AD-AO81 101 FEDERAL AVIATION ADMINISTRATION WASHINBYON DC OFFICE -4TC F/r, 5/1

DEC 75AVIATION FORECASTS F ISCAL YEARS 1971-1987. SUMMARY ANO'BR!EFING-ETC(U)-

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AVIATION FORECASTSFY 1976 - 1987

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SUMMARY AND BRIEFINGCONFERENCE

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December 4, 1975 A

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U.S. DEPARTMENT OF TRANSPORTATIONFEDERAL AVIATION ADMINISTRATION

OFFICE OF AVIATION POLICYAviation Forecast BranchWashington, D.C. 20591

80 2 22

i. Technical Report Documentation Poge

M7A-AVP-76-l

8. Performing 0rganization Report No.

9. Performing Organizsation Name and Address 10. Work Unit No. (TRAIS)

OFFICE OF AVIATION POLICY' 11. Cotrc 22Gan oFEDERAL AVIATION ADGINISTRATION 1 etataGatN

WASHINION, D.C. 20591 13. Typo of Repor and P.riod Covered

12. Sponsoring Agency Name and Address

U.S. DEPARRhIENT OF TRANSPORTATIONOFFICE OF AVIATION POLICYFEDERAL AVIATION A11MINISTRATION 14. Sponsoring Agency Code

WASHINGTO, D.C. 2059115. Supplementary Notes

16. Abstract

This publication includes Conference Papers as well as representative questionsand answers raised during the discussion period. During the Conference, theAviation Foi~at Branch presented highlights of the Aviation Fo~asts for FiscalYears 1976-1987 and described some of the thought processes, forecasting tech-niques, and assumptions which underlie graphs and data presented in various FAAforcast publications.

17. Key Words 1S. Distribution StatementDocument is available to the U.S. publicthrough the National Technical Inform- Ition Service, Springfield, Virginia22161

19. Security Clessif. (of this report) 20. Security Clessif. (af this Page) I21. No. of Pages 22. PriceUNCLASSIFIED UNCLASSIFIED 'I 138

FormDOT 170.7 (-72)Reproduction of completed page authorized

FOREWORD

r 'N The Conference was held for the primary purpose of

(1) reemphasizing the importance of accurate data and aviation

activity forecasts for Federal Aviation Administration (FAA)

planning and budgetary purposes, and (2) stimulating the

interchange of ideas between FAA and the aviation community,

particularly between the "forecasters" and the "forecast

users."' we believe that these purposes were accomplished.

$IDuring the Conference, the Aviation Forecast Branch presented

highlights of the Aviation Forecasts for Fiscal Years 1976-1987

and described some of the thought processes, forecasting

techniques, and assumptions which underlie graphs and data

presented in various FAA forecast publications.

This publication includes Conference Papers as well as

representative questions and answers raised during the

* / discussion period. --As can be surmised from the questions,

participants challenged some of our analytical techniques,

assumptions, and conclusions. We consider this exchange

of ideas highly valuable and hope to continue the dialogue

between FAA and other members of the aviation community in

this as well as other areas.

We encourage your comments on all aspects of the Conference

in order that we may improve the effectiveness of such

forums in the future.

F. A. MEISTERAssociate Administrator for PolicyDevelopment and Review (Acting)

iii

TABLE OF CONTENTS

Subject Page

Foreword

Table of Contents ii

Agenda iv

Representative Questions and Answers vi

Opening Remarks at Aviation Forecast Presentation 1- Frederick A. Meister

Aviation Outlook 5- Gene S. Mercer

Models Used in Developing the Forecasts 13- Steve Vahovich

Air Carriers 31- Bernard Hannan

Forecasts of General Aviation Activities 51- Thomas F. Henry; Maryann Froehlich

Forecast of Military Activities 73- Hugh May

Commuter Airlines 79- Regina Van Duzee

Aviation Growth 87- Gene S. Mercer

Terminal Activity Forecast 93- Jonathan Tom

Air Route Traffic Control Center Forecasts 105- James W. Hines .... F

Flight Service Stations U 115-James W. Hines "

Conclusion 123- Gene S. Mercer

iii . . . " i

B up "

PRESENTATION OF AVIATION FORECASTS

FISCAL YEARS 1976-1987

DATE: Thursday, December 4, 1975

PLACE: FAA Auditorium3rd Floor800 Independence Ave., S.W.Washington, D.C. 20591

TIME: 10:00 AM to 4:00 PMV

AGENDAMrnSession Moderator- -ilton B. Meisner

To_ _cs Speakers

10:00 AM Welcome and Opening Remarks F. A. MeisterAssociate Administrator

for Policy Developmentand Review (Acting)

10:15 AM The Nat'l Aviation Forecasts Gene S. Mercerand the National Economy--An Chief, Aviation ForecastOverview and some Assumptions Branch

10:30 AM Models used in Developing the Steve VahovichForecasts Industry Economist

10:45 AM Forecasts of Air Carrier Bernard HannanActivities Transportation Analyst

11:00 AM. Forecasts of General Thomas F. HenryAviation Activities Industry Economist

Maryann FroehlichStatistician

11:15 AM Forecasts of Military Hugh J. MayActivities Industry Economist

11:30 AM Forecasts of Commuter Regina Van DuzeeActivities Industry Economist

11:45 AM) Questions and Answers11:55 AM)

12:00 Noon LUNCH

iv

Afternoon Session

Topics Speaker

2:00 PM Recap of Morning Session. Some Gene S. MercerOverall Implications of theForecasts for FAA Activitiesand Facilities

2:15 PM Tower Activities and Terminal Jonathan TomArea Forecasts Industry Economist

2:30 PM Center Forecasts Jim HinesOperations ResearchAnalyst

2:45 PM Flight Service Stations Jim Hines

3:00 PM Research Efforts: Recently Gene S. MercerCompleted and in Progress

3:15 PM More Questions and Answers

3:45 PM Conference Wrap-Up Milton B. MeisnerActing Director,Office of Aviation

Policy

v

REPRESENTATIVE QUESTIONS AND ANSWERS

With reference to the graph (see pg. 29) on the forecast ofthe prices of crude oil, can you give us a little backgroundon how this forecast was developed?

Crude oil prices were assumed to rise at approximatelythe same rate as the Consumer Price Index and adjustedaccording to our best judgment. Currently we do nothave a formal, separate model to forecast crude oilprices.

How well do the independent variables explain the dependentvariable and do you test for correlation between the independentvariables? (See presentation on "Models," pg. 15.)

The extent to which the independent variables explainthe variance in the dependent variable is given by theR-square. One way we test for the problem of multi-collinearity is by checking for sign reversals when theindependent variables are introduced in a stepwisemanner. The correlation matrix is also used to checkfor inordinately high correlation between the exogenousvariables. Serial correlation--i.e., correlation amonga series of data points for the same variable overtime--is tested using the Durbin-Watson statistic.

How accurate have your forecasts been in the past and how doyou compare with others? (See presentation on "Models," pg. 16.)

We won't know the accuracy of the forecasted values untilthe future becomes the present and the actual counts areavailable. However, we can test the model per se inseveral ways. Basically we use such statistical techniquesas the t-test, the corrected R-square, and the Durbin-Watson statistic, along with concurrence between thehypothesized and actual sign of the parameter estimatesfor the exogenous variables to test the model. Inaddition, the root mean-squared error was used to testthe historical accuracy of the current general aviationmodel against last year's model. The results show thecurrent model is more accurate than the old, this isespecially true for all of the key variables used inFAA manpower and facility planning.

The models you discussed utilize a "top-down" approach (see,for example, the discussion of the "Terminal Activity Forecast,"pg. 94). Have you investigated a disaggregated or "bottom-up"approach to forecasting?

vi

A disaggregated or "bottom-up" approach to forecastingis currently being investigated by the Forecast Branch.Some of the problems confronting us in this effort areobtaining adequate data on appropriate economic variablesat the required micro level of disaggregation, andaccounting for possible structural dissimilaritiesamong the components in modeling at the micro level.Assuming these problems can be overcome in time, someof the results of this bottom-up approach will bereflected in next year's forecasts.

What is the future and status of user fees in light ofrequired additional funds?

The Secretary's Report to Congress, dated September 1973,notes that GA pays only 20 percent of its assigned cost.The assigned cost is 30 percent of the total cost of theNAS system. Legislation addressing this issue is nowbefore the Congress.

Has any thought been given to what constitutes a generalaviation aircraft? (See presentation on "General Aviation,"pg. 51.)

The current survey being conducted for the FAA by theBureau of the Census goes a long way toward identifyingthe current general aviation owner and aircraftcharacteristics. In this survey 10,000 general aviationaircraft owners were sampled in a manner such that theresults will be representative of the entire generalaviation community. The useable response rate is 96.5percent. The Forecast Branch plans to publish theresults of this study somewhere around the end of 1976.

What are the policy implications that result from the fore-casts of aviation activities?

For FAA towered airports, general aviation itinerantoperations are expected to represent an increasingproportion of total itinerant operations over theforecast period. While air carrier operations areforecasted to grow in absolute terms, their proportionof total itinerant operations is expected to decreaseslightly (see chart, pg. 48). Since the NationalAviation System is user oriented, we may expect thatmuch of the future expansion of the system wi'* begeared to general aviation.

vii

A

Do your forecasts of aviation activity at towered airportsreflect increases due solely to an increase in activity atcurrent facilities, or do they also reflect activity atairports entering the towered population each forecast year?Is there a way to document this distinction between increasedactivity at old towers and activity from new towers? (Seechart, pg. 47.)

The national forecasts of towered airport activity reflectboth Increases at old towers and the addition of newtowers. The models as they exist cannot distinguishbetween these two elements of growth. Because of thehigh multicollinearity between population and thenumber of towers, both variables could not be includedin the regression equations without affecting the estimatedbehavioral relationships. Consequently, a forecast ofactivity while holding the number of towers constantcannot be accomplished. Without such an exercise thesensitivity of the forecast to the addition of new towerscannot be determined.

The development of disaggregated aviation activity forecastscould lead to a discrepancy between such forecasts and thenational aggregated forecast. (See presentation on "TerminalActivity Forecast," pg. 94.) How will such discrepancies beresolved?

Two solutions are possible:

Aggregating the disaggregated forecasts to a nationaltotal and using that; or

Using the disaggregated forecasts to develop percentagesor factors which can be applied to the national forecastto obtain consistent state or regional forecasts.

Determining which methodology is better will requirefurther study. The timing of the data reporting andagency planning needs may also dictate the approachused.

How is the capacity at a terminal area being calculated? Onthe basis of runways, terminal space, ground access? Giventhat forecasts are now constrained (see, for example, pre-sentation on "Terminal Activity Forecast," pg. 94), how willa need for new facilities and equipment be determined?

The capacity at each terminal area was determined bythe runway configuration of the airport and the per-centage of air carrier and air taxi operations at theairport. FAA Advisory Circular 150/5060-lA, "Airport

viii

Capacity Criteria Used in Preparing the NationalAirport Plan" was used to determine the practicalannual capacity. Terminal space and ground accesswere not considered.

To assist planners in determining facility and equip-ment needs, a list of the airports reaching thecapacity constraint and the year in which capacityis expected to be reached will be included in theTerminal Area forecast document.

The econometric models enable you to assess the impact ofchanges in economic and regulatory or policy variables.(See, for example, presentation on "Aviation Outlook,"pg. 5.)

Has any attempt been made to analyze the impact of the AviationAct of 1975? For example, have you analyzed what the Bill says,particularly with respect to the possible effects on the Trunksand Locals?

We have not done any detailed analysis of the AviationAct of 1975 on aviation activity. We need much morespecific information on the provisions of the Bill andwe have to make quite a few assumptions before we canfeed the data into our models. It takes time to workout the details.

It is alleged that many air taxis do not report to the towerswith the "Tango" code. If this is so, how valid is the database for the air taxi forecasts? (See presentation on"Commuter Airlines," pg. 80.)

The largest percentage of air taxi operations consistsof commuter operations and commuters do report properlyto the towers. The commuter reports together with thoseair taxi that so report, which is the majority, doprovide a sufficient data base for projections.

State airport system plans do provide relevant data andforecasts. Do your forecasts take into consideration anyof these state forecasts and do you try to incorporatesuch data in your forecasts? (See presentation of "TerminalActivity Forecasts," pg. 95.)

In preparing our Terminal Area Forecast, we do takeinto consideration forecasts prepared for StateSystem Plans and adjust our individual airport forecastswhen it appears that an airport master plan forecast ismore valid.

ix

OPENING REMARKS AT AVIATION FORECAST PRESENTATION

FREDERICK A. MEISTER

Good Morning!

it is a pleasure to welcome you here today to our FirstAviation Forecast Conference. This is the first of aseries of such conferences that we hope will give you abetter understanding of our forecasting effort andstimulate and foster an interchange of ideas.

FAA forecasts are of vital importance to the agency sincethey are directed in the short-term toward providing supportfor the budget process and in the long-term toward furnishinga basis for the planning, research and development necessaryto meet the needs of the air system. In addition to our in-house utilization of these forecasts, other groups, such asState Aviation Commissions and Airport Authorities, refer toFAA forecasts in developing their projections for StateSystem Plans and Airport Master Plans. For aircraft manufac-turers and related industries and aviation trade associations,these national forecasts provide input for their own industryforecasts. Fleet size, hours flown, and operation counts areimportant system planning variables. Aircraft and engineproduction are also important since they provide us with aknowledge of the composition of probable new entrants to thefleet. If our planning is to be effective, we must considerthose factors which are likely to impact on future manpowerand facility needs.

