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105 5.5.3 Anticipation 5.6 Guidance and Accountability As currently practiced in the United States, air demand This research has revealed the benefit and need for multiple management is a reactive strategy that is performed after parties to be at the table when considering airport demand delays have reached unacceptable levels. For example, there is management. At a recent panel discussion, participating air- legislation authorizing meetings with airlines to discuss sched- port operators expressed their support for multistakeholder ule reductions at severely congested airports. The authority involvement stating that the airport operator should be a appears to be restricted to cases where the airport is already strong player in capacity and demand management. To work severely congested. In contrast to this, the demand manage- together effectively, all parties would need to be clear on expec- ment programs can be implemented most effectively prior to tations and roles. Clear guidance could help airports manage the advent of severe congestion. congestion through the entire process. Guidance can be Such pro-activity could take two forms. The demand man- thought of as the boundaries or constraints of operation. agement programs could be formulated while the airport is Within these boundaries, the airport would have latitude in relatively uncongested and prior to the time when severe con- how it decides to manage congestion. The following two exam- gestion is clearly foreseeable. This would allow a deliberative ples will shed light on how guidance for overall management approach. Moreover, it would require stakeholders, lacking of capacity and delay might occur. reliable information about when and where congestion will occur, to participate in the process without clear knowledge 5.6.1 Existing Examples of Guidance about how it will affect their own interests. Second, the program itself could be proactive, with actions Although local airport managers enjoy a unique perspec- that are triggered when unacceptable levels of congestion are tive on their airports, they also are heavily involved with the foreseeable, rather than when they actually occur. It is possi- air carriers at the airport. Federally mandated rules, such as ble to foresee congestion because airline schedules are avail- the development and adherence to airport competition plans able several months ahead of time. Capacity, the other key and providing service to small communities, provide the air- determinant on congestion, can also be confidently charac- port with a clear set of rules for airport management. This can terized within this time frame, at least in a probabilistic sense. prove to be useful, as explained in the following examples. This demand and capacity information would be used to Airport competition plans are developed by an airport fol- determine what, if any, demand management actions are lowing guidelines set out by the FAA. The plans are to show needed. Airlines could then make adjustments to their sched- how an airport is open to opportunities for carrier relations ules accordingly, thereby alleviating or preventing the con- (7). Although it is an extra task for an airport to develop such gestion that would otherwise have occurred. This is the basic a plan, airports welcome these plans because they provide logic of the Massport demand management plan put in place operating guidelines for the airport that are agreed upon with several years ago at BOS. the FAA. Having federal policy that supports new entries Such an anticipatory approach offers great advantages for allows airports to uphold competition. The competition plan both airlines and passengers. Airlines are given relatively allows the airport to have guidelines against which airline long lead times to adjust their schedules. This expands the service decisions can be made; the federal government helps range of possible responses. Carriers can adjust flight preserve competition. schedules, shift operations to other airports, up-gauge, and Defining small communities for designated air service and increase fares in congested periods. Passenger dislocation is allocating seat capacity to these small communities are tradi- kept to a minimum, as most bookings are made just a few tionally federal roles. Definition of these small communities weeks in advance, well after the schedule adjustments would is often politically charged. Instead of the airport getting have taken place. involved in both politics and controversial carrier relations, Such an approach would certainly arouse concern for those the federal government can define small communities and who believe that severe congestion is the only reliable means to necessary capacities to service these communities. The airport secure consensus to expand airport capacity. In this research, avoids discussing with communities why they were denied severe capacity shortages manifest primarily in the form of access and avoids any difficult carrier relations. demand management actions and air carrier responses to them, rather than long delays. But these actions and responses will 5.6.2 Example: Developing a Framework themselves be clearly visible to policymakers, stakeholders, and for Demand Management the public at large. Local politics could be relied upon to bal- ance the costs of demand management against those of increas- In consideration of Section 5.2 which displayed how delay ing airport capacity. can be reduced with innovative aircraft management, the

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106 following discussion centers on an example of how a frame- airports under the main airports purview, and HSR. An exam- work for the airports to manage congestion might be devel- ple is the Massport 1993 Strategic Assessment Report, which oped. A broad outline for how this could be accomplished is evaluated regional solutions for intercity travel demand. the following: setting mutually agreeable airport-delay targets, The demand management plan could outline the steps an developing a detailed list of actions an airport can take to meet airport would take to enforce the delay trigger. This could the delay level, and identifying incentives and penalties for not include the strategies to be employed to satisfy the trigger and meeting such an action. also the details behind these strategies. For example, if an air- The first step would be to define "critical-delay airports." port planned to use peak-period pricing to reduce delay in its This definition could be tied with an existing program, such demand management plan, the airport would discuss the as the Operational Evolution Partnership (OEP) airports, extra peak-period charge, the duration of the peak in which which are the commercial U.S. airports with the most activ- to charge, and other details. Other detailed strategies an