In this issue:

• The coming eVTOL shakeout
• Airlines and FAA ignored rules after runway incursions
• Unintended consequences of banning fees for family seating
• Airline ancillary fees make sense for airlines and passengers
• Superior landing system in operation in Germany
• Alaska and United diverge on electrification
• News Notes
• Quotable Quotes

The Coming eVTOL Shakeout

This year may see the first stages of winnowing out electric vertical take-off and landing (eVTOL) startup companies. Thoughtful aviation and financial experts are taking a harder look at the large array of would-be advanced aerial mobility (AAM) developers and operators.

For example, the outgoing chief executive officer of Wisk expressed serious concerns to Aviation Daily’s Ben Goldstein (Jan. 31, 2023). “There are going to be a lot of failures this year,” Wisk CEO Gary Gysin told Goldstein. “I’ve already had companies approaching me asking to be bought out because they are running out of money.” And Gysin added that he expects “a more significant batch of failures” in 2024. He noted that with interest rates sharply higher than a year ago, future earnings look a lot less rosy, with stock market valuations having been “pummeled” already.

An aviation acquaintance last November shared with me his comparison of six eVTOL startups with traded shares, contrasting their initial public offering (IPO) price with their then-current price. I have replaced his November 2022 prices with mid-February 2023 prices, as follows:

I can’t offer an explanation for EHang’s increase, but it’s not very relevant to the U.S. market since it is only seeking certification in China.

Aviation Week did a detailed assessment of eVTOL startups, “Reality Check” by Graham Warwick, in its Jan. 30-Feb. 12 issue. Drawing in part on assessments by Sergio Cecutta of SMG Consulting, it included an updated table of leading startups, with each one’s 2023 rank compared with its 2022 assessment. Here are the magazine’s revised rankings.

Many factors are discussed in Warwick’s lengthy article. I have added the number of seats for each eVTOL. From a value proposition perspective, I see little potential in carrying only one or two passengers. Lilium stands out with six, plus a longer range than most, focusing more on inter-city than air-taxi markets. And Beta may have commercial prospects by hauling only cargo. Wisk remains only 10th on the list, in part because its concept is fully autonomous, which is likely to take years longer to certify than piloted eVTOLs.

Another concern is second-ranked Archer’s plan to outsource its air vehicle production to global auto company Stellantis (parent of Jeep and RAM, among other vehicles). Goldstein quoted Savanthi Syth of Raymond James as considering this a “competitive advantage” for Archer. I disagree. There is a huge difference between auto production and aircraft construction, as pointed out by Bill Johnson of Single Seat Consulting.

“[T]he auto industry certainly has the understanding of scale, but they do not understand the safety and specifications that you need for aviation. The difference between them is the amount of tolerance that you have for safety. A car’s engine or systems can fail, and it’s not necessarily an emergency, but in a plane that’s not the case. Basically, the culture and mentality of the mass production of automobiles does not inculcate this idea of very precise and safety consciousness that the aviation industry requires,” Johnson told Aviation Daily.

If I were a market trader, I’d bet on Joby and Beta to do better than most, and also Lilium if it can achieve its inter-city range goals. EHang is irrelevant, and Volocopter and Wisk might be candidates to sell short. These are just my opinions and definitely not intended as recommendations for any actual investors.

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Airlines and FAA Ignored Rules After Two Runway Incursions

In two recent runway incursion incidents, pilots of the involved aircraft failed to comply with Federal Aviation Administration (FAA) rules put in place after an Air Canada A320 on approach to San Francisco International in 2017 nearly landed on a line of aircraft waiting on the adjacent taxiway. The rule calls for planes involved in such incidents not to complete their planned flights immediately to facilitate finding out what cockpit crews and controllers said and did in the minutes leading up to a near-collision. The reason for this rule is that cockpit voice recorders have only two hours of capacity. After that, the device records over the previous information. By going ahead with the flight, the cockpit crew destroys the evidence needed to assess what happened, with the goal of improving aviation safety.

Last month, on Jan. 13, an American 777 taxied in front of a Delta 737 that had begun its take-off roll at John F. Kennedy International Airport. After a safety warning from the airport’s ASDE-X system, the 737’s crew was able to abort its take-off, averting a collision. But soon thereafter, it took off on its planned flight, with its voice recorder proceeding to record over the incident. The same thing happened with the 777, which also went ahead with its planned take-off.

A similar incident happened on Feb. 4, when a Southwest 737 was cleared onto the runway at Austin-Bergstrom while a FedEx 767 was on final approach to that runway in low-visibility conditions (where the runway end was not visible from the control tower). Air traffic control transcripts showed that a controller asked the 737 if they were actually moving, getting the reply, “rolling now.” Fortunately, the FedEx crew realized they might land atop the 737 and made a quick decision to go around. The 737 taxied back to its starting point and made a normal takeoff. Neither plane was required to stand down at Austin-Bergstrom so that the content of their voice recorders could be saved.

“I’m very proud of the FedEx flight crew and that pilot,” Jennifer Homendy, chairwoman of the National Transportation Safety Board, told CNN. “They saved, in my view, 128 people from a potential catastrophe.” Homendy added, “It was very close, and we believe less than 100 feet.”

Aviation Daily (Feb. 7, 2023) reports that overall runway incursions have continued to increase since 2011. FAA defines four categories, of which the most serious is a near-collision such as these two, deemed Category A. While less-severe Category B incursions have increased every year since 2017, Category A incursions fluctuated between three and five per year since 2016, except for zero in 2022. Unfortunately, 2023 has now begun with two such near-disasters.

The National Transportation Safety Board (NTSB) is investigating both incidents and will record its interviews with the cockpit crews. Unfortunately, there will be no data available to judge the accuracy and completeness of what they tell NTSB. I hope its report will fault FAA for not enforcing its own stand-down rule so that cockpit voice recorder data will be saved—at least for near-collisions of airliners—in the future.

Note: For more on this topic, see the Quotable Quote below from Gary Leff.

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Unintended Consequences of Banning Fees for Family Seating
By Marc Scribner

In his State of the Union address to Congress on Feb. 7, President Joe Biden called for prohibiting or otherwise restricting “junk fees,” naming hotel resort fees, event ticket service fees, and cellular carrier transfer fees as specific targets of his ire. He also mentioned airline ancillary fees on seat selection, saying, “And we’ll prohibit airlines from charging up to $50 roundtrip for families just to sit together. Baggage fees are bad enough—they can’t just treat your child like a piece of luggage.”

This call to prohibit certain ancillary fees on airline seat selection earned widespread applause. After all, who could oppose young children sitting with their parents on a plane? While this may have been a an effective use of populist political rhetoric, it raises numerous questions on how such a rule would be implemented in practice and the potential outcomes on the traveling public. As is often the case, this may prove to be better politics than policy.

President Biden called on Congress to ban charges on family seating by passing legislation he calls the Junk Fee Prevention Act. One problem is this bill does not exist beyond the title. No legislative text has been introduced for members of Congress, let alone the public, to review. Perhaps in recognition that President Biden’s hypothetical bill won’t be ready for consideration in the near future, the White House also released a fact sheet on President Biden’s competition agenda. Included was a call for unilateral regulatory action to “[b]an airline fees for family members to sit with young children” by having the U.S. Department of Transportation (DOT) “launch a rulemaking to ban the practice.”

In order to satisfy President Biden’s request, the transportation department would presumably exercise its Section 41712 aviation consumer protection authority to prohibit “unfair” practices and methods of competition granted to it by Congress. Section 41712 powers to police against unfair airline conduct have largely remained the same since Congress first authorized them in 1938, apart from a 1958 amendment that extended the unfair conduct prohibition to include ticket sellers as well as air carriers.

The Department of Transportation’s Section 41712 authority was modeled on language included in 1938 amendments to the Federal Trade Commission Act. However, while DOT’s authority has largely remained the same since then, Congress modernized the Federal Trade Commission’s (FTC) similar Section 45 authority in 1994 to add new standards of proof. Under these standards, for conduct to qualify as legally unfair, it must be (1) “likely to cause substantial injury to consumers,” (2) not “reasonably avoidable by consumers themselves,” and (3) “not outweighed by countervailing benefits to consumers or to competition.”

The FTC’s balancing test for unfair practices reflects case law and internal agency practice developed over several decades. By codifying them, Congress aimed to ensure regulatory quality and consistency in enforcement by explicitly requiring the FTC to carefully consider the business practices alleged to be unfair and weigh them against market factors. When Congress created the Consumer Financial Protection Bureau in the Dodd-Frank Act of 2010, it also included an identical unfairness balancing test (12 U.S.C. § 5531(c)). DOT’s Section 41712 authority is both anomalous and nebulous, and the Office of the Secretary of Transportation in recent years has wielded it to re-regulate airline and ticket agent business practices best left to market competition.

Although current Section 41712 unfairness determinations aren’t subject to FTC-style standards of proof, there are many important questions that ought to be answered before DOT proceeds with a family seating ancillary fee ban.

If DOT required airlines to guarantee family seating in all circumstances, how would this mandate be integrated into airline reservation systems? What would happen if a parent attempted to purchase a ticket shortly before a flight that is already mostly full of fee-paying customers and there aren’t enough seats grouped together? Would the flight be shown as full and no sale be permitted? Could parents consent to not sit next to their minor children in this case in order to take the flight? If not, would parents flying with minor children have access to fewer flights because of this policy? Would customers who have already paid fees to select their particular seats be forcibly moved to seats they did not purchase and refunded those fees?

Ultra-low-cost carriers (ULCCs) with the most-aggressive airfare unbundling business models would bear a disproportionate share of the costs of a mandatory family seating rule. Through their aggressive pricing, ULCCs also exert most of the downward price pressure on average airfares—competitive business practices that allow all air travelers to benefit from lower fares even if they aren’t flying on a ULCC. Would this crackdown on ancillary fees cause average base airfares to rise? If so, by how much?

Perhaps the benefits of guaranteed family seating are worth the costs of higher airfares and fewer flight options for parents traveling with young children. But detailed analysis should be conducted and presented in a transparent manner for all to see. Rather than mandating a questionable policy, if Congress wishes to promote regulatory quality that maximizes consumer welfare, it should amend DOT’s Section 41712 authority to incorporate an FTC-style unfairness balancing test.

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Airline Ancillary Fees Make Sense for Airlines and Passengers

President Biden attacked airline ancillary fees in his State of the Union speech on Feb. 7, calling them “junk fees.” He demanded that airlines show the full price of a ticket, including ancillary fees—even if some of the optional extras get signed up for at the check-in counter, long after the ticket was purchased.

Ancillary fees are optional for air travelers, as is obvious when they apply to checked versus carry-on baggage, alcoholic beverages, and premium seats, if available. They have become a significant part of airline revenue, whether majors, hybrids, low-cost or ultra-low-cost carriers. According to the Department of Transportation’s Bureau of Transportation Statistics, in 1990, 88.5% of U.S. airline revenue was derived from airfares. By 2022, that number had decreased to 72.6%. The growth of ancillary fees has made it possible for airlines to advertise basic fares, expecting that many travelers will opt for some of the optional services.

Ancillary fees have been used most extensively by ULCCs, both here and in Europe. As Aviation Week’s Helen Massy-Beresford noted in an article last fall on ancillary fees in Europe, “Customers, it seems, are willing to pay to make their journeys smoother, with paid-for cabin bags, extra legroom, or assigned seats.”

The article provides examples from European LCCs EasyJet, Ryanair, and Wizz Air. For example, Wizz Air reported ancillary revenue per passenger for a recent period averaged €34.20; EasyJet’s latest was £22.07. (A personal note: I wish U.S. carriers charged for cabin bags, which would likely shift some of them from overhead bins to cargo holds so that those of us who travel light would be assured of overhead bin space.)

FAA may well be concerned because when airlines enable reduced airfares by relying more on ancillary fees, this leads to reduced ticket tax revenue since that tax applies only to the airfare itself. This is a problem that no other country faces. About 80% of FAA’s budget is devoted to the capital and operating costs of the air traffic control (ATC) system, so basically, that tax pays for air traffic control (and the general fund covers safety regulation and a portion of airport grants). In virtually every other country worldwide, the ATC system is paid for by ATC fees, paid by air carriers and business jets according to charging principles promulgated by the International Civil Aviation Organization. So any FAA or congressional gripes about short-changing the Aviation Trust Fund because of ancillary fees is only a problem because the United States is out of step with the rest of the world on how to pay for air traffic control.

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Superior Landing System Operational in Germany

I have often written about the superior performance and economics of Ground-Based Augmentation System (GBAS) landing systems over traditional Instrument Landing System (ILS). The former uses augmented GPS signals to provide precision landing approaches at far lower cost (for multi-runway airports) than ILS. One GBAS installation can handle all the runway ends at a large airport. Think what this would mean for multi-runway airports such as DFW and O’Hare.

The latest news is that the German air navigation service provider (ANSP) DFS, last summer, got the GBAS at Frankfurt Airport certified for higher-precision Category II approaches. This is a big deal because it is the first (and so far only) airport that is now doing Cat. II GBAS approaches. The Frankfurt system allows two different glide slopes, 3 degrees and 3.2 degrees. A flight doing a Cat. II approach at Frankfurt can begin at 10,000 feet altitude. 35 nautical miles from the runway end, performing a continuous descent approach at idle thrust. And the higher slope angle further reduces noise exposure on the ground.

And it gets even better. As discussed in a detailed article in Air Traffic Technology International 2023, (“Realizing the Potential for More Capacity” by Olaf Weber, Oliver Reitenbach, Winfried Dunkeo, and Jascha Runow), during low-visibility conditions when Cat. II approaches are often used, testing and simulation by DFS has shown that runway occupancy time for a Cat. II-landed aircraft is less than for an ILS Cat. II landing due to poor signal transmission in what are called instrument landing system protection zones. Since GBAS is in communication without interruption, the equipped plane can exit the runway sooner. DFS fast-time simulations found that if even 10 to 30% of arriving aircraft are GBAS-capable, there is some runway throughput increase; with 60% of arrivals GBAS equipped, the throughput increases are very significant.

Over 100 airports worldwide have installed GBAS, generally as a supplement to their existing ILS, since the majority of airliners and other aircraft are not fully equipped for GBAS landings. Besides Frankfurt, other equipped European airports include Bremen, Malaga, and Zurich. Notable examples elsewhere include Sydney, Australia and Chennai, India. In the United States, early adopters include Charleston, Houston’s George Bush Intercontinental Airport, Newark Liberty International, and Moses Lake (WA), to be joined soon by San Francisco International, which was approved by FAA last March but is not yet operational.

There is a kind of chicken-and-egg problem inhibiting wider airport GBAS usage. Most airliners are not currently able to interface with GBAS. Although most Airbus and Boeing aircraft being produced today are GPS-capable, unless the airline operating them uses GBAS-equipped airports, the onboard equipment is not enabled. To deal with this problem, a European GBAS Alliance has been organized, with representatives from airlines, airports, ANSPs, IATA, and others to “bridge the gap between on-board and ground systems.” One of its objectives is to get Single European Sky funding to certify GBAS ground systems for even more-precise Cat. III operations.

No such effort is under way in this country, in large part due to FAA indifference. Despite the superior performance and economics of GBAS, FAA does not fund either research or airport equipage with GBAS. The few U.S. airports with functioning GBAS installations have had to pay for it themselves, with United Airlines helping to pay for it at hubs, including Newark, San Francisco and George Bush Intercontinental.

GBAS should have been an integral part of modernizing air traffic management under FAA’s struggling NextGen program. I’ve never seen a coherent FAA answer to the question, “Why not?”

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Alaska and United Diverge on Electrified Aviation

Both Alaska and United plan to electrify their short-haul routes via new and re-powered aircraft, but United also plans eVTOL air taxi services to its larger hub airports.

Alaska is partnering with ZeroAvia in order to retrofit the latter’s liquid-hydrogen fuel cell to power De Havilland Dash 8-400 turboprops. This would be the airline’s first extensive use of electric propulsion. The airline has announced no plans for replacing or re-powering its Embraer E-175 regional jets.

United is investing in the Heart Aerospace 30-passenger hybrid-electric ES-30, with an initial order for 200 and deliveries starting in 2028. They will likely be flown by its regional affiliate, Mesa Air Group. United leadership is also betting heavily on eVTOL air taxis to convey passengers from central cities to their major airport(s). Edward Espiritu, of United’s Ventures and Corporate Development operation, told Aviation Week, “We’re not in it to get cool science projects. We want to invest in commercially viable products and that includes scaling it to an operational level where we can create value and ultimately profitability.”

But with the four-passenger eVTOLs it plans to acquire from Archer and Eve, it’s not clear how large that market will be. It has committed to up to 300 Archer Midnight eVTOLs and up to 400 Eve eVTOLs. Mike Leskinen, head of United Airlines Ventures, envisions competing with UberX for trips between Newark and Manhattan by offering time savings for most of the hour that the trip can take by highway. Leskinen told Aviation Week’s Ben Goldstein, “Tickets may be a bit more expensive at first—we’re thinking business travelers mainly—but we expect it to come down to a price similar to UberX before long.” How an Uber-like fare from between one and four passengers could cover the direct operating costs, landing fees, and annualized acquisition cost is hard to imagine, but it’s not my money.

Electrifying regional turboprops and possibly jets strikes me as far more likely to be commercially viable. As I’ve pointed out before, the huge amount of energy needed for vertical take-off and landing will severely limit most eVTOLs’ range, and their very limited seat capacity will limit their passenger miles per trip. But we’ll see when the best-positioned eVTOLs gain certification and begin carrying paying passengers.

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News Notes

Athens Airport Up for Sale
The Greek government’s asset management fund (HRADF) currently owns 30% of the shares in Athens International Airport. In keeping with the government’s privatization/asset-recycling policy, it has asked HRADF to sell those shares via either an initial public offering or competitive bidding by commercial entities. AviAlliance, owned by PSP Investments, already owns 40% and would have the option to buy another 10% plus one share. Other pre-qualified bidders from an aborted 2019 sale process include Ardian, ADP Group, Ferrovial, Macquarie, and Vinci Airports. The airport served 22.7 million passengers in 2022.

Pacific ANSPs Conduct Trial of Trajectory-Based Operations
The air navigation service providers of Canada, Japan, Singapore, Thailand, and the United States carried out the first multi-region trial of a procedure that coordinates traffic in a performance-based manner, called trajectory-based operations (TBO). Each ANSP developed its own way of implementing TBO and these were modeled in five scenarios involving 10 airports and nine flights traversing selected Flight Information Regions. Aviation Daily reports (Jan. 25, 2023) that the next planned step will be on live flights, for which the time frame is not yet clear.

Newark’s New Terminal A Opens Up Competition
Terminal A, which opened on Jan. 12, is not only larger and better-equipped than the “downtrodden” terminal it replaced, but it also will reduce United Airlines’ dominance of flight activity at Newark Liberty International Airport, Pre-pandemic figure published in Aviation Daily showed United with 51.% of EWR passengers, with American at 6.9%, JetBlue at 6.43%, Spirit at 4.43%, and Delta at 4.21%. The good news is that on opening day Terminal A had 21 common-use gates which Air Canada, American, and JetBlue will use; Delta will be able to expand when the next 12 gates open.

Panama Plans P3 Concessions for Three Regional Airports
Currently, all five of Panama’s commercial airports are run by the Tocumen International Airport Administration (AITSA). Early this month, it announced that it will seek long-term public-private partnerships for three of the airports. The original P3 plan called for concessions for all four of the smaller airports, but after thinking through the use of Panama Pacifico International Airport as an alternative to Tocumen International under certain weather conditions (and its use by low-cost carriers), AITSA will retain control of that airport.

Drone Advisory Group Opposes Drone Toll Lanes
AUVSI, a nonprofit organization focused on autonomous systems, last fall issued a release opposing what it terms a “dangerous trend.” State legislators in Louisiana, Mississippi, Texas, and West Virginia have introduced bills to restrict and tax flights by uncrewed air vehicles. AUVSI calls state bills to allow drone companies to acquire avigation easements from land owners as “the creation of toll lanes in the sky for drones.” This raises an important unresolved question of whether federal or state governments will define and manage low-altitude airspace—and how UAV operators will pay for their use of that airspace.

AENA Invites Financial Partners for Its Brazilian Airports
Last summer, Spanish airport company AENA won an auction for a long-term (30-year) P3 lease to operate, manage, and improve 11 Brazilian airports, paying €736 million as the winning bidder. Inframation reported (on Feb. 6, 2023) that AENA is open to investments by infrastructure funds, pension funds, and sovereign wealth funds in the concession, which is known as the Eleven Airports Block of Brazil (BOAB).

Another Japanese Airport Privatization Candidate
Medium-size Komatsu Airport appears to be close to deciding on following a number of other Japanese airport by opting for a long-term P3 concession. Komatsu handled 1.8 million passengers a year prior to the pandemic, about 14% of them international. The airport has only one runway, which it must share with the Japan Air Self-Defense Force; also, its terminal buildings are 40 years old and “in urgent need of upgrading.” A report on a potential second runway is to be discussed in March, and following that will be a discussion of the airport’s future status.

U.S. Airport Traffic Reached 95% of 2019 Levels in 3Q22
Last month, Fitch Ratings reported its findings on traffic recovery at U.S. airports and toll roads whose bonds it rates. By the third quarter of 2022, the average across all the airport Fitch rates was 95% of the third quarter of 2019. International travel lagged domestic travel recovery, putting hubs such as Los Angeles International, San Francisco International, Dulles International, O’Hare International Airport, and Seattle-Tacoma International all below 90% of 2019 levels. Above average figures were attained by domestic-oriented airports such as Chicago Midway International, LaGuardia, Dallas Love Field, Dallas-Fort Worth, DFW, and Reagan National.

Honduras Gets ADS-B and Multilateration for Newest Airport
For its new international airport serving Honduras’s capital city of Tegucigalpa, the ANSP for six Central American countries—COCESNA—implemented a Frequentis system called Quadrant. It combines ADS-B (via COCESNA’s subscription to Aireon) with wide-angle multilateration (WAM), an alternative to radar. Wide-angle multilateration uses a geographical array of ground stations with minimal maintenance needs. Space-based ADS-B provides quicker updates than radar, but operates only with ADS-B-equipped aircraft. WAM tracks non-cooperative targets as well (akin to primary radar).

Philippines Shifts to Only Partial Privatization at Manila
The long-planned privatization of Ninoy Aquino Airport has been downgraded to just an operations and maintenance contract rather than a long-term P3 concession. A $2.2 billion proposal to modernize the airport, submitted by GMR Infrastructure and Megawide Construction, was rejected by the Philippines government. Terms of reference for the operations and maintenance contract are being prepared.

Boom Breaks Ground on SST Factory
Startup supersonic transport developer Boom Supersonic broke ground for its initial production facility at Piedmont Triangle International Airport in Greensboro, N.C. This development comes prior to Boom’s completion of a flyable prototype or the development of the jet engines the production Mach 1.7 Overture airliner will use.

Delta Brings (Some) Competition to Dallas Love Field
Although it has only one gate at Southwest-dominated DAL, Delta plans to use it more extensively this year than in the past. Starting June 5, it will add twice-daily service to both LGA and LAX. It will also increase the frequency of its daily flights to ATL from DAL. The flights will be operated on Airbus A 310 aircraft with 12 first-class seats, 18 Comfort+ seats, and 102 standard economy seats. Delta is leasing its gate from Alaska Airlines.

Some Well-Informed Perspectives on Autonomous Flight
In a Feb. 3 guest op-ed for the Eno Center for Transportation, NASA-Ames expert Parimal Kopardekar outlines a number of reasons why various aviation automation concepts are being researched and follows this with the challenges each poses to airspace management. This is an excellent primer on the subject and should be read by anyone proposing innovations in this field.

Good Viewing Opportunities

• A brief and very well-done video on the FAA’s NOTAMs debacle was produced by my colleagues in Reason’s journalism division.
• A much longer video is of a recent Commerce Committee hearing about Southwest’s winter problems. The best testimony is from Cliff Winston of Brookings Institution. You can watch it at https://www.commerce.senate.gov/2023/2/executive-session.

Corrections to Last Month’s Issue

• In the article on fledgling U.S. remote tower projects, consultant Bill Payne pointed out that the remote tower project at Leesburg, VA, has received from FAA an “operational viability decision” that allows the remote tower to control traffic without a backup mobile tower (but the RT has still not been officially certified by FAA). The RT project at Loveland, CO, has not yet gotten that far.
• In the article on airline deregulation, the Europoean Union’s 1997 authorization of cabotage rights applied only to EU member states.

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Quotable Quotes

“Aviation watchdog JonNYC notes that there were procedural changes after the [2017] Air Canada near-miss [at SFO], but those changes do not seem to be followed in these two recent incidents. In all cases, the American, Delta, Southwest, and FedEx planes continued to operate. As a result, their cockpit voice recorders—which only capture the most-recent two hours of data—were overwritten. But FAA shouldn’t be allowing this. . . . The FAA’s Air Traffic Organization needs work to avoid situations like these and the FAA—supervising itself—isn’t getting that done. The FAA should not be regulating itself. We need better funding of technology, culture change, and separation of oversight. That doesn’t have to mean ‘privatization.’ The Canadian model is a separate non-profit, but we don’t even have to do that. Just put the Air Traffic Organization into a new separate agency, build the culture [from the] ground up, and do longer-term funding for IT. Have the FAA serve as regulator.”
—Gary Leff, “The FAA’s System for Responding to Air Traffic Control Near-Disasters Is Broken,” View from the Wing, Feb. 7, 2023

“The December travails of Southwest Airlines would be an everyday occurrence if its capital allocation process were as starved and unpredictable as the FAA’s. When Congress appropriates less funding for FAA than is needed to run a full-staffed, safe and efficient operation, FAA has some tools at its disposal, but they can sometimes make the situation even worse. Given a choice between safety and efficiency, FAA will always choose safety, which means they will maximize the funds available for operations. Because FAA cannot, on its own initiative, move funds between its operations budget and the Facilities & Equipment budget, it keeps new systems running out of the F&E budget long after they are fully operational, in order to preserve more funds in the safety-critical operations budget. While definitely the right choice for the airspace system, this practice reduces funds in the F&E budget that Congress and the Office of Management & Budget had really thought would be available for new systems development—like a new NOTAM system.”
—David Grizzle, “The Problems at the FAA Begin Way Outside the FAA,” Aviation Daily, Jan. 25, 2023

“[A] better question than why NOTAM failed might be why the Department of Transportation runs air traffic control in the first place. It is not a public good according to economic theory, and it could easily be provided by the private sector with funding from user fees. Canada adopted a nonprofit, private-sector air traffic control system in 1996 and it has maintained a high level of safety while also modernizing its technology faster than the U.S.—all without costing Canadian taxpayers a penny. One of the biggest problems the FAA faces is having to beg Congress for funding every year rather than having a consistent, user-based revenue stream. . . . Privatization proposals have bounced around for decades and include a 2017 House bill, which received bipartisan support, to create an equivalent to the Canadian system. It’s time to clear the runway for this idea.”
—“The Week,” National Review, Feb. 6, 2023

“Extensive research by ACI World and InterVISTAS has demonstrated the critical need to modernize global policy frameworks on airport charges towards ones that incentivize sustainability, efficiency, investment in infrastructure, and that generate a multiplier of socio-economic benefits and connectivity. In consideration of the changed competitive landscape, it is critical that airport charging policies be focused on market needs and signals, and that the best way forward for the benefit of the traveling public and local communities, is through commercial agreements between airports and airlines.”
—Luis Felipe de Oliveira, ACI World, “Building on the Successes of 2022,” International Airport Review, Dec. 2022

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The post Aviation Policy News: Airlines and FAA ignored rules after near misses on runways, junk fees in Congress, and more appeared first on Reason Foundation.

• FAA’s NOTAMs debacle
• Why doesn’t FAA’s new control tower plan include remote towers?
• Fixing the Air Traffic Organization’s culture
• Defending and building upon airline deregulation
• Should the government mandate larger airliner seats?
• News Notes
• Quotable Quotes

FAA’s NOTAMs Debacle

On Jan. 11, I was one of the hundreds of thousands of air travelers affected by the Federal Aviation Administration’s (FAA) nearly two-hour ground stop, which led to more than 11,000 flights being cancelled or delayed. The cause was a failure in FAA’s Notice to Air Missions (NOTAM) system. The direct cause was the insertion of corrupt data during an update of the system the previous day. But the underlying cause is an obsolete and dysfunctional system that should have been rethought and replaced decades ago.

Our Notice to Air Missions system is part of an international system (called AFTN), because aviation is international. It is supposed to notify pilots, dispatchers, and others about potential safety hazards at airports and along airways relevant to a planned flight. The international version began in 1920, and the format has remained mostly unchanged since 1924. The world shifted to ASCII (upper and lower case type) in 1963, but the FAA continues to use the teletype-era all-caps format.

The major problem with NOTAMs is information overload. At any given time, FAA NOTAMs may consist of 30-to-100 pages of all-caps text, with no prioritization of what might be a serious hazard and nothing highlighted for a particular air route (e.g., Ronald Reagan Washington National Airport to Miami International). According to an aviation group called OpsGroup, the number of NOTAMs reached 500,000 in 2006 but doubled to one million NOTAMs seven years later, as FAA and other agencies continued to add notifications of things like construction cranes that are far from runways and birds congregating at or near airports. The mindset seems to be, ‘We’d better include it, in case something bad happens, and we get blamed.’

In an online aviation discussion group that I’ve been a member of for several decades, pilots and other professionals offered many critiques of NOTAMs following the ground stop. One airline pilot pointed out that the airline dispatcher’s flight plan for a specific flight extracts for the cockpit crew the departure, arrival, and alternate airports for a specific flight, and arranges the airports’ NOTAM information in flight order, but the all-caps information for each airport is a mish-mash of everything someone could think of that might be relevant, with hazard locations indicated by latitude and longitude, loads of cryptic abbreviations, and no emphasis on what might actually be important. “Hence, flight crews can spend a long time sifting through irrelevant trivia about there being a 150-foot crane a mile from the airport, or the MDA [Minimum Descent Altitude] for a particular [visual] approach on an ILS runway being adjusted from 420 ft. to 425 ft.,” the pilot wrote on the message board.

The most startling thing I found in these discussions is that the ground stop was basically unnecessary. To quote the same pilot, “Most of the active NOTAMs will have been issued days or even weeks before, so the pilots could actually have been given the previous day’s NOTAMs and just been updated with any new stuff on that day.”

In subsequent online discussions, estimates of the number of flights that could have proceeded had this decision been made ranged from 80% to 99% of that morning’s flights.

FAA’s NOTAM system is a disgrace, yet there is no announced plan to replace its obsolete computers, its ancient all-caps type, and its failure to highlight relevant safety hazards. The agency’s 2015 “FAA Resiliency Assessment Report” listed 32 air traffic control-related systems that needed change to ensure their resiliency; NOTAM was not included.  In a Jan. 12 Reuters article, David Shepardson noted, “FAA has been trying to modernize the Notices to Air Mission (NOTAM) system,” but so far, the only tangible result has been changing its name to replace “Air Men” with “Air Missions.” That says something about FAA priorities.

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Why Doesn’t FAA’s New Control Tower Plan Include Remote/Digital Towers?

The winter issue of Managing the Skies, the magazine of the FAA Managers Association, includes a lengthy article on the extra money Congress allocated to the Federal Aviation Administration (FAA) via the Infrastructure Investment & Jobs Act (also often referred to as the bipartisan infrastructure law). One section of the article, “Building a New Generation of Towers,” describes FAA’s plan to replace 30 smaller control towers by 2030. It discusses the agency’s recently launched Sustainable Tower Design Initiative intended to “tap innovative minds in private industry and academia…for new approaches both to design and to rapid construction.”

The article recounts an early 1960s effort that tapped major architectural firms to develop ever-grander monuments. Alas, there is not a word in this article about remote/digital towers, and this concept is also absent from FAA’s description of the program.

Remote/digital towers are certified and in operation in half a dozen European countries. They dispense with towering buildings in favor of using an array of cameras and other sensors at various locations at an airport to feed panoramic displays in a control room either on the surface or securely underground. These facilities cost a lot less to build and maintain. They also provide better performance, for example, with infrared cameras that can see approaching aircraft through low clouds, fog, and rain. They can also electronically tag aircraft viewed on the panoramic screens, and do many other things better than 20th-century “towers.”

For replacing 30 towers at smaller airports, another possibility for low-activity airports is to control several such airports from a single remote tower center (RTC). Such RTCs are certified and in operation in Germany, Norway, and Sweden and are under development in several other European countries. Whether at single airports or for groups of several, installing digital/remote towers would be faster and less costly than constructing new 20th-century towers.

Although Congress in 2018 authorized FAA to start implementing remote towers, no such projects are under way. Two state-funded remote towers have been built and are in partial operation in Leesburg, VA, and Loveland, CO. These projects began in 2015 and 2014 and have been ready for full operation for years—but are still not FAA-certified. The agency has cooperated with the project developers and has loaned some controllers, but the endless delays in certification are beyond comprehension.

Last summer, at the U.S Contract Tower Association meeting, FAA Air Traffic Organization’s (ATO) Jeffrey Vincent told attendees that “remote/digital towers are the future.” At that time, he was ATO’s Vice President for Air Traffic Services. Recently, he was shifted to being executive director of ATO’s Drone Integration Office. The “30 by 30” program would appear to be a good fit for remote/digital towers. It would be more credible if FAA finally certified the remote/digital towers at Leesburg and Loveland. And it might help if Congress, in the 2023 FAA reauthorization bill, imposed a date after which FAA could no longer build towering edifices.

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Fixing the Air Traffic Organization’s Culture

The Notice to Air Missions (NOTAMs) fiasco and the Federal Aviation Administration’s (FAA) continued failure to embrace remote/digital towers are examples of a serious organizational problem. Congress created the Air Traffic Organization (ATO) in 2000, hoping that instead of being a cautious bureaucracy, it would become a “performance-based organization,” operating more like a Silicon Valley tech company to produce the world’s best, most-advanced air traffic control (ATC) system. As two decades of Government Accountability Office (GAO) and Department of Transportation (DOT) Inspector General reports have since documented, U.S. air traffic control has not been transformed. Other developed countries have pioneered remote towers, electronic flight strips, space-based ADS-B surveillance, and much more.

In 2012 the Hudson Institute commissioned me to do a peer-reviewed study of innovation within the FAA’s air traffic control system. My 54-page report was published by Hudson in Jan. 2014 (and is also available on the Reason Foundation website).

In the report, I examined seven case studies of air traffic control innovations (including controller-pilot data link, GPS landing systems, space-based ADS-B surveillance, and remote towers). In each of the seven cases, these innovations were developed and implemented sooner in other countries than in the United States (and some have still not been implemented here).

The report next offered several hypotheses to explain this difference in performance, noting that the peer countries that innovated faster and better had all separated their ATC function from their transportation agency and aviation safety regulator. The hypotheses were the following:

ATO identity as a safety agency, rather than a technology service provider. The hypothesis was that being embedded in a safety regulatory agency, rather than being regulated by it at arm’s length (as all the other aviation participants are) created an overly cautious organizational culture that is slow to implement innovation.

Loss of technical expertise. FAA engineers and software people are paid per standard federal general schedule pay categories, and work in what is, in fact, a very large bureaucracy. It is hardly surprising that many of the best and brightest can (and do) find greater satisfaction and higher pay by transitioning to private industry. This ends up putting the ATO at a disadvantage in dealing with large aerospace contractors, who sometimes design and develop more elaborate and expensive ways of meeting the ATO’s requirements.

Loss of managerial expertise. Despite Congress mandating “procurement reform,” the ATO’s procurement record features many projects that go far over budget and whose delivery extends over many years. As with engineers, the same differences in compensation and working environment lead to the best program managers being hired away by aerospace companies.

Excessive oversight. In conversations with individuals who previously served as ATO chief operating officer, I was often regaled with their frustration of having to pay attention to too many overseers: the Secretary of Transportation, the FAA Administrator, the Inspector General, GAO, Congress’s authorizing committees, Congress’s budget committees, etc. This problem applies to FAA itself as well as the ATO.

The assembled peer reviewers, all with considerable aviation and government experience, judged all four of these causes as significant, and they were generally positive about the reforms that I proposed. They were:

1. Separate the ATO from FAA, putting ATO at arm’s length from the safety regulator, as is now the case in nearly all first-world countries, and has been International Civil Aviation Organization (ICAO) policy since 2001. The potential for organizational culture change would be greater if the new ATO were located somewhere other than in the FAA building—perhaps across the Potomac in a Virginia suburb.
2. Shift from aviation user taxes to direct funding, similar to airports charging landing fees, rents, etc. This would be analogous to other federal entities that provide services to customers, such as the huge electric utility Tennessee Valley Authority. With its own revenue stream, the new ATO could issue long-term revenue bonds, like airports and electric utilities do, so that large capital modernizations could be financed up-front, rather than being paid for out of annual cash flow, which leads to very long periods to get improvements implemented systemwide.
3. Change the governance model. Whether new ATO would be structured as a government corporation (as proposed by the Clinton administration) or a nonprofit federally chartered corporation is a decision to be debated. Both models exist in high-performance air navigation service providers overseas.

These changes are not an all-or-nothing proposition. In a 2010 article in The Journal of Air Traffic Control, former FAA Administrator Langhorne Bond and I made a stand-alone case for simply separating the ATO from FAA, making the ATO a separate federal entity, located outside Washington, DC, regulated at arm’s length by FAA (as it regulates airports, airlines, etc.). We argued that “a separate ATO would be in a much stronger position to advocate for timely implementation [of new technology] and to carry this out in a timely and cost-effective manner.”

In other words, we think separation has a good chance of leading to a more businesslike organizational culture, consistent with the new ATO becoming a high-tech service business serving aviation customers. That paper, with slight updating, was posted on the Reason Foundation website.

This is not a call to revisit air traffic control corporatization, as was debated in 2017-18 and which failed to get beyond the House Transportation & Infrastructure Committee. The coalition that backed the bill no longer exists and shows no signs of being rebuilt. Moreover, someone inserted in the huge year-end budget omnibus bill a sentence saying, “The agreement does not support any efforts to transfer the FAA’s air traffic functions to a not-for-profit, independent, private corporation.”

But as Bond and I argued in the above paper, arm’s-length separation between FAA and the ATO would remove a potential conflict of interest (self-regulation of ATC safety), be consistent with ICAO policy and global practice, and at least offer the possibility of leading to a more entrepreneurial organizational culture. That would be a meaningful reform to include in this year’s FAA reauthorization.

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Defending and Building Upon Airline Deregulation
By Marc Scribner

FAA’s NOTAM system failure (discussed in detail in this issue’s lead article) has prompted a variety of responses, many of which misapprehend the problems faced by the aviation system and would be counterproductive if implemented. One example was an op-ed published in The New York Times by William J. McGee, a former longtime travel reviewer at Consumer Reports who is now employed by the American Economic Liberties Project, a progressive advocacy organization focused on discarding the consumer welfare standard as the lodestar of U.S. competition policy.

McGee argues that the Airline Deregulation Act of 1978 was a mistake and that the U.S. should return to something closer to the pre-deregulation environment, when interstate air travel was operated as a government-controlled cartel. This runs counter to the evidence on airline deregulation, but McGee is right to suggest that Congress should consider new reforms to improve air travel. However, contra McGee, Americans would be far better served by preserving the gains of the Airline Deregulation Act while also extending deregulation to recognize the global nature of the industry in the 21st century.

In the early 20th century, U.S. aviation policy largely focused on the carriage of mail for the Post Office. After the Postmaster General attempted to cartelize air mail providers in the early 1930s, the resulting national scandal led to a revamp of aviation regulation. This culminated with the Civil Aeronautics Act of 1938, which authorized the regulation of airfares, routing, mail rates, and safety. Soon after, regulators grandfathered the existing 23 carriers into the system, establishing and enforcing a new cartel of long- and medium-haul interstate trunk carriers that were shielded from market entry and price competition.

But the federal cartel did not apply to intrastate air travel. In 1949, Kenny Friedkin founded Pacific Southwest Airlines (PSA) to operate exclusively within California as a charter carrier. Since PSA did not operate across state lines, it was exempt from the heavy-handed economic regulation of the federal Civil Aeronautics Board (CAB) and instead operated under the authority of the more-lenient California Public Utilities Commission.

This exercise in regulatory arbitrage led to PSA becoming the first scheduled low-cost carrier. By the 1950s, PSA was offering airfares between Burbank and San Francisco for roughly $10, or approximately $100 in today’s dollars. For comparison, the airfares between Boston and Washington, which were about the same distance apart but served only by CAB-regulated trunk carriers, were more than twice as expensive as PSA’s fares. Friedkin’s success with PSA inspired Herb Kelleher to cofound Southwest Airlines in 1966 as a PSA-style intrastate carrier in Texas.

But it wasn’t just would-be regional carrier entrepreneurs taking notice of PSA’s low-cost model. Academic researchers were growing increasingly concerned that federal economic regulation’s focus on protecting incumbent trunkline carriers from competition was harming the welfare of American consumers.

One of those academics was future Supreme Court Justice Stephen Breyer, then a young Harvard Law School professor, who was hired by Sen. Edward Kennedy to advise his Judiciary Committee on airline competition and regulation. Another academic, economist Alfred Kahn of Cornell University, was appointed by President Jimmy Carter to chair the CAB in 1977. Kahn is widely known as the “father of airline deregulation” for leading the Carter administration’s role in developing the Airline Deregulation Act of 1978, which ultimately abolished the CAB that he chaired at the time.

The results of the Airline Deregulation Act have greatly benefited U.S. air travelers. Inflation-adjusted average domestic airfares fell 47% between 1978 and 2022, while passenger volumes tripled, rising more than four times faster than population growth. About 50% of scheduled interstate flights are now operated by what remains of the legacy trunk carriers, down from 100% in the pre-deregulation years. The rest are primarily operated by low-cost and ultra-low-cost carriers, which now put most of the downward pressure on airfares through aggressive price competition and route entry that was outlawed prior to the Airline Deregulation Act.

While less competition and higher prices would result from McGee’s prescription, a better approach would be to build on the success of airline deregulation by extending it to foreign carriers. The European Union fully authorized cabotage rights—the operation of domestic routes by foreign-flagged carriers—in 1997. The explosive growth of low-cost carriers such as Ryanair and EasyJet followed the European Union’s liberalization policies, and European air travelers now enjoy far greater access to popular destinations at much lower prices. Freeing the U.S. airline market to evolve to its global potential would likely generate significant benefits for travelers. But for this to occur, policymakers must correctly identify existing barriers to competition rather than resurrecting barriers from the past.

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Should the Government Mandate Larger Airline Seats?

In the 2018 FAA reauthorization act, Congress required the Federal Aviation Administration (FAA) to “issue regulations that establish minimum dimensions for passenger seats . . . including minimums for seat pitch, width, and length that are necessary for the safety of passengers.” FAA has not issued such regulations, based on its contention that no connection between seat size and emergency evacuation has been demonstrated. But with ongoing litigation over this by FlyersRights.org, the agency is seeking comments on standards for emergency evacuations.

Having grown up in an airline family, I recall hearing about airline employees being recruited for evacuation tests. In those days, the requirements for those tests were less stringent than today’s—there were no requirements for balanced demographics, for example. Today’s Part 25 (of Federal Air Regulations) spells out age and sex requirements, requires dolls to be used to simulate infants, forbids using certain categories of airline employees from playing the part of passengers, and includes requirements such as that only half the available exits may be used and using only onboard emergency lighting.

Yet there will always be problems with such evacuation tests. Those taking part know why they are there (hence, are unlikely to panic), know they will have to jump feet-first into a chute, will not have carry-on bags to worry about (or try to bring with them). The requirement is to evacuate the entire flight in 90 seconds, and somehow the tests seem to show that this is being accomplished in not-totally realistic tests.

There is less empirical data on this subject than we’d like. Back in 1993, the (now-defunct) federal Office of Technology Assessment (OTA) released a background paper, “Aircraft Evacuation Testing: Research and Technology Issues.” The report noted that evacuation tests are costly and “expose participants to significant hazards,” including injuries. They also simulate “only a narrow range of emergency conditions.” Also, the evacuation demonstration criteria “are inflexible, regardless of technologies that could extend the period of survivability within the cabin.”

A significant problem OTA pointed out is that human behavior in an actual emergency situation “cannot yet be reliably simulated,” and then-emerging dynamic simulations would need to be validated via psychological data that “will be difficult to obtain.” The report also noted that survivability is improving, thanks to highly fire-resistant materials and more crashworthy seats, restraints, and overhead bins.

Adding to the pressure for change, Sen. Tammy Duckworth (D-IL) plans to introduce a provision in the forthcoming FAA reauthorization bill to revamp evacuation standards to include disabled passengers, the hearing-impaired, the young and the old, and non-English speakers. A Politico report on this effort noted that a 2019 FAA Civil Aerospace Medical Institute study found that current seat dimensions had no impact on evacuations for 99% of able-bodied Americans. But the evacuation tests on which that conclusion was based included only able-bodied adults 18 to 64—no children, older people, or disabled people.

Yet carrying out realistic evacuation tests involving children, the very elderly, and people in wheelchairs raises serious ethical and safety questions. Yet without data, any new policies will be based on good intentions and impose large costs on airlines, which will ultimately be paid for via fare increases.

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News Notes

Skycraft Plans Space-Based ADS-B Service
A Canberra-based company, Skycraft, has reached an agreement with Airservices Australia to launch and operate a 200-satellite constellation to improve ADS-B coverage in Australia and its oceanic airspace. The first satellites are scheduled for launch this month via a SpaceX Falcon 9 launch vehicle from Cape Canaveral. The service will include controller-pilot communications in addition to ADS-B surveillance. Skycraft is the first competitor to the pioneer of space-based ADS-B, U.S.-based Aireon.

FAA Issues Airworthiness Criteria for Archer’s eVTOL
On Dec. 19, FAA issued the airworthiness criteria that Archer Aviation’s eVTOL air taxi must meet in order to operate. The company said it hopes to win that certification by late 2024. Archer’s prototype achieved its first transition from vertical to forward flight on Nov. 29. In addition to airworthiness, Archer will also need certification of its manufacturing, which it plans to carry out via auto company Stellantis, which has never built an aircraft.

Two Airport P3 Wins for Turkey’s TAV Airports
TAV, partly owned by Aeroports de Paris, has won a 25-year extension of its concession to operate Ankara’s Esenboga International Airport. The new concession will expire in 2050. TAV has agreed to invest €300 million to add a new runway, control tower, and cargo facilities. The airport served 7.9 million passengers in 2021’s first 11 months. Earlier this year, a consortium led by TAV reached financial close on the new Antalya Airport concession.

Major New Airport Opens in India
Early this month India’s newest greenfield airport opened. New Goa Airport (GOX) has an initial capacity of 4.4 million passengers; its ultimate capacity after several planned expansions will be 13.1 million passengers. It has been financed and developed under a 40-year P3 concession by GMR Group. Three Indian airlines are scheduled to begin service at GOX this month. Goa is one of the largest tourist destinations in India.

Bidders Lining Up for Paris Region Airport Concession
Inframation reported (Jan. 5) that major airport companies Vinci, Eiffage, Egis, and Bouygues are among those considering bids on Paris Beauvais Airport. The 30-year P3 concession has an estimated value of €4 billion. The airport served 4.6 million passengers in 2022. The current 15-year concession expires in June, and the RFP is to be released in February. Beauvais Airport is 80 km north of Paris, and was France’s 10th busiest airport in 2019.

Digital Towers and UTM Partnership Announced
In December, remote/digital tower pioneer Saab and UTM pioneer Altitude Angel announced a joint venture. Saab will integrate Altitude Angel’s Guardian UTM services into Saab’s r-TWR next-generation digital tower. Richard Ellis of Altitude Angel told Air Traffic Management that via the partnership, “Saab will be able to provide Digital Towers which are equipped and ready for our future skies, as the use of drones increases and Urban Air Mobility through eVTOL aircraft becomes a day-to-day occurrence.”

Airbus Plans High-Altitude 5G Service
Rural areas may have an alternative to costly 5G cell towers if Airbus succeeds in offering such service via high-altitude solar-powered aircraft. The vehicle called Zephyr is designed to stay aloft for months at altitudes in the 60,000 ft. range, electrically powered via solar cells. The company’s three prototypes have had several years of high-altitude testing, with the longest duration being 64 days. The concept is called high-altitude pseudo-satellite (HAPS), and Airbus is one of a number of would-be providers. Airbus’s  Samer Halawi told Aviation Week that providing 4G/5G service in rural Mexico would cost less than half as much as using (currently non-existent) cell towers.

Joby Completes Second FAA Review
Last month Joby Aviation completed the second of four FAA system reviews for its S4 eVTOL. This “system review” is aimed at evaluating the “overall architecture of the aircraft and ensure the company’s development process is on track to satisfy FAA’s safety objectives associated with complex aircraft systems.” Joby aims to certify the S4 by late 2024. Since Joby will be manufacturing the S4 itself, its manufacturing system must be certified, in addition to the S4’s airworthiness.

Boom Selects Custom Team to Develop Supersonic Engine
In a surprise December announcement, Boom Supersonic announced that the engines to power its Mach 1.7 aircraft will be designed by Florida Turbine Technologies, a relatively new company formed by former Pratt & Whitney engineers. Manufacturing will be done by GE Additive division of GE Aerospace, while maintenance, repair, and overhaul will be done by Standard Aero, which handles those tasks for military F110 supersonic jet engines. The first flight is now estimated at 2026, with Boom aiming for FAA certification in 2029.

Graves Undecided on User Fees for New Entrants
In a Dec. 14 interview with Politico, Rep. Garret Graves (R-LA), who will chair the House Transportation Committee’s Aviation Subcommittee, expressed uncertainty about including some kind of user fee requirement for new users of the airspace, such as drones, eVTOLs, very high altitude aircraft, and space launch and recovery. While agreeing on the subject’s importance, Graves said he is “absolutely not ready” to commit to any specifics prior to discussions with tax-writing committees and subject-matter experts.

Virgin Islands Plans Airport P3s
The U.S. Virgin Islands Port Authority (VIPA) has released a Request for Qualifications for a P3 concession to modernize and operate its airports on St. Thomas and St. Croix, which it describes as having “outdated facilities and unpleasant conditions” in their terminals. Qualifications from potential bidders are due March 16, and VIPA hopes to issue an RFP to a short-list of best-qualified teams by mid-March and a preferred team selected by Jan. 2024. Operators must have experience with airports handling at least 1 million annual passengers.

Bidders Lining Up for Greek Regional Airport
Four teams have submitted expressions of interest for a P3 concession to develop and operate Kalamata International Airport, the first of 23 regional airports to be concessioned. The four teams are headed by Aeroports de la Cote d’Azur, Fraport, GMR Airports, and Corporacion America Airports. Kalamata served 341,000 passengers in 2019, mostly from abroad.

Raytheon Testing Hybrid-Electric Propulsion
For planned testing of hybrid-electric propulsion in a converted DeHavilland Dash 8-100 turboprop airliner, Raytheon has begun ground-testing of its integrated power train. It consists of a one-megawatt electric motor and a Pratt & Whitney turbine powerplant adapted for hybrid operations. While these ground tests are going on, another alternative has begun flight testing at Moses Lake, WA. Universal Hydrogen has installed a one-megawatt powertrain driven by a hydrogen fuel cell, powering a Dash 8-300 aircraft.

London City Airport Seeking OK for Nine Million Passengers
Privately owned London City Airport has asked the United Kingdom’s government for an increase in its annual passenger cap from 6.5 million to 9 million. Final passenger numbers for 2022 are expected to be 3 million, with projected traffic back to pre-pandemic five million by 2024. It could exceed its current 6.5 million cap by the mid-2020s and hit nine million by 2031. Based on survey data from local stakeholders, London City will minimize early morning and late evening flights.

Brisbane Considering a Third Terminal
Australia’s Brisbane Airport Corporation (BAC) is discussing the addition of a third terminal with its airline customers. The airport handled 23 million passengers in 2019, and its projections show 50 million by 2040. BAC is anticipating the 2032 Summer Olympics to be held in Brisbane. Current plans call for investing $3.3 billion to upgrade its two existing terminals over the next decade, but BAC expects the third terminal will be needed to properly handle 2032 traffic.

Commercial Space Video
My colleagues at Reason TV interviewed me about my recent Reason article contrasting NASA’s method of operation and that of the emerging commercial space launch industry. They produced an excellent documentary, released around the time of NASA’s Artemis 1 launch. You can watch it on Reason TV or on its YouTube channel.

Correction to Last Month’s Article in FAMs
In the Dec. 2022 issue’s article about TSA’s Federal Air Marshals, I erred in stating that the United States and Israel are the only two countries with a program of armed guards on some commercial aviation flights. Reader Tom Windmuller emailed to inform me that Turkey also operates such a program, of which I was not aware.

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Quotable Quotes

“[T]here’s no question in my mind that the ATC system is antiquated and is not taking advantage of new technology. To quote Peter DeFazio, this whole ‘NextGen’ in many cases, we’re implementing technologies from the ‘90s, and Peter calls it ‘NeverGen.’ It’s [about] having a more agile system because technology is just going to move even faster. So how do we have a system in place in regard to training, in regard to procurement, in regard to testing, to where we can continue to take advantage of newer technologies and more-efficient systems.”
—Rep. Garret Graves (R-LA), in Oriana Pawlyk, “Politico Pro Q&A: Rep. Garret Graves, ranking member, House Transportation Aviation Subcommittee,” Politico Pro Transportation, Dec. 26, 2022

“The market for 30-seat aircraft is going to be a magnitude higher than the market for 19-seat aircraft. There’s just a lot more utility—and given the constraints that airports are going to face with growing demand—a lot more appetite for 30-seat aircraft. You can fly a lot more routes profitably, and so we were more than advocates—we were insistent that the move up to 30 seats [by Heart Aerospace] was the right decision. Once we laid out the logic to Anders [Forslund] and his team at Heart, they were all in.”
—Mike Leskinen, United Airlines VP, Corporate Development, in Ben Goldstein, “United Exec Hints at Stretched Heart ES-30 Variants,” Aviation Daily, Dec. 23, 2022

“Why address this question [airline ownership and control] via ICAO at all? This is a question for like-minded states and groups of states. In 2009 IATA launched its Agenda for Freedom, as a platform for like-minded states to mutually exchange waivers of the requirements. This was fully supported by the European Union, as well as 10 states, including, interestingly, the USA. Those were different times. The USA has been the go-to stop-the-conversation-stone-dead answer whenever this issue has been considered in the past. This was on the back of an unholy alliance of engineers and pilots who saw their jobs disappearing, on the one hand, and the military on the other, which argues that they need the right to requisition [U.S.] aircraft capacity at any time to move troops.”
—Andrew Charlton, “Who Owns Ownership and Control?” Aviation Intelligence Reporter, Nov. 2022

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The post Aviation Policy News: FAA’s debacle, new air traffic control tower plan, and more appeared first on Reason Foundation.

• Electric hybrids—an overlooked market?
• FAA’s eVTOL regulatory framework takes shape
• New propaganda from Federal Air Marshals
• J.D. Power annual airport ratings
• A possible breakthrough in sustainable aviation fuel
• Does aviation face a “climate crisis”?
• News Notes
• Quotable Quotes

Electric Hybrids—An Overlooked Market?

I continue to puzzle over the hype about tiny electric vertical take-off and landing aircraft (eVTOLs) as the coming revolution in aviation. To be sure, the idea is cool, and it increasingly appears to be technically feasible. All-electric means no vehicle emissions (despite the carbon footprint of battery production and disposal). And eVTOLs seem likely to be far quieter than helicopters, whose market they will likely challenge.

But as I’ve written previously in this newsletter, we have yet to see a business model that justifies the mass production of four-passenger commercial air vehicles just because the technology works. Consider these shortcomings—Four passengers mean very few fares, even at 100% load factor, from which to recover capital and operating costs. Short range, in most cases, is also a serious limitation for cost recovery (10-mile trips versus 300-mile trips). And insisting on vertical take-off and landing uses a huge amount of energy that might be better used for much greater range.

These considerations lead me to think there’s likely more of a market niche in larger aircraft (19 passengers and up) with longer range (at least several hundred miles) to fill a very real emerging need: short/medium-haul regional air service. While today’s batteries cannot meet those requirements, a hybrid conventional take-off/landing concept appears to be quite feasible. Here are brief profiles of companies pursuing such aircraft.

Ampaire is a start-up that last month flew a nine-passenger Cessna Caravan that it converted to hybrid-electric propulsion. The company hopes to get Federal Aviation Administration (FAA) certification for its Eco Caravan in 2024. Ampaire Chief Executive Officer Kevin Noertker pointed out to Aviation Week’s Graham Warwick that most airports don’t have electric charging infrastructure and won’t have it for some time. So hybrid electric is the way to begin the decarbonization of aviation. He says the hybrid design (diesel plus battery/motor) reduces fuel consumption and emissions by 50%-70%. And the maximum range of the aircraft is beyond 1,000 nm.

Making its first flight in September was the all-electric Alice prototype developed by startup company Eviation. It has been designed for low drag and is powered by two Magni650 electric propulsion units driving two aft-mounted propellors. It is can carry nine passengers and has a range of 440 nautical miles. That’s dramatically higher than any of the four-passenger eVTOLs, suggesting the very large difference in capacity and range enabled by foregoing vertical takeoff and landing. Eviation is aiming for 2024 certification. Like Ampaire’s plane, it can use normal aircraft certification thanks to not employing powered vertical lift.

Nine passengers are better than four, but for short/medium regional service—the niche that very definitely needs filling—30 passengers would be far more important. This brings me to the Swedish startup Heart Aerospace. Its clean-sheet-design ES-30 electric aircraft is configured for 30 passengers. With its 5.5 metric ton battery pack, its range is 200 kilometers (124 miles). But with the addition of a range-extender consisting of two turbogenerators, it can fly 248 miles with 30 passengers or 497 miles with 25 passengers. Unlike smaller hybrids, the ES-30 is pressurized and has three-abreast seating, a galley and lavatory, and overhead bins. Heart has had serious discussions with United and Mesa, both of which have invested in it, as have Air Canada and Saab.

At least three U.S. airlines have invested in hydrogen-electric developer ZeroAvia: Alaska, American, and United. ZeroAvia is developing hydrogen fuel cell powertrains to replace the conventional engines of turboprop and regional jet aircraft in the 50 to 80-passenger range. The company plans test-flying the system on aircraft such as the Dornier Do 228, Cessna Caravan, and DeHavilland Twin Otter. It is aiming for certification by the late 2020s. At this point, hydrogen fuel cells are a technically riskier proposition than hybrid-electric aircraft.

Were I wealthy enough to be an angel investor, I’d be far more disposed to put my money into companies developing hybrid electric aircraft serving regional airline markets than into eVTOLs serving yet-to-be-invented markets.

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FAA’s eVTOL Regulatory Framework Takes Shape
By Marc Scribner

Emerging electric vertical take-off and landing (eVTOL) developers have set ambitious deployment timelines, such as Joby Aviation’s target service launch in 2024. But as with other new entrants, FAA’s rules governing conventional aviation need to be modernized for these novel aircraft types to be integrated into the National Airspace System. While full airspace integration will likely take many years, FAA has recently begun the process that may allow it to meet the eVTOL industry’s aggressive timelines.

Developers of eVTOL aircraft promise to combine the versatility of helicopters with affordability and lower noise profiles, which would allow them to compete with conventional surface transportation options. Joby, a leading developer in the eVTOL and advanced air mobility (AAM) industries, has conducted acoustic flight testing with NASA. A May 2022 NASA study found that Joby’s eVTOL prototype emitted noise profiles during takeoff, cruising, and landing far below today’s acceptable cityscape sounds, and at cruising would likely be imperceptible against urban background noise. As for affordability, Joby and competitor Wisk Aero are targeting a ticket price of $3 per passenger-mile, which would put eVTOL AAM service within striking distance of Uber’s pricing for conventional surface street ride-hailing and with much shorter trip times.

That said, there are numerous technical and business challenges that must be addressed before an optimistic AAM scenario can become reality. And aside from these, a regulatory and air traffic management framework must exist to allow for eVTOL deployment at scale, accounting for both the airworthiness of the aircraft and business operations.

The first step is aircraft airworthiness certification. Last month, FAA issued a notice of proposed airworthiness criteria for Joby’s JAS4-1 eVTOL aircraft. The JAS4-1 would be operated with a single pilot onboard under visual flight rules. If FAA’s proposal is finalized quickly, it may enable Joby and others to meet their near-term deployment targets. While some in the industry had previously raised concerns about FAA’s decision to base initial eVTOL airworthiness certification on Part 21.17(b) Special Class rules that do not readily comport with international standards, past skeptics seem to have been won over by FAA’s approach of building on these early type-specific eVTOL airworthiness criteria toward generally applicable Part 23 Normal Category certification standards.

Following airworthiness certification, FAA must separately certify eVTOL operations. One of the biggest regulatory hurdles for eVTOL developers hoping to operate commercial AAM services was FAA’s existing Part 135 air carrier and operator regulations, which did not allow for the certification of powered-lift operations like those provided by eVTOL aircraft. Fortunately, FAA earlier this month published a notice of proposed rulemaking to update Part 135 air carrier definitions to explicitly include powered-lift operations. If finalized, assuming technical and business challenges are met, Joby and others may be able to achieve their mid- to late-decade commercial operations targets.

With an FAA reauthorization due by the end of Sept. 2023, Congress has indicated that it plans to address eVTOL and AAM, perhaps through a dedicated “new entrants” title to the law. To date, Congress has primarily focused on interagency coordination and infrastructure needs, such as AAM vertiports, but it may choose to examine more granular airworthiness and operations certification issues.

With respect to the congressional direction of eVTOL and AAM airworthiness and operations certification, it is important to understand that legislators possess few tools to speed up internal FAA integration efforts. In addition, due to strained staff capacity on key congressional authorizing committees and the limited technical backgrounds of those overworked staffers, this work would likely be farmed out to external stakeholders and experts. What could result from these potential political deliberations would be anyone’s guess.

