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Overview: Airport Congestion Management Concepts Regional Airport Planning Committee April 27, 2007 Oakland, California AIRPORTS COUNCIL INTERNATIONAL

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  • Overview: Airport Congestion Management Concepts

    Regional Airport Planning CommitteeApril 27, 2007Oakland, CaliforniaAIRPORTS COUNCIL INTERNATIONALNorth America1775 K Street, NW, Suite 500Washington, DC 20006

  • Discussion TopicsFramework 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

  • Understanding the Playing FieldWho Implements?How to Implement?

  • How - Administrative and RegulatoryWho - Federal Role and Limitations FAA has historically leaned toward administrative/regulatory solutionsNo FAA authority from Congress to impose feesWhatever federal agencies may have had was lessened by the Airline Deregulation ActSlots 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 hereWhen FAA has sought administrative authority to manage congestion it has been granted to some extentOften the measures are implemented as short-term fixes ORD transitional program effective?The measurements of effectiveness are usually incomplete

  • How - Administrative and RegulatoryWho - Airport PerspectiveAirline Deregulation Act limits airports too, although differently than federal agenciesAirport Noise and Capacity Act of 1990 (ANCA) explicitly seeks to minimize or eliminate airport access restrictionsPart 161 for noise purposes only?Part 161 path is not an easy or obvious oneNo doubt that an airport has a very high burden of proof both in taking action and in explaining why the proposed solution is acceptableCatch-22 problem: If the FAA has not initiated corrective action for congestion and is responsible for efficiently running ATC, how can FAA find that an airport is acting reasonably ?May be a programmed failure approach in the absence of FAA asking the airport to act

  • How - Administrative and RegulatoryWho - PANYNJs Concept for LaGuardia Management A New Path?Finite capacity - Universal agreement that LGA is congested and there is no material capacity enhancing alternativeRegionalism has been and continues to be actively pursued Perimeter rule, G.A. designated airports, JFK marketing and growth, ground access to less congested airports (e.g., AirTrain), airport acquisition (Stewart)FAA limitations - Seems unlikely FAA will move forward on its NPRM that would give FAA control of LGA access terms, and legislation giving FAA new authority seems a limited probabilityClear Authority - Airports have more legal control over the leasing of facilities than airfield access regulationsConcept - The PANYNJ is considering a concept under which a lease obligation would include certain operation performance factors that manage congestion

  • How - Market-BasedStarting Point for Airport Fees: Rate-Setting vs. PricingUse of pricing to allocate aeronautical resources or to manage congestion is rareAirport fees are generally established as cost-recovery ratesAirport fees are analogous to public utility rates (e.g., electricity), but without any time-of-day differentialsU.S. DOT has become a reactive regulator of airport fees over the yearsU.S. DOT has not clearly endorsed concepts generating revenue in excess of historical cost Various concerns about revenue positive solutionsInherent limitation on effectiveness of revenue neutral solutions

  • How - Market-BasedBaseline Landing Fees in ContextFees are based on aircraft size, in particular the gross weight of an aircraftWeight-based fees are a product of evolution Today, weight-based fees are supported from an ability to pay perspectiveThe range of payments among users is enormousFor example, between a commuter aircraft and a wide-body aircraft a fifteen-fold difference is commonThere is generally no difference between peak, off-peak, or nighttime fees

  • How - Market-BasedTwo General ApproachesSet the price at a level to produce the desired resultsGenerally referred to as peak pricing or congestion pricingMinimum fees are the most simplified version of thisMassport has been down this path twice for Logan International AirportDefine the results sought and use an auction to determine allocation of supplyLots of non-airport experience in auctionsGiven segmented authority, would appear to require the cooperation of both FAA and an airport on many fronts

  • Massports PACE Program - GoalsDelay Reduction - Customer service and environmental driversAircraft Size - Encourage the use of larger aircraftHubbing - Minimize Logans traditional role as a New England connecting hub to reduce local impactsRegionalism Hanscom, MHT, PVD, ORH

  • Massports PACE Program - ResultsLimited experimentProgram was in place for only 6 months. Demand effectsIn line with estimatesGeneral aviation: 30 - 50% of traffic eliminatedCommuter/regional: roughly 10% reduction in trafficFlights reduced in saturated routesFew flights eliminated in peak periodsAir carriers: no changes, as expected Delay reductionResults confirmed that small reductions in demand produce large decreases in delays Regional effectsNot determined in short period of implementation

  • Logan Demand Management Over a Decade LaterProspective Peak FeesAdoption of a Demand Management Plan was a condition of environmental permits for a new runwayKey feature of the plan is a revenue neutral peak hour feeThe actual levying of the fees is triggered by traffic levels, which have not yet been achievedPost 9/11 downturn Regionalism success storyKey airlines in Chapter 11Well conceived monitoring and early warning programsUntested in terms of effectiveness and longevity in the context of revenue neutralitySmall community issues unresolved

  • Why is Congestion Pricing Appealing?Part 1The traditional weight-based fee approach to landing fees: Contradicts most experiences in societyPretends that resources are not scarceCannot be explained, except by historical accidentPart 2Limited congestion pricing experience makes it often perceived as a panacea Complexities are often ignored regarding:Establishing a defensible pricing model Modeling and quantifying the potential benefitsEstimating the potential negative effects of peak-spreadingAddressing regional and corporate economic impactsAdministrative and legal challengesRecognizing the relative costs of aircraft operations

  • Congestion Pricing Not for LGA?The PANYNJ is by-passing congestion pricing, with good reasonConstraint of revenue neutrality makes little sense:The peak hour is all day Demand may be greater than any other airportAmple evidence that an unconstrained LGA would be unmanageableComplexities of establishing the price in a changing and reacting market are overwhelming No solution offered for smallest communitiesPerceived effects on ticket prices and airline financesUser support appears to be zeroConcerns about public perception, especially in regard to volume of positive revenue generated for this method to approach effectiveness

  • Observations for Todays ProgramNo one-size fits allLaGuardia is different Probably has limited portabilityMassports prospective approach for Logan has merit, but may prove insufficient as currently definedUltimately, a mix of administrative and market-based tools would be neededEffectiveness means solutions cannot be pain freeFAA participation/cooperation is essential with current uncertaintiesA federally authorized pilot program is the best way to cut through the complexities and test what works and what does not