Infrastructure Report Card 2005

AVIATION [D+]

Gridlock on America's runways eased from crisis levels earlier in the decade due to reduced demand and recent modest funding increases. However, air travel and traffic have reportedly surpassed pre-September 11, 2001, levels and are projected to grow 4.3% annually through 2015. Airports will face the challenge of accommodating increasing numbers of regional jets and new super-jumbo jets.

Background

September 11, 2001, had a profound affect on the nation's aviation industry, one which will be felt for many years to come. One effect has been to divert attention from airport infrastructure issues; however, airport capacity issues must be brought back to the forefront if we are to avoid costly delays in the future. Demand for air travel is on the rebound, and the nation's aviation system must be ready to accommodate the projected growth. The demand will continue to outpace our ability to fund capacity improvements at our nation's air-carrier airports.

Conditions

In 2000, air travel in the United States was at an all-time high, with record numbers of flight delays and cancellations. This began to change in late 2000/early 2001 with the economic slowdown and, finally, the terrorist attacks of September 11, 2001. Passenger demand rebounded slowly in 2002 and 2003, in the face of the war in Iraq and the Severe Acute Respiratory Syndrome (SARS) epidemic. In September 2004, U.S. airlines carried 47.8 million passengers, an increase of 7.2% from September 2003.

Demand for air travel service is experiencing increases in passenger and air traffic levels that are predicted by the Federal Aviation Administration (FAA) to return to pre-September 2001 levels by 2005. Large carriers and regional/commuter airlines are projected by the FAA to grow an average of 4.3% per year through 2015. This equates to a 52% increase above the 2005 passenger demand. The tremendous growth in regional/commuter carriers and low-cost carriers will affect the number of aircraft operations at our busiest airports.

Additionally, airports face the new challenge in the anticipated growth of corporate jets that seat four to six passengers; a shift of 2% of today's commercial passengers to corporate jets would result in triple the number of flights. At the other extreme, larger planes carrying 800 or more passengers would represent a significant challenge for airports' current infrastructure.

The nation's air traffic control system remains a looming issue of concern. In the mid-1980s, the FAA estimated that it would take 10 years and $12 billion to modernize the nation's air traffic control systems. Twenty years and $35 billion later, the task is not complete, and the FAA expects that it will take at least 3 additional years and an additional $16 billion. Meanwhile, the number of aircraft handled by air traffic control is expected to increase from 45.1 million in 2004 to 58.4 million by 2015.

Airport and Aviation Facts:

There are 510 U.S. airports with commercial service, accounting for 99.88% of passenger enplanements.
The number of runway incursions has decreased from a peak of 407 in 2001 to 324 in 2003.
In 2004, the FAA designated 3,344 airports as part of the National Plan of Integrated Airport Systems (NPIAS), including commercial service airports, reliever airports and selected general aviation airports.
The FAA sets a performance goal of ensuring that 93% of NPIAS airport runways are maintained in good or fair condition--in 2003, the FAA rated 75% as good, 21% as fair, and 4% as poor. At commercial service airports, the runways faired better, with 80% good, 18% fair, and 2% poor.
Accessibility--66% of Americans live within 20 miles of a commercial service airport.

There is general consensus that maintaining the integrity of the national airport system requires continual updates and a steady and predictable flow of capital. The FAA has estimated that planned capital development of $9 billion annually is necessary to meet expanding demand. The Airport Council International (ACI) puts that number at $15 billion. Neither the FAA nor ACI estimates include terminal modifications needed to accommodate new explosives-detection systems required for baggage screening.

One challenge to airport capacity-building is the fragmented nature of airport ownership. Local governments and the private sector represent the majority of owners and investors in air transportation infrastructure; they tend to focus on their own needs, and only secondarily on national, system-wide concerns.

There has been recent progress on airport infrastructure issues. In 2000, Congress passed and President Clinton signed the Wendell H. Ford Aviation Investment and Reform Act for the 21^st Century--FAIR-21. This multi-year FAA reauthorization bill included authorizations of $9.9 billion for the Airport Improvement Program (AIP) for fiscal years 2001-2003, a significant increase over previous years. The bill also increased the Passenger Facility Charge to $4.50 per boarding passenger. Congress followed this in 2003 by reauthorizing the AIP for 2004-2007 at $14.2 billion for 4 years.

Airport funding comes from several sources:

Airport bonds 59%
AIP grants 21%
Passenger Facility Charge 13%
State and local funding 4%
Airport revenue 4%

The median time to open a new runway is 10 years. The challenges faced when building new runways include reaching stakeholder agreement on purpose and need for the runway, completing the environmental review process, reaching agreement on noise mitigation and other issues, and designing and constructing the runway. New Administration and congressional actions are intended to streamline the environmental review process. New runways can increase an airport's capacity by as much as 30-60%.

Policy Options

The national aviation system faces a number of major challenges in the coming years. The old business model for airlines is being replaced by a newer, low-fare, low-cost model. Newer aircraft, some much smaller and some much larger, will soon be operational. In order to meet these challenges, the national aviation infrastructure must find ways to become more flexible, and must ensure that the necessary expenditure of capital to meet the infrastructure need is available.

The American Society of Civil Engineers (ASCE) supports the permanent extension and increase of user fees as necessary for continued funding of AIP through the Airport and Airway Trust Fund. All monies collected from these user fees should be deposited in the Airport Trust Fund, and the Airport Trust Fund should be removed from the unified federal budget. Revenue Aligned Budget Authority (RABA), which allows for the allocation of all trust fund revenues, should be established in the airport trust funds. Additionally, Congress must provide continued but separate non-AIP and non-PFC funding for security operations.

Specific ASCE recommendations: