Increase in air is coming now, despite recession and fuel costs

Jeremy C. Smith, NASA Langley Research Center, et al., Nelson M. Guerreiro, Jeffrey K. Viken, Samuel M. Dollyhigh, James W. Fenbert, 9-13-10, [“Meeting Air Transportation Demand in 2025 by using Larger Aircraft and Alternative Routing to Complement NextGen Operational Improvements,” http://ntrs.nasa.gov/search.jsp?R=20100033386] E. Liu

FAA, You know what it is, 3-7-12, [“FAA Aerospace Forecast Fiscal Years 2012-2032,” http://www.faa.gov/about/office_org/headquarters_offices/apl/aviation_forecasts/aerospace_forecasts/2012-2032/] E. Liu

This year’s forecast predicts that the industry will grow from 731 million passengers in 2011 to 1.2 billion in 2032. Cumulatively, air traffic growth for U.S. carriers–measured by revenue passenger miles–is expected to rise by more than 90 percent in the next 20 years. It grew by 3.5 percent in 2011. Airport tower operations are expected to increase by 23 percent. Also, the number of aircraft handled at FAA en-route centers, which separate high altitude traffic, is expected to increase by 50 percent. Over the next 20 years, large airports will continue to grow faster than their smaller counterparts in the United States. We are forecasting that the number of larger regional jets will increase, while most of the smaller regional jets will be retired from the fleet. On the general aviation front, the demand for products and services will continue to grow, particularly in new business jets and light sport aircraft. As our aviation system advances into the next century of flight, the solution for handling the demand for service is the Next Generation Air Transportation System, or NextGen. We are in FAA Aerospace Forecast Fiscal Years 2012-2032 the process of transforming our national air space system from the ground-based radar of today, to the satellite-based system of tomorrow. This is a fundamental change in the way the United States and the world will navigate and control air traffic. Precise, satellite-based navigation is already revolutionizing the way we do business today. Technology is helping us to become safer, quieter, cleaner and more efficient with our assets. We are creating a new template for the way we manage air traffic, yet the FAA’s core mission remains the same. We will continue to work every day to deliver the safest and most efficient aerospace system in the world.

Investment Key

Aerospace investment now prevents collapse and guarantees American competetiveness

Stevens 3/14/12

[Robert J. Stevens, Fellow of the American Astronautical Society, the American Institute of Aeronautics and Astronautics (AIAA), the Royal Aeronautical Society, and the International Academy of Astronautics, CEO of lockheed martin, http://www.lockheedmartin.com/us/news/speeches/031412-stevens.html]

With all modesty, we treasure our industry as a crown jewel. There is no other like it on earth. Friends and enemies alike envy our capabilities and work ceaselessly to replicate what we, together, have so carefully built. They recognize that the technology that we’ve developed and produced in the extraordinarily capable hands of our customers has led to a level of preeminence and prosperity that the world has not seen before. Generation after generation of Americans have recognized this value and done all that was necessary to protect and advance our strength. When our industry is at our best, we are working together with our customers and the Congress to meet our nation's greatest challenges: victory in war, prosperity in peace, exploring our universe, providing effective government services for our citizens. This requires a highly collaborative, supportive and predictable environment that extends over decades, where true innovation occurs, where insight is developed, where knowledge is gained. We, together, envision a future that others haven't seen, and we wrestle with all the challenges and problems attendant to creating things that did not exist before, while working daily under the bright light of public scrutiny. This is as it should be, and the United States has done this better than any other nation. And it was done through a sustained partnership between government and industry, and we need to invest ourselves in these valued partnerships. While our industry today is strong, it's also fragile. In the shadow of sequestration, it can be strengthened and bolstered and continue to assure our dominance for decades to come, or it can be broken. Now is our time to do all that we can.

Federal investment in the FAA is key to rapid Next Gen installation

Mouwad 3/3/12

[Jad Mouwad, airline correspondent for the NYT, former journalist at Bloomberg, masters in political science from Institut d’Études Politiques de Paris, 3/3/12“A Satellite System That Could End Circling Above the Airport” http://www.nytimes.com/2012/04/04/business/a-satellite-system-that-could-end-circling-above-the-airport.html]

[IBISworld “where knowledge is power”; the world’s largest independent publisher of U.S. industry research, IBISWorld’s team of expert analysts covers 700 different market segments http://www.prweb.com/releases/2012/5/prweb9461304.htm]

