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23 sured by the HHI) is much higher at very small non-hub air- The default values for seat size and load factor are taken to ports. This latter effect also is not surprising since many such be the average at the airport in question for 2009. In the soft- airports in fact have only a single scheduled carrier. ware, the user can alter the average seat size variable, which in The statistical modeling for non-hub airports proved to be turn will alter the operations forecast. somewhat more difficult compared to the other groupings; this was expected due to the more stochastic nature of carrier 3.3.2 Financial Impacts scheduling decisions at very small airports. Aside from the sorts of variables considered here, scheduled service at such The estimates of airport operations and enplanements airports may be heavily influenced by carrier network consid- provide a basis for estimating airport revenues. Unlike the erations, the availability of specific aircraft equipment types, air service models that were distinguished by airport hub the status of dominant local employers, etc. None of these size, there is a single model employed to estimate operating sorts of influences can be easily measured for use in a statisti- revenue encompassing all 271 airports in the analysis. Total cal model; thus, they are considered "stochastic" (i.e., ran- operating revenue data for FY 2008 were collected from dom) and outside of the framework of the models used here. FAA 5100-127 filings that are available online. A log-linear regression was estimated for 2008 revenues as a function of 2008 TAF air carrier and air taxi operations, domestic 3.3 Airport Impact Models enplanements, and international enplanements; the results This section provides a description of the airport impact are shown in Exhibit I-25. models used to translate projections from the air service The results indicate a particularly strong correlation between models into airport impacts. There are two categories of domestic enplanements and airport operating revenues. As impacts that are considered: operational and financial. The with the air service models, in the software this model is operational impacts are a direct function of the air service mod- used solely to calculate percentage changes in revenue to the els and the definitions in the software. The financial impacts baseline forecast over time (TAF or user input) and/or for depend on statistical models developed with FAA 5100-127 scenario forecasts based on the air service models described data, which are financial statements reported by each air- earlier. port annually. The two types of impacts are described in the following subsections. Exhibit I-25. Equation estimate for annual airport operating revenues. 3.3.1 Operational Impacts Coefficients The air service models explain percentage changes in annual (t-statistics) seat offers. For projection purposes, seat offers must be trans- 6.77147 lated into operations and enplanements, which are the two Intercept (11.92***) most commonly used activity measures at airports and form Air Carrier + Air Taxi Operations 0.28207 (2.63***) the basis for many airport forecasting and planning functions. 0.52448 Seats offers from the air service models are translated into Domestic Enplanements (6.63***) operations and enplanements using the following identities: 0.05396 International Enplanements (3.04***) Operations = (seat offers) / (average seat size) Adjusted R2 0.82942 Enplanements = (load factor) (seat offers) ***Significant at 99% level