An Economic Analysis of Runway Extensions
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An Economic Analysis of Runway Extensions July 2010 A Component of the Prepared for Alaska Department WIth a Grant from of Transportation and Federal Aviation Public Facilities Administration Prepared by: As subconsultants to: Northern Economics, Inc DOWL HKM 880 H Street, Suite 210 4041 B Street Anchorage, AK 99501 Anchorage, AK 99503 (907) 274-5600 www.AlaskaASP.com (907) 562-2000 AN ECONOMIC ANALYSIS OF RUNWAY EXTENSIONS A COMPONENT OF THE ALASKA AVIATION SYSTEM PLAN Prepared for: Alaska Department of Transportation and Public Facilities Prepared by: Northern Economics, Inc. 880 H Street, Suite 210 Anchorage, AK 99501 (907) 274-5600 As subconsultants to: DOWL HKM 4041 B Street Anchorage, Alaska 99503 (907) 562-2000 W.O. D59825 July 2010 An Economic Analysis of Runway Extensions TABLE OF CONTENTS Page EXECUTIVE SUMMARY ............................................................................................ I Community Benefits ............................................................................................. II Improved Reliability and Safety ....................................................................... II Reduced Fuel Transportation Costs ................................................................ II Other Benefits ...................................................................................................... III Reduced Cargo Transportation Costs ............................................................ IV Reduced Cargo Shipping Costs ...................................................................... V Reduced Operating Costs and Passenger Flights ......................................... VI KEY FINDINGS ......................................................................................................... IX 1.0 INTRODUCTION ............................................................................................. 1 2.0 BACKGROUND .............................................................................................. 5 2.1 Fuel .............................................................................................................. 5 2.2 Fish and seafood industry ............................................................................ 9 2.3 Cargo and Mail Service .............................................................................. 11 3.0 COMMUNITY CASE STUDIES ..................................................................... 14 3.1 Eek, Alaska ................................................................................................ 14 3.1.1 Airport and Public Infrastructure ............................................................ 16 3.1.2 Local Economy ...................................................................................... 16 3.1.3 Air Carrier Activities ............................................................................... 18 3.1.4 Community Impacts from Runway Extension ........................................ 30 3.2 Egegik ........................................................................................................ 33 3.2.1 Airport and Public Infrastructure ............................................................ 34 3.2.2 Local Economy ...................................................................................... 35 3.2.3 Air Carrier Activities ............................................................................... 36 3.2.4 Community Impacts from Runway Extension ........................................ 46 3.3 Kongiganak ................................................................................................ 48 3.3.1 Airport and Public Infrastructure ............................................................ 49 3.3.2 Local Economy ...................................................................................... 50 3.3.3 Air Carrier Activities ............................................................................... 51 3.3.4 Community Impacts from Runway Extension ........................................ 61 3.4 Koyukuk ...................................................................................................... 64 3.4.1 Airport and Public Infrastructure ............................................................ 65 3.4.2 Local Economy ...................................................................................... 66 3.4.3 Air Carrier Activities ............................................................................... 66 3.4.4 Community Impacts from Runway Extension ........................................ 77 3.5 Perryville ..................................................................................................... 79 3.5.1 Airport and Public Infrastructure ............................................................ 80 3.5.2 Local Economy ...................................................................................... 80 3.5.3 Air Carrier Activities ............................................................................... 82 3.5.4 Community Impacts from Runway Extension ........................................ 91 3.6 Quinhagak .................................................................................................. 94 3.6.1 Airport and Public Infrastructure ............................................................ 95 3.6.2 Local Economy ...................................................................................... 96 3.6.3 Air Carrier Activities ............................................................................... 97 3.6.4 Community Impacts from Runway Extension ...................................... 108 3.7 Sand Point ................................................................................................ 110 3.7.1 Airport and Public Infrastructure .......................................................... 111 3.7.2 Local Economy .................................................................................... 112 3.7.3 Air Carrier Activities ............................................................................. 113 3.7.4 Community Impacts from Runway Extension ...................................... 123 4.0 KEY FINDINGS ........................................................................................... 125 5.0 SOURCES .................................................................................................. 127 Page i An Economic Analysis of Runway Extensions TABLE OF CONTENTS (cont’d) TABLES Page Table 1. Estimated Cost Difference for Shipping 100,000 Pounds of Fish ................. V Table 2. Changes in Shipment Costs to Eek ............................................................ VI Table 3. Passengers, Flights, and Passengers per Flight by Comparative Groups .................................................................................................... VIII Table 4. Average Seats per Passenger Flight, 2002 and 2008 ............................... VIII Table 5. Percent Change in Passengers, Flights, and Passengers per Flight by Case Study Community after Extensions ............................................. IX Table 6. Alaska Monthly Crude Oil Prices, ($ per barrel) ........................................... 7 Table 7. Eek Population, 1990 – 2008 ..................................................................... 15 Table 8. Eek Commercial Fishing Activity, 2000 – 2008 .......................................... 18 Table 9. Eek Passenger Arrivals and Departures, 2002 – 2008 .............................. 19 Table 10. Eek Average Number of Passengers per Arrival and Departure, 2002 and 2008 ......................................................................................... 21 Table 11. Eek Air Cargo Received and Shipped, 2002 – 2008 (Pounds) ................ 22 Table 12. Eek Air Mail Received and Sent, 2002 – 2008 (Pounds) ......................... 25 Table 13. Air Carriers and Fleet Serving Eek in 2008 .............................................. 27 Table 14. Eek Arrivals by Aircraft Type, 2002 and 2008 .......................................... 28 Table 15. Overview of Aircraft Operating Costs, Payload, and Runway Requirements .......................................................................................... 29 Table 16. Changes in Shipment Costs ..................................................................... 31 Table 17. Egegik Population, 1990 – 2008 .............................................................. 34 Table 18. Port of Egegik Processed Salmon, 2000 – 2007 ...................................... 36 Table 19. Egegik Passenger Arrivals and Departures, 2001 – 2008........................ 37 Table 20. Egegik Average Number of Passengers per Arrival and Departure, 2002 and 2008 ......................................................................................... 39 Table 21. Egegik Air Cargo Received and Shipped, 2002 – 2008 (Pounds) ............ 40 Table 22. Egegik Air Mail Received and Sent, 2002 – 2008 (pounds) ..................... 42 Table 23. Air Carriers and Fleet Serving Egegik in 2008 ......................................... 43 Table 24. Egegik Arrivals by Aircraft Type, 2002 and 2008 ..................................... 44 Table 25. Overview of Direct Aircraft Operating Costs, Payload, and Runway Requirements .......................................................................................... 45 Table 26. Kongiganak Population 1990 – 2008 ....................................................... 49 Table 27. Kongiganak Commercial Fishing Activity, 2000 – 2008 ..........................