The uncertainty inherent in this approach to policymaking should give AAM advocates pause as they ramp up their education and lobbying efforts to Congress ahead of FAA reauthorization. While AAM enthusiasts may be frustrated by the often-slow pace of FAA decision-making, key regulatory decisions affecting developers may be better coming from expert regulators at FAA rather than congressional sausage-making. Even those most skeptical of FAA’s current approach to AAM should appreciate that it is often better to work with the devil you know than the devil you don’t.

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New Propaganda from Federal Air Marshals

American Military News reported that a handful of federal air marshals (FAMs) are threatening to resign if they are ordered by the Department of Homeland Security (DHS) to be sent to the country’s southern border to back up Border Patrol agents. The publication cited an article in the Washington Examiner dating an initial DHS request to FAMs to volunteer for border duty in mid-2021. Reuters reported that fewer than 150 had volunteered and that DHS has begun assigning federal air marshals to border duty.

And this led to a clever propaganda ploy by the Air Marshal National Council. After warning DHS and FAMs Director Tirrell Stevenson that FAMs will refuse orders for border duty, the organization’s public message is that this diversion of FAMs means that 99% of U.S. airline flights would be unguarded. That scary-sounding message led to Fox News and several House Republicans raising alarms about “creating a massive risk to public safety.” That rhetoric ignores the fact that the vast majority of U.S. flights do not have federal air marshals on board—a maximum of 8% ever do. It also ignores the fact that the only known country that has a comparable program of armed security officers on airline flights is Israel, which has faced far more serious threats to aviation over many decades. And it also ignores the fact that no FAM has ever interdicted a would-be terrorist on an actual airline flight.

And that’s just for starters. As I most recently reported in the story on secondary cockpit barriers (Sept. 2022 issue), the best analysis of onboard airliner security measures finds the cost of U.S. air marshals to be vastly more than any realistic estimates of their benefit to aviation security. In their 2018 book Are We Safe Enough? Mark Stewart and John Mueller calculated the benefit/cost ratio of the FAMs program to be 0.03—meaning that each dollar spent on FAMs yields only three cents worth of benefits. By contrast, adding a secondary barrier to protect the cockpit when the armored door has to be opened has a benefit/cost ratio of 41. One reason for this huge difference is that a secondary barrier is a modest one-time cost, while the FAM program consumes about $1 billion of the Transportation Security Administration’s budget every year. It also costs the airlines the loss of revenue from two front-cabin seats for each flight that has FAMs aboard.

Fox News and the Washington Examiner should apologize for misinforming viewers and readers by accepting at face value the federal air marshals’ highly misleading propaganda.

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J.D. Power’s Annual Airport Ratings

Once again, analytical firm J.D. Power has released its annual ranking of North American airports. The company assigns scores for six aspects of each airport: terminal facilities, airport arrival and departure, baggage claim, security check, and food/beverage/retail offerings. With a maximum of 1,000 points, the highest score among the “mega” airports was 800 points—earned by Minneapolis-St. Paul International Airport (MSP). In the “large” airport category, the top scorer was Tampa International Airport (TPA) at 846 points. And in the “medium” airport category, the winner was Indianapolis International Airport (IND) with 842 points.

As the above scores suggest, large airports tended to score higher than mega airports, which might suggest some dis-economies of scale. It’s also interesting to see how airports that scored below the average score in each category did. In the mega category, the average for the lower half was 755, compared with an average of 786 for the eight above-average mega airports. The lowest of the below-average mega airports was—you guessed it—Newark Liberty International Airport (EWR) at just 719 points.

In the large airport category, the average score was 804, compared with 762 for those in the bottom portion of this category. The lowest-ranked large airport was Philadelphia International (PHL) at just 729 points.

A well-known airport 2008 economic productivity study in the Journal of Urban Economics analyzed a global set of 109 airports. It found that the most-productive airports were those with partial or total control by private investors, with the second-best set-up being airports operated by airport authorities. After that came airports operated by city, county, or state/province governments—and bringing up the rear were airports operated by multi-purpose port authorities.

With the airports divided into groups this way, mega airports run by airport authorities averaged 801 points in the JD Power rankings, airports run by government departments averaged 797 points, with airports run by port authorities in last place at 790. For the large airports, the average scores were 769 points for airport authorities, 759 for government departments, and 755 for port authorities. Though both distributions are consistent with the journal article’s findings, the differences are small and likely not statistically significant. Unfortunately, there are no privatized U.S. mega, large, or medium airports for comparative scoring.

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A Possible Breakthrough in Sustainable Aviation Fuel

One of the problems with projections being made by global climate models is that—of necessity—they assume existing technology. If major breakthroughs in energy sources or propulsion technology emerge 10 years from now, that’s not possible to include in today’s models’ scenarios.

One potential breakthrough in sustainable aviation fuel (SAF) was announced on Nov. 29 by Worcester Polytechnic Institute (WPI), whose news release was headlined, “WPI Researchers Create Method for Making Net-Zero Aviation Fuel,” and was discussed in an Aviation Daily article on Dec. 6.

The research by WPI researchers Jagan Jayachandran and Adam Powell is a potential aircraft fuel composed of magnesium hydride mixed with conventional hydrocarbon fuel. The products of combustion would be magnesium oxide nanoparticles, water vapor, and (yes) CO2, but that’s not the end of the story. The nanoparticles react with CO2 and water in the exhaust plume to produce magnesium bicarbonate, thereby removing CO2 from the exhaust. An important finding is that the new fuel would be denser than conventional jet fuel, potentially leading to 8% longer range compared with today’s fuel, other things equal. Even getting the same range would be a huge improvement over liquid ammonia since it would provide 2.5 times its range, or liquid hydrogen (providing 3.5 times its range).

To be sure, this research was based on modeling and computational analysis; no such fuel has been produced, let alone tested in a jet engine. In an email Powell acknowledged that there are “8-10 potential show-stoppers, as described at the end of the paper.” He also noted that the potential 8% range increase could be eaten up by the need for stronger, heavier fuel tanks and structural modifications to carry the heavier fuel. But stronger tanks would also be needed for liquid hydrogen.

The WPI news release noted that Jayachandra and Powell plan physical experiments with samples of the fuel. And it quoted Powell as saying, “We hope our work, which opens up a new category of sustainable aviation fuel, will spark the imagination of other researchers.”

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Does Aviation Face a “Climate Crisis”?

Over the past few years, many media and government officials worldwide have switched from talking and writing about climate change and global warming to a “climate crisis” or “climate emergency.” There is no scientific question that average temperatures are increasing and sea levels are rising. But some climate-focused organizations seem to have captured enough media attention to lead large parts of U.S. and European media to adopt the more apocalyptic terminology. If we really had only 10 years or 20 years to radically reduce CO2 emissions or ‘the earth would burn’ and island nations would be submerged, drastic measures would be called for. But that is not what reputable scientists and the Intergovernmental Panel on Climate Change (IPCC) are telling us.

Most reporting on the sixth (most recent) IPCC report, released this year, focused on the worst-case climate scenario, known as RCP8.5. Among other unrealistic assumptions, this scenario assumes a six-fold rise in global per-capita coal consumption by 2100, which is grossly unrealistic. My Reason colleague, science correspondent Ron Bailey, published a useful overview of this problem back in May. Bailey recounts a New York Times article on a study using “too hot” climate models that predicted mass extinctions of marine life from climate warming, comparable to the Permian age extinction 250 million years ago. Bailey rightly concluded, “Exaggerating the real problem of man-made climate change is not helpful for guiding the public and policymakers in their efforts to mitigate and adapt to rising global temperatures.”

Bailey also cited a  commentary in the scientific journal Nature explaining that many of the “hot” climate models that project extreme temperatures by century’s end “do a poor job of reproducing historical temperatures over time.” Recognizing this problem, the 2022 IPCC report ceased its previous policy of averaging the results of a large set of models in favor of giving greater weight to models that were more consistent with historical climate and temperature trends. The five authors are all climate scientists.

This is an aviation policy newsletter, not a climate science newsletter. I’m including this article because it appears that a some aviation leaders are potentially being misled, not by what IPCC’s 2022 report actually says but by worst-case scenarios reported out of context by major media and amplified by climate-action interest groups.

In a previous newsletter article on this topic (Sept. 2021), I recommended a book by a distinguished climate scientist who served as Undersecretary for Science in the Department of Energy in the Obama administration—Steven E. Koonin. In his book, Unsettled: What Climate Science Tells Us, What It Doesn’t and Why It Matters, Koonin explains climate modeling and urges policymakers to distinguish among climate scenarios and, in particular, to be skeptical of RCP8.5. I’m happy to recommend it once again to aviation thought leaders and policymakers.

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News Notes

Vinci Invests in Mexican Airports
Vinci Airports has invested $1.17 billion to acquire 30% of Mexican airport operator Grupo Aeroportuario del Centro Norte (OMA). The company operates 13 Mexican airports, including Acapulco, Chihuahua, Ciudad Juarez, Durango, Mazatlan, Tampico, and Zacatecas. Prior to this acquisition, Vinci was the world’s sixth-largest airport group, based on 2020 revenue. Earlier this year, it won a concession for the seven airports in the Cape Verde islands, bringing its total to 70 airports. Adding the OMA airports, that total is now 83.

Partial Sale of Auckland Airport Proposed
The mayor of Auckland has proposed selling the city government’s 18% stake in Auckland International Airport, Inframation News reported on Dec. 2. Based on recent share prices on the New Zealand and Auckland stock exchanges, the sale would yield about NZ$2 billion (US $1.28 billion). While Australia is known for infrastructure asset recycling of this sort, sale of the airport stake would appear to be a first for New Zealand. The country’s three largest airports, then owned by the national government, were privatized via initial public offerings in 1998. Individual investors own 53% of Auckland International’s shares, with institutional investors owning the rest.

Steps Toward Single European Sky
Eurocontrol, which coordinates upper airspace in Europe (and collects ATC fees from airspace users on behalf of individual ANSPs) last month signed an agreement with DFS, Germany’s ANSP, under which Eurocontrol’s Maastricht Upper Area Control Center (MUAC) and DFS’s Karlsruhe Upper Area Control Center will harmonize their processes, procedures, and technology. The new system will use a common “virtual infrastructure” serving both centers and potentially extendable to other control centers. Separately, the FABEC group of ANSPs has added Swiss airspace to its upper-airspace free-route airspace agreement.

U.S. and Overseas Airlines Ask for More Time on 5G Fixes
Airlines for America, GAMA, Boeing, and others submitted a letter to FAA, DOT, the Commerce Dept. and other agencies stating that altimeter manufacturers and some airlines will be unable to meet the year-end deadline to re-equip with altimeters resistant to interference from 5G antennas near airports. On behalf of non-US airlines, IATA sent its own letter to FAA making similar points and noting that one of the replacement radar altimeters has not yet been certified by FAA. And in November, FAA asked the Federal Communications Commission to require 19 other wireless providers to agree to the same mitigation measures that AT&T and Verizon have been implementing this year.

Miami-Dade Voters Approve Defense of Miami International Airport
Two ballot measures approved by voters on Nov. 8 were aimed at preventing the state government from taking over Miami International Airport and Port Miami, in violation of the county’s home rule charter. Both measures passed: a provision requiring county commission members to support home rule status and a requirement that any proposed state takeover must be approved by a county referendum. One way to preserve county ownership would be a long-term public-private partnership lease, in which the county would remain owner and regulator but would no longer be able to micromanage the airport. A 2021 Reason Foundation policy study estimated that the net proceeds (after bond payoffs) from a public-private partnership lease of Miami International Airport would be $2.6 billion.

Colombia Planning Long-term P3 for El Dorado International
In response to an unsolicited proposal from Odinsa and Pavimentos Colombia, the National Infrastructure Agency expects next year to put out a request for proposals for a design-build-finance-operate-maintain (DBFOM) P3 concession to make major improvements to El Dorado International, the country’s largest airport, in Bogota, the capital city. Under the country’s P3 law, the first step will be a feasibility study by outside consultants.

Should EU Member Governments Self-Regulate their ANSPs?
Europe has three times as many high-altitude air traffic control centers as the United States, serving one-third less annual traffic. But elected officials in each country, under pressure from controllers’ unions, have balked at consolidating facilities and streamlining airspace. Early this month, airline trade groups the International Air Transport Association (IATA) and Airlines for Europe called for European air navigation service provider (ANSP) performance to be reviewed by an independent regulator, as called for in 2020 by the European Commission. Both organizations are stressing the need to reduce aviation emissions in calling for streamlined, more-efficient airspace.

O’Hare’s $12 Billion Terminal Upgrades Pass Environmental Review
The core of the latest phase in Chicago O’Hare International Airport’s transformation will take down aging Terminal 2 and replace it with a huge new Global Terminal. The environmental review, begun in 2018, resulted in a FONSI—a finding of no significant impact. That stemmed from the plan’s projected reduction of taxi times, which will reduce emissions. Besides replacing T2, the plan also calls for a $1.3 billion renovation of Terminal 5, increasing its gate capacity by 25%. O’Hare ranked well below average in the 2022 J.D. Power study of US airports, scoring better than only one in its category, Newark. While the decade-long program of O’Hare runway expansion is finished, that and the terminal expansion will obviously facilitate more flights. In Europe, that would not be assessed as “no significant impact.” Not that I’m complaining, mind you.

Brazil Airport Privatizations Put on Hold
The recently elected government of former president Lula da Silva has put on hold a series of previously announced infrastructure privatizations and P3s. Both the airports of Galeao and Santos Dumont were due to be privatized by the end of this year, as was a projected $1.2 billion auction of Porto de Santos, the country’s largest port.

U.S.-Canada AAM Corridor Announced
The Northeast Airspace Integration Research Alliance (NUAIR) and Canadian vertiport company VPorts announced on Nov. 29 an agreement to establish a corridor for electric aircraft between Syracuse (NY) Hancock International Airport and Montreal’s Mirabel Airport. VPorts had previously announced plans for a network of vertiports in Quebec, including both Mirabel and Saint-Hubert airports. NUAIR runs an FAA-designated test site for unmanned aircraft systems at the airport in Rome, New York and has worked with NASA on vertiport automation systems.

Skyports and Corporacion America Airports Collaboration
Latin America’s largest airport company, CAAP, has formed a joint venture with Skyports Infrastructure to develop vertiports at some of CAAP’s 53 airport sites. The first step under their memorandum of understanding is to review those airport sites to select the best candidates for vertiports.

NATS Deploys Radar Not Fooled by Wind Turbines
NATS, the United Kingdom’s ANSP, has implemented a new primary surveillance radar that is not flummoxed by huge wind turbines. Conventional radars show a wind turbine as “clutter” that can hide or be mistaken for an aircraft. The new radar installed at Lowther Hill can filter this clutter to the point where interference with air traffic surveillance is no longer a problem. The installation of this new radar will clear the way for multiple planned wind farm projects, projected to produce 2.5 gigawatts of electricity. 

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Quotable Quotes

“This summer we welcomed the ICAO Council’s formal condemnation of Russia for its numerous violations of international aviation rules. These include violating the sovereign airspace of Ukraine, as well as multiple technical requirements, which have had a significant impact on aviation safety in Russia. This includes attempts to circumvent EU sanctions by illegally double-registering aircraft in Russia that have been stolen from leasing companies and operating aircraft on international routes without a valid safety certificate. This resulted in ICAO declaring a “Significant Safety Concern” against Russia. ICAO only does this in the most exceptional circumstances, and in the gravest of cases involving aviation safety. In essence, ICAO declared that Russian aviation is unsafe, also highlighting a lack of oversight. The global aviation community has given a clear signal that these actions cannot be without consequences. This decision was historic, as it was the first time a category one country was expelled from the ICAO Council, and I am proud to say that ICAO was the first UN body to do so!”
—Henrik Hololei, European Commission, “The 41st Assembly of ICAO: A European Perspective,” Aviation Intelligence Reporter, Dec. 2022

“County Amendment 1 would amend the county charter to require the mayor and county commissioners to take an oath of office affirming that ‘They will support, protect, and defend the Miami-Dade County Home Rule Charter and the government of Miami-Dade County.’. . . Here’s what’s driving Amendment 1: In 2019 the Legislature tried to abolish the Miami-Dade Expressway Authority, which operates five local toll roads, and replace it with a state-run agency. The county has fought that measure off, for now, but there are worrisome rumblings that the state wants to take over the county’s prime economic engines: the airport and the seaport. . . . Miami-Dade County Referendum 2 asks county voters to amend the Home Rule Charter to specify that ownership or authority for Miami International Airport, PortMiami, and Miami-Dade Expressway Authority can’t be transferred without voter approval first.”
—Editorial Board, “November 2022 Election Recommendations,” Miami Herald, Nov. 4, 2022

“Digital towers—that is the wave of the future. It’s an opportunity to address some of our difficulties around staffing.”
—Jeffrey Vincent, FAA Vice President for Air Traffic Services, in “Why Digital Tower May Be the Future of FAA Contract Towers,” AAAE Aviation News Today, July 27, 2022

“In terms of the future, a radically-under-covered part of the most recent IPCC report is that it assigns a much lower probability to the extreme scenario (RCP8.5) featured in previous reports and deemed the most probable, ‘business as usual’ outcome in those reports. Put another way, the new report was surer that global warming is caused by humans, but much less sure that it would produce an extreme outcome. That would seem to qualify as good news, but the reception of the report still tended toward the apocalyptic. The UN Secretary General characterized the report’s message as a ‘code red for humanity,’ where only immediate, drastic action could prevent ‘catastrophe.’ Countless stories in mainstream media took a similar tack, which was amplified by environmental activists and echoed by most Democratic politicians.”
—Ruy Teixeira, “The Democrats’ Climate Problem: How Trying to Solve a Real Problem Turned into Political Kryptonite,” The Liberal Patriot, Oct. 27, 2022

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The post Aviation Policy News: Airport rankings, propaganda from air marshals, and more appeared first on Reason Foundation.

• Airport groups are changing commercial aviation
• ULCCs in a changing U.S. airline market
• Congress unlikely to shake up the air traffic control status quo
• Time to rethink airport slots
• Modest improvements coming for European airspace
• Progress is being made on reducing high-altitude contrails
• News notes
• Quotable quotes

Airport Groups Are Changing Commercial Aviation

Over the past 25 years, a new phenomenon has quietly evolved—the airport group. A study by ICF and Oxford Economics, commissioned by Airports Council International, documents the growth of this new entity and explains how and why it is adding value to large and medium airports worldwide. The study is “Value Creation by Airport Groups” and is online here.

An airport group is a set of airports with common management. Today, 425 airports are part of airport groups, handling 2.7 billion annual passengers (29% of the global total) and 27 million annual tons of cargo (23% of the total). As of 2019, airport groups handled 53% of Europe’s passengers, 28% of Asia-Pacific passengers, 14% of passengers in Latin America and the Caribbean, but only 3% of passengers in North America, 2% in the Middle East, and none in Africa.

If you recognize this distribution as similar to the figures for privatized airports, you’re right. Most airport groups consist of either privatized airports (London Heathrow, Frankfurt) or corporatized airports (Amsterdam Schiphol). The report identifies 27 airport groups, all but six of which provided data for the ICF-Oxford study. The five largest airport groups, ranked by the number of annual passengers, are:

Two small airport groups are U.S.-based—Vantage Airport Group and AvPorts.

The study identifies two types of airport groups in terms of their underlying business. The large majority are airport operators, per se—i.e., that is their primary business. But five large groups are led by infrastructure and construction companies: Vinci Airports, Egis Group, Atlantia, Ferrovial, and GMR Airports. The report does not identify any major differences in how the two types operate.

Why should we care about this emerging phenomenon? The report identifies a number of ways in which the airport group model adds value. It provides economies of scale (e.g., in knowledge sharing with smaller airport members, lower costs via bulk purchases), resilience (e.g., a downturn in one country’s economy may not affect the airports in other countries or regions), and increased ability to finance capital investments. The airport group can also set management policies and performance targets for member airports and ensure that various standards are met. Airport groups can try out new technologies and procedures at one of their airports before deciding whether to adopt them group-wide.

As I noted above, there is a significant overlap between airport groups and airport privatization. And that means we should not be surprised that this model has not become very visible in the United States. We have, however, seen airport groups taking part in responding to requests from qualifications from the occasional U.S. airport that expresses potential interest in privatization (e.g., St. Louis in 2019). So when U.S. airport owners finally get serious about long-term public-private partnership leases of their airports, I expect there will be keen interest from global airport groups.

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Ultra-Low-Cost Carriers in a Changing U.S. Airline Market

On his third-quarter earnings call late last month, United Airlines CEO Scott Kirby declared that ultra-low-cost carriers (ULCCs) are “doomed” due to rising fuel costs and labor shortages, going so far as to describe the ULCCs’ business model as a Ponzi scheme. Aviation Daily then quoted airline consultant William Swelbar as not having quite as negative a view but suggesting that with the current U.S. pilot shortage, “legacy carriers are offering their regional pilots as much or more money than flight crews at ULCCs earn, in many cases.” Both Kirby and Swelbar are highly knowledgeable airline experts, but I’d like to offer a different assessment.

First, I doubt that it’s sustainable for legacy carriers to dramatically increase pilot compensation for flying regional jets that carry a small fraction of mainline airliners’ passengers. Second, the fact that regionals, many of them owned by or contracted by legacy carriers, have much lower cockpit crew salaries means that ULCCs can address their own growth needs by offering improved pay and benefits to regionals’ pilots and first officers.

Third, with one exception, I see no signs of ultra-low-cost carriers slacking off on growth. That exception is Spirit, which has agreed to be bought out by JetBlue. Earlier this month, Spirit announced that it is cutting 35 routes next year, as it anticipates being absorbed into JetBlue, which will reduce the seating capacity of Spirit’s planes and convert it to JetBlue’s model of being an intermediate between a legacy carrier and an ultra-low-cost carrier. That change, assuming regulators permit the merger to happen, will open up the market for the remaining ULCCs. And they intend to expand into that void.

At the Routes World 2022 conference in Las Vegas last month, Frontier CEO Barry Biffle told attendees that JetBlue taking Spirit out of the market was as if “Nordstrom purchased a discount store like Walmart and then closed it down.” On Oct. 25, Biffle told Aviation Daily that with 18 Airbus A321XLR (extra long-range) aircraft in the pipeline, Frontier is looking to expand its existing international routes, with the new planes capable of trans-Atlantic and South American service. With the XLR version, “From Miami, you can reach pretty much anywhere in South America,” he said. Frontier already serves 20 non-U.S destinations in the Caribbean and Central America, in addition to its 92 domestic destinations, which include major airports such as ATL, BNA, BOS, BWI, CLT, DFW, FLL, LGA, MIA, MCO, MSP, ORD, PHL, SAN, SEA, and SFO, in addition to numerous smaller airports that are more-typical of ultra-low-cost carriers.

How about the other ULCCs? Allegiant now serves 91 airports, mostly in the United States. Newcomer Avelo, now in its second year, already serves 21 destinations, including Burbank, Ft. Lauderdale, Las Vegas, Orlando, and Tampa, plus smaller cities like Eugene, OR, New Haven, CT, Ogden, UT, and Sonoma, CA. And fellow newcomer Breeze has 30 destinations thus far, including large airports BNA, LAS, LAX, MCO, PIT, SFO, and TPA, plus smaller points like Ft. Myers, Hartford, Huntsville, Islip, Norfolk, Provo, and Syracuse.

Ultra-low-cost carriers appear to have found solid market niches aimed primarily at price-sensitive leisure travelers. The decline and then disappearance of Spirit will open additional opportunities, and if they can recruit enough pilots in the next five years, ULCCs’ planned growth seems probable, Scott Kirby’s skepticism notwithstanding.

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Next Congress Unlikely to Shake Up Air Traffic Control Status Quo
By Marc Scribner

At the beginning of November, I attended the Air Traffic Control Association’s ATCA Global conference in Washington, D.C. While many fascinating discussions on a variety of topics took place, perhaps the most urgent related to the forthcoming Federal Aviation Administration (FAA) reauthorization, which is due by the end of Sept. 2023.

Unlike the debate leading up to the previous reauthorization, much of which was focused on a failed effort to spin off FAA’s Air Traffic Organization into an independent, nonprofit user co-op, the debate this time around is likely to be centered on workforce problems plaguing the aviation sector. These include shortages of airline pilots and air traffic controllers needed to meet surging air travel demand in the recovery from the COVID-19 pandemic, which have led to a large number of flight delays and cancellations. As Congress prepares for FAA reauthorization with a special focus on labor shortages, it should consider technology solutions and governance reforms that could improve workforce productivity and enhance aviation system resilience.

During a panel of industry stakeholders, former longtime House Transportation and Infrastructure Committee aviation staffer Holly Woodruff Lyons said that aviation workforce shortages and their impacts on air service are likely going to be the most important issue motivating members of Congress going into reauthorization. Brad Van Dam, senior vice president for government affairs at the American Association of Airport Executives, noted that dozens of airports have seen commercial service cuts due to workforce issues, and members of Congress are experiencing the resulting flight delays and cancellations firsthand.

At another panel, aviation industry veterans weighed in on what the priorities should be for the next confirmed FAA administrator. Will Ris, the former longtime senior vice president for government affairs at American Airlines and currently a member of FAA’s Management Advisory Council, argued that Data Comm and space-based ADS-B should be the top technology priorities for the new Administrator. Ris said FAA needs to be more open to new ideas from outside the agency and must develop a better process for introducing new technologies and practices, but acknowledged this will be difficult to accomplish in a constrained and uncertain budget environment.

Sharon Pinkerton, the senior vice president for legislative and regulatory policy at Airlines for America, agreed with Ris but argued that FAA process is badly broken. Concerns about staffing at FAA are legitimate, but FAA “can’t do human infrastructure without adequate technology infrastructure,” concluded Pinkerton.

This point was underscored by Paul Rinaldi, a former air traffic controller who retired last year as the longest-serving president of the National Air Traffic Controllers Association, who called for fundamental reform of the Federal Aviation Administration. Responding to Ris’s earlier point, Rinaldi said, “Data Comm is old technology that we should already have in our system.”

Rinaldi had been a strong supporter of spinning off FAA’s Air Traffic Organization into an independent, user-supported nonprofit modeled on world-leader Nav Canada in the lead-up to the 2018 reauthorization. Institutional reform, said Rinaldi, isn’t needed solely to speed procurement and deployment of new technologies but also to recruit, train, and retain top talent. “We still train controllers like in the 1970s,” he lamented.

The Federal Aviation Administration continues to fall behind peer countries in modernizing its air traffic control system. Earlier this month, FAA announced Cleveland Hopkins International Airport as the first U.S. commercial airport to see FAA’s Terminal Flight Data Manager (TFDM) system deployed (“New Surface Congestion Prevention System Debuts At Cleveland Hopkins,” Aviation Daily, Nov. 7, 2022). Both TFDM configurations include electronic flight strips, which would replace the paper flight strips used by controllers for generations. Electronic flight strips replaced paper strips years ago in Canada, the United Kingdom, and most of Europe, but FAA doesn’t anticipate finishing its planned 89-site deployment of TFDM until 2031.

ATCA Global featured many exciting new air traffic management technologies, especially those designed to manage new entrants, such as unmanned aircraft systems and advanced air mobility. However, FAA’s legacy institutional problems are likely to prevent the agency from keeping up with technology.

At the closing keynote panel, Kip Spurio, technical director of air traffic systems at Raytheon, predicted the National Airspace System of 2035 will be a lot like today. Changing FAA culture to be more innovative will require strong leadership that hasn’t yet materialized. “If the U.S. really wants to stake a claim to being the preeminent aviation and airspace system in the world, it will require concerted effort,” said Spurio.

The air traffic control governance reforms debated five years ago that ultimately were not included in the 2018 FAA reauthorization are not likely to be considered in the next Congress. This is unfortunate because modernizing the technical capabilities of U.S. air traffic control with technologies already widely deployed in peer countries could help address both the workforce shortages facing FAA by increasing controller productivity and help integrate new entrants into the National Airspace System, subjects that are likely to receive top billing in next year’s planned reauthorization. Unfortunately, Congress is most likely to reauthorize FAA and spend the next five years wondering why their words were not translated into meaningful action.

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Time to Rethink Airport Slots

Long-time readers of this newsletter know that I oppose systems that deal with airport demand that exceeds runway capacity by having the government allocate landing/takeoff slots to specific airlines. As practically every economist will tell you, the best way to deal with demand that exceeds supply is to raise the price. Of course, in most countries, the “price” to use the scarce good of runway space is based on the gross weight of the aircraft. Legacy airlines claim that they own slots they were allocated many years or decades ago, but in the United States, at least, the U.S. Department of Transportation (DOT) has never accepted that claim.

The slot system is a barrier to competition at popular hub airports. The U.S. DOT attempts to promote competition (increased entry by non-incumbent carriers) when airlines propose to merge (or form other agreements, like American and JetBlue in the northeast, currently) by imposing divestiture of some slots at congested airports. But this is a far cry from market-based allocation.

During the pandemic, as air traffic shrank dramatically in both Europe and the U.S., governments waived the usual rule that at slot-controlled airports, carriers must use at least 80% of their slots during a given time period or they would lose those they weren’t using—the so-called 80/20 rule. U.S. DOT, last month, finally restored the 80/20 rule for U.S. slot-controlled airports, while European officials only restored theirs to 75/25, under heavy pressure from legacy carriers, some of them partially state-owned.

Recently we’ve witnessed the disclosure, during litigation about the American/JetBlue “Northeast Alliance,” that American had forgotten that it owned some of its slots at LaGuardia Airport. While that was going on, United CEO Scott Kirby threatened to cease serving JFK unless DOT gave United more slots than the few it has, which enable only four daily round-trips between that airport and two each to Los Angeles and San Francisco. He argued that because JFK has one more runway than Newark, it must have extra capacity because Newark works well with one less. Yet United has repeatedly urged DOT—unsuccessfully—not to reallocate slots that Southwest gave up when it ended service at Newark due to congestion at that airport.

Back in 2008, one of the last actions of then-Transportation Secretary Mary Peters was to change federal airport policy to permit landing fees to be based on something other than gross weight—such as demand and supply. The airline trade association (then called ATA) litigated against this change but lost in court. So the policy remains. In principle, DOT could reassert its long-standing position that airlines have no property rights in “their” slots and encourage slot-controlled airports to shift to demand-based landing and takeoff fees instead of slots.

Incidentally, since the U.K. left the European Union, it is no longer part of the EU slot system and can decide how to deal with congestion at Heathrow and Gatwick. Both airports already vary their landing fees between peak and off-peak hours, but those fees are still based on gross weight. Both airports are owned and managed by commercial airport companies that might well be amenable to a shift to market-based landing and takeoff charges.

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Modest Improvements Coming for European Airspace

At a conference sponsored by Eurocontrol last month in Brussels, the agency’s director general, Eamonn Brennan, told Aviation Week’s Helen Massy-Beresford that the long-promised Single European Sky may not happen. “I don’t think it’ll ever happen in the way we all would like it to happen—a real Single European Sky. But we can make improvements.”

The near-term improvements he was referring to are two: Europe-wide free route airspace and Eurocontrol’s new network management system. Free route airspace will enable pilots to plan flights that avoid traditional zig-zag routes between mapped waypoints used by air traffic controllers. Simon Hocquard of CANSO, the Civil Air Navigation Services Organization, cited estimates of one billion fewer nautical miles flown per year, six million metric tons of fuel saved, 20 million metric tons of CO2 reduction, and $4.8 billion in fuel savings.” Those estimates assume that pilots opt to use the free route airspace rather than requesting deviations from their filed flight plans to avoid higher air traffic control charges in some countries’ airspaces. Free route airspace implementation has been slowed down by Russia’s war against Ukraine but is now expected to be in place Europe-wide by the end of 2025, one year later than planned. Maps in the Oct. 24/Nov. 6, 2022, edition of Aviation Week showed flight information regions with free route airspace by the end of 2022 and by end-2025, the latter still with a few small gaps.

The other impending change is Eurocontrol’s forthcoming integrated network management system. This technology upgrade will apply to all its network manager operational systems, with a new digital architecture in place by 2030. The first portion will go live in 2024. Legacy systems at individual air navigation service providers (ANSPs) are expected to evolve over the next five years to interface smoothly with the network management system. The new overall system is aiming to handle 13.8 million flights per year, up from the 9.5 million expected in 2022. It is intended to enable airline-chosen “ business trajectories” and 4D profiles under which controllers can manage flights in terms of time as well as distance.

These are all worthwhile improvements, but they will do little or nothing to reduce the high unit costs of European air traffic control (compared with Canada and the United States) due to far too many ATC facilities requiring far too many controllers. Those constraints are still not being tackled, which appears to be why Brennan thinks the Single European Sky will not accomplish its original objectives.

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Progress Being Made on Reducing High-Altitude Contrails

As I’ve reported previously, aviation’s non-CO2 emissions appear to constitute as much as two-thirds of its impact on global warming. Some of this is due to other tailpipe emissions, such as soot and nitrous oxides. Another contributor is contrails, which form at high altitudes under certain temperature and moisture conditions. It turns out that today’s much-improved weather forecasting can often identify areas where those conditions exist, which in principle should enable slightly altering flight paths to either go around that area or fly at a slightly different altitude.

A company called Satavia, which specializes in data analysis and aviation atmospheric science, has been working with two airlines, Etihad and KLM, to optimize their flight plans to avoid contrail formation. Its first test project, last year with Etihad, used a 787 flight from London Heathrow to Abu Dhabi. Satavia used its DecisionX:NetZero software to calculate small changes in altitude and routing to avoid contrail-forming conditions. NATS and Eurocontrol took part in those tests, reported in Aviation Week (Jan. 10-23, 2022). Last year Eurocontrol itself conducted live contrail trials in Europe, modifying the vertical flight profile of 209 flights over a 10-month period.

Aviation Daily presented an update on Satavia’s work in its Oct. 20, 2022 issue. This year it has adjusted the flight profiles of 49 Etihad and KLM flights. Each day’s flights are evaluated for potential contrail areas, with typically between 2% and 5% selected as most likely. Satavia gives each airline a daily briefing pack of proposed routing and altitude changes. After the flights, the company analyzes whether the predicted contrail conditions were avoided and, if so, the savings—computed as CO2-equivalent. Those 49 flight adjustments were reported as saving the equivalent of 6,309 tons of CO2. The company is aiming to auction off the climate savings at $10-20 per ton. Doing that will require validation that the contrails would have formed, except for the altered flight plans.

In a separate project, Airbus is planning to test the impact of hydrogen-fueled aircraft engines on contrail formation, in a project called Blue Condor. It will equip two identical gliders each with a small jet engine—one powered by conventional kerosene fuel and the other by hydrogen. The planes will fly together in conditions conducive to contrail formation, with a chase plane carrying a suite of measurement instruments. The plan is to carry out these tests in early 2023 in the western United States. Hydrogen combustion produces 2.5 times more water vapor than conventional jet engines but no soot. So the tests should help to determine whether or how much contrail formation results from hydrogen fuel, compared with regular jet fuel.

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News Notes

MAC Calls for User Fees for New Airspace Users
The FAA Management Advisory Council (MAC) last month urged Congress to figure out how new users of the National Air Space (NAS) should pay for their growing usage of the airspace. New users include space launch and recovery, drones, and both urban air mobility (UAM) and regional air mobility (RAM). MAC member Donna McLean told Politico that new entrants are rapidly growing but are, in effect, being subsidized via the aviation user taxes paid by commercial and general aviation. “That is on everyone’s mind for [FAA] reauthorization,” McLean told an RTCA webinar audience on Oct. 26.

NATS Wins Contract to Operate Gatwick’s Tower
The UK is one of few countries where airports are responsible for local air traffic control. They can build and operate their own traditional or remote tower or hire an approved control tower company to manage tower operations. For the past six years, London Gatwick (LGW) has been served by Air Navigation Solutions Ltd, an affiliate of DFS, the German ANSP. But in this year’s competition for a new term, the tower division of NATS (the UK’s ANSP) won the bidding. According to Air Traffic Management, NATS is considering making use at LGW of some of the digital tower/artificial intelligence tools it has implemented at London Heathrow (LHR).

SpaceX and T-Mobile Plan Satellite Phone Service
T-Mobile and SpaceX announced an agreement under which the cellular phone company will use the SpaceX Starlink satellite network to provide voice and text-messaging services. The initial services will include not just the continental United States but also parts of Alaska, Hawaii, Puerto Rico, and U.S. territorial waters, with service beginning by late 2023. Competitors planning such services include AST SpaceMobile and Lynk, both of which have agreements with mobile phone networks in other countries.

Two U.S. Airports Pursuing Cargo Facility P3s
Los Angeles International (LAX) and Phoenix Sky Harbor International (PHX) are planning new air cargo facilities to be developed and operated as long-term public-private partnerships (P3s). LAX last month revised its request for proposals (RFP) to add more details on financing and to extend the deadline for submitting qualifications. The project will modernize and expand 27 cargo buildings totaling 2.6 million square feet. The Phoenix P3 project will finance, develop, and operate a new cargo complex on a 28-acre site on the airport‘s northwest corner. Responses to its RFP are due in mid-January, with a contract award as early as next May.

Nigeria Pursuing Airport P3s
Late month, the Federal Airports Authority of Nigeria (FAAN) announced winning bidders for three airport P3 concessions. A consortium led by TAV Airports was selected to develop international passenger and cargo terminals at the Murtala Mohammed International Airport in Lagos. TAV Airports, partly owned by Aeroports de Paris, operates 15 airports in Croatia, Georgia, Kazakhstan, Latvia, and other developing countries. A consortium headed by Corporacion America Airports is the preferred bidder for concessions to modernize the Abuja and Kano airports.

Can Starlink Satellites Provide GPS Backup?
The Radionavigation Laboratory at the University of Texas-Austin has announced the results of research commissioned by the Army Research Office. Their team reverse-engineered signals from Starlink satellites to show that they could be used for a positioning system in the event of GPS outages. Prof. Todd Humphrey from the Radionavigation Lab told MIT Technology Review that this research “could form the basis of a useful navigation system.” The Starlink constellation already includes over 3,000 satellites in low earth orbits, providing much higher signal strength than GPS satellites. A team at Ohio State University has also been researching this idea and says their algorithm generated an accuracy of about 7.7 meters.

Saudi eVTOL Network Planned
Saudi Arabian airline Saudia has signed a memorandum of understanding with electric vertical take-off and landing (eVTOL) developer Lilium for an eVTOL network in Saudi Arabia. The network would provide point-to-point services and feeder services to Saudia’s airport hubs. Service would be provided by Lilium’s seven-seat Jet eVTOL.

Azerbaijan Signs Up with Aireon for Space-Based ATC Surveillance
The ANSP of Azerbaijan (AZANS) has signed up with Aireon to provide space-based ADS-B surveillance of the country’s airspace. The Baku Flight Information Region (FIR) includes 86,600 square kilometers over land and 78,800 square kilometers over the Caspian Sea.

Mexican President Calls for Cabotage to Increase Airline Competition
President Andres Manual Lopez Obrador (AMLO) early this month said airfares in Mexico are too high and that allowing non-Mexican carriers to serve domestic routes would reduce average fares. In its Nov. 10 article, Aviation Daily notes that the European Union allows airlines from member states to operate domestic routes in other states, such as Ryanair’s domestic routes in Italy. Ultra-low-cost carriers (ULCCs) already have large domestic market shares in Mexico—Volaris at 40% market share and Viva Aerobus at 30%.

Inspector General Assesses FAA UAS Traffic Management Plans
In a Sept. 28 audit report, the DOT Office of Inspector General reviews FAA’s progress on the subject of managing traffic in the fast-growing field of unmanned aircraft systems (UAS). Called UAS Traffic Management, some such systems have been introduced in other countries. FAA has developed some concepts of operation but “has not established milestones for implementing the policies and processes necessary to allow for UTM deployment.” The report is AV2022041.

Drone Firm Links with Airways New Zealand UTM
New Zealand’s ANSP already has an operational UAS Traffic Management system called AirShare. It recently announced an agreement with startup company FlyFreely, which offers its own drone management platform for low-altitude operations. Airways New Zealand announced in late August an agreement that allows FlyFreely drone operators to access controlled airspace via AirShare.

October Was Big for Hydrogen News
Increasing interest in using hydrogen for future aircraft propulsion led to several developments last month. First, hydrogen pioneer ZeroAvia acquired HyPoint, a startup company developing hydrogen fuel cells for aviation. While ZeroAvia has focused on low-temperature fuel cells, HyPoint is a pioneer in high-temperature fuel cells. Several days later, American Airlines made a second strategic investment in Universal Hydrogen, which followed its August investment in ZeroAvia. Third, electric aircraft propulsion firm MagniX announced that it’s expanding into hydrogen fuel cells for 50-90-passenger aircraft.

Philippines Asks for Revised Bids for Provincial Airports
The Philippines’ government seeks to engage private companies to improve and operate 10 provincial airports throughout the island nation. Last month the government asked the companies that submitted proposals under the previous government to resubmit them to its Private Public Partnership Center before the end of the year. Inframation News also reported that the government will continue to operate the Ninoy Aquino International Airport in Manila until the two new airports being developed privately to serve Manila reach completion.

Tahiti Airport Award Thrown Out
The winning bid from Vinci Airports to redevelop and expand the Tahiti Airport was rejected by a court, leading to a new procurement. The other two bidders, Egis Projects and the local Chamber of Commerce had challenged the award of the 40-year P3 concession. A new competition is expected early in 2023.

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Quotable Quotes

“FAA has been supporting and trying to figure out how to incorporate these new users; inherently, the current aviation users are cross-subsidizing the new entrants, and it’s time for the new entrants to step up and pay. It’s very complicated, but we have got to make some decisions. . . . That’s on everyone’s mind for reauthorization.”
—Donna McLean, in Oriana Pawlyk, “New Airspace Entrants Should Pay Into the System, Advisor Says,” Politico Pro Transportation, Oct. 26, 2022

“[Airspace reform delays are] a disgrace. . . a scandal…. We have got to tackle these issues; it’s just too important; we can’t ignore it. Whether we call it the Single European Sky or whether we call it ‘get off your arse and sort [out] this inefficiency, it needs to be done.”
—Willie Walsh [IATA Director General], in Helen Massy-Beresford, “Eurocontrol Sees Free Route Airspace Delayed Until 2024,” Aviation Daily, Oct. 6, 2022

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The post Aviation Policy News: Airport groups, the evolving U.S. airline market, and more appeared first on Reason Foundation.

• Benefits from airport privatization
• A common rate for Europe’s air routes?
• Wisk plans autonomous eVTOL
• Air-to-rail substitution questioned in Europe
• Whither small community air service?
• The case for digital towers
• News Notes
• Quotable Quotes

New Study Finds Large Benefits from Airport Privatization

Does the type of ownership make a difference to airport performance? One of the much-quoted studies on this subject appeared in the Journal of Urban Economics in 2008, reflecting the early wave of mostly European sales and partial sales of airports. It found positive results on airport productivity, but its sample size was small—only 16 privatized airports out of a 109-airport dataset.

A new study from the National Bureau of Economic Research (NBER Working Paper 30544), reflects a world in which 437 airports have been privatized to date. The authors drew from a dataset of 2,444 airports in 217 countries. Rather than comparing all privatized airports with all the rest, they focused on before-and-after comparisons of the privatized airports. They sought to answer the question of whether the type of privatization leads to differences in airport performance. In particular, to the best of my knowledge, this is the first such study that considers whether different outcomes occur when airports are acquired by infrastructure investment funds, rather than by converting the airport to an airport company. Their most important finding is that “infrastructure funds improve airport performance.”

Here is a summary of seven key changes. The first is adding more air traffic, where the number of passengers per flight increases by 20% compared with non-infra-fund acquisitions. And overall passenger numbers increase by 84% under infra-fund ownership. Second, the fund-owned airports attract new airlines, with the increase in competition leading to better service and lower fares. These airports also increase the number of airline routes, especially international routes.

A surprising finding (to this American policy researcher) is that under infrastructure fund ownership, there are “dramatic declines” in flight cancellations and a large increase in on-time departures. This reflects non-U.S. airports, since even before privatization, they generally had common-use gates, which means greater flexibility for the airport to assign airliners to gates. In privatized airports, this continues to be an airport function, not an airline function.

Since the available performance data included little on the quality of airport retail and related passenger-experience indicators, the NBER researchers relied on the Airport Council International (ACI) World’s annual Air Service Quality (ASQ) awards, which assess passenger satisfaction via annual surveys. They found that transitions to infrastructure fund ownership increase the chance of an airport winning an ASQ award.

On airport finance, the researchers documented that fees charged to airlines increased after privatization of either type. There is also a strong relationship between acquisition by an infrastructure fund and removal of price regulation. Net operating income increases by 108% after infra fund acquisition, but this is due more to higher revenues than to cost-cutting—for example, there is no change in employees per passenger.

Throughout the study, the researchers distinguished between concessions of less than 30 years and those with longer terms, defining the latter (and outright sales) as forms of ownership. Overall, they found that “sales” (including longer-term concession) lead to larger efficiency improvements than shorter-term concessions, suggesting that “ownership rights may lead to better-aligned incentives.”

They also examined the role of airport competition. In general, they found that “improvements are much larger in the presence of a competing airport,” with the stronger relationship occurring under infra fund ownership.

Overall, they found that “privatization consistently improves productivity only with [infra fund] involvement.” They speculate that this may be due to new strategies, equity-based compensation for management, and investing in better passenger services and technology.

This important study is likely to inform plans for long-term airport concessions in the United States and worldwide. Inframation News (Aug. 23) provided an overview of continued investor interest, despite only a handful of transactions from 2020 through 2022. It quoted Macquarie executive John Bruen saying “Once the [aviation] sector has got itself back up there and is robust and . . . at . . . (pre-COVID) volume levels again, then I think you’ll see the transaction activity.” The report also includes a chart showing the eight largest airport infrastructure fund investors. Leading the pack with nine airports is IFM Investors, followed by Macquarie Asset Management with eight.

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A Common Rate for High-Altitude Air Routes in Europe?

Airline flights in Europe often take zigzag routes—not because of air traffic control rules, but because after becoming airborne, pilots often request a route change to avoid airspaces with high rates per kilometer flown. This does lead to minor ATC cost savings for the airlines involved, but at the expense of more fuel burned and more CO2 emissions. Getting airlines to fly the shortest, most-efficient routes has been an ongoing challenge, but could reduce per-flight CO2 emissions by up to 10%.

With increasing pressure on aviation to become more climate-friendly, Eurocontrol has endorsed an idea I proposed in the May issue of this newsletter: charging the same “unit rate” for all high-altitude flights in Europe. Eurocontrol Think Paper #18, Sept. 6, 2022 is called “One Size Fits All—A Common Unit Rate for Europe?” Current unit rates range from €28.72 to €130.30 per kilometer—a huge range. The report finds that a common unit rate is technically feasible and could save up to 4,400 tons of CO2 on a busy day. It finds that implementation by Eurocontrol (which operates the current Europe-wide billing system) would also be feasible. And it notes that different airlines would be winners and losers—those flying mostly in Europe’s core area would benefit from lower charges but those operating outside the core or to non-European regions would pay more. European airlines have long called for “fixing the fractional [air traffic management] system” and creating “an efficient airspace.”

But the Eurocontrol paper unfortunately proposes to retain the fragmentation of Europe’s air traffic management system. Its report explicitly calls for redistributing the proceeds from the common unit rate to subsidize the high-cost air navigation service providers (ANSP), assuming they would continue to retain their costly, wasteful infrastructure and excess staffing. That is no way to bring about a true Single European Sky.

Figure 5 in the report is a table showing ANSP winners and losers at the assumed common unit rate. The 19 winners—ANSPs with low costs that would receive annual windfalls absent revenue redistribution—are mostly in smaller countries such as Malta, Latvia, Estonia, Bulgaria, Cyprus, etc. The 10 losers are all in affluent western European countries, such as Switzerland, Italy, Germany, Spain, and Netherlands. When their officials cry crocodile tears over not receiving enough unit rate fee income, it’s because they and their national governments are unwilling to consider facility consolidation, labor reforms, and more-extensive cross-border free-route airspace.

Here is a table (reproduced from the May issue of this newsletter) drawn from a 2017 Eurocontrol/FAA report an air traffic management in the U.S. and Europe

To summarize, with one-third less air traffic, Europe has 200% more en-route centers and 46% more controllers. Ever since the Single European Sky was proposed more than two decades ago, this underlying problem has loomed larger than any other obstacle.

If some European body had the courage and authority to implement a common unit rate similar to the one used in the Eurocontrol report—but without the redistribution of revenue to the wealthy countries with high-cost ANSPs—what would happen? The initial response of governments in high-cost places like France, Germany, and Switzerland, would be to come up with their own subsidies to preserve the status quo of their ANSPs. But how long would their parliaments put up with those subsidies continuing indefinitely? My guess is that pressure from voters and lawmakers would soon arise calling for these subsidies to jet-setters to be phased out. And the way to do that would be to reduce their ANSPs’ cost structure. This could entail faster implementation of virtual centers and other forms of facility consolidation, remote/digital towers, possible cross-border mergers of smaller ANSPs, and some kind of labor reform, including generous early retirement incentives.

I can’t think of any other way to achieve the stated goals of the Single European Sky, leading to a system whose ANSPs are more like the efficient systems of Canada and the United States. If you know of such an alternative, please let me know.

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Wisk Plans Autonomous 4-Seat eVTOL

Start-up electric vertical take-off and landing aircraft (eVTOL) developer Wisk Aero has unveiled its planned production model, Generation 6. It is designed to carry four passengers but no pilot; its flights would be monitored by a “multi-vehicle supervisor” who would handle up to three of these eVTOLs at a time. Articles about the Generation 6 unveiling stressed that Wisk is the first such firm to apply to the Federal Aviation Administration (FAA) for certification of an autonomous passenger-carrying eVTOL.

The company has an illustrious history and some top talent. It began as Kittyhawk Aero, backed by Google co-founder Larry Page. In 2019, Boeing adopted the business to replace its in-house eVTOL project. Access to all of Boeing’s expertise suggests Wisk may have an edge over other leading eVTOL startups. Like a minority of those, Wisk plans to both produce and operate its eVTOLs in commercial service. Wisk has recruited some top-notch talent. Chief technology officer is Jim Tighe, former chief aerodynamicist for Scaled Composites and chief engineer of its SpaceShipTwo.

Despite its apparent advantages, there is a long path to FAA certification awaiting Wisk. The agency has published its Urban Air Mobility Concept of Operations (ConOps) Version 1.0, for piloted eVTOLs. NASA has done more visionary work, recently releasing a UAM ConOps at Maturity Level 4 (medium-density and complexity of operations with collaborative and automated systems). But so far there is no FAA plan for how it would certify automated eVTOLs.

An article in the June 2022 issue of Aerospace Testing International by David Hughes explores some of the other hurdles facing certification of eVTOLs and managing their flight operations in urban airspace. David Silver of the Aerospace Industries Association told Hughes that he does not expect any changes in how US airspace operates within the next three to five years.

For eVTOL operations a serious unmet need is near real-time microweather data for urban and suburban airspace. As I discussed in this newsletter several years ago, the planned vehicles are small and lightweight and subject to being blown around by unexpected wind gusts, which might appear between tall buildings. Don Berchoff of TruWeather told Aviation Week (Oct. 10-23, 2022) that “Anywhere you have buildings, we don’t have weather models today that could tell you what winds are going to do based on the building configurations. This is a total mystery that needs to get solved now because we’re going to be flying in urban areas with lighter aircraft.” TruWeather is getting underway on a $750,000 project to test a network of ground-based weather sensors in Hampton, VA.

Wisk has recently estimated that its target price for Generation 6 passenger flights is $3 per passenger-mile. I have no idea how that price could possibly cover capital and operating costs of this four-passenger vehicle with one-third of a pilot. You can’t assume 100% load factors, nor routinely clear and not-windy flight conditions. Even at an average of 2.5 passengers per trip, a 15-mile trip to the airport would generate $112. And you have to account for trips that cannot be made when planned, due to adverse weather.

These problems will affect all Urban Air Mobility providers, with or without pilots. I continue to admire the engineering that’s going into these vehicles, but I have yet to see a business model that looks plausible.

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Air-to-Rail Substitution in Europe Questioned

Several European governments are contemplating bans on some short-haul flights within Europe, aiming at routes where there is high-speed rail (HSR) service, such as that available in some inter-city corridors in France, Germany, Spain, and Italy. Both Delta and United have dipped a toe into this concept, the former with its year-old Air+Rail service, which is now available in some form to 20 destinations in Europe. And Star Alliance, which includes United and Lufthansa, in July announced a partnership with German rail operator Deutsche Bahn.

The idea is that because short-haul flights produce twice the CO2 emissions per passenger-mile as long-haul flights, they are low-hanging fruit for reducing aviation’s carbon footprint. To be sure, electrified high-speed rail has a significantly lower operational carbon footprint than diesel rail (which accounts for a significant fraction of non-HSR passenger rail in Europe). But a policy of banning short-haul flights would have many costly consequences—for airports (losing significant amounts of revenue), for air travelers (lost time and inconvenient connections to long-haul flights, etc.). Also ignored in flight-ban proposals is the fact that most European HSR stations are in downtown locations, not at airports. A plan that banned short-haul flights would require billions in new spending to build HSR extensions to, and stations at, those unserved airports.

A new study looks into these problems, analyzing various alternative air-rail policies using data on 87 air travel routes in Germany: “The Substitution of Short-Haul Flights with Rail Services in German Air Travel Markets: A Quantitative Analysis,” by Vreni Reiter, Augusto Voltes-Dorta, and Pere Suau-Sanchez.

A key factor addressed in this study is the importance of flights to and from connecting hub airports, for those traveling between points in Germany and to and from other countries. This point has been noted by officials in both France and Germany, so in building their model to assess how air travel would be affected, the researchers tried four different air-to-rail policies based on the share of connecting passengers on each of the routes: 10%, 35%, 60%, and 80%. A 10% threshold would mean that only flight frequencies where 10% or more of their capacity is used for connections would be allowed to operate. By analyzing detailed flight data for a sample month in 2019, they found the number of weekly flights that would be banned under each alternative, ranging from 1,195 weekly flights at 10% to 4,780 using the 80% threshold.
 
The next step was to assess the costs and benefits of each version of the policy. They estimated CO2 emissions for electric and diesel passenger trains, based on which types operated on which rail lines. The emission savings compared with air travel were valued at Germany’s current “social cost of carbon,” which is €77.13/ton of CO2.

Next, they estimated the excess travel time due to rail trips being longer than plane trips—taking into account waiting times, getting to airports or train stations, etc. For the least restrictive policy (10% threshold), the carbon savings were €45 million/year and the travel time cost increase was €218 million. And for the 80% threshold, the carbon savings were €227 million/year and the travel time cost increase was €1.05 billion/year. In other words, costs exceed benefits by nearly a factor of five. Note also that the estimate of costs does not include the billions of euros that would be needed to extend existing HSR lines to newly-built airport HSR stations. Nor does it include electrifying all the diesel-powered rail routes and replacing their locomotives with electric ones. Nor does it include the loss of airport revenue, due to banned short-haul flights.

In short, shifting short-haul traffic from air to rail in Europe is not a low-hanging fruit on the road to low carbon footprints. Replacing coal-fired powerplants with nuclear would have vastly greater impact.

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Whither Small Community Air Service?

There is growing concern in the aviation community about the future of airline service to small airports. Major airlines have parked 50-seat regional jets due to both pilot shortages and high fuel consumption. Faye Malarkey Black of the Regional Airline Association told Aviation Daily back in June that “I think the service we provide to the smallest communities has never seen a bigger existential threat than we see today.” Since 2019, 71% of small communities have lost some or all of their air service. Also in June, Bill Swelbar of Swelbar-Zhang Consultancy identified 89 airports vulnerable to losing additional air service that are within 180 miles of a large or medium-hub airport, of which more than half are “highly vulnerable” and served by a single carrier.

One trend that may help is the continued growth of ultra-low-cost carriers (ULCCs), which are filling in for some of the lost smaller-airport service. Recently Swelbar noted startup ULCC Avelo launching service to Kalamazoo, MI, and Breeze providing cross-country (hub-avoiding) routes from eastern airports including Charleston, SC and Richmond, VA. As I was writing this article, I received a news release announcing new Breeze service to Provo, UT, Savannah, GA, and Westchester, NY. According to Swelbar-Zhang, ULCCs now serve 192 cities. And between 2007 and 2021, ULCCs added 46 small and non-hub airports to their networks, while legacy carriers exited 43 such airports. But as Swelbar has pointed out, ULCCs typically operate something like two flights per week on a route, compared with two to three daily departures provided by traditional regional carriers.

Another idea has been proposed by SkyWest CEO Chip Childs, which has announced plans to end service to 29 small cities. It has applied to FAA for permission to launch a charter airline subsidiary, SkyWest Charter. That entity would operate under Part 135 regulations applicable to planes with no more than 30 seats. Most regional carriers operated under Part 135 until the mid-1990s, when FAA transitioned most of them to airline-category Part 121. Pilot qualification requirements are less-stringent for Part 135 carriers, which would help the new charter operation with pilot and copilot recruitment.

Longer term, of course, there is the prospect of Regional Air Mobility (RAM)—new-generation electric and eVTOL aircraft with ranges up to several hundred miles and (one hopes) passenger capacity more like 12 to 30, compared with Urban Air Mobility eVTOLs carrying four passengers. RAM would not be “the” solution for small airports, but it could be one part of a solution.

One other point should also be considered: reforming or ending Essential Air Service (EAS) subsidies. As Swelbar has pointed out, subsidizing service to small airports within 120 miles of medium and large airports is essentially “paying people not to get on the highway and drive to larger airports with superior service.” To be sure, ending or reducing EAS might become politically feasible if Regional Air Mobility can actually offer a cost-effective alternative to driving to those larger airports with far more destinations.

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The Growing Case for Digital Towers

For more than a decade, I have been reporting global progress in replacing physical control towers with what were originally called “remote towers.” That’s because the earliest applications were to provide tower services at small airports based on cameras and other sensors at the small airport and the control room located on the ground somewhere else—potentially several hundred miles away. Today, however, this phenomenon is increasingly referred to as “digital towers,” thanks to a much wider range of use cases.

London Heathrow Airport (LHR) is a good example. Its air traffic control is provided by the U.K.’s ANSP—NATS. LHR replaced its old tower with a new one in 2007, at a cost of £50 million. They are not ready to scrap it. Instead, they are enhancing its performance by installing 18 cameras on the tower, and another set of cameras on the two LHR runways. Data from those cameras is sent to a new digital lab on one floor of the tower, with large display screens like those in a remote tower centers now operational in Germany, Norway, and Sweden. The lab was created and is operated by Searidge Technologies, a company owned jointly by NATS and Nav Canada.

One of the earliest applications developed by the digital lab was a solution to an operating condition called “Tower in Cloud.” When this low-visibility weather condition occurs, controllers atop the 87-meter (285 ft.) tower cannot see the entire arrival runway. The traditional practice in such conditions is to slow down the arriving traffic, from 48 arrivals per hour to just 40. This was due to the lag time in controllers getting information from surface radar about where each plane is on the runway and when it has exited. The solution involved two improvements: first, install cameras at each exit on the arrival runway, to be followed by cameras at the “hold line” of the departure runway.

Assisting with this new runway surveillance system is a network-based artificial intelligence system called Aimee. It monitors every runway exit simultaneously and tells the controller precisely when the tail of the aircraft clears the runway. This enables an increase in the safe aircraft arrival rate during Tower in Cloud conditions (and could do the same thing for Seattle’s tower). Both LHR runways are fully equipped with the cameras, because arrivals go to one runway in the morning and to the other in the afternoon.

Another advantage of the digital facility in the tower is night-time visibility. There is considerable glare from lighted buildings, lighted parking areas, and general light pollution from the large metro area. Moreover, far away from those buildings the runways and taxiways are largely in the dark. The cameras can see better in the dark than human eyes looking out the window.

LHR is in the approval process for building its long-needed £2.5 billion third runway. It will not be visible from the existing tower cab, and LHR and NATS have no desire to build a new tower to serve that runway. So their plan is to control traffic on the new runway digitally.

This sensible approach could be adapted to solve a current problem at Chicago O’Hare (ORD). Its relatively new set of east-west runways have led to increased aircraft noise east and west of the airport during the night. To address this problem, the O’Hare Noise Compatibility Commission in August approved an “overnight runway rotation” plan aimed at evenly distributing the noise around the region. Given the wide north-south expanse of the new runway configuration, ORD added two additional control towers to serve the northernmost and southernmost runways. But those towers are closed at night (presumably for budgetary reasons). Hence, no landings or take-offs occur on those two at night—and hence, only four of the six east-west runways are left to “rotate” the nightly noise exposure. Outfitting those two runways with Heathrow-type cameras, etc. would enable them to be controlled from ORD’s main tower. But fat chance of FAA considering such a 21st-century solution.

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News Notes

User Fees for New Airspace Users
American Airlines CEO Robert Isom told attendees at last month’s U.S. Travel Association conference that new users of the airspace—such as drones, eVTOLs, and space launch companies—should start paying for their use of the air traffic control system. In a sign of potential opposition, drone organization AUVSI argued against pending proposals in some state legislatures for user taxes on those who use low-level avigation easements—in effect, toll lanes for drones.

Ligado Network Will Jam Iridium Receivers, Study Finds
In a report requested by Congress, the National Academies of Science, Engineering, and Medicine found that while “most” commercial GPS receivers will not be jammed by Ligado’s 5G wireless network, it will interfere with Iridium’s mobile satellite services used by the Pentagon (and also by Aireon, which provides space-based ADS-B services to airlines and ANSPs). Specifically, the report found that “Iridium terminals will experience harmful interference on their downlink caused by Ligado user terminals operating in the UL1 band while those Iridium terminals are within a significant range of a Ligado emitter—up to 732 meters.”

