Airport Congestion Martin

8/6/2019 Airport Congestion Martin

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Overview:

Airport Congestion Management Concepts

Regional Airport Planning Committee

April 27, 2007

Oakland, California

AIRPORTS COUNCIL INTERNATIONAL

North America1775 K Street, NW, Suite 500

Washington, DC 20006


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Discussion Topics

Framework for thinking about congestion management

Who plays what role?

What are the tools available?

What are the experiences and lessons learned?

Some observations in the context of other presenters


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Understanding the Playing Field

Administrative andRegulatory Approaches

Market-basedApproaches

FederalGovernment

Slots DCA, LGA, ORD, JFK

Slot Offspring ORD, LGA

Lottery-oriented solutions

Conceptual discussionsabout aircraft size minimums

No federal authority sincederegulation

LGA auctions or fees run by FAA

would be experiment

authority sought in FAAreauthorization

Local Airport

Operator

Local limits Long Beach,

White Plains Concepts for minimum

aircraft size

Up-gauging incentiveconcepts

Lease-based incentives Possible PANYNJ route for

LGA Regionalism solutions

Minimum landing fees various

airports Auction and peak hour concepts

floated by the PANYNJ in 2001 -LGA

PACE program and theenvironmentally driven peakperiod pricing concept not yetactivated BOS

WhoI m

plem

ents?

How to Implement?


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How - Administrative and Regulatory

Who - Federal Role and Limitations

FAA has historically leaned toward administrative/regulatory solutions

No FAA authority from Congress to impose fees

Whatever federal agencies may have had was lessened by the AirlineDeregulation Act

Slots under the HDR fell out of favor...Slot offspring emerge

FAA has some authority by virtue of the charge to run ATC efficiently FAA has not really been challenged here

When FAA has sought administrative authority to manage congestion it has

been granted to some extent

Often the measures are implemented as short-term fixes

ORD transitional program effective?

The measurements of effectiveness are usually incomplete


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Who - Airport Perspective

Airline Deregulation Act limits airports too, althoughdifferently than federal agencies

Airport Noise and Capacity Act of 1990 (ANCA) explicitlyseeks to minimize or eliminate airport access restrictions

Part 161 for noise purposes only?

Part 161 path is not an easy or obvious one

No doubt that an airport has a very high burden of proof bothin taking action and in explaining why the proposed solution isacceptable

Catch-22 problem: If the FAA has not initiated corrective actionfor congestion and is responsible for efficiently running ATC, howcan FAA find that an airport is acting reasonably ?

May be a programmed failure approach in the absence of

FAA asking the airport to act


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Who - PANYNJs Concept for LaGuardia ManagementA New Path?

1. Finite capacity - Universal agreement that LGA is congested andthere is no material capacity enhancing alternative

2. Regionalism has been and continues to be activelypursued Perimeter rule, G.A. designated airports, JFK marketingand growth, ground access to less congested airports (e.g.,AirTrain), airport acquisition (Stewart)

3. FAA limitations - Seems unlikely FAA will move forward on itsNPRM that would give FAA control of LGA access terms, and

legislation giving FAA new authority seems a limited probability

4. Clear Authority - Airports have more legal control over theleasing of facilities than airfield access regulations

Concept - The PANYNJ is considering a concept under which alease obligation would include certain operation performance

factors that manage congestion


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How - Market-Based

Starting Point for Airport Fees: Rate-Setting vs. Pricing

1. Use of pricing to allocate aeronautical resources or to manage congestion is rare

2. Airport fees are generally established as cost-recovery rates

3. Airport fees are analogous to public utility rates (e.g., electricity), but without any

time-of-day differentials

4. U.S. DOT has become a reactive regulator of airport fees over the years

5. U.S. DOT has not clearly endorsed concepts generating revenue in excess ofhistorical cost

Various concerns about revenue positive solutions

Inherent limitation on effectiveness of revenue neutral solutions


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How - Market-Based

Two General Approaches

1. Set the price at a level to produce the desired results

Generally referred to as peak pricing or congestion pricing

Minimum fees are the most simplified version of this

Massport has been down this path twice for Logan InternationalAirport

1. Define the results sought and use an auction to

determine allocation of supply

Lots of non-airport experience in auctions

Given segmented authority, would appear to require thecooperation of both FAA and an airport on many fronts


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Massports PACE Program - Goals

Delay Reduction -Customer service and environmental

drivers

Aircraft Size - Encourage the use of larger aircraft

Hubbing - Minimize Logans traditional role as a NewEngland connecting hub to reduce local impacts

Regionalism Hanscom, MHT, PVD, ORHAir

carrier

Com-muter

G.A.

Logans Traffic Mix

PACE shifted the fee schedule,but did not have time-of-day

variations in Phase 1

Phase 1 was revenue neutral

Phase 2 never happened


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Massports PACE Program - Results

Limited experimentProgram was in place for only 6 months.

Demand effectsIn line with estimates

General aviation: 30 - 50% of traffic eliminated

Commuter/regional: roughly 10% reduction in traffic

Flights reduced in saturated routes

Few flights eliminated in peak periods

Air carriers: no changes, as expected

Delay reductionResults confirmed that small reductions indemand produce large decreases in delays

Regional effectsNot determined in short period ofimplementation


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Why is Congestion Pricing Appealing?

Part 1

The traditional weight-based fee approach to landing fees:

Contradicts most experiences in society

Pretends that resources are not scarce

Cannot be explained, except by historical accident

Part 2

Limited congestion pricing experience makes it oftenperceived as a panacea

Complexities are often ignored regarding:

Establishing a defensible pricing model Modeling and quantifying the potential benefits

Estimating the potential negative effects of peak-spreading

Addressing regional and corporate economic impacts

Administrative and legal challenges

Recognizing the relative costs of aircraft operations


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Congestion Pricing Not for LGA?

The PANYNJ is by-passing congestion pricing, with good reason

Constraint of revenue neutrality makes little sense:

The peak hour is all day

Demand may be greater than any other airport

Ample evidence that an unconstrained LGA would be unmanageable

Complexities of establishing the price in a changing and reactingmarket are overwhelming

No solution offered for smallest communities

Perceived effects on ticket prices and airline finances

User support appears to be zero

Concerns about public perception, especially in regard to volume ofpositive revenue generated for this method to approacheffectiveness


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No one-size fits all

LaGuardia is different Probably has limited portability

Massports prospective approach for Logan has merit,

but may prove insufficient as currently defined

Ultimately, a mix of administrative and market-based

tools would be needed

Effectiveness means solutions cannot be pain free

FAA participation/cooperation is essential with current

uncertainties

A federally authorized pilot program is the best way tocut through the complexities and test what works and

Observations for Todays Program

Documents

Airport Congestion Martin