MIT ICATMIT ICAT

Overview of Recent Trends in the Airline Industry

Prof. R. John HansmanProf. R. John Hansman

With the help of the Faculty and Students of the MIT Global With the help of the Faculty and Students of the MIT Global Industry StudyIndustry Study

rjhans@mit.edurjhans@mit.eduTraffic Source: Sage Analysis courtesy Prof Ian Waitz

MIT ICATMIT ICAT

World Population Distribution & 2002 Air Transportation Activity

Population Source:http://www.ciesin.org/datasets/gpw/globldem.doc.htmlAir Transport Source: ICAO, R. Schild/AirbusPassenger and freight traffic represent RPK and FTK share in 2002

North America37% Pax26% Cargo~160 Airlines~4100 Airports

Latin America/Caribbean5% Pax3% Cargo~50 Airlines~580 Airports

Europe27% Pax28% Cargo~200 Airlines~2400 Airports

Africa2% Pax2% Cargo ~20 Airlines~300 Airports

Asia/Pacific26% Pax36% Cargo~80 Airlines~1800 AirportsMiddle East

4% Pax5% Cargo~20 Airlines~230 Airports

MIT ICATMIT ICAT RPK by Region

Source: ICAO, scheduled services of commercial air carriers

Scheduled Revenue Passenger-Kilomters by Region

0

200

400

600

800

1000

1200

1400

1970 1975 1980 1985 1990 1995 2000 2005

RPK

(bill

ion)

North America

Europe

Asia andPacificLatin America& CaribbeanMiddle East

Africa

MIT ICATMIT ICAT Freight Trends by Region

Source: ICAO, scheduled services of commercial air carriers

Freight Tonne-Kilomters by Region

0

5

10

15

20

25

30

35

40

45

1970 1975 1980 1985 1990 1995 2000 2005

FTK

(bill

ion)

North America

Europe

Asia andPacificLatin America& CaribbeanMiddle East

Africa

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Rapid Cargo Growthsince Mid 90s

Source: Form41 data, all US carriers

US Scheduled Pax Traffic vs. Cargo Traffic

0

100

200

300

400

500

1975 1980 1985 1990 1995 2000 2005

Nor

mal

ized

Tra

ffic

Inde

x (1

978=

100)

Pax (RPM)

Freight (FTM)

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Impact of September 11 US Domestic RPMs

Source: ATA Monthly Passenger Traffic ReportSource: ATA, US member airlines, scheduled mainline service

Domestic Traffic -- RPMs (Billions)

20

25

30

35

40

45

50

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

2000 2001 2002 2003 2004

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Cargo Traffic Is Immunized(US Monthly Scheduled FTMs)

Source: ATA Monthly Passenger Traffic ReportSource: Form41, all US carriers, scheduled cargo traffic

Scheduled Cargo Traffic -- FTMs (Billions)

1.0

1.5

2.0

2.5

3.0

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

2000 2001 2002 2003 2004

MIT ICATMIT ICAT US Airline Load Factors 2000-2003

Source: ATA Monthly Passenger Traffic ReportSource: ATA, US member airlines, scheduled mainline service

Monthly Load Factor -- System (Percent)

50

55

60

65

70

75

80

85

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

2000 2001 2002 2003 2004

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Annual Change in Average Domestic Fare (2000-2004)

Source: ATA Monthly Airfare Report; eight US major airlines excluding Southwest (WN)

Average Domestic Air Fare (Percent Change from Previous Year)

-25

-20

-15

-10

-5

0

5

10

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

2000 2001 2002 2003 2004

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Airline Profitability Impact of Sept 11

CASMCASM RASMRASM

9/119/11--9/139/13 TimeTime

$/ASM$/ASM

Security costs

Quick Recovery

Insolvency

Slow Recovery

MIT ICATMIT ICAT

All Major Carriers On “Slow Recovery” Trajectory Except Southwest

Source: Airline reports

$(1,600)

$(1,200)

$(800)

$(400)

$0

$400

$800

2000Q1 2000Q3 2001Q1 2001Q3 2002Q1 2002Q3 2003Q1 2003Q3 2004Q1

Net

Inco

me

(Los

s) in

mill

ions

AA UA DL

NW CO WN

9/11 Attacks

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$(1,600)

$(1,200)

$(800)

$(400)