Virgin Islands Seeks Airports P3
The Virgin Islands Port Authority (VIPA) plans to issue a request for qualifications (RFQ) for teams that may be interested in a long-term DBFOM concession to upgrade and manage the terminals at its two commercial airports, on St. Croix and St. Thomas. A request for proposals (RFP) may be issued by the end of the year, according to an article in Inframation News (September 22nd). Similar P3s have modernized Jamaica’s airport terminals in Kingston and Montego Bay.

Ferrovial and AECOM Seek Florida Vertiport Sites
Ferrovial Vertiports and AECOM will work together to identify sites for a planned vertiport network in Florida. The agreed-upon due-diligence protocols will consider airspace, soil conditions, weather patterns, utility sources, intermodal connections, potential eVTOL service volume, current and potential types of eVTOLs, and community priorities regarding noise, safety, and sustainability. Ferrovial is working with German eVTOL developer Lilium, whose eVTOL is targeted mainly at inter-city travel.

FAA Issues Interim Vertiport Design Guidance
On Sept. 26, FAA issued preliminary vertiport design standards, cautioning that, as of now, the agency does not have enough validated eVTOL performance data, so this guidance is a general outline. The agency hopes to issue an Advisory Circular with more specifics in 2024-25, according to Aviation Daily’s report on Oct. 4. The newsletter pointed out that the current FAA engineering brief is not closely aligned with the current European standard, according to Rex Alexander of helicopter consultancy Five-Alpha.

Vietnam Planning $1.7 Billion P3 Airport
Consistent with its national government’s plans to improve airport capacity, the province of Kon Tum in the Central Highlands is planning development of a major airport with a capacity for between 3 million and 5 million annual passengers. Construction is planned to begin in 2023, assuming the selection of a qualified P3 team.

Japan’s Kagoshima Considers Airport Privatization
In March 2022 the Kagoshima prefecture released its vision for the future of its commercial airport, saying that it would consider a P3 concession to finance improvements and operate the expanded airport. Last month it announced that it is gathering information about Japan’s recent experience with airport P3 concessions. The vision for the airport calls for 7.3 million annual passengers by 2030, compared with 5.6 million before the pandemic. The Inframation News article cites existing airport concessions in Japan and says the national government “would like all the country’s 97 airports to be privatized.”

More Electric Taxiing News
Germany’s Düsseldorf Airport has agreed to work with WheelTug on a feasibility study of the company’s FASTGate (Fast And Safe Turn) system. WheelTug installs motorizing capabilities on commercial airliners, enabling planes to taxi in and out without needing a conventional tug or using the plane’s engines. A recent feasibility study at Mumbai International Airport identified potential annual savings of tens of millions of dollars. Competitor Safran has redesigned its powered wheel system to operate one wheel on each of the two main landing gear assemblies and reduced its weight. These systems are more feasible for short/medium-range aircraft (A320, B737 families) which involve many takeoffs and landings per day.

Greece Studying Privatization of Kalamata Airport
The national Hellenic Corporation of Assets and Participations (HCAP) last month released a request for qualifications for the privatization on Kalamata International Airport in southern Greece. HCAP envisions a 40-year P3 concession that includes modernization and expansion plus operation of the airport. In addition to serving 340,000 annual passengers, Kalamata is also a base for the Hellenic Air Force.

Puerto Rico Decides Not to Privatize Regional Airports
Inframation News reported (Sept. 19) that the Puerto Rico Ports Authority has dropped plans to hire a private company to operate, manage, and improve its nine regional airports. The newsletter cited two sources, which said that the decision came about partly due to local political opposition and also to the dire financial condition of the airports.

IFM Increases Bid for Vienna Airport Stake
Australia’s IFM Global Infrastructure Fund on Sept. 16 increased its bid for 10% of the shares in Vienna Airport. The city of Vienna, the province of Lower Austria, and the Employee Foundation together own 50% of the shares. Back in June, IFM Investors made a nearly €3 billion offer to take full control of the airport, but that bid was rejected.

Macquarie Buys Major Share of Latin American Airport Companies
Australian infrastructure giant Macquarie has closed a deal to acquire 50% stakes in airport companies Odinsa and Corporacion Quiport. Odinsa is the developer/operator of El Dorado International Airport in Bogota, Colombia. And Corporacion Quiport is the developer/operator of Sucre International Airport in Quito, the capital of Ecuador, serving 5 million annual passengers.

Good Reading on LaGuardia’s New P3 Terminal
“The Team that Fixed LaGuardia,” by Ben Cohen in the Sept. 17 issue of the Wall Street Journal, tells the story of how a small team of LGA leaders, led by Frank Scremin of Vantage Airport Management, built the gleaming new Terminal B at LaGuardia airport. Their Operational Readiness and Transition (ORAT) team not only managed to keep construction on track while keeping key elements of the terminal in operation during construction but also tested and fine-tuned all its systems before the re-opening this year.

San Antonio Plans to Privatize Car Parking
Before year-end, San Antonio International Airport plans to issue a request for proposals (RFP) to upgrade and optimize its parking garages, which increasingly have to turn away would-be customers. They have in mind one of several privatization/P3 options, including a long-term concession. The airport already has a 30-year DBFOM concession with American Corporate Airport Partners that built a corporate hangar complex that the airport continues to lease to various tenants.

$7.4 Billion Invested in Advanced Aerial Mobility Thus Far
Aviation Daily (Oct. 13) reported that recent investments by United Airlines in Embraer spinoff Eve Holding and by several investors in Japan’s SkyDrive brought the reported total raised by eVTOL startups to $7.4 billion. In first place among startups is Joby Aviation ($1.8 billion) with Lilium next ($938 million).

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Quotable Quotes

“Our results suggest that [airport] privatizations, especially by PE [private equity] funds, do well both for their investors and for the general public. They increases the fees they charge airlines but despite these higher fees, also increase the number of passengers flying through them. They appear to accomplish this by providing better service, offering passengers nonstop flights to more places, lower cancellation rates, and better amenities inside the airports. Our results suggest that PE ownership increases productivity more than non-PE private without significantly different effects on prices (fees), suggesting overall benefits relative to non-PE ownership.”
—Sabrina T. Howell, Yeejin Jang, Hyeik Kim, and Michael S. Weisbach, “All Clear for Takeoff: Evidence from Airports on the Effects of Infrastructure Privatization,” National Bureau of Economic Research, NBER Working Paper 30544, Sept. 2022

“Today aircraft [in Europe] do not fly their most-efficient routes for various reasons. If we were to have every flight operate in the most optimal way, the perfect flight would have about a 10% emissions reduction between the reality we see today and the perfect flight. The perfect flight is something we will probably never obtain, but definitely between 0 and 10% there is a lot to be gained by having better flight efficiency, including by improving air traffic management.”
—Filip Cornelis, in Helen Massy-Beresford, “European Commission Urges Single European Sky Progress,” Aviation Daily, June 23, 2022

“I don’t believe anything is going to change between now and three years in how airspace operates. There is a path to certify a piloted vehicle but not a path to certify an autonomous vehicle. The goal of some of our members is to have fully autonomous vehicles but no one, including AIA, expects to have to happen in the next three to five years. We do intend to understand what we need to do to certify from an autonomous standpoint.”
—David Silver, Aerospace Industries Association, in David Hughes, “Highways in the Sky,” Aerospace Testing International, June 2020

“The [eVTOL] challenge is at the moment we’re looking at four-seaters with a pilot. It’s hard to see how you could ever make money out of that. Also, the question is will they ever be able to land airside? Do they have to land outside the airport if they’re bringing people to the airport? The concept that they’re going to pick up passengers at the top of a skyscraper in London or Sao Paulo? No way. The owners of those skyscrapers will never let random people into their building to go up to the top floor. . . . At some point you’ll get something that may work. A four-seater I don’t see, particularly without a pilot on board, and I don’t see it getting certified without a pilot on board.”
—Aengus Kelly, CEO of AerCap, in Helen Massey-Beresford, “CEO of World’s Largest Lessor Skeptical of eVTOL Air Taxis,” Aviation Daily, Oct. 14, 2022

“NATS doesn’t see building physical towers as something that is going to continue. I am not suggesting that someone who already has a physical control tower has to throw that tower away. We can enhance it with digital control tower capability. However, if that tower comes to the end of its life, a 100 percent digital tower facility will be a perfect replacement, and it will give the airport far more than a physical tower can provide.”
—Andy Taylor, NATS Chief Solutions Officer, in David Hughes, “Digital Tower Technology Goes Big with NATS at Heathrow,” The Journal of Air Traffic Control, Spring 2019

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The post Aviation Policy News: Benefits from airport privatization, the case for digital towers, and more appeared first on Reason Foundation.

• Reforming the passenger facility charge
• Secondary cockpit barriers back on the agenda
• Denver post-mortem reveals flawed terminal P3 process
• New York airspace still a mess
• News Notes
• Quotable Quotes

Reforming the Passenger Facility Charge to Support Aviation Recovery
By Marc Scribner

The COVID-19 pandemic and responses to it injected an unprecedented amount of uncertainty into the air travel market. Nearly overnight, year-over-year passenger boardings in the U.S. cratered by 95%. Aviation and travel industry analysts were predicting recovery time horizons of four or more years, but domestic air travel demand came roaring back to almost pre-pandemic levels after less than two years.

This surging demand caught the industry by surprise and has led to deteriorating airline network conditions and airport overcrowding. With respect to airports, commercial hubs are trying to adjust to new conditions but are hindered by outdated funding and financing mechanisms. A new policy brief from Reason Foundation makes the case for modernizing one such mechanism, the passenger facility charge (PFC), to give airports additional flexibility to respond to rapidly evolving air travel patterns.

Like the airlines, airports received tens of billions of dollars in taxpayer support during the worst of the pandemic. To restore airport self-sufficiency, giving airports maximum operational and financing flexibility to adjust to emerging conditions is critical to minimizing the costs and disruptions associated with aviation recovery. Reforming the PFC is one important step Congress can take in supporting this goal.

The passenger facility charge is a congressionally authorized, federally regulated, local airport user fee. It exists alongside the federal Airport Improvement Program (AIP), a grant program funded through the Airport and Airways Trust Fund by a variety of aviation taxes. Together, the PFC and AIP have historically accounted for roughly half of the total airport funding available for capital projects, according to the Congressional Budget Office.

The federal PFC cap was last raised by Congress in 2000. Under current law, public airports in the United States can charge a maximum PFC of $4.50 per boarding for the first two flight segments of a trip, with PFC collections per passenger being capped at $9 per one-way and $18 per round-trip. Thanks to inflation, the passenger facility charge has seen its purchasing power plummet by approximately half, negatively impacting airports’ ability to address their growing list of needed improvements.

Due to restrictions on use, Airport Improvement Program funds tend to support airside projects such as runways, taxiways, aprons, and noise abatement. In contrast, PFC revenue has fewer restrictions and tends to support landside projects such as passenger terminals. Importantly, unlike AIP funds, PFC funds can be used to service debt, which allows airports to long-term finance rather than merely fund improvements. These differences in flexibility have led to a strong preference for the PFC over AIP at commercial airports with sizeable passenger volumes.

The flexibility of the PFC vis-à-vis AIP also has consequences for airport productivity. Recent empirical research has found that increasing airport reliance on PFC revenue while decreasing airport reliance on AIP revenue increases airport efficiency. This enhanced productivity is thought by researchers to be the result of the PFC being available to finance a wider array of airport projects than AIP funding, which allows airports to better prioritize and undertake projects with greater returns on investment. The implication is that leaving the PFC cap at the current $4.50 while increasing AIP funding would have a negative airport efficiency impact.

Some opponents of PFC reform have argued that airports should rely more on non-aeronautical revenue as a substitute for raising or eliminating the PFC cap. While airports seek revenue opportunities from terminal concessions, Federal Aviation Administration (FAA) data from during the pandemic demonstrates that other non-aeronautical revenue sources generally carried greater revenue risk than the PFC.

The COVID-19 pandemic had varying impacts on non-aeronautical revenue sources. Between 2019 and 2021, the declines in PFC revenue and parking revenue were similar to the 44.75% drop in enplanements at commercial service airports. Restaurant and retail revenue declines were steeper than PFC and parking revenue declines, likely reflecting less time spent at the airport by those who did travel by air, concerns about crowding and ventilation, and masking. Rental car revenue fared better, with less-severe declines likely the result of a shift away from shared ground transportation (ride-hail, taxi, mass transit) and new demand from some arriving passengers for rental cars for trips that would formerly have been completed by a connecting flight.

While PFC revenue, like non-aeronautical operating revenue, depends on the demand for passenger airline service, it does not face additional risks from ground transportation modal substitution. As air travel recovers in general, so too should PFC revenue. In contrast, parking and rental car revenue are likely to be less reliable due to renewed competition from ride-hailing, which is likely to result in a net reduction in ground transportation airport revenue.

Aside from its fiscal purpose, the passenger facility charge was also designed to enhance airline competition and promote lower airfares. In the 1950s and 1960s, in exchange for airlines committing to rents and other fees to service existing airport debt and other financing arrangements, many airports granted incumbent airlines long-term exclusive-use gate leases. This led to a paucity of gates being available for new carrier entrants. Economists have estimated that annual airfares are $5.81 billion higher in 2019 dollars than they would be with adequate gate access to support new carrier entrants at large and mid-sized airports. This figure dwarfs the $3.51 billion in nationwide PFC collections in 2019.

Further expanding the passenger facility charge’s purchasing power by focusing on improving airline competition through eliminating the statutory cap—especially through expanding common-use gates available to new carrier entrants—could result in substantial fare savings for consumers. These savings could more than counteract the modest negative marginal impact on travel demand of increased PFCs, especially if airline ancillary fees on seats, baggage, and other previously bundled services were to be included in the full-price unit of analysis.

As Congress debates FAA reauthorization next year, it should consider modernizing the passenger facility charge as a pro-consumer method of restoring commercial airports to self-sufficiency in the post-pandemic aviation environment. To maximize the fairness and efficiency of PFC reform, Congress should eliminate the statutory cap on passenger facility charge collections while simultaneously requiring any airport that opts to charge a PFC more than the current $4.50 maximum to forgo 100% of its AIP funding. The annual AIP funding authorization can then be proportionately reduced, which would save federal taxpayers hundreds of millions of dollars per year.

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Secondary Cockpit Barriers: Back on the Agenda

Back in the 2018 FAA reauthorization bill, Congress mandated that FAA develop a regulation requiring airlines to add a secondary barrier between the front lavatory, adjacent to the cockpit, and the front passenger cabin. The idea was that the barrier would be extended whenever the cockpit door needed to be opened in flight, to prevent a would-be attacker from jumping over the service cart positioned in the aisle to gain access to the cockpit.

FAA convened an aviation rulemaking advisory committee, a standard practice, to gather input from stakeholders, including airlines, aircraft manufacturers, pilots, and technical experts. That committee’s 2020 report laid out how this could be carried out. Presumably due in part to the disruption caused by the COVID-19 pandemic, it was only this July that FAA issued a Notice of Proposed Rulemaking (NPRM). Needless to say, the Air Line Pilots Association (ALPA) welcomed the NPRM as long overdue.

Three main airline trade associations that have long opposed secondary barriers as unnecessary asked for a 60-day extension of the time for submitting comments. And a coalition of aircraft manufacturers, including Airbus and Boeing, submitted their own request for a 60-day extension. Both groups complained about the complexity of the issue and the need to assemble technical experts, etc. On Sept. 8, FAA dismissed these complaints, pointing out that the NPRM is consistent with the published report from 2020 and therefore that “sufficient time has passed” for commenters to prepare their submissions.

As it is, the proposal is a compromise. It would not require retrofitting secondary barriers on any existing airliners. It would apply only to aircraft produced and put into service two years or more after the final rule’s release. It would only apply to passenger airlines certified to operate under Part 121. And it would apply only to U.S. airlines.

Those limitations would certainly reduce the benefits of the regulation, which would add a modest increase in cockpit security even if retrofitted to all aircraft. Still, as I have written previously on this issue, a secondary barrier is a one-time expense, as were the original hardened cockpit doors required to be retrofitted to all in-service airliners. The big cost is in the ongoing expense of federal air marshals (FAMs) who must ride in the front cabin (on the few flights they actually appear on), adding $1 billion a year to the Transportation Security Administration’s budget paid for by taxpayers and depriving airlines of the usually higher revenue from two front-cabin seats.

In a recent paper, “Security Risk and Cost-Benefit Analysis of Secondary Flight Deck Barriers,” noted researchers Mark Stewart and John Mueller estimated potential risk reduction from secondary barriers at 8.2% and compared this to the annualized cost of the one-time upgrade. The resulting benefit/cost ratio is a very high 41. In their 2018 book, Are We Safe Enough?, Stewart and Mueller found the benefit/cost ratio of the federal air marshals program to be only 0.03—i.e., each dollar spent on FAMs yields only three cents worth of benefits, whereas each dollar spent on secondary barriers yields $41 worth of benefits. Stewart tells me they are preparing a submission in response to the NPRM.

The airlines would have a much stronger case if they called for the elimination of the costly and ineffective federal air marshals program and in exchange agreed to secondary barriers on new planes.

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Denver Post-Mortem Reveals Very Flawed Terminal P3 Process

Last month, Denver International Airport released its “Great Hall After-Action Report,” attempting to explain how its $1.8 billion long-term public-private partnership (P3) to expand and modernize the Jeppesen Terminal at Denver International went off the rails. While airport management is to be commended for assessing what went wrong, the report reveals that in selecting a long-term public-private partnership and trying to manage it as the private provider’s partner, they had a very poor understanding of this kind of P3.

While airport public-private partnerships are far more common in Europe, Latin America, and Australia than in the United States, they have been used quite a bit in this country for highway (and a few rail transit) projects, including in Colorado. The state transportation agency’s P3 unit, recently renamed the Colorado Transportation Investment Office—CTIO, has done several long-term design/build/finance/operate/maintain (DBFOM) P3s, including a major reconstruction of I-70 between the airport and downtown Denver. The airport’s management could have learned a lot from CTIO’s experience, but their after-action report reveals basic misunderstandings.

First of all, the process Denver International followed to decide whether a DBFOM P3 was superior to in-house management (generally as design-bid-build or design-build) was unusual. The normal process is to define the best-case conventional approach (called the Public Sector Comparator—PSC) and then estimate how a long-term P3 would compare, using something called a value for money (VfM) analysis. Many guides are available on how to do a VfM, including from the U.S. Department of Transportation, consulting firms, and Colorado Department of Transportation (CDOT).

A key aspect of the VfM is identifying and quantifying the expected risk transfers from the public sector to the P3 company. Such risks include revenue (if the project is financed based on project revenues), construction cost overruns, late completion, and also “competitive neutrality.” That term refers to estimating the dollar value of differences between the public agency and the P3 company, such as that the company pays for insurance whereas the agency self-insures via the taxpayers, and that if the company succeeds in making a profit over the long term of the agreement, it will generate corporate income tax revenue for the state.

The actual VfM study does not appear in the report, but the description on pp. 32-33 is very general. Its risk allocation table incredibly shows “change orders” being the public sector’s responsibility. What is also very strange is the report says the DBFOM P3 and the three conventional methods came out about the same, which reinforces my concern about a faulty VfM analysis. (I suspect it was qualitative, not quantitative.) Yet DEN should have known how to do a serious VfM. The overall report makes several references to the Colorado Department of Transportation’s Central 70 project, done as a DBFOM P3. CDOT’s detailed VfM analysis is readily available, but it’s difficult to imagine how DIA’s VfM could have been so poor if they had followed the process CDOT went through.

Another departure from normal was DEN’s failure to carry out a competitive procurement process. This usually includes issuing a request for qualifications, selecting the best, typically three, teams that responded, sending them a draft request for proposals (RFP), revising and then issuing the RFP, and selecting the best-value proposal as the basis for negotiating a long-term agreement. Instead, Denver International just held informal discussions with several companies and then decided to negotiate with Ferrovial. That company has solid airport P3 experience, but it had not done an airport project in the United States. A normal P3 procurement process might have led to a different team and a better-focused agreement.

As was widely reported when the agreement was terminated in 2019, the reason was neither “for cause” nor “for convenience.” It was the growing recognition on both sides that the relationship was not working, in part because the roles and responsibilities of the public and private partners were not well-defined or agreed to in writing, which led to all kinds of problems. As the report says, in a long-term P3, “The owner needs to understand, and accept, the limitations on their decision-making and management authority.” Given the shared problems, DEN and Ferrovial negotiated a $184 million termination payment to the company.

Fortunately, the report concludes by acknowledging that Denver’s experience does not mean long-term public-private partnerships are a bad idea for airport terminal projects. It points to the successful completion of LaGuardia’s $4 billion Terminal B replacement, for example, which opened in July pretty much on time.

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New York Airspace Still a Mess

An Aug. 16 article in Government Executive was headlined “FAA-Caused Flight Delays in New York Preview Potential ‘Crisis’ in Coming Years.” It focused on ground delays caused by air traffic controller staff shortages that have led to and continue to lead to delayed traffic in and out of Newark Liberty International Airport (EWR), John F. Kennedy International (JFK), and LaGuardia Airport (LGA). Controllers’ union president Rich Santa, in a July speech at the Aero Club of Washington, pointed out that FAA temporarily closed its training academy during the COVID-19 pandemic, just as it did in 2013 during the sequester that shut down large parts of the federal government. FAA does plan to hire 1,500 more air traffic controllers this year, but the majority of them will spend several years in training before being fully qualified to control traffic.

At any rate, a controller shortage is not the only problem that has made the New York metro area the site of far more ongoing delays than anywhere else in the country. One reason for this is the complex airspace, in which the three major airports, along with smaller ones like Teterboro and Westchester, have approach and departure paths that are difficult under the best circumstances but can conflict when weather forces runways at an airport to shift direction.

If you’ve been following FAA air traffic improvement programs for the past two decades, you may recall a big one called Metroplex. The aim was to identify major metro areas with multiple airports and complex airspace and apply new technology and procedures to streamline traffic flow. On the FAA website you can find a list of the Metroplex Airspace Locations:

• Atlanta
• Charlotte
• Cleveland-Detroit
• Denver
• Houston
• North Texas
• Northern California
• South Central Florida
• Southern California
• Washington, DC

Conspicuously absent from this list is the New York-New Jersey area. Further exploration at FAA.gov reveals a page labeled “New York/New Jersey/Philadelphia Airspace Redesign,” dated Dec. 30, 2020. It explains that this project was intended:

“…to increase the efficiency and reliability of the airspace structure and the Air Traffic Control (ATC) system, thereby accommodating growth while enhancing safety and reducing delays…While four stages of implementation were originally planned, FAA paused the project in 2012 in light of air transportation system changes in the intervening years. While several beneficial elements of the project were implemented, the National Airspace System evolved significantly between the 2007 EIS [Environmental Impact Statement] and 2012. New NextGen capabilities such as Time-Based Metering and advanced satellite-based navigation procedures, increasing consolidation of the airline industry, changes in system use, and evolving traffic patterns resulted in new and different airspace and procedures requirements. As a result, the FAA suspended the project in May 2013…There are no current plans for further work of the project.”

Every one of those changes affected the entire air traffic control system, not just New York. That mumbo-jumbo explains nothing about why New York was left out of the Metroplex program. People I asked about this years ago rolled their eyes. Their general assessment was that the politics and likely environmental opposition to any changes in flight paths in that region were likely to be so fierce that it would be deemed to be a losing battle. And that’s one of the reasons why the New York/New Jersey/Philadelphia airspace remains to this day, and will continue to be, the cause of about 40% of all U.S. air traffic delays.

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News Notes

First U.S. Mainland Airport P3 Lease Agreed
Last month, the Tweed New Haven Airport Authority approved a 43-year public-private-partnership (P3) lease with airport operator Avports, backed by a Goldman Sachs infrastructure investment fund. This is a revenue-risk concession, under which Avports/Goldman Sachs will lengthen the runway, build a new terminal on the east side of the airport, and operate and manage the airport. Thanks to this agreement airport subsidies from the city and state will be eliminated. The only other U.S. whole-airport P3 lease is San Juan International in Puerto Rico, dating to 2013.

Vinci Airports Had a Great Summer
On Aug. 1, Vinci Airports announced its purchase of a 29.99% stake in OMA, the company that operates 13 airports in northern and central Mexico. Vinci purchased the shares from shareholders SETA and Aerodrome. On Sept. 5, Vinci Airports signed a 40-year P3 agreement to operate four international airports in Cape Verde, Africa. Vinci will modernize the airports as well as operate and manage them. And on Sept. 10, Vinci Airports was selected as the preferred bidder for the Tahiti Airport, the largest airport in French Polynesia. Vinci now operates more than 50 airports worldwide, according to Inframation News.

Aena Wins Big in Brazil Airport Auction
In Brazil’s seventh round of airport asset recycling, Spanish airport operator Aena was the biggest winner, acquiring P3 leases of 11 airports in several states, the largest of which is Congonhas Airport in Sao Paulo. The other airports are in Mato Grosso do Sul, Para, and Minas Gerais. Winning a second set of airports was a joint venture of Socicam and construction company Dix, leasing the airports in Belem and Macapa. Asset management firm XP Asset won the concession for a set of general aviation airports. All three concessions are for 30 years.

LaGuardia Terminal B P3 Opens on Time
The $4 billion P3 that rebuilt and expanded LaGuardia’s formerly shabby Terminal B was declared operational in late July. All but two of the terminal’s 35 gates opened in January. The P3 company LaGuardia Gateway Partners will operate and manage the terminal for 35 years under the long-term agreement. LGP consists of Vantage Airport Group, Meridiam Infrastructure, and Skanska. The project was the 2021 winner of UNESCO’s best new airport facility. It was also certified LEED Gold. The Port Authority of New York & New Jersey is the public-sector partner of LGP.

Ups and Downs for Boom Supersonic
Summer brought both good news and bad news for Boom Supersonic, the startup developer of a Mach 1.7 supersonic airliner. The good news was an order for 20 of the aircraft from American Airlines, backed by a non-refundable deposit. That news followed a previous order for 15 of the planes from United Airlines, earlier this year. The bad news was a front-page article in Aviation Daily (Sept. 9) headlined “Rolls-Royce Withdraws from Boom Supersonic Project.” The company had been working with Boom on jet engine studies since 2020, but the engine company provided no reasons for its decision. Boom says it will announce an engine partner “within the next few months.”

LAX and MIA Testing Anti-Drone Technology
PoliticoPro reported on the Transportation Security Administration is testing a new system that can detect, track, and identify drones at both Los Angeles International Airport and Miami International Airport. Data collected in real-time “will help TSA expand this capability to other airports in the future,” TSA said. But it said nothing about what a threatened airport can do to prevent a drone intrusion.

Questioning the COVID-19 Airline Bailouts
A new report from the Mercatus Center at George Mason University suggests, per its title, that “the 2020 bailouts left airlines, the economy, and the federal budget in worse shape than before.” It’s a well-researched report by Mercatus scholars Veronique de Rugy and Gary D. Leff, who is well-known for his aviation blog, “View from the Wing.” You can find it here.

Investors Considering Beauvais Airport
Beauvais Airport is 50 miles north of Paris, and before the pandemic, it was the tenth busiest airport in France. Its 15-year concession expires next June, so the governmental owner (SMABT) is holding talks with potential successors. Inframation News reports that interested parties include Egis, Eiffage, Aeroports de la Cote d’Azur, and Vinci Airports. Ryanair accounts for 72% of the airport’s traffic and Wizz Air for another 23%.

Frontier Expands Despite Losing Spirit
Having lost out to JetBlue on acquiring Spirit Airlines, Frontier Airlines announced the first of what may be a new round of expansions last month. Frontier first announced new international flights from Atlanta’s Hartsfield-Jackson International Airport. The new destinations are Nassau, San Salvador (El Salvador), Kingston (Jamaica), and both San Jose and Liberia (Costa Rica). They bring Frontier’s total overseas routes from Atlanta to eight. A week later Frontier announced another major expansion, adding 10 new destination cities from Phoenix Sky Harbor Airport, which ups Frontier’s nonstop destinations from Phoenix to 22.

Alabama Airport to Get New P3 Terminal
Gulf Shores, Alabama, is converting its general aviation airport—Jack Edwards Field—into a commercial service airport. On Sept. 7, the Gulf Shores Airport Authority signed a P3 agreement with TBI and Vinci Airports that will include providing a temporary passenger terminal, a permanent terminal, and other airport improvements, along with operating and managing the airport. The $3.7 million temporary terminal is to be operational by next March, while the permanent terminal design will begin when annual passengers reach 75,000 and construction will begin when enplanements reach 135,000.

San Bernardino Airport Gets TSA Screening
With long-hoped-for passenger service finally beginning last month at San Bernardino Airport, the TSA has opened a new screening checkpoint and luggage screening facility at the airport. Breeze Airways began service to San Francisco International last month, with continuation service to Provo, Utah. So far that is San Bernardino’s only passenger service.

Mexican Airport Company Adding Second Terminal at Puerto Vallarta
Grupo Aeroportuario del Pacifico (GAP) is building a second passenger terminal at Puerto Vallarta’s international airport. The new terminal will add nearly 800,000 square feet of terminal area. Including other expansion projects, GAP is spending $350 million on airport improvements.

Several Companies Pursuing Electric Taxiing
A decade ago, both L-3 Communications and Honeywell/Shafran demonstrated electric airliner taxiing, using electric motors to drive the main landing gear wheels. But the idea did not seem cost-effective to airlines then. Green Taxi acquired the L-3 technology and Honeywell/Safran is reintroducing their system as Electric Green Taxi System, given today’s concern about aircraft exhaust emissions. Green Taxi has switched to nose-wheel motors, while its competitor is sticking with main gear motors. FAA certification has not yet been obtained by either.

Aeroporti di Roma Partnering with Leonardo on Vertiports
ADR, Rome’s privatized airport company, has partnered with Leonardo to develop vertiport infrastructure for what it hopes will be Europe’s first advanced air mobility (AAM) route between Italy and France. Joining them across the border is Aeroports de la Cote d’Azur. The network is to include vertiports at the airports of Bologna and Venice, in addition to Rome. The group, now known as UrbanV, is working with eVTOL (electric vertical take-off and landing) startup Volocopter and hopes to launch its first local route—between Fiumicino Airport and the city of Rome by 2024.

SAF and Other Emission Reductions Assessed by The Economist
Under the headline, “Guilt-Free Flying,” the weekly news magazine The Economist devoted two-and-a-half pages to a serious look at the possibilities and costs of sustainable aviation fuel (SAF) as the route to a greener aviation future. It’s on the magazine’s website, from the Aug. 20 issue.

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Quotable Quotes

“While lifting the cap on the PFC is justifiable by looking at project inflation, airport needs, and promoting competition, it is also important that Congress consider deregulating the rate-setting. This would allow airports to set the rate of the PFC for different markets: international, transborder, domestic, and for connecting flights. This structure borrows from the successful example of the Canadian Airport Improvement Fee (AIF). For example, at Toronto Pearson, the AIF is set at C$30 for non-connecting passengers and C$6 for connecting passengers. Because non-connecting passengers will pay a higher airline fare on average than connecting passengers, this makes sense from its effect on airfares and it recognizes the role that Toronto Pearson plans as a connecting hub, thereby not excessively discouraging small-community traffic . . . . These considerations apply in the U.S. as well and could help obtain buy-in from connecting hubs and smaller communities.”
—Steve Van Beek, “Modernize the Passenger Facility Charge? Yes, with Deregulated Rate-Setting,” Voice of Steer, Sept. 13, 2022

“On CO2 emissions, solutions based on propulsion technology and SAF will barely move the needle by 2040. To meet its CO2 reduction goals, commercial air transport will have to do less flying—in addition to modernizing fleets, using SAF, ensuring enough SAF feedstock is directed to aviation, and offsetting emissions. If you want to reduce CO2 emissions in an optimal way at society’s level, you tackle aviation last. You want to decarbonize cement production and electric power plants first. Aviation will have to compete for decarbonized energy,”
—Jim Harris, Bain & Co., in Thierry Dubois, “Fly Less,” Aviation Week, April 4-17, 2022

“Bain & Co.’s Jim Harris estimates that it could cost $10 trillion to transition 100% of aviation to sustainable aviation fuel (SAF) by 2050. For what? With aviation accounting for 3% of all CO2 emissions, the benefits would be close to zero, even at 100% carbon-neutral. Recall that China alone is building hundreds more coal-fired power plants by 2030. Add more plants built by the rest of the world, and the futility seems obvious. Redirecting that $10 trillion to build nuclear power plants could reduce [the power sector’s] man-made CO2 emissions by perhaps 90%. I have no doubt that the push for aviation to adopt SAF is a fantastic engineering exercise. It’s also a massive waste of engineering talent that could be better spend advancing other avenues of research.”
—Joseph Blake, Letters to the Editor, Aviation Week, Aug. 8-28, 2022

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The post Aviation Policy News: Passenger facility charge, flight delays in New York, and more appeared first on Reason Foundation.

• Who’s to blame for summer air travel chaos?
• Global airport privatization shows signs of recovery
• Remote digital towers are going global
• Hydrogen or sustainable aviation fuel?
• Two airport P3s fight forced terminations
• United gets new competition at fortress hub Newark
• News Notes
• Quotable Quotes

Who’s to Blame for Summer Air Travel Chaos?

In reviewing the epidemic of delayed and cancelled flights, luggage not showing up for arriving passengers, and huge crowds overwhelming staff at major European airports, I’m reminded of the fable of the blind men and the elephant. Each felt a different part of the pachyderm and concluded it was something different (a rope, a tree trunk, etc.).

Throughout July we’ve seen charges and counter-charges in both the United States and Europe about who or what is to blame: not enough air traffic controllers, a shortage of pilots, reduced numbers of airport workers (especially security staff), and of course, stormy summer weather. In fact, all of the above have been factors, but the proportions vary between this country and Europe.

Two trends have collided this summer to make things far worse than usual for this busy travel season. One is a much faster-than-expected recovery in people deciding to take plane trips, mostly leisure/vacation travelers. The second is a shortage of aviation workers of all kinds.

The upsurge in leisure travel is generally believed to be a reaction to two years of being cooped up at home due to the COVID-19 pandemic, with huge numbers deciding now is the time to get away. But the shortage of aviation staff is more complex.

One factor is government aid to airlines, aimed at keeping their workforces on board during the great contraction in flying. But many airlines, in an effort to cut costs when their passenger revenues were hitting rock-bottom, offered employees buy-outs, often in the form of early retirements. But most of those accepting such buy-outs were experienced employees, so when air travel resumed, airlines had to scramble to get whoever they could, and many of these people needed to be trained before being able to do real work. And the early-retirement trend was taking place even without airline incentives. Demographers have reported on the Great Resignation that predates the pandemic (see Peggy Noonan, “The ‘Great Resignation’ Started Long Ago,” Wall Street Journal, July 23, 2022). The same problem is facing airports, air traffic control, and airport security providers, all of whom are in short supply, particularly in Europe.

As for the back-and-forth between airlines and the Federal Aviation Administration (FAA) in this country, The Washington Post did us a great service last week by retrieving and publishing data from the Department of Transportation’s (DOT) Bureau of Transportation Statistics on causes of U.S. airline delays through May of this year. Here is the breakdown:

To his credit, on July 21, United Airlines CEO Scott Kirby apologized to DOT Secretary Pete Buttigieg for having blamed the airline’s delays and cancellations mostly on the air traffic control system.

In Europe, investor-owned London Heathrow has borne the brunt of considerable criticism for recently imposing caps on the number of daily passengers that airlines could schedule as the only way for it to catch up with shortages of airport, airline, and security staff. Less noticed were similar caps being imposed by Amsterdam Schiphol, Brussels International, and London Gatwick, implemented in the same July timeframe—and for the same reasons.

Although Europe has been slower to recover from the pandemic (the latest projections are that travel demand will reach 70% of pre-pandemic travel by the end of this year), that is faster than most European airports had expected. Airlines have tried to increase their schedules accordingly, but with airports’ current staffing levels, it’s more than they can handle.

The relatively good news is that major U.S. carriers are cutting back on their schedules for the rest of the year. That’s to give them—and the rest of the aviation ecosystem—more time to rebuild staffing to cope with what is now close to, or exceeding, 2019 demand levels. That will mean even higher load factors than we’ve experienced in the last few months. So if you have a trip in mind for this fall, book it soon while there are still seats available.

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Global Airport Privatization Shows Signs of Recovery
By Marc Scribner

Having survived the COVID-19 pandemic in 2020, the global trend of private investment in airports—via outright purchase, long-term lease, or public-private partnership (P3) projects at airports—showed signs of a slow recovery in 2021. These activities are documented in Reason Foundation’s 2022 Annual Privatization Report: Aviation, which is now available to readers of this newsletter.

The airport section includes an updated table of reported 2020 revenue of the world’s 38 largest fully or partially investor-owned airport companies, with the five largest in the depths of the pandemic being Aena Aeropuertos, Aeroports de Paris, Fraport, Heathrow Airport Holdings, and Manchester Airports. The uneven recovery of air travel in 2021 has led to an uneven recovery in airport privatization activities, but there were some very positive developments last year.

Perhaps most significant in reaffirming the long-term global interest in airport private investment was the successful buyout of Sydney Airport. The airport, Australia’s largest, was originally privatized in 2002 via a 50-year P3 lease with a 49-year renewal option. The new owner of the lease is a consortium including IFM Investors, three Australian public pension funds, and New York-based Global Infrastructure Partners. The buyout reached financial close in March 2022. The $22.8 billion purchase was approved by 96% of voting shareholders and equates to 23 times the airport’s 2019 earnings before interest, taxation, depreciation, and amortization (EBITDA) and 50 times its pandemic-era 2020 EBITDA.

This sale bodes well for airport privatization. A study published by Reason Foundation in Aug. 2021 used valuations from the sale and lease of airports worldwide in recent decades to estimate the potential market value of 31 large U.S. airports owned by city, county, and state governments. In doing so, it used a high-end valuation based on 20 times EBITDA, which is less than the 23 times EBITDA paid in the March 2022 Sydney Airport transaction.

This should interest private investors as well as government airport owners, which could use lease proceeds to improve their fiscal positions and fund other infrastructure improvements. Even at 20 times EBITDA, the Reason study found that leasing 20 of the 31 airports could be used to cover at least 60% of the jurisdictions’ unfunded public employee pension liabilities, which are a significant long-term drag on state and local government fiscal health in the U.S.

While this is a positive development, whole-airport privatization and P3 leases remain rare in the U.S. In Sept. 2021, the New Haven Board of Elders approved a 43-year lease between Tweed New Haven Airport in Connecticut and its airport management company Avports, in which the company would invest $100 million in capital improvements. Avports had been the contract manager of the airport and if the Environmental Assessment and FAA Airport Investment Partnership Program approvals are successful, it would be the first time in the U.S. that an airport’s contract manager became its financial partner.

Despite the lack of whole-airport privatizations in the U.S., there has been growing use of P3s for individual airport projects. The replacement to New York LaGuardia Airport’s outdated central terminal opened to great fanfare in Dec. 2021. New York JFK Airport’s $9.5 billion Terminal One P3 hit financing problems during the pandemic and stalled, with $7 billion in arranged debt financing lapsing in 2020. A revised agreement was reached with the P3 consortium in Dec. 2021 and the project was restarted. In June 2022, Ferrovial bought 96% of Carlyle’s equity stake, joining Ullico and JLC Infrastructure as equity partners. Construction began on July 8 and all three phases are expected to be completed by 2030.

In addition to the news out of Australia, other global developments provide reason for optimism on airport P3s. The Bahamas issued a request for prequalification in March 2022 for a P3 to finance, redevelop, operate, and maintain six airports, including Grand Bahama International Airport. These projects are estimated to cost $400 million and the Bahamian government hopes to proceed with a request for proposals for shortlisted companies later in 2022.

Building on past success, Brazil continued its aggressive program on airport P3s. It announced in January 2022 another round of concessions for 16 terminals grouped into four packages. The Brazilian government expects to attract $1.6 billion in additional investment.

In Japan, airport P3 interest showed signs of a healthy rebound following a pandemic-era lull. A 30-year concession for the Hiroshima Airport commenced in July 2021. This was followed by the October announcement that the Ishikawa prefecture government was seeking expressions of interest for a potential concession of Komatsu Airport. And in Feb. 2022, Niigata prefecture officials indicated they will make a decision on the potential concession of Niigata airport.

The report also covers recent private-sector activities in air traffic control, with particular attention to the past year’s developments in digital and remote air traffic control towers. Also summarized in the 2022 Annual Privatization Report: Aviation are updates related to contract security screening and trusted traveler programs.

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Remote Digital Towers Are Going Global

Last month’s World Air Traffic Management Congress in Madrid showcased the rapid growth of what is now termed the remote digital tower (RDT) paradigm shift. Most of the highlights are in Europe and the Asia-Pacific region. The big picture takeaways are two. First, remote tower centers managing traffic at as many as 15 smaller airports are being implemented. Second, a growing number of major hub airports are seriously considering either replacing or supplementing their traditional control tower with an RDT.

The most dramatic remote tower center (RTC) news comes from Norway, where ANSP Avinor is opening a new RTC in Bodo. With its technology partner Kongsberg, Avinor is initially adding four more smaller airports at Bodo (totaling eight), and plans to increase to 15 airports by the end of 2023. In Germany, DFS and Frequentis are adding a second airport (Erfurt) to be managed from its RTC in Leipzig, and they plan to add a third airport in the near future. In Denmark, the Frequentis DFS team is implementing that country’s first RTC at Billund, which manages approaches as well as tower functions. This site will go live in 2023, after current acceptance testing is completed. The project’s second phase will add smaller airports to be controlled from Billund. Frequentis is also working with DSNA in France to implement that country’s first RTC in Toulouse, with Tours Val De Loire Airport the first smaller airport to be managed from there. Four other airports are planned to be controlled from the RTC in the project’s second phase.

Larger airports are also studying or implementing remote digital towers. One of the first to do so was London City Airport, which has been controlled since Jan. 2021 by a Saab RDT installation at the NATS control center in Swanwick. That project last month was awarded the 2022 Airports Council International-Europe Digital Transformation Award. In Germany, Frequentis DFS is studying the possible replacement of the traditional control tower at the Munich airport with an RDT. If this actually takes place, it would be Europe’s largest RDT thus far.

Canadian RDT company Searidge is making serious strides regarding large airports in the Asia-Pacific region. Its biggest project to date is the new Digital Apron and Tower Management System (DATMS) at Hong Kong International Airport. It recently completed acceptance testing and is ready to support operations in 2022. It consists of the Digital Apron Management System for the airport authority and the Digital Tower Facilities for the ANSP. These systems have 240 camera sensors and 120 working positions. In its second phase, DATMS will be expanded to serve the new second terminal and the new third runway.

Besides Hong Kong, Searidge has delivered an Integrated Digital Tower proof of concept for Shanghai and a Smart Digital Prototype being used to evaluate the feasibility of an RDT to handle high-intensity runway operations at Singapore’s Changi Airport. Searidge also worked with Airservices Australia in 2020 on an Integrated Digital Tower proof of concept for Sydney, but Airservices has not made a decision on replacing or backing up its conventional tower.

In short, remote digital towers are going mainstream via two primary applications. First is remote tower centers serving up to a dozen or more small regional airports with better (and less costly) tower functions than with 20th-century towers. Second, and more recently, large airports are considering replacing or backing up their 20th-century tower with a remote digital tower.

These advances are certified and in operation in more and more countries. When will FAA get serious about this technology transformation?

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Hydrogen or Sustainable Aviation Fuels?

In a recent issue of Aviation Week, senior editors interviewed the CEOs of Boeing and Airbus over the environmental challenges facing aviation (Jens Flottau and Tony Osborne, “We Need Both,” Aviation Week, July 11-24, 2022). Let’s begin with a few statements from each.

Airbus CEO Guillaume Faury said the following regarding propulsion:

“We need SAF [Sustainable Aviation Fuels] now. . . . SAF is the short-term solution [and] for long-range aircraft, it is the solution for a long time. . . . But I also believe that to go to net zero for the long term, hydrogen is the solution that we absolutely need to start now. Will it be a big share of the carbon savings by 2050? No. There will initially be one plane, and to be there in 2035 we need to start now. . . . It takes decades. We want to be the first one leading hydrogen Many other companies are also looking at hydrogen, it is not just one crazy company in aerospace.”

And here is Boeing CEO David Calhoun, interviewed on the same topic:

“We’ve developed a tool that lets you look at the world’s [air] traffic every day and start throwing some lenses at it with respect to SAF utilization, airplane type, and what would happen if you accelerate renewal rates of the fleet by 10%, etc. The lion’s share of progress in this half century is going to be SAF and fleet renewal. There’s just no denying the numbers. . . . Hydrogen is going to move the needle about 1% in the 2050 time frame. So why do I mention this tool? Because we cannot make the same mistake that energy [policy] has made, where policymakers get so far ahead of industry capabilities that the music stops. That possibility exists for aviation if we don’t inform the policymakers with very simple tools whether something they [advocate] is doable or not.”

I think Boeing has the better approach to the aviation energy/carbon-footprint future. Airbus’s Faury acknowledged hydrogen’s serious limitations for aircraft propulsion. He pointed out that the energy in 1 kilogram (kg) of aviation kerosene is 12,000 Watt-hours (Wh). Although 1 kg of liquid hydrogen has 33,000 Wh, it requires much heavier, stronger tanks that both reduce payload and take up space in the fuselage. Hydrogen has much higher energy density than today’s batteries, which range from only 200 to 500 Wh per kg. So for large airliners, battery-electric propulsion is a total non-starter, while hydrogen has serious limitations in terms of conventional airliner design, weight and payload penalties, and also the lack of infrastructure to provide hydrogen at many hundreds of airports worldwide.

SAF also presents many problems, including lack of enough feedstock material (biomass, used cooking oil, etc.) to come anywhere near providing enough SAF to power today’s and 2050’s global airliner fleet. Yet based on recent tests, it looks as if SAF can be made compatible with today’s and tomorrow’s gas turbine engines and be provided to airports via conventional pipelines.

The other serious problem with SAF is cost. Thus far, even making allowances for future economies of scale in producing SAF, no one expects it to come close to aviation kerosene on a cost/gallon basis. We therefore see airline lobbying efforts for SAF tax credits, government-funded SAF research, etc.

The problem with tax credits for SAF is that this will disguise the real cost to society of air travel. I’m a very long-time champion of airline route and price deregulation, which has led to the democratization of air travel. But if air travel is to take its place in a world adjusting to climate change, it makes no sense to hide the real cost of traveling by air. We know that the higher the ticket prices, the less demand for air travel there will be, other things equal. A tax credit for SAF means that ordinary taxpayers who may not ever fly will, in effect, be required to subsidize air travel for people whose income, on average, is higher than those who seldom or never fly. And this applies especially to international travel, whose carbon footprint is the most difficult to reduce (compared to short-haul and air-taxi flights where some forms of battery electric do look feasible).

Boeing’s Calhoun makes a good point about the need for the aviation industry to level with policymakers about what is and is not doable to decarbonize aviation by 2050. And as I have written previously in this newsletter, if the cost per ton of reducing international aviation’s carbon footprint turns out to be 10 to 50 times as high as the cost per ton of numerous “low-hanging fruit” opportunities for reduced footprints, a rational society will prioritize implementing all the low-hanging fruit opportunities before putting vast sums into changes that cost enormous sums for modest gains.

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Two Airport P3s Fight Forced Termination

Long-term design/build/finance/operate/maintain public-private partnerships (P3s) are a growing trend at U.S. airports, including new or revamped terminals, hotels, and consolidated rental car centers. But this year has seen efforts by two major airports—Austin and Pittsburgh—to arbitrarily terminate long-term P3 agreements, apparently violating the termination provisions in the long-term concession agreements.

In the Austin case, a new airport management team has decided that the South Terminal developed and operated by Oaktree’s LoneStar Airport Holdings is in the way of its plan to build a new Midfield Concourse. Instead of negotiating the remaining value of Lonestar’s interest in the 40-year concession, the airport has offered to buy out the lease for a mere $1.6 million. When the company rejected that as unfair, being but a small fraction of the $30 million it has invested in the South Terminal, the airport began condemnation proceedings under eminent domain law. Needless to say, Lonestar intends to fight the condemnation.

In Pittsburgh, the airport authority abruptly terminated the 40-year concession (which expires in 2029) under which Airmall operator Fraport Pittsburgh has managed all the retail operations in the airport’s main terminal. An Allegheny County judge rejected the airport authority’s plan to prevent the public from attending a public hearing on the P3 termination. The authority had objected to the public attending the public hearing due to the need to discuss “security-related” information that could jeopardize public safety. The judge rejected the authority’s argument. Fraport contended that these “minor operational issues” (such as tools being left in places accessible to the public) were not material defaults warranting termination.

I have not seen either long-term P3 agreement, but I have several decades of familiarity with such agreements (primarily in the highway and transit field). They are structured as public-private partnerships, with built-in provisions attempting to deal with just about anything that may come up over the 30, 40, or 50-year term of the agreement. The long term generally reflects the significant capital investment and the assumption of various risks by the private partner.

Early termination may come about for two reasons: egregious failure on the part of the private partner (referred to as “termination for cause”) and termination due to major changes in plans on the part of the public partner. In general, termination for cause does not involve compensation; it’s one of the risks a private partner accepts.

Termination for convenience, however, is very different. The long-term agreement should at least lay out the basis for compensation of the private partner before it has had the benefit of generating revenue for the full number of agreed-to years. In one of the first such terminations for convenience of privately financed toll lanes in Orange County, California, the two parties agreed to a third-party assessment of the net present value of the net revenue the private party would have received had the agreement lasted for the full (in that case) 35 years.

Both Austin and Pittsburgh look to me like terminations for convenience, in which the airport is seeking to get out of whatever compensation provisions are in the agreements. Obviously, since I am not an attorney and have not read either long-term agreement, I have no idea what compensation provisions are actually included. If either agreement fails to include a provision spelling out compensation in the event of a termination for convenience, that may end up as a costly lesson for the private partners and a warning to those planning new long-term airport P3s.

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United Gets New Competition at Fortress Hub Newark

In a blow to increased airline competition, DOT awarded all 16 peak-hour slots that became available when Southwest moved out to ultra-low-cost carrier Spirit Airlines. United Airlines (UA) has long dominated Newark (EWR), providing about 72% of scheduled airline service there. Southwest had been given the slots as part of a deal when United merged with Continental. The only other significant U.S. airline at EWR is JetBlue, which is still seeking to absorb Spirit via a hostile takeover.

United continues to throw its weight around, in April accusing JetBlue of causing congestion at EWR by not abiding by the “voluntary” limit of 79 operations per hour at the airport. On an earnings call in April, UA CEO Scott Kirby accused FAA of “letting people brazenly break the rules.” JetBlue in May sent comments to FAA, advising it to take United’s comments with a grain of salt and claiming that UA’s real objective at the airport is to restrict slot access and competition, leading to a so-called Level 3 slot regime being imposed, such as applies to LaGuardia and a handful of other highly congested airports. EWR used to be Level 3 but was changed to a less-restrictive Level 2 status in 2016.

JetBlue told FAA that one cause of EWR congestion is United’s operating 18 flights per day to Reagan National (DCA) using 50-seat regional jets. FAA-sponsored simulation games in 2005 demonstrated that if congestion were dealt with via variable runway pricing instead of slot limits, airline schedulers would “up-gauge” to larger planes operating less frequently, thereby transporting the same or increased numbers of passengers with fewer landings and takeoffs. For details see the report by researchers George Donohue and Karla Hoffman

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News Notes

Nav Canada Considers European Air Traffic Platform
In a June 22 news release, the Canadian ANSP Nav Canada announced a 12-month evaluation of the iTEC air traffic management system used by seven European ANSPs, including NATS (UK) and six others that together manage two-thirds of Europe’s air traffic. Having a common platform across Europe and the North Atlantic would be an important step towards the long-planned Single European Sky.

American Confirms Order for 50 eVTOLs
Aviation Daily reported (July 18) that American Airlines has confirmed delivery slots and committed to pre-delivery payments for 50 VX4 eVTOLs under development by UK-based Vertical Aerospace. The airline’s 2021 conditional pre-order encompassed 250 aircraft, with an option for another 100. Vertical believes this is the first of its kind for a major airline in the eVTOL industry.

Sweden Considering Major Airport Privatization
A report commissioned by the Swedish government has suggested “partial” privatization of Swedavia, the state-owned company that owns and operates Arlanda (Stockholm) and nine other airports. The report suggests that the airports in Gothenburg and Malmo, in addition to Arlanda, would be good candidates for privatization, though whether via long-term lease or outright sale is not clear; both mechanisms have been used in Europe.

Finland Commissioning World’s Largest Wide Area Multilateration System
Fintraffic ANS, Ltd. on June 20 announced the debut of its long-planned nationwide wide area multilateration (WAM) system, which is operational in the southwestern portion of the country (including Helsinki) and will be operational in the rest of the Finnish Flight Information Region by early 2023. WAM is an alternative to radar for aircraft surveillance. The WAM system provided by Frequentis includes ADS-B coverage for 80% of Finnish airspace. The complete system includes 120 ground stations, from the Baltic Sea to Northern Lapland.

Flughafen Zurich to Develop and Operate New Airport in India
The private operator of Zurich Airport has signed a contract with the government of Uttar Pradesh for a 39-year concession under which it will design, build, finance, operate, and maintain Delhi Noida International Airport, 50 miles south of Delhi. The estimated cost of the initial terminal and runway is $755 million. Zurich Airport also holds concessions for eight airports in Brazil, Chile, Colombia, and Curacao.

India Finalizing List of Airports to Privatize
Inframation News reported (July 21) that India’s Ministry of Civil Aviation is finalizing the list of airports it plans to privatize to further their modernization. The current list consists of 11 airports, and the idea is to offer them in packages consisting of a larger airport paired with one or more smaller ones. Previous airport privatization rounds took place in 2006 and 2019. Global airports operator Fraport has expressed interest in the upcoming auctions, according to a June 28th article in the same publication.

African ANSP Expands Use of Space-Based Data
ASECNA, the ANSP for 17 African countries plus oceanic airspace, has signed up for an additional service from space-based surveillance provider Aireon. Air Traffic Management reported on July 18 that ASECNA now subscribes to AireonFLOW, which extends ADS-B service to cover all flights transiting across ASECNA airspace, from gate to gate. This will enable it to provide better service to its aviation customers.

Vinci Airports to Develop Seven Airports in Cape Verde
Global airport company Vinci Airports has signed a 40-year concession agreement with the government of the Cape Verde archipelago—four international airports on the main island Praia and three airports on Sal, Sao Vicente, and Boa Vista. Vinci will expand and manage the airports under the concession, whose financial close is expected by mid-2023, according to Inframation News (July 18).

Lilium eVTOL Achieves Winged Flight
German eVTOL developer Lilium’s Phoenix 2 demonstration aircraft has successfully made the transition from vertical lift to winged flight, which is essential for its goal of serving the inter-city market of several-hundred-mile trips. AOPA Pilot (August 2022) reports that Lilium says this is the first eVTOL conversion to winged flight. The company has an agreement with NetJets to acquire up to 150 Lilium jets.

Gulf Shores Airport Signs Terminal P3 Agreement
The Alabama Gulf Shore Airport Authority this month signed a concession agreement with a team led by Vinci Airports. Under the agreement, Vinci will build a temporary and then a permanent terminal at the airport, and its partner TBI Airport Management will operate them. Gulf Shores is an hour south of Mobile and an hour west of Pensacola, Florida.

New Drone Scorecard Rates States
Brent Skorup of the Mercatus Center at George Mason University on June 27 released a new edition of his state-by-state assessment of readiness for “drone highways.” Six factors are used in the ranking, with the greatest emphasis on the existence of an airspace lease law and an avigation easement law. Go here.

IFM Investors Seeking 10% of Vienna Airport Shares
On July 6, IFM Investors announced its offer for 10% of the shares in partially-privatized Vienna Airport. It had previously acquired 40% of the shares, and its new offer is priced at 25.5% more than the then-current share price. Only 50% of the shares are in private hands, with 20% held by the City of Vienna, another 20% by the Province of Lower Austria, and 10% by the Employee Foundation, none of whom are seen as likely to sell any of their shares.

CLEAR Adds Greenville-Spartanburg; Now Serves 44 Airports
On June 27, CLEAR announced that it has signed with its first airport in the Carolinas. Greenville-Spartanburg International becomes the 44th airport offering the company’s service, which allows pre-vetted members to bypass the lines at security checkpoints after verifying their identity biometrically.

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Quotable Quotes

“AAM operations are expected to start modestly, with limited service on existing helicopter shuttle routes and flights between existing, smaller airports close to cities. By the beginning of the 2030s, it should be clear whether this new aviation market actually exists and can be scaled to a volume of vehicles and operations never before seen in this industry. While significant technical and certification progress is being made on the vehicle side, the goal of scaling AAM by the early 2030s still requires much progress across a broad front. This includes building out the required vertiport and charging infrastructure, automating airspace management and operations, as well as driving down production and operating costs sufficiently to make the service affordable.”
—Guy Norris, Jens Flottau, Graham Warwick, and Sean Broderick, “The Next Ten Years,” Aviation Week, July 14-24, 2022

“In June, [FAA] announced that winged eVTOLs that meet the FAA’s definition of ‘powered lift’ could not be certified or operate as ‘airplanes’ within the existing Part 23 framework. This means certification for winged eVTOL aircraft has to be done through Title 14 of the US Code of Federal Regulations (CFR), Section 21.17(b). . . . The FAA decision blindsided the American eVTOL industry. The industry feels aggrieved that it was reached without any industry dialogue. The FAA has denied it had suddenly abandoned its previous position and [said] that any change will be gradual. It will not cause any delays to the certification process—but many eVTOL manufacturers are concerned that there are now uncertainties in the US certification process where there used to be clarity. This could [also] hinder their plans to sell eVTOLs to the Asia market.”
—Andrew Charlton, “UAM: One Small Step (Back) for the USA; One Giant Leap for Asia,” Aviation Intelligence Reporter, July 2022

“Airports still typically charge landing fees by the weight of the aircraft. I gave a talk at FAA in March 1978 in which I pointed out what a ridiculous system that is. Supposed we charged for oil paintings by the pound? You’d have more than congestion; you’d have riots at the art dealers with Van Gogh paintings for sale. We don’t have any hesitation in other markets about letting prices rise to ration such scarce goods and equate demand and supply. . . . I urge you to consider the elementary proposition I’ve reminded you of, and demand the opportunity to charge what it is proper to charge when demand exceeds supply. . . . [It] is absolutely ridiculous that the value of the slots that ration scarce supplies should be appropriated by the airlines. Those rents should be appropriated by the suppliers of that scarce capacity, just as they are in any other competitive industry, and used to expand supply.”
—Alfred E. Kahn, Keynote Address to Airports Council International 8th Regional Conference and Exhibition, Oct. 15, 1999

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The post Aviation Policy News: Air travel chaos, global airport privatization recovery, and more appeared first on Reason Foundation.

• FAA upsets the applecart on eVTOL certification
• How privatization has transformed San Juan’s airport
• More remote towers coming to the United States
• A state threat to AAM vertiport development?
• Schiphol Airport introduces “sustainable taxiing”
• The airport parking turnaround
• News Notes
• Quotable Quotes

FAA Upsets the Applecart on eVTOL Certification

Both developers of electric vertical take-off and landing (eVTOLs) aircraft and potential operators were shocked at the end of May when the Federal Aviation Administration (FAA) shifted gears on how these new air vehicles are going to be certified. While some eVTOL startups are trying to downplay the implications, the result is likely to be a longer time frame for these new vehicles to gain all the approvals needed for them to be produced and operated.

Two main types of FAA certification are required for any commercial aircraft. One is called a type certificate, under which the agency agrees that manufacturer’s design meets all requisite standards and is expected to be safe and airworthy. The other is an airline operating certificate, which requires the applicant to demonstrate that it has all the procedures and capabilities in hand to carry passengers safely. (There is also production certification, but that is less relevant to the just-announced change.)

Until now, just about everyone in the emerging eVTOL industry assumed that type certificates were to be handled under Part 23, the same regulation used to certify conventional commercial airliners. FAA would have attached special conditions to the Part 23 regs to account for the ability of eVTOLs to take off and land vertically. Instead, FAA has decided to define these new aircraft as “powered lift” vehicles to be certified under Part 21.17(b) special class rules.

As Graham Warwick reported in a detailed Aviation Week article (“FAA’s eVTOL Reset,” May 30-June 12, 2022), FAA’s Flight Standards division has wanted to go with the “powered lift” categorization because of its concerns that typical pilots would need specialized training to fly eVTOLs, all of which will initially have to be certified with onboard pilots, not automation. So one benefit of FAA’s change in category is that the same “powered lift” approach will be used for both aircraft and operational certification.

But industry scuttlebutt suggests mostly negative responses to the change. One of the likely results is that rosy scenarios presented to eVTOL investors about certification taking place over the next year or so and actual operations beginning as early as 2024 now appear to be very wide of the mark. And that has implications for battery developers, vertiport developers, and many other stakeholders. Warwick’s article points out that there are no existing airworthiness standards under Part 21.17(b), so those will have to be created before any powered-lift aircraft can receive a type certificate. Likewise, for operating certificates, FAA plans to carry out a rulemaking to create a Special Federal Aviation Regulation for powered-lift operations, since current operating rules apply only to aircraft and helicopters, not to “powered lift” craft.

Another important impact is that aircraft type certification in the United States will not easily translate to certification in Europe, and vice-versa. FAA’s Part 21.17(b) is not recognized in Europe, and the European Union Aviation Safety Agency (EASA) is following a type certification process along the lines that FAA has just rejected—basically that eVTOLs are aircraft with various special conditions, rather than an entirely new category (powered lift).