When I took on the responsibilities of the Office of AssociateAdministrator, I recognized the deficiencies in the forecasteffort at that time. In response to needs of FAA Headquarters'offices and the expanding needs of other users, a major efforthas been mounted in terms of capital resources and staff timeto expand and improve the forecast methodology and the result-ing forecasts. more sophisticated techniques give us thecapacity to respond rapidly in evaluating the impact ofvarious legislative proposals, such as the Aviation Act of1975, and those affecting fuel cost and supply. However, werecognize that forecasting is an art and not an exact science.Forecasts hinge critically on the assumptions about the futurestate of the economy. As with all forecasts, although con-siderable research stands behind the assumptions, nobody canclaim to know the future with certainty.

The first thing to note is that the various aviation

The purpose of these presentations is to give you an oppor-tunity to meet the Aviation Forecast Branch staff and in thecourse of their presentations, to understand some of thethought processes which underlie the forecasting efforts, theassumptions leading to construction of the models, and theassessment of those national economic forces which have animpact on aviation. I believe that the discussions willassist you in grasping the implications of the forecastsin terms of transportation policies and positions developedby the Office of the Secretary and the FAA. We must consider,for example, what a certain percent of growth in generalaviation activity during the next 10 years will mean to FAAin terms of manpower and facility requirements. Is thegrowth such that it will bring pressures for more generalaviation or reliever type airports? What of the apparenttrend in airline philosophy away from the wide-body aircraftto the three-engine conventional aircraft? What does thisimply in terms of number of operations that must be handledby our towers and air traffic control centers? It is in theday-to-day dealing with such problems that we must turn tothe forecasts of aviation activity to give us directions infinding the solutions.

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4

AVIATION OUTLOOK

GENE S. MERCER

Forecasting in the FAA Office of Aviation Policy is directed,in the short term, toward providing support for the budgetprocess. Therefore, it is necessary to develop a singleforecast for the 1976-1982 period. Over the long term, wherethe possible variations in economic conditions can have asignificant impact on planning, we have developed a rangeof forecasts which will furnish a basis for the planning andresearch and development necessary to meet the needs of theair system for the next decade and beyond.

in our effort to be responsive to the needs of the agency,we have developed increasingly sophisticated model buildingcapabilities. One of the advantages of this current approachis rapid and explicit integration of changes in importanteconomic variables that influence aviation activity levels.Thus it enables us to identify and assess the particularimpact of actual or proposed policy or regulatory changes.For example, using this technique, we were able to incorpo-rate the effects of the increase in the investment tax creditand individual income tax rebate in the aviation forecasts.The effect of the energy crisis is also incorporated in theseforecasts by allowing for shifting patterns of use amongalternative modes of transportation.

In the past 2 years we have found our crystal ball somewhathazy. It was an especially difficult year because of suddenaberrations in the air transportation system attributable toa variety of causes, such as fuel shortages, extensive aircarrier fare increases, and a decisive down turn in the economythat has substantially slowed growth of air carrier traffic.We believe recent events have shown that constantly acceler-ating growth in both the economy as a whole and the aircarrier industry in particular can no longer be expected.The energy crisis and other raw material shortages havehinted that limits to growth do exist. in the air carrierindustry, expansion into new markets, which accounted for asizeable portion of the growth in the past, may also belimited. We have lowered our air carrier forecasts becausewe have assumed a maturation of the airline industry makingits growth dependent on that of the general economy ratherthan a more dynamic growth such as was experienced in the1960's.

5

Aviation Forecasts FY's 1976-1987 is the latest reportin a series of forecasts of user demand for FAA services.

The basic underlying assumptions for the new forecast areshown in Chart 1. They include:

o An economic recovery within the next year and continuedmodest growth beyond.

o The supply of energy and fuel will not significantlyinhibit economic or aviation growth, although prices areexpected to increase throughout the forecast period.

o The basic trends in the air carrier industry and itsservice patterns which have evolved over the yearswill continue without substantial change.

o No economic or procedural changes will significantly

inhibit the growth of general aviation.

o No operational constraints such as curfews are reflected.

o Military aviation activities were assumed to remain ator slightly below current levels.

The FAA provides the aviation community with three distinctoperational services: Air traffic control at selected air-ports; IFR enroute traffic control; and flight services,including pilots briefings, flight plan filings, and aircraftcontacts. These services are provided to four major categoriesof users: The air carrier, the air taxis, general aviation,and the military.

Each category uses these services in different degrees.Because of the different relationships and growth trendsamong the four users and the three FAA services, there is noone workload measure such as airport operations, or aviationactivity series such as air carrier revenue passenger mileswhich typifies the past trends or future outlook for the wholeof the FAA. There have been, and there will continue to be,different socio-economic and political forces which drive thegrowth trends in each major user category. Any analysis ofthe three basic FAA operational services should properlybegin with a breakdown or separation by user category. Allof our forecasts follow this approach. First tie underlyingfactors influencing the growth patterns of each major user

6

| _ .. ....-

are determined and forecast. Based on these trends and pastrelationships and through the use of econometric models,separate demand forecasts for FAA services are derived foreach user category. The forecasts of total FAA operationsand services reflect a summation of the individual forecastsof the four major users.

As shown in Table 1, total aircraft operation (take-off s andlandings) at airports with FAA air traffic control towers

* are forecast to increase by 41 percent between FY's 1975 and1980 and to double the present level by FY 1987. This growthwill be dominated by growth in general aviation flying.General aviation operations accounted for 75 percent ofthe total in FY 1975. By FY 1980 general aviation operationswill be 79 percent of total operations. The FY 1987 estimateshows general aviation operations representing 82 percent ofthe total figure. By comparison, the air carrier portion ofthe FY 1975 total was 16 percent. By FY 1980 air carrieroperations are expected to decline to 14 percent and by FY 1987to 11 percent of total operations.

Tctal instrument operations at the same towered airports areforecast to show a growth pattern similar to aircraft opera-tions, rising 35 percent by 1980 and 92 percent by 1987.

Expressed in terms of IFR aircraft handled, the workload at theFAA air route traffic control centers is expected to increase23 percent and 67 percent by FY's 1980 and 1987, respectively.Air carrier traffic accounts for about 55 percent of the currentvolume followed by general aviation at 23 percent, militaryat 19 percent, and air taxis at 5 percent. Except for militarytraffic, all users are forecast to show relatively significantincreases. The air carriers will increase 22 percent by FY1980 and 52 percent by FY 1987. In the same time spans thenumber of general aviation IFR aircraft handled will rise 55percent and 140 percent. General aviation aircraft handledwill account for 34 percent of the total in FY 1987 comparedwith 23 percent today.

Flight services performed by the FAA, which include briefingpilots, filing flight plans, and contacting aircraft, areforecast to show the highest growth rate of any of the FAAoperational series. By FY 1980 this volume is expected toshow a 54 percent increase, and by FY 1987 the level shouldreach almost 2.5 times the current level. This series, aswith aircraft operations, is dominated by general aviation use.

7

Tables 2 and 3 are presented as a general overview of thisyear's forecasts. In addition to providing a capsule versionof the September 1975 forecast, these tables present a com-parison with last year's forecasts across the selected activitymeasures. Of the two sets of forecasts, the September 1975forecasts are clearly more pessimistic. This reflects theimpact on aviation activity of the more rapid rate of priceincrease, especially for fuel, and the slower rate of realincome growth assumed for the September 1975 forecasts as com-pared with the earlier forecast. It should be noted that thisyear's fiscal forecasts for 1977 and beyond are based on thenew fiscal year period, October 1 through September 30.

In this morning's session we will cover models used indeveloping the forecasts followed by specific discussionson the national forecasts for each major category of user.

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12

MODELS USED IN DEVELOPING THE FORECASTS

STEVE VAHOVICH

Good Morning!

My job is to give you some feel for the models we use ingenerating the aviation forecasts.

The topic of forecasting models can be made very technical;I will try to avoid this approach as far as possible. Ratherthan exploring the models equation by equation, I want topresent a walk-through of our general modeling procedure.Understanding the logic is more beneficial than attempting tocram econometric principles into a brief talk.

In the past our forecasts were based on some combination ofsimple extrapolations, trend analysis, and seat-of-the-pantsguesstimates. Recently, our forecasting techniques have beenup-graded. Although we still use some trend analysis andindustry surveys, our present forecasts are, for the mostpart, dependent on econometric linear regression techniques.One of the advantages of the current approach is that it allowsus to quickly and explicitly integrate into our forecastschanges in important economic variables that influence aviationactivity levels. The key to regression analysis is the con-struction of a formal model. Our model and hence the fore-casts are based on the fundamental assumption that the variousmeasures of aviation activity are related to the level ofeconomic activity. Our model development and forecastingprocedure can be summarized in the five basic steps shown inFigure A.

In the First Step, historical data are gathered on the aviationactivity v-iaes we wish to forecast. In addition, data oneconomic variables which we expect to be important in deter-mining the past and future course of the aviation variablesare collected.

The Second Ste is to empirically screen the economic variableswhich-Fave been selected for inclusion on theoretical grounds.This screening process consists of plots and conducting

13

statistical tests of the relationship of the economicvariables to the aviation activity variables. Thesetests show:

o Whether there is any empirical relationship betweenthe economic and aviation variables;

" Whether the relationship is the one hypothesized;

o Whether the relationship is linear or nonlinear.

The "best" economic variables--i.e., those that prove tobe the best predictors for a particular aviation variable--are retained. These variables form the basis for theforecasting equation for that aviation activity measure.

In the Third Step, the historical values of the selectedeconomic variib es are used as the basic inputs to thestandard regression estimating technique. The criticaloutput of this step is a set of estimated coefficients--one for each variable in the equation. These coefficientsindicate the effect of a one unit change in the economicvariable on the aviation activity measure. Assuming thatthe relationships, estimated by the coefficients, continueinto the future, the equation can be used for forecasting.

Additional tests are conducted at this point. Some ofthese are:

o Testing the estimated coefficients to see if theyare statistically meaningful.

o Each equation is checked for such things as the degreeto which it explains movements in the aviation activitymeasure over time. Also, analysis is conducted todetermine if the degree to which the equation claims topredict can be believed with confidence.

This process leads to the structure of our forecastingmodels.

FigresB & C show the structure of the general aviationforcasin gmodel. A technical discussion of the particulars

of this model is presented in Appendix B of this year'sforecast publication.

14

low

The first thing to note is that the various aviationactiv T~y measures are related, either directly or in-directly, to the level of the economy. For example,the economic variables directly determine the numberof active general aviation aircraft. This is illu-strated by the arrow from the economy to GAAA. Similarly,the number of active student pilots, represented by STD,is determined directly by economic variables. Localoperations, represented by LCL, are indirectly relatedto the level of economic activity. That is, localoperations depend on the nunwer of student pilots (STD),which in turn is determined by the level of economicactivity.

The second thing to note is that the various activitymeasures are dependent on one another in a specific way.For example, the number of local operations depends on thenumber of student pilots. Similarly, the number ofitinerant operations, represented by ITN, depends on thenumber of active aircraft. Thus the presumed direction ofthe causal flow is one-way.

Econometricians refer to such structural dependence as arecursive econometric model--it emphasizes the inter-dependence that exists in the National Airspace System.

Figure D shows the structure of the model forecasting aircarrier activity measures.

The principles illustrated in the air carrier model arethe same ones evident in the preceding model. That is,revenue passenger enplanements, represented by ENP, andrevenue passenger miles, represented by RPM, are determineddirectly by the level of economic activity. Air carrieritinerant operations, represented by OPS, are determinedby both revenue passenger miles and the level of economic Iactivity. A technical discussion of the air carrier fore-casting model is presented in Appendix A of this year's

forecast publication.

Before leaving model structure, T would like to emphasizethat each of the rectangles you have seen in this and thepreceding view-graphs represent a particular equation inthe model. Each equation consists of an aviation activitymeasure, the dependent variable to be forecasted, and agroup of economic or interrelated aviation variables, theindependent variables. Fach independent variable hasassociated with it a coefficient whose value and sign arebased on the historical relationship of the dependent andindependent variables.

Figure E exemplifies the result of the procedure we havediscussed so far, as it pertains to this year's forecasts.This figure shows the specific economic variables, selectedvia the testing process, for this year's forecasts ofgeneral aviation active aircraft. Since I promised not toenter a technical discussion, I will avoid discussing theestimated coefficients, t-statistics, and the like.However, we can note that the results from the model tendto confirm our initial expectations:

o Increases in employment and investment in the aircraftindustry are associated with increases in the numberof active aircraft.

o On the other hand, an increase in the sale of auto-mobiles, a substitute mode of transportation, isassociated with a decrease in the number of activeaircraft.

Figure F shows the economic variables that were used torecast air carrier enplanement and passenger miles. The

results of our analysis indicate that:

o Increases in employment, consumption of services, andinvestment in air transportation are associated withincreases in revenue passenger miles and enplanements.

o Increases in auto purchases and the price of air farerelative to other modes are associated with decreasesin RPM and ENP.

