The cost of congestion

A recent study puts a price on the impact of congestion—and boosts calls for improving the U.S. aviation system

BY RACHEL RADWAY

Federal Aviation Administration forecasters and industry experts have long predicted growth in air traffic volume over the next decade that will far outstrip system capacity. They’ve said that the drastic reduction in demand for consumer and business air travel that began on Sept. 11, 2001, is only temporary; people and goods will soon be flying again in pre-9/11 numbers.

The results of a study Boeing and five other major aviation organizations released on Sept. 30 not only support these assertions—they underscore the urgent need for a major new initiative to modernize the United States’ air traffic system.

DRI•WEFA and the Campbell-Hill Aviation Group conducted the study, called “The National Economic Impact of Civil Aviation.” They designed it to determine and document the impact of civil aviation products and services on the U.S. economy and, by extension, on the quality of life in the United States. The study also examined the economic impact of congestion and delays in the aviation system, both historically and projected into the future.

The study’s findings are dramatic. Congestion and delays in commercial air transport in 2000 cost the United States $9.4 billion. According to the formulas used in the analysis, this figure—total delay costs—includes $4.7 billion to passengers and $4.7 billion to the U.S. economy. Examples of costs resulting from congestion delay are extra fuel consumption, flight and ground crew rescheduling, overtime pay, lost revenue from canceled flights and hotel stays for forced overnights.

And an analysis of projected costs, in 2000 dollars, for the next 10 years yielded staggering results: Even if all of the aviation infrastructure projects outlined in the Federal Aviation Administration’s Operational Evolution Plan are completed as planned, there still will be more delays in 2012 than there were in 2000. And the cumulative cost of delays to the U.S. economy by 2012 would be close to $158 billion.

From its establishment in November 2000, the mission of the Boeing Air Traffic Management business unit has been to reduce air traffic congestion and delays significantly while increasing system capacity and enhancing safety and security. The challenges inherent in an effort as massive as trying to revolutionize the entire air traffic system are both technical and political. The technological aspects of the undertaking, however, are relatively straightforward in comparison with the attempt to revolutionize a system in which numerous companies, labor unions, government agencies and industry organizations have a major stake.

Political barriers have been eroding gradually as key figures such as John Marburger, the White House science adviser, have come out in support of major change. With the release of the economic impact study and its emphasis on the immense costs of maintaining the status quo, the implications have become even clearer.

“The study documents what we know intuitively—that there’s a direct link between the health of the U.S. aviation industry and the U.S. economy,” said Alan Mulally, president of Boeing Commercial Airplanes, a cosponsor of the study with Boeing Air Traffic Management. “Aviation is vital to our economic future as well as to our way of life and the freedoms we all enjoy.”

And, to realize this future, we need to act now to get a much more robust air traffic system in place, said John Hayhurst, president of Air Traffic Management.

“Current government efforts to expand the capacity of the nation’s aviation system are important contributions that must be fully funded in the years ahead,” Hayhurst said. “But they do not go far enough. To fully meet our nation’s air transportation requirements in the decades ahead, we need a system with far greater capacity than what we have today.

“It is absolutely clear that we must do more to create a system that meets our future air transportation needs,” Hayhurst said. “A fundamental redesign of the current system is necessary to address both future capacity requirements and the new security environment, post-9/11.”

rachel.e.radway@boeing.com