Air Travel at the Edge of Chaos George L. Donohue, Ph.D. Professor Systems Engineering and Operations Research Director of the Center for Air Transportation Systems Research Volgenau School of Information Technology and Engineering NEXTOR Workshop 28 Sept, 2007 CENTER FOR AIR TRANSPORTATION SYSTEMS RESEARCH © George L. Donohue 2007 Outline • How bad and widespread is the Problem • Passenger QOS • Economic Impact • What are the Underlying Causes • Too Many Scheduled Flights into Too Few Runways • Why the Airlines cannot fix the Problem Themselves • Prisoners Dilemma and Curse of the Commons • Government (Congress/DOT/FAA) Measures Required to Fix the Problem • Airport Arrival Time Slot Auctions • NEXTGEN ATM system • Larger Aircraft Fleet Implications for the Environment 2 CATSR Air Transportation System (ATS) is a CAS Network with 6 Interacting Layers •The ATS is a Public - Private Partnership with conflicting objective functions: •Public – Commerce and safety; interest groups •Private – Profit maximization Passenger/Cargo Layer (Delays, Cancellations) Airline Layer (Routes, Schedules, A/C size) TSA/FAA Layer (ATC Radar, Radios, Ctr’s, Unions) Weather Layer (Thunderstorms, Ice Storms) Physical Layer (i.e. Cities, Airports, Demographics) Government Regulatory Control Layer 3 CATSR Background: Air Transportation System Passenger Tier Performance = f (Vehicle Tier Performance, Passenger Factors) 4 CATSR Passenger Total Delay – Airports • 29% of the OEP-35 airports 50% Total EPTD • some airports significantly impact EPTD more than others (e.g. ORD, ATL, DFW and MCO) 50% Close Network of OEP35 Airport in 2004 5 CATSR 200 Routes generate 50% of Total EPTD • 17% of the 1044 routes between OEP-35 airports 50% Total EPTD • LGA, JFK, EWR, PHL connected Routes 11 out of top 20 routes 50% Close Network of OEP35 Airport in 2004 6 CATSR Top 20 Worst Airports in the US: Passenger Quality of Service Metric Year Rank 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 7 2004 Airports ORD EWR LGA PHL ATL MIA FLL MCO DFW LAS BOS SFO IAD JFK CLE SEA TPA STL PDX BWI Prob. Of PaxDelay >45 min 14% 14% 13% 12% 11% 9% 9% 9% 9% 9% 9% 9% 9% 9% 9% 8% 8% 8% 8% 8% 2005 Prob. Of PaxDelay Airports >45 min 18% EWR 17% LGA 14% ATL 13% PHL 13% BOS 12% ORD 12% FLL 12% JFK 11% MIA 11% SFO 10% SEA 10% IAD 10% TPA 10% MCO 9% BWI 9% PIT 9% PDX 9% DTW 9% LAS 9% DCA 2006 Airports ORD EWR LGA PHL JFK IAD MIA ATL MDW DTW DFW BOS DEN CLT IAH CLE PIT DCA MEM SFO Prob. Of PaxDelay >45 min 17% 16% 15% 15% 14% 12% 12% 12% 12% 12% 12% 11% 11% 10% 10% 10% 10% 10% 10% 10% CATSR Average of 2004 to 2006 Airports EWR LGA ORD PHL ATL JFK BOS MIA FLL IAD DFW SFO DTW MCO LAS CLE PIT SEA MDW DCA Prob. Of PaxDelay >45 min 16% 15% 15% 13% 12% 11% 11% 11% 10% 10% 10% 10% 9% 9% 9% 9% 9% 9% 9% 9% D. Wang, GMU PhD. In Progress Many Highly Congested Airports can Shift Passengers to other Large Airports Connecting Airport Passengers % Chicago O'Hare 59 Newark NJ 32 NY LaGuardia 8 NY JFK 40 Philadelphia 38 Atlanta 66 Boston 15 Miami 55 Washington Dulles 53 Dallas/Fort Worth 60 8 FAA 2006 NPIAS CATSR Airline Load Factors are Increasing Percent Aircraft Seats Occupied (Average) 90 Load Factor (Anticipated) 85 80 Load Factor ATA Historical Data 75 70 65 60 55 50 45 1960 1970 1980 1990 Year 9 2000 2010 CATSR GMU Model Projects Passenger Delays to Greatly Exceed 2000 delays by 2010 Total Passenger Delays 160 Delayed Flights Cancelled Flights Poly. (Delayed Flights) Poly. (Cancelled Flights) Hours (millions) 140 120 100 80 60 40 20 1998 2000 2002 2004 2006 2008 2010 2012 Year 10 D. Wang 2007 CATSR Annual Passenger Enplanements Predicted to be Lost: FAA Forecast to 2025 CATSR Annual Projected Enplanements Foregone Because of Airport Capacity Constraints 25 ORD 20 JFK 2025 2015 15 2005 EWR 10 LGA Airports STL TPA SLC SEA SFO PIT SAN PHL PHX PDX ORD MIA MSP MEM MCO MDW LAX LGA LAS IAH JFK IAD FLL HNL DTW EWR DEN DFW DCA CLT CVG BWI CLE ATL 5 0 11 Optimistic: All Planned Airport Improvements Occur All available landing slots fully utilized regardless of congestion BOS Annual Enplanements Lost (Millions) 30 FAA 2005 TAF & 2004 Benchmark Estimated Annual Cost to US (Lost