Economic Performance and NGATS
NEXTOR 2nd National Airspace System Infrastructure
Management Conference
13 June 2006
Dr. Sherry S. Borener
Director
Evaluation and Analysis Division
Joint Planning and Development Office
Acknowledgement
This presentation includes work performed by a
number of organizations and persons supporting
the JPDO Evaluation and Analysis Division.
GRA, Incorporated
Outline
• 2025 Aeronautics Activities and Worldwide
Demand
• NAS Capacity Constraints Analysis – What if we
can’t satisfy 3X demand?
– Estimating the loss in feasible throughput
– Estimating the economic loss
• JPDO Cost Workshops
• Supplement – Alternative Funding Schemes
2025 Global Aeronautics Activities
• 2/3 of world aeronautics industry will take place
outside of North America by 2025.
• U.S.-International trade in aeronautics goods and
services will grow in importance with respect to
U.S. domestic trade in goods and services.
• American airlines and aeronautics companies will
form more partnerships with foreign partners.
JPDO Process for Achieving the NGATS
6,000
2
R = 0.67
Delays (>1 Hour)
4,000
2003
2004
2,000
1,000
1,000
$5
$4
Measure PostImplementation
Performance, Service,
and Cost of Segment
3,000
-
ATO Capital Budget Shortfall
Baseline and
Assess Today’s
Performance
2
R = 0.62
$ Billions
5,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
Cumulative $3.2B
Projected Funding
$2
$1
$0
FY04
FY05
FY06
FY07
FY08
FY09
Define Concept of
Operations;
Identify
• Define the “What”
Future
• Architect & Analyze
Capabilities and
• Define Solutions
Outcomes
2006
Airports
Enhanced System
Operations to Meet
NGATS Goals
(Operations $)
DEVELOP
IMPLEMENT
Segment 4
DEVELOP
IMPLEMENT
Self
Separation
2025
Automated Maneuvering to
avoid Mid-air collisions
Exception Handling
Services
Formation Takeoff &
Landings
Noise Reducing
Operations
Environmental Ground
Equipment & Operations
Revise AIP including
Regional Capacity
Planning
Automated Aircraft Taxi
& Surface Management
Market for
Environmental Credits
Comprehensive Airport Program
Model Airport of the Future
With Transparent Screening
Risk Based
Screening
Integrated Aviation and Border Security Functions
Network Enabled
Coordinated
Response
Routine Use of
Remote Pilots
Refuse to Crash Avionics
New Airframes, Materials
and Propulsion
Near all weather
takeoff & landing
I BM
IB M
Security
Management
& Reporting
Enclave Comm.
Control (ECC)
Support
Enclave(s)
397 GBT + Backup F&E
397 GBT + Backup O&M
Total Radar Centric F&E + O&M
350,000
Two Aircraft on Same
Runway
Core Enclave(s)
400,000
DMZ
NAS Security Boundary
300,000
18,000
250,000
Non-NAS Entities
17,000
200,000
16,000
150,000
15,000
Staff
100,000
14,000
50,000
13,000
2039
2036
2040
2034
2038
2037
2035
2033
2031
2032
2030
12,000
2029
0
2011
Policy, Portfolio, Roadmaps,
and Business Cases
Analyze Alternative
Solutions and Assess
Tradeoffs
2013
IMPLEMENT
2008
DEVELOP
2012
IMPLEMENT
Segment 7
Spec
2010
DEVELOP
Note: Segments are defined by their operational date
Specific start dates and implementation timelines vary by IPT and solution element
2009
IMPLEMENT
Segment 6
Spec
2007
DEVELOP
FY05 $K
Segment 5
Spec
2006
Research , Analysis,
and Demonstrations
(Research $)
2005
Spec
2028
Spec
2026
Segment 3
2027
IMPLEMENT
2021
DEVELOP
2025
IMPLEMENT
Segment 2
Proactive Safety Management Culture with
Non-Punitive Data Sharing &
Comprehensive FAR Review
Security &
Safety
DEVELOP
Spec
2015
Market Based Flow
Management (NASDAQ)
Performance
Based Services
Develop EA; Identify Gaps and
Overlaps; Determine Research
and Program Needs
Segment 1
Spec
Decouple from
Ground Based CNS
Vehicles
• Execute & Measure
FY 24
2024
FY22
2023
FY20
2022
FY18
2018
FY16
2016
FY14
2020
FY12
2019
FY10
2017
FY08
2015
FY06
2014
Define and Implement
Incremental Solutions
via Segments
2008
Fuzzy logic to manage
Weather uncertainty
Airspace
Weather Score
FY04 Capital Investment Plan
$3
FY
11,000
10,000
2005
2006
2007
2008
2009
2010
Year
2011
2012
2013
2014
2015
Vision
• Aircraft can self
separate with or
without pilots and
when necessary
control can be
assumed from the
ground
• Customers and
operators are
fully informed
with increased
options to selfmanage their
ability to meet
their needs
• All communities
are connected
into the global air
transportation
network
2025 – International Harmonization
• Successful NGATS implementation will require significant
coordination between the U.S. government and industry
and foreign governments and industry.
