philadelphia Intl. FOK Westhampton Beach/The Francis S. Gabreski Morristown Municipal LDJ Linden Airport Islip/Long Island WRI McGuire AFB White Plains/Westchester County SWF Newburgh/Stewart Intl. HVN New Haven/Tweed-New Haven Exhibit Airports within the Study Area 1 E N V I R O N M E N T A L I M P A C T S T A T E M E N T NY/NJ/PHL Airspace Redesign EIS Aviation Activity Forecasts Report application of reasonable trend extrapolations do add to the confidence level in the forecast results. II. Key Assumptions Commercial passenger demand is projected to experience sustained growth throughout the forecast period (through 2011). International passenger activity is expected to continue to grow at a pace that exceeds the growth of U.S. Gross Domestic Product over the forecast period. Among the most pronounced changes in commercial passenger fleets in recent years has been the replacement of turboprop aircraft with regional jets. The growth in regional jet traffic has primarily been limited by the ability of the manufacturers to produce sufficient new aircraft to meet demand. The continued growth in regional jet use is expected to drive an increase in the average seating configuration of regional airline markets. A number of other general assumptions and factors affecting demand were also considered in the forecast exercise including, but not limited to, the following: (cid:52) Aviation Security - Passenger confidence in enhanced aviation security will return. (cid:52) U.S. Economy - The U.S. economy will recover beginning in the second half of 2002. Many economists believe that the recovery will be slower than from recent recessions. (cid:52) Regional Airport Trends - The basic character of each of the study airports will not change during the forecast period. Airports with only general aviation activity will remain GA-only airports while major facilities such as JFK, LGA, EWR, and PHL will remain the dominant airports in the region. (cid:52) Commercial Service - No new commercial service airports will be constructed in the region during the forecast period. (cid:52) Airline Yield - Airline yield will continue to decline on a constant dollar basis as projected by the FAA. The latest FAA aviation forecast predicts a 0.9 percent annual decrease in real (inflation-adjusted) U.S. domestic airline yield between 2001 and 2013. Yield is the revenue per flight mile received by the airlines for carrying each passenger. Since deregulation, the decline in real yield has accelerated, so that by 2001 real yield fell to 13.94 cents, an average yearly decline of 2.1 percent from 1978. (cid:52) New Aircraft - Only one new class of aircraft is assumed to be introduced throughout the forecast period. A widebody with an estimated capacity of 550 passengers is assumed to enter the international fleet in a very limited way before the end of the forecast period. (cid:52) Adaptation of Air Carriers in a New Aviation Economy - U.S. airlines experienced strong profits in the late 1990’s, and 2000 was one of the airlines’ best years in history. In 2001 however, the U. S. major airlines collectively lost over $7 billion, Landrum & Brown Appendix B September, 2005 Page B-3 NY/NJ/PHL Airspace Redesign EIS Aviation Activity Forecasts Report even after a governmental infusion of about $4 billion. In 2002, the U.S. majors are expected to post losses of about $4 billion. Due to the combined affects of the current economic recession and the events of September 11, many in the industry see more than just the swings of a cyclical business. They believe a changing of the guard may have begun. Low-fare carriers now account for nearly 20 percent of domestic air capacity, up from 6 percent in the early 1990s. Southwest has surpassed Northwest, Continental, and US Airways in terms of revenue passenger miles flown domestically. (cid:52) Fuel Costs - Fuel costs are a significant, yet variable, component of an airline’s operating expenses. Generally, there has been an overall decline in fuel costs since 1981, which has reduced the operating costs of airlines, and therefore, the cost of air travel. In the short-term, such factors as weather, demand for heating oil, shipping incidents, political conflicts and production difficulties caused by unusual circumstances may impact fuel costs. However, these events have had little long- term effect on the overall cost of air travel. This report makes the assumption that fuel will continue to be available in sufficient quantities, that only short-term shifts will occur in the cost of fuel and that the overall trend in fuel cost increases will be moderate during the forecast period. It is also assumed that the new fuel-efficient aircraft will moderate the impact of long-term fluctuations in fuel costs and that fuel costs will not significantly impact long-term average ticket prices. Therefore, it is assumed that air travel demand will not be adversely impacted by fuel costs or availability over the forecast period. (cid:52) Long-term Economic Indicators - A basic assumption inherent in any forecast of aviation demand is the overall condition of the U.S. and world economies. Long- term, continued economic stability, reasonable consumer confidence, and growth of disposable personal income are foreseen by most economists. All are positive influences on future air travel growth. (cid:52) Teleconferencing – Industry observers have considered the impacts of communications technology on air travel demand. No reliable empirical evidence has surfaced to date that quantifies the impact of technology on air travel demand. Therefore, it is assumed that air travel demand will not be adversely impacted by teleconferencing during the forecast period. (cid:52) Hub-and-Spoke Effects - Airlines have always concentrated air service at a limited number of airports, usually in major cities. Since airline deregulation in 1978, there has been an even more pronounced emphasis on developing hub and spoke route systems centered on a limited number of airports. The hub and spoke route networks offer the most economically efficient system to move passengers and cargo throughout the country. For most international service, using hubs as gateways is almost the only way to provide the economies of scale sufficient to operate long- range, high capacity aircraft across the Atlantic, Pacific or to other distant international destinations. No significant change in the hub-and-spoke system is foreseen in the forecast period. However, new routes and new service points will Landrum & Brown Appendix B September, 2005 Page B-4