Consumer Surplus, 2005$) due to Expected Airport Capacity Limitations Annual Cost to US Economy ($B) $25 $20 $15 $10 --FAA Assumptions on Growth in Airport Operations --Boeing Passenger Growth Assumptions: 3.6% per year --Aircraft Upgage: 5% in 2015, 10% in 2025 CY2015, All A/P Improvements CY2015, No A/P Improvements Assumes: $200/segment ticket Price Elasticity = -1 CY2025, All A/P Improvements $5 CY2025, No A/P Improvements $0 100% 12 95% 90% 85% Usable NAS Capacity (%) 80% Shaver 2007 CATSR Minimum Congestion Cost is a function of NEXTGEN Technology Effectiveness and Network Efficiency Annual Congestion Cost ($B) $20 Caution: Some Costs Not Included Sum of Costs ($B) $15 Costs Resulting from Passenger Delays and Flight Cancellations $10 $5 Consumer Surplus Costs Resulting From Limiting Airport Slots $0 0.8 0.85 0.9 Congestion Factor 13 0.95 1 CATSR Outline • How bad and widespread is the Problem • Passenger QOS • Economic Impact • What are the Underlying Causes • Too Many Scheduled Flights into Too Few Runways • Why the Airlines cannot fix the Problem Themselves • Prisoners Dilemma and Curse of the Commons • Government (Congress/DOT/FAA) Measures Required to Fix the Problem • Airport Arrival Time Slot Auctions • NEXTGEN ATM system Larger Aircraft Fleet Implications for the Environment 14 CATSR Severe Congestion at NY Area Airports: A 40-year-old Reality CATSR Timeline recap of congestion management measures HDR at EWR, LGA, JFK, DCA, ORD Perimeter rule at LGA, DCA 1969 - Limited #IFR slots during specific time periods - Negotiation-based allocation 15 early 1970s Deregulation 1978 Removal of HDR at EWR Introduction of Huband-Spoke Network System Slot ownership AIR-21 1985 4.2000 Use-it-orlose-it rule based on 80% usage Exempt from HDR at LGA, JFK, ORD certain flights to address competition and small market access NYNJ comparison to Comparable European Airports Airport Frankfurt, Gr (FRA) London, UK (LHR) Newark (EWR) Amsterdam, NL (AMS) New York Laguardia (LGA) Munich (MUC) New York Kennedy (JFK) Madrid, Sp (MAD) Total Movements 2005 490,147 477,884 437,402 420,736 404,853 398,838 <353,000 415,677 Data taken from ACI-NA, EC PR2006 and FAA ASPM 16 2000 458,731 466,815 450,187 432,480 384,554 <384,000 <384,000 Total Passengers 2005 52,219,412 67,915,403 33,999,990 44,163,098 <29,000,000 <29,000,000 41,885,104 41,940,059 2000 49,360,630 64,606,826 34,188,468 39,606,925 <28,000,000 32,856,220 32,893,190 CATSR Average Delays Minutes 2006 2.7 3 28.8 0.7 23.4 1.8 24.3 1.8 EWR a NYNJ Airport with No Slot Controls: Delays 2006 Delay per Flight (minutes) EWR 80 60 40 20 35 Airport BN Model 0 Summer 2006 Data -20 -40 (N. Xie GMU 2007) 0 5 10 15 Time of Day (hour) Passenger Quality of Service Metric that Includes Flight Cancellations & Missed Connections (D. Wang GMU 2007) 17 20 CATSR Calculated Capacity (Today) and Actual Throughput Optimum Rate CATSR 80 Calculated Capacity - Today Facility Reported Rate - EWR (arrivals, departures per hr) Arrivals per Hour 42, 42 60 EWR : DoT/FAA 40 Infrequent 2004 Capacity Benchmark Report Most Frequent 20 Each symbol represents actual traffic during a single hour 0 0 20 40 60 80 Departures per Hour Marginal Rate IFR Rate 80 60 Arrivals per Hour Arrivals per Hour 80 40, 40 40 20 33, 33 40 20 0 0 0 18 60 20 40 60 Departures per Hour 80 0 20 40 60 Departures per Hour 80 EWR Free-Market Fleet Mix Appears to be Far from Optimum 19 CATSR New York LaGuardia Airport: Case Study of a Slot Controlled Airport Data (2005): • Throughput: • • • • 20 404,853 flights/yr Average flight delay: 38 min Revenue passengers: 26,671,787 Average aircraft size: 96 passenger Average inter-city fare: $133 CATSR NYNJ Airport with Current Slot Controls: LGA 2004 – 2006 (DOT Data) CATSR Calculated Capacity (Today) and Actual Throughput LGA 60 Calculated Capacity - Today 60 39,39 40 Arrivals per Hour Delay per Flight (minutes) Optimum Rate 80 20 0 Facility Reported Rate - LGA (arrivals, departures per hr) 40 Infrequent 20 -20 -40 Most Frequent Each symbol represents actual traffic during a single hour 0 0 5 10 15 20 0 Time of Day (hour) 20 40 60 Departures per Hour Marginal Rate IFR Rate 60 60 