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2 Airports and the Newest Generation of General Aviation Aircraft 1.2 General Aviation Overview Although specific airplanes are typically described as general aviation (GA) aircraft, general avi- ation actually refers to how an airplane is used and who operates it. In broad terms, there are three basic user categories--air carriers (as defined by the FAA), the military, and general aviation. GA essentially refers to all types of aviation not covered by air carriers or the military. General aviation operations in the United States are conducted under two basic sets of regulations: Federal Aviation Regulations (FAR) Part 91--General Operating and Flight Rules FAR Part 135--Operating Requirements: Commuter and On-Demand Operations FAR Part 91 are the regulations used to govern private (not-for-hire) operations, although some of the private operators voluntarily apply FAR Part 135 standards to increase the margin of safety. Fractional ownership operations are conducted under either a special subsection of FAR Part 91 (Subpart K) or FAR Part 135. Charter and air taxi operations are conducted under Part 135. Anyone involved in general aviation in the United States is aware of the many reasons that the industry has been successful. First and foremost, GA provides various benefits and advantages for its users. GA aircraft are used for many different purposes, as indicated in Figure 1-1. Although new generation aircraft can and certainly will be used in all of these categories, the pri- mary focus for most of the major VLJ aircraft programs--including the three that have reached certification status (i.e., Eclipse 500, Cessna Citation Mustang, and Embraer Phenom 100)--has been on business, corporate, and commercial air taxi use. Business use is distinguished from cor- porate use in that the latter refers to flying with a paid flight crew, whereas the former does not. Fractional ownership use therefore falls under the corporate category. But at least two development programs--the Cirrus Vision SF50 and Diamond D-Jet--are single-engine designs focused pri- marily on the personal flying market. Existing new generation piston and turboprop aircraft are Other Part 135 Air Medical 4.7% 1.5% Air Medical Air Tours 0.4% 1.8% Sightseeing Air Taxi 0.6% 11.2% Other Work 0.5% Personal 31.2% External Load 0.5% Aerial Other 1.3% Aerial Observation 4.9% Aerial Application 5.1% Business Instructional 11.1% 13.7% Corporate 11.5% Source: FAA, 2007 General Aviation and Part 135 Activity (GA) Survey. Figure 1-1. Categories of GA flying.

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Introduction 3 already large components in personal use flying. Where appropriate, the guidebook will also address how personal use of new generation small aircraft may affect airports. Businesses Use GA to The FAA refers to FAR Part 135 on-demand (i.e., non-scheduled) passenger oper- Save time versus the use ations as air taxi, which traditionally describes air charter services where companies of commercial air or essentially rent exclusive use of an entire aircraft. But the development of new gener- surface transportation ation aircraft has led to new business models that redefine air taxi to mean something Provide efficient access less expensive (and less exclusive) than traditional charter; this will be discussed later. to and from small Business, corporate, and commercial air taxi make up about 34% of total GA fly- communities ing. Although the GA Survey referenced in Figure 1-1 provides only limited data on Avoid congestion and types of use by aircraft type, business, corporate, and commercial air taxi flying will security lines at large hub represent a major share of the new generation of aircraft, particularly VLJs. All three airports of these categories reflect a business purpose for GA, and companies of all types make Reach multiple locations productive use of GA aircraft. in a single day Avoid dead time in-transit The sources of the time-related benefits of GA versus other available modes of travel Improve employee are clear when the components are broken down as shown in Figure 1-2. Surface travel, productivity in particular, may be a viable alternative only up to about 200 to 300 miles for a typical Enhance security and business trip. Much beyond that, the time becomes excessive, typically requiring extra convenience overnight stays, and the personal wear-and-tear associated with taking a very long- Increase comfort and ease distance business trip via automobile easily outweighs any out-of-pocket cost savings. of travel The commercial air mode is a viable alternative to GA over longer distances, but trends in commercial airline service over the past decade have diminished its viabil- ity for many business users. Industry consolidation, major changes in security procedures since 9/11, and more rational fleet and schedule planning centered on major hub airports have all con- tributed to both a real and perceived decline in the quality of service, especially for businesses (and their customers) not located within short driving distances of a major airport. Drive 1 2 6 Fly Commercial (assumes nonstop flight 1 3 4 5 6 available) Fly GA 1 3 4 5 6 0.00 1.00 2.00 3.00 4.00 5.00 6.00 Hours 1 Drive Time to Interstate or Airport 2 Interstate Drive Time 3 Terminal Access/Wait Time 4 Flight Time 5 Terminal Egress Time 6 Drive Time to Final Dest Source: GRA, Inc. estimates. Figure 1-2. Typical 250-mile trip between outlying regional markets.