The forecasted values you see in this and the preceding slidebring us to the Fourth Step in the forecasting procedure;that is, assumptmon must e made as to the future courseof the economic variables. This, of course, is a vulnerablepart of any forecast. Because we do not know the future withcertainty, unforeseen economic events may nullify the mostcarefully formulated forecasting effort.

In lieu of presenting a detailed account of the multitudeof economic assumptions that go into our forecasts, thefollowing list gives a flavor for the general economicclimate we expect over the next 12 years:

o Slide 1 shows that the Nation's gross national productin constant 1958 dollars is expected to increase froman estimated $784 billion in 1975 to about $1,250 billionin 1987, an average growth rate of 4.0 percent per year.

106

o Slide 2 shows that total real personal consumptionexpend~itures are forecasted to grow at an annualaverage rate of about 3.7 percent, increasing from$533 billion (constant 1958 dollars) in 1975 to $820billion in 1987.

o Slide 3 shows that the inflation rate is expected tode-crease from an estimated 10.1 percent in 1975 toan average of 7.1 percent per year until 1980, andbthen to about 5.5 percent per year from 1980 to 1987.

o Slide 4 shows the expected future course of unemploy-me,73ecreasing from an estimated 9.3 percent in 1975to 6.6 percent by 1980, and then to about 5.3 percentby 1987.

o Slide 5 shows our assumptions about the cost of crudeoTi. T is forecast forms the basis for more specificassumptions about air carrier and general aviationfuel prices. The slide shows the 1975 estimated costof crude oil at $9.94 per barrel, rising to $13.19by 1980, and then to $17.90 by 1987.

While the forecasted increases in GNP and personal consump-tion, and declines in the rates of inflation and unemploymentmay appear to add an optimistic note to this year's aviationforecasts, it should be noted that these assumptions are farmore conservative than the assumptions which formed the basisfor last year' s aviation forecasts. Last year the majorityof economic forecasters did not foresee the depth and lengthof the present economic downturn.

The Fifth, and Final, Ste in the forecasting procedure isto "plug' FeF"cs~ values of the economic variablesinto the forecasting equations. This process generatesthe resultant aviation forecasts, presented in this year'sIforecast publication.

The foregoing overview outlined a fairly standardized modelingprocedure. However, it should not lead us to the falseconclusion that forecasting is cut-and-dried. Interesting

*1 economic and econometric problems and continual evolutionof model formulation and testing are always present. Butaside from these, a major problem we face is the disaggre-[gation of the national forecasts by geographic area, type of

aircraft, and other relevant characteristics. For example,

17

Table 5 of this year's forecast publication presents totalactive general aviation aircraft disaggregated by piston,turbine, rotocraft, and others. Such data are availablefor historical periods. However, for the forecasted period,we project the ratio of the type of aircraft to total fleetbased on the past trend toward larger turbine aircraft andaway from smaller piston aircraft. The national levelforecast of the active fleet is then distributed accordingto these forecasted ratios. The latter approach is a top-down approach to forecasting.

While this is a reasonable procedure it does not provideus with as much information on the component parts as wewould like. In order to obtain a more complete picture,we are considering converting our forecasts to a bottom-upapproach. Thus we would do our forecasts at the lowestlevel of disaggregation and then aggregate the parts toobtain the national forecasts. Some problems with thisapproach are:

o Obtaining adequate data on appropriate economicvariables at the required micro level of disaggre-gation, and

o Accounting for possible structural dissimilaritiesamong the components in modeling at the micro level.

It is critical that modeling at the micro level beperformed with extreme care, or else small errors madeat the lower level will be aggregated to seriously distortthe national level forecasts. We have already taken somesteps toward solving the data and conceptual problems.Assuming sufficient resources will continue to be available,some of this effort will be reflected in next year's forecasts.

18

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30

AIR CARRIERS

BERNARD HANNAN

Good Morning!

I will be talking to you today about the air carrier portion* of the FAA forecasts.

First of all we should define what an air carrier is. Thereare three major organizations: the Civil Aeronautics Board

* (CAB); Air Transportation Association (ATA); and the FederalAviation Administration (FAA), that deal with air carriersand each has a slightly different reporting base for thesecarriers. The FAA definition of an air carrier is simply"any operator of large aircraft that transports passengersor cargo for hire."

on the screen you will see the groupings that the FAA dividesthe air carrier industry into when preparing its forecasts(Figure 1).

[low do thtse differ from the CAB or the 7TA? The CAB regulatesthe trunk, local service, all cargo, supplemental, helicopter,and to some extent the foreign carriers serving U.S. points.

The ATA represents the trunk, all cargo, helicopter, and mostof the carriers that the FAA places in the local service group.These carriers represented by the ATA account for more than80 percent of the air carrier operations handled by the FAA.

There are also differences in the statistics reported by theCAB and FAA; as an example, the trunk carriers. The CABbreaks the trunks into two units: domestic and international.Hlowever, all international trunks are also domestic trunks andall domestic trunks except one, t~ited, are also internationaltrunks. It is interesting to note that United, the only trunkcarrier that is not considered an international carrier, is thefree world's largest air carrier. flowever, as we know, Uniteddoes serve Vancouver and Toronto.

* This is a good example of one difference between CAB and FAAair carrier operations statistics. The CAB counts the U.S.air carrier operations at Canadian and Mexican airports nearour boundaries in its domestic operations. Hlowever, operationsat airports in U.S. territories such as Puerto Rico are reportedas international operations by the CAB.

The FAA does net break its operations reports into domesticand international, but simply uses a single report that includesall air carrier operations, U.S. and foreign, at United States'

31

and its territories' airports that receive FAA service.Therotore, when you see ur operations reports they includeSan Juan, Puerto Vico, as well as Wausau, Wisconsin.

Now let's take a closer look at the I'AA groupings of aircarriers (Fiqtire 2) . The trunk carriers include airlinessuch as Am~erican and Pan Am~erican. There are 11 trunkcarriers and they operate 1,706 aircraft. The FAA localservice carriers include the CAB designated local servicecarriers, flawAiian carriers, Alasf~an carriers, and a ( qroupthat the CAB classifies a,. ther. We have included allthese carriters in one qrouip because they offer s i ilarservice aind operaite simtilar types of equi pnient. There are17 carriers in this qroup and they operate 522 all craft.There are three cairiers in the "all1 cargo" area: Fl yinqTigers; Seaboard World; and A'irli ft International. Theyoperate 35 aircraft. There were three helicopter operat orswho operated 10 hel icopters when our- torecast-s were accomiplished.Today there are tw~o operators- who operate sevenr hel1icopters.The helicopter operaitors i uclided in the air cariri or forecastsare only those ce t i fied by1 t he (CAP. The supplemenltal1 cam 1 orsinclIude airl1ine-, suich as Vor Id and Overseas Nait i onalI. Theyare charter a ir lines who operate mest- of their service intointernational areas. There art, eitht of these carrie--rs andlthey operate? 78 aircraft.Th i ntra-state carriers includeoperators like Pacific Southwest Pirlines aind iPr Flor-ida.There are fi ve of those cor ri rs ind t Icy operate 4 3 aiArcra ft.Thie cornnerc ja cairm ers are usuailly cont ract carriers -such os?an Top, which deals, most Iv i th the automobile manufacturerscarr~ ink~ att parts and Al as)e a International which operatesHercules T]ranspcrts in support of the oil drill ma and pipelineI-i Idino operationr. in P1 aska. There are :'I commerciail carriersand they operate 11 7 ai rcratft . '11( lajSt Liroup' of -ir- cariersare the t iavel ci ulbs such as the Cornhusker ."i r Tflave I 'id u'Andthe ['meral d SciIleah howdor i'nd Inch inq o(Ciety', In)c.Thetre irc 1 2 ofI these, c'arri1ers and t hey (Micra V 1 5 a ircra ft.

The operat ions at VAA toi' ereki a i ports and air coute trafficcontrol1 center s 1), these 80 cars ieis opera inq 2 ,526 a ircrafttalong with the t oreiun air carriers are, the ones thalt the VAAincludes in its air carrier StaIt iSt iCS and telecasts.

flefoit we review our forecosts, I would like to reviewthe result s of F'Y 1 975. The a it carrier i ndis try cont inued.to be subject to a var iety of economic aInd operatio(nalpressures which )'eoon in FY 1 074. t: sinq fuel1 prices0and other opera it i no cost i uc roases , along wit h a depressed

economl, all had their constraining effect on aviationgrowth. The subject that drew the gieatest attentionwas the rapid rise in the cost of fuel. As can be seenon the chart (FiJure 3), the average cost of fuel in 1973was 12.5< per gallon. In 1975 this had increased to 28.9¢per gallon. Even though other costs were also rising duringthis period, fuel costs, which were 12 percent of totaloperating costs in 1973, became 19 percent of total operat-ing costs in 1975.

Domestic revenue passenger miles (RPM's) decreased by slightlymore than 1 percent, while international RPM's decreased by10.5 percent (Figure 4). In order to compensate for the dropin RPM's, the scheduled carriers decreased their departuresby 2 percent domestically and over 10 percent internationally(Figure 5). I1mw..ever, although operations were cut, the carriersreceived delivery of additional wide-body aircraft during theyear and increased the utilization of the larger aircraftwhich had been cut during the fuel crisis. This led to anincrease in the amount of available seat miles. Because ofthis, the load factor dropped from 51 percent to slightlyless than 53 percent domestically and from 54 percent to50 percent internationally.

For FY 1975 the operating profit for the total air carrierindustry was $[.281 million, a b4 percent drop from the.777 million profit reported for FY 1974 (Figure 6). Theinternational scheduled carriers continued to show a poorprofit picture when looke(Q at as a group. The internationaltrunk carriers decreised from an FY 1974 operating profit of$11 million to an operating loss of $49 million in FY 1975.

However, with an expectcd economic recovery beginning inlate calendar year [075 we have forecast domestic scheduledpassenqer traffic to increase s;ubstantially in 1976.

Ncw let us look at what the FAA has forecast for air carrieroperations. Steve has pre'iously described to us several ofthe models ,,e use to Aetermine our forecasts. I will nowdiscus.4 the results ,f our forecasting effort.

The basic undei ]yini assumptions for all our forecastsinclude:

o An economic reco\ery within the next year andcontinued mode!;t growth beyond.

o The supply ot cneroy and fuel will not significantlyinhibit economic or aviation growth, althouqh pricesare expected to increase throuqhout the forecast period.

.. . . . . . ... .. . ,,1

o The basic trends in the air carrier industry and itsservice patterns which have evolved over the years willcontinue without substantial change.

o No economic or procedural changes will sigrificantlyinhibit the growth of aviation.

o No operational constraints such as curfews arereflected.

We have forecast a tgrowth in domestic PPl's from FY 1975's128 billion to 205 billion in 1982 for an average growthrate of 7 percent per year (Figure 7). In the internationalarea, PPM's are forecast to glow from 31 billion to 46.5 billionfor an average growth of slightly less than 6 percent per year.The international. qrowth is lower than the domestic becausewe are forecasting that the recovery in the internationalfield will lag behind the doritestic. In fact, we are fore-casting no (rowth trn the international area for this fiscalyear. These forecasts of PPM's are for schedulcd pOssenI;crtra f fic.

Pftet we have completed our RPM forecast!;, we then accomplishan air carrier fleet and operations forecast. In order to dothis, we first talk to all the major aircraft manufacturersand as large a sampling of airlires from all qroup: as timewi1 ] 'trmit.

The assumptions that we have mtade dealing with equipmentare that:

o Stretch version,: of present twin eng ine and threeer(1inc. st-anklart: lody jets will continue to ht,introduced into the fl,.t t.

o At least one new aircraft with a seatingI capacitybetween the ?7-200 and the wvil-body trijets willbe introduced ill t1'e late 1970's or early 1)0 's.

O Stretch versions of the present wide-body trijetswill appear in the t-arly 1980's.

o Ret irement of nnfan aid .ome older fan-jet aircraftu ill occur F'efort, revised Fedeial Aviation Poulation(PAR) 16 rulcs bcome of fect ivI,.

- -- Ma

Seating Capacity

o Continued decrease in the size of the first classsection which will result in an overall increasein aircraft seating.

o The number of seats abreast will increase by onein the wide-body jets in the late 1970's.

o Load factor will increase from the present 53 percentto 57 percent by the early 1980's.

Using these assumptions, we forecast the air carrier fleetto grow from 2,526 aircraft in 1975 to 3,095 by 1982 (Fioure 8).As you can see, all of the growth will take place in the purejet area. The piston and turboprop fleet will continue todecrease during this period. As far as airborne hours areconcerned, they are forecast to increase from 6.2 millionto 7.9 million in 1982. As you can see, by 1982 almost allflying will be in jet aircraft (Figure 9).

11- we compare the air carrier fleet size and airborne hoursto the total aviation cormunity, we will see that the aircarrier fleet represents 1.3 percent of the total number ofactive aircraft (Figure 10). However, because of theircomparatively high utilization rate, the air carriersproduce 14 percent of the hours flown. By 1987 the aircarrier fleet is forecast to reach slightly over 3,500airplanes. This will represent 1.2 percent of the totalfleet and they will produce 12 percent of the hours flown.

