GRA, IncorporatedDavid Ballard, Senior Economist115 West Avenue • Jenkintown, PA 19046 • USA [email protected] 215 884 7500
2nd Annual NEXTOR GMU FAA Workshop Innovations in NAS-Wide Simulation
In Support of NextGen Benefits Analysis
Advances in Monetization ofBenefits
January 28, 2010
2NEXTOR GMU -- Innovations in
NAS-Wide Simulation – 1/28/2010GRA, Incorporated
Overview
Acknowledgement of IPSA Team Members and Team Environment
NextGen Performance Improvements ATM Improvements and Changes in Use of System ATM as One of Many Inputs for System Users and Decision-Making Benefits as User “Harvesting” of Performance Improvements under Specific
Scenarios
Advances in Benefits Monetization Environmental Implications of Aviation Growth and NextGen Capabilities Benefits for High Performance GA Users Assessing Benefits for Travelers and the Broader Economy Airlines and NextGen – Beneficiaries or Intermediaries?
• Partners in either case
What’s Next?
3NEXTOR GMU -- Innovations in
NAS-Wide Simulation – 1/28/2010GRA, Incorporated
GRA, Incorporated
IPSA Team Leadership and Members
4NEXTOR GMU -- Innovations in
NAS-Wide Simulation – 1/28/2010GRA, Incorporated
Delays attributable to Weather reduced by over 40% through improved airport capacity in
Weather, improved aircraft capability in Weather, and advances in probabilistic
decision making
Through High Density Operations, new runways, and other
operational improvements, airport capacities increased 40 to 60%,
allowing increased throughput while maintaining reasonable
Demand/Capacity ratios
Future individual aircraft (airframes, engines) and ATC exhibit:32 dB noise reduction
(cumulative)33% reduction in fuel burn
60% reduction in emissions
X
BaselineNextGen
NextGen provides numerous NAS performance improvements
Noise Exposure NextGenNoise Exposure
Baseline
Through Trajectory Based Operations, satellite navigation, data communications, and other operational improvements, en
route capacities increased 70% to 95%
1
2
34
5NEXTOR GMU -- Innovations in
NAS-Wide Simulation – 1/28/2010GRA, Incorporated
Primary benefit opportunities for NextGen performance are increased throughput and reduced average delay
Feasible Projected Throughput with NextGen
NextGen Capacity
Capacity Increase Due to NextGen
BaselineCapacity
Average Delay
Number of FlightsFeasible Projected Throughput, Baseline Future without NextGen
Baseline Projected Delay/Throughput
Reduce Delay
Reduced Delay Possible with Unchanged Throughput
Accommodate Growth
Increased Throughput Possible with Same Average Delay as Baseline
This analysis is predicated on the fundamental capacity tradeoff between throughput (quantity of service) and delay (quality of service) in the NAS
D
A
B
C
6NEXTOR GMU -- Innovations in
NAS-Wide Simulation – 1/28/2010GRA, Incorporated
What Must Operators Take into Account?
Operator Costs and Inputs
Fuel Labor Airport costs Ownership/overhead ATC Infrastructure and
Operations Delay costs
Market Features
Demand
Competitive environment
Environmental constraints
ANSP policies and “rules of the road”
7NEXTOR GMU -- Innovations in
NAS-Wide Simulation – 1/28/2010GRA, Incorporated
Depending on circumstances affecting other inputs and parameters, NAS users will “harvest” the NextGen capabilities in different ways
Feasible Projected Throughput with NextGen
NextGen Capacity
Capacity Increase Due to NextGen
BaselineCapacity
Average Delay
Number of FlightsFeasible Projected Throughput, Baseline Future without NextGen
Baseline Projected Delay/Throughput
Reduce Delay
Reduced Delay Possible with Unchanged Throughput
Accommodate Growth
Increased Throughput Possible with Same Average Delay as Baseline
The response by airlines and other system users to NextGen capabilities (opportunities for delay savings and increased throughput) will determine the ultimate levels of improved performance
A
B
C
8NEXTOR GMU -- Innovations in
NAS-Wide Simulation – 1/28/2010GRA, Incorporated
Valuing NextGen requires, in part, valuing possible scenarios individually
Feasible Projected Throughput with NextGen
NextGen Capacity
Capacity Increase Due to NextGen
BaselineCapacity
Average Delay
Number of FlightsFeasible Projected Throughput, Baseline Future without NextGen
Baseline Projected Delay/Throughput
Reduce Delay
Reduced Delay Possible with Unchanged Throughput
Accommodate Growth
Increased Throughput Possible with Same Average Delay as Baseline