• We must develop truly ‘international’ standards for aircraft,
required equipage, and operational paradigms.
– Because of residual value concerns, this is an issue even for
non-international carriers.
• Aeronautics companies must bear this in mind, paying more
attention to other parts of the world.
• This will require placing increased emphasis on the needs of
other countries and coordinating with key regions for the
continued competitiveness of U.S. industry.
Notional NGATS Funding Profiles
Profile “A”: No
new funds; Live
within budget
runouts
Budget Runout @ 3%
$
NGATS Budget
Committed Budget
2006
Profile “B”:
Moderate constant
resource increase
required
2011
2016
2021
2026
2031
Budget Runout @ 3%
$
NGATS Budget
Committed Budget
2006
2011
2016
2021
2026
2031
Profile “C”:
Major program
phases and
funding required
Budget Runout @ 3%
$
NGATS Budget
Committed Budget
2006
2011
2016
2021
2026
2031
2025 Fleet Predictions
• Overseas demand for aircraft will by far outpace U.S. domestic
demand over the next 20 years
– Airbus predicts that 72 percent of the demand for new aircraft though
2025 will be outside of the United States
– Boeing forecasts that 66 percent of the demand will be outside of the
United States
• Of new aircraft needed, the United States will need 28 percent,
Europe will need 32 percent, and Asia-Pacific countries will need
27 percent.
• Boeing predicts that the world passenger fleet will double in the
next 20 years to almost 35,000 airplanes.
• The world freighter fleet will double over the next 20 years, from
1,766 to 3,456.
• By 2025, there will be more RPKs to/from the U.S. than within the
U.S.
Aligning Incentives Between
Providers and Users
Productive Efficiency
ATM Costs
Users
Transparency
Budgets
User Charges
Allocative Efficiency
ATM
Providers
Analysis of NAS Capacity Constraints
• We know that there are many facets of National
Airspace System (NAS) capacity
– Terminals, Runways, Taxiways, En Route sectors
• At a macro level, for this analysis, we have lumped
capacity into only two categories: en route and airport
• What we’d like to see is which of these two categories
constrains NAS performance first and to what degree
• We also want to investigate characteristics of the
traffic when the NAS performance is constrained
Capacity Analysis Approach
Flights
Avg. Stage Length, Avg. Aircraft Seats
ASMs
Load Factor
(available seat miles)
Average Stage Length,
Average Aircraft Seats
Load Factor
RPMs
Load Factor
One single-stage flight consists of
two airport operations
(takeoff and landing) plus a number
of en route operations
(ATC communications). The total
time required for takeoff, travel
through the NAS and landing is
calculated for every flight
(commercial and general aviation).
Average Aircraft Seats
(revenue passenger miles)
Average Stage Length
Enplanements
(revenue passengers boarding an aircraft)
Capacity Analysis Metrics
• “Unconstrained demand” represents the public’s
desire for air transportation
– The FAA’s Terminal Area Forecast, based on socioeconomic data, does not consider whether future NAS
capacity will be sufficient to accommodate all the demand
– Capacity constraints will force some of the demand to be left
unsatisfied
• Our composite capacity metric is “feasible
throughput” which is measured in terms of number
of flights
– Flights are eliminated from the future flight schedule after a
specified airport delay tolerance or sector capacity is
reached
Fred’s Visualization
3X Scenario Results
180000
100%
Feasible Throughput
100%
% Demand Satisfied
Feasible Throughput (flights)
82%
80%
140000
65%
120000
66%
70%
60%
100000
50%
80000
40%
60000
30%
40000
20%
20000
10%
0
0%
Unconstrained Demand
Both Constraints
Airport Constraints Only Sector Constraints Only
Demand Satisfied (% of Unconstrained)
90%
160000
Summary of Capacity Constraints Analysis
3X Demand
3X Feasible
Throughput
(Airports
Constrained)
3X Feasible
Throughput
(Airports and
Airspace
Constrained)
Category
3X Baseline
Demand
3X Feasible
Throughput
(Airspace
Constrained)
Flights in NAS
173,980
142,782
114,156
112,595
Number of
Flights Trimmed
N/A
31,198
59,824
61,385
% of Flights
Trimmed
N/A
18%
34%
35%
•Assuming only FAA airport capacity benchmark report airport capacity
improvements and no airspace capacity improvements, the portion of
demand that cannot be satisfied ranges from 18% to 35%.
•Note that the unsatisfied demand for the Airport Constrained and the
Airport/Airspace Constrained cases are almost identical.