$0

$400

$800

$1,200

$1,600

2000Q1 2000Q3 2001Q1 2001Q3 2002Q1 2002Q3 2003Q1 2003Q3 2004Q1

Net

Inco

me

(Los

s) in

mill

ions

AA UA

DL NW

CO WN

UPS FedEx

9/11 Attacks

SARSIraq War

West CoastDock Strike

Operating Performance ofMajor Pax and Cargo Carriers

Source: companies’ annual reports

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Market Cap: US Majors, 6/10/04With Jet Blue

Southwest59.3%

Delta3.6%

United0.6% Continental

3.4%Northwest

4.3%

Alaska2.9%

US Airways0.7%

ATA0.3%

America West1.7%

American9.4%

Jet Blue13.8%

Total Market Cap: $20.9 billionTotal Market Cap: $20.9 billion

Source: Yahoo! Finance. Includes ATA

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AlaskaAmerican West

American

ATAJetBlue

US AirwaysContinental

Delta

Northwest

Southwest

United

0%

5%

10%

15%

20%

25%

0% 10% 20% 30% 40% 50% 60%

Relative Market Cap 06/04

Mon

thly

RPM

Sha

re 0

5/04

Current Market Cap vs. RPM ShareUS Majors and ATA

Network vs. Cost Efficiency QuestionsNetwork vs. Cost Efficiency Questions

Source: Yahoo! Finance and airline traffic reports

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Weak Carriers Vulnerable to LCC Attack

Sources:http://www.southwest.com/cities/philadelphia.html, ETMS Data Analysis

Southwest PHL EntryService since May 9:

Chicago (Midway) $ 79 one-wayLas Vegas $ 99 one-wayOrlando $ 79 one-wayProvidence $ 29 one-way

US AirwaysNetwork

US Airways match many of Southwest's fares with its own new, less restricted "GoFares.“

Both airlines offer the lowest available fares on many competing routes.

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Emergence of Low-Cost Carriers

Total 111 LCCs, 16 started/to start in 2003/2004Source: http://www.etn.nl/lcostair.htm, airline news

Africa (2)1TimeKulula

Europe (60, 3 in 2004)Aer Arann Baboo Fare4U Sun Express Air 2000 Basiq Air German Wings SwedlineAir Baltic Bexx Air Germania Express ThomsonFlyAir Berlin BMI Baby Globespan V BirdAir Finland British European Hapag Lloyd Express Virgin Express Air Luxor Lite BudgetAir Hellas Jet VLM AirlinesAir Polonia Corendon Helvetic Airways VolareWeb Air Scotland Deutsche BA Iceland Express Windjet VolaAir Southwest EasyJet Ryanair Smart WingsAir Wales Evolavia Snalskjutsen Wizz AirAlpi Eagles Excel Airways SnowFlake Airlines HopAzzurra Air Fairline Austria Sterling

Asia/Pacific (20, 8 in 2004)Air Arabia ValuAirAir Asia Virgin Blue Air Deccan Air BlueAthena Air Services Air OneCitilink BackpackersXpressFreedom Air JetstarLion Airways Nok AirOne-Two-Go Pacific BlueSkymark Airlines SkyAsiaSkynet Asia Airways Tiger Airways

South America (3)BraGolU Air

Canada (7, 1 in 2004)CanJet WestjetHMY Airways ZipJetsGo Airlines Canada WestTango Airlines

USA (19, 4 in 2003/2004)AirTran Spirit AirlinesAllegiant Air Song AirAmerican West Sun Country ATA USA 3000 AirlinesFrontier Airlines Vacation ExpressInterstate Jet TedJetBlue Airways Independence Midwest Express Virgin USAPan AmericanSoutheast AirlinesSouthwest Airlines

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Macro Scale DriversUS Airline Net Profit

Source: ATA, Form41, US Airlines all services NB: 2001 data includes Air Trans Stabilization Act receipts

Cyclic Industry with Exponential Growth In Volatility Since DereCyclic Industry with Exponential Growth In Volatility Since Deregulationgulation

-12

-10

-8

-6

-4

-2

0

2

4

6

47 49 51 53 55 57 59 61 63 65 67 69 71 73 75 77 79 81 83 85 87 89 91 93 95 97 99 01 03

Net

Pro

fit (2

000

US$

B)

DeregulationDeregulation

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-30

-20

-10

0

10

20

30

40

78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12

Net

Pro

fit (2

000

US$

B)

US US Fit

US Airlines Net Profit Model - 2002Best Fit of Undamped Oscillation

Cycle Period = 11.3 yr eFolding Time = 7.9 yr

PredictionsPredictions2003 2003 ($14.3B)($14.3B)2004 2004 ($13.2B)($13.2B)2005 2005 ($ 7.0B)($ 7.0B)

NB: Predictions are in constant 2000 dollars.