There are many more details in Warwick’s three-page article, but the implications for Advanced Air Mobility are clear. It will take more years to certify the airworthiness of eVTOLs and to certify operating plans than is envisioned in any of the startups’ business plans. That, added to the sudden rise in interest rates, will lead to significant changes in those business plans, and may well begin a shake-out of the less-viable contenders. The same thing happened in the early days of aviation (and automobiles) when scores of entrepreneurs and investors thought they would get rich pioneering new modes of transportation. Fortunately, this process of creative destruction eventually led to viable companies with sound business models.

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How Privatization Has Transformed San Juan’s Airport

I’ve only been to San Juan, Puerto Rico, once, in 2010. The airport looked like something out of the 1950s: shabby corridors, a generic news outlet, a generic restaurant, and a few tacky souvenir shops. And that was only the superficial view of a traveler. Underlying problems were far more serious. Former New York Times reporter John Tierney researched the situation and learned that “on rainy days the ceiling leaked, the floors of the boarding bridges from the gates to the planes were riddled with holes, and it often took days or weeks to repair a broken toilet.” Even worse, the Instrument Landing System (ILS) was not reliable, due to trees that interfered with its signals. For some reason, FAA had not intervened in this outrageous safety problem, and pilots had been making only visual approaches for years.

All that changed after San Juan’s Luis Munoz Marin International Airport (SJU) was privatized in 2013. This was the only successful privatization (via long-term public-private partnership lease) under the former FAA Airport Privatization Pilot Program. The winning bidder, Aerostar, immediately chopped down the trees blocking the ILS and proceeded to redesign the concourses, install new jetways, and implement a state-of-the-art baggage-screening system, while also opening the airport to an array of new retail outlets. The first three years’ changes were documented in Tierney’s article in the Winter 2017 issue of the Manhattan Institute’s City Journal.

I have yet to experience the transformed San Juan airport, but I’ve often wondered whether the ongoing investments by Aerostar continue to improve things there. So I was pleased to learn that an update was provided by Jorge Hernandez, CEO of Aerostar Airport Holdings last month at the GAD Americas conference, held in San Juan. What I summarize here is based on an article by Carole Hedden in Aviation Daily on May 30.

In his presentation, Hernandez explained that since 2013 Aerostar has invested $296 million into the airport. Under the terms of the 40-year P3 lease, Aerostar also made an up-front payment of $615 million to the Puerto Rico government and agreed to annual revenue-sharing of 5 to 10% of airport revenue as ongoing lease payments. Its mission, agreed upon with the FAA and the Commonwealth government, was to rehabilitate and modernize the airport to maintain its Part 139 certificate.

The renovations still have a ways to go, thanks in part to the growth in air travel at SJU. Hernandez told conference attendees that Aerostar will spend another $257 million over the next five years to make additional airside improvements, along with further improvements to the terminals and upgrades in security.

The major carriers serving SJU—American, Delta, JetBlue, and Southwest—endorsed the privatization since the agreement gave them greater certainty regarding future fees and charges, as well as offering a greatly improved airport. And the results of the improvements are evident in SJU’s strong growth since 2013. Annual enplanements in 2013 were 4.1 million; they had already doubled to 8.3 million by 2016. However, between Hurricane Maria in 2017 and the subsequent pandemic, enplanements plunged to 4.8 million in 2020. But as tourism recovered in 2021, enplanements reached a record high of 9.7 million, with 155 daily flights. International cargo and passenger traffic has increased by 230% since 2013.

I’m not aware of any U.S. airport that’s anywhere near the decrepit condition that SJU was in prior to the P3 lease. But the very positive experience in San Juan offers a counterpoint to knee-jerk assumptions that airport privatization would come at the expense of airlines and/or air travelers. SJU was de-politicized via privatization and thereby freed to operate as a real business, serving its airline and passenger customers. Many relatively well-run U.S. airports are still micromanaged to varying degrees by city or county governments. These airport managements must focus part of their attention on dealing with those political overseers, rather than focusing on how best to serve their customers.

The former Airport Privatization Pilot Program was expanded by Congress to all U.S. air-carrier airports in 2018 and renamed the Airport Investment Partnership Program. How long-term P3 leases might affect other U.S. airports is the subject of a 2021 Reason Foundation policy study.

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More Remote Towers Coming to the United States

For years, this newsletter has been reporting on the United States being an outlier in the global move from conventional airport control towers to what are increasingly called “digital” or “remote” towers. While this transformation has been underway for nearly a decade in Europe, there are only two locally-funded efforts to implement remote towers in the United States—one at Leesburg, VA, and the other at Loveland, CO. After many years in development, neither has achieved FAA certification.

That situation is starting to change, partly as a result of Congress in the 2018 FAA reauthorization measure calling on FAA to begin implementing remote towers where airports are interested. One that I’ve been following is Friedman Memorial Airport in Hailey, ID. It is a participant in the FAA Contract Tower Program, but its tower does not meet current FAA siting requirements, so needs to be replaced. The airport has applied to FAA to be America’s third remote tower site, under the congressionally authorized program. The airport has recently selected the team of Raytheon and Frequentis as its preferred provider, and I’m told that contract negotiations are underway.

Another interested airport is Craig Field in Selma, AL, a former Air Force base. The old USAF tower remains but is not in operation. The Selma Economic Development Authority has announced plans for a remote tower center to be located at Craig Field (SEM). It has reached agreements with Advanced ATC, Inc. (Valdosta, GA) and Indra Corp., a Spanish defense and aerospace firm that has developed remote/digital towers in Europe. What the two companies plan is not simply a remote tower at SEM. Their aim is to build a remote tower center (like several that are already operational in Germany and Scandinavia) capable of managing traffic at up to 40 airports. They also plan a controller training academy, located at Craig Field.

Dan Cunningham, chief operating officer of Advanced ATC, has been operations manager of FAA towers in Charlotte and Salt Lake City, and has held other ATC positions within FAA and USAF earlier in his career. He told the Associated Press that he understands that the Leesburg and Loveland remote towers are still in the FAA approval process, so he is under no illusions about speedy approvals for the ambitious Advanced ATC/Indra plans in Selma.

In commenting on this proposal in JDA Journal (May 16), former FAA Chief Counsel Sandy Murdock noted recent hopeful signs of FAA progress. In 2020 it issued a remote tower system concept of operations, and in Jan. 2022 it released a technical requirements document—but only for single-runway airports in Class D airspace. That’s at least some progress, but Advanced ATC’s timetable strikes me as very over-optimistic.

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A State Threat to AAM Vertiport Development?
By Marc Scribner

Advanced air mobility (AAM), the umbrella term for urban and regional air mobility uses of electric vertical takeoff and landing (eVTOL) aircraft, remains in the research and development stage. Despite its technological infancy, lawmakers are increasingly working to prepare the legal and policy landscape for potentially transformative AAM operations. At the federal level, the U.S. House of Representatives in June easily passed two bipartisan advanced air mobility bills aimed at strengthening intergovernmental coordination (S. 516) and state, regional, and local long-range infrastructure planning (H.R. 6270). Unfortunately, AAM legislative activity in the states has proven more contentious, with divisive bills threatening to foreclose promising procurement methods and business models for vertiports before AAM vehicles take flight.

In March of this year, FAA released a draft Engineering Brief 105 on vertiport design to provide interim guidance until the formal vertiport design Advisory Circular is published, which is expected in late 2024. It contains chapters on safety-critical design elements; marking, lighting, and visual aids; charging and electric infrastructure; special considerations for on-airport vertiports; and site safety elements such as firefighting and downwash. Many of these are similar to FAA requirements on heliports, and the Engineering Brief explicitly contemplates heliport-to-vertiport conversions. During this interim period, FAA expects to update the Engineering Brief as new data on AAM vehicles emerges. These draft guidelines are to be treated as mandatory for any vertiport project receiving federal funding.

While the ink was still wet on FAA’s draft Engineering Brief, West Virginia Gov. Jim Justice signed H.B. 4827 into law. It includes several provisions, including prohibiting local ordinances granting exclusive franchises to vertiport owners or operators, supporting “public-use vertiport” development, requiring vertiport owner-operators to submit a vertiport layout plan to FAA, and promoting general harmonization with FAA vertiport standards as they develop.

Unfortunately, the West Virginia law reflected the input of a single eVTOL developer, Hyundai Motor Group subsidiary Supernal, and its nebulous language has alarmed Supernal’s AAM competitors Archer and Joby Aviation, as well as conventional aviation interests, according to a May article in The Air Current (“Unlikely West Virginia Is Cautionary Tale for States Seeking eVOTL Investment,” subscription required).

One major source of ambiguity centers on the term “public-use vertiport.” The law’s sponsor, Del. Gary Howell, told The Air Current that he intended that to mean “anything that’s built for public use and may have state money in it, may have FAA money, has to be designed in such a way that it’s universal so that anybody can use it.”

In contrast, Supernal lobbyist Diana Marina Cooper defined “public use” to mean “anytime the general public is invited to a vertiport to take part in operations, so if you want to have passenger-carrying services at a vertiport, then that would be considered public use.”

These dueling interpretations raise numerous practical questions for would-be vertiport investors, owners, and eVTOL operators. Under federal aviation law, a public-use designation comes with numerous strings that limit operations compared to private airfields or heliports. These strings preclude more stringent aircraft noise limits and enhanced aircraft operator liability insurance, which are likely to be desirable given anticipated low-altitude AAM operations within dense urban environments. An FAA “public use” designation would also force expansive open-access requirements on vertiports, introducing potential hazards and nuisances from general aviation eVTOL aircraft that could sour communities on vertiports and AAM more broadly.

Del. Howell’s more narrow definition of “public use” might avoid some of the pitfalls of Cooper’s, but it is vague on what would be considered public vs. private in a way that could inhibit innovative vertiport public-private partnership (P3) procurement methods. For example, would a privately financed and operated vertiport sited on top of a government-owned parking garage under a long-term lease between the vertiport’s owner-operator and the government be considered public or private? If deemed public use and with all the strings attached, it is unlikely that private investors would be willing to assume the financing and construction risk in vertiport development in the first place, thereby constituting a de facto prohibition on vertiport P3s.

According to FAA’s Airport Data and Information Portal, of the 5,965 civilian heliports in the U.S., 5,330—89%—are private. Perhaps the urban nature of some AAM operations will lend itself to public-use heliports, but the similarities between eVTOL and legacy helicopters suggest the majority of vertiports will be private. At this early stage of AAM development, it is important for policymakers to not foreclose potentially viable business models and infrastructure procurement methods. As states consider their first steps on AAM policy, West Virginia’s misguided vertiport law illustrates what not to do.

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Schiphol Airport Introduces “Sustainable Taxiing”

As reported in the latest issue of International Airport Review, Amsterdam Schiphol Airport (AMS) is the first large airport to deploy Taxibots to tow airliners between terminals and runways. Because the plane does not have to start its engines until it nears the runway, or leave them running to get from the runway exit to the terminal, the plane produces fewer emissions during those short periods of time. The taxibot of course requires energy, but Schiphol says it uses only one-third as much as having the plane taxi out or in under its own power.

Wilma Van Dijk, Director of Safety, Security & Environment at Schiphol Group, envisions this 2022 trial as a precursor to a big improvement in the airport’s sustainability. Let’s take a closer look at this claim. First, the pilot is very limited, employing just two Taxibots. They almost certainly cost more than conventional tugs, and they still require a human driver, so there is likely an increased cost since each Taxibot driver will spend more hours of driving time compared with the limited distances traversed by ordinary tugs in the terminal area.

Second, current Taxibots can handle single-aisle A320 and B737 series airliners, but not heavier planes. As a major international hub, much of AMS’s traffic is heavy wide-body aircraft. So even a much larger fleet of Taxibots would be handling only a fraction of all departures and arrivals. Van Djik admits as much, in writing that if the initial trial is successful, this new procedure will become standard “for certain types of aircraft”—and taxiing only to the Polderbaa runway—the one most distant from the terminal. And she follows up by saying that if all goes well, “about a fifth of all flights are expected to taxi sustainably.”

But the longer-term aim, she says, is “to introduce sustainable taxiing on other runways from 2025 onwards to that it will be standard procedure across Schiphol by 2030.” It’s hard to imagine how that could come about. First, there would need to be a large fleet of super-heavy-duty Taxibots to handle all the wide-body aircraft that serve Schiphol. Unlike most other airports, Schiphol does not permit long lines of planes on taxiways waiting for permission to advance to the take-off position on the runway. But at nearly all other airports, planes in those conga lines will need their engines running during those sometimes-long waits and periodic moves forward, so the reduction in emissions will be only from the initial taxi-out to each plane’s place at the end of the conga line. At Schiphol and other airports, there will also have to be a return-to-terminal pathway for all the Taxibots to get back to the terminal after delivering their planes to the runway, so there will be construction and maintenance costs for that additional infrastructure for each of those taxiways.

I doubt if anyone has estimated the cost per ton of CO2 saved by this ambitious project, after factoring in the cost of buying the large fleet of Taxibots, the increased labor cost of their drivers, and the capital and operating costs of the taxiway additions. My guess is that the cost per ton would come out quite high, compared with other aviation CO2-reduction efforts.

In a rational world, sustainability should not extend to measures that cost thousands of dollars per ton of CO2 saved, when there are numerous measures that cost only tens or hundreds of dollars per ton (i.e., low-hanging fruit). Sustainability at all costs may sound good to some non-economists, but it is not sound public policy.

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The Airport Parking Turnaround

In early 2020, both aviation media and general media featured articles about how Lyft and Uber were cutting severely into airport parking revenues. For example, the Salt Lake Tribune reported that these ride-hail companies had “captured 70% of the commercial ground transportation business at SLC. And The Wall Street Journal’s Scott McCartney pointed to declining parking transactions at LAX and the emerging decline in car rentals.

Then the pandemic hit, and aviation media started writing about where to put all the rental cars that were not being rented. Pre-pandemic, about 70% of LAX’s rental cars were rented at any given time, but in April 2020 only 10% were. Where were they going to put all those cars? Of course, the rental car companies sold off significant portions of their fleets, some of them to Lyft and Uber. During this period, I wondered about the risk LAX was assuming in agreeing to long-term availability payments to finance its forthcoming consolidated rental car center—and the risk that investors were taking on in financing a similar facility at EWR.

But that was then, and this is now. In the June 13, 2022, Wall Street Journal, Allison Pohle reports on the new problem of full airport parking structures. In response, some airports are increasing parking rates to encourage travelers to use other means of getting to and from the airport. Others are launching or expanding parking reservation systems so that people can be assured of a space when they arrive at the airport.

Airport vans and mass transit are still less popular than before the pandemic. And Lyft and Uber prices are now mostly higher than taxi fares, so more people are shifting to cabs (nearly all of which have shifted to credit card charging with emailed receipts). Off-airport parking lots are also doing booming business.

It’s a good thing airports did not take hasty actions to re-purpose parking capacity or give up on consolidated rental car centers. As aviation reverts to largely pre-pandemic passenger demand, passengers are reverting to pre-pandemic airport access.

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News Notes

FAA and 5G Firms Reach One-Year Compromise
In an agreement between FAA and 5G wireless companies AT&T and Verizon released on June 17, the parties have agreed to a one-year extension of restrictions on 5G signal strength at certain airports. FAA is requiring that 1,700 Airbus and Embraer aircraft used mostly in regional air service be equipped with interference filters by the end of this year. FAA also announced that it expects filters and replacement radar altimeters to be available on a schedule that would be “largely completed” by July 2023. Both Airlines for America (A4A) and the Regional Airline Association (RAA) issued statements critical of the deal.

JFK New Terminal One P3 Reaches Financial Close
On June 10, the consortium that will design, build, finance, operate, and maintain the $9.2 billion New Terminal One project at JFK International reached financial close. The consortium consists of Ferrovial’s airport division, JLC Infrastructure, Ullico, and Carlyle Group. Earlier this year Ferrovial acquired 96% of Carlyle’s 51% stake in the concession company, making it the largest member. Ferrovial’s biggest airport investment is 25% of London Heathrow Airport.

Brazil Plans 7th Round of Airport Concessions
After privatizing most of its larger airports over the past decade, Brazil’s Ministry of Infrastructure plans to initiate a 7th round this summer, consisting of three groups of airports. Financial commitments to airport improvements total $1.5 billion. The largest airport, Congonhas in Sao Paulo, is in the four-airport block designated SP/MS/PA/MG, which requires $1.2 billion of the $1.5 billion investment. The ministry’s overall 2022 program also includes concessions of some highways and the Port of Santos, according to a report in Inframation News.

Startup Lilium Gets New CEO
Aviation Daily reported earlier this month that German eVTOL developer Lilium has appointed an Airbus executive as its CEO, replacing co-founder Daniel Weigand. Klaus Rowe will join Lilium on August 1, while Weigand will remain as Lilium’s chief engineer for innovation and future programs. At Airbus, Rowe led both the A320neo program and the A320 family program from 2015 to 2019. Lilium’s chairman is former Airbus CEO Tom Enders.

Fraport Refinances Its 14 Greek Regional Airports
Fraport Greece, which won the bidding in 2017 to upgrade and manage 14 regional airports in Greece, has launched a nearly €1 billion refinancing of its debt, to take advantage of lower long-term interest rates. The original acquisition debt came from multilateral development banks, but Greek banks are considered more competitive at this point for domestic projects. Fraport’s Greek airports traffic in 2021 increased by 102% over the pandemic-reduced passenger traffic of 2020.

Japan’s Komatsu Airport Privatization Back on the Agenda
Ishikawa prefecture in central Japan has resumed planning the privatization of its Komatsu airport after a two-year gap due to the pandemic. In April, Japan’s transport ministry provided the prefecture with current specifics about the airport and feedback from private operators on how to run both the Komatsu and Oita procurements as P3 concessions.

San Jose Airport Seeks Airport Transit P3 Team
The City of San Jose has issued an RFP for its planned rail link between the airport and the downtown Diridon Station, a transit hub. Proposals are due in August. It plans a “progressive P3” approach, under which one (or possibly two) contractors would be selected for a predevelopment agreement to validate the business case and then develop the design and address environmental clearance. If the project moves forward at that point, the city would negotiate a long-term DBFOM P3 agreement with the winning predevelopment partner.

Inmarsat Testing U.K. GPS Enhancement System
Since the U.K. withdrew from the European Union, it no longer has access to the latter’s Galileo satellite navigation system, which provides error-correction signals for GPS. Aerospace communications firm Inmarsat is therefore testing a new overlay system that can increase civil GPS accuracy from meters to centimeters. The overlay signals would be available to all the myriad GPS users in the United Kingdom.

Groups Partner to Advance AAM in Brazil
Aviation Daily reported (June 6) that a new partnership will develop design requirements and potential locations for vertiports, as it seeks to speed the implementation of advanced air mobility (AAM) in that country. Included in the new partnership is Corporacion America Airports, the world’s largest operator (by number of airports) of privatized airports, Gol Airlines, and ground transportation company Grupo Comporte, which plans to lease Vertical Aerospace eVTOLs from lessor Avolon. The group has conducted workshops with civil aviation authority ANAC.

Amazon to Launch Drone Deliveries
On June 13, Amazon announced that it will begin drone delivery service to customers in Lockeford, CA later this year. The drones will be part of Amazon’s Prime Air service. Prime Air holds a Part 135 FAA certificate for drones, and has demonstrated flights over people, at night, and beyond visual operation, as well as see-and-avoid capability, controlling multiple vehicles from a single point, and remote pilot qualification. It has also received a type certificate (MK27-2) for its drones, awarded on Jan. 27, 2022. Amazon has 71 of its drones registered. (“Bezos’ Drones May Be Flying Soon,” Sandy Murdock, JDA Journal, June 14, 2022.)

$1.5 Billion Airport Concession in French Guiana
The main airport of French Guiana—Cayenne-Felix Eboue—will be offered as a 30-year P3 concession. The first notice appeared in January, followed by a Request for Qualifications, responses to which are due by June 27th. The concessionaire will be required to expand and modernize the airport terminal, surrounding infrastructure, and other technical installations and then operate and maintain the airport for 30 years. Prior to the pandemic, the airport served 560,000 passengers in 2019.

LAX People Mover Guideway Completed
Public Works Financing reported (May 2022) that the 2.25-mile elevated guideway for the LAX people mover project was completed in May. The overall project is being developed under a 30-year DBFOM P3 concession valued at $4.9 billion. The concession is held by a joint venture of Fluor, Balfour Beatty, Flatiron, and Dragados. The project includes six stations, four at various passenger terminals, one at an LA Metro transit station, and the last at the under-development consolidated rental car center.

GAO Surveys AAM Stakeholders
At the request of Congress, the Government Accountability Office surveyed aviation stakeholders about issues that will need to be addressed to bring about Advanced Air Mobility (AAM). Among the key topics are FAA approval of novel aircraft designs, gaining public acceptance of new aircraft such as eVTOLs, and developing needed infrastructure on the ground. The report, GAO-22-105020, is available here.

Airports Council International Report on AAM and Airports
ACI-World last month released a new policy brief: “Advanced Air Mobility: Integration Into the Airport Environment.” It sets forth ACI’s current positions and policy statement on what it hopes will be a “seamless integration” of these new entrants into existing airports. It is available for download here.

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Quotable Quotes

“If U.S. legislators continue to ignore the commercial pilot shortage and do not support common-sense solutions to fill an empty pipeline, they will have no one to blame for the consequences . . . Failure to act helps organized labor protect the significant wage and benefit gains won before the pandemic. Dampened competition will do that. As the only stakeholder not accepting that there is a shortage, pilot labor is unabashedly leveraging a very real pilot demand/supply imbalance for its benefit. . , . As an institution, the union’s dues are based on pay rates at the carriers they represent. The pilot salaries ALPA has negotiated at Spirit and three other ULCCs, as well as at the eight regional carriers they represent, are less than those at the Big Three U.S. airlines.”
—William Swelbar, “Why Unions Do Not Want to Tackle the Pilot Shortage,” Aviation Daily, June 20, 2022

“[Regarding FAA’s proposed requirement for more fuel-efficient airliners], there is lots of new technology out there waiting to be certificated. What are its plans to accomplish that? The peril is that FAA will commence ill-conceived rule-making to develop fuel-efficiency standards, thereby hobbling engine and perhaps airframe development until the standards are released, then further hobbling certification projects because FAA doesn’t and won’t have the wherewithal to do all the new work in a timely fashion. All for what? Fuel efficiency is absolutely top-of-mind for engine manufacturers and airframers now and will stay so for the foreseeable future, as far as the eye can see. (My eye sees as far as global transportation relies on fossil fuels; until a practical alternative to fossil fuel emerges. I’m not sure how far down the road that is, but until it happens, engine manufacturers and airframers will be laser-focused on fuel efficiency.) FAA rule-making will only interfere. It will hot help; it will harm those efforts.”
—Joseph Corrao, civil aviation regulation expert, posted on Mifnet.com, June 16, 2022 (used by permission)

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The post Aviation Policy News: FAA change on eVTOL certification, San Juan’s airport transformed by privatization, and more appeared first on Reason Foundation.

• A new approach for the Single European Sky
• Mexico’s air traffic control mess
• U.S. airline competition continues heating up
• Another vertiport developer—ahead of its time?
• Reforming the airport passenger facility charge
• “Privatizing” the East Hampton airport?
• News Notes
• Quotable Quotes

A New Approach for the Single European Sky

Airlines serving Europe complained bitterly about the inefficiency of Europe’s fragmented air traffic control (ATC) system, during the Airlines for Europe (A4E) summit in Brussels, on March 31. Under pressure to reduce their carbon footprint, they pointed to large potential emission reductions if all flights within Europe could follow the shortest paths between origin and destination. But this idealized system is nearly as far from being realized as when the Single European Sky program began in 1999.

“Fixing the fractionated ATM system will future-proof European aviation,” said Ryanair CEO Michael O’Leary.

European Commission Transport Director General Henrik Hololei added, “It is a disgrace and unacceptable that the member states have not been able to agree on ambitious reforms and deliver a Single European Sky. It is blocked at the member states, and there is not enough willingness to move forward.”

To see how costly and inefficient the European air traffic control system is, consider the following statistics, extracted from the “2017 Comparison of Air Traffic Management-Related Operational Performance, U.S./Europe,” put together by Eurocontrol and the FAA Air Traffic Organization.

Because each country insists on keeping all its air traffic control facilities, Europe has triple the number of en-route centers compared with the United States, serving one-third fewer daily flights, with nearly 50% more air traffic controllers. And this leads to less-efficient routes in addition to much higher costs. A recent study carried out by researchers at the Otto Beisheim School of Management at a German university that goes by its initials (WHU), found that direct flight routes between European cities could reduce airline emissions by as much as 40%. (Arne K. Strauss and Jan-Rasmus Kunnen, “Reducing Flight Detours to Cut Emissions,” Air Traffic Management, Issue 1, Spring 2022)

However, the status quo is maintained by the governments of each sovereign country, along with massive lobbying and strike threats from the numerous air traffic controller unions. A recent example, reported in the May 2022 issue of Aviation Intelligence Reporter, was the attempt of the air navigation service provider (ANSP) of Poland—PANSA—to implement a partially automated air traffic management system that would have enabled “less location-specific air traffic control.” This mild reform led to threats of a strike and agitation by controller unions, not limited to Poland. The government caved, and—sadly—European airlines sat on their hands.

But in the same issue of that newsletter, editor Andrew Charlton suggested that if Eurocontrol’s Network Manager could actually direct air traffic flows (as the FAA’s Command Center can), more efficient, lower-emission routes could result. One factor that hinders this is that the air traffic control charge per flight kilometer varies widely among European air navigation service providers. This leads to the well-known practice of airlines routing around airspace with high per-kilometer rates to save money, thereby taking longer and burning more fuel, leading to higher emissions.

But what if—in the name of carbon reduction—the European Commission were able to mandate a single en-route rate per kilometer regardless of which ANSP was controlling a portion of the flight path. That would eliminate routing around high-cost airspace, but it would also do something else. Since a high-cost ANSP would no longer be able to recover 100% of its bloated costs (from too many centers, too many controllers), for the first time it would have a significant economic incentive to take on its unions and other status-quo forces (e.g., members of parliament who resist consolidation of centers) to make serious cost-saving reforms.

This would be a real challenge to the sovereignty question that has stymied achieving the original Single European Sky vision. I don’t know which European Union body may have the authority to make such a change, but aviation stakeholders should pursue this proposal. The new aspect that could make a difference is the widely agreed need to reduce aviation’s carbon footprint in Europe.

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Mexico’s Air Traffic Control Mess

A near-collision on May 7 between two Volaris A320s at Mexico City’s Benito Juarez International Airport (MEX) has called attention to serious problems with the recent redesign of the country’s airspace.

For years Benito Juarez International Airport has been trying to handle more flights and passengers than it was designed for—and its location makes it difficult to expand the airport. The previous government had selected a farther-out site for a replacement airport, based on a Mitre Corporation study. It commissioned a state-of-the-art design from Norman Foster Partners and launched a major construction project, estimated at $13 billion. The new airport was about 40% completed when the new government of Andres Manuel Lopez Obrador (AMLO) took office in 2018. One of its first actions was to cancel that project, leaving bondholders without the planned airport revenue for debt service. The government’s new plan was to keep MEX in place but to supplement it with a new airport based on an existing military air base, to be named Felipe Angeles Airport, at a cost of $5.6 billion. Further away, there is another airport with some scheduled service—Toluca.

Going from basically one large hub for airline service to three passenger airports required redesigning the airspace. In principle, that should have been no big deal. Numerous large metro areas have multiple airports: Chicago, Dallas/Ft. Worth, London, Los Angeles, Miami, New York, Paris, San Francisco, and Washington, D.C., to name just a few. But this task seemed beyond the ability of the ANSP of Mexico, SENEAM. After airlines last year began reporting ground proximity warning system (GPWS) incidents, our own FAA downgraded Mexican air traffic control from Category 1 to Category 2.

Shortly before the near-collision at Benito Juarez International Airport, both the International Air Transport Association (IATA) and the International Federation of Air Line Pilots’ Associations (IFALPA) released safety warnings about Mexican airspace, noting many GPWS alerts, unplanned holding patterns, and other problems. “It would appear that with the opening of this newly converted airport, ATC has apparently received little training and support as to how to operate this new configuration of the airspace,” IFALPA’s safety bulletin stated.

The reaction by the government in the wake of the near-collision at MEX was swift. The head of SENEAM was fired, and Deputy Transport Minister Rogelio Jimenez Pons announced that flights at MEX would be reduced by 25% over the next 12 months, with airlines apparently forced to shift routes from MEX to Felipe Angeles. He also noted that SENEAM is short at least 250 controllers. President AMLO called for SENEAM to “put the airspace in order.”

By the way, Felipe Andres, though nominally open, is still partly under construction. And construction of the promised airport train to Mexico City has barely started, and it won’t be ready to transport passengers until the second half of 2023. That will not make airlines and their passengers eager to shift flights to Felipe Andres from Benito Juarez International Airport.

This is a sad comedown for Mexican aviation, reflecting the politicization of airports and neglect of the air traffic control system. Ironically, Mexico was the second country in the world (after the United States) to have an independent, self-supporting ATC system. Our system was begun in 1929 as a nonprofit airline co-op called Aeronautical Radio, Inc. (ARINC). After that fledgling system was taken over by the federal government in 1936, ARINC stayed in business providing services to the growing airline industry. After World War II, it helped to set up two similar nonprofit user co-op ATC providers, RACSA in Cuba and RAMSA in Mexico. Both of those developed their countries’ initial ATC systems, and they continued in operation until they were nationalized, RACSA by the incoming Castro regime and RAMSA in 1978.

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U.S. Airline Competition Continues Heating Up

Start-up ultra-low-cost carriers (ULCCs) Avelo and Breeze announced additional new routes in recent weeks, offering cost-conscious travelers new non-stop alternatives to legacy airlines.

On April 28, Avelo began its second year by announcing that its third base (after Burbank and New Haven) will be in Orlando (MCO). Avelo’s initial routes from Orlando will serve Charleston, SC, (CHS), Baltimore/Washington (BWI), and Wilmington, NC (ILM). By the end of this year, its plans include 10 destinations to be served from Orlando. Avelo also plans to consolidate its flight attendant and pilot training in Orlando.

As noted previously in this newsletter, Avports is leading a $100 million capital improvement program at New Haven (HVN), lengthening its runway and adding a modern passenger terminal. Avports has secured a 43-year lease for its public-private partnership to finance and build the improvements and operate the airport. As of this summer, Avelo will serve 14 destinations from New Haven.

Breeze Airways has also announced service expansions in recent weeks. Thanks to the range of its incoming Airbus A220-300s, it will begin transatlantic service from Westchester County Airport (HPN), just north of New York City. In September, Breeze will offer daily nonstop flights to Los Angeles (LAX) and Las Vegas (LAS) from HPN. Other destinations to be served from HPN are Charleston (CHS), Norfolk (ORF), and Jacksonville (JAX). Breeze also announced Orlando (MCO) as its thirtieth airport. And in mid-May, Breeze announced that it will serve Provo, UT, (PVU) starting in August, with five routes from there planned to be in operation by November. Destinations from Provo will include San Francisco (SFO), San Bernardino (SBD), Las Vegas (LAS), and HPN (in this case one-stop service).

Both Avelo and Breeze are following the classic ultra-low-cost carrier model of providing direct, non-stop service from under-served, smaller airports (HVN, HPN, PVU) to leisure and (to some extent) business destinations such as BWI, LAS, LAX, MCO, and SFO. This is the business model pioneered with great success by Allegiant, Frontier, and Spirit.

These latest developments bring us to the ongoing battle between JetBlue and Frontier to merge with Spirit. After Spirit rejected JetBlue’s unsolicited takeover proposal, JetBlue approached Spirit’s shareholders with a hostile all-cash $3.6 billion takeover offer. Spirit’s management has urged shareholders to reject that offer, arguing that the combination of JetBlue and Spirit would likely face extensive, costly antitrust challenges from the federal government. While that does seem to be likely, there’s a better reason to reject the offer.

Merging Spirit into JetBlue would convert the former Spirit from a ULCC to just a low-cost carrier, reducing the amount of ULCC competition and markedly changing the corporate culture of the Spirit component. By contrast, the original Frontier/Spirit merger would create an ultra-low-cost carrier powerhouse, offering robust competition with ULCCs Allegiant, Avelo, and Breeze. That expanded ULCC segment of the airline industry would be a more powerful competitive force keeping airfares affordable for air travelers across the board.  

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Another Vertiport Developer: Ahead of Its Time?

Aviation Week devoted a whole page to the debut of a prototype vertiport in Coventry, England, earlier this month. (Tony Osborne, “eVTOL Vertiport Template Gains International Traction,” Aviation Week, May 2-15, 2022) Called Air One, the prototype was developed by startup company Urban-Air Port Ltd. (UAP), founded by entrepreneur Ricky Sandhu. It consists of a modular tent covering 18,800 square feet, with a movable circular 56-foot diameter platform on which eVTOLs would land and take off. This Final Approach and Takeoff (FATO) platform is capable of supporting 15 metric tons. Once the loaded eVTOL, at ground level, is ready to depart, the FATO would be raised above the tent high enough to clear nearby obstacles prior to the aircraft’s lift-off. When an approaching eVTOL nears the facility, it would land on the elevated platform, which would then be lowered to the floor of the tent.

UAP envisions Air One facilities located on the ground at key locations (e.g., adjacent to Coventry’s railroad station), on rooftops, and at airports. The elevating FATO has been developed by Supernal, another startup, in this case, funded by Hyundai which is reportedly working on an eVTOL of its own. The rationale is to reduce sideline noise (though no comparative noise impacts have been reported) and for the aircraft to clear adjacent obstacles, such as fences. This implies that the eVTOLs will not be taking off or landing vertically but will need to follow some kind of glide path to the landing pad. That is realistic, since true vertical takeoffs require more power than angled takeoffs, especially if the eVTOL has wings, as some do. You don’t want to use up too much battery power on vertical takeoffs and landings if you can avoid them.

UAP seems to be envisioning a large near-term market for advanced air mobility (AAM), the umbrella term encompassing both urban air mobility (UAM) and regional air mobility (RAM). My assessment at this point is that a business case for UAM (i.e. short-haul air taxis within an urban area) is far less probable than RAM—serving cities up to several hundred miles apart, as Lilium and one or two eVTOL developers envision. Locating a vertiport adjacent to a rail station is consistent with UAM (taking a flying taxi to the station for a rail journey). But it makes no sense if the market is largely or entirely for RAM, which would compete with passenger rail.

Some concerns about UAM were aired in a thoughtful article by economics/technology columnist Christopher Mims in The Wall Street Journal. Mims interviewed several transportation consultants about difficulties in finding and getting local government approval for vertiport sites, including protecting vertiport glide paths from future adjacent tall buildings, interaction with FAA airspace constraints, etc. Former FAA official Mike Whittaker, now with Supernal, fears that cities may require vertiports to be outside of city centers due to land-use constraints in downtowns. Not mentioned in the article is the likelihood that FAA certification and oversight of vertiports will be required, just as it is for airports serving passengers.

My concern about premature investment in vertiports stems from an assessment I share with many others in aviation: over-optimistic expectations for FAA certification of the eVTOLs themselves, certification of their manufacturing, and air operator certification for the companies offering UAM or RAM services to paying customers—and here I’m considering only piloted eVTOLs; autonomous eVTOLs is another whole story. Aviation Daily reported on May 16 that there is currently a divergence between the approach to eVTOL certification being pursued by aviation safety regulator EASA in Europe and FAA’s current plans. Unless those approaches are harmonized, an eVTOL would have to be certified separately in Europe and the United States in order to be sold and operated in both jurisdictions. That would add considerable time and cost, further delaying the debut of actual UAM or RAM service.

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Reforming Airport Passenger Facility Charges
By Stephen Van Beek, Head of North American Aviation for Steer

Summer airline scheduling data show that many U.S. airports will be soon reaching or exceeding 2019 passenger levels. Accordingly, airport boards and executive teams are once again looking at their facility plans with an eye towards upgraded infrastructure, which can provide services to their airline partners, to their passengers, and to growing business lines including cargo and general aviation, which have boomed during the pandemic.

Looking across transportation, the passenger facility charge (PFC) is one of, if not the most, elegant user charges to fund infrastructure. Authorized by the Airport Noise and Capacity Act (1990), the PFC was created recognizing two realities. First, federal capital funds, provided under the FAA’s Airport Improvement Program (AIP), were insufficient to fund infrastructure needs, especially at the largest commercial service airports. Second, airports needed a reliable, independent source of revenue. Policymakers wisely statutorily exempted them from the old-style use and lease agreements under which the largest airlines could block capital improvements at airports where additional capacity could benefit new entrants or smaller airlines seeking to increase service. Passenger facility charges are a vital tool for competition in the airline industry.

Today, there are two PFC rate levels, $3.00 and $4.50, assessed on most passenger itineraries up to two flight segments per trip. Airports net $2.89 and $4.39 from each segment, with 11 cents going to the airlines for their handling of the PFC (on their tickets). Passenger facility charges may only be used for FAA-authorized projects, including airside, terminal, and landside passenger-related infrastructure. As federally-authorized locally generated revenue, PFCs are the purest of user fees—assessed on passenger tickets only for infrastructure that airport passengers use.

Since they were first collected in 1992, over $62 billion of PFC revenue has been invested in airport infrastructure. Airports can also leverage PFCs to back new revenue bonds or pay interest on existing bonds. Their use has minimized direct federal capital spending, put downward pressure on airline charges for runways and gates, and under a creative formula has reduced capital grants for larger airports and shifted billions of dollars to smaller airports where fixed costs are high and passenger levels are often low, but where connectivity to the national air system remains critical.

PFCs’ strength have been their simplicity, but in a changing airport development environment, that is becoming its weakness. Congress has not acted to increase the PFC rate levels for over 20 years, reducing the inflation-adjusted value by half, and contributing to a tremendous backlog of capital needs for the airport industry. Airports Council International North America identifies over “$115 billion in planned and much-needed infrastructure projects.” While airport representatives have aggressively lobbied policymakers to increase and “modernize” the PFC, their efforts have been beaten back in the committee rooms and floors of Congress by vociferous airline lobbying, often with the false characterization of PFCs as a tax.

Even though passenger facility charges are a user fee, FAA regulatory oversight makes the PFC application process unnecessarily complex, delaying critical investments. To get approval for a PFC application, for example, airports must detail use of the PFC in terminals often down to the square foot. This is required so that no PFC revenue is spent on ineligible uses such as facilities supporting concessions (even though all airport net revenues are required by law to be reinvested in the airport).

It is fair to ask: What is different today? Why would policymakers and industry representatives agree to increase the PFC?

The current FAA authorization expires on Sept. 30, 2023, and the industry is already preparing for a challenging effort. Today, after years of being in surplus, the Airport and Airway Trust Fund (AATF) has an inadequate balance to meet FAA budgetary needs (due to the drop in traffic and the suspension of taxes and fees during the height of the pandemic), which includes the capital and operating elements of air traffic control, airport infrastructure grants (AIP), research, and a slew of other needs.

To return the AATF to financial sustainability will require a review of current taxes and fees and forecasting how their collection will fund the $18.6 billion annual FAA budget. In this environment, the PFC as an airport “self-help revenue source” can help reduce federal capital grants to airports and the ticket taxes necessary to fund those grants. Several years ago, while I was sitting on the FAA Management Advisory Council and we were recommending significant reform in the delivery of air traffic control, Robert Crandall, the former CEO of American Airlines, noted “[d]oing a deal to swap higher PFCs for AIP—and building in provisions to give airlines some protection from airport grandiosity—would be a good deal for airports, airlines, passengers, and Mr. and Mrs. America who do not want to travel through run-down, out-of-date airport facilities.”

Recently, some smaller commercial service airports have stated their concerns that a PFC increase could hurt their air service as often their passengers must connect through an airline hub airport to their destination. Thus, any increase could be multiplied by four and added to the ticket price, adding already to the sometimes-high ticket prices discouraging service to those communities. To address that concern, we need to go no further than our Canadian neighbors for a solution.

In Canada, rate-setting for their PFC equivalents, called the Airport Improvement Fee (AIF), are set by the airports. At Toronto, recognizing their value as a hub serving small communities, they charge C$6 for connecting traffic or one-fifth of the C$30 charge for originating traffic.

For the upcoming FAA reauthorization, several options for policymakers are possible. Here are four:

• Deregulate the PFC: allow the airport to set the rate level by type of traffic
  (e.g., international, domestic, connecting), as in Canada;
• Raise the PFC ceiling to account for inflation and index it: policymakers could raise the ceilings and build in an annual adjustment – e.g., initially $6.00 and $8.00 for the two PFC rate levels; or
• Adjust the PFC ceiling (as with 2 above) but retain the current levels for connecting traffic—this would recognize that connecting traffic does require infrastructure, but it would help mitigate the effect on small communities and their air service.
• Stipulate that 75% of airport terminals are PFC eligible, thereby greatly simplifying the application process. If airports would like a higher proportion to be eligible, they would have the option to submit more detailed analyses.

As we approach an era of greater concern about government spending and unmet airport infrastructure needs, passenger facility charges are a proven and effective tool that suit the time. Aviation industry representatives should use this period leading up to FAA reauthorization to review the options and come up with a consensus-based solution.

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“Privatizing” the East Hampton Airport?

The aviation world has been buzzing for several months about a plan by the wealthy town of East Hampton (Long Island) to “privatize” its airport and re-open it with severe restrictions on the type and frequency of private planes and helicopters that use it.

The town’s plan is a response to airport neighbors’ concerns about noise from helicopters and business jets. It would limit any plane or helicopter to only one landing/takeoff per day. That would not likely affect those who own their own business jets, flying to their weekend homes in the Hamptons. But it would greatly affect helicopter and fractional-jet operators who rely on multiple daily round trips to East Hampton on many days. So the battle is being written about as a clash between the super-rich against the merely rich who live in East Hampton full time.

Opponents of the plan have filed several lawsuits arguing that the “privatization” is illegal on various grounds. The town’s plan to shut down the airport on May 17 and reopen it as a private facility the next morning was halted by a Suffolk County judge’s temporary restraining order in response to several of the lawsuits, including one from the National Business Aviation Association (NBAA).

I am not a lawyer, and I have not read the briefs, but here is something I learned in the 1990s when then-mayor Richard Riordan attempted to privatize Los Angeles International Airport (prior to the subsequently-enacted Airport Privatization Pilot Program). Federal aviation law provides that, except for an airport approved by FAA under the successor privatization program, an airport owned by a local or state government cannot be sold if it has received and used any federal airport grants in the previous 20 years. If East Hampton’s airport has received such grants during the past 20 years, what it is trying to do would be illegal.

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News Notes

Worst 10 U.S. Airports According to Frommer’s
Travel guide publisher Frommer’s recently released its latest assessment of the 10 worst U.S. airports. Here is a brief summary of Frommer’s rankings and reasoning:

• #10 Washington Dulles (IAD)—due to inconvenient location, confusing layout
• #9 Yeager Airport (CRW), Charleston, WV—due to allegedly scary location
• #8 Dallas/Ft. Worth (DFW)—due to flight delays and cancellations, long lines due to understaffing
• #7 Denver International (DEN)—due to bumpy takeoffs and landings, long security lines, parking
• #6 Cleveland Hopkins (CLE)—due to outdated facilities, limited accessibilities
• #5 Philadelphia International (PHL)—due to outdated terminals, traffic
• #4 O’Hare International (ORD)—due to overcrowding, delays, and cancellations
• #3 Los Angeles International (LAX)—due to bad customer experience, traffic, confusing layout
• #2 LaGuardia (LGA)—delays and cancellations, poor ground transportation
• #1  Newark-Liberty International (EWR)—due to delays and cancellations, poor amenities, and an inconvenient location.

DOT Inspector General Will Audit FAA UAM Certification
Urban Air Mobility (UAM) is the term for urban-area service intended to be provided by new-technology aircraft: small electric vertical take-off and landing (eVTOLs). The Office of Inspector General has begun an audit of how the Federal Aviation Administration is planning for the certification of these aircraft. The March 7 memorandum about the study notes that FAA is taking a different approach to this subject than the European Union Air Safety Agency (EASA), which has developed a special-condition approach to type certification. FAA plans to fit eVTOLs into existing regulations. Those with wings will be certified under Part 23 general aviation provisions, with special conditions, while volocopters will be certified under Part 21.17b for special-class aircraft.

RFP for San Jose Airport Connector P3
Norman Y. Mineta San Jose International Airport has issued a request for proposals (RFP) for its airport connector public-private partnership (P3) project. The project would connect the airport with the downtown Diridon Station rail transit hub, a distance of three miles. The aim is to design, build, finance, operate, and maintain the link under a long-term P3 agreement. The estimated cost of the system is $500 million.

Barbados Qualifies 13 Companies for Airport P3 Project
The Barbados government seeks to upgrade its Grantley Adams International Airport. The 13 companies that will be invited to bid on the RFP for a 30-year P3 concession include Ferrovial Airports, Grupo Aeroportuario del Centro Norte, Schipol Netherlands, and Vinci Airports. The government’s aim is to have the winner selected by year-end and the long-term concession negotiated and signed in the first half of 2023.

Russia Is Jamming Airline GPS in Three Regions
Bloomberg’s Tara Patel reported the Russian military has been jamming commercial aviation GPS receivers since the start of its Ukraine invasion. Pilots have reported GPS disruption near the Black Sea, Kaliningrad, and eastern Finland. The head of satellite navigation at French aviation regulator DGAC suggested that the jamming is collateral damage rather than intended interference with commercial aviation. But this kind of interference further highlights the need for alternatives to GPS, which aviation (and nearly all other GPS users) still do not have.

Jamaica’s Privatized Airports to Expand Capacity
The Jamaican government has approved $106 million to be spent this year and next to assist the P3 concession companies MBJ Airports Ltd. (Montego Bay) and PAC Kingston Airports Ltd. (Kingston). MJB will spend $150 million of its own money on the continued expansion of the departure terminal and a 3MW solar power project; the government money will cover phase 3 of the Montego Bay runway extension project. PAC Kingston will also install a solar power plant (5MW), and the government money will be used for runway improvements.

Brazil Seeks Studies for Rio de Janeiro Airport P3s
The government’s Estruturadora Brasilia de Projetos (EBP) is seeking qualified consulting firms to develop P3 concession models for the two passenger airports serving Rio: the major hub Galeao International and the smaller Santos Dumont Airport. Selected firms will have 90 days to produce and submit their reports, including an economic evaluation, market assessment, and engineering and environmental studies. EBP has $4.5 million available for the studies.

Boom Supersonic Signs Carbon Capture Contract
Boom Supersonic, whose XB-1flying prototype will soon be making its initial test flights in California, earlier this month signed a 10-year agreement with Climeworks for CO2 removal via its carbon capture facilities. Boom plans to use 100% sustainable aviation fuel (SAF); which reduces but does not eliminates CO2 emissions. Climeworks has several carbon capture facilities in operation. Boom aims to begin production of its Overture supersonic airliner in 2024, with the prototype rollout set for 2025, flight tests in 2026, and certification by the end of 2029.

White House Proposes Local Control Over Drone Flights
On April 25, the Biden administration released an eight-point plan, calling for Congress to allow state and local governments to regulate some aspects of drone operations near “critical buildings,” along with new authority for those governments to detect and track drones, as well as allowing law enforcement and infrastructure operators to use federal detection and tracking technologies. It would be a six-year pilot program under which only a limited number of state and local entities would be authorized at any one time.

CLEAR Adds San Diego as its 43rd Airport
CLEAR’s expedited security lanes began operating in Terminal 2 of San Diego International Airport on April 26. The CLEAR lanes enable subscribers to establish their biometric identity and then bypass the long lines at security checkpoints. San Diego is CLEAR’s 43rd U.S. airport and the 8th in California.

Stewart Airport Loses Norse Atlantic Airlines
Before it even begins trans-Atlantic service, startup low-cost carrier Norse Atlantic has deleted New York’s Stewart Airport (SWF) from its schedule. Plans still include initial services from Oslo (Norway) to Ft. Lauderdale (FLL) and to Ontario (ONT), which is east of Los Angeles. The reason for dropping SWF is its lack of air cargo facilities. Cargo is an important part of the airline’s revenue plans. Instead of SWF, Norse will begin its New York service at Kennedy International (JFK).

New Berlin Airport Loses Over Half Billion Dollars
The Berlin-Brandenburg Airport (BER) booked a loss of $602 million in its first full year of operation, Tribune News Service reported on May 3, 2022. To cover its losses, BER relies on federal and state funding to supplement its self-generated revenue from airlines and passengers. It is also known for long lines at check-in counters and security lanes, staff shortages, and miscellaneous problems such as broken walkways.

Companies Partner on Lighter Hydrogen Fuel Tanks
One of the problems with using hydrogen for aircraft propulsion is the weight of onboard hydrogen fuel tanks (which need to be much stronger than gasoline and jet fuel tanks). Gloyer Taylor Laboratories (GTL) has developed a lighter-weight tank that startup company HyPoint sees as a better match for its hydrogen fuel cells for aviation applications. Current tank designs weigh far more than the fuel they carry, whereas a new GTL tank weighs far less. Hypoint suggests that an aircraft using those tanks could achieve as much as four times the range of a conventional aircraft using aviation fuel.

To Address Aviation Staff Shortages, Recruit More Women
Recruit more women is the message from the Women in Aviation Advisory Board, established by Congress in the 2018 FAA reauthorization law. Its 2021 report, “Breaking Barriers for Women in Aviation: Flight Plan for the Future,” urges leaders in aviation to work for culture change that will encourage more women to pursue careers in aviation and offers numerous suggestions to that end.

Why GPS Should Embrace Privatization to Avoid Obsolescence
In a recent Forbes column, Charles Beames introduces a startup company called Hawkeye360, founded by Chris DeMay, formerly a program director at both the National Security Agency and the National Reconnaissance Office. His company is planning a small-sat network in low earth orbit to provide position/navigation/timing (PNT) signals of far greater strength than today’s GPS—and at a far lower cost. Beames briefly profiles several other researchers/entrepreneurs with other PNT proposals. They take heart from the Space Force’s Hybrid Space Architecture concept—using both government and private small-sat elements, amounting to a far more robust PNT capability.

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Quotable Quotes

[T]he CEO of Delta, Ed Bastian, is now deep in historical revision territory, claiming that the bailout that he and the other U.S. airlines begged for, and secured by threatening mass lay-offs of staff, was not a bailout at all. It was nothing more or less than the airlines deserved. The airlines were merely helping the American economy out. And what a good job they did for the U.S. economy. In February 2020 Delta had about 91,500 employees. Once the not-bailout funds had worked their magic, by February 2021 it had 62,500. Instead of retaining staff, Delta and the other airlines used the money to fund early retirement and retrenchment programs. The result, inevitably, was a serious loss of corporate memory. New graduates are now doing jobs that once needed experience and background. . . . Rotation of staff is not of itself a bad thing, but remember, we are now screaming about staff shortages.”
—Andrew Charlton, “Bailouts, Buy-Backs, and Other Forms of Aid: For Whom?” Aviation Intelligence Reporter, May 2022

“I do worry that we are missing the opportunity to deliver the EU Single European Sky (SES)—because vested interests are still preventing it from going forward. . . . We also need to make sure that the system as a whole does not include perverse incentives for airlines to do things that make economic, but not environmental, sense—such as fuel tankering and flying longer routes in order to avoid expensive states.”
—Eamonn Brennan, Director General, Eurocontrol, in Philip Butterworth-Hayes, “A Different Kind of Future,” Air Traffic Management, Issue 1, Spring 2022

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The post Aviation Policy News: New approach for Europe, U.S. airline competition, and more appeared first on Reason Foundation.

• New insights on European aviation and climate change
• Rethinking airline service at small airports
• Noise—a serious challenge for eVTOLs and vertiports
• Finishing up the 5G and altimeters drama
• Amazon Air adds business for airports
• What’s in store for the next FAA reauthorization
• News Notes
• Quotable Quotes

New Insights on European Aviation and Climate Change

On April 15, Eurocontrol released a detailed report on “the aviation path to 2050,” forecasting three possible growth scenarios and discussing how each would deal with the European Union’s aviation goal of net zero CO2 emissions by 2050.

In the mid-range scenario, here are the five components that Eurocontrol projects as contributing toward that 2050 net zero CO2 goal:

• 17% via evolutionary improvements to aircraft and engines;
• 2% via revolutionary new aircraft technologies, such as electric and hydrogen-propelled aircraft;
• 8% via more efficient flights, such as improved air traffic management;
• 41% via gradually increasing use of sustainable aviation fuels (SAF); and.
• 32% via various market-based measures, such as buying offsets (CORSIA) and applying Europe’s Emissions Trading System to aviation.

Not included in Eurocontrol’s report are policies such as one being implemented in France to require trips up to 500 kilometers to be made via rail instead of air travel. The idea is being discussed in several other countries, which makes the release of a new study carried out by consulting firm Oxera on behalf of five aviation stakeholder groups very timely. Despite being funded by trade groups ERA, ACI Europe, ASD Europe, CANSO, and A4E, the report, “Short-haul Flying and Sustainable Connectivity,” released on March 24, is well-done and provides a thoughtful and data-rich assessment of short-haul flying and various alternatives, primarily passenger rail.

This turns out to be a more complex issue than is evident at first glance. CO2 emissions per passenger-kilometer are higher on short-haul flights than on long-haul flights, since take-offs and landings are a larger fraction of short-haul flights. The European Environment Agency (EEA) notes that the carbon footprint of passenger rail includes the CO2 emissions from the production of the steel and concrete used, especially for high-speed rail (HSR). The report cites EEA’s calculations of the monetary cost of pollution per passenger for a 500 km journey and finds that it is higher for gasoline and diesel cars carrying one person but that the same cars have much lower pollution costs if they’re carrying four people. The report notes in passing that by 2050, if government and auto industry electric vehicle plans are realized, a very large fraction of personal vehicle trips in Europe will be electric, rather than petroleum-fueled.

The report also discusses the non-CO2 environmental impacts of air and rail travel. Noise exposure occurs along the entire rail right of way, whereas aviation noise is limited to land areas around airports. Railroads also have negative impacts on wildlife and biodiversity. They produce soil pollution from abrasion of brakes, wheels, tracks, and overhead electrical lines. Indirect emissions account for 21% of overall emissions from aviation but 39% and 100% from diesel and electric trains, respectively.

Section 3 of the report focuses on the challenges in shifting short-haul travel from air to rail in Europe. One key finding is that “There is unlikely to be sufficient rail capacity [already in existence] to accommodate the passengers shifting from air,” if this is mandated. There is no real HSR network in Europe today, as opposed to “an ineffective patchwork of poorly connected national lines,” in the words of a 2018 review by the European Court of Auditors. And for existing non-HSR railroads, about 45% of track miles are non-electrified. Hence, to be a low-carbon alternative to air travel, Europe’s passenger rail system would need to electrify the rest of conventional rail and greatly expand and interconnect national HSR systems, at huge taxpayer cost.

Another problem is the much longer travel time of passenger rail. Of the top 150 intra-EU rail routes, only 14% have a duration of less than four hours. Another 20% take four to six hours, and 39% are eight to sixteen hours long. So it’s no surprise that current proposals for air-to-rail shifts focus on routes of 500 km or less. A case study of travel between Berlin and Munich finds that door-to-door trip times for that route may be comparable, but current rail service between the two could accommodate only 26% of current air passengers. Rail capacity would need to be greatly expanded, generating a large carbon footprint. The alternative would be to accept that some large fraction of those travelers would shift to driving or intercity bus. Unfortunately, the report does not analyze intercity bus travel, which is extensive in Europe.

As for the carbon footprint of newly added high-speed rail lines, the report presents estimates for three hypothetical cases: high-potential (strong demand, minimal tunnels, or elevated track), low potential (low demand, considerable tunnels and elevated track), and an in-between case. The low-potential case has an estimated carbon payback time of 50 years, versus just three years for the high-potential case. But given the political choices of where to build HSR in many countries, low-potential routes would likely be part of the mix.

One other important factor is that a large fraction of short-haul European air travel is flights from smaller cities to major hub airports where passengers connect to longer-haul flights. Yet few of the originating cities have convenient rail lines that connect directly to those larger hub airports. This leads to the possibility that if short-haul flights are banned within Europe, some passengers may opt to fly to a connecting hub outside Europe (e.g., Turkey or Dubai) to reach long-haul destinations.

There’s far more in this well-done report than I can summarize here. It raises many important considerations about both the feasibility and extent of carbon footprint reduction from a mandated shift of short-haul air travel to passenger rail.

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Rethinking Airline Service at Small Airports

Changes in aircraft economics are leading to cuts in airline service at small airports. The 50-seat regional jets that used to provide much of the service to such airports are fuel-guzzlers and are being retired from service. A new study from Swelbar-Zhong finds that as of June, 50-seat regional jets will fly only 53% of the departures they flew three years ago. And this shows up in numbers for the big-three legacy carriers. For airports that rely on 50-seat regional jets, American this June will serve only 33, down from 42 in June 2019. And while Delta and United have not cut any airports so far, their connections to hubs from small airports are down from 2.2 per day to 1.7. The same report also looks at airports served 100% by regional airlines. The June 2022 schedules show American-affiliated regionals will serve 122, down from 139 in June 2019. Delta is down from 82 to 76, and United is down from 142 to 124.

Newer, larger regional jets have better fuel economy, but that’s meaningful to their operator only if they fly mostly full of fare-paying passengers. So this leads to one or two large RJs replacing three or four small RJs. As industry analyst Bill Swelbar points out, that may be okay for vacation travelers, but not for those needing to make timely connections at a large hub airport. So this is not only a problem for small airports; it is also a problem for business travelers and others needing to make connections.

About 100 small airports are eligible for per-passenger federal subsidies under the Essential Air Services program, enacted in 1978 as a 10-year transition program to help smaller cities adjust to newly deregulated air travel. That program has numerous flaws and inequities and it does not directly address the changes in aircraft economics that are driving the changes noted above. So what hope is there for smaller airports?

One promising trend is the ongoing growth of ultra-low-cost carriers, including, Allegiant, Avelo, Breeze, Frontier, Spirit, and others. These carriers seek to connect smaller airports with popular destinations, especially for leisure travelers (though some budget-conscious business travelers use them, too).

A possible future option is regional air mobility, via a new generation of electric vertical take-off and landing (eVTOL) aircraft, though at this point their business case is unknown and uncertain. An opinion piece in Aviation Daily by David Marcontell of Waltzing Matilda Aviation explains its plan to offer fuel-efficient service to small airports using DHC Dash 8 Q400 turboprops initially, with possible future upgrades to Universal Hydrogen’s fuel-cell electric conversion. That, too, is speculative, but his point about the potential of fuel-efficient turboprops to replace fuel-guzzling 50-seat RJs is sensible.

Another option already in motion is customized bus service. American, Sun Country, and United have made deals with bus operator Landline. American, its most-recent partner, will begin Landline service on June 3, 2022, between Philadelphia and two small airports: Atlantic City and Allentown/Bethlehem. Already in operation is Landline service for United from Fort Collins and Breckenridge (CO) to United’s Denver hub. And Sun Country has Landline service from seven small airports in Minnesota and Wisconsin. The value proposition for customers is being able to check in for their flights and be security-screened at a Landline Portal at the small airport and then be delivered directly to their gates at the destination airport. The Landline buses have leather seats, free Wi-Fi, in-seat power, and streaming entertainment.

Landline, in my view, has a lot of potential and has just raised $28 million to expand its service. And from a public policy standpoint, it is unsubsidized, unlike the poorly justified federal Essential Air Service program, still in existence after 44 years.

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Noise: A Serious Challenge for eVTOLs and Vertiports

On April 7, an aviation news article appeared in my in-box, “Flying Electric Cars Are Coming—and Oshkosh’s Airport Might Be One of the Few Places to Charge Them.” The rather breathless story focused on a startup vertiport developer, Volatus Infrastructure, which announced plans to build “the first permanent electric vertical takeoff and landing vertiport in the Americas” at Wittman Regional Airport, the site of the huge annual AirVenture fly-in convention. Volatus co-founder Grant Fisk seems to have missed Palm Beach International’s agreement for a vertiport announced last year. But he also told the reporter that “half a dozen [eVTOL] vehicles are in final approval stages for general use and sale early next year.” I don’t think so. And what kind of vertiport business model depends on a single annual event for a large fraction of its paying customers?

Fisk is onto something, however, in seeing merit in locating initial vertiports at airports. Thousands of small U.S. airports exist, many of them lightly used, and a McKinsey study found that most Americans live within a 16-minute drive from an airport of some sort. Garrett Reim of Aviation Week pointed out in a March 21-April 3 article that such “airfields may offer an early and cheap test case for urban air mobility.” Reim’s article went into detail explaining that the lack of eVTOL performance data means that FAA cannot yet produce detailed guidance or regulations for vertiports. Its initial “Engineering Brief No. 105, Vertiport Design,” consultant Rex Alexander pointed out, can be seen as a “foundational document to build from, since there is not yet data from eVTOL prototype testing to be able to provide realistic guidance. We’re still trying to identify what a stabilized approach is for an eVTOL,” and that may vary depending on its configuration and its propulsion and lift system.

An even larger problem is likely to be noise exposure. For urban air mobility, as Graham Warwick points out in an Aviation Week commentary (March 21-April 3, 2022), when bringing aviation closer to people, “any level of [noise] annoyance will foster public opposition and could put the brakes on [this] democratization of aviation before it can gain momentum.” He recalls that the original 2016 Uber Elevate white paper stressed that urban air mobility (UAM) must blend into urban background noise.

There are at least two big problems with urban air mobility noise. First, there is very little real noise data available, since there are only a few flying prototypes so far, and only one or two (e.g. Joby, working with NASA) are systematically measuring and documenting noise. Because of the many different forms of lift and propulsion, each eVTOL may have different noise impacts, as well as different approach and landing paths.