Investment Key – Recovery

[Steven Ozuna is the owner and president of New Bedford Panoramex Corp., a leader in engineering, manufacturing and designcon; contributor to the hill, .http://thehill.com/blogs/congress-blog/economy-a-budget/195835-congress-needs-to-fund-the-faa]

Perhaps one of the few things that most Republicans and Democrats in Washington can agree upon these days is the reality that our economic recovery does not solely depend on taxing and spending, but on the vitality of innovative small businesses. As the debate rages about the best way to reduce our debt, it seems that a fundamental principal of business and sports has been forgotten. To win, sometimes you just need to hit singles and doubles. A clear example of this disconnect can be found in Congress’ repeated failure to reauthorize the Federal Aviation Administration (FAA), which has been in a holding pattern for over three years. The bill, which would fund the day-to-day operations of the nation’s aviation system, would also transform the nation’s antiquated 1950’s style ground-based air traffic control system to a “Next Generation” satellite-based system. The benefits of making our air traffic system both safer and more efficient are both obvious and manifold. However, another key benefit to passing this legislation is that it would allow airports and businesses to make long-term plans regarding infrastructure projects. This is more important to an airport or business than stimulus and more important for our economy in the next few years than anything that will come from the Debt Relief effort. Perhaps most importantly, unlike the Debt Relief bill, the funding of Next Gen would come directly from industry, not the taxpayer. Moreover, Congress and the key stakeholders agreed on the formula many months ago. Passing the FAA bill would be a solid “double” for our economy and Congress should set aside the partisan fringe issues holding it up and pass it now. Despite the fact that major aviation projects and all long term planning have been in limbo for several years, the FAA and small companies are doing their best to innovate and modernize our airports as best they can. In many cases this has been dependent upon businesses developing new technologies to address pressing needs on their own dime in the hopes they will be adopted. Doing it this way can be incredibly risky, particularly for smaller, family-owned businesses in this economic climate. In this vein, our company was proud to announce the launch of a new partnership with the Federal Aviation Administration (FAA) that will revolutionize energy usage and efficiency at our nation’s airports.

Lighting Investment Key

Next Gen lighting initiatives spur economic growth

Ozuna ‘11

[Steven Ozuna is the owner and president of New Bedford Panoramex Corp., a leader in engineering, manufacturing and designcon; contributor to the hill, .http://thehill.com/blogs/congress-blog/economy-a-budget/195835-congress-needs-to-fund-the-faa]

Beginning next year, we will begin to replace legacy navigational lighting systems (PAPIs) powered by antiquated incandescent lamps with up to 400 systems that are by powered by Light Emitting Diode (LED) lamps. Once implemented, this program could cut energy costs for PAPI systems at U.S. airports by 75 percent. Under normal daytime use, the existing FAA incandescent PAPI requires approximately 3500 watts of power, while the Next Gen PAPI draws about 850 watts, or 75 percent less energy. The Next Gen PAPIs are much more reliable than the current PAPI systems and require less maintenance. The LED lamps last over 50,000 hours while the incandescent lamps last approximately 1000 hours. In addition to being a solid “single” for our nation’s aviation economy, the green lighting initiative is also a “triple play” for our nation’s ailing economy. The program will dramatically drive down airport energy, maintenance, and environmental mitigation costs and represents significant savings to airports and taxpayers over time. As we learned in the aftermath of 9/11, our nation’s aviation sector, and the 1.2 trillion in activity and 11 million good paying American jobs it represents, is a vital financial engine for our nation. While they may not appear very large to some, in the aggregate these smart partnerships can turn out to be substantial. In these uncertain budgetary times, the Department of Transportation and the FAA should continue to look to small innovative companies to allow this engine to run cleaner and faster, and spark the rally we all so desperately need.

NextGen Key – Delays

Flight delays cost billions and make business less productive

Ball et al., 2010

(Michael Ball et al. “Total Delay Impact Study”, October 2010, http://its.berkeley.edu/sites/default/files/NEXTOR_TDI_Report_Final_October_2010.pdf)

The TDI project team estimates that the total cost of all US air transportation delays in 2007 was $32.9 billion. The $8.3 billion airline component consists of increased expenses for crew, fuel, and maintenance, among others. The $16.7 billion passenger component is based on the passenger time lost due to schedule buffer, delayed flights, flight cancellations, and missed connections. The $3.9 billion cost from lost demand is an estimate of the welfare loss incurred by passengers who avoid air travel as the result of delays. In addition to these direct costs imposed on the airline industry and its customers, flight delays have indirect effects on the US economy. Specifically, inefficiency in the air transportation sector increases the cost of doing business for other sectors, making the associated businesses less productive. The impact here is subtle, however. For example, the airline industry would actually employ fewer people as it becomes more efficient. The overall impact, of course, would be positive. The TDI team estimates that air transportation delays reduced the 2007 US GDP by $4 billion.
Preventing flight delays increases business output and demand