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-15

-10

-5

0

5

10

15

1970 1975 1980 1985 1990 1995 2000 2005

Net

Pro

fit (C

urre

nt U

S$ B

n)

200

400

600

800

1000

1200

Airc

raft

Del

iver

ies

(uni

t)

Net ProfitsNet Profits

DeliveriesDeliveries

Source: ICAO data

Net Profit and Aircraft DeliveriesHypothesize that instability driven by capacity

response phase lag

World Airlines Net Profits vs. Aircraft DeliveriesWorld Airlines Net Profits vs. Aircraft Deliveries

MIT ICATMIT ICAT

Simple Conceptual Model for Capacity Effects

Demand

Capacity

Economy (GDP)

Social Factors

LatentDemandModel

PriceDemandElasticity

RevenueManagement

TacticalSchedulingDelay (months)

Delay (yrs)

LoadFactor

Traffic (RPM)

Yield

VarCost/ASM

Capacity(ASM) Operating

Expense

Revenue Net Profit

FleetPlanning

LatentDemand

Fixed Cost

++Variable

Cost

+-

PotentialLift

(PASM)

UtilizationRate (%)

Retirement

NetOrders

Target LF

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-30

-20

-10

0

10

20

30

40

78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12

Net

Pro

fit (2

000

US$

B)

Growth LimitsConstraints vs Damping

Downside: FinancialDownside: Financial

Upside: Capacity, MarketUpside: Capacity, Market

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-30

-20

-10

0

10

20

30

40

78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12

Net

Pro

fit (2

000

US$

B)

US US Fit

US Airline Performance Cycling Up Faster Than Predicted

PredictionPrediction2003 2003 ($15.3B)($15.3B)

ActualActual2003 2003 ($3.6B)($3.6B)

NB: predictions are in current dollars.

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Profitability Improvement Factors

• Cargo Airlines Profitable

• Yields Turned the Corner

• Wage ConcessionsUS: $1 billionUA: $2.56 billionAA: $2 billion

• Distribution Costs$1 billion

• Debt Restructuring & Chapter 11

• Pensions (Pension Benefit Guaranty Corporation (PBGC))

• Security Costs and Insurance?

• Operating Efficiencies$4 billion

• Fuel

MIT ICATMIT ICAT Trends in Fuel Price

Historical: Average Jet Fuel and Crude Oil Prices

40

50

60

70

80

90

100

110

120

130

Jan-

86

Jan-

87

Jan-

88

Jan-

89

Jan-

90

Jan-

91

Jan-

92

Jan-

93

Jan-

94

Jan-

95

Jan-

96

Jan-

97

Jan-

98

Jan-

99

Jan-

00

Jan-

01

Jan-

02

Jan-

03

Jan-

04

Jet F

uel:

Cen

ts p

er G

allo

n

0

5

10

15

20

25

30

35

40

45

Crude O

il: Dollars per B

arrel

System (L)Crude Oil (R)

Source: ATA data; U.S. major, national, large regional passenger and cargo airlines; all services

MIT ICATMIT ICAT 2004 Fuel Hedge Levels

• Reduce the risk of high fuel prices by hedging future fuel contracts• Many U.S. major carriers lack credit lines or cash to buy hedges

Source: Lehman Brothers, MSNBC news, Goldman Sachs, airline news

15%

34%

9%

22%

57%

0%

41%

80%

0%

72%

0%

90%

20%

0%

20%

40%

60%

80%

100%

AirTran American Continental JetBlue Northwest EasyJet QantasAir France LufthansaSouthwestDeltaAlaska American

West

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-30

-20

-10

0

10

20

30

40

78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12

Net

Pro

fit (2

000

US$

B)

Growth LimitsConstraints vs Damping

Downside: FinancialDownside: Financial

Upside: Capacity, MarketUpside: Capacity, Market

MIT ICATMIT ICAT Flight Delays Reemerging

Source: FAA OPSNET data

OPSNET National Delays

0

10000

20000

30000

40000

50000

60000

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Month

Tota

l Del

ays 2004

2003

2002

2001

2000

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Total Delays at Chicago O’Hare Intl