Now how do these increases affect the FAA? The F.A providesthe aviation community with three distinct operationalservices: First, air traffic control at selected airports(these include all airports that receive air carrier serviceexcept for some isolated airports such as those in thesparsely populated areas of Alaska); secondly, IFR enroutetraffic control; and lastly, flight services, which includesuch services as pilot briefings and flight plan filings.

The aii carriers use of the FAA flight service facilitiesis so slight that they are not shown as part of theseforecasts. Therefore, the air carriers are dealt within the remaining two areas.

Total operations at alirports with FAA traffic controltowers amourted to )i million in FY 1974 (Fioure 11). Theair carriers accLunted for 9.1) willion or 17 percent ofthe total. By 1487, air carriet operations are forecastto increase to 14.4 million, a '2 percent increase.

However, because of the faster growth in general aviationoperations, the air carriers will then account foi 12 percentof the 125 million total operations. Total airport operationsare broken down into local operations (taking off and landingat the sam* airport and staving within 25 miles of the air-port)--and itinerant operations (taking off at one airportand landing at another). As you can see in Figure 12, the aircarriers, for all intents and purposes, do no local flying.Therefore, their airport operations are all itinerantoperations. In FY 1974 the air carriers account for 26percent of the itinerint operations at FAA controlled air-ports. By 1987, this will decrease to 20 percent. In dealingwith IFR aircraft handled at FAA air route traffic controlcenters, the air carriers are the largest user of thisservice today and will continue to be in the foreseeablefuture (Figure 13). In 1975 the FAA handled 12.4 millionair carrier operations at its centers and this accountedfor 53 percent of the total. By ]987 air carier aircrafthandled ai.e forecast to increase to 18.8 million or 48 percentof the total.

A more coitplete discussion of the total operations at FAAcontrolled airports, air route traffic control centers, andflight service facilities will be given this aftrnoon.

This concludes our discussion of the FAA air carrier forecasts.:e will be happy to answer any questions on this suhject duringthe question and answer T'ericd.

36

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GENERALAVIATION

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279,844 ACTIVE AIRCRAFT

.-~.AIR CARRIESR.

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TOTAL AIRCRAFT OPERATIONS AT

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49

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FORECASTS OF GENERAL AVIATION ACTIVITIES

THOMAS F. HENRYMARYANN FROEHLICH

In a recent staff report on the general aviation (GA) industry,the authors documented the impressive growth of the generalaviation industry and emphasized the fact that GA activitiesare becoming increasingly important in the National AviationSystem of Airports and Airways. They also indicated that thisgrowth in general aviation activities implied increased FAAworkload.

Today, Maryann Froehlich and I will examine selectedelements of the National Aviation Forecasts for FY 1976-1987which relate to~the general ~'iation industry and we willindicate their possible impact on the air traffic system.Specifically, we shall examine the topics indicated in theoutline chart:

o The general aviation fleet size and composition

o Hours flown

o Aircraft production

o Fuel consumption and

o Selected measures of GA aircraft activities

I will present the information relevant to the fleet andits characteristics and Ms. Froehlich will present thesection on selected measures of GA aircraft activities.

FLEET SIZE

As of January 1, 1975, there were 161,500 aircraft in thegeneral aviation fleet (see Chart 1). The fleet is expectedto increase to 202,000 in 1982 and to reach 245,000 by 1986.These data represent a 52 percent increase (3.3 percentannually) during the 1975-1986 period.

By comparison, the average annual rate of growth duringthe 1960-1975 period was 5.5 percent. During that period,the general aviation fleet more than doubled, increasingfrom the 1960 total of 68,700 to the 161,500 recorded in1975.

51

FLEET COMPOSITION

Single-engine piston aircraft constitute the largestproportion of the general aviation aircraft fleet. As ofJanuary 1, 1975, single-engine piston aircraft totaled131,700, approximately 82 percent of the general aviationfleet (see Table 1). By 1982, the number of single-enginepiston aircraft is expected to increase to 160,200,representing 79 percent of the fleet. Multi-engine pistonaircraft totals 20,100 and is expected to increase to 27,600by 1982. Turbine aircraft is forecast to increase from4,000 to 7,000.

HOURS FLOWN

The number of hours flown in FY 1975 was 32.2 million(see Chart 1). The number of hours flown is expected toincrease to 45.3 million in 1982 and to 57.5 million by1986. The 1986 total number of hours flown represents anincrease of 78 percent over the 1975 level. This isequivalent to an annual average growth of 5.5 percent.

During the 1965-1975 period, the average annual increasewas 6.5 percent. During that period, the number of hoursflown by general aviation aircraft nearly doubled--increasingfrom 16.7 million hours in 1965 to the 32.2 millionestimated for 1975.

HOURS FLOWN BY CATEGORY OF AIRCRAFT

Single-engine piston aircraft accounted for 23.3 millionhours of operation in 1975 (see Table 2). This is expectedto increase by 8.6 million hours to a total of 31.9 millionin 1982. The greatest percentage increase (77 percent)is forecast for the turbine category, which will increasetheir hours of operation from 2.2 million to 3.9 million.As indicated in Table 2, single-engine piston aircraft willaccount for about 66 percent of the total increase in thenumber of hours flown.

COMPARISON OF GENERAL AVIATION FLEET SIZE AND HOURS FLOWN

Chart Number 2 shows the composition of the general aviationfleet and the relative share of the total number of hoursflown attributable to different types of aircraft. Forexample, single-engine piston aircraft currently comprise

52

82 percent of the general aviation fleet; but this type ofaircraft accounts for only 73 percent of the number of hoursflown. In contrast, multi-engine piston aircraft constituteabout 12.5 percent of the fleet, but this aircraft typeaccounts for 16 percent of the hours flown. Similarly,turbine powered aircraft make up only 2.5 percent of theGA fleet but account for nearly 7 percent of the numberof hours flown. As indicated in the chart, the number ofmulti-engine piston and the number of turbine aircraft areexpected to increase slightly and are expected to accountfor a slightly higher proportion of the number of hoursflown in 1982 than in 1975. These small increases will comeat the expense of the single-engine piston aircraft.

UTILIZATION RATE OF GENERAL AVIATION AIRCRAFT

The data indicated in previous charts suggest that theutilization rate varies for different types of aircraft.This is substantiated by the data presented in chart number 3.For example, turbine-powered aircraft indicate a muchhigher utilization rate than single-engine piston poweredaircraft--ar ,roximatelv 550 hours per turbine-powered aircraftper year in 1975 compared with 175 hours per single-enginepiston aircraft in the same year. Surprisingly, rotorcrafthave a relatively high utilization rate--approximately 360hours per year per aircraft in 1975. As indicated on thechart, all aircraft types are expected to have small increasesin the number of hours flown during the forecast period.

GENERAL AVIATION FLEET BY USER CATEGORY

Chart number 4 shows the GA fleet by user category. Anoteworthy feature of this chart is the high proportion ofturbine and multi-engine piston aircraft that are utilizedfor business purposes--78 percent, in the case of turbineaircraft and 62 percent, in the case of multi-engine pistonaircraft. In contrast, only 21 percent of single-enginepiston aircraft are used for business purposes.

AIRCRAFT PRODUCTION

In FY 1975, manufacturers of qeneral aviation aircraftproduced a total of approximately 15,200 aircraft (see Chart 5).The anticipated production during the 1976-1982 period totals102,100 or an average or 14,600 aircraft per year.

53

I

Production during the 1976-1982 period is expected to bedistributed as indicated in Table 3--single-engine pistonaircraft: 74,779, comprising 73 percent of total production,multi-engine piston: 15,437, 15 percent and so forth.

During the 1965-1974 period, general aviation manufacturersproduced a total of 119,900 aircraft--approximately 12,000aircraft a year on the average (see Table 4). This table alsoindicates the export of United States made general aviation air-craft during the 1965-1974 period. Approximately 23 pcorcentof GA aircraft have been exported during that period.W~hile the national forecast does not present separate forecastsof export of United State aircraft, if we permit recent experienceto influence our thinking, we may estimate, optimistically, thatapproximately 25 to 30 percent of the GA production willbe exported during the forecast period.

FUEL CONSUMED

In FY 1975, general aviation aircraft consumed a totalof 454 million gallons of aviation gasoline (see Chart 6).This constituted approximately 96 percent of all aviationgasoline consumed. By 1982, consumption of gasoline bygeneral aviation aircraft is expected to increase to 669million gallons (99 percent of all aviation gasoline). The1982 level represented an increase of 47 percent over the amountof fuel consumed in 1975.

In 1975, general aviation aircraft used a total of 405million gallons of jet fuel (only 5 percent of the totalconsumption of jet fuel). By 1982, the consumption of jetfuel by GA aircraft is expected to increase to 753 million--approximately 7 percent of all jet fuel.

In summary, I have covered briefly the forecasts of fleetsize and composition and aircraft production and utilization.At this point, I will offer the podium to Ms. Froehlichso that she may give you some ideas about the impact thatthe general aviation fleet size and utilization rate willhave on the aviation system in terms of levels of aircraftactivities.

The topic with which I will deal will be in the area of generalaviation aircraft operations and its impacts on the NationalAviation System. The data presented previously on generalaviation fleet size and hours flown included air taxis.Lowever, data which I will present on aircraft operationsexcludes air taxis. It might be noted that some of the dataon air taxis will be covered by another speaker later.

54

LOCAL AND ITINERANT GENERAL AVIATION AIRCRAFT OPERATIONS ATAMRTT WITH FAA TRAFFIC CONTROL SERVICE

In FY 1975 local and itinerant GA aircraft operationsat airports with FAA traffic control service totaled 44.2million. Such operations are forecast to increase to 76.2million in 1982 and to 95.4 million in 1986. As indicatedin chart number 7, itinerant GA operations constituteapproximately 55 percent of total GA operations. Thisproportion is expected to decline slightly during the fore-cast period. Chart number 7 also shows that currently GAoperations constitute approximately 75 percent of totaloperations at airports with FAA traffic control service.This proportion is expected to increase to 80 percent in1982 and to 82 percent in 1986.

TOTAL AND GENERAL AVIATION INSTRUMENT OPERATIONS AT AIRPORTSWIH FAA TRAFFIC CONTROL SERVICE

The number of general aviation instrument operations totaled10.8 million in 1975 (see Chart 8). This constituted 41percent of all instrument operations. The number of GAinstrument operations is forecast to increase to 20.8 millionby 1982 and to 26.7 million by 1986.

As indicated in chart number 8, GA instrument operationsis expected to form an increasing proportion of totalinstrument operation: 52 percent in 1982 and 56 percentin 1986.

TOTAL AND GENERAL AVIA7IIN IFR AIRCRAFT HANDLED AT FAAKY-ROUT TRAFFIC CONTRMI. CENTERS

In FY 1975, GA instrument flight rule (IFR) aircrafthandled at FAA Air Route Traffic Control Centers totaled5.5 million (see Chart 9). IFR aircraft handled is expectedto increase to 9.2 million in 1982 and to 12.5 million inFY 1986.

55

ACTIVE PILOTS BY TYPE OF CERTIFICATE

In FY 1975, there were approximately 730,500 active pilots.Of these, 42 percent held certificates for private aircraft;26 percent held commercial certificates; and 25 percent wereclassified as students. The number of pilots is expectedto increase to more than 1.0 million by 1982. Chart number10 shows the total number of pilots and the relativeproportions in the different categories for selected years.

We hope that our presentation today has given you a glimpseof the future of general aviation and its relation to theFAA Air Traffic System. Thank you.

56

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U.S. ACTIVE GENERAL AVIATION FLEET(SELECTED YEARS: 1972-1986)

NUMBER OF AIRCRAFT(IN THOUSANDS)

52% INCREASE

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1972 1975 1978 1982 1986

ESTIMATED HOURS FLOWN IN GENERALAVIATION (SELECTED YEARS: 1972-1986)

NUMBER OF HOURS FLOWNIIN MILLIONS)

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U.S. GENERALAVIATION AIRCRAFT PRODUCTION

NUMBER OF AIRCRAFT(IN THOUSANDS)

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DETAILSNOT

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GALLONS OF FUELCONSUMED (IN MILLIONS)

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AIR CARRIER

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FISCAL YEAR

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GALLONS OF FUELCONSUMED (IN MILLIONS)

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71

PFA M XG PA BL NK NOT I J 6

FORECAST OF MILITARY ACTIVITIES

HUGH MAY

Military Aviation Forecasts occupy a more significant positionin FAA forecasting efforts than their bare, numerical valuewould at first suggest. Expressed in terms of FAA air trafficworkload, the military portion in Fiscal Year 1975 accountedfor only:

o 4 1/2 percent of total aircraft operations atairports with FAA air traffic control towers.

o 15 percent of the total instrument operationsat those same FAA-towered airports.

o 19 percent of the IFR aircraft handled workloadat FAA air route traffic control centers.

o 7 percent of the aircraft contacted by the FAAat flight service stations and combined station/towers.

The basic mnilitary activity series--the projected activeaircraft fleet and their volume of flying hours--isfurnished us by the Department of Defense and the U.S.Coast Guard. This information is separated in terms offlying services (Air Force, Army, Navy, Marines, andCoast Guard) and also in terms of type of flight equipment(fixed-wing piston, turboprop or jet aircraft and heli-copters). The aircraft and hours forecasts are translatedinto anticipated deman s on the national aviation system.

