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4 FUTURE RESEARCH DIRECTIONS ACRP 03-19 is designed to span both broad and narrow topics relating to airport capital investment. In the broad sense, it is intended to improve the application of benefit-cost analysis for airport investment decision-making through research into the value of air passenger travel time savings and preparation of a guidebook on integrating the value of air passenger travel time into benefit-cost analysis. In the narrow sense, it is a first step in a longer research process focusing on improving âvalue of timeâ measures which are used to help monetize benefits of capacity improvements. In practice, some (but not all) airport capital investments are made specifically to increase capacity and reduce delays occurring at some point in the course of making an air trip, in the air or on the ground, that reduces the time that air passengers need to spend getting to and through the airport. The given value of air passenger time delay is actually a mean ascribed valueâthe value of air passenger time is an array of a broader set of delay-related costs, and even those delay costs differ depending on when, where and how they occur. However, by improving the techniques for the valuation of passenger time delay, this research enables a much broader set of improvements to be made in the entire practice of capital planning assessment, which is to be addressed by the guidebook. The logical relationship between the broad topic of airport capital investment planning and the narrower subject of the value of air passenger travel time is illustrated in Figure 24. Figure 24. Relationship of Passenger Time Value to Broader Capital Planning Assessment 4 Page 95
4.1 Research Conducted Research for the current project initially drew on literature and case studies to review tools and analytical techniques used by airport managers and airport sponsors to evaluate: (1) how capital investment decisions are made; and (2) how the value of passenger time has been incorporated into these decisions. These parts of the research were followed by a summary of the most prominent current theories explaining how value of time and value of reliability are determined. Then the Research Team considered attributes of air travel that are relevant in light of these concepts, and decomposed air trips into distinct travel time components. The components include the process of getting to and from the airport, the different steps in getting through the airport, and elements of the flight itself. This approach was motivated by the recognition that air traveler willingness to pay (WTP) for time savings may differ for the time savings in each of these components, as well as by other attributes of the air trip, such as the trip purpose. Finally the Research Team developed and implemented a web-based stated preference survey that gathered information from air travelers who had recently made a domestic air trip within the U.S. and were able to recall the details of their trip. Using these products, the Research Team has: 1) Collected data on the sample of recent air trips by survey respondents and used stated preference experiments to collect data that were used to estimate survey respondentsâ WTP for travel time savings in various travel time components under a range of different hypothetical conditions; and 2) Built a discrete choice model to explain the choices made by the survey respondents in the stated preference experiments and applied the estimated model coefficients to estimate the values of the willingness to pay for time savings in the various travel time components that are part of an air trip. These include airport ground access time, time to reach the terminal, time to reach and pass through security screening, time to reach the gate area from security screening, time spent waiting at the gate or in the gate area until boarding, in-flight time, and expected flight delay. As research was conducted and reviewed for the project, it became obvious to the Research Team that practical considerations of scope and budget would limit the aspects that could be addressed in the current project and that a number of issues identified in the research would require more intensive data collection and modeling than was possible under this project. Future research to explore lines of inquiry, in addition to those addressed in the current project, would increase the understanding of how the values assigned by air passengers to savings of travel time and reduced delay vary across the different components of the trip. These time savings and delay reductions would also vary with the characteristics of the traveler and circumstances of the trip and would add depth to tools for capital investment decision making at airports. Just as the resources of this project were maximized by leveraging previous research, research following this project should be expected to leverage data collection techniques and findings from this project and subsequent or ongoing research. Page 96
4.2 Recommendations for Future Research Refine and extend the findings of this project The following research activities will add depth to the âwillingness-to-payâ analysis that was reported in Chapter 3: 1) Increase the number of respondents to follow-on stated preference surveys to allow more in-depth analysis; 2) Maintain timeliness of estimated values of travel time savings by performing future stated preference surveys; and 3) Design any future stated preference surveys to achieve a balance between the stated preference surveyâs length (not to overburden respondents) and comprehensiveness. A stated preference survey with a significantly larger sample size will need to be performed and analyzed in order to enable future research to explore how WTP values vary across subsets of the air traveler population, such as different income strata, household composition, age, and gender, as well as for different trip purposes. In particular, a larger sample of air travelers on business trips is needed to improve the statistical significance of the WTP values for business travel. Furthermore, it would be helpful to collect data on the position of the respondents in their firm or organization, as well as the type of firm or organization they work for and more details on the purpose of the business trip being made, in order to provide more resolution on different types of business travel. The stated preference survey and analysis of results