Source: FAA OPSNET data

ORD: Total Delays

0

2000

4000

6000

8000

10000

12000

14000

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Month

Tota

l Del

ays 2004

2003

2002

2001

2000

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Airport SystemCapacity Limit Factors

• Runways

• WeatherCapacity VariabilityConvective Weather

• Landside LimitsGatesTerminals & SecurityRoad Access

• Downstream Constraints

• Controller Workload

• EnvironmentalCommunity NoiseEmissions

• Safety

MIT ICATMIT ICAT

Emergence of Secondary Airports

SFO

LAX

MSP

DFW

IAH

DTWORD

STL

CVG

ATL

DCA

PHLLGA / JFK / EWR

BOS

MIA

PHX

Congested major airportSecondary airport(Traffic above 5% MAS M.S.)

BUR

OAK/SJC

ONT

SNA

FLL

BWI

ISP

MHT

MDWPVD

Secondary airport(Traffic below 5% MAS M.S.)

Constrained secondary airportFailed secondary airport

BLV

ORH

LGB

MIT ICATMIT ICAT

0

2

4

6

8

10

12

14

16

18

Bostonregion

Chicagoregion

New Yorkregion

Washingtonregion

Miami region Los Angelesregion

SanFransisco

region

Num

ber o

f usa

ble

runw

ays

(at a

ny ti

me

and

long

er th

an 5

000

ft)

Runways at surroundingairports (50miles)

Core airports runways

Additional Capacity at Region Level

MIT ICATMIT ICAT

BOS Logan International Airport

Core airport

50 miles

EWB

MHT

PSM

ORH

PVD

BED

BVY

ASH

SFZ

LWM

Surrounding airports (with runways length greater than 5000 ft)

Secondary airport

Case study of the Boston Metropolitan Area

Identification of Secondary Airports

MIT ICATMIT ICAT

Population densityPopulation density

Density of Population

BOS Logan International Airport

50 miles

MHT

PVD

MIT ICATMIT ICAT

Distribution of population

050

100150200250300

0 4 8 12 16 20 24 28 32 36 40 44 48

Thou

sand

s

Distance (in miles) from BOS airportDistribution of population

050

100150200250300

0 4 8 12 16 20 24 28 32 36 40 44 48

Thou

sand

s

Distance (in miles) f rom MHT airport

Dis tr ibution of population

050

100150200250300

0 4 8 12 16 20 24 28 32 36 40 44 48

Thou

sand

s

Dis tance (in miles) f rom PV D airport

Core airportBoston Logan (BOS)

Population within 20 miles:

2.6 millions

Secondary airportsManchester (MHT)

Population within 20 miles:

0.6 million

Providence (PVD)

Population within 20 miles:

1.2 million

Secondary Basin

of Population

Secondary Basin

of Population

Primary Basin

of Population

Population: Distribution of Population around Core and Secondary Airports

Factors Influencing the Emergence of Sec. Airports

MIT ICATMIT ICAT

BWI

FLLEWR

MHT

PVD ISP

MDWOAK

IAD

0

10

20

30

40

50

1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002

Year of Em ergence

Dis

tanc

e (m

iles)

from

the

prim

ary

basi

n of

pop

ulat

ion

to

the

seco

ndar

y ai

rpor

t

Population: Evolution in the Secondary Airport Location Relative to Primary Basin of Population

?

Factors Influencing the Emergence of Sec. Airports

MIT ICATMIT ICAT

Enplanements at airports within 50 miles of BOS

BOS

MHT

PVD

0

2

4

6

8

10

12

14

16

1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002

Milli

ons

Enpl

anem

ents

ASH BED BOS BVY EWB LWMMHT ORH PSM PVD SFZ

Case : Boston Region

Southwest entry

Southwest entry

Data source: Historical data from FAA Terminal Area Forecasts

Low Cost Carriers: Secondary Airport Emergence is correlated with Low Cost Carrier entry.