This information is incorporated in summary form in theannual edition of the office of Aviation Policy publicationentitled "Aviation Forecasts Fiscal Years 1976-1987." Amore detailed presentation of the military inf-rmation appearsin the publication "Military Aviation Forecasts Fiscal Years1976-1987."

Worldwide total U.S. military active aircraft were almost40,000 in 1955. By 1973, the total was down to 28,416 withthe Air Force accounting for 45 percent, the Navy 24 percent,and the Army for 31 percent.

73

U.S. military active aircraft in the continental 48 States(CONUS) decreased slightly during the last 5 years--from20,481 in 1971 to 19,999 in 1975 (a decline of 2 percent).Aircraft flying hours in the same period dropped sharplyfrom 8.9 million to 6.7 million hours, 25 percent.

Detailed planning information supplied by the Departmentof Defense goes through Fiscal Year 1982. The Fiscal Year1982 forecast shows 20,268 military active aircraft, virtuallyno change from the current Fiscal Year 1975 total of 19,999active aircraft. Flying hours for 1982 are projected at6.7 million, the same as 1975.

Translatina these basic elements (aircraft and hours) intoexpected FAA air traffic workload, we find FAA towers inFiscal Year 1982 will probably handle 2.7 million military air-craft ope::ations (the same number as in Fiscal Year 1975). FAAflight service stations are forecast to handle 669,000military aircraft contacts in Fiscal Year 1982, about 7 per-cent less than the 720,000 in 1975. Military aircraft handledunder IFR rules by FAA air route traffic control centers areestimated at 4.0 million in 1982--9 percent below the4.4 million in 1975. Military instrument operations are pro-jected to move up slightly by 1982 to 4.0 million--100,000more operations thin in 1975.

FORECASTS 197b-1987

(1) ACTIVE ATRCPAVT

The United States military services active aircraft inventorywill show little change in the 12 years of the forecast period1976 through 1987. The active military aircraft count willremain at about 20,000 aircraft for the entire perird. Com-position o the active inventory will show little change ex-cept for a further decline in piston fixed-wing planes from0 percent of the total in 1976 to 5 percent by 1981.Jet fixed-wiing aircraft wvith 48 percent of the total andl..lIcopters with 3(1 percent account for the bulk of the active-%!itary inventoty throughout this 12-year time span.

t...... of aircraft in the inventory, whetht,,i turboprop or,, not is significant a factor in projecting workload onS", ,IlIa Av lation System (NAS) as in the volume of flying

. w let u.-; look at airciaft hours.

74

(2) AIRCRAFT FLYING HOURS

Flying hours logged by the U.S. Armed Forces In ContinentalUnited States have steadily declined since 1971. The FiscaiYear 1975 total of 6.7 million hours was 25 percent less thanthe 1971 total of 8.9 million hours.

For the next 12 years--1976 through 1987--military aircraftflying hours are expected to fluctuate narrowly between 6.6million and 6.7 million hours.

(3) AIRCRAFT OPERATIONS

Military aircraft operations at FAA-operated control towersin Fiscal Year 1975 stayed at the same volume as in FiscalYear 1974 (2.8 million operations). The FAA forecast projects2.6 million military aircraft operations for 1976 through 1980and 2.7 million operations annually for Fiscal Years 1981-1987.

It should be noted that past studies have found that FAAtowers handle about 10 percent of total military operations--the other 90 percent are handled at military airport bases.

The Air Training Command (ATC) with 21 percent of the basesand auxiliaries in the CONUS accounted for almost 39 percentof the USAF aircraft operations. The Strategic Air Command(SAC) and Tactical Air Command (TAC) each accounted for 16percent of all USAF aircraft operations. Together thesethree commands--ATC, SAC and TAC--accounted for 71 percentof the USAF flying operations in Fiscal Year 1975.

Williams AFB near Phoenix, Arizona, ranked number one amongUSAF bases in CONUS in 1975 with 472,000 aircraft operationsand is served by FAA approach control. Six additional USAFbases had more than 300,000 operations each. Reese AFB,Lubbock, Texas, with 301,000 operations also has approach con-trol by FAA.

The FAA report shows the 35 leading FAA-controlled airportsranked by averaqe hourly operations. It shows an hourlyaverage of 114 for Williams AFB, 105 for Santa Ana, and 100for Van Nuys. Chicago O'Hare had an average of 78 aircraftoperations hourly, Opa Locka 72, Atlanta International 57,and Redford, Massachusetts 43. These averages were calcu-lated in terms of 12 hours of daily operation at Williams

75

AFB--16 hours at Santa Ana, Van Nuys, Opa Locka and Bedford--and 24 hours daily at Atlanta and O'Hare.

(4) AIRCRAFT CONTACTED

FAA flight service stations and combined station/towers re-corded 720,000 aircraft contacts during Fiscal Year 1975, adrop of 16 percent from the previous year. The FAA forecasts655,000 military aircraft contacts for Fiscal Year 1976 andvolume fluctuating between 660,000 and 674,000 throughout theremainder of the forecast period ending in 1987.

(5) INSTRUMENT FLIGHT RULES (IFR) AIRCRAFT FANDLED

There were 4.4 million military aircraft handled under IFRconditions at the 27 FAA centers during Fiscal Year 1975,some 100,000 more than in Fiscal Year 1974. Planning datasupplied by the U.S. military flying Armed Forces on activeaircraft and flying hours indicate that approximately 4 millionmilitary aircraft will be handled annually during the forecastperiod 1976-1987.

(6) INSTRUMENT OPERATIONS

Military instrument operations at FAA towers totaled 3.9 millionin Fiscal Year 1975. The current FAA forecast anticipates a4 million figure for the period 1977-1987.

The FAA forecast report also shows CONUS USAF approach controllocations listed in rank order of instrument operations handledduring Fiscal Year 1975. The report shows the USAF commandand civil locations served by the USAF approach control facility.This summary is valuable to document some of the air trafficservices performed by the military for civil aviation. Forexample, Vance AFB led with 181,000 instrument operations andserved Enid Woodring FAA Tower.

Another table in the report shows instrument operationshandled by FAA approach control and by Air Force control atAir Training Command locations in Calendar Year 1974. Civilinstrument operations range from 60 percent of the total atGulf port - Kessler, 48 percent at the Air Force Academy, 41percent at Mather - Sacramento, and 36 percent at WilliamsPhoenix down to 1 percent at Vance and Laughlin.

76

(7) GEOGRAPHIC DISTRIBUTION

While normally one thinks of military flying as being con-centrated in the south or southwest, the Fiscal Year 1975distribution pattern shows the FAA Eastern Region was theleader with 22 percent of all military aircraft operationshandled at FAA towers. The Southern Region was number two,and the Southwest Region was number three.

Andrews Air Force Base, located in the Eastern Region, justoutside Washington, D.C., was the busiest FAA tower in termsof military operations with almost 154,000 operations--twicethe volume of the second busiest FAA-operated tower in termsof military aircraft operations at Palmdale, California.The Andrews AFB activity was 61 percent itinerant and 39 per-cent local operations. At Palmdale the activity was 18 per-cent itinerant and 82 percent local.

in descending order after Andrews and Palmdale, the followingFAA towers each reported more than 40,000 military aircraftoperations: Charleston, South Carolina; Honolulu, Hawaii;Pueblo, Colorado; Niagara Falls, New York; Colorado Springs,Colorado; Dothan, Alabama; Richmond, Virginia; andAtlantic City, New Jersey.

(8) FAA RELATIONSHIP WITH MILITARY

FAA has had long and very close day-to-day operating relationswith the military services as evidenced in the FAA Air TrafficService where a special military activities branch is devotedto day-to-day liaison work. This branch has 7 liaison unitsthroughout the Continental United States as follows:

1. Strategic Air Command, Of futt AFB, Omaha, Nebraska

2. Tactical Air Command, Langley AFB, Hampden, Virginia

3. Military Airlift Command, Washington, D.C.

4. North American Air Defense Command, Ent AFB, Colorado

5. ATC Headquarters Liaison, Randolph AFB, Texas

6. USAF Flying Safety, Norton AFB, California

7. Naval Safety Center, Norfolk NAS, Virginia

77

Since 1967 , 3 'ErF 1%'Lr Traffic Controllers have saved 338 civilairraf ui~1,662 people on board. Estimated dollar cost

of these air,:raft was almost $73 million, hit far more significantwere the num'xer of lives involved.

!Ihe Air Force operates Airport Surveillance Radar (ASR) at 112locations, 84 of which provide approach control service, inmany cases to civil, airports. All military services are par-ticipatinq i~i the national effort to develop a T~icrowaveLanding S-sttm rneLS).

Miilitary ope-ations, 1-.e they normal or special, often must beconducted I~n the c-aie airspace shared by other users. Whilecertain rilil.ary operations would be hazardous to nonparticipants;and must be -onducted inL restricted and warning areas, it isnnt possible for all military operations to be perforned insuch areos.

BLeginning in July 1975, Military Operating 7Areas (MOA s) inwhich trainii.q is !r.erformaed are charted on both sectionaland low altitude charts available to both military and civilflyers. Thefe military operating areas are not restricteda-ioas and arc not new or additional areas. They are areasin which t1'.e viilitar\, has been conducting operations for along timo, but novw fcr the first time they appear on chartsavailihice to the entire aviation community. 'This should re-siilt in a much safor environment For all concerned.

if you havL- any .:x~ o cu will Ibe c l1ad to try to icothem in the (1ucsti-:. period which will follow ~ot"

78

COMMUTER AIRLINES

RFGINA VAN~ DUZEE

Although our forecasts at this time are designated "Air Taxi"which includes both air taxi and commuter carriers, I am goingto concentrate on commuter airlines in this discussion becausewe expect the bulk of aviation activity in the air taxi segmentto be contributed by them. Commuter air carriers have becomean increasingly important part of the transportation systemand because of their special situation we feel it necessary togenerate a separate forecast.

I would like to give you a little background on the commuterindustry. Commuter airlines have an ambivalent status sincethey ate not classified as certificated air carriers nor dothey fit in the categories of air taxi or general aviation.They operate under CAB economic regulation Part 298 and in1969 were defined as "those operators which perform, pursuantto published schedules, at least five round trips per weekbetween two or more points or carry mail." They do not comeunder the definition of certificated carriers since they aresubject to only limited regulation and reporting requirementsby the CAB, are allowed free access to all markets, and haveno route protection. They offer regularly scheduled serviceas opposed to air taxi operators who offer piloted aircraftfor hire for a specific journey. Commuters, operating smallaircraft over unregulated routes, serve many communities thattrunk and local service carriers find it uneconomic to serve.

The industry has experienced beqinnings similar to those ofthe local service carriers which evolved over a period ofyears as replacements for long-haul trunk carriers in theirsmaller markets. As trunk lines obtained ever larger ecuip-ment, it became uneconomic to service thin short-haul markets.They suspended or deleted service to small communities andthe local service carriers, with the encouragement of the CAB,moved in to replace them. The pattern is now repeating itselfas local service carriers hecome "Regional Carriers" with longerroutes and~ ever larger let aircraft. Because of the ability ofthe commuters to provide freeouent well-timed service with air-craft better suited to the market, they have been graduallyfilling a gap in the air transportation system by providingreplacement service for local service carriers. Under thefirst Part 298 regulations, commuters were allowed to operateaircraft weighing a maximum of 12,500 pounds with a capacityof no more than 19 passengers. Ihowever, in 1972, the rulewas liberalized to allow operAtion of aircrnft with 30 seats

79

and a 7,500 pound payload. This restriction has been furtherclarified to eliminate any aircraft with a maximu fuel weightgreater than 35,000 pounds.

The FAA' is charged with regulating safety of commuter operationsand they operate under Part 135 of the Federal Pviation Regula-tions. General aviation district offices are directly responsiblefor issuing airworthiness certificates for aircraft and monitoringoperations, maintenance and other procedures affecting safety.Since March 1971, stringent type certification requirements haveapplied for new "srall" airplanes. Planes with 10 or morepassenger seats are subject to the same airwcrthiness standardsas transport category aircraft operated by certificated aircarriers, wit. allowances made for operational differences dueto aircraft s-e.

Before 1972, I'AA air traffic control towers included air taxi andcormuter operotions in general aviation counts. Since thattine, the tow(,rs have maintained a separate count rakina itpossil-le for iis to develop a forecast of air taxi operationsand enplaned passengers in the terminal area forecast. We donot as yet have a rational forecast of commuter airline activity.

