The recent major increases in fuel prices, exacerbated by the turmoil in the financial and credit markets, have provided the impetus for airlines to take a hard look at their operations and begin to tailor their operations to today’s needs. The increased fuel prices have a major affect on the ability of various aircraft in the fleet to produce positive yields, and the load factors necessary for all aircraft to produce positive yield. This has led airlines to critically evaluate demand and attempt to better match segment demand with capacity. The results of this endeavor are not final as of yet, but it generally means that capacity will be reduced on some routes while others will be eliminated entirely. As a result, many airport operators find themselves unable or unwilling to move forward with planned capital development programs. However, depending on each individual airport’s situation, this period may provide a real opportunity to move ahead and avoid the paralysis that typically accompanies uncertainty.
First, it is important to recognize that there are three very distinct categories of airports with respect to the likely impacts of the current airline restructuring. The first category includes those airports that are unlikely to see any material decline in passenger traffic even with a significant decline in operations. Basically these airports include those that serve the “federal” cities (i.e., those with federal agency regional offices or significant installations), are centers of finance and business, are fortress hub locations, are major international gateways, or are strong destination locations. All of these locations have non-discretionary origin-destination demand that is unlikely to change materially since competing travel modes are also impacted by the cost of fuel. In fact, considering the relatively small changes in airline fares we have seen so far, the adverse impact on the economics of air travel to these specific destinations may be far less than any competing mode.
The second group of airports includes those where native origin-destination demand is only moderately tied to business or specific destinations and a large portion of this demand can be considered discretionary. This group probably faces greater uncertainty since demand is sufficient to maintain service but the level of service, in terms of the number of non-stop destinations and the number of carriers, is not certain at this point.
The final group includes those locations that have little non-leisure origin-destination demand. These are the locations where the demand is very elastic with respect to price and where the yields to the airlines are very marginal, particularly where smaller regional jets formerly were the appropriate aircraft size to produce acceptable yields. These locations will either lose service entirely or may be served by turbo-prop aircraft rather than regional jets, possibly with additional adverse effects on demand.
The first group of airports should probably move forward with their current capital plans. Rebounds in demand in the aviation industry have historically been dramatic and the current decline in operations may well provide some opportunity to complete airfield modernization projects without increasing local or system wide delays. In fact, it may provide the opportunity to accelerate some terminal or airfield capacity enhancement projects where exotic phasing, driven by the need to minimize delays, has dramatically increased both the risk and cost of the project. For example, where a terminal airside expansion is proposed, a short-term decrease in gate demand may allow an expansion project to be “fenced out” of the security identification area (SIDA) and its cost reduced as well as limiting interference with terminal and airside operations. For these airports engineers can assist airport management by identifying the potential for simplifying phasing and saving time and money with a supporting risk assessment that will assist them in proposing such acceleration to governing board members who may be as interested in public perception of their action as they are with what is best for the airport. These analyses can help educate the media and the public and allow them to separate specific airport issues from the general economic discussion.
It is the second and third groups that engineers may better serve by helping airport management identify the likely effects of the current restructuring on facility needs. For example, at locations where the numbers of flights are decreased but the non-stop destinations and number of airlines remain essentially the same, airfield operations will decrease but landside and terminal processing elements will be subjected to increasing peak loads due to the realities of the airlines’ scheduling processes. While it may make sense to delay some major capital development programs if they are dependent on service levels or can be affected by discretionary demand, there are other items necessary for the safe and efficient operation and maintenance of airports that will still be required. These necessary elements may include items such as:
Does the airport currently have a progressive maintenance program and a modern work order tracking system? Does the airport have a viable pavement maintenance program? Does the airport have a graphic information system (GIS) developed? If so, does it include building, real estate, leasing, and other information that supports airport management’s day to day functions? Does the airport have an information “backbone” in place, typically a fiber optic backbone for airport management and tenants use in more efficiently managing their operations? Are there opportunities to make simple changes to facilities that will result in operational cost savings? An example might be replacing incandescent bulbs with compact fluorescent or LED, or changing airfield lighting to LED in order to minimize power consumption and electric bills. Another might be to change over airport vehicles to hybrid or alternative fuel vehicles to minimize operational costs. Are security systems up to date? Do they include biometrics? Are perimeter security systems adequate? Do vehicle gates have adequate automatic barriers? These will all need to be upgraded to meet new and changing standards and may have been delayed because of the costs associated with major capital development programs. Has the Airport Layout Plan been reviewed for safety issues, such as minimizing the opportunity for runway incursions? Does the airport have adequate runway safety areas? Are the pavement surfaces, including fillets, appropriate for the current aircraft fleet serving the airport? Is the airport still using terminal check-in floor plate for baggage screening? If so, getting screening activities into the baggage makeup area can “buy” additional check-in space at a relatively low cost. Likewise, remodeling the check-in area so that it supports today’s check-in activities instead of the 1960s ticket counters that we still see in the majority of airports will provide additional peak capacity within existing structures at a minimal cost. Is there land that needs to be “banked” either for future development or to provide protection for the airport from future incompatible land uses? This may be a good time to begin such acquisition programs as well as to ensure that there are no outstanding issues related to FAA’s policies regarding noise land, property acquisition/disposal regulations, etc.
In specific situations there will be many additional opportunities for these airports to prepare themselves for the future. Airport engineers, planners and financial consultants can assist airports by identifying these opportunities and providing the necessary information to support airport management in presenting these plans to their governing bodies. Now is not the time for inaction due to paralysis. This period of uncertainty provides an opportunity to modernize, restore and focus our aviation infrastructure in an environment where individual airport and system delays can be avoided and where the demand peak changes caused by operational changes can be addressed before they create additional delays because we didn’t recognize the effects of those changes.