- Aviation and climate change, post-COP-26
- FAA vs. FCC on 5G and radio altimeters
- Sydney Airport worth $18 billion
- Bipartisan infrastructure bill and airports
- Regional air mobility: VLJs again?
- More on FAA and remote towers
- News Notes
- Quotable Quotes
Aviation and Climate Change, Post-COP-26
The much-anticipated United Nations Climate Change Conference of the Parties (COP26) in Glasgow ended, not with a bang but a whimper. Walter Russell Mead summed it up this way in his Wall Street Journal column:
“COP26 was the kind of hollow ritual that characterized Carlyle’s Age of Shams. As one politician after another committed their countries to unenforceable pledges, none had the bad manners to observe that no country anywhere fully honored the climate pledges made with such fanfare in Paris six years ago. Even the pledges are insufficient to meet the stated goals of the U.N. climate process, and nobody is keeping the pledges.”
News headlines generally expressed much the same thought, sometimes put less bluntly. At the same time, aviation and climate policymakers, especially in Europe, are busily making pledges that are also unlikely to be achievable. And some are being egged on by politicians and the fringe of the environmental movement.
- Last May, the International Energy Agency laid out its proposed path to “net zero” for aviation. Its net zero emissions (NZE) scenario assumes that aviation revenue passenger miles grow by only 3% a year between 2020 and 2050 rather than the 6% a year we saw between 2010 and 2019. It also assumes government policies that shift shorter trips to high-speed rail and “rein in expansion of long-haul business travel.”
- Greenpeace subsequently weighed in with its call for the European Union to flat-out ban short-haul flights “wherever a viable alternative already exists.”
- Not to be outdone, in a study published in Environmental Research Letters, researchers from the University of Oxford and Manchester Metropolitan University upped the ante further. What is really needed, an article in The Guardian explained, is to “reduce air traffic by just 2.5% each year,” which would mean 50% less air traffic in 2050.
While Airbus and EU governments are pouring huge R&D sums into hydrogen as a potential replacement for jet fuel (or to be used in fuel cells, as an alternative to batteries), no form of non-fossil fuel propulsion has come anywhere near being demonstrated as feasible for long-haul jet transportation. Yet the International Air Transport Association stunned many observers last month by releasing its own Net Zero Carbon 2050 resolution, based largely on a massive (and likely very costly) conversion to sustainable aviation fuel (SAF). The IATA resolution also calls on governments to be “active partners” in reaching this goal—presumably via large-scale subsidies. Adding to the unreality, French President Emmanuel Macron announced that the first commercial aircraft powered by hydrogen should be in service by 2030, five years earlier than Airbus’s aspirational target of 2035. (Politicians are now propulsion engineers?)
Let me pose a difficult question for aviation and climate policy. Suppose it is impossible to build large zero-emission international passenger and cargo aircraft by 2030 or 2035; what should we do? One alternative is to shrink aviation, as some green groups are now urging. The alternative is to question whether it makes sense to reduce all carbon emissions to zero, even if doing so in some industries (perhaps aviation, perhaps producing concrete) costs far more per ton of CO2 removed than in other sectors.
Many economists have suggested that a wise investment strategy for reducing the planet’s carbon footprint is to prioritize investments from the lowest cost per ton to the highest, and start with the lowest-cost ones—i.e., getting the most bang for the buck with every billion invested. There is abundant evidence that a wealthier global economy can support greater research and development that may yield breakthroughs in low/no-carbon energy generation and ways of producing steel and concrete that minimize their carbon footprint. Bill Gates embraced this approach in his book, How to Avoid a Climate Disaster. A chart in the Feb. 27, 2021 issue of The Economist draws on research from McKinsey, Boston Consulting Group, and others about where the lowest-hanging fruit is in terms of cost/ton of CO2 reduction. The article also notes trade-offs between sectors, citing an MIT study that shows it would be more cost-effective to first achieve a zero-carbon electricity grid and only then to strive for zero-carbon transportation.
