View
216
Download
0
Category
Tags:
Preview:
Citation preview
Airports Types:
• Private
• Military• Especially during WW2
– 250 airports were developed for national defense
• Municipal Governments• Federal funding was disallowed by the Air
Commerce Act of 1926
Federal Airport Act of 1946
Authorized funding for capital improvements
Grants and matching funds to Municipalities• Most of the 250 WW2 airports were declared
surplus• returned to Municipalities
Airport/Airway Development Act (1970)
Jet aircraft with large payloads required improved airport and terminal facilities• Users were charged a Levy
• Held in trust to provide Federal grants and matching funds
National Plan of Integrated Airport Systems• Developed by the FAA
• Identified 3,000 eligible airports for funding• “Adequate” airport: must be located within 20 SM of
97% of U.S. population
NPIAS Recognizes 3 General Classes of Airports
• Commercial Service Airports: 2,500 PAX Enplanements Per Year
• Reliever Airports: General Aviation Airports within the Metro Area
• General Aviation Airports: General Aviation Airports Outside the Metro Area
NPIAS Commercial Service
• 546
• 422 are primary: > 10,000 enplanements pa
Reliever• 260
• Average of 28 GA based there (27% of total GA)
GA• Considered by NPIAS if 10 based GA and > 20
SM from other NPIAS
NPIAS
FAA Hub Classification:• Different to airline• City + Standard Metropolitan Statistical Area:
• Large: at least 1% of total enplanements
• Medium: at least 0.25% of total enplanements
• Small: at least 0.05% of total emplanements
• Nonhub
NPIASTable 1 Distribution of Activity
NumberAirports
Airport TypePercentage of
AllEnplanements
Percentage ofActive GA
Aircraft *31 Large-Hub Primary 69.6 1.337 Medium-Hub Primary 19.3 2.974 Small-Hub Primary 7.7 4.7
280 Nonhub Primary 3.2 11.3124 Other Commercial Service 0.1 2.0260 Relievers 0.0 27.1
2,558 General Aviation 0.0 37.23,364 Total Existing NPIAS Airports 100.0 86.4
15,942Other Low Activ ity Landing Areas(Non-NPIAS)
0.0 13.6
* Based on active aircraft fleet of 219,464 aircraft in 1999.
70% of emplanements take place at the 31 Large Hubs!
Airside Runways Taxiways Aprons Influence land area and design:
• Type of users (aircraft): size/weight/pax
• Location of terminal/maintenance facilities
• Available land area
• Movement of ground service vehicles
Terminal Operation
Provides the link between landside and airside
3 main areas:• Curb-side
• Central processing area
• Links to the airside
Terminal Operation
Must meet the needs of all users:• Primary users: Pax, Mail & Cargo
• Secondary users:• Airport/airline/gov’t employees
• Meeters-greeters
• Well-wishers, etc.
Landside
Development has generally lagged:• FAA does not usually provide funds
Enter - Exit Roads Parking Taxi Hotel Rental Cars
Operational Considerations
Runway Layout Local Terrain Local Weather Other Local Airport Operations ATC Requirements
Social Considerations
Local Pax Demand Ground Access Noise Local Environmental Impact/Land Use Wildlife Habitats
Population affected by Enplanements
Although enplanements have increased, the population affected by this has decreased, as airports have been sited away from population centers
The Civil Aeronautics Board CAB (1938-1985):
• Acted as a public utility• Granted authority to regulate:
• Entrants
• Routes/service areas
• Fares
• Profit margins
• Types of aircraft used
• Even seating configurations!!
1960’s - 1970’s
Economists critical of economic regulation:
• Pricing and entry restrictions caused excess service and insufficient pricing competition, inflated airline costs, unsatisfactory profits
• Jets introduced in 60’s (wide-bodied in 70’s):– Aircraft faster, more efficient, more comfortable, more
reliable, therefore:
• Increased passenger demand
– Existing airlines unable to meet demand
– New entrants not allowed in the club; therefore:
• Public disgruntlement
Deregulation 1
Air Cargo Deregulation Act (1977):• Operate on any domestic route• Charge whatever market would bear• CAB must approve:
• Not “public interest”
• But “fit, willing, and able”
• Growth of express package carriers:• Absorbed local incumbents • Hub & Spoke networks
Deregulation 2• Passenger carriers given more freedom in
setting routes• Initially prospered/growing public support;
therefore: Airline Deregulation Act (Oct, 1978):
• 1981: no authority over routes
• 1983: no authority over fares
• 1985: no CAB:– Antitrust/essential air service to FAA
– International regs (BASA/BAA) to Dept of State
• overwhelming bi-partisan support• opposed by “in the club” airlines
Deregulation 3
Goals of deregulation:• time to increase competition• improved service with reduced fares• stimulate economy• introduce innovative service offerings• enhance productivity and efficiency
Rapid impact: • Airlines reshaped networks• New entrants
Deregulation Effects
Profits skyrocketed • for a very short time period
By early 1980’s • economic recessions hit• airline profits fell, service fell, mergers grew• worst losses in history
Airline Reaction
Airlines were forced to refocus on:• Cost savings:
• more efficient aircraft
• personnel reductions
• wage and benefit reductions
• route changes
Many went under
Air Carrier & Commercial Operators
Certification under Part 119:• Part 121: Flag/domestic/supplemental
operations in larger aircraft • Part 125: Corporate aviation in larger aircraft
(smaller aircraft operate under Part 91)• Part 135: On-demand/commuter operations in
smaller aircraft
Types of Operation (#119)
Commuter (#135):• 5 scheduled round-trip flights per week• Airplane:
• Non turbojet
• Passenger seats: 9 or less
• Max. payload: 7,500lb or less– Normal/utility/acrobatic/commuter category
Air Carrier
A person who undertakes directly by lease, or other arrangement, to engage in air transportation (#1).• An air carrier certificated in accordance with
Part 121 to conduct scheduled services on specified routes.