needs to be repeated periodically (e.g., every five years) in order to track the changes in WTP over time. This is particularly important to account for changes in technology available to travelers and airport security processes adopted due to new laws or regulations. For example, cell phones, smart phones and the almost universal access to Wi-Fi in airports affect how air travelers are able to spend their time in airport terminals while waiting for flights. Similarly, the availability and use of Wi-Fi during flight may affect the value of time while in the air. While changing technology may in turn affect the values of travel time and reliability, this would only become apparent over time and would be dependent on the nature of the technological changes. The widespread use of personal electronic devices facilitates and enhances professional and personal productivity while onboard flights, and thus these changes in onboard connectivity may reduce the perceived disutility of flight time and delays. Therefore, it could be expected that the value of time saved in flight would be reduced over time in real terms relative to incomes. This project had to balance the conflicting requirements of the need for an in-depth survey, but also one that was not unduly complex, or had an overly burdensome length that would discourage responses. To accomplish this, trade-offs were made that limited the number of Page 97
questions in order to shorten the survey length. While necessary, these trade-offs limited the issues that the survey was able to address. For example, the survey did not address airport egress (moving through the airport to baggage claim or terminal exit, waiting at baggage claim, waiting for ground transportation, getting to car rental or parking, and the ground trip to the final destination). Values in the guidebook for egress are based on the corresponding aspects of airport access and terminal circulation. Also, the choice experiments did not distinguish between time spent checking in or checking any bags and time spent walking from the terminal entrance to security screening. While the Research Team had initially intended to separate the two aspects, these were consolidated to reduce the complexity of the choice experiments. Since many travelers check-in online before arriving at the airport and do not check bags, it would have been necessary to tailor the choice experiments to the circumstances of each respondent in order to generate appropriate times in the choice experiments. Questions to this effect would have added one more step to those who checked in or checked bags. More importantly, the survey presented respondents with separate stated preference choice experiments for the decisions involving flight attributes and the decisions involving airport ground access and airport terminal attributes. Initially, it had been intended to develop choice experiments that varied both the flight attributes and ground access and airport terminal attributes in the same choice alternatives presented to the respondents, but it became clear that this presented respondents with too much information at once. In addition, it had initially been intended to include different airports in the choice experiments, but this would not only add a further level of complexity to the choice process, but would present difficulties generating appropriate values for the airports other than the one actually used by the respondent for their reported recent trip (for which they had provided details of the times and costs involved). These decisions to reduce the survey length in the interest of the time it would take to complete the survey imposed three significant constraints on the choice experiments that deserve closer examination in future research. The first is that the values of time for ground access and terminal components of the trip are based on differences in ground access costs, while the values of time for the flight components of the trip are based on differences in airfare. In principle, the resulting WTP values should be consistent, although, of course, travelers may have a different willingness to pay for savings in ground access time from savings in flight time, as was found in the analysis. However, unlike the flight choice experiments, where differences in airfare are largely independent of the differences in flight time, convenience of the schedule, and number and duration of connections, differences in ground access costs are primarily due to differences in modal characteristics. Therefore, it is possible that the WTP values for ground access time savings are partly reflecting modal preferences rather than the true WTP for time savings for a given mode. Page 98
In an attempt to address this concern, some of the choice experiments presented different times and costs for the same ground access mode, although this presented the respondents with a counter-intuitive situation in which one alternative had a different ground access time and/or cost from the other alternative, when both alternatives used the same ground access mode (which, of course, in the real world would have the same travel time and cost in each alternative). While situations can arise in the real world in which there are differences in travel time and cost for the same mode (e.g., parking in a lower cost but more distant parking lot), in practice those choices are independent of any differences in the time spent in the airport terminal and travelers can make those trade-offs irrespective of the situation faced in the airport terminal. The extent to which this very artificial choice scenario influenced the choices made, and hence the implied WTP value, is unclear and deserving of further research. The second constraint is that by eliminating airport choice from the experiments, the differences in the airport terminal time components between the two alternatives in each choice experiment were presenting respondents with two different situations at the same airport. Of course, in the real world, while there are differences in the time required to complete some steps in getting through the terminal (e.g., security screening) at the same airport, these are due to differences in congestion, which is not something that a traveler can choose between for a given flight.25 The survey respondents were instructed to take the times shown for each alternative in the choice experiments at face value. However, whether they in fact did so is unknown and how this may have influenced the relative weight they gave to time savings in the different components of their trip to and through the airport is also unclear and deserving of further research. The third constraint is that separating the flight choice experiments from the airport ground access and terminal time choice experiments implicitly assumed that the different flight options presented to respondents were independent of any differences in ground access time or terminal time. However, in reality, differences in flight departure time can influence ground access times by different access modes. Where different airlines with similar flights available use different terminals, there may be differences in the time that travelers expect to spend in the airport terminal, as noted above. The extent to which air travelers consider airport ground access factors and the anticipated time required in the airport terminal in choosing between flights is unclear and deserving of future research. In all, the survey had 1,260 respondents. A potential future project may take advantage of and build on the research reported in Chapter 2 and in Appendix A, including components 25 Although by choosing between airlines, an experienced traveler can avoid a particularly congested terminal if another airline using a different terminal offers flights to the same destination at approximately the same time. Page 99
of an air trip, the literature review, and analysis of tools and techniques. The future project could consist of a much larger sample size, perhaps one with 5,000 or more responses, but divided into (perhaps) four surveys of 1,200 to 1,500 responses, that go into greater depth among fewer topics. One survey, for example, could concentrate on ground access and egress, while a second could address on-airport circulation issues. A third survey could cover the time spent between clearing security screening and boarding the aircraft, while a fourth could concentrate on flight times and delays. The surveys could then be joined for analysis, giving more depth to the topics addressed in the survey undertaken in this research. Further Considerations that May Affect Value of Time but Go Beyond the Scope of this Research Assessing the effect of airline strategies and business plans on the reliability of air travel goes beyond the scope of the current study. Airline interests lie in maintaining and increasing their market shares in a competitive market while offering air transport services at a high enough price to make a profit. This results in scheduling strategies at hubs and across airlinesâ route networks that contribute to the reliability of air travel. Flight time reliability affects airline costs, so airlines do have an interest in improved reliability aside from the benefit to their passengers. It is not clear whether airlines can translate improved reliability into higher fares, but this may be a suitable topic for future research. The different airport time components have a relationship to a travelerâs overall trip experience. This is an important consideration that could be featured in expanded research into how air travelers value the total air travel experience, including the travel time required in each component of the trip. Given the difference in values of time for the various trip components, it is not clear how the calculation of the total value of the end-to-end trip would proceed. However, as the focus of the current project is on passenger value of time considerations in airport capital investment decisions, the critical question is how a given capital investment affects the time spent in each component of the trip through the airport. Thus, the key issue is how to value the total travel experience at the airport, and whether aspects other than the time involved need to be considered. While this is a valid question, there is clearly more to how travelers value their travel experience than simply the time they spend traveling. In fact, one might expect that the more attractive the experience is, the more time the travelers would choose to spend at the airport. So, in this case, the value of time (using the conventional metrics) would be lower. While we may be able to make some inferences about this from the differences in the value of time of the different time components, the design of the stated preference experiments did not address non-time aspects of the airport experience and many of these issues are beyond the scope of the current project. Research is also needed for improving an understanding about the extent to which travelers consider airport ground access and the time required to get through the airport terminal in making flight choices for a given trip, particularly when choosing between flights at the same airport. Presumably, these factors assume greater importance when choosing Page 100
between flights at different airports. While it is clear that air travelers choose between flights based on cost differences, departure and arrival time considerations, and such factors as the airline, and the number and location of any flight connections, it is much less clear how the time spent in the airport terminal is perceived, and whether congestion or other in-terminal considerations are factors affecting the choice of flights. A related question is the amount of time that travelers allow for unanticipated delays getting to and from the airport or through check-in and security screening. Allowing more time to get to and through the airport reduces the likelihood of missing a flight, but results in spending more time waiting at the gate or in airport concessions if the delays are less than allowed for. A better understanding of these issues is needed to develop appropriate measures of the overall value of reducing end-to-end travel time for a given trip. Assessing the wider social benefits of airport capital investments, such as benefits from investments that reduce emissions, is beyond the scope of the current study. These benefits are commonly referred to by economists as âexternalities,â since they typically do not contribute directly to the costs or revenues of airports or their users. Such benefits are recognized throughout the benefit-cost literature as an important topic that should be considered in performing benefit-cost analysis. In future research, the value of social benefits can be integrated with the values of time and direct costs savings in a handbook for evaluation of airport capital investment decisions. Page 101