37,37 Arrivals per Hour Arrivals per Hour 37,37 40 20 0 21 40 20 0 0 20 40 Departures per Hour 60 0 20 40 Departures per Hour 60 Current Government Rules at LGA Lead to Poor Use of Runway Resources • Inefficient use of resources CATSR Airports win Airlines win (High Load Factor/Large Aircraft) Airports lose Airlines lose (Low load factor/Small Aircraft) 22 LGA High Frequency Flights: Current and 90% of Optimum Boston Logan Washington DC Reagen Nat Chicago O'Hare Atlanta Hartsfield Fort Lauderdale Fl Raueigh/Durham NC Detroit Mi Charlotte NC Columbus OH Dallas Ft Worth 23 Market Daily Freq BOS 73 DCA 69 ORD 62 ATL 48 FLL 43 RDU 37 DTW 32 CLT 32 CMH 26 DFW 26 A/C seats 106 108 138 156 157 46 122 102 46 148 Model Model Normalized Freq seats Freq 60 208 0.8 68 131 1.0 56 139 0.9 32 145 0.7 26 181 0.6 22 95 0.6 22 175 0.7 30 97 0.9 22 102 0.8 26 146 1.0 CATSR Rank Seats 2.0 1.2 1.0 0.9 1.2 2.1 1.4 1.0 2.2 1.0 1 2 3 4 5 6 7 8 9 10 Outline • How bad and widespread is the Problem • Passenger QOS • Economic Impact • What are the Underlying Causes • Too Many Scheduled Flights into Too Few Runways • Why the Airlines cannot fix the Problem Themselves • Prisoners Dilemma and Curse of the Commons • Government (Congress/DOT/FAA) Measures Required to Fix the Problem • Airport Arrival Time Slot Auctions • NEXTGEN ATM system • Larger Aircraft Fleet Implications for the Environment 24 CATSR Why do the Airlines Schedule beyond the Maximum Safe RW Capacity with Flights that Loose Revenue? CATSR • There is no government regulation to limit schedules for safety or compensate passengers for delays and cancellations • These were errors in the 1978 Deregulation Act • Passenger surveys indicate that frequency and price are the most desirable characteristics of a flight • Passengers are not told of consequences of schedule to travel predictability • If any one airline decided to offer rational schedules, their competition will offer more frequency to capture market share • Thus, still producing delays and cancellations for all • In Game Theory, this is called the Prisoner’s Dilemma 25 A Natural Question? Is There an Optimal Allocation of Scarce Runway Resources? • What would happen if schedules at major airports were capped by predictable runway capacity and allocated by a market mechanism? • What markets would be served? • How would airline schedules change? – Frequency – Equipment (#seats per aircraft) • How would passenger demand change? – At airport – On routes • How would airfares change? – What would happen to airline profit margins? • How would airport and network delays be altered? 26 CATSR Outline • How bad and widespread is the Problem • Passenger QOS • Economic Impact • What are the Underlying Causes • Too Many Scheduled Flights into Too Few Runways • Why the Airlines cannot fix the Problem Themselves • Prisoners Dilemma and Curse of the Commons • Government (Congress/DOT/FAA) Measures Required to Fix the Problem • Airport Arrival Time Slot Auctions • NEXTGEN ATM system Larger Aircraft Fleet Implications for the Environment 27 CATSR Modeling Approach and Assumptions • Port Authority of NY&NJ has the ability to Determine and Set an Optimum Schedule to: • Operate at Competitive Profit Margins • Maximize Passenger Throughput • Ensure an Airline Operating Profit (Max, 90%,80%) • All Current Origin and Destination Markets are Considered • 67 Scheduled Daily Serviced Markets • Current Market Price Elasticity Remains Constant 28 CATSR NY LGA Has 67 Daily Markets 29 CATSR Airline Competitive Scheduling: Modeling Framework Auction 32 Slots/Hr Demand-Price Elasticity $ ASPM, BTS databases S1 S2 D # Network Flow Optimization Problem Flight schedules Fleet mix Average fare Flight delays Delay Network Simulation 30 (Le, 2006) CATSR Model Estimate of Aircraft Gauge Change Estimate of Aircraft Up-Gauging 300 Current Fleet Allocation - 1010 Flts 90% Optimum Fleet Allocation - 806 Flts Number of Daily Flights 250 200 150 100 50 0 19 to 37 44 to 50 69 to 77 31 88 to 110 117 to 133 138 to 158 Aircraft Seating Capacity 166 to 181 194 to 225 CATSR Unprofitable daily markets at LGA CATSR • Three markets (13 Flights) that are not