• Certificated as Flag or Domestic
• May also provide nonscheduled/charter services as a secondary operation.
Types of Operation (#119)
• Domestic/Flag (#121):• Domestic:
– Within lower 48– Wholly within Hawaii/Alaska
• Flag:– Everything else including international
• Airplane• Turbojet• Passenger seats: > 9• Max. payload: > 7,500lb
– Commuter/transport category
Air Carriers
Four carrier groupings for FAA stats. are: • Major Carrier: Annual Gross Over $1B
• National Carrier: Annual Gross $100M
• Large Regional: Annual Gross $20M
• Medium Regional: Annual Gross < $20 M
Definitions for Economics Average Passenger Yield
• Revenue for Carrying One Passenger One Mile
Available Seat Miles• One seat transported one mile
Revenue Passenger Miles• What an air carrier sells
• One revenue passenger transported one mile in revenue service.
More Definitions for Econ.
Load Factor• The Ratio of Seats Occupied (Revenue
Passenger Miles) To Seats Available (Available Seat Miles)
• Divide seats occupied by seats available
• Gives percentage of seating or freight capacity utilized
2001 - Average Major US Airline Load Factor was 71.1%
Current Situation
• Industry• Capacity reductions
• 20% at most major carriers except WN
• Government• Airline Stabilization bill:
•$5B in direct aid, $10B in loan guarantees• Aviation Security bill:
•Federalization of screeners, more air marshalls• War risk insurance• Tax deferrals
•Traffic is recovering•Yields are improving slowly
Economic Outlook
• U.S.• 2 qtr recession ending 1Q02 then strong recovery• Long run growth > 3%• Oil prices fall sharply then rise modestly• Inflation remains modest
• World• Slowdown in 02 coinciding with U.S. recession• Long run growth averages 3.3%
• Highest growth in Asia and Latin America!
The FAA Forecast: Three Phases
Activity
2002: Decline
2003: Recovery
2004-13: Resumption of Long Run Trend
Capacity and traffic falls, then recovers in 2003; BUT real yield continues to fall!!
Regional Carriers’ RPMs Expected to Increase 7.1% a Year
Slight slowdown in 2002, recovery then gradual slowing
Route Transfers=> Longer trip length
Move to Jet Aircraft
Percent Growth
03-134
5
6
7
8
9
10
01 02 03
Risks to Forecast
Security issues Return of the business traveler? Financial woes => consolidation Management/labor issues
Why Do Regional Airlines Fail?
Management Lack of Knowledge & Experience in Marketing
Under capitalization Competition
Fares
CAB Set Fares Based on Cost of Operation Currently Fares Are Based on Market &
Competition • Particular Market Segments Drive the Fare
Rates-Not Distance Traveled • Big Margins, Make Money-Route A, Break Even-
Route B, Lose Money Route C
• High Demand Periods-Higher Fares
• Low Competition-Higher Fares
(Chicago) Convention on International Civil Aviation
1944 Goals: 2
• Establish international technical standards• Establish the principles and procedures for
economic regulation of international routes, fares, etc.
Warsaw Convention
Scope:• International carriage:
• Documentation:– Passengers
– Luggage
– Cargo
• Carrier’s liability
Rome Convention
Damage caused by foreign aircraft to third parties on the surface:• Aircraft or person/object falling from• Liability limited:
• Based on aircraft MTOW
• Death or injury: 500,000 Francs per person– Franc equates to gold standard
• Aircraft must be insured to cover
Tokyo Convention
State of Registration has jurisdiction Other States not interfere, except:
• Territory affected• Offence against national/PR of State• Offence against State security• Breach of ROTA• In accordance with a multilateral agreement
The Hague Convention
Expansion of Tokyo Includes:
• Unlawful seizure is extraditable offence• Report ASAP to ICAO Council:
• Offence
• Action taken to restore control to legal owner/PIC
• Action taken against offender (extradition, etc.)
World Trade Organization (WTO)
Formed by 1994 (Uruguay) round of trade talks• Rules of trade through agreements (GATT)• Objectives:
• Free trade flow
• Liberalization of markets
• Dispute settlement
GATT
Eliminate customs duties No technical barriers No preferred suppliers No unreasonable import quotas No unfair subsidies
General Agreement on Trade in Services (GATS)
Art II: no favoritism Art III: transparency Art XVI: market access Art XVII: national treatment
5 Freedoms IATA: IASTA & IATA 5 Freedoms Technical Rights: 2
1. Right to Overfly without Landing
2. Right to Land for Technical Purposes
Traffic Rights: 33. Right to put down pax, cargo, & mail
4. Right to pick up pax, cargo, & mail
5. Right to operate between 2 other countries
Recommended