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4 Airports and the Newest Generation of General Aviation Aircraft Small US Commercial Service Airports (< 0.05% of Total Boardings) 120 100 Departures (thousands) 80 Small Airports - Prop 60 Small Airports - RJ Small Airports - Std Jet 40 20 0 Dec 2000 Dec 2008 Note: "Std Jet" refers to narrowbody or widebody jets that are larger than RJs. Sources: allcargo_stats/passenger/ and GRA, Inc. analysis of Official Airline Guide data, Dec 2000 and Dec 2008. Figure 1-3. Changes in scheduled service at small airports. The overall number of scheduled flights in the United States has declined by 17% since 2000. The pattern of service has also changed, with commercial carriers dramatically cutting flights to and from smaller airports. Among all airports identified by the FAA as commercial service facil- ities, service to the two smallest categories (about 400 airports designated as primary non-hub and non-primary) has declined by 38%. Nearly 130 of these airports actually had no scheduled service by December 2008. The decline in service to small airports has been part of the commer- cial airlines' decisions to reduce or eliminate service by pistons or turboprops and replace that service with regional jet (RJ) service (small narrowbody jets with less than 90 seats). The shift to RJ service has been much more dramatic at larger airports. The shifts in service can be seen in Figures 1-3 and 1-4. 1,000 Departures (thousands) 800 600 Large Airports - Prop Large Airports - RJ Large Airports - Std Jet 400 200 0 Dec 2000 Dec 2008 Note: "Std Jet" refers to narrowbody or widebody jets that are larger than RJs. Sources: _allcargo_stats/passenger/ and GRA, Inc. analysis of Official Airline Guide data, Dec 2000 and Dec 2008. Figure 1-4. Changes in scheduled service at large airports.

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Introduction 5 Of course business users must weigh the time-related benefits of GA against the costs. Traditionally, the actual out-of-pocket Different Forms of Non-Scheduled costs of traveling via GA versus other available alternatives have On-Demand Services under Part 135 been significant. For private business or corporate flying, the decision often is determined internally based on the business' Traditional Air Charter--Exclusive rental of requirements or the company's flight department assessments an entire aircraft for a fixed hourly rate that and availability. covers the cost of the aircraft, including pilot salaries and fuel. Additional costs can include For Part 135 commercial non-scheduled flying, the combina- taxes, repositioning fees, and overnight/ tion of the decline in scheduled service to small airports along waiting fees. Even if a return trip is not needed, with the development of new generation small GA aircraft has a charge for the cost of repositioning the air- been a primary impetus in the development of new business craft to its home (or other) location is likely. models that may provide less-expensive GA flying options than There may also be a daily minimum charge. traditional charter operations. These business models have taken Air Taxi On-Demand--Rental of an entire air- various forms. craft for a fixed hourly rate, but without charges Recently several air taxi operators have attempted to institute for repositioning or overnight/waiting times; all some variation of air taxi on-demand or per-seat on-demand costs are built into the hourly rate. If there is a services. The most noted of these was DayJet, based in Delray return trip, it may be on a different aircraft (or Beach, FL. DayJet offered per-seat on-demand pricing in the even provided by a different company). This southeastern United States for service on its fleet of Eclipse 500 type of service may only be available between VLJ aircraft. The company began operations in September 2007, certain (specified) airports. but ceased all operations and filed for bankruptcy a year later. A Per-Seat On-Demand--Similar to buying a ticket more successful story is SATSair, which offers service through- for an individual seat from a commercial airline, out the Southeastern United States and operates a fleet of new but there is no fixed flight schedule. The price generation Cirrus SR22 piston aircraft; they have operated as an may depend on the number of other passengers air taxi on-demand service that charges a flat hourly rate with no actually on-board the flight, or it could be pre- repositioning or waiting fees. determined based on the average number of Other current air taxi operators include ImagineAir (based in passengers the operator expects. There may also Georgia, flying Cirrus SR-22s), LinearAir (based in Massachusetts, be other pricing structure variations, such as flying both Eclipse 500 VLJs and Cessna Grand Caravan turbo- offering a lower pre-determined price if the pas- senger is willing to travel any time within some props), and North American Jet Charter (based in Chicago, flying pre-defined time window. This type of service Eclipse 500 VLJs). Other planned startups include Miwok Airways would only make sense in markets that have a and JetSuite, both based in southern California. Each of these com- sufficient volume of traffic. panies use (or plan to use) different business strategies that prom- ise lower prices than can be offered by traditional charter, and all Source: Adapted from Burton, Roger L. "Air Taxi-Air Charter--What's the Difference in Pricing?" intend to rely on lower cost, more fuel-efficient new generation aircraft. Air-Taxi-Air-Charter---Whats-the-Difference-in- Pricing?&id=859210 Although the recent severe downturn in the economy signifi- cantly affected GA flying in general, and on-demand flying in par- ticular, it is still prudent for airport operators to begin thinking about how new generation GA aircraft and new air taxi business models may affect facilities. Existing facilities and the attractiveness of the surrounding community can greatly influence what may be required to accommodate and/or attract these aircraft. In the short term the effect of new air taxi business models may be limited; however, the underlying fundamentals have not changed significantly and, once the economy turns around, some of these on-demand ventures probably will expand and become successful. With that perspective, airport operators need to investigate what the specific types of new generation aircraft are and how they might be accommodated and/or attracted.