air- ity. According to the FAA (8), more than 70% of passengers port could consider are discussed in Section 5.7. move through these airports, and delays at the OEP 35 air- ports have a ripple effect on other locations. Therefore, con- Airports with Trigger Not Exceeded taining delays at these airports could be considered to be of national significance. Airports where the trigger is not exceeded could be further Critical-delay airports could be given this designation to subdivided into two categories. Some airports would find ensure that local decisions regarding a congested airport do through their modeling that traffic will exceed the trigger not hinder the entire NAS. The goal would be for these air- before their next scheduled master plan update. Such airports ports to hold delays to a certain level. This level is called a could update their master plan--potentially immediately. "trigger" because any delay experienced beyond this level Airports where the trigger would be exceeded in over 5 years could set off a series of actions. The trigger would be deter- but before the next master plan could update their master mined by using a combination of experience and economic plan in a 5-year period. modeling techniques. This delay trigger would be developed to ensure other airports in the NAS are not unduly affected 5.6.3 Airport Accountability by local decisions, particularly ones that result in high levels of delay. It is also expected that airlines using an airport Airports could have wide latitude to manage their own con- would be well aware of the ripple effects to their own opera- gestion and delay and could accept consequences for failing tions caused by delays there and would make these known to to meet the delay standard. To encourage airports to accept the local airport operator. their designation of critical delay airports, incentives could Critical-delay airports could be further divided based on be provided. their current levels of delay. Once the delay trigger is decided, each critical-delay airport could model the delay experienced Accountability Incentives on a fair-weather day with their existing schedules and an estimation of unscheduled traffic. Airports could be divided There are ways to encourage airports to embrace the critical- into those that exceed the trigger under existing conditions delay airport designation. As noted, airport managers tend and those that will exceed it in the future. to favor solutions beyond demand management; one way to encourage airport managers to see greater benefits of demand management could be to allow more flexibility in using rev- Airports with Trigger Exceeded enue from their demand management plan. If some aspects of Airports that immediately exceed the delay trigger would revenue neutrality (discussed in Section 5.7) were relaxed and update their master plan at once. This airport master plan the operator was allowed to have wide latitude to use the funds update could have, at minimum, two new sections. One could to make improvements, an airport operator might more read- address the potential of the airport to expand capacity in the ily embrace the critical-delay airport designation. There is long term to manage demand. The other section could be the general consensus among experts that operators of congested development of a demand management plan. airports have to make money to run the airport as efficiently The capacity expansion plan could take the perspective of as possible. Any revenue raised could be considered funds for regional growth accommodation instead of airport-specific airport improvements. growth. The airport could study how it can provide its passen- Certain airport demand patterns make revenue neutrality gers service without being limited to runway development. a challenge. For example, an airport with persistent all-day The airport capacity expansion plan could incorporate many demand is unable to offer a discount in the off-peak, as the strategies, including multimodal solutions, regional airports, off-peak does not exist. Another example is an airport that

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107 experiences extreme peaks and an entrenched hub carrier. Said another way, each passenger would be willing to pay an An airport with extreme peaking could offer negative land- average of $48 per passenger trip to avoid delays. Coupled with ing fees; however, if the airport is a hub airport, the hub the findings that many delays are related to airport congestion, carrier would almost exclusively benefit from such an organ- a conclusion is that the 12 largest coastal mega-region airports ization. Some airports could be able to remain revenue are not available on reasonable terms because passengers have neutral with a demand management plan because they have a large willingness to pay to avoid delays. For this reason, it is a significantly long off-peak period in which they can offer possible that although congested airports are following the discount landing fees. These airports could be given the classical definition of making an airport available on "reason- option of remaining revenue neutral. These airports could able terms," passengers are not being served on reasonable use their revenue to offer off-peak discounts; they could terms. The delays incurred are also not equally distributed. Air- also choose to operate like airports unable to remain rev- port passengers on high-frequency, low-capacity aircraft are enue neutral. experiencing less delay than passengers on low-frequency, Revenues could be placed in an airport's reserve fund and high-capacity aircraft because passengers on frequent, low- available for a wide range of purposes--from the capital pro- capacity aircraft experience less schedule delay (the difference gram to the maintenance reserves. Although airports would between desired departure time and actual departure time) than have latitude in spending these funds, additional guidance passengers on larger, less frequent aircraft. Again, although an would be necessary about how funds could be spent. airport may not be discriminating against classes of aeronauti- cal users, the delay distribution is not entirely equitable. This key guidance that an airport receives is crucial in Passenger Accountability motivating an airport to manage congestion and delays in a When airports accept public funds from the FAA, they agree way that is agreeable to all parties. The following section dis- under United States Code Title 49 (Section 5.4.3) to conditions cusses an example of an airport receiving guidance from the of grant assurances. Agreeing to these assurances means that all FAA to develop a comprehensive demand management and aircraft that can safely land at that airport must be accommo- capacity enhancing plan. The research team is not consider- dated with no discrimination. Section 5.2 introduced the idea ing this a "best practice" case study, but rather one instance that carriers have fleet mix recipes with important ramifica- of guidance in action. tions for the quality of service and the level of accessibility pro- vided by airports and the entire air transportation system. The 5.6.4 Example: Guidance in Action guidance provided to airports for accepting their designation as critical-delay airports could involve a new way to envision The following example is based on Massport and the FAA's aviation system accountability. relationship in managing BOS--a unique airport and histor- Section 5.2 showed that a balance exists between providing ically one of the nation's most delayed airports. It is an OD customer service in the terms of flight frequency and reliability. airport as opposed to a transfer, hub airport. It is the biggest It is possible that making an airport available to all aeronauti- airport in the upper Northeast and therefore attracts a diversity cal users increases frequency and degrades customer service to of fleet mixes. Being in the Northeast, BOS deals with extreme a point where an airport is not "reasonably available" to pas- weather patterns. Finally, BOS is constrained in expansion sengers. Similarly, nondiscrimination could lead to over sched- due to its location and is operationally challenged due to uling and, as shown in Section 5.2, to the over scheduling of community pressure. small aircraft. This excessive frequency tips the balance so that In the mid-1980s, Massport worked to implement PACE. reliability is significantly decreased. This program was implemented in response to a strong growth One of the many motivations behind demand manage- in regional operations; growth in this sector was threatening ment is to make air travel reliable for passengers. A way to the capacity of the airport. The program changed the landing consider airport accountability beyond making the airport fee formula from weight-based to a hybrid-fixed and variable available for all classes of aeronautical activities is to focus on structure. However, owing to small aircraft being charged the passenger experience. A congested airport does not neces- more and larger aircraft charged less under this fee structure, sarily make the airport reasonably available nor are delays the DOT found that this scheme discriminated against an aero- arguably nondiscriminatory from the passenger perspective. nautical user group and therefore was in violation of the grant When there is a delay, passengers experience a loss from assurances. as small as lost time to a missed connection. According to While PACE was closed, persistent delays continued at research performed by the research team, passenger delay at BOS, motivating further studies and investigations. Massport the 12 largest coastal mega-region airports in 2007 cost passen- proactively sought out solutions that ranged from HSR to the gers $15.4 billion per year (as defined in Table 1.2, Section 1.2). increased use of regional airports. The purpose was to accom-

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108 modate demand for intercity travel involving the Northeast The demand management program at Massport is out- region in the long run. However, the result of these studies lined as follows. Every 6 months, the airport collects the pointed to BOS as the focus airport for the region. To this end, schedules given by the carriers. The airport then develops a the airport proactively performed an environmental impact monitoring report. This report involves the airport entering statement (EIS) in 1995. The goal of the EIS was a delay reduc- the collected schedules and non-scheduled traffic into a sim- tion program at BOS. The EIS included a feasibility study, ulation model to estimate whether the airport is oversub- which looked at different delay reduction items and came up scribed on a fair-weather day. Massport has a delay trigger of with the following list of potential strategies: a 15-min average total delay per operation over a period of 3 consecutive hours. If the simulation report finds that this Demand management and peak-period pricing, trigger is exceeded, the airport will tell the airlines that the A new runway and new taxiway improvements, and congestion management program will go into place in the next Using technologies to reduce spacing minimums on cer- schedule iteration. This action puts the airlines on notice that tain runways. a peak fee will be implemented if the schedule does not change. The airport will recalculate the delay if the airlines It is important to note from this list that demand manage- update their schedules. Figure 5.16 displays the process for ment was one part of a larger list of delay reduction strategies. implementing the peak period pricing at BOS. The analysis performed for the EIS showed that all these strate- The FAA provided clear guidance to Massport to develop gies were necessary for delay management. Furthermore, while a capacity enhancement and demand management proposal a new runway was suggested, Massport was committed to stay- in response to the airport's findings that both a runway for ing within their spatial footprint and therefore knew a demand increased capacity and a demand management program would management portion of their plans was necessary to comple- be necessary to balance future capacity and demand. There are ment their capacity expansion. Because the strategies were many federal constraints with which Massport had to operate complementary and Massport would remain in their existing to develop their demand management plan. The plan refer- footprint, the FAA Record of Decision and the state permit felt ences two decisions that, taken together, form the basis of the that all strategies should be implemented (5). Massport agreed guidance for Massport's demand management plan. The 2008 to develop a demand management plan to complement their Record of Decision allows airports to implement peak pricing new runway development. This transparent, three-pronged under certain conditions; the PACE decision separates the role delay reduction strategy also earned Massport stakeholders of the airport and the role of the FAA. In addition to these rul- buy-in, as stakeholders were able to see the trade-offs among ings, the FAA provided Massport with "guidance in the form the strategies. Massport was obligated to develop a demand of a policy statement relating to the development of a reason- management program along with the plan for runway devel- able fee structure and in two pending policy initiatives address- opment, so as to both manage future demand and manage it in ing airport proprietor demand management programs" (5). such a way that all stakeholders are prepared. It is this guidance from the FAA that enabled Massport to Figure 5.16. Time impacts of eliminating short-haul flights, by assumed access penalty, 4-day average (9).