The second problem is that the FAA’s current way of accounting for airport noise exposure has come under increasing criticism as not being able to assess changed noise impacts on specific neighborhoods—such as when approach and departure paths change due to the implementation of performance-based navigation (PBN) at major airports. In its report “Aircraft Noise: FAA Should Improve Efforts to Address Community Concerns” (GAO-22-105844), released last month, the Government Accountability Office pointed out that the current Day-Night Average Sound Level (DNL) method comes up with the same average impact for one flight per day at 114.4 dB and 100 flights per day at 94.4 dB. GAO recommends that FAA identify better metrics, especially ones that identify changed noise impact for specific locations near airports.

Assessing urban air mobility noise impacts will be even more challenging. Juliet Page of acoustical engineering company Blue Ridge Research & Consulting” told Aviation Week’s Reim that, for example, eVTOLs in the heart of a city will create noise that bounces off surrounding buildings. She added that eVTOL noise will not be anything like the day-night average sound level currently used for airports. “We need to consider sound in three dimensions,” she said, and this involves the field of psychoacoustics—the study of human perception of sound. She also pointed out that some local noise ordinances “really make no technical sense,” being developed by people who don’t understand decibels, log scales, and other aspects of acoustics.

While these urban noise problems may be solvable, they constitute another barrier to the potential business viability of urban air mobility. More viable, in my view, is regional air mobility, which can rely on vertiports located at airports (of all sizes) and fall within the airport’s overall noise regulations. I still think a vertiport at Oshkosh is at least five years too soon, but it’s not as bizarre as (today) building a vertiport downtown, prior to any real data on eVTOL noise or any FAA standards for such vertiports.

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Finishing Up the 5G and Altimeters Drama

After all of the miscommunication between the Federal Aviation Administration (FAA) and the Federal Communications Commission (FCC) prior to the auction of C-band spectrum for expanded telecommunications, it turns out there was—and is—a simple, previously-used solution.

My long-time friend, economist Tom Hazlett (who is also a former chief economist at FCC) co-authored a commentary in the Spring 2022 issue of Regulation, “Why Couldn’t the FCC and FAA Solve Their 5G Problem?” What he and co-author Michael J. Marcus point out is that there is a well-established process when new uses of spectrum displace or inconvenience prior users of that spectrum. When the spectrum is auctioned off to new users, the old users are compensated with a portion of the federal government’s auction proceeds.

The parallel with 5G is not exact, because aviation was not actually using the spectrum that AT&T, Verizon, and other companies paid $94 billion to acquire. FCC had previously worked out a deal with the actual incumbent users of that spectrum, to provide them with $13 billion in compensation. FCC had negotiated that compensation deal in advance of the auction. But because it had dismissed aviation’s concerns about interference with radar altimeters, no such compensation for affected airlines had been considered.

Fast forward a few months, and we find that testing of the commercial aviation fleet by FAA has found that about 90% of the fleet have modern altimeters that are properly shielded from the potential interference that was the source of FAA and airline concerns. The altimeters that will need to be replaced are mostly on older regional jets, not on mainstream narrow-body and wide-body jetliners.

Hazlett and Marcus don’t know the estimated replacement cost of those altimeters—nor do I. But it’s possible to make a ballpark estimate. Assume each replacement box costs $50,000 each, in quantity, and costs another $1,000 in labor to install for a unit cost of $51,000. There are about 5,800 U.S. commercial airliners, so 10% of those is 580. Some multiplication yields a replacement cost of about $30 million. That’s a trivial fraction of the $13 billion paid to prior incumbent users of the 5G spectrum. And it’s an even tinier fraction of the $81 billion the Treasury netted from the auction.

In congressional testimony in February, Meredith Attwell Baker, president of telecommunications trade group CTIA said “There have been all sorts of instances where, through a Spectrum Relocation Fund or through a designation from Congress, there has been use of spectrum auction proceeds. Congress can use the proceeds . . . as they wish.”

Rather than sticking regional airlines with the bill for retrofits, it would make sense for Congress to use a bit of the $81 billion to pay for the replacement altimeters. Had FAA and FCC held serious discussions on the potential interference problem a year in advance of the spectrum auction, the testing and a compensation plan could have been part of the deal. It wasn’t, so the problem is now one for Congress to solve.

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Amazon Air Adds Business for Airports

The Chaddick Institute at DePaul University last month released another in its recent series of reports on the growth of Amazon Air, the air cargo carrier that Amazon has created for inventory shipments among its warehouses and fulfillment centers. The report is: “Total Package: Amazon Air’s Changing Network and Strategic Orientation,” March 2022.

The first thing to understand is that while Amazon Air is a wholly-owned subsidiary of Amazon, all its air cargo operations are carried out by contractors; it does not hold an airline operating certificate. The 85 aircraft in its fleets carry the Amazon Air logo but are operated and maintained by contractors such as Air Transport Services Group (ATSG) and Atlas Air. In Europe, Amazon Air contracts with Irish cargo carrier ASL Airlines and several others.

The Chaddick report finds that from August 2021 to March 2022 Amazon Air itself increased its flight activity by 14% and expanded its U.S. network to have fulfillment centers or warehouses within 100 miles of 73% of the U.S. population. Growth was even larger in Europe, with Amazon Air’s own operations there growing from 8 to 18 between August and March, and with its European partner airlines ramping up from just a handful of daily flights to between 20 and 24 per day. Its European network includes Barcelona, Cologne, East Midlands, Hanover, Katowice, Leipzig, Madrid, Milan, Paris, and Rome—each of which got between one and three flights per day as of March.

I’m especially interested in seeing which U.S. airports are playing key roles in the fast-growing Amazon Air network. Table 1 in the report lists all the U.S. airports it serves as of March 2022. In order of daily flights, the top five are:

Close behind the top five is up-and-coming San Bernardino (CA) at 15.5, which the report dubs an emerging hub.

Number 1 on the list is Alliance Airport, a largely cargo airport with no scheduled passenger airline service, and number 3 is a comparable cargo airport, Wilmington. I’d expected to see Chicago Rockford in the top group, but the report lists it as a declining hub for Amazon Air (10.2 flights/day), possibly because of large and growing UPS operations there. Lakeland also has no scheduled passenger airline service and is midway between the booming Orlando and Tampa markets.

Surprises in the top 5 are BWI and CVG, both of which are very passenger-focused. I don’t have an answer for BWI, unless Amazon’s operations are mainly overnight, when passenger traffic is light. CVG is only 60 miles from Wilmington, and Amazon Air operates the two of them in a complementary manner, with ILN departures mostly in the middle of the night, while CVG’s take place mostly in the middle of the day.

If Amazon Air continues growing at recent rates (as the Chaddick analysts expect), that growth could be a boon to strategically located airports with spare capacity, such as Ontario (CA), Riverside March Air Reserve Base, Kansas City International, and Albuquerque. Amazon Air certainly bears watching.

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What’s in Store for the Next FAA Reauthorization?
By Marc Scribner

With a year and a half left in the FAA Reauthorization Act of 2018, lawmakers will begin holding initial discussions on the next FAA reauthorization due by October 2023. At the Air Traffic Control Association’s (ATCA’s) annual meeting in February, speakers provided insight into the key policy issues that will likely be the focus of reauthorization negotiations. The bill is likely to be less transformative than past reauthorization proposals, and midterm election results are likely to guide the shape of the bill, but some substantive policy improvements appear to be on the minds of both industry and Capitol Hill.

The current authorization was agreed upon as a milquetoast compromise after an ambitious proposal to spin off FAA’s Air Traffic Organization into a self-supporting user cooperative failed to win support from key political factions. Holly Woodruff Lyons, now in private consulting after a long career on the staff of the House Transportation and Infrastructure Committee as the Republicans’ aviation point person, said that Rep. Sam Graves (R-MO), the committee’s ranking member and its likely chairman if Republicans win control of the House in November’s elections, is not interested in reopening major FAA reorganization at this time. This is disappointing but an understandable sentiment following the often-acrimonious battle to bring international best practices to U.S. air traffic control in the lead-up to the 2018 reauthorization.

But the outlook for air traffic control reform wasn’t uniformly negative. Woodruff Lyons did note the committee is very interested in remote towers, particularly at rural airports that currently lack towers. Readers of this newsletter are familiar with Congress’s and FAA’s lackluster efforts on remote towers, another area where the U.S. is falling behind peer countries. With the $4.9 million in FY 2022 funding for Leesburg and Fort Collins remote tower projects that was appropriated in March, Congress is well-positioned to harness this limited momentum into a more robust program in the FAA reauthorization due next year.

Woodruff Lyons highlighted two areas of potential conflict. First, the aviation industry has made a lot of bold environmental commitments without a lot of detail on how those green goals can be achieved. Electric and hydrogen-fueled airliners remain a dream and drop-in sustainable aviation fuel (SAF), viewed by some as an important bridge between the present and net-zero greenhouse gas emission future, may be on track to hit 2% of total aviation fuel by 2025, according to the International Air Transport Association (IATA).

Gina Zuckerman of the Cargo Airline Association said SAF is the only way for the industry to potentially meet aggressive climate goals, so scaling up production and closing the price gap between SAF and kerosene are top priorities. But the impression the aviation industry is leaving with many in Congress is that they expect taxpayers to pay for this transition. This may not sit well with some members, warned Woodruff Lyons, especially Republicans.

Second, consideration of new user fees on new airspace users—and drones in particular—is likely to provoke a jurisdictional turf war between authorizing committees and tax-writing committees. Tax-writers on the House Ways and Means and Senate Finance Committees tend to be more focused on overall tax burdens than promoting the users-pay/users-benefit principle. Authorizers with the House Transportation and Infrastructure and Senate Commerce Committees will need to begin working with their tax-writing colleagues early in the reauthorization process in order to minimize the negative effects of this looming conflict. The good news is these new entrants do not appear to be opposed to paying reasonable fees to support the system, according to Steve Brown of the National Business Aviation Association.

Another jurisdictional turf war may be brewing as Congress debates permanent fixes to the 5G cellular deployments and avionics interference conflict that have generated a great deal of heartburn in the telecommunications and aviation industries. In late 2021 and early 2022, Congress was focused on dealing with the immediate fallout of this intergovernmental and inter-industry dispute, but the FAA reauthorization may be a logical place to address it, according to Woodruff Lyons’ replacement, House Aviation Subcommittee Republican Staff Director Hunter Presti. With allies of the aviation and telecommunications industries dug into their positions, the Senate may prove to be the better venue because the Senate Commerce Committee has jurisdiction over both the airwaves and the airspace, while the House splits aviation and spectrum management jurisdiction between the Transportation and Infrastructure Committee and House Energy and Commerce Committee.

Mike Reynolds, the deputy policy director for aviation and space for Senate Commerce Committee Republicans, said initial stakeholder meetings and hearings in advance of FAA reauthorization are likely to begin in late summer or early fall of this year. That being said, the policy priorities of the next FAA reauthorization will be contingent on the outcome of November’s midterm elections, as well as the Democratic leadership race to replace retiring House Transportation and Infrastructure Committee Chairman Peter DeFazio (D-OR). Stay tuned.

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News Notes

Fourth Quarter US Airport Travel at 85% of 2019 Levels
Data released on April 5 by Fitch Ratings showed that in the fourth quarter of 2021 U.S. airports averaged 85% of passenger numbers from the fourth quarter of 2019, before the pandemic. For the full year of 2021, passenger traffic averaged 71% of 2019 levels. The data are based on figures from a select group of 38 of the 60 U.S. airports whose bonds Fitch rates, so they may not be fully representative of all U.S. passenger airports.

Newark May Expand Use of P3s for Modernization
Following the completion of LaGuardia Airport’s central terminal public-private partnership makeover, and the impending financing of three such projects at Kennedy International, airport operator Port Authority of New York and New Jersey is looking into several additional major projects to upgrade and modernize facilities at Newark Liberty International (EWR). It has issued a request for proposals for a master planner to work with the authority on the next phase of EWR modernization, with proposals due April 25. Replacement of the airport’s aging Terminal B is the next major project, following over $5 billion invested in current efforts to rebuild Terminal A, replace the aging AirTrain, and complete the privately-financed Consolidated Rental Car Center.

Ferrovial Buying Stake in JFK P3 Terminal Project
Ferrovial, the major Spanish developer, is negotiating with Carlyle Group to acquire 96% of Carlyle’s 51% stake in the $9.5 billion New Terminal One Project, which will replace aging Terminals 1, 2, and 3 at Kennedy International Airport. Other shareholders in the NTO consortium are JLC Infrastructure and Ullico.

FAA Announces New Contract Tower Program
As of now, 156 mostly small U.S. airports are part of FAA’s long-standing contract tower program. FAA’s April 18 news release announced that the FY2022 application period is now open for the new FAA Contract Tower Grant Program, which is to receive $20 million per year for five years. The notice does include projects “to construct a remote tower certified by the FAA,” but also notes that “The FAA is currently evaluating this technology to assess its suitability for use in the [National Airspace System].”

Denmark’s ANSP Expanding Scope of Remote Tower Contract
Naviair has announced that it is expanding the scope of its Remote Digital Tower contract with Frequentis. The contract will also cover implementing a new backup air traffic management system using the company’s PRISMA backup system. It will build on the PRISMA remote tower backup being implemented for the remote digital tower project at Billund to include PRISMA Enroute for Naviair’s area control center and approach control services at Copenhagen, Billund, and Roskilde airports.

Saab Remote Digital Tower Approved for U.K. Military Use
The United Kingdom Military Aviation Authority has accredited Saab’s remote digital tower capabilities under the Air Traffic Management Equipment Approved Organization Scheme (AAOS). This is the first AAOS ever issued for military remote digital tower equipment. The certification was reported by Air Traffic Management on April 7.

Ecuador Considering P3 for Some of 17 Airports
Of Ecuador’s 21 airports, three are already under public-private partnership concessions. This month, the country’s undersecretary for air transport announced that it is considering such concessions for at least some of the others. It may offer a package of airports, as has been done in Chile, Peru, and Uruguay. One possible model would be packages of four airports: two with strong air traffic and the others needing development. The undersecretary mentioned interest in such P3s from companies in Colombia, Mexico, South Korea, and the United States, according to Inframation News.

Two News Items on German eVTOL Company Lilium
One of the better-funded eVTOL startup companies—German developer Lilium—had two significant developments in recent weeks. First, U.S. company NetJets signed an agreement with Lilium for a possible order of 150 of its LiliumJet seven-seat eVTOL aircraft, to potentially operate using Lilium’s planned network of vertiports in Florida. Second, Aviation Daily reported (April 1) that Lilium had moved its target date for EASA certification from 2024 to 2025, due in part to supply-chain problems but also to increase the likelihood of successful certification.

Rockford Negotiating with Bidder for New Cargo Facility
Chicago-Rockford International Airport, which has pursued aggressive growth in serving air cargo operators, announced that it is in negotiation with its preferred developer of expanded cargo facilities at the airport, likely on a long-term P3 basis. The airport was impressed enough with the qualifications submitted by one of two short-listed firms that it opted not to issue a request for proposals but to begin negotiations with its preferred company, whose identity has not yet been disclosed. The project may add one or two 400,000 square-foot cargo facilities to the 190,000 sq. ft. already in use at Rockford.

Mobile Commits to New Airport
Officials in Mobile, Alabama, have approved going forward with relocating commercial air service to the downtown airport adjacent to the seaport, replacing the Mobile Regional Airport as the location for airline service. Airbus has a large production facility at the downtown airport. In October, the City Council transferred $30 million in reserves to the airport project; the city has also been authorized for two federal airport grants totaling $162 million. And the Mobile County board kicked in its own $30 million in March. The project will add a replacement terminal configured for international flights. On April 5, FAA approved the plan.

Proposed Federal Budget Calls for End to Diverting TSA Fees
Among the many provisions in the Biden administration’s FY2023 budget proposal is to end the practice of diverting to the general fund the revenue from the TSA security fee paid by airline passengers. The intent of the fee was to have passengers help support the costs of security screening, but putting the proceeds in the general fund makes it a tax, not a user fee. This has prevented easy comparisons of screening costs vs. user charges.

Avolon Cites 550 eVTOL Commitments
Aircraft leasing company Avolon announced it has amassed 550 commitments from would-be lessees of the Vertical VX4 eVTOL, exceeding its target of 500 (310 pre-orders and 190 options), reported Aviation Daily on March 30. Among the identified potential lessees are Japan Airlines, AirAsia, and Turkey’s Gozen Holding. Avolon has 500 of the eVTOLs on pre-order with U.K. startup Vertical Aerospace.

Airport Slot News
FAA has continued its “temporary” waiver of use-it-or-lose-it slot rules for international air services at airports—John F. Kennedy Internationa, LaGuardia, and Ronald Reagan Washington National Airport through Oct. 29. Hence, those airlines may reduce their flights at those airports without losing their previously allocated slots. Meanwhile, the United Kingdom Competition and Markets Commission will require British Airways and American Airlines to continue to offer four daily airport slots to competitors on three UK-US routes until March 2026. Those requirements were part of the approval of a joint business agreement between American and British Airways, which the commission judged would limit competition.

New Jersey Agency Seeks Developers for Atlantic City International
The South Jersey Transportation Authority is seeking companies interested in developing a 400-acre parcel on the northwest quadrant of the airport. Its airfield uses only 23% of its capacity, according to the Atlantic County Economic Alliance, which is promoting the proposed transaction. SJTC and New Jersey Transit are doing a feasibility study on adding a rail station at the airport.

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Quotable Quotes

“The same governments who call for more to be done on climate are the ones blocking [change]. We cannot continue to waste fuel with damaging environmental consequences. [Single European Sky] has failed. Twenty years later it has made no progress. If we can’t reform it, let’s liberalize it and allow national ATC providers to compete against each other.”
—Ryanair CEO Michael O’Leary in “European Airlines Hope Sustainability Focus Sparks Airspace Reform,” by Helen Massy-Beresford, Aviation Daily, April 1, 2022

“The [European Network Airlines Association]’s Amaud Camus . . . chairs the competitiveness working group of the ENAA and has the task of distinguishing between off-shore state aid—very market-distorting—and on-shore state aid—very good. By competitiveness, he clearly means that somehow, state aid in the form of loans is more competitive and less distorting than state aid in the form of equity; and that European legacy carriers should not be crucified because their low-cost European colleagues did not put their snouts in the trough and ask for some. He did not actually say that last sentence in those words. Still, presumably, that is competitiveness the ENAA can applaud.”
—Andrew Charlton in “De-Platforming the Airline Coordination Platform,” Aviation Intelligence Reporter, April 2022

“The idea of this subsidy at its origin made sense and reflected rational concern about changes to the nation’s air services under deregulation. But today’s airline system is highly efficient and even serves small cities that have enough demand to justify service. There are advantages and disadvantages to living anywhere. Those living in or near big cities have access to plenty of air service, more restaurants, and more activities. They also likely have more crime, higher taxes, and a higher cost of living. Living in a small city brings lower overall costs but greater distances to airports, Broadway shows, and Chipotle. There is no public good served by saying that those who choose to live in a small place must be subsidized by the American taxpayer to have flights connecting to another city. They can drive to a close-by airport, just like in the hundreds of small cities that never received these subsidies in the first place.”
—Former Spirit CEO Ben Baldanza in “The Essential Air Service Program Is No Longer Essential,” Forbes, March 21, 2022

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The post Aviation Policy News: European aviation’s net zero plan, rethinking service at small airports, and more appeared first on Reason Foundation.

In this issue:

• Frontier/Spirit merger will increase airline competition
• Eliminating the North Atlantic tracks
• New airlines link smaller airports to popular destinations
• Europe’s slow progress on Single European Sky
• Legal scholars debate approach to drone law
• News Notes
• Quotable Quotes

The Frontier/Spirit Merger Will Increase U.S. Airline Competition

Critics of the proposed merger between ultra-low-cost carriers (ULCCs) Frontier and Spirit came out of the woodwork before the ink was dry on the Feb. 7 news release. Antitrust supporters, like Diana Moss of the nonprofit American Antitrust Institute, fear that this further “airline consolidation” would lead to less real competition, especially at leisure destinations like Las Vegas and Orlando, which are important hubs for both airlines. And Sarah Miller of the “anti-monopoly advocacy group” American Economic Liberties Project expressed doubts about any cost savings for customers.

Sens. Bernie Sanders (I-VT) and Elizbeth Warren (D-MA), joined by Rep. Alexandria Ocasio-Cortez (D-NY), sent a letter to Transportation Secretary Pete Buttigieg and Assistant Attorney General Jonathan Kanter urging a scrupulous review and action to prevent the merger “if you determine it will threaten competition in the airline industry.”

Let’s take a close look at what the merger would do regarding airline competition. Together, the merged carriers would have about 8% of the U.S. airline passenger market. Moss focused especially on Las Vegas and Orlando, both served by Southwest in addition to the two ULCCs. The combination of Southwest and the merged ultra-low-cost carrier would exceed 50% of flights at those two airports. But neither airport is “capacity-constrained,” and Allegiant (the third prominent ULCC) has its largest base in Las Vegas. If the antitrust division is going to consider ULCs and ULCCs at 50% as a threat to competition, let me suggest a few more-worthy targets. How about fortress hubs, such as:

• Atlanta Hartsfield-Jackson Airport (ATL), where Delta has an 80% market share;
• Dallas/Fort Worth International Airport (DFW), where American has 86.5%;
• Newark Liberty International Airport (EWR), where United has 58.5%;
• And Baltimore/Washington International Thurgood Marshall Airport (BWI) where Southwest has 71.8%.

In fact, since there is open entry at nearly all U.S. airports (including those four), I don’t see those situations as throttling competition (and in fact, Spirit already provides a competitive force at all four). But this certainly puts claims that the merger would throttle competition into perspective.

But there’s more than just debunking anti-competition claims. In fact, respected aviation attorney Ken Quinn told Airport Business Editor Joe Petrie that with the merged airline’s orders for a combined 300 new aircraft, it would likely continue expanding into new markets served by the big four (legacy) carriers: American, Delta, Southwest, and United. Empirical studies find that the entrance of a ULC or ULCC into a legacy airline market leads to fare decreases by the latter airlines—which is one of the primary benefits of competition. And as Ben Goldstein and Lori Ransom explained in Aviation Week, financial analysts are generally bullish on the planned merger.

The historic Airline Deregulation Act of 1978 ended government allocation of airline routes and generous price controls that allowed the regulated carriers to pass through costs, rather than seeking efficiencies. In those days, since fares were so high, only the relatively wealthy could afford to fly, and load factors were around 50%. While deregulation was painful for those legacy carriers that could not adapt to a free market (Braniff, Eastern, National, Pan Am, TWA, etc.) it was of huge benefit to ordinary Americans and came to be dubbed “the democratization of air travel.”

The Frontier-Spirit merger would yield a more-robust ultra-low-cost carrier to bring competition and lower fares to more routes and more air travelers. For that reason, it should be approved.

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Eliminating the North Atlantic Tracks

As most readers of this newsletter know, air traffic controllers in oceanic airspace have had to rely on “procedural” separation, since there is no radar coverage there (or in polar and many mountainous regions). Aircraft reported their estimated positions (based on inertial navigation) to controllers every 14 minutes. This rather inexact system led to requirements for wide spacing laterally (wingtip to wingtip) and longitudinally (nose to tail) as a precaution against aircraft inadvertently getting too close to one another.

To take into account the jet stream—strong high-altitude winds blowing from west to east, which can speed up flights heading east and slow down those heading west—back in the 1960s aviation organizations devised the North Atlantic Organized Track System (OTS). Every day, based on the latest forecast of the jet stream’s path and wind speed, up to 12 parallel tracks were created at the most favorable altitudes and provided to pilots via the relevant air navigation service providers—in the North Atlantic, Nav Canada for the western half and NATS for the eastern half.

Since 2019, Aireon’s space-based ADS-B system has provided air navigation service providers (ANSPs) with each flight’s position update every 7-8 seconds—a huge improvement over the previous every 14 minutes. Once controllers and pilots were used to this, the ANSPs gained permission (from the International Civil Aviation Organization—ICAO) to begin reducing the required separations between aircraft—most recently from 40 nautical miles fore-and-aft to just 14 nm. And lateral separations were reduced from 23 nm to 19 nm. These changes meant that more parallel tracks could be offered, and each track could hold more aircraft at any time. And that means many more flights each day could get the best altitude for whichever set of parameters they want to optimize, such as minimizing flight time or minimizing fuel burn, or some combination.

In a February blog post, Jacob Young of NATS explained what is now in prospect: abolishing the Organized Tracks altogether. The large decrease in North Atlantic flight activity in 2020 (from as many as 1,700 per day to as few as 200 on some days) enabled NATS and Nav Canada to experiment (again, with ICAO permission). In 2021, with traffic as low as 500 per day, they tried not offering any organized tracks—i.e., letting each operator select the route and altitude that would best meet its objectives. Young reports that this option was in use on 20 days last year with no westbound organized tracks. NATS is currently using data from those trials to enable simulation of “OTS Nil” on higher-traffic days, as North Atlantic air traffic gradually builds back. In addition to feasibility, the simulations will estimate reductions in flight time, fuel burn, and CO2 emissions. Young reports that a recent airline study found that every minute saved crossing the North Atlantic saves it £51, so a 20-minute saving would exceed £1,000.

As an initial step, NATS announced that as of March 1, any aircraft flying at 33,000 feet or below will be able to fly “entirely free from the OTS structure.” His blog post is here.

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New Airlines Link Smaller Airports to Popular Destinations

Three new low-cost carriers are following variations on a common theme: connect secondary airports nonstop to desirable destinations. That’s the model being introduced by Avelo, Breeze, and Norse Atlantic (internationally). If they succeed, these second-generation ultra low-cost carriers will boost some local economies and bring affordable air travel to many more people.

Avelo, which began service last year on the west coast out of Hollywood/Burbank (BUR) mostly to resort destinations, has defied skeptics by opening an east coast base at New Haven (HVN) from which it continues to expand air service. In February it announced four new destinations from there: Charleston and Myrtle Beach, SC, Savannah, GA, and Nashville, TN. Introductory fares start at $49 one-way, with service to begin May 5. Early this month Avelo announced its first Midwest destination from New Haven: Chicago Midway. That service will begin on May 26, with an introductory one-way fare of $69.

Much larger Breeze Airways has a similar business model. Though already operating from Bradley Field (BDL) in Hartford, CT, in February it announced that BDL will be its fifth base of operations and will add eight new destinations to the four it already serves from there. As of mid-February, Breeze was already serving 18 cities in 14 states, including recent additions New York/Islip and West Palm Beach. Other points already served from Bradley Field include Charleston, SC, Columbus, OH, Norfolk, VA, and Pittsburgh, PA. On March 8, founder and CEO David Neeleman announced plans to add 35 more routes to the 35 already being flown, including cross-country flights using its new, longer-range Airbus A-220s. Among the new services will be San Bernardino (SBD) to San Francisco (SFO), marking the first scheduled airline service ever from SBD, the former Norton Air Foree Base. Unlike Avelo, which uses 737s on all its routes, Breeze is building a two-aircraft fleet, consisting of medium-range 118-passenger Embraer E-195 and the longer-range Airbus A-220.

The third new airline is Norse Atlantic, a startup based in Oslo, Norway. The business plan is to offer low-fare transatlantic flights from Oslo to airports such as Fort Lauderdale (FLL), Ontario (ONT) in the Inland Empire portion of greater Los Angeles, and New York Stewart (SWF). Once Oslo routes are established, Norse plans to also serve Paris and London (via Gatwick—LGW). Initial routes are now planned to launch in June, and the airline will use Boeing 787s that formerly belonged to Norwegian Air Shuttle (whose low-fare transatlantic service failed to be viable). I don’t know how many Americans want to visit Oslo, but it’s likely that many Norwegians would like to visit Los Angeles, Florida, and New York.

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Europe’s Slow Progress on a Single Sky for Air Traffic

In December, Airlines for Europe (A4E) blasted European Union decision-makers for foot-dragging on the two-decades-old project to create a Single European Sky (SES). Although Europe has twice as many high-altitude control centers as the United States, it has less air traffic. That means air traffic control costs about twice as much per mile in Europe as it does in the United States. A4E correctly links air traffic control streamlining with reducing aviation’s carbon footprint. As Helen Massy-Beresford reported, serious progress on SES is “a significant opportunity to cut aviation emissions without limiting airlines’ activities.” (“Airlines Criticize Slow Single European Sky Progress,” Aviation Daily, Dec. 13, 2021)

There is incremental, fragmented progress involving two key concepts: (1) virtual centers, currently being pursued by Swiss ANSP Skyguide and being researched by DFS, PANSA, and NATS, and (2) free route airspace, which individual ANSPs and two overlapping ANSP alliances are pursuing. I’ve discussed virtual centers in previous newsletters, so this article provides an update on free route airspace (FRA). As is emerging on the North Atlantic (see the previous article), the idea is to remove historic high-altitude flight paths linked to ground-based navigation aids and allow aircraft operators to request and fly more direct, fuel-saving routes. The main benefits occur for routes that overfly multiple countries whose ANSPs have jointly embraced FRA.

France’s DSNA and Italy’s ENAC have embraced free route airspace, but in each case for their country only, thus far. ENAC began its project in 2018 and announced in December 2021 that it is now operational across all of Italy. DSNA has implemented FRA at three of its five centers as of the end of 2021, covering about half the country’s airspace. But neither is in a multi-country free route airspace alliance.

There are two such alliances currently in operation: iTEC with seven members and Borealis with nine. Only two ANSPs belong to both: Norway’s Avinor and the UK’s NATS. The idea behind iTEC is to have its members all adopt the same high-altitude air traffic management system, which enables managing free route airspace. Their choice is iTEC 4.0, developed by Indra, which has helped bring this coalition together. Besides Avinor and NATS, its other members are Germany’s DFS, Spain’s ENAIRE, LVNL of the Netherlands, Poland’s PANSA, and Lithuania’s Oro Navigacija. Progress varies among the members, with ENAIRE recently announcing that all five of its en-route centers are now equipped and operating with iTEC 4.0.

Borealis Alliance members, in addition to Avinor and NATS, include EANS (Estonia), Finavia (Finland), IAA (Ireland), ISAVIA (Iceland), LGS (Latvia), LFV (Sweden), and Naviair (Denmark). As a member of both alliances, NATS recently announced that it has implemented FRA for its portion of the North Atlantic, the North Sea, Northern Ireland, Scotland, and a small portion of northern England—together representing one-third of the airspace the UK is responsible for.

Aviation Week’s Thierry Dubois recently reported that when free route airspace is fully implemented across Europe, an estimated 10,000 metric tons of CO2 per day will be eliminated. That amounts to 2% of European commercial air transport’s emissions, a building block toward the goal of 10% reduction due to improvements in air traffic management and operations by 2050—not to mention savings in time and fuel. (“Free Route Airspace Gains Ground in Europe,” Aviation Daily, Dec. 9, 2021)  

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Legal Scholars Debate Approaches to Drone Law
By Marc Scribner

On Feb. 18, the Law & Economics Center (LEC) of the Antonin Scalia Law School at George Mason University held a webinar that sought to answer the question, “Can Common Law Adjust to a Drone World?” Law professor and LEC Deputy Executive Director Donald J. Kochan moderated a panel featuring Joshua S. Turner, a partner at D.C. law firm Wiley Rein; Prof. Hilary Farber of the University of Massachusetts School of Law; and Prof. Troy Rule at Arizona State’s Sandra Day O’Connor College of Law. A recording is available here.

Turner co-authored the recently-released study Torts of the Future: Drones for the U.S. Chamber of Commerce’s Institute for Legal Reform. His position is most common among aviation lawyers in general and lawyers specializing in drones in particular. It could be broadly summarized as believing that the Federal Aviation Administration’s traditional uniform airspace authority should be maintained and that the common law can evolve to address novel small unmanned aircraft system (sUAS, which are drones weighing less than 55 pounds) technologies without the imposition of radical new legal doctrines for privacy, trespass, and negligence torts that may arise from sUAS operations.

In contrast, Tony Rule called for sweeping changes to airspace governance, rejecting FAA’s uniform authority and arguing for devolving the management of near-surface airspace to landowners, subject to state and local property law and regulation. Rule shares this position with Brent Skorup of the Mercatus Center, whose proposals have been previously discussed in this newsletter (“Are Airspace Property Rights the Way Forward for Drones?” Dec. 2020), as well as companies such as AirMap, which develop and market UAS airspace authorization software.

Under this proposed framework, the right to exclude others from the immediate reaches of your property would be enshrined and expanded. It would, according to Rule, allow for the development of airspace zoning regulation, similar to exclusionary land-use zoning that has existed in the U.S. for a century. This would presumably greatly increase the demand for more- sophisticated sUAS authorization software, because instead of requiring a single authorization per sUAS flight operation—which happens now through FAA’s Low Altitude Authorization and Notification Capability (LAANC)—each sUAS operation might require dozens, hundreds, or even thousands of authorizations from landowners, municipalities, counties, states, and/or FAA for every parcel of land in every jurisdiction overflown by the sUAS.

Rule said his proposal would soon be published by the Mercatus Center and that it involves blockchain, reverse auctions, and other innovative technologies and mechanisms to minimize the transaction costs associated with obtaining advance permission to fly over each individual backyard in America. Revolutionary technology would surely be required to implement such a revolutionary approach. Unfortunately, U.S. policymakers cannot crib from successful international case studies—there are none—and the U.S. experience with deploying modern airspace management technologies, practices, and governance for conventional aircraft leaves much to be desired, as readers of this newsletter are well aware.

Farber’s position lies between those of Turner and Rule. In reviewing cases involving alleged drone torts, she found gaps in common law remedies that primarily arise from sUAS technology having abilities for continuous surveillance and privacy-violating conduct that didn’t exist with earlier technologies. Farber identified the 2015-2016 legislative session as marking a dramatic shift away from focusing on government misuse of sUAS and toward potential problems associated with private use. This coincided with an explosion in sUAS sales and complaints about hobbyist misuse, as well as FAA’s Dec. 2015 emergency rule requiring marking and registration of sUAS used recreationally (that rule was subsequently struck down in 2017 in the D.C. Circuit Court of Appeals in an opinion written by then-Judge Brett Kavanaugh and then reissued under an explicit authorization from Congress).

By 2017, more than 40 states had proposed or enacted drone-specific legislation. Since then hundreds of bills have been introduced at the state and local level on sUAS, with the vast majority of them aiming to prohibit flight operations that are currently legal under federal law. Despite this flurry of legislative activity, Farber argued that the new drone laws generally fail to address the identified gaps present in common law, including: What is the reasonable expectation of privacy? How does this interact with the constitutional right to gather news? How are airspace rights defined?

Farber concluded with a point of agreement among the panel: all of this state and local legislative and regulatory activity may be overshadowed by FAA preemption should FAA move to occupy the policy field. Many of these outstanding questions could be answered through more detailed federal policy. The most next likely opportunity for Congress to address these murky sUAS legal issues would be in the FAA reauthorization due by the end of Sept. 2023. But until federal preemption issues are resolved, said Farber, “this preoccupation will remain front and center with lawmakers at the state level.”

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News Notes

U.S. Domestic Air Travel Bookings Exceed 2019 Level
Data from the Adobe Digital Economy Index from six of the top-10 U.S. airlines show that Americans booked $6.6 billion worth of airline trips in February, which is six percent more than the figure for Feb. 2019. The company reported that the number of domestic bookings was also above the 2019 level for the first time. The most popular destinations were resort locations.

Boring Company Wins in San Antonio
The proposal from Elon Musk’s Boring Company to build a twin-tunnel route between downtown San Antonio and its airport was selected over a proposed elevated rail route from a group headed by SAK Construction. The Boring Company proposal resembles the system it is building in Las Vegas, transporting passengers in Tesla vehicles. The company estimates the cost at between $247 million and $289 million.

First International Location for TSA PreCheck
TSA PreCheck members flying back to the United States from Nassau, Bahamas got some good news last month. TSA has added a PreCheck lane to the security screening area at Lynden Pindling International Airport. Nassau is the program’s first non-U.S. airport with PreCheck, and this brings the total number of airports with this service to 200. Nassau is also one of 16 overseas locations where returning Americans can pre-clear U.S. customs and immigration before departing for home.

First Virtual Ramp Tower Headed for Kansas City Airport (MCI)
Remote/digital tower pioneer Saab has won a contract from the Kansas City Aviation Department for a Virtual Ramp Control System for the airport’s New Terminal, now under construction. The system will include two centralized camera houses plus additional distributed cameras, along with Saab’s Aerobahn Collaborative Decision Making software. The VCRS will enable airport ramp controllers to better manage aircraft moving between the airport’s movement area (controlled by FAA) and the “non-movement area” controlled by the airport. The contract includes installation of the system and five years of ramp control services.

Battle Over New Lisbon Airport Slots
As a condition of the Portuguese government bailout of ailing TAP Air Portugal, the airline agreed to give up 18 slots at Lisbon Airport (LIS). A bidding process for the slots is under way, to be wrapped up in April. However, the slots would not become available until the winter 2022/23 season in late October. Ryanair wanted the slots to be available for this summer; when that request was denied, on March 11 Ryanair said it would cancel 19 routes from LIS this summer, resulting in 5,000 fewer flights. But those routes will return in the winter season, since Ryanair has enough slots for that season.

SpaceX Will Launch Competitor’s Broadband Satellites
OneWeb’s broadband satellites have all been launched into orbit by Russian Soyuz booster rockets—until now. On March 3, Roscosmos told the company it would launch no more OneWeb satellites unless the company agreed that (1) there would be no military uses of the satellites and (2) the U.K. government would sell its minority stake in the company. Those terms were unacceptable, but on March 21, OneWeb announced an agreement with SpaceX to launch the remainder of the company’s constellation, with the first launch to occur sometime this year. As of this month, OneWeb had launched 428 of its planned 648-satellite constellation.

Fort Lauderdale Planning Airport People Mover
Broward County has announced the design phase for a $600 million elevated people mover to serve the Fort Lauderdale/Hollywood International Airport (FLL). It will use a $12.95 million grant from Florida DOT for the design study. The overall plan would not only link the four terminals and parking structure but would be extended to reach the nearby Port Everglades (numerous cruise ships) and Convention Center. At some point, it might also include a station on the nearby Brightline passenger rail line. But first the county government will have to figure out where to get the remainder of the estimated $600 million cost.

Increased Low-Cost Carrier Access to Newark Coming Soon
On Feb. 25, U.S. DOT finalized its decision to open up former Southwest Airlines slots at EWR to low-cost and ultra-low-cost carriers, “to help address competition issues at the airport.” DOT Secretary Peter Buttigieg said that “This decision to open up access at Newark means lower fares and more choices for the traveling public.” The agency apparently plans to award all 16 slots to a single airline.

Burbank Airport Challenges California High-Speed Rail
The Hollywood/Burbank Airport has filed an environmental lawsuit challenging the system’s plan for tracks and an underground station on the airport’s eastern boundary. The suit was filed in response to the High-Speed Rail Authority’s environmental impact report on the yet-to-be-funded 13.7-mile segment between Burbank and downtown Los Angeles. The suit argues that the environmental study failed to consider how the construction would impact the airport, including its safety. Also objecting to the report is the Burbank City Council.

Multinational ANSP Wins Space-Based ADS-B Award
ASECNA, the ANSP for 18 member states in Africa, contracted with Aireon to provide radar-like surveillance over the 16.1 million square kilometers for which it is responsible. The project was the 2021 winner of the World ATM Conference “Maverick Award” in the “collaboration” category. Congratulations, ASECNA!

Federal Air Marshal Service Is 60 Years Old, Says TSA
The March 2 news release surprised me, but I guess it’s true. In 1962 the first 18 Sky Marshals were sworn in by Attorney General Robert Kennedy. In those pre-TSA days, the Sky Marshals were part of FAA, which had regulatory authority for aviation security. Following creation of TSA in 2001, the Sky Marshals became Federal Air Marshals under the TSA’s umbrella.

Berlin Brandenburg Opening Its Second Terminal
As this issue of the newsletter was being written, on March 24 Berlin Brandenburg Airport (BER) was scheduled to open the second of its two new terminals. T2 is connected to the operational Terminal 1 via two bridge walkways. The train station beneath Terminal 1 links the airport to Berlin itself. Ryanair is the main carrier serving Terminal 2 as it begins operations.

Southwest Plans Expansion of Hobby Airport Terminal
In 2015 Southwest began international service from the terminal at Hobby Airport in Houston, covering two-thirds of the $156 million cost of adding five gates. It is now planning to add seven more, six for domestic flights and one common-use international gate. As of now, how much of the $250 million cost Southwest will cover has not been disclosed.

U.S. Airports Dominate World’s Top Airports by 2021 Passengers
A dramatic illustration of the faster air travel recovery in the United States is shown by figures from CAPA Center for Aviation and Aviation Week Intelligence Network. All but one of the global top 10 last year were U.S. airports, with Hartsfield-Jackson Atlanta International in its usual first place; the only non-U.S. airport was Guangzhou Baiyun International in China at #8. By contrast, in 2018 Flight Airline Business reported that seven of the world’s top 10 were non-U.S., including Beijing (#2), Dubai (3), Tokyo Haneda (5), London Heathrow (7), Hong Kong (8), Shanghai (9), and Paris de Gaulle (10).

RTCA Interview with Robert Poole
As a follow-up to the February webinar I did with RTCA on ATC technology, on Feb. 28 I recorded a video interview with Executive Director Terry McVenes discussing three key aviation topics, including the challenge posed by global climate change. If you’d like to watch, it is available online here.

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Quotable Quotes

“[Some] companies don’t have a real, plausible design or certification wherewithal and yet are able to attract a lot of money because their story is good. And that gets convoluted with companies who have the wherewithal and perhaps speak a more modest truth. I’m not going to start a company today and claim that in two years I’m going to be certified. Rather, it’s going to be a company that’s been working for 6-10 years and that maybe in 2-4 [more] years can be certified. But the truth gets lost in the hype. And part of that is this capital that’s out there looking for where to invest. And since it’s really hard to tell who is real, anyone with a plausible story is funded, which is absolutely amazing.”
—Roei Ganzarski, in Graham Warwick, “Electrifying Revolutionary,” Aviation Week, Feb. 21-March 6, 2022

“Unfortunately, the FAA eschewed the NTIA [National Telecommunications & Information Administration] process and declined to tap NTIA technical experts. Instead, FAA turned to outside analysts who concluded that 5G could jeopardize aviation safety but whose analysis had serious flaws. In its March 2020 Order, the FCC criticized the first FAA-commissioned study, by the Aerospace Vehicle Systems Institute (AVSI), for using scenarios that assumed transmitter emission levels in excess of what the FCC’s own rules permit and for using an interference test that was triggered by other sources on the plane even before the simulated 5G signals were turned on. A second study, by the Radio Technical Commission for Aeronautics, which used inputs from the AVSI study, had similar methodological weaknesses. When the Department of Transportation and the FAA finally went to NTIA in December 2020—asking it to engage with the FCC to defer the auction scheduled for later than month—they got the silent treatment. NTIA had a leadership problem. The agency was on its third acting administrator, its last Senate-confirmed head having been fired in May 2019.In addition, then-acting chief Adam Candeub said later he did not act on the request because FAA’s interference analysis was so flawed.”
—Dorothy Robyn, “Hard Landing: Why the 5G Rollout Was So Contentious, and What We Can Learn From It,” Brookings Institution, Feb. 2, 2022

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The post Aviation Policy News: Merger increases airline competition, eliminating the North Atlantic tracks, and more appeared first on Reason Foundation.

• Remote towers going mainstream in Europe
• Handicapping the eVTOL race
• 2022: banner year for U.S. airport P3 projects
• Next-generation SSTs: progress and challenges
• EU airport slot system under fire
• Langhorne Bond, R.I.P.
• News Notes
• Quotable Quotes

Remote Towers Are Going Mainstream in Europe

In preparing for my RTCA webinar earlier this month, I did some catch-up research on the growth of remote towers. Much of my research had already been done by Dave Hughes, former Aviation Week reporter, with recent freelance articles in Air Traffic Management, the Journal of Air Traffic Control, and elsewhere. The latest trends are:

• Multi-airport remote tower centers (RTCs)
• Replacement towers for medium and large airports
• Three global remote/digital technology firms, getting most of the RT business.

Multi-airport remote tower centers have been pioneered in Scandinavia, where there are quite a few small airports in rural areas. Swedish air navigation service provider (ANSP) LFV, working with Saab, opened the first remote tower center in Sundsvall in 2011, and so far it controls traffic at four Swedish airports. LFV’s second RTC is under development at Stockholm Arlanda Airport; it’s being designed to handle up to 24 airports. Norway has followed Sweden’s lead, with its first RTC operational at Bodo and so far managing traffic at three airports. Avinor AS, the company that operates most of the civil airports in Norway, plans to manage air traffic at up to 15 airports from there. More recently, the air navigation service providers of Belgium, Denmark, Germany, the Netherlands, and Spain have all followed suit, each developing remote tower centers to control multiple smaller airports.

But the remote/digital tower is not just for small airports. German ANSP DFS, working with Frequentis, is under way on a feasibility study of replacing the aging tower at Munich International (Germany’s second-largest airport) with a digital facility at that airport. As I reported here previously, such a transition took place last year in the United Kingdom, when London City Airport replaced its physical tower with a remote tower facility located within NATS’s Swanwick control center about 100 miles from London. And in Hungary, Searidge Technologies implemented an RTC at Budapest International Airport as a backup. But during the COVID-19 pandemic, HungaroControl used the physical tower during the night shift and the remote tower during the day shift, to keep the two teams of controllers physically separated. Moreover, London Heathrow and NATS are studying the feasibility of not building a second physical tower to manage the airport’s planned third runway (which will not be visible from the existing tower) but instead implementing a remote/digital tower.

For an ANSP looking to get started with remote/digital towers, the good news is that there are at least three internationally-experienced firms that have implemented remote/digital towers which are now certified and in operation in most of the countries noted above. Saab Digital Air Traffic Solutions has the longest track record and has moved up in project size as the key player in the new London City Airport remote tower. DFS Frequentis is a joint venture between the German ANSP and an international aviation technology company. Searidge Technologies is owned 50/50 by two ANSPs, NATS and Nav Canada. Also in this field is Indra Navia, with a growing track record in Norway.

Something else you should know is that remote/digital towers not only cost a lot less to implement. They are also delivering superior performance compared with eyeballs looking out of conventional tower windows. To begin with, a remote tower installation can install cameras all over the airfield, meaning no relevant runway or taxiway is ever out of view. Second, in low-visibility conditions, infrared cameras can still see and track aircraft. Some airports (like Heathro, Seattle-Tacoma International Airport, and San Francisco International) experience periodic episodes of “tower in cloud,” where the tower windows are above fog or low-lying clouds. A remote/digital tower can still see all the traffic so that operations can continue just about like normal. High-definition cameras can magnify distant aircraft up to 30 times, which no human eyes can do.

One of the people Dave Hughes interviewed pointed out that many air regulations regarding control of air traffic in landing, taxiing, and take-off modes are based on what the human eye can see, not what cameras and digital technology can see and do. It’s no wonder that several of those he interviewed, such as Alexander Koch of DFS said, “It’s a paradigm shift for an ANSP. I do not think we will see any new (traditional) towers in the future. Remote tower technology will be the future.”

For the sake of air safety and wise use of aviation excise tax dollars in the United States, I hope the Fedearl Aviation Administration gets the message soon.

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Handicapping the eVTOL Race

As Graham Warwick pointed out recently in Aviation Week’s detailed review of startup electric vertical take-off and landing (eVTOL) companies, while 2021’s focus was on eVTOL startups’ raising money, their emphasis this year must turn to obtaining government certification. For most would-be eVTOL developers, three types of certification from the relevant air safety regulator (FAA here,  EASA for most of Europe) are required: type certification (the design is safe/airworthy), production certification (they can produce it to spec), and airline operating certification—if they plan to operate rather than just build and sell the aircraft.

Warwick’s Aviation Week article includes a summary table, rank-ordering his estimate of the top 13 eVTOL developers. Rather than going through all of them, I will discuss only the top six, four of which were in his top six last year. Most of the six plan small air vehicles (typically four occupants) with relatively short-range, aiming for urban air-taxi service. The only one focused on inter-city routes (with a seven-passenger initial aircraft) is Lilium. Four of the six plan to both build and operate their vehicle(s), which strikes me as a riskier approach than just building them to sell to operators with experience in marketing and operations.

Ranking first, (and up from ranking second last year) is Joby Aviation, which appears to be first in line for FAA certification, probably a year or two ahead of most of the other eVTOL startups. And as former FAA Chief Counsel and Deputy Administrator Sandy Murdock pointed out in JDA Journal (Jan. 25), Joby’s staff and management include people with certification experience, and its board recently added former FAA acting administrator Dan Elwell and former controllers’ union president Paul Rinaldi. Joby is also ranked first on the Advanced Air Mobility Reality List compiled and updated annually by Sergio Cecutta of SMG Consulting.

Ranked second by Aviation Week is Beta Technologies, one of the few that is focusing on producing eVTOLs to sell to operators. It is also emphasizing cargo rather than passenger transport, with investments made by both Amazon and UPS. Cecutta thinks cargo will be half the market for eVTOLs by 2030, and he also ranks Beta as number two.

Two German startups are in third and fourth place: Volocopter and Lilium, respectively. Both plan to operate as well as build eVTOLs, so they will need all three kinds of certification. Lilium is the only one in the top six focusing on regional air mobility, with intercity networks so far planned for Florida, Germany, and the UK.

Ranked fifth and sixth are Archer and Vertical, respectively. Archer, based in California like Joby, is on a fast pace to catch up with Joby, writes Warwick. At $858 million, it has raised the second-largest amount of capital (compared with Joby’s $1.2 billion). UK-based Vertical is the only one besides Beta that plans to build but not operate eVTOLs. It has supplier partners in Honeywell, Microsoft, and Roll-Royce, as well as intended customers American Airlines and aircraft lessor Avolon.

I’m not qualified to give investment advice, but in terms of what I’ve read about business plans and investors in these (and many other) eVTOL startups, Joby and Lilium stand out—assuming their different technical approaches to eVTOL design pan out. Joby impresses me with a very experienced team and board, while Lilium may be wiser than most in focusing on regional rather than urban air mobility.

Just one caution flag to throw down on the field. The past two years of near-zero interest rates have likely made startup business projections look a lot rosier than would be the case with normal interest rates, which are now starting to reappear worldwide. It’s not too hard to guess that many startups (of all kinds) financed in this unusual economic period will go bust rather than realizing their investors’ hopes.

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2022 Is Set to Be a Banner Year for U.S. Airport Project P3s

While no serious proposals for a long-term public-private partnership lease of a large or medium hub airport have surfaced since the termination of such an effort in St. Louis in December 2019, P3 design-build-finance-operate-maintain projects are proliferating. Besides several modest-size projects reported in this month’s News Notes section below, $14.6 billion of such projects are due to reach financial close this year for new terminals at Kennedy International Airport in New York.

The largest of these is New Terminal One at an estimated cost of $9.2 billion. The P3 consortium leading this effort consists of Carlyle Group and its CAG Holdings entity, JLC Infrastructure, Ullico, and Munich Airport International, which will operate the new terminal. It will replace existing Terminals 1, 2, and 3 with a new 23-gate terminal. There will be a new arrivals and departure hall and other new facilities. Financial close and the start of construction are expected to take place in the first half of this year.

The next-largest JFK project is the $3.9 billion Terminal 6 project, with JetBlue as the anchor tenant. The P3 entity called JFK Millennium Partners, consists of JetBlue Airways, Vantage Airport Group, and American Triple I. The new terminal will occupy the site of the former Terminals 6 and 7. Financing is reported to be 20% equity/80% debt, according to Inframation News, and financial close is expected this spring.

The last of the three is the $1.5 billion Terminal 4 renovation and expansion. The private partners of the P3 (in all three projects the Port Authority of New York & New Jersey is the public partner) are Delta Air Lines and JFK International Air Terminal, the developer/operator of the original T4 P3 project two decades ago. The project will add 10 gates and an additional 150,000 sq. ft.

With the completion of the $3.8 billion public-private partnership for the replacement of the LaGuardia Central Terminal and the $480 million P3 for Newark’s new consolidated rental car center under construction, the Port Authority has now taken part in major P3 projects at all three of its major New York/New Jersey airports.

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Next-Generation SSTs: Progress and Challenges

Boom Supersonic seems to have pulled ahead of its U.S. competitors with its announcement last month of a deal with Piedmont Triad International Airport (near Greensboro, NC) to build a 400,000 square foot structure in which to build its Mach 1.7 Overture airliner. The 65-acre site has room for expansion, has access to two coastal North Carolina ports, and is within a relatively short flying time of the Atlantic Ocean, where supersonic test flights can be carried out.

Boom’s subscale demonstrator, the XB-1, began engine tests last month; its three engines are afterburning GE J85-15s. This will be followed by taxi tests at Boom’s headquarters location, Centennial Airport in Colorado. After that, flight tests are planned from the Mojave Airport in California. The full-size prototype Overture is planned for construction at the new North Carolina Overture Superfactory in 2024, with rollout in 2025 and flight tests in 2026. Assuming FAA certification under to-be-defined 21st-century SST regulations, Boom hopes Overtures will enter airline service by 2029. Boom has announced 15 orders for Overtures from United Airlines and claims a backlog worth $14 million.

Besides FAA certification, next-generation supersonic transport (SST) developers must also contend with environmental opposition. A group called the International Council on Clean Transportation (ICCT) is opposing any return to supersonic airliners on grounds that they will have a much larger carbon footprint than today’s subsonic airliners. Last month, ICCT released a report, citing numbers from a study conducted by the MIT Laboratory for Aviation and the Environment, which used the GEOS-Chem global chemistry transport model to derive the radiative forcing impact of supersonic airliners. It claimed that the two SST models it investigated, one of which is similar to Boom’s Overture (75 seats, Mach 1.70), would burn seven-to-nine times more fuel per seat-kilometer flown than baseline subsonic aircraft, though in a hypothetical case in which the SSTs use “e-kerosene” of about the same cost as today’s Jet A kerosene, the e-kerosene would produce 90% less CO2 emissions than Jet A. But the report also claimed that due to the higher altitudes and (presumably) contrails from new SSTs, their operations would greatly increase commercial aviation’s radiative forcing.

As anyone who has built models knows full well, the results depend critically on the assumptions made. Jon Sindreu, reporting in The Wall Street Journal, contrasts the study’s claim of seven-to-nine times more fuel per seat-km from an SST similar to Overture with Boom’s own assertion that Overture will at most use only twice as much fuel. And ICCT also assumes that sustainable aviation fuel (SAF) will cost twice as much as Jet A by 2030, which ignores potential economies of scale as SAF gets put into much larger production volumes.

We will learn more once Boom actually selects the engines for Overture and is able to do real flight tests using various fuels.

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EU Airport Slot System Under Fire

A recent controversy over “ghost flights” in Europe is bringing new attention to the arbitrariness and unfairness of the current system under which bureaucrats protect incumbent airlines’ access to high-demand airports while leaving the crumbs for new entrants.

In normal times, airlines that hold slots to land and take off at a particular airport must make use of those slots at least 80% of the time, or they forfeit the less-used slots to be reassigned to other airlines. With air travel having fallen dramatically since March 2020, the European Union temporarily changed the use-it-or-lose-it rule to just 50%, meaning a lot of capacity was being hogged, unused by incumbents while low-cost carriers like EasyJet, Ryanair, and Wizz Air were mostly denied access. Now that air travel has recovered somewhat, EU policy for the upcoming summer season has upped the threshold to 64% instead of restoring the normal 80% threshold.

But this time there has been pushback from the media and some of the public. In December, Lufthansa Group CEO Carsten Spohr made public reference to 18,000 unnecessary flights in the winter schedule. Popular media characterized this as “ghost flights” that were wasting fuel and needlessly increasing aviation’s carbon footprint—which is basically true. Spohr hoped his comments would lead to a return to the 50% standard, so it could avoid empty or very lightly-loaded flights flown to preserve its slots. What his comment seems to have done instead is to motivate Airports Council International (ACI) to start calling for a serious re-examination of the long-standing slot system once the pandemic is over (see Quotable Quotes, below)

There are isolated cases at a few airports of low-cost carriers picking up new slots in recent months, due to unusual circumstances. Wizz Air negotiated a deal with bankrupt Norwegian Air Shuttle to acquire 15 daily slot pairs at London Gatwick (LGW). This will enable Wizz Air to base five A321 neo aircraft at LGW rather than the current one, significantly expanding service to various European cities. Another example is Milan’s Linate Airport. Bankrupt Alitalia could not use most of its 207 weekly slots at Linate, so many of these slots were able to be reassigned to low-cost carriers Blue Air, Volotea, and Wizz Air.

It should not take bankruptcies to enable low-cost carriers to gain access to airports. As I and some economists have long urged, runway pricing—of both landings and takeoffs—would allow market forces (rather than bureaucratic selection) to determine which airlines serve which airports how frequently. The rethinking now being called for by Airports Council International is long overdue and very welcome.

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Langhorne Bond, RIP

The aviation world lost a giant, and I lost a good friend, when Langhorne Bond passed away on Jan. 29 at age 84.

Perhaps best-known as FAA administrator during the Carter administration, Langhorne championed major safety improvements, such as the Traffic Alert and Collision Avoidance System (TCAS) now standard on all airliners and business jets and the Ground Proximity Warning System. He also grounded the DC-10 fleet temporarily, after a fatal crash whose suspected cause was a design defect. As my friend and former Department of Transportation (DOT) official Jeff Shane pointed out in a privately circulated appreciation, Langhorne’s official portrait in FAA headquarters shows him with his coat open, revealing both a belt and suspenders, an indication of his dedication to air safety. Langhorne served in a number of key positions in transportation, including as the state DOT secretary in Illinois and as the newly created U.S. DOT’s first chief of staff. In 1996 he was one of the first high-profile advocates of the need for a backup for the GPS system, which we still lack.

I was introduced to Langhorne in 2001 by his cousin, Jim Haynes, a fan of my work on air traffic control reform, We hit it off, and Langhorne helped assemble a group of nine former FAA officials who signed a statement in support of separating the air traffic control system from safety regulator FAA and reconstituting it as a separate entity. He and I co-authored an article for the New Democrat Blueprint Magazine on this subject in 2001 and another on separating the Air Traffic Organization from FAA in The Journal of Air Traffic Control in 2010. In 2011, when the Business Roundtable asked me to assemble an expert team to develop a business plan for an air traffic control corporation, among those I recruited were Langhorne Bond and Jeff Shane. Our proposal won the support of Airlines for America and the National Air Traffic Controllers Association. Along with a study from the Eno Center for Transportation, it became the basis for the ATC corporatization bills drafted under House T&I Committee Chairman Rep. Bill Shuster, approved by partisan majority votes in 2016 and 2018, but which went no further.

I have fond memories of meeting with Langhorne for meals at the Cosmos Club and at annual ATCA/CANSO dinners at the Metropolitan Club, for many years chaired by Langhorne. The last time I saw and talked with him was at one of those dinners, I believe in 2018, where I finally got to meet his wife Queta. He was a bit shaky then, but I had no idea it was the last time I’d see him. We continued to keep in touch via Christmas letters.

U.S. aviation benefitted greatly from Langhorne’s efforts, in and out of government. We have lost an aviation giant, and I have lost a dear friend.

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News Notes

Sydney Airport $17 Billion Buyout Approved by Shareholders
On Feb. 3, shareholders of privatized Sydney Airport (Australia’s largest) approved by 96% a $16.85 billion offer for the airport company. The buyer is a consortium including IFM Investors, three Australian public pension funds, and New York-based Global Infrastructure Partners. The buyout still requires Australian regulatory approval.

Hyundai Investment Boosts Urban-Air Port Prospects
British startup Urban-Air Port Ltd. received a new (amount-unspecified) investment from Supernal, the mobility division of Hyundai Motor Group, to boost UAP’s plans to build a network of vertiports in the UK. The company’s first vertiport has begun construction in a parking lot in Coventry, and the company plans three weeks of cargo drone test flights in April, reported Engineering News-Record.

Alabama Airport P3 Attracts Investor Interest
The Gulf Shores Airport Authority (in the coastal city of that name) received four responses to its request for qualifications for a public-private partnership (P3) for a new terminal at its Jack Edwards National Airport. The four responses came from Groupe ADP (France), Dublin Airport Authority (Ireland), AvPorts (US), and TBI Airport Management (US). The planned terminal is estimated to cost $20 million, but the project is viewed as one of a small number of potential airport P3 projects.

Melbourne Airport Planning a Third Runway
Privatized Melbourne Airport, Australia’s second-largest airport, this month announced plans to build a third runway to cope with a projected doubling of passenger volume over the next 20 years. Prior to the COVID-19 pandemic, the airport “frequently experienced delays in peak periods due to the airport’s congested cross-runway system.” The plan is to add a parallel runway. A public comment period will run through May 16.

Avports Partners with Jaunt Air Mobility for eVTOL Network
Airport management company Avports has signed a memorandum of understanding with Jaunt Air Mobility, developer of an eVTOL that uses slow-rotor compound technology for an aircraft with an 80-to-100-mile range. Jaunt has developed the concept of an Access Skyways alliance to support the integration of eVTOLs with airports and the overall aviation system.

Canada Requiring More ADS-B Equipage as of 2023
ANSP Nav Canada announced]that by Feb. 23, 2023, all aircraft flying above 12,500 feet must transmit ADS-B/Out signals. This will require general aviation aircraft to use 1090 MHZ transponders with both top- and bottom-mounted antennas to enable the signals to be received by both space-based and ground-based ADS-B receivers. Similar requirements for lower airspace are expected “no sooner than 2026.”

Philadelphia Airport Seeks to Privatize Parking
Philadelphia International Airport (PHL) is ending its 50-year relationship with the Philadelphia Parking Authority, after completing payments on the $54 million PPA bond issue that financed the airport’s current parking structure. PHL now plans to go out to bid with private-sector parking companies to take over operating airport parking.

