11

Northeast Corridor Northeast Corridor Cost Benefit Cost Benefit AssessmentAssessment

StatusStatus

Mark KippermanMark KippermanSAICSAIC

July 14, 2003July 14, 2003

22

OverviewOverview

Economic Information for AnalysisEconomic Information for Analysis

Operational CapabilitiesOperational Capabilities– Higher Volume OperationsHigher Volume Operations– Lower Landing MinimumsLower Landing Minimums– Single-Pilot PerformanceSingle-Pilot Performance– En Route ProceduresEn Route Procedures

SummarySummary

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Economic Information for Economic Information for AnalysisAnalysis

Inflation and Discount RatesInflation and Discount Rates– Adjust to constant (fixed-year) dollars based on GDP price deflatorAdjust to constant (fixed-year) dollars based on GDP price deflator– OMB guidance for time value of money (normally 7% annually)OMB guidance for time value of money (normally 7% annually)

Aircraft ValuesAircraft Values– Fixed/variable operating costs, replacement and restoration costsFixed/variable operating costs, replacement and restoration costs– General costs by aircraft category from FAA, specific costs from VA Tech & General costs by aircraft category from FAA, specific costs from VA Tech &

other models, Team Vision, internet sites, etc.other models, Team Vision, internet sites, etc.

Passenger ValuesPassenger Values– Passenger value of time (PVT) significant in SATS analysisPassenger value of time (PVT) significant in SATS analysis– Likely SATS users have higher average PVT than most air travelersLikely SATS users have higher average PVT than most air travelers

Life and Injuries ValuesLife and Injuries Values– Used in calculating safety benefitsUsed in calculating safety benefits– Avoided fatality valued at $2.7 millionAvoided fatality valued at $2.7 million

44

SATS Operational CapabilitiesSATS Operational Capabilities

Higher Volume OperationsHigher Volume Operations

Lower Landing MinimumsLower Landing Minimums

Single-Pilot PerformanceSingle-Pilot Performance

En Route ProceduresEn Route Procedures

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Higher Volume OperationsHigher Volume OperationsWho Benefits?Who Benefits?

– Those already using (or projected to use) the airport: reduced flight timeThose already using (or projected to use) the airport: reduced flight time– Flights added because of HVO: reduced total travel time, ground transport costsFlights added because of HVO: reduced total travel time, ground transport costs– Flights at large airports: reduced congestion and delayFlights at large airports: reduced congestion and delay

HVO Cost-Benefit ApproachHVO Cost-Benefit Approach– Compare total O/D time, cost between large airports and SATS HVO airportsCompare total O/D time, cost between large airports and SATS HVO airports– Estimate PVT for potential passengersEstimate PVT for potential passengers– Estimate number of passengers/flights to use HVO airports; quantify savingsEstimate number of passengers/flights to use HVO airports; quantify savings– Estimate HVO-induced traffic/delay reduction at large airportsEstimate HVO-induced traffic/delay reduction at large airports

Needed HVO DataNeeded HVO Data– ““Real” origin-destination information for passengers at large airportsReal” origin-destination information for passengers at large airports– HVO airports with year of implementation HVO airports with year of implementation – Cost/ travel time to large & HVO airportsCost/ travel time to large & HVO airports– PVT distribution of potential passengersPVT distribution of potential passengers– Forecast airport traffic and delays (FAA)Forecast airport traffic and delays (FAA)– Untapped market; non-fliers who might fly because of HVOUntapped market; non-fliers who might fly because of HVO– Cost of equipment needed for HVOCost of equipment needed for HVO

66

Lower Landing MinimumsLower Landing MinimumsWho benefits?Who benefits?– Aircraft & passengers using/projected to use the airport: avoided disruptionsAircraft & passengers using/projected to use the airport: avoided disruptions– Flights added due to LLM: reduced total travel time, ground transportation costsFlights added due to LLM: reduced total travel time, ground transportation costs– Flights at large airports where traffic is reduced because of LLM at nearby Flights at large airports where traffic is reduced because of LLM at nearby

airports: reduced congestion and delayairports: reduced congestion and delayLLM Cost-Benefit ApproachLLM Cost-Benefit Approach– Compare total O/D time and costCompare total O/D time and cost– Estimate distribution of PVT & number benefiting; quantify savingsEstimate distribution of PVT & number benefiting; quantify savings– Estimate reduction of traffic and delays at large airportsEstimate reduction of traffic and delays at large airports– Estimate number of avoided disruptions due to LLMEstimate number of avoided disruptions due to LLM– Estimate distribution/benefits of avoided disruptionsEstimate distribution/benefits of avoided disruptions