The data available for commuter airlines are very ]imite(corrpare 1 to that for other segments of aviation. They havebeen required to provide only limited traffic statistic2concerning flights, passengers, mail/carciao, airports ser-.2cand aircraft ised as shown in Table I. Ir fact, that tablecontains just about thc sum total of the available data.We have statistics for calendar years from 1970 through 1973and for FY 2974. rlthouqh there was a drop from !97C to 1971,the nurlber of reporting carriers still increised 21 percentover that three-year period. However, some of this incrasecan also be attributed to the fact that as the regulatorysystem was set up, a qireater number of carriers bean roportincq.The number of flights increased 1y the same percntage and thenumber of )as-(enqers b)y almost 33 percent, an annual qro.fthi rateof more than 0 percent. During that same period, domestictraffic of ce'-tificated air carriers grew about 7.5 Fercentannually. Carclo and nail traffic has shown a draratic' increaseof 101 and Ili percent respectively. Since the CAB does net asyet have statistics for CY 1974, we have included the latestperiod available, FY 1974. The growth from FY 1973 to FY 1974was 11 percent in number of carriers, 16 percent ir. number offlights, 15 percent in number of passengers and 30 percei't incargo. Mail tonnage stabili7ed. The larger increase inpassengers and cargo carried in the 1974 fiscal period may bepartially accounted for by the fuel shortaqc theft existed inareas cf the country fror October 1973 to April 1974. PuringV that period, many automobile drivers temporarily abandoned

80

.. .. .. ... , i n

their cars and took to commuter airlines because of real oranticipated shortages of gasoline.

of course, the industry is still relatively small. Passengerenpianements amounted to only 3 percent of the number carriedby domestic certificated carriers. However, commuters didcarry 6.3 million passengers, compared to 34.5 million by thelocal service carriers, or almost 18 percent of the localservice number. Because flight frequency with small aircraftis the key to commuter success, they generate a greater numberof operations, for the number of passengers carried, thancertificated carriers. This, of course, is of concern to theFAA.

The number of airports served has expanded from 466 in 1976to 725 by FY 1974, an addition of 259 points. The numberof aircraft in the commuter fleet is increasing as well,from 782 in 1971 to 1,042 in 1974. The type of aircraftin use ranges from the 7 or 8 passenger Beech 18's, Cessna402's, and Piper Navajos and in some cases even smalleraircraft, to 15 passenger Beech 99's and 20 passenger TwinOtters. In the case of the largest carrier, PrinAir inPuerto Rico, the aircraft is a 19-passenger deflavilland Heron,a 4-engine turboprop converted and reconfigured to suit theairline's specific needs. The average stage length for acommuter is about 100 miles.

A number of factors have contributed to the rapid growthindicated in Table I. Perhaps the most dominant has been thetrend for local service carriers to request suspension ofservice in those short-haul low-density markets they finduneconomical to serve with large aircraft. The Alleghenycommuters pioneered this approach and offer an example ofcontract carriers. Eleven carriers replace Allegheny at27 points. They carry Allegheny's colors and hold 10-yearcontracts that call for a minimum level of service andprovides for joint reservations, baggage handling, ticketand passenger service. other commuters have the support ofthe local service carriers they replace although they maynot have contracts. In some cases, they have strong supportof trunk carriers, a notable example being Houston Metrowhich at its Lake City, Texas terminal near NASA's spacecontrol facility, has Continental ticket agents staffing theticket counter.

81

As of January 31, 1975, commuter carriers provided replace-went service for certificated carriers at 53 points. Inaddition, there are a number of points where certificatedcarriers have terminated service and commuters have establishedservice without formal replacement agreements between carriers.

The traffic density in markets served by commuters has beensubstantially improved since 1971. Commuters have gained accessto markets with higher traffic densities while eliminatingmarkets with little potential. Table II shows that the numberof markets served by commuters generating 20 or more passengersper day has ircreased by 50 percent since 1971, while the numberof markets with less than five passengers per day has declinedby nearly 18 percent, indicating not only trarket developmentbut also selectivity on the part of the operators. In 1974,commuters offtred a greater number of flight frequencies infewer markets. The average flight frequency per marl.et hasincreased by 50 percent since 1971.

Other factors encouraging growth have been a substantialpopulation and economic growth in outlying rural andsuburban areas and the stimulative impact of additionalfrequencies in markets previously served by local servicecarriers offering one or two flights a day. In addition,the conanuters themselves have developed stronger managementstructures and greater operating expertise. Cargo and Failgrowth bas been fostered by the cutbacks in rail service andnight schedules for mail carriage that fit the needs of thePost Office better than the daytime schedules of certificatedcarriers.

When forecasting cormuter activity, we must remedber thatthe fortunes cf commuters are closely tied to those of thejlarger certificated carriers, since 80 to R5 percent oftheir passengers are making connections at large airports.Thus, for the most part, (-ormuters serve as foeders.

The Ofrice of "anagement Systems, by survey, determines thenumber of air taxi passengers each year; the CAR reportscommuter passengers; and an operations count is maintainedby traffic control towers. From a base of 2.8 millionoperations at towered airports in 1975, we expect a growthto 3.7 nillion in 1981 and between 4.8 and 5 million by 1987.Of the 861 airports included in the terminal area fcrt-castdata base, 626 are served by commuters and air taxis. Inorder to forecast air taxi activity for those airports, wehave used the enplaned passenger data base provided by theManagement Systems Purvey and CA statistics and the operationscount provided Yy FAA towers. T he socio-economic assumptionsdeveloped for our rational air carrier and ieneral aviation

h2. , r , P-' '

forecasts are utilized, with allowances made for the specialgrowth situation in the air taxi-commuter industry, to fore-cast the air taxi portion of the terminal area forecast.

Future industry growth will come from two basic sources--normal traffic growth in existing markets and market additions.The present political climate is favorable toward commuters.It has been suggested that subsidies for local service carrierscould be reduced or eliminated if they drop service at low-density points in favor of commuters. In fact, the AviationAct of 1975 proposes that unregulated carriers be permittedto operate aircraft up to 56 seats. One of the constraintson growth frequently mentioned by airline management is lackof a suitable aircraft. A few are operating Britten NormanIslanders and even Grumman Goose Flying Boats of the 1934-40vintage. Management is particularly concerned with passengeracceptance and desires a more comfortable pressurized aircraftat a price that will allow economic viability.

Since we have to work with a very limited amount of data,commuter and air taxi activity is difficult to forecast.Recognizing this, we are in the process of mounting aspecial effort to develop a national forecast of commuterairline aviation activity which will project growth inpresent markets and attempt to identify those low-densityshort-haul markets that are likely to receive future service.We believe it is important to FAA and to industry users tomake our forecasts as valid as possible for this rapidlygrowing segment of aviation.

83

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AVIATION GROWTH

GENE S. MERCER

WHY DO WE EXPECT FUTURE GROWTH?

This morning you observed that the FAA forecasts show growth inboth air carrier and general aviation activity. In addition tothe economic assumptions, the factors which we expect to contri-bute to continued aviation growth are as follows:

FIRST FOR GENERAL AVIATION

o Historically, general aviation (GA) has accounted for about98 percent of all active civil aircraft and the number ofGA operations has increased by more than 204 percent between1959 and 1974. Currently, GA accounts for about 75 percentof all operations at FAA towered airports.

o Even during the worst phase of the fuel crisis, beginningwith the oil embargo (October 1973) and ending with itstermination (April 1974), GA itinerant operations increasedby 11.2 percent and local operations by 5.8 percent overthe corresponding time period one year earlier.

" Fuel crunch did not affect GA because of co~rresponding fuelcost increases in other modes of transportation. For examplethe percentage change in the average per gallon price of avgasand turbine fuels between 1973 and 1974 was 16.7 percentand 25.9 percent respectively, whereas the average retail .selling price of regular automotive gasoline increased 49.5percent over that time period.

o The number of turbine powered aircraft as a percentage oftotal GA active fleet is increasing, from 1.82 percent in1971 to 2.15 percent in 1974 and is projected to increaseto 3.46 percent by 1982. The purchase cost of this typeof aircraft implies high utilization which is reflected inincreased operations counts.

NEXT AIR TAXI

o The President's Aviation Act of 1975 supports the growthof commuter aircraft by recommending increases in the sizeof these aircraft, thereby enabling commuter airline topurchase larger turboprop aircraft and expand their scopeof operation to communities not attractive to certificatedcarriers.

87

o Kentucky is currently offering direct, and Orgeon indirect,subsidies to a network of commuter operations.

The factors contributing to continued increase in air carrieroperations are:

o Termination of capacity agreement between airlines.

o New charter rules which allow greater freedom in schedulingcharter trips in the United States.

o Regulatory reform proposals.

o Decrease in fares would Increase number of passengerswhich would in turn require an increase in number oftrips.

o Freedom of entry into markets would increase the number

of total trips flown in many markets.o Increased cost of ground transportation when compared to

air carrier fares.

o Because of lower traffic forecasts, air carriers have, inmany cases, switched their orders for new equipment fromlarge capacity wide-body jets to smaller standard-body jetswhich means that lower traffic forecasts are being accountedfor by decteases in capacity growth rather than operationsgrowth.

WHY COULD AVIATION GROWTH CHANGE FROM THAT FORECAST?

The preceding list of factors supporting future growth inaviation activity levels should not lead us to the falseconclusion that such growth is inevitable. Significanteconomic and/or legislative changes can seriously dampenaviation growth. For example, the Secretary of Transportation'sreport to Congress notes that general aviation pays only20 percent of its assigned cost. The allocated cost, accordingto the DOT Cost Allocation Study, is 30 percent of the totalcost of the national airspace system--representing a potentialfive-fold increase in the general aviation tax. How congressacts on this question in the future will obviously be importantin determining the level of aviation growth. Capacity constraintsrepresent another gray area of uncertainty. The number ofairports has nearly doubled over the last 15 years, going from6,426 in 1960 to 12,700 in 1975. In view of heightening

88

Pr AD-AO81 101 FEDERAL AVIATION ADMINISTRATION WASHINGTON DC OFFICE --ETC F/B 5/1

C7AVIA TI ON FORECASTS FISCAL YEARS 1976-1987. SUMMARY AND 6REFINS-ErIC(UIDEC 's

UNCLASSIFIFD FAA-AVP-76-1 NL

IIIII00l380IIIIIIIIIII 1

environmental concerns and spiralling costs of new airportconstruction, such growth may not be a realistic solutionin the future to accommodate fairly rapidly increasing demand.Unconstrained demand competing for scarce resources characterizesthe current capacity problems at most large hubs during peakhours. Hopefully, some degree of relief may be expected from -Air Traffic Control (ATC) improvements developed in the UpgradedThird Generation (UG3RD) System. The foregoing areas of energy,environment, user charges and automation are a few examples offorces that may change aviation growth rates.

The point of these remarks brings us back to my opening comment:that is, while we are forecasting growth in aviation activitylevels and while we may be able to defend such forecasts oneconomic and other grounds, forecasting is a precarious task.In the end, what the forecasts represent is our "Best Shot"given the current state-of-the-art and current informationavailable.

* FAA Workload is determined by activity at FAA terminal, enroute,and flight service station facilities and these are the relevantforecasts for FAA manpower and facility planning. Total operationsat FAA air traffic control towers, instrument operations, enrouteaircraft handled, and total flight services comprise the importantworkload measures.

Currently, 12 additional towers are scheduled for commissioningin FY 1976. These additional towers in FY 1976 combined with theexpected economic recovery are forecasted to cause a 6.8 percent

* increase in tower operations over the corresponding 1975 total. Theaverage yearly growth rate is forecasted to be 7.0 percent throughFY 1982 (see Table 1). The early growth occurs mainly in itinerantoperations, while the later growth results mostly from increases inlocal operations. The growth in itinerant operations can be attributedprimarily to relatively high growth rates in air taxi and generalaviation activity plus some increase in air carrier operations.The increase in local operations are brought about solely bygeneral aviation since military operations are expected to

* remain nearly constant throughout the forecast period.

Like total aircraft operations, instrument operations at FAAtowers are expected to increase in the years ahead. However,because further implementation of terminal control areas andStage III of expanded radar service is not anticipated after

* FY 1976, this will cause instrument operations to grow at a morenormal rate. General aviation is expected to continue pasttrends and increase its use of sophisticated avionics equipment.

89

Consequently, the general aviation category of instrumentoperations will grow at an average 9.8 percent annual ratethrough FY 1982. Total instrument operations are forecastto increase at a 6.1 percent annual growth rate.

The reasons for the forecasted increase in activity at airroute traffic control centers are similar to those forinstrument operations. In the future, general aviation activitywill have an increasing impact on center workload. As an example,general aviation IFR aircraft handled are expected to grow at a7.5 percent rate per year through FY 1982. Total aircraft handledwill increase at a 4.6 percent annual growth rate.

Historically, flight service stations have provided the greatestshare of their flight services to general aviation. The basicworkload measuie for the flight service stations is the numberof flight services which is a weighted measure of aircraft con-tacted, flight plans originated, and pilot briefs. During theperiod from FY 1975 to FY 1982, total flight services areforecast to increase from 58.3 million to 104.4 million--an8.7 percent increase over FY 1975.

This afternoon we will present specific information concerning

our FAA facility forecasting activity:

o Tower Activities and Terminal Area Forecasts

o Center Forecasts

o Flight Service Stations Forecasts

90

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TERMINAL ACTIVITY FORECAST

JONATHAN TOM

Good Afternoon!

The principal mission of the FAA forecasting effort is toaid planners in making intelligent decisions about futurerequirements for maintaining aviation safety. During thenext 15 minutes, I will summarize the impact of FAAtower activity and terminal area forecasts on facility andmanpower planning at FAA air traffic control towers.

Because this is the first FAA aviation forecasting conferencein which the Indians are playing as important a role as theChiefs, there is little precedent to guide me in what or howmuch I should say. Given this free-rein, I will briefly covertwo topics:

o First, our method for developing the terminal areaforecasts, and

o Second, the implications of our national and terminalarea forecasts on FAA facilities and staffing.

Before discussing the impacts of forecasts, an understandingof the forecasting methodology is important. Since thedevelopment of the national forecasts was covered this morning,I will concentrate on the Terminal Area Forecast (TAF).