profitable to operate on a daily basis are identified to be: • • • Lebanon-Hanover, NH (LEB), Roanoke Municipal, VA (ROA), Knoxville, TN (TYS). Runway Cap. Market seats/AC Fare Passengers RPM Yield Flights/day unconstrained LEB 19 $153 50 $0.72 6 10,9,8,7 ROA 37 $186 77 $0.46 5 6,5,4 TYS 50 $125 85 $0.19 2 32 Research Results – Win Win CATSR Airlines adapt with aircraft size and frequency to congestion constraint: Positive impacts on passengers, airports, airlines, and ATC •Airlines • Reduced frequency with larger aircraft • Most Markets Retained • More Profitable (90% of Optimum) •Passengers 33 • Markets served: Little change • Airfares no change • Improved Predictability • Airports • Increased passenger throughput • Reduced delays (70%) •Air Traffic Control • Reduced delays – Demand within capacity – Reduced Prob. SRO Outline • How bad and widespread is the Problem • Passenger QOS • Economic Impact • What are the Underlying Causes • Too Many Scheduled Flights into Too Few Runways • Why the Airlines cannot fix the Problem Themselves • Prisoners Dilemma and Curse of the Commons • Government (Congress/DOT/FAA) Measures Required to Fix the Problem • Airport Arrival Time Slot Auctions • NEXTGEN ATM system • Larger Aircraft Fleet Implications for the Environment 34 CATSR The Predicted Growth in Aviation Demand is based on Passenger Demand NOT Aircraft Operations CATSR • Larger Aircraft will be required to meet X2 or X3 demand • Business Jet and VLJ Air Taxi Service will emerge to compete with Commercial aviation due to current System Failure • May not be able to put the Geni back in the Bottle • Environmental Implications? • New Aircraft (e.g. B 787) should be Environmentally Friendly (Emissions/passenger/mi.?) • US airlines are not currently ordering them due to poor financial position • New Public Policy will be needed to Deal with these Complex Adaptive System Problems • NEXTGEN System not addressing these issues 35 Center for Air Transportation System Research Publications and Information • http://catsr.ite.gmu.edu – Other Useful Web Sites • http://mytravelrights.com • http://gao.gov • http://www.airconsumer.ost.dot.gov 36 CATSR CATSR BACKUP Material 37 Summary of European Passenger Bill of Rights http://news.bbc.co.uk/1/hi/business/4267095.stm CATSR • Overbooked Flights • • Passengers can now get roughly double the existing compensation if they are bumped off a flight. – Compensation must be paid immediately. – These passengers must also be offered the choice of a refund, a flight back to their original point of departure, or an alternative flight to continue their journey. May also have rights to meals, refreshments, hotel accommodation if necessary even free emails, faxes or telephone calls. • Cancelled Flights • • • • • Offered a refund of your ticket, along with a free flight back to your initial point of departure, when relevant. Or, alternative transport to your final destination. Rights to meals, refreshments, hotel accommodation if necessary, even free e-mails or telephone calls. – Airlines can only offer you a refund in the form of travel vouchers if you agree in writing Refunds may also be paid in cash, by bank transfer or cheque If the reason for your flight's cancellation is "within the airline's control", it must pay compensation. Compensation for cancellations must be paid within seven days. • Delayed Flights • 38 • Airline may be obliged to supply meals and refreshments, along with accommodation if an overnight stay is required. If the delay is for five hours or more, passengers are also entitled to a refund of their ticket with a free flight back to your initial point of departure if this is relevant. Air Transportation is Characterized as a Complex Adaptive System (CAS) Fleet Attributes Fleet Costs Trips flown by fleet CATSR Fleet Revenue Effect on GDP Passenger Delays Delays Airport Capacity Enroute Capacity Flight Delays & Cancellations Offered Schedule Inconven ience Reference demand 39 Airline Profits Effective Price Flights by Fleet Market Clearing Ticket price Aircraft Fleets Active fleet Effective price by length of trip Baseline Demand Bengi Mezhepoglu, PhD in progress