But what do we do if the cost of getting to zero-carbon in some sectors is extremely high? Rather than giving up the sector’s benefits, policies aimed at “negative emissions” also have a critically important role to play. A portion of the superb Special Report on climate policies in The Economist (Oct. 27, 2021) is titled “Why the World Needs Negative Emissions.” It describes a large array of proven and potential technologies to convert CO2 to stone, to directly capture carbon from the air, and to employ “nature-based solutions” such as a trillion acres of new trees to remove CO2 from the air and store it in their wood. I don’t have space here to describe these in any detail, but I urge aviation policymakers to read the entire Special Report, including this important section.
Finally, for some additional thinking on what does and does not make sense in this field, my Reason colleague Julian Morris recently produced a primer, “Evidence-Based Policies to Slow Climate Change”.
FAA vs. FCC on 5G and Radar Altimeters
How did the Federal Aviation Administration and Federal Communications Commission end up at cross-purposes over the use of spectrum for 5G telecommunications that might interfere with radio altimeters on a wide array of aircraft?
It’s not as if the problem was unknown to FAA. As Diana Furchtgott-Roth (former deputy assistant secretary for research and technology at the U.S. Department of Transportation) pointed out in a Nov. 2 Forbes.com column, House Transportation & Infrastructure Chair Peter DeFazio (D-OR) wrote to FCC Chairman Ajit Pai in November 2019 and again in December 2020 explaining the potential interference problem with spectrum in the 3.7-4.2 GHz C-Band being leased for use by 5G operators. An array of aviation groups submitted a joint filing to the FCC stating that the industry for several years had been warning of possible interference with radio altimeters in that frequency band. A December 2020 letter from FAA Administrator Steve Dickson and Deputy Secretary of Transportation Steve Bradbury to the National Telecommunications Information Administration (NTIA) expressed the same concerns.
But that letter never reached the FCC, nor was it publicly released, because NTIA declined to do so. The question is why this important agency made that decision. Furchtgott-Roth does not directly answer it but writes: “By refusing to put the letter in the public record, NTIA withheld important information from bidders [for the spectrum] about the potential liabilities associated with the C-Band that might affect the value of the spectrum. If the wireless companies had known that the head of the FAA had concerns about airline safety, they might not have bid as much for the spectrum.”
(As far as I can tell, FAA never went public about this problem prior to the FCC’s spectrum auction. Given the very real safety implications, this is disturbing.)
As for why NTIA sat on the FAA/DOT letter, I will venture a hypothesis. NTIA is part of the Department of Commerce. And in 2019-2020 the Secretary of Commerce was Wilbur Ross. Google his name and 5G and you will find numerous articles about his championing of 5G as a race with China that the USA must win. So it seems entirely plausible that when the NTIA was deciding what to do with the FAA/DOT letter, the secretary or those close to him might well have directed that nothing must interfere with the planned spectrum auction. And nothing did. Together, Verizon, AT&T, and T-Mobile spent $80 billion on C Band spectrum for their planned 5G networks, unaware that operating those systems, at least near airports, could subject them to liability for restrictions on flights or even terrible accidents.
While 5G systems are already in operation in some other countries, the only one I’m aware of that has enacted restrictions on 5G near airports is Canada, but Aviation Daily (Nov. 4) noted that some countries “have implemented temporary proximity and power restrictions” on 5G networks. FAA’s Special Airworthiness Information Bulletin (Nov. 2) alerted aviation manufacturers, aircraft operators, and pilots of possible adverse impacts on radio altimeters.
It’s been widely reported that AT&T and Verizon have announced delays in their planned Dec. 5 rollout of 5G in the disputed spectrum. That sounds good until you read that both “delays” are only for a month. Meanwhile, aviation standards organization RTCA has been developing adjacent-band compatible minimum operational performance standards for future radio altimeter designs (under Special Committee 239). One year ago SC-239 released the results of tests it ran on radio frequency interference from 5G operating in the 3.7-3.98 band. It found a “major risk” of harmful interference with radio altimeters on all types of civil aircraft, but that information did not make its way into public awareness.
The Nov. 4 Aviation Daily article reported that FreeFlight Systems (Irving, TX) announced last month that it expects to receive FAA certification by the year’s end of two new radio altimeters designed to coexist with 5G mobile networks. But it would be many years before thousands of aircraft could replace their current radio altimeters. Some kind of near-term solution remains to be arrived at.