This first slide outlines the development of the TAF (seeFigure 1). As in all analytical processes, we begin with acollection of the base year data. For FAA facilities, therequired data is gathered from the Air Traffic Activityreports for the last complete fiscal year. In addition tothe tower data, this source provides the instrument approachcounts and the military radar approach control activity. Forexample, this next slide represents the forecast for a typicalairport with an air traffic control tower. The base datagathered from the air traffic statistics are labeled ArA.

93

Por all airports towered and nontowercd, the putlished aircarrier enplanement data tagged AAS in this example (seeFigure 2) :omes from the CAB reports as published in theAirport Activity Statistics Handbook. Because the CABcollects reports only from U.S. certificated route aircarriers, adjustments are made to accommodate the foreignflaq and intra-state carriers. Air taxi enplanements labeledAMS are acauired from an annual survey of the air taxioperators done by the Office of Management Systems and fromCAB statistics on the commuter airlines. In addition, AirportActivity qtatistics provide air carrier operations at non-towered airports. This is labeled with AAS in this exampleof a nontowered airport forecast (see Figure 3).

Other nontcwered operations are obtained from the AirportMaster Pecord in whicY estimates of air taxi, aeneral aviation,and militar, activity are updated periodically. Specialsurveys also contribute to these data. These are tagged AMRon the slide.

Returning to thie outline of the forecast process, after thedata have been oathered, the preliminary forecast is generated.As in previous years, the 1975 TAF is being developed from a"top-down" approach. National aggregates of aviation activityhave been distributed to the terminal areas based on FY 1975terminal activity levels. However, varying uses of generalaviation and diverse state economics cause differences inqrowth rates of aviation activity from location to location.A "ton-down" anproach then may not be appropriate for someseoments of the aviation community. While efforts aimed atdeveloping models for forecastino terminal activity state-by-state are currently underway, we are employinq two irterimadiustments.

First, using the number of commuter or scheduled air taxioperators as an indicator, a qrowth rate for air taxi operationswas determined individually for each airport served. JudcTmentsmade about both the strength of the carriers themselves, andthe strength of the market served are the basis of these rates.

Second, an airport specific limit on total operations wasimposed on the forecasts. In the past, the "top-down" approachhas failed to recoanize properly the capability of an airportto handle aircraft. As a result, the forecasts for some of thelarge airports exceeded their capacity. In this context,"capacity" is conceptualized as the ability of a given runwayconfiguration to physically handle a certain number of landinqsand take-offs during a specified time period. Tn accommodatethis problem, the activity at- each terminal area was constrainedby a capacity level dependent on the mix of operations and on

94

the runway configuration at that airport. In other words,in the years after the aircraft operations forecast reach thecapacity limit, total operations forecasts are held constantat that capacity constraint. Moreover, we assume that firstlocal flying and then personal aviation flying will leave theseairports as they become more crowded. This assumption isconsistent with the historical behavior of activity at highdensity terminal areas.

After the basic top-down forecast was generated, the FAAregional planrinq offices were asked to comment on it. Byincluding these staffs in the forecast development process,,;e have received not only information about airports whichare expected to deviate from the national trends, but alsoindications of state aviation growth. The comments receivedare currently beinq evaluated for inclusion in the final 1975TAF publicaticn.

Now that we have discussed the methodology used to develop theforecasts on both the national and terminal area levels ofaqqregation, how much activity can we expect at these areas?Prd what are the implications of these forecasts for staffingand equipment planninc at these facilities? I-'ithin the currentFAA budget cycle, the national forec:ists are applied to a staffingformula developed by the Air Traffic Service to determine airtraffic control terminal position requirements. "his formularelates controller requirements to forecasted tnwered airportaircraft and instrument operations.

To repeat sore of the ideas presented e.rlier, : we can seefrom the following two charts, tower ope-ation-, are expectedto reach 94.9 million by 1982 (see Figure 4). This implies a7 percent annual growth rate. As we have seen this morninq,qeneral aviation is becoming an increasinqlv le.rqer seqmentof this type of activity. Similarly, instrument operations areforecasted to increase at an averaqe annual growth rate of 6.1percent to a level of 39.7 million by 1982 (see Figure 5).Again, qeneral aviation accounts for most of this qrowth. Theinstrument forecast is lower than the 1974 forecasts primarilybecause the number of terminal control areaq and Staqe III radarlocations is not expected to increase beyond the 1975 level.STo cive you an idea about how these forecasts impact on man-power requirements, let us apply them to the latest staffingformula developed last January. The use of this vehicle showsthat in FY 1978 terminals may need approximately 11,400controllers. By FY 1982 this requirement will have grown to

95

13,700. "ote that these numbers were developed usinqtHe 1975 .3tif.ing formula for illustration purposesonjl. They do not reflect e- tfi-r--1anc- recruitment,.d cther specianeeds, or changes in productivity.

As the next slide shows, of the 2,300 additional personnelneeded in ry :982 vis-a-vis FY 1978, 1,700 are reauired to!erve the inc:'easinglv active general aviation community (seeriqure 6). ?:; the GA pilot and his aircraft become moresophisticated, TFR flying is also expected to be more prevalent.Consequently, we have projected a 9.8 percent average annualgrowthi rate for GA instrument operations through the forecastp riod. This growth increases the required tower staffinq byovor 1,300 eortro!lerF: in 4 years.

For purposes cf cormparison, growth in air carrier activityover the sar,e tire span will increase tower staffiny require-

K-ncnts Lb 300 contrellcrs. It is apparent then that basednn "he i975 national forecasts, i.:e can expect the maior increasein %,workload at air traffic control towers to come from thegeneral aviation users.

Now that we he.ve seen the impact of the national forecast onFAA towers inc termin,.l areas, I would like to discuss how the7'AF miqht influence future facility and manpower planning.Currently, the TAF is used to guide the facilities in theirforecasts of activity and personnel reouirements. Tn addition,predicted charqes in 1orkload influence advance recruitmentneeds.

Ilowever, within the constraints cf the accuracy of the fore-rasts, the -AF c7n also vive an indication as to which airportsra, reouire towers in the future. As an example, let us usethc 1975 TAF in its current stage of developrent. Note that wearc in the p)rocess uf reviewing this forecast, so that theanalysis done here iq preliminary.

By applying the c-urrent Phase I tower candidate criteria asde.veloped by the c'ffice of Aviation rystem Plans, 34 nontoweredairports will have enouah acti'ity in 1982 to be consideredfor towers. M\Ithouqh these airports will underqo furtherexxamination before a tower is scheduled, the TAF can showpfanners appro'<imately how many towers will be needed.

The TAF can also indicate which airports will need new runways.Given that the practical annual capacity currently used is avalid neasare o0 'rh'vn airports will need additinnal concre3te.::2 r.,limi-ary 'Ar shows that tv 19F2 a.Lout 200 nirports shouldbg.on planning for expansion. The conccpt cf--aracit- used her

•ii-r'-trs -hr eAtch cjeratior.

.r tYir "hort time, we have summarized the development of theTerminal Area Forecasts and the application of forecasts totower and terminal area planning. Before I conclude, two currentresearch projects intended to improve the TAF should be mentioned(see Figure 7). "irst, we are attempting to relate annualinstrument approaches (AIA's) at each terminal area to itsitinerant aviation activity and weather. Initial models haveled to good forecasts of the national number of AIA's, but poorindividual airport predictions. Since accurate forecasts ofairport AIA's will show FAA planners where future landing aidsare needed, further research in this area is essential.

The other current research project is directed at developingforecasts of aviation activity on a state level of agqregation.By accounting for regional differences in economics and demo-graphics, the models developed during this research will enableus to pinpoint states in which aviation growth can be expected.Py disaaregating the forecast and usino a "riddle-out" approach,we hope to improve individual terminal area forecasts, whilemaintaining the quality of the national forecast. Consideringthe number of airports which we are required to forecast andthe time in which we have to accomplish this task, a state-by-state model appears to be the most effective approach.

In the longer term, our goal is to develop a model forforecasting primary instrument operations at nonradar approachtowers. Since this activity determines if a tower qualifiesfor an approach radar, such a model will aid planners toestimate the number of additional facilities required in thefuture.

As our terminal area forecasting techniques become moresophisticated, and as the forecasts become more accurate, theywill be more useful in planning staffing, towers, landingaids, approach radar, and runways at individual terminalareas. Conseauently, we will be able to pinpoint whereadditional money can be spent most effectively to ensurethe pilot a safe trip each time he takes off.

97

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101

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INSTRUMENT OPERATIONS ATAIRPORTS WITH FAA TRAFFIC CONTROL SERVICE

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AIR ROUTE TRAFFIC CONTROL CENTER FORECASTS

JAMES W. HINES

Good Afternooni

Before actually discussing forecasts of activity, I wouldlike to briefly talk to you about the centers and to pointout that the forecasts serve as a base for the FAA planningand budget process in determining future requirements forARTCC facilities, equipment, and manpower as well as toprovide planning data for research and development and otheragency elements.

The purpose of enroute traffic control and service is topromote the safe, expeditious, and orderly flow of aircraftoperating on instrument flight rules (IFR) flight plans,within controlled air space, primarily between departure andJestination terminal areas.

These enroute services are provided in the air space overthe continental United States from 21 FAA facilities knownas Air Route Traffic Control Centers (ARTCCs or Centers)(see Figure 1). Five (5) other ARTCCs, including the combinedcenter/radar approach control (CERAP) facilities on Guam andin the Canal Zone, provide enroute air traffic control (ATC)services in the air space overlying Alaska, Hawaii, U.S.territories, and other areas under the sovereignty of theUnited States.

In addition, the International Civil Aviation Organization(ICAO) has divided the air space overlying internatioralwaters into flight information regions (FIRs). ATC isexercised in the FIRs by the member states of ICAO whichprovide the service. Presently, the United States providesoceanic ATC from nine oceanic control facilities, each ofwhich are physically located within an associated ARTCCbuilding.

105

The enroute ATC system relies upon the skill and dedication

of the Air Traffic Controllers who use radar for aircraftsurveillance, telephone, and teletypewriters for ground-to-ground communications, and a combination of telephones andradios for grcund-to-air communications. As aircraftactivity increases, so does the demand for the acquisition,processing, transfer, and display of information, both inthe aircraft cnd on the ground. The agency has institutedprocesses and installed equipment to enable the controllerto best apply judgment and take the proper action.

Why am I taking time to tell you these things? Because Iwant to emphasize in a nonstatistical manner that the enroutecenters are "Lig busi ess" in regard to agency operationalroles and that the maiagement of today's centers is asuphisticated process requiring the best data estimatesobtainable un('er time and cost constraints.

For example, as part of this manag:mnent data system, one canreadily appreciate the impact that the center forecasts canmake upon the detormixiation of center requirements. Ir orderof annual events occu2ring in the agency budgetary process, theAir Traffic Service (iAT) applies P'RTCC planning standards toactual and forecasted data--first in the regions, then by com-put~r application in Washinyton, followed by additional regionaland extensive Headqua ters' staffing and forecast reviews. Thefinal forecasts and applicatior of standards then provide thebasis of support for the air traffic stafring request in theannual] FTMi3:'.T's de ailud budget submission to tne Cr,ngiess. Incorclusion, one can see t*.at the better the forecast estimates,the better the estahlishmt.nt of requirements for facilities,equipme!nt, and! maxiiov.er.

With this introduction, let ixs now start tdlkiny alout theforecast numbers ind begin with a pictorial presentation ofthe national forecasts for the ARTCCa (see Fikeure 2).

rhe reasons for the forecasted activity at ARTCCs are s inilarti; thoe for instrumeint operations anti general a'iatioxiacLivit i. expected to have an increasinq iimpact on center%orkload becaLse of ir.creasing use of sophisticated avioniotsequipment. General a'iation IFR aircraft handled are expected

106

to grow at about an 8.0 percent rate per year through FY 1982.Complementing this growth is an expected 4.0 percent annualgrowth rate in air carrier aircraft handled and no growthin military activity. As can also be noted on Figure 2,air carrier will still be a major percentage of the IFRaircraft handled.

To be more specific numberswise, a detailed presentation ofthe forecasts shown in Table I can be found in Table 15 onPage 45 of Report No. FAA-AVP-75-5, Aviation Forecasts,FY 76-87. The forecasts were developed through the use ofthe air carrier and general aviation forecasting modelsdescribed in A-pendices A and B of that report. As you cansee under the total column, the center statistics areassembled by IFR aircraft handled, IFR departures, andovers by user category. All other user category columnsin Table 15 of the report show the same breakdown but IFRdepartures and overs have been deleted for this example.

In summary, the national forecast of IFR aircraft handled,as reported in the above publication, calls for a modestgrowth in air carrier activity, a substantial increase ingeneral aviation and air taxi IFR flying and a stabilizedlevel of military activity.

Since the listing of the numbers presented in Table 15 ofthe report is not a very exciting event, I thought that apresentation of thert in terms of long-term annual growthrates from FY 75 to FY 87 would perhaps be more indicativeof the overall growth trends. I shall leave individualanalyses involving graphs, ratios, percentages, cross-classifications and the like to the budget personnel andthe pldnners in the field and to all my fellow statisticalforecasters--work which they "dearly" love.