Impact on U.S./International Traffic
3X Demand – Airports/Airspace Constrained
Category
International
Outbound
Flights
International
Inbound
Flights
International
Overflights
3X
Unconstrained
Demand
8,100
7,400
20,106
3X Feasible
Throughput
6,012
5,550
20,044
Number of
Flights Trimmed
2,088
1,850
62
% of Flights
Trimmed
26%
25%
0%
• Approximately ¼ of both International Inbound and
International Outbound flights to/from the U.S. could not be
satisfied under the 3X scenario.
• The impact on International Overflights is negligible.
Reduction in INTL flights at OEP Airports
OEP Airports
3X Demand – Airports/Airspace Constrained
MIA
JFK
IAH
IAD
LAX
EW
FLL
ORD
PHL
ATL
DTW
MSP
SEA
MC
SFO
BOS
DFW
CLT
CVG
HNL
LAS
ME
PHX
DEN
BWI
CLE
SLC
LGA
PDX
TPA
PIT
DCA
STL
MD
SAN
Average number of INTL flights trimmed at OEP Airports: 89
Average % of INTL flights trimmed at OEP Airports: 25%
Average number of INTL flights are trimmed at Top 10 OEP Airports with
most INTL Ops:223
Average % of INTL flights are trimmed at Top 10 OEP Airports with most
INTL Ops:29%
3X Baseline Demand
3X Airport and Airspace Trimmed Demand
-
200
400
600
800
1,000
Airport Operations (Departures + Arrivals)
1,200
1,400
3X Constraints Analysis
Yield and Consumer Surplus
836 881
20
yield (2005 cents)
19
946
1072
1220
1332
1625
19.3
Constrained by All
18
Noise Constrained
17
Emissions Constrained
18.3
17.1
16
15
15.1
Terminal-Constrained
demand curve at 3X RPM
14
13
12
12.1
Enroute-Constrained
11
10
APO Forecast
9
10.6
2025
600
800
Extrapolated from APO
1000
1200
1400
RPMs (billions/fiscal year)
3X RPMs
1600
9.9
1800
As demand grows while constraints limit supply, prices will rise
NXTE
19
NTE
18
FAA Forecast (Mainline+Regional)
XTE
17
Extrapolated from APO
yield (2005 cents)
Constrained by:
16
N - noise
X - emissions
T - terminal
E - enroute
TE
T
15
14
13
2004
E
12
2017
11
10
2025
2032
Elasticity = -1
600
800
1000
1200
1400
RPMs (billions/fiscal year)
1600
1800
NPV of Constraints Reduction (3X)
$180
$160
$140
$120
$100
$80
NPV
$60
$40
$20
$0
Noise,
emissions,
terminal,
enroute
2016
noise, term, emiss, term,
enr
enr
2018
term, enr
term
2019
2022
2022
Constraint (year of emergence)
enr
2028
3X Constraints Analysis
Yield and Consumer Surplus
20
Nothing solved
19
$8.6B
18
$11.0B
yield (2005 cents)
17
16
$18.0B
15
$2.1B
Emissions solved; +$8.6B consumer surplus
(const 2005$)
Noise solved; +$19.5B total
Noise, emissions solved; +$37.6B
Noise, emissions, enroute solved;
+$39.7B
demand curve at 3X RPM
14
$36.1B
13
Noise, emissions,
terminal solved;+$75.8B
12
$32.5B
11
All solved
+$108.3B
10
9
0
200
400
600
800
1000
1200
RPMs (billions/fiscal year)
1400
1600
1800
JPDO Cost Workshops
• A detailed “bottom-up” design cost for a program of
this complexity, duration, and number of “known
unknowns” is not yet practicable
• Objective of Cost Workshops are to make first order
engineering estimates of:
– required total funding
– contingency reserves
– funding profile shape, magnitude, and duration with
acceptable performance outcomes and risks
• Continually justify requirements through political and
technical reviews
Cost Workshop 1 – Key Policy Issues
• Who (NASA or FAA) will do the research?
– Distribution of funding and people?
– Are the combined resources available?
• Research should account for international
harmonization issues and requirements
• Industry wants to work collaboratively to develop specifics
of the architecture
• Successful execution to the NGATS schedule requires strong
linkage & leadership from fundamental research through
decision points to certification and implementation
• FAA must gain commitment from other agencies
Cost Workshop 1 – Key Policy Issues
• FAA commitment must be demonstrated
– Exploit existing aircraft capabilities, e.g., RNP1 procedures
– Develop integrated process representing all FAA players and
necessary steps for implementation (including certification)
– Harmonize international standards to preclude extra
equipage (impacts residual aircraft values)
• NAS users have short ROI horizons
– Less than one year for existing equipment
– Approximately 1 – 3 years for new equipment
– Implication: early adopters will need hard incentives
• Subsidies, tax breaks, financing options, targeted deployments for early
adopters
• An NGATS service roadmap is needed that
– Specifies required equipage in specific time increments and airspace
accessibility
– Bundles capabilities with clearly defined anticipated benefits and
needed investments
– Uses a 4 – 5 year equipage cycle to synch
with maintenance schedules
Questions?