Sydney Airport Negotiating $18 Billion Sale
After rejecting several prior buyout offers, the board of Sydney International Airport, Australia’s largest, has begun negotiations thanks to an offer that is $1 billion higher than before. It equates to 35 times the airport’s 2019 earnings before interest, taxation, depreciation, and amortization (EBITDA). The consortium making the offer consists of IFM Investments, two Australian pension funds (AustralianSuper and QSuper), and an arm of New York-based infrastructure investment fund Global Infrastructure Partners (GIP).
Sydney Airport was privatized via a 50-year public-private partnership lease in 2002 and shares in the company holding the concession are traded on the stock exchange. The company’s board has voted unanimously for shareholders to approve the offer at meetings likely to be held early next year. The CAPA Centre for Aviation expects the deal to be approved then, and the only remaining hurdle will be a review by the Australian Competition and Consumer Commission. Potential concerns will be mostly over the potential concentration of ownership in the country’s airports. IFM owns 25% of the Melbourne Airport concession company, 20% of Brisbane, 13% of Adelaide, and 77% of Darwin. The two pension funds also own smaller stakes in several Australian airports. Another question is the potential impact of the second Sydney airport, under construction by the state government 30 miles west of downtown Sydney.
There are several implications here for potential U.S. airport P3 leases. First, this transaction illustrates investor hunger for major airports in developed countries—of which the United States is the last essentially untapped market. Second, it suggests that airport investors are taking a long-term view, basing their valuation estimate not on the severely depressed EBITDA of 2020 but on the normal year results of 2019. Third, the valuation at 35 times 2019 EBITDA is far higher than the 20-times multiple used in the Reason Foundation study of 31 U.S. airports that was released in August. The highest-valued airport in that study was Los Angeles International (LAX) at $17.8 billion. That is just about the same as the $18 billion now pending for Sydney, an airport with half the annual passenger flow of LAX.
The CAPA Centre report on this transaction noted that “one thing this transaction might do is to kick-start dormant transactions elsewhere in the world, or even prompt new ones.” I think that assessment is on-target.
Bipartisan Infrastructure Bill and Airports
The bipartisan infrastructure bill calls for $25 billion for airport and air traffic control projects. That means airports will get $15 billion in grants that can be used for terminal improvements, unlike Airport Improvement Program (AIP) grants that are pretty much limited to airfield projects. There is also a separate $5 billion “airport terminal program,” to be distributed as competitive grants. So from the airports’ standpoint, this will be a welcome windfall.
Likewise, FAA’s Facilities & Equipment budget is in line for an additional $1 billion per year for five years. There is also $100 million reserved for airports participating in the FAA Contract Tower program.
So what’s not to like? Every dollar of these $25 billion is to come from the general fund—which means all taxpayers, whether or not they make any direct use of aviation. This upends the general practice for most of the last 50 years that U.S. aviation is funded largely by user taxes and user fees. This is in sharp contrast to Amtrak and urban transit, the large majority of whose budgets (capital and operating costs) are paid for by federal and to some extent state and local taxpayers. Many years ago DOT’s Bureau of Transportation Statistics used federal budget data to figure out the extent that each major passenger transportation mode was subsidized by federal taxpayers. They totaled up federal spending on each mode and compared that to federal user taxes collected from each mode. The federal subsidy per mode worked out as follows:
|Mode||Federal subsidy/1000 passenger-miles (2004)|
|Passenger rail (Amtrak)||$186|
The results were so embarrassing to fans of transit and Amtrak that political pressure led to BTS never updating those numbers. Years later former Office of Management and Budget analyst Ron Utt and transportation researcher Wendell Cox followed the same procedures with 2006 BTS numbers and got similar results. (The original BTS report is archived here).
Congress has been chipping away at this users-pay/users-benefit system especially in the past decade, via various bailout and infrastructure bills paid for out of general revenues. In highways alone, repeated injections of general-fund money into the Highway Trust Fund have totaled $157 billion since 2008. This has enabled highway opponents to crow that highways are subsidized just like transit is—with the implicit message that those of us who favor users-pay/users-benefit should now just shut up.
This had happened to airports and air traffic control to a small extent, but this new $25 billion for airports and ATC is a big deviation from the largely self-supporting nature of ATC (about 90% in recent years) and for large and medium hub airports (also in that range, including PFC revenues). In addition to undercutting the wise and successful system of users paying for what they get in aviation, the new program increases the role of Congress in deciding where the new dollars go.
