Airlines brace for peak hour pricing as the FAA imposes runway rationing
Ramon Lopez/WASHINGTON DC
In the face of worsening airline delays, the US Department of Transportation (DoT) will implement what it calls "market-based methods" to allocate take-off and landing slots at the USA's 31 most congested airports.
Last year, 682 million passengers boarded civil transports at US airports; a number expected to grow to exceed 1 billion by the end of the decade. But along with the good news comes the bad. Last year was the worst on record for airline delays, and 2001 may be even worse. Delays in 2000 were up 19% over the previous year, to a total of 1,234 per day. During the first nine months of 2000 alone, one out of every four flights was delayed, cancelled or diverted, affecting 119 million passengers. And delays in 2000 cost the airlines an estimated $6.5 billion, up from $5.4 billion in 1999.
The situation was so bad at New York's LaGuardia Airport that the US Federal Aviation Administration (FAA) earlier this year imposed a slot lottery as a temporary measure to balance demand with the airport's runway limitations. The programme, which affects flights during peak hours, remains in place until September, when a permanent way of doling out slots will be implemented.
The slot lottery scheme was devised only after the Port Authority of New York and New Jersey, which runs LaGuardia, set a moratorium on new flights during peak hours. This challenged federal legislation, known as AIR 21, which opened access there to regional jets and initial service by new long-haul airline entrants.
New DoT Secretary Norman Mineta says airline over-scheduling has led to chronic delays at LaGuardia, and calls the FAA lottery an appropriate temporary solution to a complicated problem. A long-term solution to air traffic congestion at this and other US airports is needed, however, and FAA administrator Jane Garvey is working to establish "demand management" solutions.
Higher landing fees
Kenneth Mead, the DoT's inspector general, says the FAA might have to impose higher landing fees or implement slot control during peak hours in order to force air carriers to alter their schedules at major US airports. Slot restrictions were previously imposed at four US airports. Congressman James Oberstar, however, says the slot programme "has had a long and sorry history. We must not repeat these mistakes by imposing slot controls at other airports."
Frederick Warren-Boulton, an economist with Microeconomic Consulting & Research Associates, believes landing fees should go to the highest bidder. "We would like peak load pricing to get airlines to schedule efficiently and set a price equal to the amount of scarce landing time. The idea is also to encourage the use of larger aircraft."
David Plavin, president of Airports Council International - North America, says runway construction is the long-term solution, but demand management tools should be used to help reduce flight delays in the interim. These tools could include a variety of non-market options such as slot lotteries, administrative slot limitations and airline scheduling committees. Market-based options would include peak-hour pricing on aircraft landing fees and slot auctions. He believes a market-based solution "is more likely to result in a balance of supply and demand and can be used to incorporate important public goals such as the protection of service to small communities and enhancement of airline competition". He also believes air carriers should be given limited anti-trust exemption to discuss ways to reduce overscheduling and flight delays during hours of peak operations.
Plavin says "market-based and non-market options have their pros and cons. Moreover, each airport is different, so we should turn away from a one-size fits all strategy. Let airports and communities define what works best, and where to limit demand in the interim."
The Air Transport Association (ATA) says a shortage of runways - not airline scheduling - is the root of the problem. The ATA notes that many delay-plagued US airports are actually operating below capacity, and a number of the airports with the least delays are above capacity, indicating that there are other delay-causing issues to resolve. The ATA says air traffic control modernisation and additional runways would solve the aviation gridlock problem.
Solving congestion
Herb Kelleher, chairman and chief executive of Southwest Airlines, says "the shortest route" to solving congestion and delays is new runways. He says the Bush Administration must "jump-start" the needed expansion in airport capacity that has been stagnating. "The political will to build more runways has been startlingly absent...The productivity of airplanes and airline employees is being seriously eroded, and increased costs through runway delays are inexorably producing much higher fares," he says.
Rono Dutta, president of United Airlines, says: "An impending crisis is facing our aviation system: too little capacity to meet soaring consumer demand.... We are not going to solve this problem with Band-Aid solutions, fewer flights or higher costs to consumers. The only real way to meet the growing needs of customers and communities is to add runways."
The American Association of Airport Executives (AAAE) says adding 80km (43nm) of runway at the nation's 25 busiest airports would eliminate most delays since a new runway can allow 30-40 more operations per hour. Some argue that airport and runway construction has not kept pace with demand for air travel, but Garvey says "runway capacity is only one piece of the delay puzzle".
This sentiment is shared by the National Air Traffic Controllers Association (NATCA), which believes that "aviation delays are a multi-faceted problem. Just as there is not one cause, there is no blanket solution or quick fix. Capacity enhancements in the air traffic control system, in the airport's capacity and its capacity management are the three key factors." But NATCA also says that ATC modernisation "will only increase capacity a fraction as much as new runway construction".
The FAA recently set capacity benchmarks for the USA's 31 busiest airports, providing data on their current state. The results confirm the obvious: that there is insufficient capacity for a number of reasons, including a shortage of runways where they are most needed.
Insufficient airport runway capacity is, perhaps, the key issue. Only six of the nation's largest airports managed to complete new runway projects in the last decade. Overall, in the last 10 years, airport capacity increased 1% while air traffic mushroomed by 37%. The USA has 546 airports with commercial airline service, but seven out of 10 passengers board civil transports at just 31 airports.
The FAA defines capacity benchmarks as the maximum number of flights an airport can routinely handle in an hour. Each congested airport received two benchmarks: an "optimum rate" under ideal conditions, and a "reduced rate" during adverse weather. Overall, the capacity benchmark study showed that eight of the nation's major airports suffer significant delays, and that LaGuardia is unable to operate without delays even under sunny skies. Other US airports with significant delays are New York Newark, New York Kennedy, Chicago O'Hare, San Francisco, Philadelphia, Hartsfield Atlanta and Boston Logan.
The head of the FAA says capacity improvements planned for Newark over the next decade will boost capacity by 10%. But demand will increase by 20%, causing even more delays at Newark alongside seven other US airports (including LaGuardia and Los Angeles) where runway construction is not planned.
New Atlanta runway
On the other hand, construction of a new 2,730m (9,000ft) runway will allow Atlanta Hartsfield to easily handle a 28% growth in demand during the same period. "The new runway is clearly responsible for the vast majority of the new capacity in Atlanta. Obviously, this situation stands in stark contrast to what we described at Newark," Garvey adds. Capacity will also improve in Boston when concrete is poured for a new 1,517m (5,000ft) commuter runway. In all, new runways are planned at 14 of the 31 most-congested US airports.
Logan may have come up with the right solution. It stands ready to enact congestion pricing should air carriers over-schedule the airport's good weather capacity. At the same time, it is promoting the use of alternative airports in the area. Thomas Kinton, director of aviation for the Massachusetts Port Authority, says: "The numbers speak for themselves. In the mid-1990s, eight out of 10 new passengers in New England flew out of Logan. But by the late-1990s, eight out of 10 new passengers were flying out of regional airports.
"This startling turnaround was not achieved easily. As airports are more accustomed to competing, they had to be convinced of the shared benefits to those that co-operate as part of a integrated aviation system," he says.
Source: Flight International
