Air Demand in a Dynamic Competitive Context with the Automobile (2019)

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1 The managers of smaller American airports and the communities dedicated to supporting them are facing a challenging business market. The managers of smaller American airports and the communities dedicated to support- ing them are facing a challenging business market. A national aviation business model in which coverage of many smaller airports by many national airlines was deemed essential for competition has largely been replaced by a business model in which only profit-making flight segments would be operated. With fewer major airlines now dominating the market, decisions to offer fewer short flights are challenged by fewer competitors. This report pro- vides the first systematic examination of the major competitor to the trip by short-distance flight—the trip by a privately driven automobile. Major Themes of This Report More Competition from the Car in the Short Trip This report is designed to help all members of the transportation planning and manage- ment community to understand the extent to which a higher dependence on the privately driven car has replaced or otherwise diminished the role of short-distance feeder flights. This research has revealed that the role of the automobile in providing trips between 200 miles and 1,000 miles in distance has radically changed since the base year in which national long-distance data were last collected. Holding growth in the population aside, the number of airplane seat-miles per capita has fallen drastically for shorter air trips. At the same time, survey results show that while the share of short trips taken by air has fallen considerably, the amount of auto- mobile driving for long-distance tripmaking has increased. Accordingly, the research team created a wide variety of future market scenarios that would provide the backdrop for either an increase in short-distance air passenger volumes, or a continued further decrease in them. More Competition from the Evolving Automobile of the Future The report also concludes that advocates of smaller airports should carefully monitor the evolution of private vehicles, which are increasingly benefitting from advanced infor- mation and communications technology, including higher levels of amenity within the vehicle and improved communications with other vehicles on the road. At its ultimate development, the advanced vehicle would be self-driving, at which point the competition between car and air would take on dimensions entirely different from those of today. S U M M A R Y Air Demand in a Dynamic Competitive Context with the Automobile The number of airplane seat-miles per capita has fallen drastically for the shorter air trip, while the amount of automobile driving for long- distance tripmaking has increased.

2 Air Demand in a Dynamic Competitive Context with the Automobile Possible Futures That Could Impact the Smaller Airport The future mode share for air trips is not at all a given. With considerable historical volatility reported, the research team for ACRP Project 03-40 created a base case and five possible scenarios to reflect a wide variety of possible futures. After the creation of a base case (trends extended), one pessimistic-for-air scenario was created in which the automobile of the present evolves into an autonomous vehicle capable of undertaking long-distance trips. Two other scenarios were created to reflect conditions supportive of smaller American airports, including the possible use of future aircraft technology capable of lowering the costs of low- and medium-distance flight. One scenario predicts a future for continued dominance by large hub airports, and a final scenario looks at a maximum role for flying in general. Implications from the Scenario Testing More Competition from the Automobile Seen from the point of view of the airport operator (and the smaller-airport operator in several cases), the results demonstrate the volatility of the air market, with some scenarios exploring positive futures and one very important scenario exploring a very negative future. The focus of this research on competition from the automobile allows a detailed examination of the possibility of the present automobile evolving into a fully automated vehicle, perhaps in the coming decades. In this possible future scenario, the automobile that competes with the air trip will travel from door to door and provide a private space where the “driver” could be entertained, stay connected, and even sleep. Chapter 1 of this report shows that the impact of such a future would affect shorter airplane trips more than long ones and smaller airports more than larger ones. More Direct Flights? From the perspective of smaller airports, a desirable finding of the research is that if, for one reason or another, a greater number of direct short- and medium-distance flights could be operated between and among smaller airports, a sizeable market could abandon the automobile and return to the air mode. While it is primarily the directness of the flights and frequency of the flights that would be determinant, any improvement in aircraft technology that lowers the operating costs of small planes would support a resurgence in air use for the lower- and moderate-distance flight. Less Leakage? In a parallel manner, the existence of more such direct air services could lessen the present pattern of leakage, in which passengers drive a long distance to an airport with direct flights, abandoning the local airport, which might be valued in terms of local economic development and for other reasons. This report documents the present scale of leakage and provides quantified estimates of the impact of this airport-choice pattern on intercity highways. How Modal Decisions Are Made: Implications for Local Marketing In the near term, advocates of smaller airports can take steps to better understand how travelers presently decide whether to take a trip by automobile or a shorter-distance flight. A better understanding of how this decision is made by travelers could impact the content of local marketing efforts, which need to acknowledge the role of the car as a competitor. To If, for one reason or another, a greater number of direct short- and medium-distance flights could be operated between and among smaller airports, a sizable market could abandon the automobile and return to the air mode.

Summary 3 improve the understanding of how travelers make this modal decision, this report utilizes a set of advanced research methods to document and model how values, preferences, and attitudes affect the choice of intercity mode. These research results can help the reader to better understand both “hard” (travel times and costs) and “soft” factors (attitudes and preferences) in mode choice. This report concludes that the traveler, while holding an underlying preference for air travel, weighs the cost of the air trip against the perceived discomfort of, and distaste for, the automobile trip. In general, the report finds that the mode choices made are rational and under- standable: when the air trip costs less per mile than the automobile trip at distances longer than 1,500 miles, some 70% of travelers choose the air. When the cost per mile of the air trip of less than 700 miles is more than double the air cost for longer trips, some 70% of travelers choose the auto mobile. This report documents in some detail how mode is influenced by the distance of the proposed trip and its interaction with variables such as income, purpose, party size, need for the automobile at the non-home end of a trip, and the number of destinations within the tour. In each case, the logic of the influence of each variable is evident from the data. This report documents that, overwhelmingly, most American travelers would prefer to travel by air were it not for the associated costs. Some 52% of the surveyed population fall into market segments with a clear preference for air travel, while only 24% fall into categories of a clear preference for automobile travel. Perhaps surprisingly, the data from a survey conducted by the ACRP Project 03-40 research team in 2017 does not support any hypothesis that Americans find air travel significantly unpleasant, with even the experience of airport security not found to be particularly stressful by any of the demographic catego- ries examined. Similarly, no meaningful demographic differences were found in the strong agreement with the statement that, “Compared to driving a car, I would be less tired and stressed if I took the trip by air.” Local marketing efforts should take into consideration the fact that fundamental dis- agreement exists among demographic groups on matters such as the importance of private automobile ownership, distaste for the long-distance trip, stress from the automobile trip, and stress associated with airports and air tripmaking. In many cases, the group under 35 years of age expresses less tolerance for the long-distance automobile trip than does the group older than 35. In short, this report documents that factors beyond time and cost are perceived differently by different groups and valued differently as well. Demographic differences are revealed in the reaction to the concept of the driverless car; most of those above age 35 report they would not be likely to abandon the plane, while those under age 35 take the opposite position. In the more immediate term, this research provides basic information that could be used in marketing efforts to build on known weaknesses in the preference for automobile travel. Next Steps This report ends with a set of conclusions concerning the need to refine and build upon key aspects of this research. It emphasizes the need for future multimodal and intermodal analyses to coordinate closely with ongoing improvements in the way data describing automobile tripmaking are collected—the key weak point in the present understanding of travel behavior. This research has documented the powerful attractions of the auto- mobile mode—both for the full trip and for accessing a non-proximate airport. The results should be of value to those concerned with maintaining and developing smaller airports in the United States; more research will be needed to support these programs. The traveler, holding an under- lying preference for air travel, weighs the cost of the air trip against the perceived discomfort of, and distaste for, the automobile trip.