Early in my career in transportation policy, I was shocked to learn that every federal transportation grant (and I suppose every other federal grant) is required by law to be announced in a news release by the member of Congress in whose district the project or facility is located. The implicit (or sometimes explicit) message is: “See what nice goodies I brought back to you from Washington.”
This is not a smart way to decide on infrastructure investments. It substitutes political decisions for sound investment decisions (though occasionally these may align). Also, this method poses real risks of putting taxpayer money into projects or facilities whose output is worth less than the cost of building them. Economists call these “value-subtracting enterprises,” and they do not yield true economic growth. Yet that is the path Congress keeps expanding.
For airports, it would have been better for Congress to remove or at least increase the federal cap on airports’ passenger facility charges (PFCs), which has not been increased since 2000 and has therefore lost a large fraction of its real value.
Regional Air Mobility: VLJs Déjà Vu?
Back in April NASA released a white paper, developed in conjunction with a number of companies that are targeting the reginal air mobility (RAM) market using small electric aircraft, including Ampaire, Electra, MagniX, Reliable Robotics, and Xwing. As summarized by Graham Warwick in Aviation Daily (April 27, 2021), the white paper concludes that RAM “can offer early benefits for communities, industry, and investors.” The key concept is to make use of more than 5,000 public-use airports, only a handful of which currently have scheduled passenger service.
According to the white paper “Most Americans live within 16 minutes of an airport. RAM’s vision is to make these local airports the community hubs they were always meant to be.” It acknowledges that the economics of serving these routes has been challenging, but says that “If an affordable, efficient, robust, and environmentally friendly aircraft network was implemented across these thousands of airports, more people would be able to choose convenient air travel over cars for mid-distant trips around 50-500 miles.”
This concept began to ring a bell with me, so I went through previous newsletters and found a lead article in the June 2006 issue of Air Traffic Control Reform News: “Very Light Jets Will Increase ATC Overload.” Readers with long memories will recall the VLJ craze of the first decade of this century. Companies such as Eclipse and Adam Aircraft developed prototypes of twin-engine jets carrying four or five people, with the idea of bringing air travel to thousands of underutilized public airports across the country.
That article highlighted an announcement by start-up VLJ airline DayJet of its first locations to be served by its planned fleet of Eclipse 500 aircraft. So seriously was this taken by FAA that its 2006 Aviation Forecast projected the growth of jet-powered aircraft in general aviation and air taxi service to increase by 10.2% annually through 2017, due largely to the expected growth of VLJ air taxi service. This appeared to be based in part on a 2005 study by NASA Langley and Virginia Polytechnic University’s Air Transportation Systems Laboratory, “Future On-Demand (VLJ) Aviation Forecasts Using TSAM, Report to JPDO.”
That vision, of course, cratered with the bankruptcy filing of Adam, DayJet, and Eclipse, with a lot of venture capital down the drain. Today’s investment in as many as 150 emerging eVTOL startups dwarfs the amount invested in VLJ developers and would-be regional air mobility operators. A growing number of skeptics appear to be seeing parallels with that epic failure. Richard Aboulafia, vice president of analysis of aviation consulting firm Teal Group, told Flying magazine recently that compared with conventional airlines serving large numbers of passengers per flight, and thousands of flights, “the math doesn’t work” for an eVTOL fleet transporting a handful of passengers per flight and far fewer total flights. “How Much Will It Cost to Fly on eVTOL Air Taxis?” by Thom Patterson (Flying, Oct. 22, 2021) raises a number of other concerns about economic feasibility, though its focus is more on urban air mobility than regional air mobility.
I have written before that I admire the creativity and gumption of the numerous developers of eVTOLs, and I’d be glad to see the best of them succeed. But I have yet to see a proposed UAM or RAM business model whose numbers are well-grounded and can predict profitable passenger operations.
Shortly after last month’s article about FAA’s very slow progress on implementing lower-cost, higher-performing remote towers appeared, I received an email announcing FAA’s new “Sustainable Tower Design Initiative.” My initial hopes were dashed as I discovered that this project is a competition for—wait for it—new designs for conventional control towers. Lest you have any doubts, the FAA announcement requires the proposed designs to be between 60 and 119 ft. above ground level, include one elevator, a mechanical floor, an electrical floor, an equipment room, and dedicated office space. It also requires a control cab on top with 360-degree view of the airfield. And the release touts 16 control towers designed by the architectural firm of I. M. Pei. So FAA is still in the business of funding architectural monuments at airports.
Meanwhile, as I’ve been writing for more than a decade, the world aviation community is rapidly embracing digital remote towers, with only the sensing equipment mounted on masts and the control room and other facilities at ground level or possibly underground. Aviation journalist David Hughes has an article on recent worldwide remote tower developments in the latest issue of Air Traffic Management magazine.
Congress seems to be getting more concerned that FAA is falling behind the rest of the world on this important transition. In the 2018 FAA reauthorization act, it authorized FAA to operate a pilot program under which it would develop and test remote towers at five different locations. But to the best of my knowledge, Congress has appropriated no funds for this project. That may be changing. In its FY 2022 transportation and housing appropriations bill, the Senate Appropriations Committee’s recommendation for FAA’s Facilities and Equipment account includes $4.9 million for remote towers, focused on getting the still-in-testing projects at Leesburg, VA, and Ft. Collins, CO, certified. The language also expresses concern about FAA delays in certification and asks for a report 90 days after enactment of this legislation, explaining the agency’s plan and schedule for getting this done.
As I was writing this article, I learned that FAA has issued an “Operational Viability Decision” on the Saab Remote Tower System at Leesburg, authorizing it to continue managing traffic there. This is not official “certification” of the system, but it triggers the type certification process between Saab and FAA. Once that is done (no time frame was announced), the system will be approved as a non-federal system within the National Airspace System. Former FAA Chief Counsel Sandy Murdock, in JDA Journal, asks the obvious question: “Why Is It Taking So Long for the KYJO [Leesburg] Saab Remote Tower Test by the FAA?”
However, there is still no funding for new remote tower projects, though there is definite interest from small airports in (or aiming to be in) the FAA Contract Tower program. One of these is the Freedman Memorial Airport in Hailey, ID. Its current tower does not comply with runway clearance requirements, so the airport board is seeking to replace it with a remote tower, pursuant to the pilot program in the 2018 legislation, with its application submitted in 2019. Both Idaho senators and its lone House member wrote to FAA supporting this request in February 2019. But no approval has been forthcoming. It looks to me as if FAA would rather continue to build architectural monuments.
American/JetBlue Alliance Challenged by Justice Department
Despite having been approved last year by the Trump administration, the Northeast Alliance (NEA) under which American and JetBlue are pooling resources at the airports of Boston and New York/New Jersey is being challenged as anti-competitive. The reason for the NEA is the lack of any available slots in the New York metro area, which had prevented JetBlue from adding flights. As Aviation Week reporter Ben Goldstein reports, thus far NEA has produced “mostly positive consumer benefits.” Either runway pricing or large-scale slot auctions would be a better solution to entry barriers in that market.
Skyguide Pioneers European Airspace Unification
Swiss ANSP Skyguide is more than halfway through a 10-year plan that will culminate in a single flight information region managed by a virtual center. Controllers will continue to work at the two existing locations—Geneva and Zurich. But they will all be responsible for all flights in the entire 16,000 sq. mi. country. Key tools include controller-pilot datalink communications (2016), new unified flight management software (by end-2021), and operation as a virtual center by end-2024. One aim of the project is to provide a model for other European countries, with their proliferation of centers (twice as many in the United States).
Breeze Pioneers “Premium ULCC”
Existing ultra-low-cost carriers achieve their low costs via high-density seating and charging fees for everything except the basic ticket. Breeze Airways founder David Neeleman has a different idea. He aims to attract premium travelers as well as penny-pinchers by configuring its 80 new A220s with 36 premium seats (at 39” pitch), 10 upgraded economy seats (33”), and the rest economy seats (30”). As he told a recent rollout ceremony for the first A220, “We are not going to do legacy pricing of three times the cost of our economy fares for business class customers. We want anybody to be able to upgrade from coach for an extra $50.” That is a dramatic new business model for an ULCC.