Russia Shifting to Non-GPS Loran for Ukraine Invasion
GPS World reported on February 17 that since Russian military doctrine assumes that its GLONASS space-based navigation system will likely be jammed or spoofed during hostilities, for its Ukraine invasion it will rely on Loran-C, which covers much of Russia. Loran operates in an entirely different frequency region than GPS and GLONASS, and it has much stronger signal strength. Three of Russia’s Chayka/Loran stations “have Ukraine surrounded,” according to a Loran expert quoted in the article.

Full SpaceX Starlink Constellation Questioned by NASA
As reported by The Wall Street Journal, NASA is expressing concerns over low-orbit traffic congestion and potential collisions, as SpaceX and others continue with plans for huge numbers of satellites to provide global broadband service. SpaceX in January asked the Federal Communications Commissionto authorize another 30,000 Starlink satellites, in addition to the currently-authorized 12,000. However, NASA did not submit any comments to FCC opposing the SpaceX request.

San Antonio Airport Connector P3 Moving Forward
Last month, two teams were pre-qualified by the Alamo Regional Mobility Authority to advance to the next stage in the process for a project to link the airport with downtown San Antonio. The selected teams were Elon Musk’s The Boring Company and a consortium of SAK Construction, ModuTram, and Thalle Construction. The former is proposing twin tunnels using Tesla vehicles, at an estimated cost of $241-298 million. The latter proposes an automated bus system traveling on a combination of elevated and tunnel right of way, at an estimated cost of $330 million. The request for qualifications to which the teams responded called for a private partner to design, build, and possibly operate and finance the airport connector.

Rockford Airport Seeking P3 Cargo Facilities
Chicago-Rockford International Airport is expected to issue a request for proposals this month for two 400,000 square foot cargo buildings, estimated to cost $100-to-$150 million. The airport is “open to” a public-private partnership (P3) approach to the project, according to a report in Inframation News.

Fitch Ratings Sees Airport Traffic Recovery in 2021
In a Feb. 16 report, Fitch Ratings found that U.S. airports had reached an average recovery of 81% of pre-COVID-19 volume by Sept. 2021. Toll roads have done even better, the report says, reaching an average of 95% of pre-pandemic traffic by last September. The data are included in Fitch’s latest U.S. Airports and Toll Roads Traffic Monitor.

Autonomous Flights by Sikorsky Black Hawk Helicopter
Earlier this month, a Sikorsky Black Hawk (UH-60) carried out two fully autonomous flights at Fort Campbell, KY. The aircraft used a Sikorsky-developed autonomy system in place of a human pilot. On the longer of the two flights, the Black Hawk maneuvered around simulated buildings. The test flights were sponsored by DARPA, under an ongoing autonomous vehicle program called Alias.

H2 Clipper Plans Hydrogen Airships
Santa Barbara-based startup H2 Clipper is developing an airship that would use hydrogen gas for buoyancy and propulsion as well as transporting green hydrogen to users in Europe. The prototype is designed for a payload of 340,000 pounds and a range of 6,000 miles, at speeds of up to 175 miles per hour. The aim is to transport liquid hydrogen from locations where it is plentiful (e.g., the Middle East) to locations of high demand (Europe). On the return trips, freight would be carried. It aims to fly a subscale prototype in 2024.

State Airport Authority Hopes to Buy Sikorsky Airport
The Connecticut Airport Authority (operator of Bradley International and several small airports) has offered $10 million to the city of Bridgeport, which owns and currently operates the airport (which is named after helicopter pioneer Igor Sikorsky).

Correction re: Turbulence Aware
Last month’s article on the SafeLand system mentioned a previous article about Turbulence Aware, a system that measures and reports turbulence in flight. That article erroneously stated that Turbulence Aware was developed at the National Center for Atmospheric Research (NCAR). Although it was based on NCAR research, it was developed privately. Today the program is sponsored by the International Air Transport Association, which tells me that 15 airlines use or plan to use the system. See article. My thanks to Perry Flint at IATA for this information.

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Quotable Quotes

“The FAA cannot be treated as just another ‘interested party’ that can be expected to accept quietly an outcome it deems insufficiently tested in the real world. Indeed, walking away from the issue despite its continuing uncertainty would represent a clear violation of FAA’s statutory obligation to ensure the safety of flight. Simply put, the FAA should not be required to bear the burden of proof before the FCC on a matter of aviation safety; if anything, it should be just the reverse. The bottom line is clear: the FCC should never be permitted to make a decision on the use of spectrum that FAA believes might compromise aviation safety. It must ensure that the FAA’s concerns are resolved to its satisfaction before making any decision, and certainly before auctioning spectrum, lest bidders be inadequately informed of possible limits on the spectrum they are bidding on.”
—Letter to House Transportation & Infrastructure Committee leadership from nine current and former members of the FAA Management Advisory Council, Feb. 2, 2022

“Ensuring that mechanisms like the EU slot regulation—which should guarantee the optimal use of airport capacity—are fit for purpose should be the highest of priorities. Once the effects of the [Covid-19] crisis on aviation have been thoroughly evaluated and lessons learned, we look forward to engaging in a root-and-branch review of the regulation.”
—Olivier Jankovec (Director General, ACI Europe), Victoria Morris, “European Airports Back Latest EU Slot Waiver,” Aviation Daily, July 27, 2021

“We’ve learned a few things. One, that politicians are not very good at planning and constructing airports. And two, once you have a design, you shouldn’t change it. You have to stick to it, you have to finish construction and then you have to do what every other airport does—you have to adapt your facility to the needs of the users.”
—Patrick Muller (COO of Berlin Brandenburg Airport), Tara Craig, “A Capital Asset,” International Airport Review, Winter Issue 2021

“The SAF [sustainable aviation fuel] delivery system for much of Europe is owned and controlled by NATO. It is fair to say that NATO is not as green as Greta. NATO has shown very little interest in SAFs to date, and now might not be the time to propose that it do the work necessary to certify that SAFs can be acceptable in fighter jet engines. Untangling that, finding ways to allow the delivery of SAFs to airports and streamlining and codifying joint user hydrant installations is work on a platform that cuts across national boundaries and adds value. It would also be interesting to know why we continue to charge airlines at an airport on a per-weight basis, instead of making clear that airports can charge what they believe works best for their airline customers.”
—Andrew Charlton, “What Does Better Look Like?” Aviation Intelligence Reporter, February 2022

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The post Aviation Policy News: Remote towers going mainstream in Europe, handicapping the eVTOL race, and more appeared first on Reason Foundation.

• 5G and aviation: the aftermath
• Automation to prevent runway overruns
• A new threat to airline deregulation
• FAA’s Metroplex nears completion
• Why mid-size airports consolidate their terminals
• Privatized airports add capacity and win awards
• Upcoming Aviation Event
• News Notes
• Quotable Quotes

5G and Aviation: the Aftermath

Well, AT&T and Verizon turned on their new 5G towers in much of the United States this month—and aviation has not ground to a halt. The majority of the U.S. airline fleet, it turns out, have radar altimeters which the Federal Aviation Administration (FAA) has now judged can be operated at most of the airports where the telecom companies have at least temporarily taken measures to reduce possible interference with altimeters and other avionics. But most commercial landings thus far have not been under serious low-visibility conditions. Flights that would have to use radar altimeters to land safely at some airports under Instrument Flight Rule (IFR) conditions would have been canceled under current FAA protocols.

The question I asked in the November and December editions of this newsletter—how FAA and the U.S. Department of Transportation (US DOT) could have done so little after receiving the October 2020 Radio Technical Commission for Aeronautics (RTCA) report identifying serious signal interference risks—has not been fully answered. FAA did notify the Federal Communications Commission (FCC) about the problem in late 2020, as noted in a front-page Wall Street Journal article on Jan 21. When FCC ignored this warning, the aviation community, led by US DOT, should have carried out a large-scale public information campaign right then, prior to the FCC spectrum auctions. Had that occurred, the bidders would have taken into account the possible need to modify their tower locations and strength near airports and might have bid somewhat less than the $80 billion the government received.

Another question is why this problem has not occurred in other developed countries. A partial answer crossed my screen as I was writing this month’s issue. CNN Business posted “Europe Rolled Out 5G Without Hurting Aviation. Here’s How,” by Charles Riley and Joseph Ataman, to whom we should be grateful. As they report, the European Union Aviation Safety Agency (EASA) told CNN Business: “The technical data received from EU manufacturers offers no conclusive evidence for immediate safety concerns. . . . At this time, EASA is not aware of any in-service incidents caused by 5G interference.” And the U.K. Civil Aviation Authority had basically the same message.

However, this is not a case of he-said, she-said. There are real differences in how 5G is being implemented in Europe, compared with the United States. The underlying U.S. aviation concern is that some 5G signals could be emitted at frequencies slightly above the assigned band, where they could overlap the signals used in radar altimeters and other onboard avionics.

In Europe, the authorized 5G spectrum is between 3.4 and 3.8 GHz. But in this country, the 5G spectrum bought by ATT and Verizon is 3.7 to 3.98 GHz. Radar altimeters operate between 4.2 and 4.4 GHz, which sounds like it’s sufficiently separated from 3.98 GHz. But the RTCA report and other data suggest that spurious signals in the 3.98 range could interfere with radar altimeters unless the 5G towers are located far enough from runways to make that impossible. France’s National Frequency Agency worked with its aviation safety regulator to ensure that 5G antennas near 17 major French airports comply with limits on height, distance from runways, and power output, and are also required to be tilted away from flight paths.

No such coordination between FAA and FCC took place, either before or after the 5G spectrum auction. This is a serious institutional failure, and thus far no one has been held accountable.

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Automation to Counter Runway Overruns

“Runway excursions” is the aviation term for any unintended departure of a plane from the runway, such as running off the end due to various factors. Research by the International Air Transport Association (IATA) found that 25% of all airline accidents from 2005 to mid-2019 involved a runway excursion—the most frequent type of accident. Late last year saw the release of a Global Action Plan for Prevention of Runway Excursions (Gappre)—a two-year international effort coordinated by Eurocontrol and the Flight Safety Foundation. (See Sean Broderick’s story, “Eye on Excursions,” Aviation Week, Nov. 22, 2021)  

Aer Lingus has been working on this problem for several years, and one of its findings is that dealing with such risks requires both data and coordination. As Broderick reported, “Issues such as runway surface conditions that involve multiple stakeholder groups—pilots that analyze and report them and air traffic controllers that pass the information along—require collaboration.”

They also cry out for replacing manual, subjective information with automated data reporting.

In the September issue of this newsletter, I reported on such a solution to deal with a different problem: en-route turbulence. Pilot reports (Pireps) on turbulence are subjective, often late, and are not necessarily passed along by air traffic controllers to following aircraft. A system called Turbulence Aware automates this process. It was developed by the National Center for Atmospheric Research, working with Delta, Southwest, and United Airlines.

A reader of the newsletter emailed in response to that article, telling me about an analogous system to automate reporting of dangerous runway conditions. It’s called SafeLand and was developed by Aviation Safety Technologies. The system makes use of real-time data already available from the aircraft’s flight management system about runway conditions and available braking friction (especially when there is water, ice, or snow on the runway). The real-time reports can be sent immediately to incoming aircraft, airport operations, and air traffic controllers. SafeLand complies with a recent ASTM International Standard (E3266) for Friction-Limited Braking Measurements, released in November 2020.

I learned from someone who was present that this then-new technology was presented to FAA leadership about a decade ago, but the agency could not endorse it because of a policy “against promoting a commercial product.” Of course, at that point, there was no ASTM standard on which a request for a proposal for a generic real-time runway condition-reporting system could be based. Now there is, and FAA people (along with experts from Airbus and Boeing) were among those drafting it. There is also now a Global Reporting Format—a standardized methodology to assess runway conditions.

Last summer, Transport Canada announced that it would release an Advisory Circular (AC 700-0060) that defines both Pilot Braking Action Reports and Aircraft Braking Action Reports (ABAR). It makes clear the precision and accuracy of the latter. FAA has been following this development, and I’m told that it is working on a similar Advisory Circular to be released for comment this year. It is also rumored to be considering a methodology to determine compliance with the ASTM standards and to authorize aircraft operators and airports to use ABAR technologies.

It’s been a long journey from that decade-ago briefing to FAA leadership, but the stars seem to be coming into alignment for this impressive technology to reduce runway overruns in bad weather. In my view, it’s long overdue.

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The Biden Administration’s Aviation Rulemaking Agenda
By Marc Scribner

The vast majority of economic regulation comes from executive branch agencies, not from Congress. The Fall 2021 Unified Agenda of Regulatory and Deregulatory Actions released in December contained a new Department of Transportation (DOT) rulemaking project on Enhancing Transparency of Airline Ancillary Service Fees. At first glance, many would view this as a positive endeavor. Who, other than greedy airlines, could be against enhanced transparency of ancillary fees on baggage and seat selection? But a review of the regulatory record suggests this rulemaking is part of a broader effort to enhance regulatory power at the expense of consumer welfare.

This story begins with the Airline Deregulation Act of 1978. Signed into law by President Jimmy Carter, the legislation was the product of a rare bipartisan recognition that industrial regulation can go too far. It eliminated most economic regulations on airlines and set in motion the termination of the Civil Aeronautics Board (CAB), leading to extensive airline competition and much lower airfares, which consumers still enjoy today.

It was followed by the Civil Aeronautics Board Sunset Act of 1984, which specified the remaining powers that would be transferred to the U.S. Department of Transportation following the termination of the board on Jan. 1, 1985. Among them was a general prohibition of unfair and deceptive practices and unfair methods of competition, initially created by the Civil Aeronautics Act of 1938 and known colloquially as the Aviation Consumer Protection Authority. As amended, it covers conduct related to air transportation and the sale of air transportation and is currently codified at 49 U.S.C. § 41712.

Around the same time that Aviation Consumer Protection Authority oversight was changing hands from the disbanded CAB to the Office of the Secretary of Transportation, the Federal Trade Commission’s (FTC’s) similar but broader consumer protection oversight powers were being modernized to better reflect mitigating economic factors.

Specifically, FTC internal practice was evolving to adopt two necessary standards of proof to enforce the broad statutory prohibition on unfair or deceptive acts and practices. The first requires that conduct must be “likely to cause substantial injury to consumers which is not reasonably avoidable by consumers themselves.” The second requires that conduct “not [be] outweighed by countervailing benefits to consumers or to competition.” The FTC Act Amendments of 1994 formally codified these standards of proof at 15 U.S.C. § 45(n).

These reforms were made at a time when Democrats controlled both chambers of Congress and the White House, and they earned bipartisan support. Similar language was included in the Dodd-Frank Act of 2010 covering the enforcement responsibilities of the Consumer Financial Protection Bureau, also when the federal government was fully controlled by Democrats. Unfortunately, while bipartisan recognition of these mitigating economic factors exists in virtually every other federal consumer protection context, Congress to date has not taken up reform of DOT’s similar Section 41712 Aviation Consumer Protection Authority.

Congress’s failure to act has allowed DOT to use its nebulous Aviation Consumer Protection Authority to expand its power and chip away at the successful reforms of the Airline Deregulation Act. During the Obama administration, this authority was used to promulgate dubious regulations on airfare advertising (limiting carrier dissemination to consumers of information related to government taxes and fees), airfare refunds (outlawing true non-refundable ticketing and putting upward price pressure on airfares), and on-tarmac delays (increasing cancelations and travel delays). DOT began a rulemaking under this authority to ban in-flight cellular voice calls, but this was mooted when Congress passed an explicit ban on voice calls as part of the FAA Reauthorization Act of 2018.

The Obama administration also initiated a series of rulemaking projects on ancillary fees. At the most absurd point, they attempted to expand their power to cover “metasearch” websites like Google Flights as regulated ticket agents, even though these websites were not involved in the sale of air transportation. They conceded “quantifiable costs of this rulemaking exceed the quantifiable benefits” and then tried to justify this cost-benefit failure by claiming that “unquantified benefits,” such as “improved customer goodwill towards ticket agents,” justified going ahead, but the clock ran out on this proposal.

During the Trump administration, this broader ancillary fee regulatory effort was put on ice. DOT also moved to do what Congress has failed to do: defining the Aviation Consumer Protection Authority with FTC-style standards of proof that account for mitigating economic factors (14 C.F.R. § 399.79(b)).

Unfortunately, the Biden administration appears to be looking to reverse this progress at harmonizing federal consumer protection authorities and return to using the Aviation Consumer Protection Authority as a chisel to the Airline Deregulation Act. The first Unified Agenda of Regulatory and Deregulatory Actions of the Biden administration in Spring 2021 indicated the administration had planned to publish a proposal amending the hearing procedures of the final rule on Defining Unfair or Deceptive Practices aimed at increasing the speed in which an Aviation Consumer Protection Authority regulation can be imposed. These amendments were publicly released on Jan. 24.

The Fall 2021 Unified Agenda also contained a new rulemaking project on Enhancing Transparency of Airline Ancillary Service Fees, where the proposed rule is estimated to be published in June 2022. The Spring 2022 Unified Agenda should indicate to what extent the Biden administration plans to embrace the Aviation Consumer Protection Authority as the primary tool for re-regulating the airline industry without the consent of Congress. Importantly, the Jan. 24 rule designed to limit procedural protections during the evidentiary hearings that precede Aviation Consumer Protection Authority rulemakings notes that DOT plans a separate interpretive rule “that would more clearly apprise the public of the Department’s interpretation of the definitions of ‘unfair’ and ‘deceptive’”—this likely means watering down the FTC-style standards of proof.

All of this is particularly concerning because a crackdown on ancillary fees and airfare unbundling would do disproportionate harm to the ultra-low-cost carriers (ULCCs) that have been driving airline competition in recent decades. Any policies that have a negative disparate impact on ULCCs are likely to further entrench legacy carriers’ market positions during the recovery from COVID-19, resulting in higher airfares and reducing consumer welfare. Policymakers should instead continue “placing maximum reliance on competitive market forces and on actual and potential competition” (49 U.S.C. § 40101(a)(6)) as required by the Airline Deregulation Act.

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FAA’s Metroplex Program Nears Finish Line

An article in the Winter 2022 issue of Managing the Skies presents an update on the tenth (of 11 planned) FAA Metroplex projects that are redesigning the airspace in large metro areas, aiming to save time and fuel while reducing noise exposure near the airports. The article focuses on the Metroplex restructuring in Las Vegas, encompassing not only McCarran International (LAS) but also general aviation fields such as Henderson Executive Airport (HND) and nearby Nellis Air Force Base.

Among the changes made were to de-conflict approach and departure routes for each airport, separating airline traffic from business and general aviation traffic, enabling instrument approaches to seven McCarran International runway ends (up from only three), and implementing continuous descent approaches for airliners. Those are all worthwhile changes, and according to the article (prepared by Mitre Corporation, which assisted FAA on the project), the 10 Metroplex projects that are finished are saving airspace users $41 million per year in fuel costs and reducing CO2 emissions by 123,000 metric tons per year. That sounds impressive, but on a per-metro-area basis, that works out to only $4.1 million in fuel savings and 12,300 tons of CO2.

In August 2019 the Department of Transportation Office of Inspector General (OIG) released AV2019062, assessing Metroplex progress by then. OIG noted that the program was taking longer than planned: the original completion date for the projects was 2017, but the estimated completion date had been pushed back to 2021 (and is now 2022). The most-complex and most-congested metro area (New York/New Jersey) was left out, despite the likely benefits being far greater there than at any of the other Metroplex locations, and as of 2019 Phoenix had been de-listed, due to extensive litigation over new noise exposure from the revised arrival and departure routes (which concentrated noise over certain neighborhoods, while reducing the square miles impacted by aircraft noise). In addition, the benefits were coming in about half of the level that had been projected at the outset of Metroplex. At the Northern California Metroplex, measured benefits were actually negative (i.e., more fuel and CO2 emissions were reported than prior to Metroplex).

The OIG researchers noted that FAA’s benefit projections depended on the judgments of subject-matter experts, rather than empirical data. They also noted that a lot of the benefits assumed widespread use of performance-based navigation (PBN), for which as of 2019 a significant fraction of the airline fleet was still not equipped. And on the air traffic control (ATC) side, it also assumed widespread implementation of technology tools such as time-based flow management (TBFM) in en-route centers and terminal-area sequencing and spacing (TSAS) in TRACONs. As of 2019, neither was in widespread use, and the current Mitre article provides no data on how much that situation may have improved. While more narrow-body and wide-body airliners may now be PBN-equipped, most regional airline aircraft are not so equipped. Controllers are still not comfortable mixing PBN and non-PBN planes in arriving traffic.

To get a more balanced assessment of Metroplex, we will have to wait until the Office of Inspector General does a final report on the program, once South/Central Florida is finally wrapped up. Since I live beneath that airspace, the only thing I’ve noticed is more departures from Fort Lauderdale-Hollywood International Airport (FLL) flying over my house.

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Why Mid-Size Airports Reconfigure Their Terminals

Several weeks ago I got an email from a reporter in St. Louis wanting to understand why St. Louis Lambert International Airport was considering replacing its current terminals with a single new facility, at considerable expense. The plan, developed by consulting firm WSP, calls for removing existing Terminal 2 and creating a new 62-gate terminal incorporating some design features of the current Terminal 1, totaling 1.6 million sq. ft.

But why consolidate into a single terminal? At the time of this query, I had just read an article in Airport Business about a project getting under way at Southwest Florida Regional Airport (RSW) in Ft. Myers, FL. This $331 million project will consolidate the security checkpoints, remodel the existing terminal space while adding 71% more square footage. While RSW is a much smaller airport than STL, the motivations for the changes are parallel.

Creating a consolidated checkpoint area in itself conserves airport floor space and makes Transportation Security Administration (TSA) screening more efficient, since airlines may have somewhat different peaks and valleys in-flight activity. And TSA screeners will have smoother day-long flows through the consolidated checkpoint compared with peaks and valleys at concourse-specific screening points. The same kind of redesign is nearing completion at Ronald Reagan National Airport (DCA) serving Washington, DC. The new consolidated checkpoint area now serves all four concourses in the main terminal, gates 10-59.

A second major benefit of consolidation is to give passengers a much wider array of shops and eating places post-security. With the older design, passengers were limited to the concessions located on the concourse from which they were departing. The few shops and restaurants prior to security did less business than they would have done post-security due to passengers hesitating to take the time for a meal if the security lines were long, and taking time for a meal might lead to missing their boarding time. There should be significant increases in non-aeronautical from the consolidated design.

I have not attempted to assemble a list of the airports that have adopted the consolidated model, but another recent project along these lines is nearing completion at Kansas City International Airport (MCI), which is replacing several smaller terminals each with its own TSA checkpoint with a new consolidated terminal. Given the advantages for both TSA and airport revenues, I think we will see more projects along these lines when airports need to expand.

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Privatized Airports Investing in Capacity, Winning Awards

Airports that have been sold to investors and airport managing companies, or that have been leased under long-term public-private partnership agreements, are still coming under fire from airline groups such as the International Air Transport Association and from ideological interest groups that consider it wrong for anyone to make a profit from providing important public services. (Of course, if that premise were adopted, there would be no such thing as investor-owned utilities.)

The contrast between anti-airport-privatization views and reality struck me while reading the December issue of International Airport Review. The cover story features the publication’s Person of the Year: Videh Kumar Jaipuriar, CEO of Delhi International Airport, Ltd., which was privatized last decade. Among the accomplishments cited in the article is a huge improvement in processing arriving international passengers in the current COVID-19 pandemic era. What had been a 6-to-7-hour ordeal for those passengers is now only 30-45 minutes, thanks to Delhi Airport digitizing the process, via its new Air Suvidha. That system has now been adopted by every Indian airport that has international service. As as for fears of profit-minded airport businesses not investing in needed capacity, Delhi Airport is expanding its terminal capacity from 74 million passengers per year to 100 million. It is also developing a fourth runway.

Another privatized airport in the same issue of the magazine is the largest airport in Colombia. El Dorado International Airport in Bogota has won awards for its El Dorado Digital Ecosystem, which provides passengers with real-time interaction with all services at the airport, and includes both a new website and an El Dorado mobile app. Yet another privatized award winner is Montego Bay, Jamaica. The airport company MBJ Airports Ltd. replaced the old-fashioned terminal with a much larger, modern facility shortly after the privatization last decade. It took advantage of the traffic reduction during COVID-19 to accelerate additional improvements. It was the first in the Caribbean to obtain Airport Council Internation’s new Airport Health Accreditation, and in 2020 was ranked as one of the world’s Top 5 Best Airports by Conde Nast Traveler readers.

Many privatized airports are investing in capacity expansion projects, both landside (terminal expansion) and airside (runway and tower investments). London City Airport has added a full-length taxiway and switched from an onsite conventional control tower to a remote/digital tower located within a NATS control center many miles away from the land-constrained airport. London Heathrow and Gatwick are both planning runway capacity additions, assuming they can get the needed planning permission.  In Germany, privatized Frankfurt is under way on a major terminal expansion, following its project that added a new runway several years ago. Among the leading privatized airports in South America, Lima is being expanded under a 30-year P3 lease that includes a major terminal expansion and an additional runway.

Privatized airports aim to make money by providing passengers and airlines with good service, and they are investing in facilities and services in keeping with this premise.

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Upcoming Aviation Event

I will be the presenter in February for the monthly webinar series sponsored by RTCA. My topic will be “Why Does the United States Lag Other Developed Countries in Advanced ATC Technologies?” on Feb. 16, 2022, at 1 pm ET. To register, go here.

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News Notes

Air Traffic Control Complicity in Illegal Flight Diversion to Belarus
Officials of the Belarus air navigation service provider worked closely with the state security agency to use a false bomb scare to divert a Ryanair flight to Minsk, Belarus last May, so as to capture a dissident journalist and his girlfriend. A federal grand jury indicted four of those officials on Jan. 21, charging them with aircraft piracy. UCLA law professor Eugene Volokh has all the details in a chilling blog post here.
 
Brazilian Airlines Embrace eVTOLs
As Aviation Daily reported (Dec. 23), two Brazilian airlines—Azul and GOL—have made pledges to purchase eVTOL aircraft for use on inter-city routes. Azul announced a deal with Lilium to build an eVTOL network in the country, using 220 of Lilium’s under-development eVTOL. Competitor GOL announced plans with aircraft lessor Avolon for an eVTOL ride-sharing platform; it also announced plans to acquire 250 eVTOLs from Vertical Aerospace. Meanwhile, Embraer’s eVTOL spinoff, Eve Urban Air Mobility announced plans to go public via a Special Purpose Acquisition Company. It also announced a letter of intent from aircraft lessor Falko for 200 of its Eve air taxis.

Should Maryland Lease BWI Airport?
An op-ed in the Washington Post, ”Maryland Should Lease Out BWI to Pay Off Its Pension Debt,” cited the estimated $2.3 billion market value of Baltimore/Washington International Thurgood Marshall Airport from a 2021 Reason Foundation policy study. After paying off outstanding BWI bonds, the net proceeds from a lease would be around $1.6 billion. The authors note, “Using these [BWI lease] funds to pay down pension debt could reduce future pension costs for the state. Maryland is spending $1.8 billion a year in contributions to the pension plans, and $1.4 billion of this is going toward debt payments. Maryland could free up a portion of its budget each year by using the revenue generated from the airport lease to pay down part of this pension debt.”

Belgian ANSP to Use Drones to Monitor Ground-Based Navaids
Instrument Landing Systems (ILSs) and other ground-based navigation aids such as VORs need their performance checked periodically. FAA and most other air navigation service providers use a fleet of planes to fly these inspection runs, at considerable capital and operating costs. Belgian air navigation service provider (ANSP) skeyes announced plans last year to purchase a drone system to carry out these flight inspections. It was developed by Skyguide, the Swiss ANSP, which has been using drones to carry out its own inspections. The purchase by skeyes is Skyguide’s first sale of the system to another ANSP.

Denver Contracts for Last Stage of Terminal Expansion
The Denver City Council earlier this month approved a $1.3 billion contract with Hansel Phelps to develop the third phase of the project to expand its Great Hall land-side terminal. Phases 1 and 2 cost $770 million, with the first phase completed and the second scheduled to wrap up in mid-2024. At the end of phase 3, the terminal’s capacity will be 100 million annual passengers.

Saab and LFV End Digital Tower Joint Venture
LFV, the ANSP of Sweden, and aerospace company SAAB have decided to end their joint-venture company that has developed and implemented remote digital towers in a growing number of countries since 2015. LFV originally owned 41% of Saab Digital Air Traffic Solutions (SDATS), but Saab will now own 100% of the company, which is still very active in the remote tower business.

Small Airports Making Good
Two small airports have been making strong progress in recent years by specializing in specific kinds of air service. Chicago Rockford International (RFD) found its market niche by emphasizing air cargo and its location 70 miles from giant hub Chicago O’Hare (ORD). As of 2021, RFD had become the second-largest hub for UPS in North America; it is also an Amazon Air gateway. Another late-bloomer in Illinois is MidAmerica Airport (BLV), across the Mississippi River from St. Louis. With growing service from ultra-low-cost carrier Allegiant, BLV handled a record 320,000 passengers in 2021, 3.4% more than in pre-pandemic 2019. The airline now serves 12 destinations from BLV, mostly in Florida.

California Appealing San Bernardino Amazon Air Decision
Attorney General Rob Bonta announced on January 4 that his office is appealing the 9th Circuit Court of Appeals decision rejecting an environmental group’s challenge of FAA’s 2019 approval of the environmental impact of the now-operational Amazon Air cargo sorting facility. He wants the entire 9th Circuit to rehear the case that was decided by a three-judge panel of the Court. Should the appeal prevail, the consequences for airport expansion would be dire.

JFK $1.5 Billion P3 Terminal Project Groundbreaking
Ground was broken last month for the privately financed expansion and rehabilitation of JFK Terminal 4. The P3 entity is a joint venture of Delta Air Lines and JFK International Air Terminal. It will add 10 new gates and 150,000 square feet to the terminal’s footprint.

San Jose Moving Forward with Airport Connector P3
The city of San Jose released technology standards for its proposed transit link connecting Mineta International Airport with downtown San Jose. Any proposed technology must have a minimum maturity level of six (prototype demonstrated in a relevant environment). An ordinance authorizing the project will be considered by the city council in February, and if adopted, the request for proposals is expected to be issued in March.

FAA Backs Off Approving Missile Defenses for FedEx Aircraft
Earlier this month, FAA withdrew a request for comments on FedEx’s proposal to equip cargo planes that traverse dangerous areas be equipped with infrared laser technology that could foil missile attacks. The request for comments had been issued only four days before and attracted considerable media attention. FedEx’s proposal was intended to apply to a single A-321 aircraft for test and evaluation purposes.

Hydrogen’s Impact on Contrail Formation Is Complex
As Thierry Dubois reported in Aviation Daily on Jan. 11, European researchers on contrails formed from aircraft burning hydrogen as fuel have multiple impacts. Hydrogen fuel leads to more water vapor in the exhaust than kerosene, leading to more ice crystals and probably more contrails. But reduced soot emissions have the opposite effect on contrail formation. The Cirrus H2 project at French aerospace center Onera is conducting modeling and experimentation on these questions. Despite many unknowns, hydrogen is seen in Europe as the leading candidate for reducing aircraft climate impacts.

Boom Supersonic Seeking North Carolina Production Site
Local news reports suggest that Boom Supersonic is negotiating to lease a large site at Piedmont Triad International Airport (GSO) near Greensboro, NC. The Raleigh News & Observer said the company has been in negotiations with the airport for a 1,000-acre site near the airport’s northern boundary. Honda Aircraft has a production facility at the airport for its HondaJet.

Startup Company Radian Plans Suborbital Spaceplane
Ars Technica’s Eric Berger reported that a venture-capital-funded company called Radian is developing a single-stage-to-orbit vehicle, Radian One, which could also provide airline-like suborbital flights much faster than the emerging generation of supersonic airliners. Based in Renton, WA—and currently with 18 employees—the company has been doing R&D on the concept since 2016. Its founders have NASA, Department of Defense, and aerospace company backgrounds. The Radian One prototype is aimed at taking 10,000 pounds of payload into orbit. Radian has raised $32 million thus far.

Air Traffic Organization’s COO, Teri Bristol, to Retire
After eight years as chief operating officer of FAA’s Air Traffic Organization (ATO), Teri Bristol announced earlier this month that she will be retiring at the end of February. She has run ATO since 2014, succeeding David Grizzle in that position. FAA did not immediately announce plans for selecting her successor.

Fred Ford, R.I.P.
Airport management pioneer Frederick C. Ford died on Jan. 13. His long airport career included positions at Massport (Boston), Pan Am World Services, and Chicago-Rockford. In recent years, he put his airport privatization experience to good use developing the case and the organization to develop Airglades Airport, as a P3 cargo airport to supplement the limited perishable cargo capacity at Miami International (MIA). He helped create a new organization, Florida Cargo Fresh, representing major agricultural interests. His airport experience helped to get the Airglades project through the approval process at FAA. I met Fred at a transportation conference in Peoria many years ago, and I kept in touch with him during the decade it took to get Airglades off the ground. He was one of a kind and will certainly be missed.

Error in December Issue
An alert reader spotted an error in last month’s newsletter. The article “Congress Oblivious to Increased Airline Competition” mislabeled low-cost carrier Volaris as based in Hungary, rather than its actual home, Mexico. The error occurred in editing, for which I apologize.

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Quotable Quotes

“The telecommunications companies—we’re not their regulator. Over the last couple of months, we understand each other much better than we did before, and we’re working very effectively together. We want to enable 5G C-band deployment, make no mistake about that. But we’ve got to do it in a way so that aviation safety is not compromised. There’s a way to do that; it just requires engagement and collaboration. I’m optimistic that we will be able to achieve that.”
—FAA Administrator Steve Dickson in “FAA’s Dickson Calls for Stronger Aviation, Telecom Relations,” by Bill Carey, Aviation Daily, Jan. 20, 2022

“We were aware of a 5G issue. . . . We were not aware that the power of the antennas in the United States has been doubled compared to what’s going on elsewhere. We were not aware that the antennas themselves have been put into a vertical position rather than a slight slanting position, which taken together compromise not only the radio altimeter systems but the flight control systems on the fly-by-wire aircraft. So on that basis we took that decision late last night to suspend all our services [to the U.S.] until we had clarity.”
—Emirates Airline President Tim Clark in “Emirates President: The 5G SNAFU Is the Biggest Screwup I’ve Seen in My Career,” by Chris Liakos and Richard Quest, CNN Business, Jan. 19, 2022

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The post Aviation Policy News: Institutional failure on 5G and aviation, runway excursions, and more appeared first on Reason Foundation.

• Vertiports for Regional Air Mobility
• Congress oblivious to increased airline competition
• 5G and aviation—from bad to worse
• Rethinking airport charges and regulation
• Business jet travel is booming—and subsidized
• New space stations mean lots more launches
• News Notes
• Quotable Quotes

Vertiports and Regional Air Mobility

During the first nine months of 2021, three of the largest eVTOL startup companies (Archer, Joby, and Lilium) spent $326 million on development, as they aim for certification by 2024. Graham Warwick reported this in “AAM Leaders Ramp Up Development Spending on eVTOL Air Taxis,” Aviation Week, Nov. 22-Dec. 5, 2021. But while well-funded eVTOL development continues, investor skepticism is growing.

Clean Technica’s Michael Barnard notes in a recent article that eVTOL developer stocks have lost over $16 billion in 2021, with aggregate market value declining from a peak of $27.92 billion to $11.82 billion in late November. As Aviation Intelligence Reporter’s Andrew Charlton summed up Barnard’s message to investors: “If you are . . . engaged with Urban Air Mobility, be aware that the bloom is off this rose, cut your losses, and pivot to Regional Air Mobility.”

That’s in line with skepticism I’ve expressed in recent issues of this newsletter, expecting that eVTOL air taxis will be too costly for the kinds of commuting and short-haul trips envisioned by many devotees, but that a more viable market may be regional air mobility (RAM): larger vehicles with longer range, able to connect cities over distances of 100 to 200 miles or so. While  I have yet to see a business model put forth for either UAM or RAM, several eVTOL companies appear to be focusing more on RAM than on urban air-taxi service: Vertical, Lilium, Eve, and Blade.

Spanish infrastructure giant Ferrovial has been in the news recently, thanks to opening a new division, Ferrovial Vertiports. It has made a deal with Lilium to develop a set of 10 vertiports in Florida, with the first location secured via a lease agreement with the Palm Beach County government. The company also has an agreement with Vertical Aerospace and Lilium to develop a 25-vertiport network in the U.K.

I spoke with Ferrovial Vertiports CEO Kevin Cox earlier this month to get a better understanding of their view of the eVTOL market. He told me they have spent several years developing a comprehensive demand model to help them make decisions on eVTOL companies to work with and where to focus their vertiport investments.

A competitor to Ferrovial Vertiports was announced in October. Urban Blue was created by Italian and French airport companies (Aeroporti de Roma, Aeroporto di Venzia, Aeroporto Guglielmo Marconi di Bologna, and Aeroports de Cote d’Azur). They are working with Volocopter to develop vertiports for its planned system linking Nice, Rome, and Venice—again regional air mobility. In addition, vertiport developer Skyports is partnering with Milan airport operator SEA Group for a network linking key Italian cities.

These remain early days in the eVTOL and vertiports business. But I’m glad to see the focus starting to shift to regional air mobility as likely to be a more viable business than urban air taxis.

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Congress Oblivious to Changing Airline Competition

Aviation leaders in the House and Senate are beating up on legacy carriers, basically calling them on the carpet for scheduling mishaps and flight cancellations earlier this fall, despite the airlines’ smooth handling of pandemic-record travel over the Thanksgiving weekend. The essential message seemed to be: “We gave you all this money last year; how can you possibly be understaffed?”

I don’t envy the task facing airline planners and schedulers, dealing with the not-really-predictable path of emerging Covid-19 variants, shifting government policies on travel, and trying to estimate how air travelers will respond. But to the extent that legacy carriers are not meeting politicians’ expectations, the best remedy is increasing competition. Fortunately, a sea change is taking place worldwide, as low-cost carriers generally recover more quickly than the legacy airlines.

A recent headline underscores what’s going on. As Aviation Daily reported on November 16, “Indigo Partners, ULCCs Stun Dubai Airshow with 255-Aircraft Deal.” Indigo is a private equity fund that owns majority stakes in four ultra-low-cost carriers (ULCCs): Frontier (U.S.), JetSMART (Chile), Volaris (Hungary) and Wizz Air (Hungary). The massive order is for Airbus A321neo and A321XLR aircraft to be divvied up among these four ULCCs. In recent years, Indigo has ordered a total of 1,145 A320-family aircraft for its four airlines.

In another stunning announcement, highly successful ULCC Allegiant Air announced a planned joint venture with Mexican LCC Viva Aerobus. The JV is subject to antitrust approvals from both governments. Both airlines envision the JV as far less costly than each developing its own large trans-border route system. Allegiant points out that there are about 239 routes that have no nonstop service between U.S. airports it now serves and leisure destinations in Mexico.

Also of interest is the potential success of the two newest low-cost carriers, Avelo and Breeze. Avelo’s east coast base at Tweed New Haven Airport (HVN) has previously lost the small amounts of service it used to have from American, United, and U.S. Airways, thus offering Avelo an open airport in a region with poor service. Its initial flights focus on Florida, offering Connecticut residents new nonstop flights to Ft. Lauderdale, Ft. Myers, Orlando, Sarasota, Tampa, and West Palm Beach. The airline’s west coast base, operating separately, is Burbank (BUR), with routes primarily to northern California and the Pacific Northwest, some of which have legacy-carrier competition.

Much larger and better-funded startup Breeze Airways is already operating a number of short/medium routes using Embraer E-jets, and thus far it is the sole airline offering nonstop service on 98% of those routes. Once its larger and longer-range Airbus A220s start arriving, Breeze will begin serving longer routes with them. As of early December it had not announced any A220 routes, but founder David Neeleman noted that the aircraft has 6.5-hour endurance with a full passenger load, opening the door for service to much of Latin America from Florida, as well as long-distance routes within the continental United States. Breeze has 80 A220-300 series on order, with five expected to be in service by the second quarter of next year.

The benefits of airline deregulation continue to be realized. New airlines and new approaches offering numerous routes that bypass hubs seem poised to change U.S. aviation, offering lower fares and more choices for air travelers. Congress should leave well enough alone.

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From Bad to Worse on 5G and U.S. Aviation

Developments since last month’s story about potential interference between new 5G telecommunications activity in the C band (3.7 – 4.2 MHz) and aircraft radar altimeters have not led to a resolution. Spectrum auction winners AT&T and Verizon postponed their date for turning on the new system for only one month, to January 5. And with no sign of any action by either the Federal Communications Commission (FCC) or the 5G companies, on December 7th FAA issued airworthiness directives requiring aircraft operators to prohibit flight activity that relies on radar altimeters when in the presence of 5G wireless transmissions.

After back and forth mitigation proposals between aviation and telecommunications groups, a coalition of aviation groups, led by the Aerospace Industries Association, called for a further delay in turning on 5G transmission in the vicinity of airports. The coalition warned of delayed or cancelled flights and cargo shipments due to aircraft being unable to operate legally in potentially many situations. Former DOT official Diana Furchtgott-Roth reported in a recent Forbes.com column that Canada’s Department of Innovation, Science, and Economic Development is restricting 5G services in exclusion zones around 26 airports. The restrictions will be in effect until both domestic and international studies reach a definite conclusion about the scope of the problem.

So what do we actually know about the likelihood of 5G interference with radar altimeters? The most definitive study was organized by RTCA (the nonprofit that advises FAA on technical and communications issues). In 2020 it convened a six-month stakeholder group from both industries “to examine spectrum spectrum coexistence issues with radar altimeters.” As RTCA letters transmitting the study to both FAA and FCC last year explained, thanks to detailed information provided by both industries, it was “able to examine issues of compatibility more thoroughly . . . than were the earlier preliminary analyses submitted to the [FCC].” And the primary finding was as follows:

“The analysis found serious threats of harmful interference to today’s installed radar altimeters from anticipated flexible use licensed deployments, including from spurious emissions into the radar altimeter band.”

The report, with a cover letter from which the above-quoted material is taken, was submitted to both FAA and FCC on Oct. 8, 2020—more than a year ago. My engineering degrees are not in electrical engineering, so I have not attempted to read the RTCA report. But if you are interested, you can find it here.

As far as I can tell, FCC did not pay serious attention to this report. It went ahead with its spectrum auction, not informing potential bidders of the potential problem. FAA and DOT did, as I noted last month, send a letter about the problem to the National Telecommunications Information Administration (part of the Commerce Department), but it apparently did not get transmitted from NTIA to the FCC.

The RTCA report’s finding of a serious potential threat to aviation should have led to postponement of the spectrum auction. That it did not raises serious questions about the inability of our federal government to respond to a serious air safety problem before the only responsible alternative left was for FAA to restrict flying.  

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Rethinking Airport Charges and Regulation

Airports Council International (ACI) is fighting back against allegations from airline trade organization IATA that planned increases in airport charges are unwarranted (see “IATA Berates Airport and ANSP Fee Increases,” Aviation Policy News, October 2021). Last month ACI released “Beyond the Rhetoric: Some Hard Facts on Airport Charges and the Industry”

ACI’s Patrick Lucas begins by reminding the airlines that “airports are businesses in their own right,” and in fact are infrastructure-intensive businesses. When demand shrinks, as it has during the pandemic, although a large airport may be able to reduce operating expenses by shutting down one of several terminals, its capital costs must continue to be paid, mostly in the form of maintaining debt service payments on airport revenue bonds.

For all IATA’s complaints about rising airport charges to airlines, Lucas draws on data from IATA’s own World Air Transport Statistics showing that charges to airlines represent just 4 to 5% of airline operating budgets, and that percentage has actually been trending downward in recent years. On the other hand, these data show that “24% of all airport revenues come from charges that are levied on airlines,” and I will add that this fraction is much higher in the United States, where airports on average lag behind world airports on commercial revenues.

Building on this information, on November 23, speaking at the ACI World general assembly in Cancun, ACI Director General Luis Felipe de Oliveira argued that the time has come for a fundamental rethinking of airport charges to airlines. Given projected capacity needs as air traffic resumes, “airports need to be able to set charges with a commercial focus to attract the level of investment needed and to signal whether users are willing to pay for these investments,” as David Casey reported in Aviation Daily (November 25). Elaborating further, de Oliveira stated that:

“Where there is excess demand for airport capacity and expansion is difficult [e.g., London Heathrow], airport charges should play a critical role in signaling which airline operations would make the best use of the scarce capacity. Charges should signal the scarcity and whether the market is willing to pay for capacity expansion. Where there is a willingness, scarcity-based charges can be used to prefund much [capital expenditure]. On the other hand, where airport capacity is underutilized, there is a role for airport charges to provide incentives for new services to increase regional connectivity and hence maximize the economic and social benefits of air transport.”

This approach would overturn the widespread practice, especially in Europe, of cost-based regulation. It would be replaced by “commercial agreements between airports and airlines,” and even more radically, perhaps by “light-handed regulation,” as has been the mode of regulation in Australia since its major airports were privatized two decades ago.

In the December 2021-January 2022 issue of Aviation Intelligence Reporter, Andrew Charlton calls attention to a report prepared for ACI Europe by Harry Bush and Warren Mundy, “Lessons for Europe from Australia: A Review of Australian Airport Economic Regulation.” The regulatory approach in Australia is based on consumer welfare. If airport behavior is alleged to be anti-competitive (i.e, harming customers—airlines or passengers), government will review the situation to see if any action is warranted. While airlines oppose the policy, it seems to have worked well. Bush and Mundy sum up the lessons for Europe as follows:

“Regulators should avoid being distracted by surface turbulence and focus instead on the underlying economics and incentives influencing the parties. For the airport sector, the Productivity Commission finds that the light-handed monitoring regime (and potential for regulatory intervention if things go awry) is sufficient to safeguard the public and consumer interest, and has indeed delivered good outcomes.”

While European governments have generally accepted the idea that airports and ANSPs are businesses, and that their customers should pay for their services (as with any other utility), they have still imposed cost-based regulation, which is often at odds with sound economic management. Australia represents a working model of a better approach.

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Business Jet Travel Is Booming—and Subsidized

The Wall Street Journal’s Jon Sindreu reported on December 4 that “Plane Rentals Are Really Taking Off.” For example, “Business jet traffic is now up 45% worldwide relative to the start of 2019, compared with a 24% drop in commercial traffic,” per data from FlightAware. In response, “private-aircraft makers’ order backlogs are swelling, and used jet inventories are at record lows.”

Sindreu also reports that companies like Net Jets and Wheels Up are increasingly popular, because they allow corporate moguls and other wealthy people to fly in bizjets with no logos, making their luxury travel less visible. Demand for their business is more than these companies’ capacity, with many such companies putting people on waiting lists rather than signing them up immediately.

There are also pricing innovations. Fractional ownership (the Net Jets model) requires advance commitment for a minimum number of flight hours (say, $500,000 for 50 flight hours). So Wheels Up is now offering a three-hour flight for just $17,000—that’s only $5,667 per hour versus $10,000/hour under fractional ownership.

Sindreu notes that biz-jet travel is starting to come under the same kind of carbon-footprint scrutiny as airline travel. He notes that private jets account for only 4% of passenger air travel, whose global carbon emissions he puts at 2.4% of the global total. That means biz-jets account for less than a tenth of 1% of passenger aviation emissions. But when it comes to emissions per person, a Gulfstream G650 emits 244 kg per hour per passenger—about four times more than a Boeing 787. This is leading to discussions in Europe of per-passenger taxes which, to be fair, would need to be several times higher for business jet passengers.

Of course, when it comes to paying for aviation infrastructure, business jets nowhere pay their fair share. In the vast majority of the world, they pay weight-distance user fees for air traffic control services and weight-based landing fees. This is despite each bizjet requiring just as much ATC service and runway occupancy as a jet airliner. It’s even worse in the United States, where bizjets pay a tiny fuel tax that is half or less than half of what an efficient air navigation service provider charges (see my 2006 Reason policy study, “Business Jets and ATC User Fees: Taking a Closer Look”.

These below-market taxes and charges should be on the agenda for rethinking, as aviation policy makers consider dealing with the industry’s carbon footprint. One step in the right direction would be to scrap the ICAO-blessed weight and weight-distance methods of airport and ATC charges. Airports should charge for both landings and takeoffs, with variable rates as necessary to match demand with capacity. And air traffic control should shift to mileage-based rates that recover the full costs of providing ATC services. Any new carbon-related taxes should be considered only after the cross-subsidies inherent in current charging systems are removed.

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New Space Stations Will Increase Space Launch and Recovery Traffic

For most of the space age, the vast majority of space traffic was one-way: launches to orbit. Only when humans were occasionally on board (as in the Apollo and Space Shuttle flights) were there return trips to terra firma. Two developments are changing that. The first is reusable human-rated launch vehicles, which have dramatically reduced the cost of getting payloads into orbit. And the second, soon to come, will be a proliferation of space stations.

The International Space Station (ISS) is nearing the end of its useful life. It was originally intended to be shut down and de-orbited by 2024, but NASA now hopes to keep it in operation until about 2028. To its credit, the space agency has not proposed spending another $150 billion on a replacement. Rather, it is encouraging the growing space private sector to develop multiple commercial outposts in earth orbit, on which NASA will lease space. The new program is called the Commercial Low-Earth-Orbit Destinations (CLD) program.

In a recent report, “Private Space Stations: Placing Perches in the Sky,” The Economist provided an overview of what is going on. Blue Origin, for example, has announced plans for an outpost called Orbital Reef, to be developed in partnership with Boeing and Sierra Space. Lockheed Martin unveiled a plan for a permanently staffed station called Starlab, that it hopes to launch in 2027. Axiom has a smaller station under development, to be initially attached to ISS in 2024, and after several other modules are launched and added, the plan is to separate Axiom Station into a free-flying habitat with double the volume of ISS (which will then be de-orbited). The project’s estimated cost is $3 billion, not the $150 billion it cost taxpayers to build ISS.

These three are far from the only plans for permanently occupied orbital habitats. They will require far more launches and landings than ISS, and those launches will be carried out by a number of companies using mostly re-usable vehicles, as pioneered by SpaceX. This makes it all the more important for FAA to get its Space Data Integrator and Aircraft Hazard Area Generator fully operational, so as to minimize the aviation delays and flight detours currently required during space launches and recoveries.

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News Notes

Frankfurt-Hahn Airport Open for Bids  
The secondary airport 75 miles from Frankfurt, Germany, entered insolvency proceedings in October. The insolvency administrator last month issued a request for expressions of interest to investors interested in acquiring the airport or various of its assets. The airport is 82.5% owned by bankrupt Chinese firm HNA Group. It served 1.5 million passengers in 2019; Ryanair opened a base there in 1999, but passenger numbers have declined from a peak of 4 million in 2007.

Miami International Gets $1.1 Billion Cargo P3 Proposal
Debtwire reported last month that MIA received an unsolicited public-private partnership (P3) proposal to double the airport’s cargo capacity, consistent with the airport’s 2019 capital improvement objectives. The proposal came from Brazilian infrastructure investor CCR and aviation facility developer Airis. Cargo operations currently use 35% of MIA’s acreage but account for only 6.6% of total airport revenue.

Remote Tower Project Under Way for Budapest Airport
Indra and Micro Nav are joining forces, under a contract with HungaroControl, to develop a digital remote tower for Budapest Ferenc Liszt International Airport. While Indra is the prime contractor, Micro Nav will use its Beginning to End Simulation and Training (BEST) technology to create a complete simulation of the remote tower’s operation to train the controllers who will staff the new facility. When operational, Budapest will be one of the largest airports to date with a remote tower.

Amazon Air Beats Environmental Lawsuit Over San Bernardino Facility
The 9th Circuit Court of Appeals rejected a legal challenge to FAA’s 2019 approval of a 660,000 sq. ft. cargo sorting facility located at San Bernardino International Airport in southern California. The suit had been filed by former State Attorney General Xavier Becerra and local “environmental justice” groups, arguing that increased aircraft emissions due to the facility would be harmful, and were not adequately evaluated by FAA prior to its approval of the project. Plaintiffs argued that locating the facility at this airport constituted “environmental racism.” The court judged that FAA’s environmental review was acceptable.

Federal TIFIA Loan Program Expands Airport Coverage
Though used most commonly for surface transportation projects, the low-interest-rate TIFIA loan program has included some airport landside airport improvements. The new Bipartisan Infrastructure Law expands the definition of eligible projects to terminals, gates, noise compatibility, and conversion of service vehicles to low emission standards. Airport projects can account for up to 15% of TIFIA budget authorizations. Eligible project financing must have an investment-grade rating apart from any TIFIA loan.

Airport Authority May Take Over Bridgeport, CT Airport
The City of Bridgeport and the Connecticut Airport Authority (CAA) are discussing the possible takeover of money-losing Sikorsky Memorial Airport. The airport authority was created a decade ago to take several smaller airports off the books of Connecticut DOT. Possibilities include assisting with the airport’s planning or operating it under a lease. The CAA’s executive director was quoted in a news story saying that “commercial [air] service is within reach at Sikorsky Airport.”

Amsterdam Schiphol Plans Electric Tugs
As the first step in a long-term sustainability plan, Schiphol Airport will begin using electric tugs to taxi airliners to and from its newest (of six) runways. The pilot project will use two TaxiBot semi-robotic electric tugs, with the plane’s engines not running during most of the taxi-out time. The project requires new pavement for the tugs to drive back from the runway after towing a plane out and to travel to the runway to connect with an arriving plane. The overall aim is to achieve low-emission taxiing for all six runways by 2030.

Resilient Backup for GPS: Locata and UrsaNav
GPS World (Dec. 8, 2021) reports that two U.S. companies—Locata Corp. and Ursa Navigation Solutions—have joined forces to offer a resilient position, navigation, and timing (PNT) alternative to the GPS system that is vulnerable to interference, jamming, and anti-satellite attacks. Locata has been providing the U.S Air Force, NASA, and commercial firms with precise positioning and timing. UrsaNav offers electronic Loran positioning and timing information in an entirely different frequency band than GPS. The article points out that the recent European MarRINav Report recommended this Locata/UrsaNav combination to protect UK shipping, ports, and other key infrastructure sectors.

Progress on Preventing Contrails in Europe
The first live trial aimed at shifting flights to altitudes with atmospheric conditions less likely to lead to contrails has been completed after 10 months by the Maastricht Upper Area Control Center (MUAC) and German aerospace research center DLR. MUAC and DLR interpreted weather forecasts for ice-super-saturated regions and rerouted 209 flights to avoid them. Among the practical concerns were controller actions, the precision of meteorological tools, and the effectiveness of real-time feedback. The results are still being analyzed, and may lead to somewhat different approaches in the future. Separately, Etihad Airways announced a pilot project on contrail avoidance with atmospheric science firm Satavia.

Electric Aircraft Will Need Better Batteries
A white paper from the U.S. Department of Energy and NASA was released in October, addressing R&D needs for the growth of electric-powered aircraft. As summarized by Graham Warwick in Aviation Week (Oct. 11-24, 2021), a main finding of the study is that to move beyond small, light aircraft will require much better batteries than the automotive batteries being used thus far. The underlying problem is electricity output per pound of battery weight, which is not much of a problem in passenger cars but is a major problem for aircraft, where heavy batteries reduce payload and/or range. One cited example of progress is eVTOL startup Lilium partnering with Porsche-backed Customcells, which is developing “energy-dense silicon-anode batteries” that Lilium hopes to use in its aircraft.

New Terminal Planned for Phoenix Mesa Airport
The secondary airport for the Phoenix metro area now has nonstop jet service to 60 U.S. and Canadian destinations on five airlines. Officials think it’s time to replace the temporary four-gate terminal erected years ago when the airport was converted to passenger service. Plans call for adding a five-gate state-of-the-art terminal, though no cost estimate is currently available. Nor is there a financing plan, but local boosters hope that some of the $25 billion in new federal airport funding (in the Bipartisan Infrastructure Law) will be available for this project.

New Airport Operations Center at Rome’s Largest Airport
Aeroporti di Roma (ADR), owner of Rome Fiumicino Airport (among others), last month opened a new Airport Operations Center at Fiumicino. The 1900 sq. meters facility includes 112 workstations, so that airlines, airport, and terminal ATC people can interact directly in daily airport operations. The systems have been designed as part of the EU-wide SESAR program to improve air traffic management across Europe.

Miami International to Retain Limits on Retail Prices
After back and forth debate, the Miami-Dade County Commission voted on December 1st to retain limits on the prices of food and other retail offerings at Miami International Airport. The pricing rules require that retail prices at MIA’s various concessions be no more than 10 to 15% more than the same goods or services cost at non-airport locations. Commissioners had been told, incorrectly, that few airports impose such limits. Finding out that this is often common practice appeared to change the vote to favor retaining the limits.

Aviation Week Details Swiss Virtual Centers Plan
Last month’s issue of this newsletter included a News Note about Swiss ANSP Skyguide’s plan to shift to a single “virtual” air traffic center for the whole country, with controllers still reporting to work at the existing Geneva and Zurich locations. A detailed report on this important change is “The Long Winding Road” by Thierry Dubois in the Nov. 22-Dec. 5 issue of Aviation Week.

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Quotable Quotes

“Climate change should be fought with a price for carbon, research and development subsidies, and highly scrutinized public investments; not by rationing flights, promoting green national champions, or enlisting central banks to distort financial markets.”
—Editorial, “The Triumph of Big Government,” The Economist, Nov. 20, 2021

“I spoke with one of the managers from Jacksonville Center recently. He told me that during the pandemic, controllers have been working there only three days/week. The other two normal workdays are administrative (at home with duties, but available to come to work to cover for sick call-ins). He said when called to cover for sick controllers, those on administrative duties usually advised that they are sick as well. He said this arrangement is resulting in extraordinary amounts of overtime.”
—Ed Drury (retired FAA manager), email to Robert Poole, Dec. 7, 2021 (used with permission)

“European governments, unlike governments in most other parts of the world, decided that the users of airports and ANSPs should pay for those [facilities]. From the societal perspective, this is fair. The wealthier in the population, who can afford to fly regularly, should pay for the use of the infrastructure, rather than impose the cost on all of society through general taxation. Running an ANSP or an airport is expensive. A slab of concrete four kilometers long and 50 meters wide, and a building that sees millions of pairs of shoes crossing its thresholds every year, need to be renovated from time-to-time. Nonetheless, at many airports, airlines have managed to pull a quick one on their regulators. They have convinced governments that airport charges should be ‘cost-related’ but then they [airlines] pocket the value of the airport slot. That topic, fascinating and unending, needs to be addressed as a matter of some urgency.”
—Andrew Charlton, “Charges! Knights-Errant Airlines Attack Airport Windmills,” Aviation Intelligence Reporter, December 2021-January 2022

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The post Aviation Policy News: Vertiports for regional air mobility, Congress oblivious to changing airline competition, and more appeared first on Reason Foundation.

• 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”.

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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.

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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.

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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:

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. 

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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.

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More on FAA and Remote Towers

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.

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News Notes

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.

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Quotable Quotes

“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

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The post Aviation Policy News: Bipartisan infrastructure bill and airports, FAA vs. FCC on 5G, and more appeared first on Reason Foundation.

• Over-hyped airport flow-management tool
• U.S. control tower debacle
• IATA vs. airports and ATC providers
• Vertiports planned for Florida
• Increased air safety over the North Atlantic
• A tale of two airport surveys
• News Notes
• Quotable Quotes

Much Ado Over New NextGen Tool for Airport Flow Management

Popular media were full of stories about the release of a new tool for air traffic controllers to minimize long conga lines of departing flights, lined up on taxiways burning fuel and emitting CO2, while frustrating passengers. The reality, unfortunately, is considerably less exciting than most aviation media have conveyed.

The tool emerged from NASA’s ongoing Airspace Technology Demonstration 2 (ATD-2). It will be integrated into FAA’s Terminal Flight Data Manager (TFDM), the NextGen airport surface management program. It was tried out at Charlotte (CLT) and Dallas/Ft. Worth (DFW) airports and the FAA/NASA news release provided performance improvements documented during the CLT testing. By using an array of airline, air traffic control, and weather information, the tool aims to release aircraft from the gate so they can taxi out only when it is “optimal” to do so without a long delay on the taxiway. So the tests at CLT measured reductions in fuel burn, CO2 emissions, and delay hours.

FAA’s plan is to roll out the new tool to the 27 busiest airports over the next 10 years. Why 10 years? According to Alan Levin’s Sept. 28 Bloomberg article, “It will take an estimated 10 years to customize the system for each of the airports, all of which have unique layouts, according to FAA.” This sounds a lot like FAA’s Metroplex rollout, which is still under way at major airports more than a decade after it began.

Deciding on the “optimum” time for pushback from the gate is very difficult. What might be optimum for reduced fuel burn may be far from optimal for a departing flight that is already late (due to a late arrival, or any number of other factors). Another very real constraint is that gates are a scarce resource at most of the targeted airports. When an arriving flight lands but finds its gate occupied due to the new tool holding up that plane’s departure, then the arriving plane, in most cases, waits with its engines running until the gate opens up. (This happens to me a lot when traveling.) These kinds of gate conflicts occur more often than they should, in part because airlines often schedule more flights in and out per hour than an airport can handle. So I don’t expect overwhelming savings from this new tweak to TFDM. But let’s go to the numbers from the testing at Charlotte Douglas International.

As reported in NASA’s news release, those tests showed the following savings:

• Fuel savings: 275,000 gallons per year
• Reduced CO2: 8 tons per day
• Reduced delays: 916 hours over four years.

You might wonder why these three key metrics each have different time periods. (And by the way, NASA also included whiz-bang comparisons for each, e.g. the fuel savings would be enough to fly 185 Boeing 737 aircraft between New York and Chicago.) Things look a bit different when you put all three metrics on a daily basis. Thus revised, they are as follows:

• Fuel savings: 753 gallons per day
• CO2 reduced: 8 tons per day
• Delay hours reduced: 0.63 hours per day (37.6 minutes).