Needed LLM DataNeeded LLM Data– Same data for LLM airports as for HVO airportsSame data for LLM airports as for HVO airports– Comparison of landing minimums with and without LLM Comparison of landing minimums with and without LLM – Airport/area weather data (% time below various ceiling/visibility combinations)Airport/area weather data (% time below various ceiling/visibility combinations)

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Single-Pilot Performance (SPP),Single-Pilot Performance (SPP),En Route Procedures (ER)En Route Procedures (ER)

BenefitsBenefits– Time and fuel savings Time and fuel savings – Reduced risk/severity of accidents (SPP)Reduced risk/severity of accidents (SPP)– ER similar to Free Flight for smaller aircraftER similar to Free Flight for smaller aircraft

ApproachApproach– Compare accident and navigation error rates between single-Compare accident and navigation error rates between single-

pilot and dual-pilot aircraftpilot and dual-pilot aircraft– Evaluate existing studies on Free FlightEvaluate existing studies on Free Flight– Analyze similarities and differences for SATS ERAnalyze similarities and differences for SATS ER

Needed DataNeeded Data– Expected improvements; type, quantity, and timingExpected improvements; type, quantity, and timing– Effects of improvements on safety & efficiencyEffects of improvements on safety & efficiency– Costs of implementationCosts of implementation

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SATS (AT) Preferred Means of SATS (AT) Preferred Means of Travel for Distances 180-560 MilesTravel for Distances 180-560 Miles

Benefits to new SATS passengers compared Benefits to new SATS passengers compared to POV (auto) and Air Carrier (changing to POV (auto) and Air Carrier (changing assumptions changes results)assumptions changes results)

Travel Cost, Including Value of Time

$350

$450

$550

$650

$750

$850

$950

100 200 300 400 500 600

Distance

POV Cost

AT Cost

AC Cost

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Benefits to SATS Passengers Benefits to SATS Passengers $730 Million (Preliminary Results)$730 Million (Preliminary Results)

Benefits to New SATS Passengers:Benefits to New SATS Passengers:$705M over 15 years$705M over 15 years– Average Benefit $70 per passengerAverage Benefit $70 per passenger– 1600+ passengers/day1600+ passengers/day– Estimate for 2008:Estimate for 2008: $42M$42M

Benefits to Existing Air Taxi Passengers:Benefits to Existing Air Taxi Passengers: $25M$25M

Total Benefits to SATS Passengers:Total Benefits to SATS Passengers:$730M$730M

1010

SATS Reduces Congestion and SATS Reduces Congestion and Delay at Large AirportsDelay at Large Airports

Benefits to Non-SATS Passengers at Benefits to Non-SATS Passengers at Congested Airports: $256MCongested Airports: $256M

SATS Reduced Congestion Benefits

$100 $65 $34 $2$3$9$13$29

$0$10$20$30$40$50$60$70$80$90

$100

LGA EWR PHL JFK BOS BWI IAD DCA

Airport

15-Year Benefits

($Millions)

1111

SummarySummary

Total SATS Benefits Almost $1 Billion Total SATS Benefits Almost $1 Billion (preliminary results)(preliminary results)Cost benefit analysis structure completedCost benefit analysis structure completedAvailable dataAvailable data– Traffic (updated) and delays at major airportsTraffic (updated) and delays at major airports– Forecast en route & terminal traffic (updated)Forecast en route & terminal traffic (updated)– Aviation weatherAviation weather

Needed dataNeeded data– Refined user-preference and PVT dataRefined user-preference and PVT data– ““Real” O/D dataReal” O/D data– Cost of implementationCost of implementation