The National Academies

ACRP 03-22 [Final]

Addressing Uncertainty about Future Airport Activity Levels in Airport Decision Making

  Project Data
Funds: $350,000
Research Agency: InterVISTAS Consulting
Principal Investigator: Michael Tretheway
Effective Date: 7/15/2010
Completion Date: 6/30/2012

Forecasts of airport activity levels are essential to airport planning and financing decisions. In recent years, however, the ability of traditional forecast techniques to produce reliable estimates has been a growing concern. There are numerous examples of situations where unforeseen events and developments have had a significant effect on realization of airport development plans. Many parameters essential for preparation of air traffic forecasts (e.g., economic growth, fuel costs, and airline yields) have recently become more volatile. For example, the extreme fuel price rises experienced in 2008 led air carriers to cut air service. This price increase was followed by a sharp economic downturn which, in turn, put additional pressure on airline yields, traffic levels, and air carrier viability.  In addition, concerns around shock events (e.g., terrorism or health pandemics) have magnified the degree of uncertainty involved in producing reliable air traffic forecasts.  The effects of changing economic conditions on air cargo demand, airline mergers and bankruptcies, and airline decisions concerning routes and hubbing activities have also impacted the reliability of air traffic forecasts. The traditional approach to handling uncertainty has been to supplement base case forecasts with high- and low-case forecasts to account for a range of potential outcomes. This approach, however, provides only a cursory understanding of the risk profile and provides no detail on how unforeseen events and developments actually affect forecasts and resulting decisions. It is important to incorporate a comprehensive analysis of risks and opportunities into those airport management plans that rely on air traffic forecasts. In an operating environment subject to a great deal of uncertainty, airports need to generate and incorporate accurate measures of numerous factors (e.g., fuel prices, economic growth, and industry structure) in their long-term forecasts in support of physical and financial planning. An effective and systematic analysis framework will assist airport managers in meeting this requirement.
The objective of this research is to develop a guidebook and an associated reproducible and transparent systems analysis methodology to help airport management make decisions in the face of uncertain futures, recognizing and addressing risks and opportunities as input to facility planning and development. This research will assess how various external factors (e.g., fuel price, user taxes, airline strategies, regulations, social and demographic change, technology change, environmental change, and changing market and financial conditions) affect airport activity levels as measured by number of origin, destination, and connecting passengers; number of aircraft operations; aircraft fleet mix; and air cargo volume. The guidebook and associated systems analysis methodology should (1) examine ways to identify and characterize risks and opportunities, including their plausibility and magnitude, and how to consider them as elements of comprehensive airport planning and development strategies; and (2) enable airport management to address risks and opportunities in their business models, so as to avoid surprise and need for belated action.  
STATUS: The final report has been published as ACRP Report 76.

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