And if we then take those daily figures and divide them by the average number of daily departures from Charlotte (around 700), we get the following:

• Fuel savings: 1.1 gallons per departure
• CO2 reduction: 20 pounds per departure
• Delay reduction: 3 seconds per departure.

I guess NASA assumed Americans are math-challenged, and judging from what I’ve read, including in aviation-focused media, many people were taken in by NASA’s various topline estimates for reducing flight delays, fuel usage, and carbon emissions that are far less impressive than they seem.

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The Ongoing U.S. Control Tower Debacle

Every time I see an article about a U.S. airport needing an air traffic control tower, I wonder if the FAA is living in a separate world from the rest of us. As I’ve been reporting for the last seven years, across much of Europe remote/digital air traffic control towers are going in, both as replacements for conventional towers and as towers for smaller airports that have lacked tower services. Most recently, the control tower needs of Tampa, FL, and Bend, OR, have been in the news.

Tampa’s 49-year old tower is “deteriorating,” Rep. Kathy Castor (D-FL) told the Tampa Bay Times, and it sounds as if she’s right. Controller complaints include sometimes-inoperative elevators, heating and air conditioning problems, cracked windows, broken water pipes near electrical wiring, and plumbing and sewage problems. In the same article, an FAA spokesperson said the agency “looks forward to the passage of this once-in-a-generation funding” to fix such problems. And Rep. Castor has written to Transportation Secretary Pete Buttigieg and FAA Administrator Steve Dickson, pleading for a new tower.

This is the age-old political game. Congress spells out the FAA budget, focusing on new ribbon-cutting opportunities for its members (“See this wonderful new tower I brought you!”) while allowing FAA to skimp on ongoing maintenance of a whole flotilla of aging facilities, many of which could be consolidated. And because FAA sticks with the very costly 20^th-century model of a tall building with windows as the controllers’ means of keeping track of arrivals and departures, the cost of each replacement tower is likely twice what a remote/digital tower at ground level would cost to install and maintain.

Besides being a lot more costly (meaning fewer such towers can be built each funding cycle), conventional air traffic control tower performance lags that of remote towers with infrared as well as conventional video cameras and other digital features that enable controllers to “see” flights in rain, fog, and other adverse conditions, as well as avoiding runway incursions.

FAA and Congress, ever since the Reagan and Clinton administrations, have taken a somewhat more cost-effective approach to towers suitable for smaller airports that historically have lacked towers. The FAA Contract Tower (FCT) program has provided new towers that cost less to build and much less to operate than comparable towers at FAA-towered airports. Bend Municipal Airport is Oregon’s third-busiest but still lacks a tower. It was accepted last fall as a candidate for FCT, and it’s working on getting a consultant to wend its way through the process. Yet, the FCT program still does not include the option of a lower-construction-cost remote/digital tower (despite Congress authorizing this in 2018). As I have reported periodically since 2014, the two state-initiated remote tower projects (at Leesburg, VA, and Loveland, CO) are still struggling to gain final FAA certification after years of operational testing.

This is ludicrous. The FAA was once regarded, correctly, as operating the best and most advanced air traffic control system in the world. Sadly, that is no longer true, and the absence of remote/digital towers in the National Airspace System is an embarrassing case in point.

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IATA Berates Airport and ANSP Fee Increases

A war of words broke out last month, initiated by Willie Walsh, the head of the International Air Transport Association. In an Oct. 4 news release, Walsh lambasted airports and air navigation service providers (ANSPs) for planned rate increases starting in 2022. Walsh referred to “confirmed airport and ANSP charges increases” of $2.3 billion announced thus far as “outrageous.” This is rather hypocritical coming from the head of an airline industry that, together with airports, has received $225 billion in COVID-19 grants and loans from governments, the lion’s share of which has gone to airlines.

At the World Routes 2021 conference in Milan on Oct. 10, Airports Council International-World Director General Luis Felipe de Oliveira described Walsh’s blast as disappointing and not “part of the good spirit of the industry.” Airports have taken huge hits during the COVID-19 pandemic, as their revenues collapsed, and while they were able to cut some costs, many had to use reserve funds and/or equity injections from shareholders to avoid defaulting on their bonds. The idea that they should not begin increasing rates and charges as air travel recovers is bizarre. He also pointed out that ANSP and airport charges in 2020 together made up only about 5% of airline operating costs that year.

Compared with airlines and airports, ANSPs have received little or no government bailouts during the pandemic. Yet, because their air traffic management systems had to remain operational (for air cargo and the limited amount of passenger airline traffic), ANSPs had very few options to reduce their operating budgets. Airports could close down some terminals, but ANSPs could not close down some sectors.

ANSPs in Europe did get one break, thanks to Eurocontrol, which provides high-altitude air traffic control services in the MUAC flight information region but also bills and collects ATC charges across Europe on behalf of the ANSPs of each country. In April 2020, Eurocontrol’s 41 member governments agreed on a plan under which $1.2 billion in ATC charges to airlines would be deferred to 2021, and to cover ongoing ANSP costs during this deferral, the 41 member governments approved a Eurocontrol loan of $1.38 billion for short-term compensation of ANSPs. The underlying premise, of course, was that ANSP charging would resume in 2021 and might well have to be increased in 2022 and beyond.

The International Air Transport Association (IATA) and Walsh later in October blasted a proposed increase in the regulated airline charges at London Heathrow (LHR). Under the U.K. government’s RPI Minus X regulatory regime for the largest U.K. airports, the Civil Aviation Authority (CAA) reviews an airport’s capital and operating costs every five years and estimates a reasonable increase or decrease in airline charges. The preliminary announcement was that the CAA was looking into an increase from the current average charge per passenger of £22 to between £24.50 and £34.40. While the CAA conducts discussions with LHR stakeholders on the final five-year charging scheme, an interim £30/passenger model will be implemented.

Since Heathrow is in the early stages of planning and design of its third runway, and also has to recoup pandemic losses, this seems reasonable to me, given LHR’s £2 billion operating loss in 2020.

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Vertiports Being Planned for Florida and Elsewhere

NASA continues to research the potential roles of eVTOL and other electric-powered aircraft for both Urban Air Mobility (UAM) and Regional Air Mobility (RAM). UAM’s focus is primarily on air-taxi services within a metro area, while RAM concerns short-haul service between cities up to several hundred miles apart. My current assessment is that the market for RAM is likely to be far larger than that for UAM (which strikes me as a luxury niche market that might replace urban helicopter services that have never become profitable businesses). But these are early days, and I might be wrong. Either type of new air travel that involves vertical takeoffs and landings (VTOL) will require the development of vertiports, and there are a number of recent developments on this subject, two of them in Florida.

NASA Ames has released a GIS (geographical information system) model to assist transportation planners in figuring out suitable locations for new vertiports. Late last month it was reviewed by transportation planners in Hillsborough County (Tampa), Florida. Brian Pessaro of the Tampa Bay Area Regional Transit authority (TBARTA) and NASA’s Kapil Sheth explained how the model works based on its initial assessment of potential Hillsborough County vertiport sites. The most promising locations were in or near downtown Tampa and at Tampa International Airport.

The same Sept. 27 Catalyst article included the news that neighboring St. Petersburg’s Mayor Rick Kriseman has held talks with eVTOL company Lilium about possible service in the region. Unlike most eVTOL air-taxi developers, Lilium is focusing on somewhat larger aircraft aimed at trips between cities several hundred miles apart (i.e., RAM). Back in January, it announced a framework agreement with Ferrovial Airports, one of the world’s largest airport companies, to develop a network of vertiports in Florida, starting with a hub vertiport in an Orlando suburb. Lilium’s chief operating officer, Dr. Remo Gerber, said then that its strategy is to locate Florida vertiports such that nearly all 20 million Floridians will live within 30 minutes of one of these vertiports. In late October, Ferrovial Airports announced the launch of a U.S. headquarters for its Ferrovial Vertiports business, to be located initially in Dallas.

Another vertiport development plan was announced last month. Hyundai and U.K. startup Urban-Air Port unveiled plans to develop 65 vertiports at key locations in the U.S., U.K., European Union, and Asia Pacific. The first vertiport is scheduled to be opened early next year in Coventry, England. Their concept is a compact, modular design to enable vertiports to be located in dense urban areas and potentially to be moved to a different site as the UAM sector expands. Hyundai is investing $1.5 billion in UAM, partly to support Urban-Air Port but also to develop its own eVTOL for service beginning in 2028.

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Increased Safety in North Atlantic Airspace

The vast majority of people flying across oceans likely, and understandably, have no idea how air traffic has been managed in vast airspaces where there is no radar surveillance. If you told them about “procedural” separation, under which pilots periodically call in their estimated position via unreliable high-frequency (HF) radio, and may then be out of contact for as much as 45 minutes, many of those passengers would likely be aghast. And if they thought a little further and wondered what would happen in an emergency, or if a plane drifted off track, some might have reconsidered flying across an ocean at all.

The good news is that the advent of space-based ADS-B global surveillance has changed all that. Controllers now can see the position, altitude, and speed of every aircraft with those and other data elements updated every eight seconds, thanks to this system developed and operated by Aireon. An excellent update on ADS-B in the North Atlantic appears in the current issue of Air Traffic Technology International 2022: “Changing Tracks in the North Atlantic,” by aviation reporter David Hughes. While Hughes covers an array of topics, including improvements in aircraft performance and fuel savings (due to getting their requested optimal altitudes far more often), in this article my focus is on the increased safety of oceanic flying in those airspaces (such as the North Atlantic) where the ANSPs subscribe to Aireon’s real-time surveillance data.

As part of his research for the article, Hughes visited an Aireon facility and learned that thanks to the system’s constellation of 66 satellites, an aircraft can be under surveillance by as many as seven satellites at a time, providing considerable redundancy. One of the problems with “procedural” separation has been the long time delays between a plane drifting off its assigned track or altitude and potentially heading for a collision without the controller knowing this. Another problem was a pilot deciding to deviate due to some problem but not notifying a controller until many minutes later. Today on the North Atlantic, with updates every eight seconds, controllers quickly see a change of direction, altitude, or other deviation and can communicate with the pilot via controller-pilot datalink (now on about 90% of aircraft traversing the North Atlantic).

Ever since global altitude separations were reduced in the 1990s, the ANSPs handling the North Atlantic had not been meeting their risk target for collisions (the chance of a fatal collision being no more than 5 x 10^-9 per flight hour). But thanks to ADS-B quickly alerting controllers to deviations, the safety risk has been reduced 76% from pre-ADS-B levels in the past several years.

Another safety benefit is Aireon Alert, offered at no charge to aircraft operators and ANSPs. In the event of a surveilled aircraft ceasing to broadcast, the alert system provides any ANSP and rescue organization that has signed up the most recent 15 minutes’ worth of flight data, enabling a faster and more accurate search and rescue effort. Aireon Alert was developed and is operated in partnership with the Irish Aviation Authority. As of the Hughes article, 308 ANSPs, rescue services, and others have signed up for the service, along with 145 airlines.

While the safety and operational benefits of space-based ADS-B are being realized every day in North Atlantic airspace (the responsibility of Nav Canada and NATS), no such service is in operation over the Pacific Ocean, whose largest flight information regions are FAA’s responsibility. Officially, FAA is still studying possible applications for the service in the Caribbean, which would be beneficial, but it has said nothing about bringing the safety and efficiency benefits to the vast Pacific oceanic airspace. Maybe it’s time for the FAA Management Advisory Council to push harder on this subject.

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A Tale of Two Airport Surveys

With the results of the annual J.D. Power Airport Customer Satisfaction Survey being released last month, I thought it would be interesting to compare these results (for U.S. airports only) with the latest Skytrax World’s Top 100 Airports survey. Both are carried out by professional firms, surveying only U.S. air travelers in the first case and global air travelers in the second.

First, kudos to the top-scoring U.S. airports as ranked by their passengers. In the “large” airport category the top five are:

1. Louis Armstrong New Orleans International [with a brand new terminal]
2. Tampa International [ongoing major upgrades]
3. Raleigh-Durham International
4. Dallas Love Field
5. Salt Lake City International [also a major new terminal]

And in the “mega” airport category, here are the top five U.S. airports:

1. Miami International
2. New York’s Kennedy International
3. Minneapolis-St. Paul International
4. Orlando International
5. Phoenix Sky Harbor International

Congratulations to these winners, as judged by U.S. air travelers.

The Skytrax survey of global air travelers involves mostly airports with large fractions on international flights. So it’s not surprising that none of the five “large” airports in the J.D. Power survey appears in the Skytrax top 100. What is especially interesting, however, is the relatively low Skytrax rankings of U.S. large and mega airports with lots of international travel. Of the top five in the J.D. Power mega category, only JFK (#77 in Skytrax), MSP (#81), and PHX (#83) appear in the Skytrax top 100. Only four U.S. airports make the top 50 in Skytrax:

Houston Intercontinental (#31), Cincinnati/Northern Kentucky (#34), Denver (#37), and Atlanta (#41). Ten other U.S. airports are in the bottom 25 in the top 100, including JFK (#77), MSP (#81), BOS (#82), PHX (#83), and DTW (#95).

To be sure, the world includes a much larger array of airports for global travelers to evaluate, but to repeat a point I made in a recent policy study, one explanatory variable seems to be ownership form. Of the top 25 airports in the Skytrax survey, 11 are either wholly or partly privately owned (e.g., Copenhagen, Heathrow, Frankfurt, Vienna) or privately financed and managed under long-term public-private partnership arrangements (e.g., Cape Town, Kansai, Melbourne). And of the Skytrax top 50, which includes only four U.S. airports as noted above, 27 are private or P3 airports.

These two surveys show what relevant groups of air travelers think of the quality and performance of the airports they use. That so few U.S. airports make the global top 100 should serve as a wake-up call for the owners of America’s airports. Yes, some are seen as better than others, but most are likely not as good as they could be, as assessed by international air travelers.

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News Notes

San Antonio Seeking Proposals for Airport Connector
The Alamo Regional Mobility Authority has issued a Request for Qualifications and Proposals (RFQP) for a project to transport people between downtown San Antonio and its international airport (SAT). The winning team would design, build, and possibly finance and operate the new facility via a public-private partnership (P3) agreement. In response to a Request for Information issued in 2019, the most substantive response was a proposed tunnel from Elon Musk’s The Boring Company. The RFQP asks respondents to include a project concept, preliminary cost, financial feasibility, and project delivery approach. Interviews with short-listed teams are planned for January 2022.

French Airports Challenge Mandated Shift to Rail
The trade association of French airports (UAF), along with ACI-Europe, has filed suit in Brussels over a new French law that bans domestic flights for which a rail alternative with a trip time of 2.5 hours or less exists. This would ban flights between Paris Orly and Bordeaux, Orly and Nantes, Orly and Lyon, and between Lyon and Marseille. The law excludes flights operating as connectors to hubs. The measure would become effective in spring 2022. UAF and ACI-Europe argue that the CO2 savings from the measure are miniscule compared to the negative effects on the airports and airlines involved.

Another Australian Airport Privatized
Jandakot Airport in Perth has been sold in a deal worth $946 million. The buyers were investment fund Dexus and property group APN Industrial REIT, with Dexus having two-thirds of the ownership. While not the primary commercial airport in Perth, Jandakot is one of the busiest secondary hub airports in Australia. Dexus manages a portfolio of properties valued at $23 billion.

SpaceX Starlink Satellites Provide Alternative to GPS for Location Function
Researchers from Ohio State University’s Center for Automated Vehicles Research with Multimodal Assured Navigation (CARMEN) have figured out how to use signals from the growing SpaceX constellation of low-orbit Starlink satellites to identify a location on earth within an accuracy of 8 meters. Doing this required using signals from six of the 1,700 satellites in the current constellation. Because they are in much lower orbits than GPS satellites, the signals are much stronger and less subject to interference. The researchers told GPS Daily that as the constellation grows to as many as 40,000 satellites, the precision of the location information should improve considerably.

Belgium To Unify Air Navigation
Three former providers of air traffic services over Belgium have announced a plan that leads to a single unified air traffic management system by 2027. Historically, the Ministry of Defense has operated its own air traffic system, but recently it switched to Shared Air Traffic Services System 2 (SAS2) developed and operated by the Maastricht Upper Area Control Center (MUAC), which is responsible for upper airspace (above 24,500 ft.) over Belgium and adjacent countries. That left Belgian airports, operating their own Aircat system for control towers and non-military low-altitude airspace. These two systems will be replaced by SAS3, planned to be operational by 2027. MUAC told Aviation24 that the SAS system is based on the virtual center concept developed by MUAC and the Royal Netherlands Air Force and used by the Belgian Air Force (as SAS 2) since 2019.

LaGuardia Air Train Project on Hold
New York’s new governor, Kathy Hochul, has asked FAA and the Port Authority of New York and New Jersey to review alternative transit options to the previously FAA-approved plan for the new rail link from LGA to an existing station served by the No. 7 subway line and the Long Island Railroad. Based on previous analysis, the Port Authority has defended the plan as the least-destructive to Queens neighborhoods, but continuing NIMBY and environmental group protests have led to this new delay for the proposed $2.1 billion project.

Denver Signs First Contracts for $1.2 Billion Runway
Despite already having six long and widely separated runways, Denver officials have let $83.5 million worth of contracts to begin planning and environmental review for a seventh runway. The airport property has room for up to 12 runways on its huge acreage. Chicago O’Hare leads the nation with eight runways, and DFW is next with seven. The three contracts approved by the city council go to AECOM, HNTB, and Jacobs Engineering.

Eurocontrol Awards $203 Million Contract for Its Network Manager Role
Spanish company Indra has won a major contract to digitalize the data used to manage high-altitude airspace across Europe. The aim of the project is to enable Eurocontrol’s network manager function to improve air traffic flow management. Digitalization will lay the basis for Eurocontrol’s planned integrated Network Management system, which will coordinate airport slot availability based on the time of an aircraft’s departure.

United Objects to Newark Slot Decision
FAA’s decision to re-allocate 16 vacant EWR slots (eight arrival-departure pairs) to a low-cost or ultra-low-cost carrier, to increase competition at this United fortress hub, has drawn objections from United. Since the slots are all at peak times of day, United claims the decision will worsen congestion during those peak periods. This ignores the fact that those 16 slots were previously used by Southwest, which freed up the slots by exiting EWR in 2019. It also ignores the legal option available to EWR and other airports with peak-period congestion to increase its landing fees during peaks, as privatized U.K. airports Heathrow and Gatwick have done for many years.

New Haven Approves Airport Lease Deal
At its September 23 meeting, the Board of Elders of New Haven approved the 43-year P3 lease between Tweed New Haven Airport (HVN) and AvPorts. The company has committed to building a new passenger terminal, in addition to extending the runway to handle fully loaded 737s like those planned to be based there by start-up airline Avelo.

GAO Points to FAA Metroplex Problem
FAA’s Metroplex plan to implement performance-based navigation (PBN) procedures in the airspace serving the nation’s 21 largest metro areas has been slowed down considerably by citizen complaints over increased noise exposure. In GAO-21-103933, the Government Accountability Office offers some possible remedies. First, it suggests relying not just on a single Day-Night Average Sound Level (DNL) to measure airport noise, since perceived noise depends a lot on flight frequency as well as actual decibel levels. Second, it suggests using supplemental metrics (in addition to DNL), like those used in designing new flight paths, to explain projected changes in noise from the altered PBN approach and departure plans.

AOPA Objects to Nassau Passenger Charge
The Lynden Pindling International Airport in Nassau, Bahamas has proposed a $28 passenger facility charge for individuals arriving from overseas on private aircraft. The revenue would be spent on funding “major construction projects to better serve GA passengers and reduce their delay impact on commercial flights and passengers.” The November issue of AOPA Pilot magazine criticizes the proposed PFC as “creating a disparate cost burden on GA flights, likely curtailing economic benefits.”

Inspector General Plans Audit of FAA Staffing and Training
In an October 12 news release, the DOT Office of Inspector General (OIG) announced a self-initiated audit of how FAA selects, trains, and allocates controllers for the agency’s more than 300 staffed facilities. The audit will include assessing the impact on controller training of COVID-19.

U.K. Civil Aviation Authority Takes on Space Flight
New U.K. statutes add responsibilities to the CAA’s charter. They include space launch licensing, spaceport licensing, range control services, and satellite operations. The CAA announced that it intends to be a light-touch regulator of space-related activities, as it has been for civil aviation. For more detail, see “UK Regulator Limbers Up for Space Role,” Tony Osborne, Aviation Week, August 9-29, 2021.

DFW Expands Concourse Using Six Modular Units
In a U.S. first, a DFW Airport contractor built six terminal modules in a prefabrication yard on airport property and between August 26 and September 9, transported them across the airfield and hoisted them into place. The modules averaged nearly 960,000 lbs. (480 tons) and were each moved by a 64-wheel transporter. As installed, the modules are 60% completed, and finishing and testing plans call for the new terminal space to be opened by summer 2022.

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Quotable Quotes

“Paternalistic governments have dug deep into their pockets during the pandemic. Between its onset and March this year, public handouts to aviation exceeded $225 billion globally, IATA calculates. This largesse helps explain why fewer carriers entered bankruptcy worldwide in calamitous 2020 (43 of them) than in 2018 (56) or 2019 (46) according to Cirium. Even if cash infusions tide some airlines over, though, they are no cure-all. On the contrary, they may prove poisonous. As Mr. Morris of Cirium politely puts it, state support leads to ‘inappropriate cost bases.’ One careworn observer remarks that Air France-KLM, a Franco-Dutch entity, has been ‘paid by the government not to restructure.’ France wants to save as many jobs as possible, and the Netherlands to ensure that Schiphol in Amsterdam remains a big connecting airport. Neither objective has much to do with returns.”
—“The Airline Business: Dark Skies and Silver Linings,” The Economist, July 10, 2021

“Speaking at an ACI-Europe symposium in June, Jon Phillips of the Global Infrastructure Investors Association noted that his members, which invest in a range of infrastructure, including pipelines, water, electricity distribution, and so on, as well as airports, currently have $200 billion sitting on the sidelines, waiting to invest. The GIAA experience of airport regulation is threefold: it varies considerably by country; the regulators go to a remarkably deep level of granularity reviewing and regulating so that the ability of airport managers to actually manage commercially is limited; and that generally, there is a populist focus on rates going down now instead of addressing longer-term issues.”
—Andrew Charlton, Aviation Intelligence Reporter, July 2021

“In general [electric propulsion] works better for ground transportation than air. Batteries are heavy, and even when their charge is depleted, they remain heavy. The kerosene burned by jet engines packs a lot of energy for its weight, and once used, it’s gone, and the plane gets lighter. Unless there are big changes in battery technology, the weight required to fly large airliners with passengers and cargo over long distances doesn’t work.”
—Scott McCartney, “Electric Planes and a Refund Surprise,” The Wall Street Journal, Sept. 27, 2021

“At home, we definitely need a sovereign capability for when space is denied by solar weather or our adversaries. Also to be a check on space signals because our adversaries and criminals are spoofing them more and more. I have always thought eLoran was a good choice. The UK pioneered its development and had the world’s first operational system in 2015. It is really hard to interfere with the signal, and there are other features that could be added to it that would make it even more robust. There was a very interesting report called MarRINav put out last year about what UK maritime needs to ensure it can navigate regardless of whether the satellites are working or not. They came up with a reasonably inexpensive combination of systems anchored by eLoran.”
—Admiral Lord West, quoted in Dana Goward, “Galileo, OneWeb, and the UK’s Sovereignty Way Forward,” GPS World, Sept. 15, 2021

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The post Aviation Policy News: Airport emissions and delay management tool, air traffic control tower debacle, and more appeared first on Reason Foundation.

• Answering questions about Reason’s airports P3 lease study
• Aviation and climate change policies
• Dealing with in-flight turbulence
• Addressing small drone safety
• Aviation security: The legacy of 9/11
• News notes
• Quotable quotes

Responses to Reason Airports P3 Lease Study

Last month, Reason Foundation released a study estimating that 31 large and medium hub airports could have a market value of $131 billion, which their city, county, or state government owners could monetize to invest in other infrastructure, pay down debt, and/or reduce their unfunded public employee pension system liabilities.

As I expected, there has been considerable media interest in the study, especially in metro areas where the 31 airports are located. You can read some of the national media coverage at Bond Buyer, Forbes, and Governing and some of aviation-focused media reporting by Aviation Week (subscription req’d), Aviation International News, Aviation Pros, Flyer Talk, and Transportation Today. In addition, the study has been the subject of discussion and debate online and in various aviation and transportation discussion groups so I thought it would be useful to respond here to a number of the concerns expressed.

Several knowledgeable aviation people have criticized the report’s use of a single “high” multiple of earnings before interest, taxation, depreciation, and amortization (EBITDA) as inherently flawed to measure what a particular large or medium hub airport might be worth in a lease deal. That of course is correct; any actual offer would be based on a bidder’s assessment of that specific airport’s operating costs, need for improvements, potential traffic increases, ability to expand capacity, and many other factors. One purpose of the study was to help make airport owners (the city, county, and state governments that own these specific 31 airports) aware that they are sitting on a very valuable asset on which they are currently not getting any direct financial return, due to federal law. The report helps provide the latest on the global move toward investor ownership and global airport company operation of numerous large and medium airports in Europe, the Asia/Pacific region, and Latin America and the Caribbean. The study also explains that, under the 2018 Airport Investment Partnership Program, it is now quite legal to lease their airports long-term via a public-private partnership. While the management staff at these U.S. airports are probably well aware of these trends and developments, some elected officials of these government owners may not be.

Another criticism has been that our EBITDA-multiple estimates of market value understate many airports’ likely value. We had extensive internal debates on the valuation methodology, as well as discussions with the study’s external peer reviewers. We decided to use conservative value estimates, reasoning that it was better to be proved wrong on actual bids higher than we estimated than to be criticized for overly optimistic estimates. In this context, I was pleased to see that the current public-private partnership (P3) company that operates Sydney International Airport (SYD), after rejecting two bids as too low, has now opened negotiations with the team of IFM Investors and Macquarie on a revised $17.4 billion offer for the remaining years of Sydney’s 50-year P3 lease. That is close to our study’s $17.8 billion “high” estimate for Los Angeles International Airport, an airport with twice the annual passengers of SYD.

An airport consultant friend pointed to one of the failed bids for Chicago’s Midway Airport (MDW) a decade ago as having worked out a deal structure with its airlines (mainly Southwest) that could not cover airlines’ share of MDW’s capital and operating costs. That deal structure (a short-term freeze on rates, followed by annual Consumer Price Index-based increases) is basically the same template that won airline approval of P3 leases in San Juan (operational), St. Louis, and Westchester County. What the consultant neglected was the potential not only for cost reductions but also for improved management to produce increases in non-aeronautical revenue (parking, rental cars, retail concessions, etc.). Both Chicago airports in the study rank near the bottom in the fraction of airport revenue that comes from non-aeronautical sources—just 35% at MDW and a pathetic 27% at O’Hare. U.S airports generally perform well below investor-run airports overseas, which often get 60% or more of their revenue from non-aero sources. Of the 31 airports in the Reason study, 14 generate less than 50% of their revenue from non-aero sources.

Several aviation people raised the question of a higher cost of capital since U.S. airports (unlike their overseas counterparts) finance capital projects via tax-exempt debt. Those bonds must be retired in the event of a change of control (such as a long-term P3 lease), as the study noted in subtracting outstanding bonds from the estimated asset value. And yes, all financing done by the P3 company will have to be done at taxable rates, unless and until Congress changes the tax code. The 2018 White House infrastructure plan outline called for allowing a P3 company to take over and continue to pay debt service on existing transportation entity tax-exempt bonds. And Congress many years ago allowed surface transportation P3 companies to issue tax-exempt private activity bonds for improvement projects. In the absence of such a change, the question becomes: Are the benefits of a P3 lease high enough to offset the higher average cost of capital? Part 2 of the study summarizes research demonstrating very real benefits from investor-run airports.

One other criticism was a reminder that a handful of U.S. airports have a grandfathered exemption from the FAA grant assurance that forbids revenue diversion to non-airport uses. Table 4 in the study shows the annual revenue diverted to the six grandfathered jurisdictions that own airports in the study. Except for the state of Maryland ($155 million per year), the amounts are trivial, ranging from $5.6 million to $26.5 million per year.

I’ll stop here, but welcome hearing other concerns from aviation professionals and airport owners.

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Aviation and Climate Change Policies

I’m increasingly concerned about the kinds of policy ideas being considered, especially in Europe, to restrict the scope of air travel in the name of reducing aviation’s impact on global climate change.

For example, discussions are under way within the European Union about banning short-haul flights, which has been partly implemented thus far by Austria and France. A “moderate” policy from the International Energy Agency (IEA), called its Net Zero Emissions (NZE) plan, would require airline passenger miles to grow by only 3% a year compared with pre-pandemic growth of 6% annually. A French study asserted that it will be common by 2040 for an A320 to have to leave 30 seats unoccupied in the three summer months, due to much higher temperatures in 2040. Aviation Week even published a guest editorial reporting that several studies on the impact of the CO2 emitted by an airliner over its life found that this would lead to 226 deaths by the end of this century. The author, Dan Rutherford, suggested that airliners with emissions this high could (should) be deemed unfit to fly by safety regulators.

When I read assertions of this kind, my first question is: based on which Intergovernmental Panel on Climate Change’s (IPCC) scenario? The IPCC’s periodic reports focus on five climate change scenarios. The one that gets the most attention in the summary for policymakers is called RCP8.5 and is described as the “business as usual scenario.” Yet this scenario, whose underlying assumptions are largely unchanged from the first IPCC report in 1990, assumes a six-fold increase in global coal consumption per capita by the year 2100. That is at odds with the IEA’s conclusion that fossil fuel energy emissions have likely peaked and will be going down between now and the end of the century. The latest IPCC report, dubbed its sixth assessment report (AR6), retains a slightly modified version of RCP8.5 called SSP5-8.5. That unrealistic scenario (because it does not include numerous actual and proposed policy changes) has a best-estimate temperature increase by 2100 of 4.4˚ Celsius (C). By comparison, the mid-range scenario (SSP2-4.5) has a far less-drastic best estimate of 2.7˚ C. That’s still higher than anyone would want, but far less damaging than the SSP5-8.5 scenario.

For some additional aviation context, a webinar presentation by Valerie Masson-Delmotte of France’s Institut Simon Laplace reported that aviation accounts for 3.5% of global anthropic radiative forcing, a far better measure of impact than aviation’s CO2 emissions. As Thierry Dubois reported in Aviation Daily (March 15, 2021), Masson-Delmotte noted that “non-CO2 effects represent two-thirds of that contribution.” Thus, aviation’s CO2 emissions account for only 1.16% of anthropic radiative forcing. The other impacts are due to contrails, water, and nitrous oxide emissions, which are likely easier to reduce than CO2.

It is important for the commercial airline industry to dig into the IPCC models so as to distinguish between hyperbole (based largely on the highly implausible RCP8.5) and the more realistic scenarios. Aviation climate change policies must be based on scenarios that reflect ongoing changes in countries’ energy use, demographics, etc. as well as likely policy changes in coming decades. I can recommend two readings to give aviation policymakers a better grounding in this complex subject. The first is a short paper published in Issues in Science and Technology Policy by Roger Pielke, Jr. and Justin Richie, “How Climate Scenarios Lost Touch with Reality.” The other is a book, Unsettled: What Climate Science Tell Us, What It Doesn’t, and Why It Matters, by Steven E. Koonin. He’s a former professor of theoretical physics at Cal Tech and has held numerous positions with various science institutions. He was Undersecretary for Science in the U.S. Department of Energy during the Obama administration.

One last thought on this very important subject concerns policy choices. A thoughtful article in The Economist, “Carbon Abatement: Giving Up Carbs” (Feb. 27, 2021) explains a growing body of thought that since resources are limited, the most sensible approach to deciding on GHG reduction methods is to calculate the bang for the buck for every proposed policy. It leads off with two European examples. A cargo bike program in Berlin would reduce carbon emissions by only seven tonnes per year, which worked out to costing the city €50,000/tonne. By contrast, a project that subsidized low-carbon heating systems cost only €200/tonne. The article includes a chart that compares the cost per ton of a large array of carbon-abatement projects. Electrification of ground transport vehicles is estimated to cost between $800 and $1,000 per ton of CO2 equivalent. In other words, some carbon-abatement proposals possibly should not be implemented, because they are far less productive than others. In his book How to Avoid a Climate Disaster, Bill Gates endorses a version of this idea, to distinguish between poor and productive investments in carbon reduction.

The aviation industry should insist on rigorous cost-per-ton estimates for every proposed aviation carbon-abatement idea. Investing billions on changes that hardly move the needle will do little good for the climate while potentially devastating a vitally important industry.

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A Better Way to Deal with In-Flight Turbulence

A not-yet-released study by the National Transportation Safety Board (NTSB) was previewed in a board meeting presentation and summarized by Sean Broderick in Aviation Week (August 30-September 12, 2021) It turns out that turbulence causes more U.S. air carrier injuries than any other cause. NTSB had not looked into this subject since 1971, when only one-seventh as many people were flying.

One of the key findings in the report is the inadequacies of pilot-generated weather reports (PIREPs). These are created in-flight and transmitted to air traffic control. There are numerous problems with this system. For one thing, there is no standard terminology for the seriousness of the turbulence, and pilots may wait until they are well past turbulent air before generating and sending a PIREP about it. Less than 10% of weather-related notifications to controllers included a PIREP, and controllers have non-standard ways of dealing with PIREPs and may be too overloaded to deal with them right away. Hence, planes that should have been warned about upcoming turbulence may not get the warning.

Automation is the key NTSB recommendation, and it is long overdue. To account for the subjectivity of individual pilots in assessing the severity of turbulence, the agency recommends creating a system that would use technology to measure conditions such as turbulence and send the information to air traffic control, so it can warn following aircraft. Tests of such systems have been done in recent years, and the International Civil Aviation Organization (ICAO) recommends one that uses onboard software to collect real-time data on airspeed and angle of attack and then calculates an eddy dissipation rate, or EDR (comparable to the height of a wave in the ocean). Several commercial systems are available to do this, but they apparently are proprietary.

Global airline organization IATA favors shifting to an open-source EDR developed by the U.S. National Center for Atmospheric Research, with the cooperation of Delta, Southwest, and United. Called Turbulence Aware, it lets airlines create a turbulence reporting system that will automatically report any EDR higher than a pre-set value and report it to the ground (airline dispatchers). But such messages could also be sent automatically to air traffic control so that controllers could warn following aircraft. Boeing already offers the software for this on its new planes, and it is also available for retrofit. Turbulence Aware is currently in use by 15 operators encompassing 1,500 aircraft.

NTSB is also recommending that the Federal Aviation Administration update its guidance on preventing injuries from turbulence. It would be good to see FAA at least encouraging airlines to embrace Turbulence Aware, if not requiring it. Creating PIREPs by hand is a burden on pilots, and using them promptly is a burden on controllers. These burdens could be alleviated by automating turbulence reporting.

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Addressing Small Drone Safety
By Marc Scribner

Integrating small unmanned aircraft systems (UAS weighing less than 55 pounds) into the National Airspace System continues to face challenges nearly a decade after Congress ordered the U.S. Department of Transportation to develop a comprehensive UAS airspace integration plan. A significant challenge has been adequately identifying and mitigating safety hazards that may be introduced by unmanned aircraft operations. The Eno Center for Transportation earlier this month released a white paper (“Guiding the New UAS Industry to Safety Excellence”) authored by aviation industry veteran Ken Dunlap that attempts to address these difficulties and chart a path forward. Dunlap does an admirable job surveying the field and making concrete recommendations to Congress, FAA regulators, and the small UAS industry itself. However, some of his recommendations raise additional questions that should be addressed before acting upon them.

The Eno report focuses broadly on two elements: fostering a safety culture within the UAS industry and using that as a springboard to develop and deploy Safety Management Systems for small UAS operators and manufacturers. (Note that about 60% of registered U.S. small drones are non-commercial.)

“Safety culture” is defined as “the fundamental attitudes and approach to resolving risks used by an organization, whether an individual or a group of people.” Dunlap acknowledges that instilling a safety culture in the small UAS industry may be more difficult than with legacy aviation industry segments, both because of the novelty of UAS and the fact that many of those working for small UAS startups come from outside of aviation. As he notes, “The tech industry’s famous ‘move fast and break things ethic’ likely does not have any analogs in aviation,” and this mantra and the modus operandi it implies are unlikely to be viewed favorably by regulators and traditional airspace users.

Despite those complications, Dunlap recommends a sensible path forward. He suggests that adherence by actors in small UAS market segments to the emerging body of industry consensus standards can serve as building blocks for developing organizational safety cultures. Among other specific recommendations, he urges Congress to mandate that FAA create new federal UAS safety standards that rely on consensus standards.

However, as Dunlap notes, according to a federal government database (albeit one last updated more than five years ago), FAA currently incorporates just seven consensus standards in its regulations. My review of that same database found that 97% of standards incorporated by reference in FAA regulations are government-unique. This is quite different from the practices of the National Highway Traffic Safety Administration and the Federal Motor Carrier Safety Administration. Unlike FAA, those agencies have a history of relying heavily on industry consensus standards for their minimum safety and performance regulations. This practice long predates the federal-wide policy established during the Clinton administration encouraging the use of industry consensus standards in lieu of government-unique standards (OMB Circular A-119).

This divergence in practice among federal transportation safety regulators suggests something that Dunlap does not mention: perhaps it is FAA culture that needs to evolve first in order to better facilitate regulatory and non-regulatory safety measures administered by FAA. Outdated agency practices are unlikely to support the goal of fostering foundational safety cultures for operators and manufacturers of emerging aviation technologies.

Further, Dunlap does not address a common complaint made by regulated entities of those agencies that do make wide use of consensus standards in rulemaking: antiquated standards are locked in regulation long after those standards have been revised by the standards-developing organizations. If FAA is to incorporate more consensus standards in regulation—and it probably should—it should also develop a periodic “audit and update” process to identify outdated standards in regulation and take steps necessary to conform regulations to updated standards as technology evolves.

In contrast to the sometimes nebulous qualities of a safety culture, a Safety Management System (SMS) offers tangible “repeatable, persistent, transparent, and auditable processes in operations from the field to the boardroom.” Dunlap provides an excellent overview of the history of SMS in the U.S. transportation regulatory context and the necessary elements for an SMS to be successfully implemented.

Of particular relevance is the FAA’s 2015 SMS mandate on Part 121 scheduled air carriers. That effort (which took six years) was required by Congress in response to the 2009 Colgan Air flight 3407 crash in upstate New York that killed all 49 passengers and crew plus one person on the ground. An SMS mandate for FAA-certificated airports may be coming as soon as next month. Building off existing uses, Dunlap recommends different risk-based SMS approaches for the various small UAS industry segments.

Despite Dunlap’s laudable efforts on this front and the conceptual soundness of his recommendations, it is apparent why commercial UAS manufacturers and operators may resist this proposal. The 2015 final rule mandating SMS for Part 121 scheduled air carriers included a less-than-stellar regulatory evaluation that estimated 10-year implementation costs of $135.1 million and benefits ranging from $104.9 million to $241.9 million (in 2010 dollars, using OMB’s required 7% discount rate).

In the face of the SMS rule’s potential negative net benefits, it is no surprise that Part 135 on-demand and charter carriers have opposed a similar SMS mandate. They argue the costs are excessive, the benefits unimpressive, and that an SMS mandate would disrupt existing safety protocols and culture. And if Part 135 operators of commercial passenger turbojet aircraft carrying up to 30 passengers and weighing in excess of 25,000 pounds on takeoff are not subject to federal SMS requirements, should rolling out an SMS mandate on small UAS weighing less than 55 pounds and carrying no people take priority with Congress and FAA?

Notwithstanding these additional questions raised by Dunlap’s recommendations (which should be answered before proceeding with new legislation and regulation), the report is a thoughtful and thorough analysis of a complex web of issues deserving more attention. The UAS industry and aviation policymakers should carefully consider its recommendations as we approach the forthcoming FAA reauthorization due by October 2023.

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Aviation Security: The Legacy of 9/11

In the days following the unprecedented terrorist attack on Sept. 11, 2001, I was dismayed by hasty calls for the federal government to take over all airport security. My friend Viggo Butler (of airport company Lockheed Air Terminal) and I wrote a policy brief arguing that the airport security failure that tragic day was in using unqualified contractors with no performance standards and no real federal oversight. We pointed to successful European airports’ use of security companies with strong performance requirements and national government oversight. Airport security workers were employed directly by the airports. By contrast, the extant U.S. passenger screening was an unfunded mandate imposed on airlines. And with no real performance requirements, airlines carried out this mandate as inexpensively as possible.

In response to that policy brief, that October a conservative think tank invited me to spend a week in DC on this topic, which included brainstorming meetings with White House staffers and discussing emerging legislation with staffers of the House Aviation Subcommittee (which had jurisdiction, since airport screening was an FAA program). At the end of the week, I took part in a news conference on the Capitol steps with House Transportation and Infrastructure Committee Chair Don Young (R-AK) and Aviation Subcommittee Chair John Mica (R-FL). We explained the European performance contracting approach as preferable to creating a whole new federal agency, and the House bill that emerged was based on that approach.

Unfortunately, the Senate bill called for a complete federal takeover, creating the Transportation Security Administration (TSA) as the new provider of all airport security. Not really understood was that this created an entity that was both the aviation safety regulator and the biggest component (in budget and staff) of the safety apparatus to be regulated—i.e., self-regulation. Eventually, the Bush White House caved and the legislation based mostly on the Senate’s federal takeover approach passed. Our only consolation prize at the time was the five-airport pilot program allowing them to test privately contracted screening with strong performance standards. That eventually evolved into TSA’s Screening Partnership Program (SPP), which today has 22 airport participants.

Twenty years after 9/11 we are still stuck with TSA’s built-in contradiction—being both the aviation security regulator and the largest component of airport security. And since aviation security is politically fraught (as is Food and Drug Administration drug-approval policy), it has proved very difficult to change policies that are clearly not cost-effective. Over the past 20 years, this newsletter has reported on research that seriously questions the value of federal air marshals, given both strengthened cockpit doors and the Federal Flight Deck Officer program. It has also cited reports from the Government Accountability Office and the Department of Homeland Security Inspector General’s Office on the continued poor performance of TSA checkpoint screening. The Screening Partnership Program (SPP) is far too centralized; airports should be free to solicit proposals from any TSA-certified screening company and to choose the one that best meets their needs. That would be a proper regulatory/oversight role for TSA. And GAO audits of SPP find that TSA stacks the deck on the cost comparison between TSA and contract screening by failing to include various TSA overhead costs (such as pensions and human resources) that are part of any screening entity’s cost structure.

There has been some progress in airport screening. After a decade of TSA stonewalling, we finally got a genuine trusted traveler program (PreCheck) in 2013. Screening checkpoints at airports are gradually replacing 2-D X-ray scanners with 3-D computed tomography scanners, so far at 140 of the country’s 500 commercial airports. Sean Broderick reports on the DHS Science & Technology Directorate’s “Screening at Speed” project, aiming to make screening “a more self-guided activity,” based on new technology. (Sean Broderick, “Gradual Gains,” Aviation Week, August 30-September 12, 2021)

One can hope that DHS technologists will be free to consider abolishing obsolete and poorly justified policies, such as mandatory shoe removal (for all but PreCheck passengers). As noted in a recent commentary by Reason’s Jacob Sullum, the only two other large countries that do this today are Russia and the Philippines. International practices on liquids in carry-on bags vary widely, according to the same article.

Congress shows little interest in serious reform of TSA, so we are likely to be stuck with its inherently contradictory structure and heavy-handed approaches for a long time.

Note: My detailed assessment of TSA problems appears as Chapter 14 in Protecting Airline Passengers in the Age of Terrorism, Paul Seidenstat and Francis Splane (eds.), Praeger Security International, 2009. My airport security-related work and archive is available here.

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News Notes

Newark Slots Opened to Low-Cost Carriers
FAA has decided to make available 16 vacant slots at Newark Liberty International Airport (EWR) to low-cost carriers. They are former slots held by Southwest Airlines, which departed EWR several years ago. The decision is consistent with the Biden administration’s executive order on competition, which requires each federal agency to take steps to increase competition in the industries it oversees. Southwest got the slots in 2010 as part of the decision to permit United Airlines (the dominant carrier at EWR) to merge with Continental Airlines.

Airbus, Boeing, and ICAO Urge Integrated Airspace Management
At an August conference of the Electric Aircraft Technologies Symposium, the International Civil Aviation Organization (ICAO) announced a project with aviation stakeholders to develop “a global vision for integrated air traffic management that meets the needs of all existing and emerging airspace users.” According to Aviation Daily (Aug. 31, 2021), both Airbus and Boeing have been advocating such an effort. Both companies portrayed Unmanned Traffic Management (UTM) as the key enabler or common foundation for this broader rethinking, with Boeing’s speaker saying that UTM is foundational for that vision. Both companies would like to see a global action plan for UTM, which could then be the basis for expanding those concepts to the rest of the airspace.

Gatwick Under Way on Second Runway Plan
Last month, London Gatwick Airport (LGW) formally began the process under which it plans to upgrade its parallel taxiway to a complete second runway. On August 25 it announced the launch of a public consultation process for the conversion. The project would require moving the taxiway’s centerline 12 meters (39 feet) to the north, to comply with current dual-runway separation standards. Due to its 8,413 ft. length, the second runway would be limited to 737 and A320 aircraft types, and the plan calls for using the new runway only for departures. This is expected to add capacity for 12 million additional passengers. LGW hopes to obtain planning permission by 2024, with construction completed by 2029.

India Launches Airport P3 Lease Program
Last month, India’s government announced plans to open 25 airports to long-term public-private partnership (P3) leases over the next four years. The airports would remain owned by the Airports Authority of India, with six to be leased in 2022, eight in fiscal 2023, six more in 2024, and the remaining five in 2025. The largest of these airports is at Chennai, which served 22 million passengers in 2019. The airport P3 program is part of a larger National Monetization Plan aiming to raise a total of $81 billion over four years; four percent of that would come from the airport leases ($3.24 billion).

Parking Structures as eVTOL Vertiports
Two electric vertical takeoff and landing aircraft (eVTOL) startup companies have signed deals with parking garage owner/operator Reef, which operates over 4,800 parking garages. Joby Aviation announced a deal in June, and Archer announced its own deal with Reef in August. Archer is targeting vertiport locations in its two planned launch areas, Los Angeles and Miami, and in an August 18^th investor briefing, the company said it has identified locations for its first five vertiports. The parking structure idea is based on the size of their top decks and a minimal need for additional construction. Also, on September 12, Archer announced that it had reached an initial milestone toward FAA certification, a G-1 Issue Paper. Both Joby and Lilium have also reached that milestone or its European equivalent.

Joby and NASA Measuring eVTOL Noise Footprint
Early this month, Joby became the first eVTOL company to take part in NASA’s Advanced Air Mobility effort. It conducted a two-week test of its full-scale electric prototype aircraft, with a focus on measuring its acoustic footprint. The testing, near Santa Cruz, CA, involves NASA’s mobile acoustics facility, which uses more than 50 ground-based microphones in a grid array. The aim was to generate “noise hemispheres” that measure the intensity and character of the sounds, for comparison with helicopters. Noise is a critically important aspect of potential community acceptance of eVTOLs.

Biden Administration’s SAF “Grand Challenge”
On Sept. 9, the Biden administration announced a series of actions and programs aimed at increasing the production of sustainable aviation fuel (SAF) to three billion gallons a year by 2030. The primary agencies involved are Agriculture (USDA), Energy (DOE), and Transportation (DOT). Current levels of SAF are only 4.5 million gallons per year. This new Grand Challenge is in addition to the current administration proposal for a blenders’ tax credit of $1.50/gallon of SAF that yields a 50% lifecycle greenhouse gas reduction and $2/gallon for SAF yielding 100% reduction.

Puerto Rico Agencies Nearing Regional Airports P3 Decision
Inframation News (August 25) reported that the Puerto Rico Ports Authority and the Public-Private Partnership Authority are nearing completion of their assessment of long-term P3 leases of the nine regional airports that need upgrading. The P3 Authority has had great success with its 40-year P3 lease of San Juan International, which included a large up-front payment and annual lease payments plus revenue-sharing. The regional airports are far smaller, so the study is looking at what kind of financial arrangements would accomplish the public-sector goals while still being viable for one or more private partners.

San Jose Gets Two Proposals for Airport Connector P3
The San Jose Department of Transportation has received two unsolicited proposals for its project to link a downtown rail transit station with Mineta San Jose International Airport (SJC). One is from TCE Financial and the other is from Plenary Americas and Glydways. The agency plans to hold an industry day in mid-to-late October and to issue a request for proposals early in 2022. Some 23 companies responded to the request for information in 2019, but the project was put on hold due to the COVID-19 pandemic.

San Diego Moving Forward on $3 Billion Terminal Expansion
The California Coastal Commission has given its approval for a $3 billion project to replace Terminal 1 at San Diego International Airport (SAN). The new terminal will have 30 gates, compared with the 19 in the crowded existing terminal. The project will also include roadway improvements and a new parking garage. The Coastal Commission is requiring an on-airport transit station, a free shuttle from the Old Town neighborhood, and reduced greenhouse gas emissions.

Courageous NATCA Leaders Stepping Down
On Aug. 31, the top leaders of the National Air Traffic Controllers Association—President Paul Rinaldi and Exec. Vice President Trish Gilbert—announced their retirements from those positions after 12 years. When I first met with them, following a period of government shutdown in 2013, we had a laugh that the world would see our emerging alliance on air traffic control reform as strange bedfellows. That was because a predecessor NATCA leader had been very opposed to any form of air traffic control reform and had attacked Reason Foundation’s proposals on the subject. But Paul and Trish had learned first-hand that a politically funded and politically micromanaged air traffic control system was very suboptimal. After gaining detailed knowledge of ATC corporations Nav Canada and the UK’s NATS, they brought NATCA on board as the sole federal government union supporting air traffic control corporatization. We fought a good fight between 2013 and 2018 but were defeated by a coalition of other government unions, bizjet organization NBAA, and general aviation organization AOPA. Thanks, Paul and Trish, for fighting the good fight.

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Quotable Quotes

“The lessons from the [Robert] Poole research, the Indy concession, the San Juan success, and the St. Louis initiative might be summarized as follows. The public body needs to retain a role to protect important public values. The public needs to have a role in advancing a city’s tourism and economic development. Clarity regarding job protection needs to be addressed. And a compelling use of the proceeds—for example, one that compensates for historical inequitable infrastructure investment in urban neighborhoods—needs to be clear. If a city could put a billion dollars into its neglected neighborhoods and infrastructure without any drag on taxes or debt, then the effort of working through the complexities of unlocking the value of an asset like an airport would seem to be well worth it.”
—Stephen Goldsmith, “Why Big-City Airports Are Prime Candidates for ‘Asset Recycling,’” Governing, Sept. 15, 2021

“[T]he industry is only just beginning to tap into the full potential of digital tower technology. The idea that a digital tower is solely about replicating exactly what a controller can already see in a remote location is being increasingly challenged. With the right technology and specifically software, digital towers can be scalable and flexible in what they deliver for airports—from the smallest airfield to the world’s biggest hubs.”
—Andy Taylor (NATS), “Leading the Digital Tower Transformation,” Air Traffic Technology International 2022, September 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. . . . 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 establishing 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. . . . Some analysts have opined that GPS is the highest-priority target for those who would do America harm, from lone-wolf hackers to hostile nations. And many think it is time to ‘get the bullseye off GPS’ with complementary and backup systems and restore America’s place in the world as PNT leader. Failing to do so will leave the cockpit doors open to nearly everyone, and the nation vulnerable to another devastating attack.”
—Dana A. Goward, “GPS Lessons from Before 9/11 Still Endanger the U.S.,” Resilient Navigation and Timing Foundation, Sept. 17, 2021

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The post Aviation Policy News: Responses to airport lease study, airport security since 9/11, and more appeared first on Reason Foundation.

• Major U.S. airports worth $131 billion
• Europe moving to space-based landing systems
• Airline deregulation still means lower fares
• Progress and cautions on urban air taxis
• News Notes
• Quotable Quotes

Major U.S. Airports Are Worth $131 Billion, Think Tank Study Says

American city and county governments (and a few state governments) are sitting on potential gold mines, according to a new policy study by the Reason Foundation. The report estimates the potential market value of 31 large and medium U.S. airports as $131 billion. Among the most valuable are Los Angeles International ($17.8 billion), San Francisco International ($11.9 billion), Dallas/Ft. Worth International ($11.9 billion) and Atlanta’s Hartsfield-Jackson ($9.2 billion). The full study (.pdf) is here.

The study used valuations from the sale and lease of airports worldwide in recent decades to estimate the potential market value of 31 U.S. airports owned by city, county, and state governments. The study suggests that U.S. airport owners consider monetizing the asset value of their airports via long-term public-private partnership (P3) leases, as are increasingly common in Europe, Australia, and Latin America.

In most overseas cases, the lease payments are made up-front, creating a large one-time windfall for the government that owns the airport. The study advises that wise uses of such a windfall would be to invest the proceeds in other needed infrastructure, to pay down debt, or to strengthen under-funded public employee pension systems. In some cases, the net proceeds from a long-term airport lease would be large enough to eliminate a city or county pension system’s unfunded liabilities.

The report also documents the global trend toward private investment and management of airports. The Airports Council International found that 75% of European air travelers are served by airports with majority private-sector investment, as are 66% of passengers in Latin America and the Caribbean. The United States is in last place, at a mere 1% (reflecting the long-term lease of Puerto Rico’s San Juan Airport in 2013).  

The Reason study’s estimates are possibly too conservative. The report’s valuations are based on 20 times earnings before interest, taxation, depreciation, and amortization (EBITDA), a widely-used measure of annual cash flow. But last month, Sydney International Airport, Australia’s largest, received a $17 billion buyout offer based on 26 times EBITDA—and that offer was rejected as too low. This suggests that infrastructure investors are valuing airports for their long-term prospects, despite the effects the COVID-19 pandemic has had on air travel.

The study also reports that the U.S. airport sector is seen by infrastructure investors as a very attractive but largely untapped market. In 2019, when St. Louis sought to long-term lease its major airport, observers were surprised that 18 international teams submitted qualifications and the 11 best-qualified teams made detailed presentations that won support from the airlines serving that airport. (Local politics ended up terminating those plans.)

Congress opened the door in 2018 with the new Airport Investment Partnership Program (AIPP) that permits all major airport owners to enter into long-term leases with private investors and airport companies, using the lease proceeds for other governmental purposes. And the new bipartisan infrastructure bill includes a section on “asset recycling” that would offer planning grants for state and local governments to research and design the procurement process for such long-term public-private partnerships.

U.S. airports, while generally well-run, lag international standards in passenger-friendliness and economic productivity, according to studies cited in the Reason Foundation report. For example, the Skytrax World’s Top 100 Airports 2020 survey includes no U.S. airports in its top 25, but 11 of that top 25 are privatized/P3 airports. U.S. airports also depend more heavily on airline fees and charges, as opposed to non-aviation revenues from retail concessions, parking, rental cars, etc. This may be why airlines have supported recent proposals for airport leases in Chicago, St. Louis, San Juan, and Westchester County, NY.

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Europe Moving Toward Space-Based Augmentation for Landings

GPS provides precise locational information, but the signals available to non-defense users are not accurate enough to provide precision approach and landing guidance, especially for those procedures in limited-visibility conditions. There are currently two different ways to augment civilian GPS signals for this purpose: ground-based and space-based. The less-costly way, with higher capability and security, is ground-based, as I discussed in the June issue of this newsletter (“SFO Is Implementing GBAS. Why Aren’t Other Airports?”) The other option is space-based augmentation, which has recently been decreed by the European Commission to be Europe’s method going forward.

The same dichotomy exists in the United States. Many years ago, the Federal Aviation Administration (FAA) was pursuing both approaches, but when the Ground-Based Augmentation System (GBAS) technology initially proved difficult to adapt to Category 1 approaches (the least stringent of three categories of precision approach), the agency dropped GBAS in favor of what it called Wide-Area Augmentation System (WAAS). FAA paid industry to develop and launch three dedicated WAAS satellites and the service went live in 2003. It supplies data to 38 ground-based reference stations at known locations that feed data to three WAAS master stations that calculate error messages and send them to ground uplink stations that broadcast correction information to aircraft receivers. (If this sounds clunky and costly to you, I agree—but FAA has never revealed the total capital and operating costs of WAAS.) Those receivers are almost entirely in general aviation aircraft, which has created a powerful lobby for the continued support of WAAS and continued FAA shunning of GBAS, despite the latter’s superiority and its being fully certified for Cat. 1 approaches, with Cat. 2 and Cat. 3 certification in the near future. FAA still refuses to fund GBAS, so airports (like Newark Liberty, George Bush Intercontinental/Houston, and San Francisco International) and airlines that want GBAS have to pay for it themselves.

That brings us to the recent European Commission decisions. Rather than launch new satellites as FAA did, the EC awarded contracts recently to upgrade the existing European Geostationary Navigation Overlay Service (EGNOS) to improve its signal accuracy to permit Cat. 2 approaches, and to enable it to use signals from both GPS and Europe’s Galileo. Two additional policies will further undercut GBAS in Europe: (1) requiring all Cat. 1 approaches to be done only using EGNOS by 2030, and (2) requiring every EU airport with an ILS to create an EGNOS approach by 2024. Unlike in the United States, where hardly any airliners are equipped for WAAS, most airliners in Europe “have or soon will have EGNOS capability,” reported Thierry Dubois in Aviation Week (June 15-28, 2020). Both Airbus and Boeing protested these impending developments for a decade (2000-2010), but seem to have given up.

The future of more cost-effective GBAS for U.S. airliners is hard to forecast. On one hand, a growing fraction of U.S. airliners are equipped for GBAS, and more large airports seem likely to follow SFO’s recent decision to install GBAS at its own expense. There is also a new bill in Congress to require FAA to fund GBAS as part of NextGen (see News Notes). On the other hand, U.S. airlines that serve European destinations face new costs to equip those planes with EGNOS, so they may balk at also needing a GBAS interface for them when operating in FAA airspace.

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Airline Deregulation Continues to Democratize Air Travel

A basic premise of the Airline Deregulation Act of 1978 was that removing federal controls on air routes and pricing would bring competition to what had been a cartelized industry. And that competition would serve customers, by expanding service and keeping airfares affordable.

A recent release from the U.S. Department of Transportation’s Bureau of Transportation Statistics (BTS) bears this out. BTS provides both then-current dollar amounts and inflation-adjusted to 2021 dollar figures for average domestic airfares from 1995 through 2021. To summarize the annual data succinctly, while the average fare (in 2021 dollars) in 1995 was $518, the average in 2019 (pre-pandemic) was $364 (30% less) with further declines in 2020 and 2021 (with the latter at a competition-generated $260—50% below 1995. To be sure, there were some ups and downs in between, but the long-term trend is decidedly downward. As the headline on Wall Street Journal air-travel columnist Scott McCartney’s August 11 column modestly put it, “Why Fares Have Barely Budged in 25 Years.”

Critics will be quick to raise concerns about this finding. Sure, base fares are low, but today there are all these optional add-ons (checked baggage, food, premium seating, etc.) that increase the actual cost of an airline trip for many people. True of course, but they are a small fraction of the fare for most air travelers. For example, BTS found that in 2019 baggage fees totaled $5.8 billion, accounting for just 2.9% of operating revenue.

Other critics, including some in Congress, point to what they portray as a shared monopoly of the big four airlines: American, Delta, Southwest, and United. Yet what economists have learned to watch is competition at the margin. There is ample evidence of things like the “Southwest effect”: when that airline enters a market, fares charged by other carriers nearly always decline. Other lower-cost carriers, like Alaska and JetBlue, also provide this kind of competition with the big four. And then there are the ultra-low-cost carriers, especially Allegiant, Frontier, and Spirit. As John Heimlich, chief economist at Airlines for America points out, the share of passengers of the ultra-low-cost carriers (ULCC) increased from 4% in 2009 to 11% in 2019. And as I have written in previous issues of this newsletter, those three carriers plus newcomers like Alevo and Breeze are likely to take additional market share from the legacy carriers.

What makes it possible for this kind of competition to continue keeping airfares affordable? Here are four important factors.

• First, unlike Europe, only a handful of U.S. airports have slot controls, imposed as a way for government to micromanage demand that exceeds capacity. We (and Europe) could fix that by switching to runway pricing for airports with that problem.
• Second, airports in many popular locations (e.g., Las Vegas and Orlando) have had the foresight (and space) to expand their capacity to enable new entrants. Orlando has built an entirely new south terminal and was rewarded in July by ULCC Frontier announcing nine new domestic and eight new international routes.
• A third factor has been the advent of Passenger Facility Charges (PFCs) which have enabled airports to more easily finance terminal expansions that would have been much harder to do when most airports were locked into long-term leases with legacy carriers that gave them veto power over terminal expansions.
• Finally, changes in gate policies have opened entry, such as Miami International’s 2018 decision to change its gate fees policy from per-use to flat monthly fees. That has opened the door for Frontier and other lower-cost carriers (including Southwest) to enter an airport that had been too costly to use.

One other change was proposed recently by Frontier CEO Barry Biffle at the Routes Americas 2021 conference in June. He urged airports to “stop charging [for landings] by weight and start charging more by movement.” He pointed out that traditional weight-based landing fees encourage smaller jets with fewer passengers, rather than larger jets with more passengers. He might have added that runway pricing along these lines would also reduce congestion, as airlines “up-gauged” from smaller planes to larger ones.

Many years ago I got to know economist Alfred Kahn, widely known as the father of airline deregulation. He gave me copies of reports in which he argued, around the time of deregulation, that merely deregulating airlines would not be sufficient for the large-scale expansion in air travel that deregulation would bring about. He argued for airport pricing and for a businesslike reform of the air traffic control system. Both still make good sense, but thanks to the factors I’ve noted above, we have emerged with robust airline competition anyway.