Factors Influencing the Emergence of Sec. Airports

MIT ICATMIT ICAT FAA Air Traffic Responses

• Air Traffic Organization Stood UpRuss Chew COOPerformance Based OrganizationIn Transition

• Schedule Reductions at ORD“Voluntary” reduction*

United and American to reduce flights by 5 percent between Marchand October 2004United cancelled 50 daily flights, American cancelled 27

Collaborative Decision MakingPilot Case

• “Express Lanes” from Congested Core SystemsDelay “peripheral” airports

Source: Subcommittee on Aviation; Hearing on Avoiding Summer Delays And A Review Of The FAA’s Air Traffic Organization; May 13, 2004; http://www.house.gov/transportation/aviation/05-13-04/05-13-04memo.html

MIT ICATMIT ICAT

New York Center AirspaceWith Primary EWR Departure Fixes/Jet-routes

Based on Lincoln Laboratory ITWS Map

WHITE

BIGGYLANNAPARKE

ELIOT

COATE

GAYELGREKI

MERIT

ZDCZNY

ZNYZOB

ZNYZBW

J209

J75

J48J6

J80

J64

J60

J36

J95

JKFEWR

LGATEB

MSP, SEAPDX, SLC

SFO

ELM, MKEORD

PIT, CLEIND, MCI

DEN, PHXLAS, LAX

HNL

IAD, BNADFW, SAN

MEX

ATL, MSY, IAH BWI, DCA, GSO, CLT, TPA

RIC, ORF, CHS, MCO, PBI, MIACentral and South America

BOSEurope

YMQBVT

MIT ICATMIT ICAT Trends in Aircraft Size

Data source: Form 41 Traffic data from Bureau of Transportation Statistics (includes Regional Jets and Turboprops)

8090

100110120130140150160170180190200210220

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

Ave

rage

sea

ts p

er d

epar

ture

Domestic International Total

MIT ICATMIT ICAT

71

856

716

182

528

1108

104 103

1222

966863

1019

429

228 186

491

1129

264390

198258 208

764

942

100 64

489

11

16119181 43 0

1918

0

500

1000

1500

2000

2500

707

727

737

(JT8

D)

737

(CFM

I)

DC

-8

DC

-9

MD

-80

MD

-90

717

737N

G

757

767

747

777

DC

-10

MD

-11

A31

9

A32

0

A32

1

A30

0

A31

0

A33

0

A34

0

CR

J200

CR

J700

CR

J900

ERJ-

135

ERJ-

140

ERJ-

145

Avr

o R

J-70

Avr

o R

J-85

/100

BA

e 14

6

328J

ET

Fokk

er 7

0

Oth

er

BAe 2558Boeing Airbus Bombardier Embraer Dornier Fokker Other

World Jet Fleet Summary(as of May 14, 2003)

Source: Airclaims, published by ATW, July 2003

Total 17,995 Jet AircraftTotal 17,995 Jet Aircraft

Others include L-1011, Fokker 100, Russia/Ukraine a/c

MIT ICATMIT ICAT U.S. Regional Jet Growth

Source: FAA registration data from 1995 until the present

0

200

400

600

800

1000

1200

140019

95Q

1

1995

Q3

1996

Q1

1996

Q4

1997

Q2

1997

Q4

1998

Q2

1998

Q4

1999

Q2

1999

Q4

2000

Q2

2000

Q4

2001

Q2

2001

Q4

2002

Q2

2002

Q4

2003

Q2

2003

Q4

CRJ900CRJ700CRJ200CRJ100EMB135EMB145BAE145

MIT ICATMIT ICAT Most Common Regional Jets

CRJ 200 (50 seats)ERJ 145 (50 seats)

About 400 aircraft in national fleetAbout 2000 daily flights in January 2003

About 400 aircraft in national fleetAbout 1500 daily flights in January 2003

MIT ICATMIT ICAT

‘98 ‘99 ‘00 ‘01 ‘02 ‘03

Jan

Apr Jul

Jan

Apr Jul

Oct Jan

Apr Jul

OctOct Jan

Apr Jul

Oct Jan

Apr Jan

Regional Jet Density Growth

MIT ICATMIT ICAT

Significant Regional Jet Growth at Hub Airports

• About 90% of regional jet flights depart from or arrive at a hub airport

0%

20%

40%

60%

80%

100%

1998 1999 2000 2001 2002 2003

Non-Hub, Non-Hub

Hub, Non-Hub

Hub, Hub

MIT ICATMIT ICAT Form 41 Averages by Aircraft Type

14120.08187386EMB140

15720.09169354EMB145

13410.10181351EMB135

22140.06215542CRJ700

28380.13287459CRJ200

53590.05460931A319

68360.044111094A320

103260.055471236B757

45050.05430663B737

Total Aircraft Operating Cost/Trip

Total Aircraft Operating Cost/ASM

Pilot Cost/Block

Hour

Average Trip

Length

Aircraft Type

MIT ICATMIT ICAT

Total Operating Cost per ASM when Pilot Cost/Block Hour is Normalized to $450

00.020.040.060.080.1

0.120.140.16

B737

B757

A320

A319

CRJ200

CRJ700

EMB135

EMB145

EMB140

Cost

/AS

M Base Line

Pilot Cost/BlockHour = 450

($)