D, the “operating point analyzed,” arises from modeling choices about parameter settings for the simulation tools – D is not directly chosen
Points shown (A through D) are simulation results but the curves are notional – actually tracing a curve requires repeated simulation runs
DOperating
Point Analyzed
A
B
C
9NEXTOR GMU -- Innovations in
NAS-Wide Simulation – 1/28/2010GRA, Incorporated
Note that some scenarios may rely on different combinations or uses of NextGen components or alternatives, giving rise to different capacities
Feasible Projected Throughput with NextGen
NextGen(s) Capacities
Capacity Increase(s) Due to NextGen(s)
BaselineCapacity
Average Delay
Number of FlightsFeasible Projected Throughput, Baseline Future without NextGen
Baseline Projected Delay/Throughput
Reduce Delay
Reduced Delay Possible with Unchanged Throughput
Accommodate Growth
Increased Throughput Possible with Same Average Delay as Baseline
Examples of factors that might lead to different capacity curves include greater use of secondary airports, differing levels of avionics equipage or capability, or differences in policy environments or “rules of the road”
A
B
C
10NEXTOR GMU -- Innovations in
NAS-Wide Simulation – 1/28/2010GRA, Incorporated
Advances – Environmental Implications
Environmental implications of NextGen improvements are complex, controversial, of interest to many parties and depend on the future policy treatment of environmental mitigation across all sources
IPSA is treating aviation environmental impacts through increasing collaboration and coordination (through the JPDO Environmental Working Group) with FAA AEE and its Aviation Environmental Portfolio Management Tool (APMT), which is under development by several universities and contractors. This coordination will involve use of a common set of methodologies and
parameters for measuring and valuing the relevant inventories
11NEXTOR GMU -- Innovations in
NAS-Wide Simulation – 1/28/2010GRA, Incorporated
Advances – HPGA Users
Focus has been on Delay savings for these users based on simulated flight trajectories with
and without NextGen Analysis of user activity at the airport level has increased understanding of
where HPGA aircraft customarily operate, which affects where and how NextGen equipage issues arise for these users
12NEXTOR GMU -- Innovations in
NAS-Wide Simulation – 1/28/2010GRA, Incorporated
Advances – Passenger Benefits
Feasible Projected Throughput with NextGen
NextGen Capacity
Capacity Increase Due to NextGen
BaselineCapacity
Average Delay
Number of FlightsFeasible Projected Throughput, Baseline Future without NextGen
Baseline Projected Delay/Throughput
Reduce Delay
Reduced Delay Possible with Unchanged Throughput
Accommodate Growth
Increased Throughput Possible with Same Average Delay as Baseline
Depending on operator choices about “harvesting” NextGen capabilities, passengers may benefit from an increased availability of flights with unchanged average delay (service quality), at point C, improved service quality (reduced delay) on an unchanged level of seat availability at point B, or from additional flights and improved average delays, at an intermediate point like D, the “operating point analyzed” shown above.
There are relatively straightforward ways to value (from the passenger perspective) an outcome at point C (increased consumer surplus due to fares lower than they would be otherwise) or an outcome at point B (reduced average delay valued using the average value of passenger time), but how can intermediate points be assessed?
DOperating
Point Analyzed
A
B
C
Annual RPMs
13NEXTOR GMU -- Innovations in
NAS-Wide Simulation – 1/28/2010GRA, Incorporated
Advances – Passenger Benefits
Feasible Projected Throughput with NextGen
NextGen Capacity
Capacity Increase Due to NextGen
BaselineCapacity
Average Delay
Number of FlightsFeasible Projected Throughput, Baseline Future without NextGen
Baseline Projected Delay/Throughput
Reduce Delay
Reduced Delay Possible with Unchanged Throughput
Accommodate Growth
Increased Throughput Possible with Same Average Delay as Baseline
Depending on operator choices about “harvesting” NextGen capabilities, passengers may benefit from an increased availability of flights with unchanged average delay (service quality), at point C, improved service quality (reduced delay) on an unchanged level of seat availability at point B, or from additional flights and improved average delays, at an intermediate point like D, the “operating point analyzed” shown above.