Ball et al., 2010

(Michael Ball et al. “Total Delay Impact Study”, October 2010, http://its.berkeley.edu/sites/default/files/NEXTOR_TDI_Report_Final_October_2010.pdf)

A reduction in flight delay has two economic effects. First, a reduction in delay will lead to a reduction in airline costs. Because of the model’s assumption of perfect competition, this reduction will also lead to a reduction in air fares. The reduction in air fares will lead to an increase in the demand for leisure travel by domestic residents to domestic destinations, represented as the Holiday industry in the USAGE model, and to an increase in leisure travel by foreign residents to domestic destinations, represented by the Export Tourism industry in the USAGE model. A decrease in domestic air fares will reduce the price of a domestic vacation for both domestic and foreign residents. An increase in leisure travel will also increase the demand for the output of tourism related industries, such as hotels, restaurants, entertainment, and other forms of transportation, such as car rentals. The decrease in air fares will also reduce the cost of business travel, leading to a reduction in firm costs and prices. The second main economic effect is an increase in labor productivity from a reduction in the number of unproductive hours lost to delay. This increase in productivity will itself have three economic effects. First, it will reduce the demand for labor at constant prices because firms can produce the same level of output with less labor. Second, because labor is more productive, it becomes relatively less expensive to employ than capital (e.g., there is a reduction in the “effective price” of labor). This will encourage firms to substitute labor for capital. Third, the reduction in the effective price of labor will lead to lower firm costs and price. This reduction in price will lead to an increase in demand for the firm’s product, thereby encouraging firm expansion and increasing the demand for labor. As shown in Table 3-23, the last two effects dominate the first, resulting in an increase in the demand for labor and an increase in real wages in the policy simulation compared to the forecast simulation.

Solvency – Congestion

Models and empirics prove NextGen helps congestion – Outweighs the alt causes

bin Salam, Fellow, Eno Center for Transportation, 12

Sakib bin Salam, Fellow, Eno Center for Transportation, 4-12, [“NextGen Aligning Costs, Benefits and Political Leadership,” Eno Center for Transportation Policy, https://www.enotrans.org/store/research-papers/nextgen-aligning-costs-benefits-and-political-leadership] E. Liu

Franklin Roach, Seminar Lead at the Industrial College of the Armed Forces , et al., CAPT Stephen Black, USN, Faculty Lead Col William Andrews, USAF, Faculty Dr. Gerald Berg, Faculty Professor Donald Briggs, Faculty, Spring 09, [“Final Report Aircraft Industry ,” get it online] E. Liu

Infrastructure Modernization. Continued growth of air traffic presents a challenge to aging ATM system infrastructure and a bottleneck that will limit demand in the aircraft industry. Over the past 20 years, air travel grew by an average of 4.8 percent per year. Over the next twenty years, passenger travel is anticipated to grow at a rate of 5.0 percent per year, with cargo traffic increasing by 5.8 percent per year.90 The effect of this explosive growth in the airline industry is congestion, both in the air and on the ground. The Federal Aviation Administration (FAA) estimates that failure to implement NextGen ATM will cost the U.S. economy $22 billion by 2022 and $40 billion by 2033 in lost economic activity.91 Although the current economic recession has slowed the growth in demand for airline flights, and thus commercial aircraft demand, temporarily, the growth will return as the economy recovers. To address this impending recession, the FAA is leading the effort to field modernized hardware and traffic management procedures to increase the capacity of the national airspace. Without the improvements planned for in the NextGen ATM, the vision of robust growth in air travel will likely wither. While the air traffic infrastructure is the focus of the FAA’s modernization program, ground support also presents a potential bottleneck. Aircraft can be more efficiently routed between airports and stacked even more closely along the airways, but the increase in throughput is all for naught if the network of airports cannot turnaround the increased number and rate of aircraft arriving. The current modernization program does not synchronize the increased capacity of the airways with an increase in ground handling capability. The FAA should develop a more comprehensive plan to include needed improvements in ground support to match the modernization of the air traffic system.

Solvency – Sequestration