Hybrids as Next Step for Surf Air Mobility
Regional airline Surf Air has ordered 100 nine-seat Cessna Grand Caravan aircraft to be equipped with a hybrid-electric powertrain developed by Ampair. Surf Air CEO Sudhin Shahani told Aviation Week his conclusion that the first generation of electric aircraft will be hybrids that don’t need charging stations at airports, enabling them to operate from more than 5,000 public-use airports. It is also a prudent move until battery performance improves significantly.
Appeals Court Rejects Los Angeles Noise Review
On Oct. 26, the Ninth Circuit Court of Appeals denied the City of Los Angeles’s claim that FAA must revert to pre-Metroplex departure routes from Burbank Airport (BUR). FAA denied that it has made final changes to departure paths and was not intentionally directing those flights further south (resulting in a flurry of noise complaints). And since there was no “final” determination of FAA departure paths under Metroplex, the court said it lacked jurisdiction to review it.
Honda Plans to Enter the eVTOL Market
Aviation Week reported (October 11-24, 2021 issue) that Honda has announced plans to develop an electric VTOL aircraft. But rather than being all-electric and aimed at air-taxi service, the Honda entry will use hybrid propulsion and be aimed at intercity transportation. The initial concept is a four-passenger aircraft, which strikes me as too small. The current hybrid system has an estimated range of 250 miles. The plan calls for flight tests of a hybrid prototype in 2025 and certification (“if we go ahead”) in 2030.
Propeller Airports Acquires a Fixed-Base Operator
The company that developed and operates the passenger terminal at Paine Field north of Seattle has acquired the FBO at this airport. The addition marks the start of Propeller Aero Services, a subsidiary which will focus on FBO development and operations. The Paine Field FBO was formerly owned by Castle & Cooke.
“All the suppliers of remote towers I talked to for my article in Air Traffic Management magazine (just out) said they do not think any new physical towers will be built. It seems to me FAA and NATCA are falling behind, while Munich may go remote after London City did, NATS wants one for its new runway at Heathrow, and the Scandinavians will run 15 small-to-medium-size airports or more from one remote center. And for a new airport for a ski resort, it is easy to ramp up and ramp down seasonal staffing. I wonder how many more U.S. airports like the two in Colorado and Leesburg that FAA is making slow progress on could benefit from tower services without having the hurdle of building a physical tower? Whatever happened to the U.S. leading the world in aviation?”
—David Hughes, email to Robert Poole in response to FAA news release seeking architectural concepts for new (physical) control towers, Nov. 1, 2021; used with permission.
“Aviation has accepted that it is a global institution; that with limited exceptions, one civil aviation authority should be able to rely on the technical expertise of its peers. The regulatory competence of Australia, Finland, Ireland, Netherlands, Sweden, and the UK are held by the FAA in highest regard. However, the exact same Saab Remote Tower System is being used by these sovereigns [and] the records of these operations are available to the U.S. evaluators. Yet after two years of testing at [Leesburg] it requires another two years of assessment before the FAA will accept it. The Leesburg test is being conducted in the Commonwealth of Virginia, not a foreign country for which the FAA has concerns about its ATC reliability. It would be fascinating to see what more the FAA needs to know!”
—Sandy Murdock, “What Is Taking So Long for the Test of the KJYO Saab Remote Tower Test by the FAA?” JDA Journal, Nov. 14, 2021
“20 years after the first comprehensive official warnings about GPS vulnerability, America has still failed to act. In fact, rather than moving forward, in some areas we have regressed. Instead of being careful to protect GPS frequencies, the Federal Communications Commission has licensed operations that many say will interfere with GPS signals. And rather than improving its ability to detect violations and act against jammers and spoofers, the FCC has reduced staff and equipment. GPS alternative projects within the Department of Defense are still in the science-project stage. The Government Accountability Office reports those efforts don’t have the support of senior leadership and often die on the vine. And despite nearly a dozen studies, a law requiring establishment of a national alternative for GPS timing, and public promises by two administrations to create a backup system, nothing has been done. Worse, a national alternative system used by some telecom and other industries was terminated in 2010 against the recommendation of nearly every engineer and technologist in government.”
—Dana A. Goward, “GPS Lessons from Before 9/11 Still Endanger the U.S.—Nextgov,” Sept. 17, 2021