There are relatively straightforward ways to value (from the passenger perspective) an outcome at point C (increased consumer surplus due to fares lower than they would be otherwise) or an outcome at point B (reduced average delay valued using the average value of passenger time), but how can intermediate points be assessed?
DOperating
Point Analyzed
A
B
C
Annual RPMs
14NEXTOR GMU -- Innovations in
NAS-Wide Simulation – 1/28/2010GRA, Incorporated
BaselineCapacity
Average Delay
Feasible Projected Throughput, Baseline Future w/o NextGen
WITHOUT INVESTMENT: Baseline Projected Delay/Throughput
AReduce
Delay
AFTER NEXTGEN INVESTMENT: Reduced Delay is Possible for Unchanged Throughput
B
NextGen Investment
Due to
DOperating
Point Analyzed
Stakeholders can employ the increased capability offered by NextGen in a range of ways. Parameters chosen for simulating NextGen infrastructure, ATM and operational characteristics in
this analysis resulted in the system operating at “point 2.5” which combines increased throughput with decreased average delays
C
Accommodate Growth
AFTER NEXTGEN INVESTMENT: Increased Throughput is Possible with No Additional Average Delay
a
bx
c
Y
Calculating the Hybrid Value
Key annual throughput, baseline feasible (Point A)
• a average delay, baseline infrastructure with feasible throughput (Point A)
• b average delay, NextGen infrastructure with baseline throughput (Point B)
annual throughput, NextGen infrastructure at approximate level of average delay a (Point C)
• x average delay associated with Point D
• Y annual throughput associated with Point D
Valuation•Using the reduction in average delay associated with operating unchanged throughput through a more capable NextGen system, using on the passenger value of time (PVT), the value of time savings at Point D is denoted VT = Value(B)
•Using the reduction in average real yield associated with bringing increased throughput to market, the value to passengers at Point C is the aggregation of savings on RPMs sold at reduced average real yield (the consumer surplus method), denoted CS = Value(C)
•The value of capabilities and operational outcomes leading to Point D is calculated as a weighted sum of these two “corner” valuations:
•Value at interior points can also be calculated.
CSYVTbaxaDValue
)(
15NEXTOR GMU -- Innovations in
NAS-Wide Simulation – 1/28/2010GRA, Incorporated
Advances – Benefits to the Broader Economy
Not currently a part of IPSA approach Other researchers (Harback, et.al. from Mitre-CAASD, Jeffrey Cohen from
University of Hartford) have looked at Computable General Equilibrium (CGE) approaches to estimating the impact on GDP of aviation or transportation infrastructure investment.
• This is not the same thing as “economic impact”
Work is still preliminary for aviation – concern is that aviation is such a small sector within entire economy
16NEXTOR GMU -- Innovations in
NAS-Wide Simulation – 1/28/2010GRA, Incorporated
Advances – Implications/Benefits for Airlines
NextGen enables operational improvements to airline NAS users across a variety of metrics Increased flight opportunities Reduced flight delays Reduced fuel requirements (more direct and precise flight trajectories)
• Lowers cost per flight• Reduces environmental impacts
Are airlines beneficiaries or just intermediaries that transfer the capabilities (“harvest”) enabled by NextGen investments to final users of the NAS (passengers, shippers, broader population)?
Given current and anticipated institutional arrangements, the incentives of airlines and other users to make necessary NextGen investments – their “NextGen business case” – must be understood and taken account of by policymakers (e.g., RTCA TF5)
17NEXTOR GMU -- Innovations in
NAS-Wide Simulation – 1/28/2010GRA, Incorporated
What’s in Operators’ “Big Picture?”
Operator Costs and Inputs
Fuel Labor Airport costs Ownership/overhead ATC Infrastructure and
Operations Delay costs
Market Features
Demand
Competitive environment
Environmental constraints
ANSP policies and “rules of the road”
18NEXTOR GMU -- Innovations in
NAS-Wide Simulation – 1/28/2010GRA, Incorporated
Next Steps
Stakeholder business cases Rationale and pace of equipage for specific users Active and ongoing engagement of stakeholders as NextGen is designed
and deployed
Scenarios within which NextGen is deployed Economic growth/input costs Environmental constraints
Alternative far term formulations for NextGen Equipage requirements Variations in infrastructure deployment or use
Thank You
NEXTOR Asilomar -- April 15, 2009GRA, Incorporated