But, the national growth rates would be even more meaningfulif one had some geographical distribution to compare themawith. You guessed it, we do have a companion forecast. Itis Report No. FAA-AVP-ll, IFR Aircraft Handled, forecastby air route traffic control center, FY 76--97. This reportprovides forecasts of instrument flight rule (IFR) aircrafthandled by the ARTCCs.

These forecasts for the individual centers were derived byfirst analyzing the past relationship of each data series tothe respective national totals. Based on this analysis,

107

0-tirnates v,.*ze miie of the future percentage each series wille of the noi j.nal fTecast. The lesu]ting activity levels

were nxt cc[pared with each center's historical trend.Adjustiwents, as necessary, were made for consistency withthese tre d.di after taking into account inputs from FAAregional offices, announced plans of DOD (e.g., base closingsand tranisfers) and known alterations in center boundaries.

T!he iirpact or center activity of expanded positive controlof air :;pne, a greater number of airports with terminalcontr, ! ar.,,ts, and expanded radar service by FAA towers willcontinue to ke monitored in order to give them proper weightin the foro'cest. To date, their impact appears to have beenrinimal.

TLe total Unitecd States output is shown to yu as an exampleof the f ornrat used f( r a l the tables of this report (seeTable 2). ldenticdl ,:olunn headings as shown under the%,4epartxiro' oat.,%,ry ai--2 shown under the overs for domesticand oceanic ,tctiviti s. There is one for each center andr'eion. Although reciional and center boundaries do notcoincido, for puiposts of this report the total for a regioni:icludf-s all aircraft handled by centers headquartered withinthat regiou. Foreca ts of IFR aircraft departures and ove.-sby air ceariv,,, aene, UI aviation, and nilitary categories arepIsented IOr FY 19 it , 1977, 1978, 1979, and 1997 for AURCCsin each o th, 11 FAI reqions. Prior to July 1, 1971, some ofthe air taxi %aeun.; a; included in the air carrier statistics.

This chzngje a,cerints or part of the decline in national airc. -riiL icti, ty in F' 1972 which is reflected in the datafc, many idi "idual cnters.

Examination o tue tbliles in the repoit will show that theregiunal gq.,wtJ. tron( ; fo, air carrier and general aviationfollow the nal icn.i I t Nrecasts in that general aviation showsthe rore suLs!.antiil increases. However. there is, ascould be expeoted, variation between regions and centers.

"ov, I'll let you thoiqht I forgot all -ibout the annualqgiowth rates ren'i t,'ne, soe time ago by ne. Not s.' I amgoing tc r~ake you have to sit up and look at some norestatist ics.

In conclusion, I will not dwell on the growth rates sho'wnin Table 3. The 1.tta speak for themselves. There isvariability shown amo.q the regions--as well there shouldbo. The im'ia(.t of qv,, eral nviatio n can be seen. The table's

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variability does generate the question of how far should wego to arrive at a level of geographical detail which wouldprovide even a better basis for evaluating the detailedstaffing requirements of the ARTCCs. I leave this questionto ARTCC management and to all users--research and development,other FAA agency and external planning personnel--and welcometheir suggestions regarding how to obtain the best ARTCCforecast estimates possible under time and cost constraints.

Thank you.

109

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FLIGHT SERVICE STATIONS

JAMES W. HINES

Good Afternoon, once more.

As I did with the Air Route Traffic Control Centers, I'llbegin by telling you somethirg about our flight servicesand the forecasts we develop for management's use indetermining future requirements for facilities, equipment,and manpower.

Under the present system, flight assistance services areprovided by specialists from manned Flight Service Stations(FSSs) operating on full-time or part-time basis and unmannedstations located in the conterminuous United States and inthe Alaska, Pacific, and Caribbean areas. In addition tothese facilities, there are International Flight ServiceStations (IFSSs) which provide flight assistance serviceson an international basis and aeronautical telecommunicationsswitching centers which automatically transmit messagesthroughout the United States and the world.

For convenience, most of the functions performed by FSSs canbe grouped under three (3) major headings: Weather and NOTAM(Notices to Airmen) data dissemination; ATr support activities;and emergency assistance services.

The first group, weather and NOTAM data dissemination,includes the collection of several kinds of aviationweather and NOTAM data and its distribution over variousteletypewriter networks. It also includes the dissemina-tion of data to the pilot by means of in-person, tele-phone and radio pre-flight briefings, recorded telephoneand radio briefings, scheduled and unscheduled broadcasts,and enroute air/ground communications.

The second major grouping, ATC support activities, includeshandling IFR flight plans, relaying ATC messages, andmonitoring navigation aids.

115

The third qrouping of primary functions includes thoseassociated vith emergency assistance service: flightassists and the search and rescue alerting function. Thelatter includes the VFR flight plan system and variousspecial reporting services.

Flight Service Stations perform a number of other functionswhich are not as easily grouped in any specific category.These miscellaneous functions include taking weather observa-tions, conducting airmen examinations, trans-border flighthandling, prov'iding airport advisory service and militaryflight service.

Currently, the nationwide FSS system numbers 319 stations;and, 280 of these operate 24 hours a day and provide mostservices. Thirty-nine are manned part-time to handle pilotbriefs and flight plans. There are also some 17 unmannedairport information desks for pilot self-briefing which arenot included in the total number of FSSs.

Now, I promised to tell you something about flight serviceand I think the foregoing was ample enough of an introductionfor this afternoon's forecast topic--Flight Service Stations.

At the present time, we are providing only national forecasts;and, these are oriented to the data necessary for calculatingestimates of total flight services (n~ee Figure 1).

The number of flight services is the basic workload measurefor the Flight Service Stations. It is a weighted workloadmeasure of aircraft contacted, flight plans originated, andpilot briefs. The FSS functions are used primarily by thegeneral aviation community; and, this has been historicallySO.

The specific data points for this figure were obtained fromTable 16, Total Flight Services, Pilot briefs, and FlightPlans Originated, and Table 17, Aircraft Contacted, as shown

116

in Report No. FAA-AVP-75-7, Aviation Forecasts, FY 76-87.These forecasts also were developed through the use of theair carrier and general aviation forecasting models describedin Appendices A and B of that report.

Let's take a brief look at some examples of these tablesfrom the report (See Table 1). Ps you can see from thisexample of Table 16 in the report, total flight servicesare forecast to increase from 58 million to 104 million duringthe period from FY 75 to FY 82. By FY 87, total flight servicesare forecast to reach 144 million, a nearly 150 percent incieaseover FY 75 or, in terms of a 12-year annual growth rate, anaverage rate of nearly 8 percent.

Other growth rate calculations for the same 12-year periodshow about 9 percent for pilot briefs and 6 percent fortotal flight plans originated.

As shown in Table 2, Table 17 in the report shows the totalaircraft contacted which represents a record of the number ofaircraft with which FAA facilities (FSS, CS/T) have establishedradio communications contact. Total aircraft contacted areforecast to increase from 10 million to 17 million during theperiod from FY 75 to FY 82. By FY 87, we expect this figureto reach nearly 24 million--a 12-year annual growth rate of7.5 percent. Over 80 percent of the aircraft contacted arogeneral aviation, with a 7-year annual growth rate about9 percent. This illustrates that Flight Service Stationsprovide the greatest share of their flight services to generalaviation.

This general aviation share prompts me to make the observationthat an important economic strength of many communities restswith the transportation, industry, and employment foundat its airports: providing economic strength to the states,and to the Nation. Fince the FSS system plays a major rolein providing safety and flight services to general aviation,in addition to providing an interface with the rest of theAir Traffic Control system, one could hypothesize that improve-ments made to the FSS system that provide benefits directlyto general aviation will result in additional broad basedeconomic gain to the Nation.

117

Consideration of the above, at least from my viewpoint,raises the question again of how far should we go to arriveat a level of geographical detail which would provide abetter basis for evaluating future requirements forfacilities, equipment, and manpower. Indeed, it is my under-standing that the current demands on the FSS system and futureflight service requirements support a program of major recon-figuration and facility modernization. What type of forecastsand what role will forecasts serve in defining an FSS systemconcept appropriate for the future and how can we assuretheir compatibility will continue to be problems in thisforecasting area. FSS forecasts will necessarily be influencedby the nature of aviation growth, technological change,further evolution of the ATC system, and a host of other factors.

In conclusion, I want to mention one bit of knowledge whichwould help us assess and analyze some of the above inter-actions. This knowledge would be a better understandingof the relationships between FSS activity measures and theunique characteristics of each FSS. In the past, a problemassociated with the previously discussed annual aggregatedstatistics at the national level was the need to develop avalid method for disaggregating these national statisticsdown to the level of individual FSSs. Now, a methodologyhas been developed for deriving long-term forecasts ofactivity for the individual FSS.

The general approach taken was confined to an analysis ofa representative sample of FSSs and involved the develop-ment of relationships between FSS activity measures and theunique characteristics of each FSS and the relationshipswere used to develop forecasts for individual FSSs.

The study did provide us with some of the answers we neededconcerning the relationships between FSS activity measuresand the characteristics of individual FSSs. However, theresultant forecast model is preliminary and is, therefore,less than ideal for detailed program planning and budgetingpurposes. Nevertheless, it does provide a reasonable firstapproximation upon which further research can be based. Withfurther refinement, it will provide the means for evaluatingalternative policy decisions, such as the effect of consoli-dating FSSs, upon activity levels.

118

-.

We are continuing our work in regard to forecastingindividual FSSs and we have active plans to providepreliminary forecasts for individual FSSs to our FAAregions as we do in our Terminal Area Forecasts.

Again, we welcome your suggestions regarding how we canprovide better FSS forecast service to you--the forecastuser.

Thank you.

119

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TOTAL FLIGHT SERVICES AT FAA FLIGHT SERVICE STATIONSAND COMBINED STATION/TOWERS

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Proper development of a forecasting capability involves theaccumulation and molding of a considerable amount of expertise

* regarding the behavior and determinants of aviation activityand econometric and other analytical techniques. An objectiveof the aviation forecast branch is to improve our forecastmodeling technology with both in-house and contract assistancein order to upgrade the usefulness and credibility of aviationactivity forcasts. We also are augmenting, purifying andautomating the forecast data base as required to support ourforcasting effort.

Some selected current efforts that may be of interest to manyof you are shown in Chart 1. They are:

First, and undoubtedly our most publicized recent effort, ist eeneral aviation survey that is being conducted by theBureau of the Census on our behalf. This activity involvesa random sample of some 10,000 active registered generalaviation aircraft owners. The results will be representativeof all general aviation aircraft owners according to a listof demographic criteria. The field work on this project iscompleted, and census is coding the results in a manner suitablefor computer analysis. The usable response rate was 96.5percent, and the results will be available to us sometimethis month. Information on the age, type and use, andon-board communication and navigational equipment of aircraftwill be available along with other aircraft and pilotcharacteristics. This body of information represents asignificant addition to our aviation data base. At this point,we plan to publish the results of this study sometime next year.

* A second interesting area of research is nontowered airports.In a recent study of the 25 largest air carrier airports it wasdetermined that general aviation accounted for only 24 percentof all operations. On a national basis, however, generalaviation accounts for 75 percent of total operations at allFAA towered airports. if general aviation is growing on anational basis where is it going? The statistics suggest thatmuch of the growth in general aviation is occurring at thesmaller, less operationally restricted rural areas. Thisevidence further suggests that general aviation growth ratesmay be substantially different between large and small airports.

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'n pa:ticular, it is questionable to assume identical growthrates of general aviation at towered and nontowered airports.Thus, we are currently gathering operations information andare investigating and attempting to model general aviationactivity levels at nontowered airports.

Air cargo forecasting is a third area where we are concentra-ting researc* efforts. This was one of the areas singled outat the NASA/CAB/DOT workshop as requiring considerableinvestigation. Having received relatively little attentionin the past, adequate historical data and anlyses are noteasily available. Thus, our current project will providedata and forecasting models for both the domestic andinternational air cargo markets.

A fourth area will be development of a general aviationaircraft production model which will provide a more detailedforecast cf future GA fleet composition.

A fifth major area will be development cf an air commuterforecast model to generate national forecasts of passengers,operations and fleet size for this rapidly growing segment ofaviation.

Also, a contractor is developing a dynamic simulation modelfr FAA fo study the effects of changing cost of transportationin alternative rodes on general aviation by being responsiveto potential future external situations and by properlyaccounting for the complex interactions which occur betweenGA, I. deral ag,-ncies, competing modes of transportatioci, andthe gtnei-al economic system.

Finally, there has been much recent publicity given to theplight of ait carriers. Since they perform the dailyfunction of providing comm.ercial air service to the public,they are a very important segment of the aviation industry.Some problems which we are currently investigating involvethe implicaticn of partial deregulation nnd impacts ofairline mergers and promotional fare packages on competition,overcapacity, and operating efficiency.

In conclusion, the assumptions concerning the future courseof economic e,,ents are a vulnerable part of any forecast.Unforeseen ci-cumstances may compound the most carefullyformulated predictions. The forecast branch is developingthe capacity to easily alter and modify those assumptions

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that may appear precipitous in the light of additionaleconomic data. This will further improve our ability toprovide accurate forecasts and our capacity to providecontingency forecasts under various economic scenarios.In brief# the efforts of the forecast branch are directedtoward obtaining the highest possible level of accuracy,incorporating the most significant variables that have animpact on aviation, and providing timely and updated versionsof aviation forecasts.

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