MIT ICATMIT ICAT

Total Operating Cost per Trip when Pilot Cost/Block Hour is Normalized to $450

0

2000

4000

6000

8000

10000

12000B

737

B75

7

A32

0

A31

9

CR

J200

CR

J700

EM

B13

5

EM

B14

5

EM

B14

0

Cos

t/Tri

p Base Line

Pilot Cost/BlockHour = 450

($)

MIT ICATMIT ICAT RJ-NB Boundary Blurred

Source: based on manufactures’ a/c specifications. Full pax range of standard version

1000

1200

1400

1600

1800

2000

2200

2400

20 40 60 80 100 120 140 160A/C Seats

Ran

ge (n

m)

ERJ170

CRJ200

ERJ145

CRJ700

ERJ190

CRJ900

B735/6 B737

DC-9

Regional JetsRegional Jets New AircraftNew Aircraft

A318

B717 MD-80

MD-90

NarrowNarrow--bodybody

A319

MIT ICATMIT ICAT EMB 170

• March DeliveriesLotAlitaliaUS Airways

• OrdersUS Airways

85

MIT ICATMIT ICAT EMB 190

• First Flight3/12/04

• OrdersJet Blue

100Air Canada

45

MIT ICATMIT ICAT A-380

•http://www.airbus.com/

• A380 BaselineShrinkStretchER Variants

• 555 passengers (3 class)

• 14,800km/8,000nm range

• Payload: 330,000lbs over 10,400km/5,600nm

• Rolls-Royce Trent 900 engines or GP7200 engines

MIT ICATMIT ICAT Boeing 7E7

•200 pax, 7800 nm range•50 firm orders by All Nippon Airways (ANA)

•http://www.boeing.com/commercial/7e7/k62790.html

MIT ICATMIT ICAT

Small Turbofan Passenger Aircraft

Eclipse Jet2100 orders

Cessna Mustang330+ orders

Adam 70075 orders

HondaJet

MIT ICATMIT ICAT Security?

MIT ICATMIT ICAT

Passenger Delays VariableAirport as an Adaptive System

GatesGates

Add’lAdd’l PaxPaxScreenScreen

Ckd BagCkd BagScreenScreen

CheckCheck--InInDropDrop--offoffParkingParking

AirsideAirside LandsideLandside

PassengersPassengers

Bags/CargoBags/CargoGroundGroundTransportTransport

PickPick--upupParkingParking

SecuritySecurityCheckCheck

GateGateBoardingBoarding

Bag ClaimBag Claim

SecuritySecurityPointPoint

MIT ICATMIT ICAT

Workforce of Federal Screeners

55,600

48,30045,300

56,000

43,800

30000

35000

40000

45000

50000

55000

60000

Dec-02 May-03 Sep-03 Jan-04 May-04

Declining Airport Screener Workforce

• Deployed at 451 commercial airports• Allocation revised to cover busier airports this summer

Source: Committee on Transportation and Infrastructure – Aviation, Hearing on Aviation Security: Progress And Problems In Passenger And Baggage Screening, Feb 12 2004; http://www.house.gov/transportation/aviation/02-12-04/02-12-04memo.htmlTSA press releases; Washingtonpost (http://www.washingtonpost.com/wp-dyn/articles/A34892-2004May17.html)

Congressional Cap

MIT ICATMIT ICAT Immigration

• US-VISIT SystemPhoto, Fingerprinting, Biometrics

Countries in the Visa Waiver Program: Andorra, Australia, Austria, Belgium, Brunei, Denmark, Finland, France, Germany, Iceland, Ireland, Italy, Japan, Liechtenstein, Luxembourg, Monaco, Netherlands, New Zealand, Norway, Portugal, San Marino, Singapore, Slovenia, Spain, Sweden, Switzerland and the United Kingdom

• Parity ProgramsBrazil, China

MIT ICATMIT ICAT Safety Trend

Source: Boeing Statistical Abstract