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Progress and Caution Flags on eVTOL Startups

August has been a big month for the growing array of startup companies hoping to succeed in Urban Air Mobility (UAM) using a new generation of electric-powered vertical take-off and landing (eVTOL) craft. Some August highlights include the following:

• Joby Aero announced its record-setting 150-mile flight on a single electric charging, as well as completing comparative noise tests, as required for FAA certification which is already under way. Unlike most other eVTOL startups, Joby plans to both produce the aircraft and operate them in commercial service, so it has applied for both an air-carrier operating certificate (AOC) under Part 135 and a Part 23 type certificate for production and sale of its first eVTOL aircraft. In addition, it completed its acquisition by a special-purpose acquisition company (SPAC) and began trading on the New York Stock Exchange.
• Lilium made two big announcements in August. First, Brazilian airline Azul signed a memorandum of understanding to acquire 220 7-seat Lilium Jets, a prototype of which does not yet exist. Secondly, the company announced that Honeywell will provide the avionics and flight control systems for the Lilium Jet eVTOL.
• On a less-happy note, Archer countersued Wisk, responding to Wisk’s April lawsuit accusing Archer of stealing the design of its sixth-generation eVTOL. The SPAC taking Archer public in July cut its valuation from $2.7 billion to $1.7 billion.

Meanwhile, more cautionary notes appeared regarding the commercial viability of eVTOLs and Urban Air Mobility as a viable business venture. In a Wall Street Journal “Heard on the Street” column, Jon Sindreu suggested that the most plausible way forward for eVTOL buyers is to displace much of the world’s fleet of 23,000 commercial helicopters, “which are on average 20 years old, noisy, and unsafe.” But he quickly pointed out that the commercial helicopter business is currently valued at $50 billion, a tiny fraction of projections that eVTOLs will become a $1 trillion industry within 20 years. He then went on to examine who rides in existing taxicabs, suggesting that if the air taxi market is the target, smaller vehicles are probably more viable than larger ones.

Porsche Consulting followed up its 2018 market study on eVTOLs with a sober near-term assessment. To overcome various environmental and customer-appeal barriers will take between $20 and $25 billion by 2035, compared with the $5.5 billion raised by the main startups thus far. It still forecasts potential revenues of $21 billion by that date, but investors should be prepared for no returns for at least 10 years. Their report focused on urban air taxis, rather than regional mobility (which is Lilium’s primary target). It suggested that in the first phase of air taxis, “vertical mobility will be a service for special occasions,” but “neither economically nor socially relevant.” (Note: this is how most new technologies start out,)  Broad social acceptance will be the key factor in being able to move on to the second phase, to thousands of vehicles in dozens of cities offering services for daily travel. Another $5-10 billion will be essential to launch this second phase.

Finally, the infrastructure publication Inframation News offered a thoughtful article on August 11 on the infrastructure required for Urban Air Mobility. The short answer: infrastructure investors are not eager to jump in. The only example it found was the deal announced several months ago between REEF Technologies and Oaktree Capital’s Transportation Infrastructure Fund aiming to acquire and refurbish urban parking structures as eVTOL vertiports. The article provides cautionary thoughts from Rex Alexander, former head of aviation infrastructure for Uber and now operating a consultancy serving the helicopter and vertical lift industries. One possible location for eVTOL vertiports, he noted, is regional and local (GA) airports near major cities (such as Los Angeles, Miami, and New York which are being targeted by some eVTOL startups). He thinks “public acceptance will be a monster,” so any would-be air taxi operator needs to get out in front and educate the public that this is not “a new kind of helicopter.”

As I’ve written previously, eVTOL is an exciting new aircraft concept, with many very talented engineers coming up with fresh designs and operating concepts. Still to be determined is whether there are viable business models that will come close to generating the billions of dollars in revenue being projected by these companies and their financial backers.

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News Notes

New Bill Would Make GBAS an FAA Program
A bipartisan bill was introduced in Congress this month that would require FAA to provide grants to America’s 39 busiest airports to install ground-based augmentation systems (GBAS) to supplement aging instrument landing systems (ILSs). HB 3933 is sponsored by two Republican and two Democratic House members. As noted previously in this newsletter, FAA has never included GBAS in its NextGen modernization program, and only a handful of major airports have self-funded this important advanced technology. If passed, the bill would require FAA to develop an implementation plan within 12 months and make grants to airports over the following nine years. It also requires annual progress reports to the relevant congressional committees.

JFK Terminal 6 P3 Back on Track
The Port Authority of New York & New Jersey announced on Aug. 3 that it had reached an agreement with JFK Millennium Partners on the latter’s $3.9 billion project to redevelop the JetBlue Terminal 6. The previously selected P3 consortium includes JetBlue Airways, Vantage Airport Group, and American Triple I. The project will be financed with 80% debt and 20% equity, plus a $130 million investment by the Port Authority. A recent extension of the Port Authority’s lease agreement with New York City enables the PA to enter into a longer-term lease agreement with the consortium, which improves its potential return on investment.

Germany Launches Pilot Drone Traffic System
Germany’s air navigation service provider DFS announced in July that its pilot project to implement drone traffic management (referred to in Europe as U-Space) will be launched for the area encompassing the Port of Hamburg. The project is being paid for by a €1 million grant from the federal government’s infrastructure agency, BMVI. This “U-Space Sandbox” will be carried out by DFS subsidiary Droniq GmbH. Under policies from the European Union Aviation Safety Agency (EASA), drone traffic is to be coordinated by a U-Space Service Provider, which can be a branch of the national ANSP (as Germany is doing) or a separate company.

Alabama Airport Seeks Passenger Terminal P3
The Jack Edwards National Airport serves mostly general aviation tourists to the resort city of Gulf Shores, an hour west by car from Pensacola, FL. Since 95% of the area’s 7 million annual visitors drive to the area, the Gulf Shores Airport Authority hopes that a modern passenger terminal will prompt leisure-oriented airlines to offer air service. The agency issued a request for statements of interest in such a project, and received five serious responses by the August 20 due date. They envision a 40-year term for the terminal P3 project, with commercial airline service planned to begin in April 2022. The airport is transitioning from general aviation to commercial air service. A new control tower is on schedule for commissioning in November 2021.

Avelo to Serve Florida from New Haven
Start-up airline Avelo has announced its first east coast routes, to be operated from its second hub, Tweed New Haven Airport (HVN). They will serve Ft. Lauderdale, Ft. Myers, Orlando, and Tampa Bay, with the first route (Orlando) to launch November 4.  All four routes will begin with less than daily service, and all will use single-class Boeing 737-700 aircraft with 147 seats. Avelo began service from its western hub, Burbank (BUR) in April.

The Boring Company Proposes Airport Tunnels in Austin and San Antonio
The latest news from Elon Musk’s tunnel company is proposals for tunnels linking the downtowns of Austin and San Antonio to their respective airports. KVAN (Austin) reported that the company has met with city officials to discuss a tunnel from downtown to the new Tesla Gigafactory under construction near Austin Bergstrom International Airport. The San Antonio Express-News has reported similar talks in that city between Boring Company and the San Antonio Economic Development Foundation (SATX).

Amazon Air Opens Cargo Hub in Cincinnati
This month saw the opening of Amazon Air’s $1.5 billion air cargo hub at the Cincinnati/Northern Kentucky International Airport (CVG). The 800,000 sq. ft. facility will serve Amazon Air’s growing air cargo fleet, and will employ an estimated 2,000 workers. Kentucky Gov. Andy Beshear said the new hub would put the state at the center of Amazon’s distribution system, and will attract manufacturers, service providers, and tech companies to the state.

Air Force Seeking Contractor for Anti-Drone System
The Air Force Research Laboratory is seeking bidders to develop a fieldable high-power microwave system that can protect air bases by disabling or destroying drone intruders. The solicitation was released July 28, and AFRL hopes to begin the program this fall, with a prototype to enter testing in 2023. The program is named for the Norse god Thor’s hammer, Mjolnir, since it is based on an experimental version called THOR. The program’s goal is a system that can be produced and deployed in large numbers.

Kentucky Seeks Advisor for Airport P3 Project
The state government seeks to develop an “industrial general aviation airport” on the grounds of Bluegrass Station, a military-industrial business park east of Lexington. The project would be to advise the state’s Department of Military Affairs and the state’s Finance & Administration Cabinet on procuring the airport development as a P3 project. It would include a feasibility study, development of an RFI and analysis of responses, and other advice on the potential P3 project.

Hardened Cockpit Doors for Cargo Planes Proposed in House Bill
Reps. Jesus Garcia (D-IL) and Brian Fitzpatrick (R-PA) have proposed a Cargo Flight Deck Security Act, to require the same kind of hardened cockpit doors on cargo aircraft as on passenger airliners. The Air Line Pilots Association (ALPA) points to cases when cargo flights include non-crew cargo personnel who “are frequently onboard cargo flights” without receiving the same level of screening as flight-deck crews.

German Airports Relieved of Tower Costs—at a Price
The German parliament recently passed legislation to have DFS, the country’s ANSP, cover all the costs of control towers, relieving airports of those costs. However, the change eliminated potential competition for control towers from other tower companies, including new remote-tower providers. Meanwhile, DFS’s tower division remains free to offer contract tower services throughout Europe.

OneWeb Launches Space-Based Broadband Service in Alaska, Canada, and U.K.
The smallest of three global companies offering space-based broadband services, OneWeb, has announced that global services will begin later this year in northern regions of the northern hemisphere. Currently, only SpaceX’s Starlink is offering such services, in beta-testing mode. Amazon’s Kuiper system is still being developed. As of July, Aviation Week reported, OneWeb’s constellation is 40% complete, with 254 satellites currently in orbit. Its plan calls for global service to be available by June 2022, when its full 648-satellite fleet is in orbit.

JetBlue Service to London Takes Off
Using its recently acquired slots at London Heathrow (LHR), JetBlue Airways launched its initial service linking LHR with New York’s JFK International. Its second route, between JFK and London Gatwick (LGW) will begin service on September 29. Its aim is to attract business travelers with a less-expensive business class service up front, while attracting price-conscious tourist travelers to its main cabin. New York/London is one of the world’s most profitable airline markets for legacy carriers.

UK Government Competition for Zero-Emission Airport Services
The government’s Jet Zero Council has announced a competition, offering grants to airports to demonstrate projects that could assist in the introduction of battery-electric and hydrogen-powered commercial aircraft. The Zero Emission Flight Infrastructure program has $4.1 million available for grants for such projects, with plans to award at least 12 grants.

New Study on Space Traffic Management and Orbital Debris
A new policy brief from Reason Foundation addresses the growing problem of orbital debris and possible roles for a new U.S. policy on space traffic management in addressing the problem. The paper was researched and written by Senior Fellow Rebecca van Burken, and is available here.

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Quotable Quotes

“The [European] airlines say that if the [use-it-or-use-it] threshold is back to 80%, they will have to do a lot of unnecessary but most certainly pollution-emitting flying. Why? If they do not fly, what is the worst thing that happens? The slots go back into the pool. There is a risk—to those airlines, not to Europe, not to European aviation—that a new entrant will take some of the slots available. If they succeed, more power to them. That is what building back better might look like. If they do not, the legacy carriers lose nothing. They might even trade up at some of the formerly very slot-constrained airports. That too would improve the competitive landscape. This largesse and pandering has gone on too long. For too long now we have let the legacy carriers cry havoc. It is time to let slip the dogs of war, or at least a recovery that is better, and more competitive.”
—Andrew Charlton, “Airlines Support Recycling—at Least When It Comes to Slot Exemptions,” Aviation Intelligence Reporter, July 2021

“ACI Europe also repeated its call for a wider review of EU slot regulation, describing it as ’28 years old and wholly inadequate to today’s market. Planning certainty and the ability to invest have never been more crucial—nor have they ever been harder to achieve,’ [ACI Europe’s] Jankovec said. ‘Ensuring that mechanisms like the EU slot regulation—which should guarantee the optimal use of airport capacity—are fit for purpose should be the highest of priorities. Once the effects of the crisis on aviation have been thoroughly evaluated and lessons learned, we look forward to engaging in a root-and-branch review of the regulation.’”
—Victoria Moores, “European Airports Back Latest EU Slot Waiver,” Aviation Daily, July 27, 2021

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The post Aviation Policy News: U.S. airports worth $131 billion, benefits of airline deregulation, and more appeared first on Reason Foundation.

• Airport privatization survives the pandemic
• Inspector General on troubled FAA Logistics Center
• Airlines’ risky eVTOL plans
• Bad-mouthing billionaires in space
• A new era in airline competition
• News Notes
• Quotable Quotes

Airport Privatization and P3s Survive the Pandemic

The global trend of private investment in airports—via outright purchase, long-term lease, or public-private partnership (P3) projects at airports—continued at a reduced pace during the pandemic year of 2020. These activities are documented in Reason Foundation’s 2021 Annual Privatization Report: Aviation, which is available now to this newsletter’s readers and being published later this week.

The aviation section includes an updated table of reported 2019 revenue of the world’s 39 largest fully or partially investor-owned airport companies, with the five largest being Aeroports de Paris, Aena Aeropuertos, Fraport, Heathrow Airport Holdings, and Vinci Airports. Despite the dire financial straits of airports worldwide in 2020, some privatizations have continued taking place.

After negotiations in 2020, Bulgaria’s Sofia Airport began operating under a 35-year concession (won by Meridiam, Strabag, and Munich Airport) in early 2021. Bolivia is negotiating a 30-year concession for the Viru Viru Airport in Santa Cruz with Aeroports de Paris. And following up on planning done in 2020, Brazil this spring raised $600 million from auctions of 22 medium-size airports, 15 won by CCR and seven by Vinci Airports.

In Asia, India awarded GMR Airports a 40-year concession to develop and operate a new airport in Bhogapuram, designed for six million annual passengers. Adani Enterprises acquired GVK and its 74% stake in the project under way to develop Mumbai’s second airport And Flughafen Zürich signed a 40-year concession to finance, develop, and operate Delhi’s second airport, planned for 12 million annual passengers. Japan’s planned 2020 privatization of the Hiroshima Airport was postponed to sometime this year. And in the Philippines, the proposed new Manila airport at Sangley Point was put on hold after the government rejected China Communications Construction Co. as the developer/operator. But the $14 billion project by San Miguel Corporation for the new airport at nearby Bulacan, under a 50-year concession, is proceeding as planned.

The biggest airport privatization news of all concerned Sydney International Airport, Australia’s largest. The airport company raised AU$2 billion in equity in 2020 and retained its BBB+ credit rating, while also receiving a token investment from giant infrastructure investment fund Brookfield. Early this month (too late for inclusion in the Annual Privatization Report), the airport received a buyout offer of AU$22.3 billion (US $17 billion) from IFM Investors, QSuper, and Global Infrastructure Partners. The bid represents a multiple of 26 times the airport’s 2019 earnings before interest, taxes, depreciation, and amortization (EBITDA, a measure of cash flow). This news was followed by multiple reports that a consortium led by Macquarie Group Ltd. is exploring a rival bid, but the airport company has now rejected the IFM bid; others are still expected.

Taken together, these developments suggest that investor interest in airports has survived 2020’s huge downturn in air travel and that at least some infrastructure investors are taking a long-term view of airports as revenue-generating infrastructure.

In the United States, most current public-private partnership activity centers on individual projects at airports, such as consolidated rental car centers (Los Angeles, Newark), new terminals (LaGuardia, JFK, Paine Field), cargo facilities (Atlanta and Anchorage), and others such as a passenger lounge (San Diego), a commercial development on airport land (Phoenix-Mesa), and a tunnel connecting a commuter rail station with the airport terminal (Ontario, CA). But there is one new whole-airport P3 lease under way. Tweed New Haven Airport and its contract management company AvPORTS are negotiating a long-term lease under which the company will upgrade the existing terminal, lengthen the runway to accommodate the 737s of the airport’s newest airline, Avelo, and later develop a new terminal.

The report also covers recent private-sector activities in air traffic control, with particular attention to the growing subscription base of Aireon, which offers global space-based surveillance of aircraft flights in the 70% of the world where there is no radar surveillance (oceans, polar regions, and mountain areas). Also summarized in the Annual Privatization Report: Aviation is the continued implementation of remote (digital) control towers, especially in Europe, where developers of the technology are partnering with innovative air navigation service providers. A growing number of these projects enable arrivals and departures at multiple small airports to be managed from a single remote tower center.

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Inspector General Faults FAA Logistics Center for Management Failures

As the operator of the air traffic control system, the Federal Aviation Administration (FAA) deals with a huge number of components for a wide array of facilities and equipment. A key player in this process is the agency’s Logistics Center in Oklahoma City. According to a recent audit report by the Department of Transportation’s Office of Inspector General (OIG), the center has more than a million parts in its inventory, worth about $735 million. Each year it ships and receives about 200,000 parts, supporting over 77,000 systems. And the place is a mess. (Report No. FI2021029, July 12, 2021)

The main focus of the report is a dysfunctional inventory system, implemented in 2016 and the subject of two previous OIG audits, in 2016 (on the non-standard way in which the new system was procured) and another in 2019. Basically, while the former system kept accurate track of items coming in for repair, new or repaired items going back to the field, and “excess, obsolete, or unserviceable (EOU) items,” the new system does not. The 2021 audit finds that these known problem have still not been addressed. The center does not (cannot?) assess the age of inventory items and hence maintains “excessive quantities of old and unserviceable parts.” When a new part is sent to the field to replace a non-functioning part, the latter is supposed to be shipped to the center for possible repair within 30 days—but more than 10,000 such parts, worth $38 million, have not been returned from the field. OIG auditors found $1 million in discrepancies between the new inventory system and the records of its warehouse management system. And “year after year, [the center] continues to accumulate excess inventory parts held for repair,” increasing from $359 million worth in 2017 to $431 million in 2020. According to the OIG audit, the excuse for all these problems is that the new (2016) inventory system does not have the capabilities of the system it replaced.

This is a tragic comedown for the FAA Logistics Center, which at the turn of the 21st century was being seen as a model of “reinventing government.” Norman Bowles, who became the center director in 1996, had previously served as a team leader on then-Vice President Al Gore’s National Performance Review. Prior to that, Bowles was a senior official in the U.S. Department of Transportation’s (DOT’s) then-new Office of Commercial Space Transportation. Prior to his appointment to head the Logistics Center, it was “derided inside and outside the [FAA] . . . as a costly and inefficient government distribution center that could be better managed by the private sector.” As an article in Government Executive documenting the Bowles-led reinvention noted, “Parts weren’t always in stock, repairs often took weeks, and the center had not taken an inventory of its 20 million items in two decades.”

Bowles reinvented the center to focus on serving its FAA customers in the field. After studying the problems, he persuaded Congress to distribute the center’s $120 million annual budget to those customers. Henceforth, they would have to pay for repairs, giving them incentives to consider alternatives rather than what tended to happen: costly repairs of aging parts that would have been much cheaper to replace with new ones. Moreover, the bureaucratic organization was based on functions, rather than on major products and services. That often meant a project had to involve people from several divisions, rather than being a pre-existing team focused on, say, radar systems. Bowles reorganized into system-related divisions and provided all employees with extensive training on customer service and performance. He also created a board of directors, made up of managers from each of the center’s new divisions. The Logistics Center achieved ISO 9000 certification for high performance, and it received the very first President’s Quality Award, comparable to the Malcolm Baldridge Award in the private sector.

Bowles retired from FAA in 2003, leaving government service to move to Colorado and take on new challenges as a professional ski and snowboard instructor and professional mountain hiking guide. You can read the detailed 2002 Government Executive article on the reinvention of the Logistics Center here.

I have no idea how the Logistics Center went from being a widely praised success to being something more like its pre-Bowles identity. There is no mention in the OIG report of the transition Bowles and his management team implemented 20 years ago. There is only this in-passing reference on page 18:

“[A]s FAA acknowledges, the Agency was billing customers for unreturned [items] before the implementation of [the new inventory system]; we recommend that FAA return to that practice. Unfortunately, FAA does not plan to do so, citing development costs for software modification.”

In other words, it appears that the pre-reinvention bureaucratic culture has returned to the Logistics Center, and no one in FAA seems to care.

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Airlines Taking a Big Chance on eVTOL Startups

As a lifelong aviation geek, I remain fascinated by the growing array of startups seeking to develop (and in some cases, operate) electric-powered vertical take-off and landing (eVTOL) aircraft. One of the newest developments is airlines placing sizeable, albeit conditional, orders with various startup eVTOL companies: American and Virgin Atlantic with Vertical Aerospace and United with Archer Aviation. JetBlue, while not yet placing any orders, has invested in Joby Aviation via its Technology Ventures Fund.

I remain skeptical about the cost-effectiveness of battery power for these new aircraft and also about how quick or easy it will be to obtain FAA certification in this country and EASA certification in Europe. There is also a growing cadre of skeptics of both an eVTOL air taxi business model (given how small the short-haul commercial helicopter market is) and whether air taxis are a logical line-extension of airline business models. Aviation Week’s Ben Goldstein suggests that if airlines do expand into shuttling passengers to airports, “that would amount to a substantial broadening of their existing businesses, akin to taking on ground transportation such as an in-house taxi or limousine service.” He notes that Virgin Atlantic scrapped its car chauffeur service in February 2020. Goldstein quotes aviation consultant George Hamlin as saying, “Adding complexity to your present business that doesn’t reinforce your core business significantly would seem to be a mistake. You’re going to get management distracted from its present mission, which thus far has not proven to produce robust profits over a long period of time for most airlines, apart from Southwest.”

Another consultant, Craig Jenks of Airlines/Aircraft Projects, suggested to Goldstein that he doesn’t think airlines know exactly how they would use eVTOLs. “The spectrum of ways that they can be used is absolutely huge, but you don’t know which uses will be winners.”

Even more skeptical is Cai von Rumohr of Cowen, an investment bank. After noting that airlines’ conditional orders require only minimum deposits and can be dropped if the projects don’t seem to be working out, von Rumohr suggested, “The airlines’ current eVTOL investments look mainly like relatively cheap opportunities to boost ESG ratings.”

Nearly all the leading eVTOL startup companies are aiming at relatively short-haul air taxi service, of up to 50 miles, sufficient to bring commuters from far-flung exurbs or suburbs to central business districts or to a major airport. One prominent exception is Lillium, which is targeting short-haul inter-city trips of up to 150 miles, assuming it can get batteries to support that kind of range in an eVTOL. Its current plans are to start such services between cities in Germany and in Florida. Rather than marketing its vehicles to airlines, it plans to obtain its own air operator’s certificate (AOC). That range could also serve routes between metro areas and resort destinations, such as Martha’s Vineyard, the East Hamptons, or some ski areas near Los Angeles and San Francisco.

One troubling sign emerged in mid-July from what purports to be a robust, privately financed industry. “Electric Air Taxi Companies Want to Be Included in Infrastructure Bill”, read the headline in a July 15 article on AviationToday.com. In a letter addressed to House and Senate leaders of both parties, 19 companies asked that any pending infrastructure legislation include funding “for deployment of electric aircraft charging infrastructure.” I guess their reasoning is: ‘If Washington has cash to hand out, why not get in line for it?’

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Bad-Mouthing Billionaires in Space

While most of us cheered the successful flights of Richard Branson (Virgin Galactic) and Jeff Bezos (Blue Origin) to the edge of space, their successful flights also resulted in calls for regulation, taxation, and outrage at the flights’ carbon footprints. As commercial space continues to grow in volume, these questions will have to be addressed, since space travel will eventually become somewhat more like air travel, as technology improves and costs come down.

A good example is the new Air Force program called Rocket Cargo. As Aviation Week’s Lee Hudson reported, the advent within the next few years of 100-ton commercial reusable rockets makes it feasible to consider suborbital flights to deliver military supplies, disaster relief, and eventually suborbital cargo and passenger service—a staple of science fiction for more than half a century. Decreasing costs from reusability and other innovations (SpaceX and Blue Origin) make the idea at least conceivable. Under its Rocket Cargo program, the Air Force Research Laboratory has created the Rocket Experimentation for Global Agile Logistics project, aiming for multiple proof-of-concept demonstrations over the next three years. Suborbital passenger flights would be much faster than any planned supersonic transport projects.

The Blue Origin and Virgin Galactic flights prompted a social media storm of criticism of huge carbon footprints associated with rocket launches. House Transportation & Infrastructure Committee Chair Peter DeFazio (D-OR) told Politico, “Commercial space launch vehicles emit a stunning amount of carbon dioxide—more in a few minutes than the average car would emit in two centuries of driving.” It’s true that a Falcon 9 is estimated to produce the equivalent of 395 transatlantic airline flights due to its hydrocarbon fuel. On the other hand, Blue Origin’s rocket engines use liquid hydrogen and liquid oxygen, producing zero CO2, as vetted by Politifact. But since most rockets do burn hydrocarbons, why single out commercial ones, when the same is true of NASA and military rockets?

Angst over billionaires investing their own money to reduce the cost of access to space seems to be responsible for singling out commercial launches. On July 20, the day of Blue Origin’s historic launch, Rep. Earl Blumenauer (D-OR) called for a per-passenger tax on the price of commercial space launch tickets and a two-tiered excise tax on the launch companies, one tax rate for suborbital flights, and a higher tax rate for orbital launches. He made an analogy to airline passenger ticket taxes but failed to mention that those are user taxes that pay for airport and air traffic control infrastructure, not taxes aimed at redistributing wealth. Blumenauer would also exempt NASA flights, yet those launches impose the same constraints on air traffic control infrastructure and air travel as commercial launches. Rep. Blumenauer wants the tax revenue to support the “public good,” not air and space infrastructure.

Yet the more commercial space grows, the more those launches and recoveries will conflict with the flight paths of airliners and private aviation. FAA’s barely-out-of-diapers Space Data Integrator (SDI) is a start, scheduled to begin this summer feeding launch and recovery trajectory data from the space vehicles to FAA’s ATC System Command Center in Warrenton, VA, as Aviation Week’s Bill Carey reported in the June 28-July 11 issue. But SDI does not use that real-time data to define the aircraft hazard area (AHA) for various time periods connected with launch and recovery. This essential component is still in prototype form and has only been used for testing, Carey explained. Axios reports that SDI alone is expected to reduce airspace closures from an average of four hours to “only” two. Also still being researched is equipping launch vehicles with ADS-B for additional real-time surveillance. It costs FAA money to research, develop, and operate systems like SDI and the AHA generator. The users of the airspace who create the need for these services should clearly be paying fees for the services, just as they pay various spaceports for the launch facilities they use.

And at some point well beyond where we are today, passengers on commercial launch vehicles will begin to expect the kind of safety standards that have made commercial aviation one of the world’s safest ways to travel. Currently—and correctly—commercial passenger launch is still in the experimental, development stage. The industry asked for, and Congress has granted and extended, future dates before which such launches will graduate from being experimental. Under current law, launch companies are only responsible to prevent harm to non-consenting parties (such as the owner of a house damaged or destroyed by a launch vehicle gone astray). Passengers sign consent forms acknowledging the experimental nature of the flights. For a thoughtful explanation of why this makes sense, see Rand Simberg’s book, SAFE Is Not an Option, with cover blubs from notables, including Stuart Witt of Mojave Air & Space Port.

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Airline Competition About to Blossom

According to the trendy new approach to antitrust now emerging at the Justice Department and the Federal Trade Commission, the criterion should be the number of firms in the market, not customer welfare. Advocates of this approach point to the huge U.S. domestic market share of the current Big Four airlines (American, Delta, Southwest, and United) as if this is inherently bad for air travelers. But evidence that passengers have few choices or face monopolistic prices is lacking. And when we get to a post-pandemic airline market, airline competition is about to increase dramatically.

To begin with, the combined market share of what I’ll call the legacy ultra-low-cost carriers (Allegiant, Frontier, and Spirit) has increased from 5% to 10% in the past five years. They survived the pandemic in better shape than American, Delta, and United, and are all now in the process of significant expansion. Both Frontier and Spirit plan to double in size, with large fleet expansions under way. Frontier plans to add 150 A320s to its existing 110-aircraft fleet while Spirit says it will add 160 planes of that family to its existing 160-plane fleet. Unlike the other ultra-low-cost carriers (ULCCs), Spirit is moving into major hubs, with a big entry into Miami International set for October, for example. Miami is a major hub for American, but there are lots of unused or under-used gates available. Southwest has been following a similar strategy in recent years.

What I find most interesting is the emergence of three new ultra-low-cost carriers in the U.S. market. Breeze, founded by serial airline entrepreneur David Neeleman, gets the most publicity, but Avelo and Porter are following a similar strategy: target mostly unserved nonstop markets with affordable jet service. At a recent conference, airline analyst Bill Swelbar of Swelbar-Zhong presented the results of his research on such markets. In 2019, there were 665 U.S. city pairs with at least 30 passengers a day traveling between them but with no nonstop service. By June 2021 that number had increased to 885. Swelbar also noted the pandemic-related migration away from some of the country’s largest metro areas, providing more residents of smaller cities who will still need to travel, for business as well as leisure.

When Breeze announced its first 39 routes in May, all but two met Swelbar’s criteria (though resulted from Breeze’s own analysis). The initial focus cities are Charleston, New Orleans, Norfolk, and Tampa. Flights to all 16 destinations served by the 39 routes were planned to begin by July 22. Neeleman announced that Breeze has a further 100 cities under consideration, beyond the initial 16. Initial service is being provided by Embraer e190s with 108 seats and E-195s with 118 seats. Those routes will all be less than two-hours’ duration. Breeze will begin taking delivery of an order for 60 larger Airbus A220 in October, and those jets will serve routes with longer than two-hour flight times.

Avelo began serving its initial 12 cities from Burbank on April 28. Its announcement in early July that two of the routes (to Grand Junction, CO, and Bozeman, MT) would be suspended, led Zach Griff at thepointsguy.com, asking, “Could trouble be brewing for one of America’s newest startup airlines?”

But trial and error is how entrepreneurial firms gain empirical data to supplement their modeling. Avelo continues working with Tweed New Haven Airport (HVN) getting ready to launch service from there by the end of the year, basing three 737s there. In June, Avelo committed $1.2 million for near-term improvements to the existing passenger terminal, to which airport contract manager AvPORTS is adding $2.8 million. AvPORTS has reached an agreement with HVN to finance a $100 million capital improvement program that includes lengthening the runway by 1,000 feet (to facilitate fully-loaded 737 operations) and an all-new passenger terminal, under a 43-year lease agreement.

The newest new-entrant is Canada’s Porter Airlines. After having shut down flight operations during most of the COVID-19 pandemic, Porter is being remade into a much larger low-cost carrier. It has ordered 80 Embraer E195-E2 jets with transcontinental range. While it will resume operating smaller aircraft out of its original home base at downtown Toronto’s Billy Bishop Airport, it will operate the E195s from Toronto Pearson as well as Montreal, Ottawa, and Vancouver. And among the many planned routes will be service to “sun destinations” in the United States (expanding well beyond its current routes to Myrtle Beach and Orlando) plus destinations in the Caribbean and Mexico. Thus, Americans in “sun” cities planning travel to Canada will have a new alternative.

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News Notes

Is U.S. Slot Reform in Sight?
President Joe Biden’s sweeping executive order intending to increase competition includes reference to increased competition at airports, which led many media sources to suggest that slots at several major airports could be seen as unfairly benefitting incumbent carriers at the expense of new entrants. Alas, the actual language refers only to “improve[d] airport congestion management, implementation of airport competition plans pursuant to 49 USC 47106(f), and slot administration,” but the order does not call for any study or actual policy change.

Steep Approaches Approved for London City Airport
Airframe company Embraer has received EASA certification for its new E190-E2 to operate into London City Airport (LCY) on a 5.5-degree glideslope (compared to the standard 3 degrees). This is made possible by the aircraft’s new approach software, activated by a “steep approach” switch on the control panel, and by the capabilities of LCY’s new remote tower. The steeper approach will reduce noise exposure near the airport, while also providing greater clearance from tall buildings within two miles of the runway’s western threshold.

Tests Under Way to Reduce Contrail Formation
Eurocontrol’s Maastricht Upper-Area Control Center (MUAC) is conducting tests of whether high-altitude contrails can be reduced or eliminated by changing the cruise altitude of jetliners by a few thousand feet, to avoid meteorological conditions under which ice condenses from water droplets in engine exhaust. The tests are taking place during late afternoon and evening hours this summer. In separate tests, a team of Germany’s DLR and NASA is measuring the extent to which contrails can be reduced by powering aircraft with sustainable aircraft fuels (SAF). Initial tests show that the use of low-aromatic SAF can yield a 50%-to-70% reduction in contrail formation. Non-CO2 effects, including contrails, account for two-thirds of aviation’s impact on radiative forcing.

France Used Laser to Destroy Drone in Test
The French military reported the successful destruction of a drone, using a laser-powered cannon. The anti-drone system was developed under contract by French startup company Cilas. The objective is to protect sensitive institutions such as military bases, nuclear plants, and (presumably) airports from drone intrusions. The French government also announced that it intends to have an anti-drone system in place to protect the facilities of the 2024 Summer Olympics. The system tested on July 7 can detect drones at up to 3 km, track them, and destroy them once they are within 1 km of the laser cannon.

Denver Begins Phase 2 of Great Hall Renovation
Despite having been unable to work with a design/build/finance/operate/maintain partner to expand and renovate its airside terminal (Great Hall), Denver International Airport is making good progress on its scaled-back modernization using conventional contracting. Phase 1, which is adding check-in positions and restrooms, is on track to be completed by the end of 2021. And on July 12, the airport began phase 2, which will add an expanded security area on the north end of the terminal, with state-of-the-art screening technology. Hensel Phelps is the contractor for both phases of the renovation, with a budget of $770 million.

United Backs Another Electric Aircraft Startup
Together with its regional airline partner Mesa Airlines, United Airlines has invested in Sweden’s Heart Aerospace, along with placing a conditional order for 200 of its planned 19-passenger electric-powered commuter aircraft. The ES-19 is targeted to begin service in 2026, assuming no technology problems and U.S. and European certification. This is not an electric VTOL, but rather a conventional-airframe commuter plane powered by batteries instead of petroleum-based fuel. Earlier this year, United also placed a conditional $1 billion order for eVTOL air taxis under development by Archer Aviation.

Bahamas Seeking P3 to Upgrade Smaller Airports
The government of the Bahamas is seeking to enter into a long-term public-private partnership (P3) to redevelop the airports of what it terms its Family Islands. Those islands include Abaco, Eleuthera, Exuma, Grand Bahama, Great Harbor Cay, and Long Island. The Ministry of Tourism & Aviation hired Leigh Fisher in April to develop the request for proposal (RFP)for the project, and it held a forum for interested parties on June 28. The winning P3 team will redevelop, operate, and maintain these airports for a term of years that has not yet been announced.

Cargo Glut Benefits Some Smaller Airports
According to a June 21 report in the Journal of Commerce, freight forwarders are shifting many inbound air cargo shipments to secondary airports, to avoid ground handling bottlenecks at major hubs. One of the airports benefitting is Rockford International, 85 miles from Chicago O’Hare, which already hosts Amazon Air. Another beneficiary is Rickenbacker International near Columbus, OH. Its cargo carriers include Cargolux, Cathay Pacific Cargo, Emirates SkyCargo, and Korean Air Cargo. Major traditional cargo hubs such as O’Hare and LAX have seen record incoming cargo this year, but are plagued by delays in unloading and moving that cargo to where it is destined.

French Aviation Consortium Selects Paris Airports for Hydrogen Projects
A consortium led by Aeroports de Paris (ADP) has selected (no surprise) the Paris airports as the location of 11 projects dealing with hydrogen aircraft propulsion. Companies taking part include U.S. company Universal Hydrogen, Air Liquide, Ecodrome, and a number of others. The H2 Hub Airport project is led by ADP, Airbus, Air France-KLM, and the Ile-de-France Region, all of which are convinced the hydrogen is the aviation fuel of the future.

Court Dings FAA for Changed Air Routes at LAX
The Ninth Circuit Court of Appeals ruled on July 8 that FAA made a “serious error” in changing the Los Angeles International Airport arrival routes it had announced in 2016, without a “proper” environmental review of the change. The city of Los Angeles filed suit against the 2018 changes, which imposed different noise and emission consequences on various communities than the original arrival routes. The changes were part of the Southern California Metroplex plan aiming to standardize approach and departure routes to reduce overall noise and other impacts. Los Angeles has also filed suit against FAA for Metroplex changes affecting departures to the south from the Burbank Airport (BUR).

Over 100 Governments Now Signed Up for CORSIA
International Civil Aviation Organization’s carbon offsetting plan for global aviation as of this month has more than 100 national governments signed up for the voluntary phase, 2021-2023. Sixteen island and less-developed countries signed up recently, including the Bahamas, Belize, Oman, Suriname, Tonga, and Vanuatu, bringing the total to 104. Some 35 governments are mandated to take part in the second phase, through 2035, in which their airlines will be required to offset their carbon emissions. Those 35 include all major industrial countries, including China and Russia.

CLEAR Health Pass Available for Hawaii Travel
Travelers from the U.S. mainland to Hawaii can avoid the 10-day arrival quarantine if they are signed up for CLEAR’s Health Pass technology, under which their vaccination status can be verified. CLEAR announced the agreement with Hawaii on July 9.

Heathrow Reopens Terminal 3
London Heathrow (LHR) announced that its Terminal 3, shuttered since May 2020, has reopened to traffic as of July 15. Virgin America and its partner Delta Air Lines are the largest carriers at T3, but have operated their pandemic-reduced schedules from T2 and T5 until now. While T3 was closed, it actually was used for arrivals from “red list” countries with high infection rates.

July 6 Was National Air Traffic Control Day
Unfortunately, I did not get the word in time to celebrate, but I learned about it a few days later from an online aviation discussion group. Senate Joint Resolution 188 (in 1986) focused attention on the air traffic control system and the role that controllers play in keeping air travel safe. President Ronald Reagan officially proclaimed the day on July 6, 1986, seeking to honor both the controllers who had not gone on the (illegal) 1981 strike, as well as all those who had joined FAA as it built the system back to full capability.

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Quotable Quotes

“In our view, the competition among airlines serving the domestic [U.S.] market generally and the business and leisure markets specifically is about to get very interesting. This will have an impact on the airports and the related supply chain, and people should not be surprised when it happens. Combining a market’s economic and demographic underpinnings with the absolute number of local passengers that were forced to connect pre-COVID, in effect creates a ready-made list of airports to serve, whether as an incumbent or a new entrant.”
—Bill Swelbar, in Sean Broderick and Ben Goldstein, “Breeze Airways Launches Into Changing U.S. Market,” Aviation Week, June 14-27, 2021

“The real difficulties with hydrogen are storing it and managing refueling. Hydrogen is very flammable, and although the flame shoots upwards, the ease with which it ignites and the fact that the flame is invisible make it a serious hazard. Storing liquid hydrogen for long periods requires carefully constructed tanks with inbuilt refrigeration, like the tank NASA uses at the Kennedy Space Center. Handling hydrogen gas at pressures of 700 to 800 atmospheres requires special couplings with refueling only being done by trained personnel under close supervision. It would appear that hydrogen is not practical for longer-range intercontinental aircraft. Although in principle light or short-range aircraft have enough space in the wing, in practice either the range or the payload would be reduced because of the weight of the hydrogen tanks. The real problems are the difficulty of storing a liquid at extremely low temperatures or a gas at very high pressure.”
—Peter Rez, Arizona State University, “Vaporware: Can Hydrogen Replace Fossil Fuels in Aviation?” AOPA Pilot, Aug. 2021

“There are two reasons to hop on a taxi: convenience and speed. But unlike a car, an eVTOL needs dedicated vertiports to land and take off. Air-taxi companies are partnering with firms like parking-garage owner REE and construction contractor Ferrovial to build them, but if restrictions on helicopters are a good guide, many cities won’t be able of willing to host enough vertiports to make for a financially viable air-taxi network.”
—Jon Sindreu, “Air Taxis Could Be Coming, but Not in the Way You Might Think,” The Wall Street Journal, July 2, 2021

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The post Aviation Policy News: Airport Privatization, Billionaires in Space, and More appeared first on Reason Foundation.

• Superior landing system for San Francisco
• Quo vadis supersonic transports?
• Paying for airports and ATC after COVID-19
• Some progress on airport slots
• Single European Sky still far from reality
• News notes
• Quotable quotes

SFO Is Implementing GBAS. Why Aren’t Other Airports?

After four years of study, San Francisco International Airport (SFO) has announced that it will implement Honeywell’s SmartPath ground-based augmentation system (GBAS) to manage approaches to its runways. GBAS adds ground-based GPS receivers at an airport to provide corrections to GPS signals, enabling very precise approaches and landings, far beyond what legacy instrument landing systems (ILS) provide. Whereas each ILS serves only a single runway end, a single GBAS can handle up to 48 separate approaches to all of an airport’s runways.

At SFO, GBAS will permit curved or offset approaches to keep approaching flights over water for a longer period of time, reducing noise in nearby communities. It also permits steeper glide slopes, also reducing community noise exposure. GBAS also has lower maintenance and inspection costs than ILS. With all these advantages, you would think GBAS would be an integral part of the Federal Aviation Administration’s Next Generation Air Transportation System, or NextGen, program, to increase precision flying, reduce fuel consumption, and increase on-time performance. But you’d be wrong. San Francisco is only the third U.S. airport to install GBAS, after Houston Intercontinental (IAH) and Newark (EWR). 

What’s going on here?

First of all, unlike other elements of NextGen which are part of the Federal Aviation Administration’s (FAA) budget, GBAS has been left out. Hence, any airport that wants to install it must cover the costs itself. That raises the obvious question of why. And thereby hangs a tale.

There are two different ways in which GPS signals can be augmented to be accurate enough to guide precision landings: ground-based and space-based. The original FAA programs for these were called LAAS (local area augmentation system) and WAAS (wide-area augmentation system). In the early days of LAAS, technical difficulties, highlighted by a 2003 Department of Transportation Inspector General report, led to the cancellation of that program in 2004. Honeywell’s people continued work on GBAS, and FAA eventually certified it in 2009.

By that point, however, FAA had already spent billions of dollars on WAAS, putting satellites in geostationary orbit to provide space-based correction signals that would be available to areas across the country—and particularly to smaller and general-aviation airports. Regional airlines, general aviation organizations, the Aircraft Owners and Pilots Association (AOPA) and the National Business Aviation Association (NBAA), and avionics manufacturers all pushed hard for WAAS funding. A consultant friend of mine (ex-FAA and now retired from a major aerospace company) says that the WAAS people at FAA, in effect, “stacked the deck” against GBAS via over-specification, not properly assessing benefits, and not assessing true costs in their cost/benefit studies.

And that bias is still evident. Efforts are under way to get increased FAA funding (perhaps in a federal infrastructure bill) to pay for equipping regional airline jets with avionics needed to interface with WAAS (specifically for the vertical navigation [VNAV] capability). Full-size airliners mostly don’t use those smaller airports and have no need to be WAAS-equipped. And large airliners produced in recent years are equipped (or could easily be retrofitted) with GBAS-capable multimode receivers.

There is no good reason for FAA’s exclusion of GBAS from NextGen. It’s the logical successor to ILS at least for large and medium hub airports. It is used at a growing number of major airports around the world, due to its superior cost-effectiveness. Its exclusion by FAA is an ongoing blunder.

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Is There a Future for Commercial Supersonics?

On May 21, the largest and apparently most credible developer of a commercial supersonic aircraft—Aerion Supersonic—announced that it was ceasing operations (though it did not file for bankruptcy). The announcement led a number of aviation experts to opine that there is no plausible commercial future for this category of aircraft.

But two weeks later, United Airlines again stunned the aviation world by announcing a firm order for 15 supersonic airliners from competitor Boom Supersonic. Unlike Aerion, Boom actually has a prototype aircraft ready to begin flight trials toward the end of this year. Its production model has a planned 60-to-88 passengers, versus 10 for Aerion’s proposed business jet. And Boom’s Overture is to fly at Mach 1.7, compared with Aerion AS2’s Mach 1.4.

While Aerion had 10 firm orders and options for 20 more, Boom has United’s 15 firm orders, another 35 UA options, and options for 20 from Japan Airlines and 10 from Virgin Atlantic. Aerion had working arrangements, at one point or another, with Airbus, Lockheed Martin, and Boeing, but all came to naught. It also had a contract with GE Aviation to develop an engine model specifically for the AS2, but that agreement also fizzled out. Boom has an ongoing relationship with Rolls Royce for engine development.

There are numerous challenges that any commercially viable supersonic aircraft must address successfully. These include avoiding sonic booms while flying over land, meeting emerging sustainability requirements, and gaining certification from FAA and other safety agencies which have no current category into which an SST fits. Even if these are all resolved, there in the major question of economics. As aviation writer Dan Reed pointed out in his recent Forbes column, “breaking the profit barrier in such a plane is much, much harder than breaking the sound barrier.” Ultimately, Reed says, the question boils down to how much are the travel time savings worth to potential customers?

Aviation consultant Bob Mann points out that an airline like United might “cannibalize” some of its existing premium cabin business on routes where it offers supersonic service, especially if—as Boom claims—Overture’s ticket prices could be comparable to current business class fares. Yet the per-passenger ownership and operating cost of the supersonic plane will almost certainly be much higher than that of a 787 or A350. Another potential problem is scheduling. Many U.S. to Europe flights go to slot-controlled airports, and slot pairs that work for 7-8 hour flights will not work for much faster trips, Mann told Aviation Daily.

As with urban air mobility via eVTOLs, I remain excited by the prospect of long-haul supersonic commercial air service and would like to see it succeed. But I’m not betting that any of the remaining three startups can go the distance. And just for speculation’s sake, if getting to successful Mach 1.7 airliners takes a couple of decades, they may be obsolete by that point if SpaceX, Blue Origin, or another company succeeds in developing long-distance cargo and passenger suborbital rockets.

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Paying for Airports and Air Traffic Control

The COVID-19 pandemic has inflicted serious damage on airlines, which in some countries (including the United States) have received significant taxpayer bailouts. Airports have suffered significant losses (and received federal bailouts), but since their finances are far more conservative, most have pulled through and some have even continued large construction projects during the lull in air travel. Most affected of all have been air navigation service providers (ANSPs), which for the most part have received little or no government aid. Worse, the ANSPs had far less scope to furlough staff or shut down whole sectors (as some airports did with some of their terminals) because air traffic control needed to be maintained more or less everywhere as long as flying continued.

As is the case with highways and transit, the “after-times” will be somewhat different from the business-as-usual days before the COVID-19 pandemic. As I have written here previously, most analysts think business travel will not recover to the same extent as personal/leisure travel, due to the rise of virtual conferences and meetings. That will affect some airports more than others, and will also affect ANSPs due to somewhat reduced flight activity.

In most of the world, ANSPs receive their revenue directly from the operators of aircraft that use their services. Nearly all ANSPs, whether they are parts of a government transport agency or operate as corporations (government-owned, nonprofit, or partly investor-owned) receive their revenue (directly or indirectly) from weight-distance fees, as spelled out by the International Civil Aviation Organization The ANSPs in corporate form charge and receive the user fees directly, and use the revenue to fund their operations. The larger ones are also able to issue revenue bonds to finance large capital investment in facilities and equipment.

The United States remains an outlier from this model, points out Steve Van Beek, North America Director for consulting firm Steer. In a white paper issued last summer, “The Public to the Rescue, But for How Long?”, he reminds us that “other nations over the last three decades have removed their aviation service providers from public operation and control. . . . [They] have created various forms of commercial entities including Air Navigation Service Providers, handling their nation’s commercial and private air traffic. . . . These ANSPs operate on the principle of cost recovery, charging users for their services and investing in the capital and operating resources required to provide these services.”

By contrast, FAA programs—both air traffic control and capital funding for airports—are supported by the Airport and Airway Trust Fund, getting about 80% of its funding from aviation excise taxes and the balance from federal taxpayers in general. But last year, via the CARES Act, Congress suspended those user taxes through the end of 2020. Thus, for most of the year, what had been a hefty Trust Fund balance was significantly depleted. With those taxes being collected again only since January 2021, FAA does not have enough money to fully support its $15 billion budget.

Looking to the future, Van Beek sees three possible courses. One is simply to continue the pre-pandemic status quo, which would take several years to rebuild the Trust Fund. A second option would be to reform the public system, “attempting to apportion the costs of funding the system to future users of the system,” based on “a thorough examination of the fairness, adequacy, and economic effects of the AATF taxes and fees,” something that has not occurred in decades. The third option is to “change how services are provided, including a commercial ANSP and deregulated airports.” There could still be federal support for remote and rural community air services, as well as lifesaving and safety services.

Van Beek is a veteran of U.S DOT, ACI North America, and the FAA Management Advisory Council, so he speaks from considerable aviation background and knowledge. I think his third option is worth serious discussion.

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Bits of Progress on Airport Slots

In both Europe and the United States, there have been small tweaks in restrictive airport slot systems, letting in a bit more competition.

First, here in the United States, Spirit Airlines won 36 slots at United-dominated Newark Airport (EWR). The slots were given to Southwest Airlines as a condition of United’s merger with Continental back in 2010, with the aim of increasing competition at EWR. When Southwest left Newark for LaGuardia in 2019, Spirit asked for the slots but FAA decided to extinguish them. This was despite both the Port Authority and the Justice Department’s antitrust division supporting the transfer to Spirit. The airline appealed, and late last month the U.S. Court of Appeals in Washington, DC, overruled the agency, saying “FAA’s decision was arbitrary and capricious” in ignoring competitive issues at EWR.

Second, in a somewhat comparable case in the United Kingdom, the Competition & Market Authority (CMA) reached a decision to open up slots at Heathrow (LHR) and/or Gatwick (LGW) to other airlines as a condition for approving a North Atlantic joint agreement among five Oneworld carriers. CMA decided that only limited competition would exist on routes between London and Boston, London and Dallas-Fort Worth, and London and Miami. Hence it requires Oneworld to give up enough slots for daily round-trip service on each of those routes for four IATA seasons (i.e., two calendar years) beginning in the summer 2022 season. Interested airlines have until July 1 to apply.

Third, there are two bits of good news about slots in the European Union. For the summer 2021 season, incumbent slot-holders can not use 50% of their slots without losing them, as long as the incumbents use their remaining slots at least 50% of the time. This opens up some summer service opportunities for low-cost carriers such as Ryanair and Wizz Air, but with no certainty about continuing any such services in the subsequent winter season. But beyond these minuscule openings, ACI Europe is now speaking out about the need to reform the slot system, to take into account changes in European aviation since the system’s beginning 30 years ago. Deregulation within the European Union and the rise of low-cost carriers have significantly changed aviation there, as has privatization of most of the state-owned airlines.

I can’t leave this subject without noting that the above tweaking of slots to allow a bit more competition is still an attempt at central planning, rather than leaving airport access to market forces. Even though incumbent airlines consider their current slots as owned assets, that is not true legally, either in Europe or the United States. But politically they might as well be assets, so any proposed system to buy and sell slots would be only an incremental reform, taking decades (and bankruptcies) before much real competition occurred at the most popular airports.

By contrast, ignoring slots and, instead, charging market prices for both take-offs and landings would affect all flights immediately. Simulation games with real airline schedulers and airport officials carried out by FAA and several universities in 2004-2005 showed that congestion pricing would work to reduce congestion at slot-controlled airports, in part by leading carriers to substitute larger aircraft for more frequent smaller aircraft. It did not lead to a legacy carrier dominating all service.

This is an approach that really needs to be tried.

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Single European Sky Still Far Off, But There Is Some Progress

The effort to create a unified air traffic management system across all of Europe has been under way for nearly two decades, but Europe still has twice as many control centers as the United States, despite serving a smaller amount of flight activity and a smaller geographic area. Since this ambitious effort began, not a single center has been shut down, and the unit costs of air traffic control remain well above those of the United States.

Various concepts for achieving greater efficiency without directly taking on national sovereignty have produced very limited results. Functional Airspace Blocks (FABs) among several adjoining countries have led to some streamlined routes, but very little cost saving. And European aviation groups are now vociferously protesting the idea that they—the fee-paying customers—after having air traffic control fees waived for a year or more—will now be asked to start making up the ANSPs’ accumulated losses starting in 2023.

The European Commission this spring proposed that Eurocontrol’s Network Manager be able to manage all the upper airspace in the sense of assigning flights to the most direct routes, rather than leaving airlines free to take longer zig-zag routes to avoid higher user fees. Current user fees are charged based on great-circle miles between origin and destination, regardless of airlines taking different routes in search of lower per-mile charges. Increased EU emphasis on reducing greenhouse gas emissions may become a reason to bring agreement on changing pricing policy and/or dynamically reconfiguring airspace to balance supply and demand. Either could be part of the Network Manager’s increased role.

Unfortunately, these proposals were significantly watered down by the European Council early this month. It rejected any changes in en-route charges as well as the EC’s enhanced role for the Eurocontrol Network Manager. Instead, it touted FABs as the best way forward. The International Air Transport Association (IATA) announced on June 8 that this watering down “will mean the inefficiencies in the air navigation network that result in 6-10% in avoidable carbon emissions will continue.” It also criticized the council’s “diminished role of the Network Manager.”

Amidst all this furor, there were a few modest signs pointing toward future change. First, Estonia and Finland announced plans this month to develop a joint air traffic service for the Gulf of Finland, which would operate from two existing centers, one in each country, but under a single management. This goes beyond what FABs have been able to accomplish. Second, Finland, Ireland, Malta, and Spain released a joint statement that implied going farther than the council’s plans, garnering praise from IATA.

Finally, I’m remiss in not previously reporting progress on simulated virtual air traffic management. An article in Aviation Today (March 31, 2021) reported on simulations carried out by the ANSPs of Germany, Poland, and the UK to validate the feasibility of using a virtual center to manage flights beyond country borders. Assisting the three ANSPs (DFS, PANSA, and NATS) were technology firms Frequentis and Indra. One simulation involved transferring control at night between centers and the other simulated transfer of control from a center experiencing a failure to a center in another country. The researchers acknowledged two real-world constraints on implementing virtual centers: sovereignty (and hence legal questions) and the lack of international licensing of controllers. Nevertheless, it’s good to see work going on to develop this promising concept.

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News Notes

Competitor for Space-Based ADS-B Announced
Spanish ANSP Enaire has teamed with Indra in creating a new company called Startical, whose aim is to develop a space-based system to provide both ADS-B surveillance and VHF communications between pilots and controllers. The plan would make use of a 200-satellite constellation in low-Earth orbit (LEO). Between now and 2023, the company will focus on technology development and regulatory and market aspects. Phase 2, from 2024 to 2027, envisions the launch of the satellites and the start of commercial services. Aviation Daily (June 2, 2021) reports that Startical has selected GomSpace to develop and launch three prototype nanosatellites for the project.

North Atlantic Tracks Nil?
Nav Canada and NATS have been experimenting with managing traffic across the North Atlantic without the usual Organized Track System (OTS) routes. Thanks to Aireon’s space-based ADS-B surveillance, airlines can now fly more-optimized routes each way, saving time and fuel. Aviation Week reported (May 17-30, 2021) that “in recent weeks, the two ANSPs have undertaken so-called nil-OTS days, on which airlines can submit their preferred flight tracks for approval. The two ANSPs next plan to work with 15 airlines to develop “table-top exercises” on removal of the OTS on a permanent basis.

Pentagon Looking into Suborbital Cargo Delivery
The Wall Street Journal reported that the Pentagon is considering the potential of quickly delivering military cargo to anywhere in the world via suborbital flights. The article was accompanied by a photo of a SpaceX Starship blasting off. That vehicle is currently the only rocket that can handle a payload of up to 100 tons, the same as a C-17 cargo plane. The project is called the Air Force Rocket Cargo Initiative and has $48 million in the agency’s latest budget request.

Joby Aviation Strikes Deal for Parking Garages
If urban air taxis achieve FAA certification, where will they land and take off in urban areas? One possibility is the roofs or top floors of urban parking structures. Hence the June 11 announcement of a partnership of urban air mobility startup Joby Aviation with parking technology company REEF Technology and its affiliated Neighborhood Property Group. Joby’s initial goal is to acquire rooftop vertiport sites in target metro areas Los Angeles, Miami, New York, and San Francisco.

Garmin Wins Collier Trophy
The National Aeronautic Association early this month announced that the winner of the coveted 2020 Robert J. Collier Trophy is avionics company Garmin. Specifically, the award honors the Garmin Autoland system, which enables a general aviation aircraft whose pilot is incapacitated to automatically locate the nearest available airport and guide the plane to a safe landing. Thus far, Autoland has been FAA-certified for the Piper M600, Daher TBM 940, and the Cirrus SF50 Vision Jet.

Clear Planning $100 Million IPO
Having survived the worst U.S. airline recession in history, airport security company Clear has filed paperwork for an initial public offering (IPO) aiming to raise $100 million to expand its services. It provides airport services at 38 locations and serves 26 sports and entertainment venues. It has enrolled the biometrics of 5.6 million people. Its latest offering is Clear Health Pass, a way to provide proof of health and vaccination status.

Space Data Integrator Goes Live This Month
At long last, FAA’s technology that tracks space launches and re-entries in real-time and provides that data to air traffic control facilities is scheduled to go live in June. An important goal is to minimize the size and duration of airspace that must be closed during such space operations. Those disruptions are occurring more frequently, as commercial space traffic increases. In the 2020 calendar year, FAA’s commercial space office (AST) licensed a record 39 launches, and in just the most recent six months there have been 37, reported Aviation Daily (June 2, 2021). Unfortunately, the related system—the aircraft hazard area (AHA) generator—is still in the prototype stage and has so far been used only for testing.

Idaho Airport Seeks a Remote Tower
Ever since 2018, board members of Friedman Memorial Airport in Hailey, Idaho, have been following the progress of digital remote towers. In April 2021, they moved this item to the top of their agenda. The airport has a conventional tower but FAA in 2013 mandated that it be replaced for safety reasons at an estimated cost of $7.5 million. The board now plans to develop an RFP for a digital remote tower, hoping for FAA approval under a little-used congressional plan for FAA to foster such projects.

Eurocontrol Testing Reduced Contrails Plan
A known way to reduce or eliminate contrails produced by high-flying aircraft is to change their altitudes to ones where ice crystals are less likely to form. Eurocontrol’s MUAC manages airspace from 24,500 to 60,000 feet and in normal times handles over 5,000 flights a day. Using forecasted atmospheric data, MUAC is trying out small altitude adjustments (e.g., 2,000 ft. up or down) that aim to reduce or eliminate contrails. The project, with support from German aerospace research lab DLR, will continue through December.

U.S. Airport Drone Intrusion Projects Moving Forward
Both the Transportation Security Administration and FAA have efforts under way to deal with drones illegally intruding into restricted airport airspace. On May 6, TSA’s Acting Director appeared at Miami International Airport to announce the start of its project to detect, monitor, and track such drones, using radar, thermal imaging, and artificial intelligence. It will extend through December. FAA is getting ready to test drone detection and mitigation technologies at Atlantic City, Huntsville (AL), Rickenbacker (Columbus, OH), Seattle, and Syracuse airports. Overall, at least 10 technologies will be tested at one or more of these airports.

What Are the Main Challenges for Electric Airliner Propulsion?
Aviation Week’s Graham Warwick and Thierry Dubois devoted a full page in the magazine’s May 17-30, 2021, issue going over the many technological obstacles to affordable and effective electric (whether battery or hydrogen fuel cell) propulsion system for medium and large commercial airliners. It’s a formidable set of challenges, and the piece is well worth reading.

Error Regarding NATS Swanwick Center
In last month’s article about the new remote tower for London City Airport, I wrote that Swanwick is 100 miles north of that airport. Martin Rolfe of NATS quickly emailed to note that it is actually 100 miles to the south. I’m happy to set the record straight.

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Quotable Quotes

“The question in the case of UAM [urban air mobility] makers is whether the market can afford—and actually will pay more—for the time savings provided by low-flying and relatively slow UAM vehicles that skip over traffic-clogged highways. Will enough of highly paid executives’ time be saved by UAM vehicles to make low-level urban flying a significant cost saver and efficiency enhancer? And will that be true in a future that is likely to feature a lot more work-from-home arrangements than anyone foresaw 18 months ago before Covid-19 made tens of millions of people home-based workers? . . . If the answer to that is yes, then great; we’re headed toward an amazing future of affordable low-level intra-city transportation. But if the answer is no, or even just maybe, then most or even all of the nascent UAM developers could be headed for the same kind of stillbirth as Aerion’s Mach 1.4 AS2 supersonic passenger plane.”
—Dan Reed, “The Collapse of Aerion Supersonic Shows That Aviation Advances Must Be As Affordable As They Are Amazing,” Forbes.com, June 2, 2021

“We support a rethink of the [EU] slot rules and a revision of the regulation. Its 30th birthday is coming up, and when you see the amazing changes in the aviation market in that time, it’s clear that it is not designed for today’s market or tomorrow’s. That needs to be done in a methodical manner. First, let’s come out of these temporary measures and return to the status quo, while taking the time and effort to reform the regulation in a way which is prepared for the future.”
—Aidan Flanagan, ACI Europe, in Helen Massy-Beresford and Ben Goldstein, “Slot Shifts,” Aviation Week, May 3-16, 2021

“Delivery of ATM [air traffic management] is increasingly disconnected from the location of the service. That is not fantasy; it is real. Sydney Airport’s tower services are to be provided from Melbourne, a mere 900 kilometers away. Why this should stop at national borders in a world of satellites and data is impossible to justify, except by reference to a 1944 treaty, long before satellites. Once the digitization starts to move into the area of controlling flights and movements around airports, it could also work outwards and backwards into distribution and back-office functions, and further and deeper integration between the airport and airline on customer service and customer handling as well.”
—Andrew Charlton, “The Unbearable Lightness of Being an Airport,” Aviation Intelligence Reporter, June 2021

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