A CHAPTER TWO AVIATION FORECASTS An important factor in airport planning is the such forecasts with the objective of including deinition of demand that may reasonably be them in its Terminal Area Forecasts (TAF) expected to occur over a deined period of and the National Plan of Integrated Airport time. For the purposes of master planning, Systems (NPIAS). In addition, aviation this involves projecting potential aviation activity forecasts are an important input to activity over the short term period of the beneit-cost analyses associated with ive years, as well as consideration of a airport development, and FAA reviews these longer timeframe. For small hub, primary analyses when federal funding requests are commercial service airports, such as submitted. Santa Barbara Airport (SBA), forecasts of passengers, cargo, based aircraft, and As stated in FAA Order 5090.3C, Field operations (takeoffs and landings) serve as a Formulation of the National Plan of Integrated basis for planning. Airport Systems (NPIAS), dated December 4, 2004, forecasts should: The Federal Aviation Administration (FAA) has a responsibility to review aviation Be realistic forecasts that are submitted to the agency in Be based on the latest available data conjunction with airport planning, including Relect current conditions at the airport master plans, Code of Federal Regulations Be supported by information in the study (CFR) Part 150 noise compatibility studies, Provide adequate justiication for the and environmental studies. The FAA reviews airport planning and development AIRPORT MASTER PLAN DRAFT FINAL 2-1 The forecast process consists of a series behavioral factors characteristic of the of basic steps that can vary depending Airport or the airline industry as a whole. upon the issues to be addressed and the level of effort required to develop the The following analysis begins with a dis- forecast. The steps include a review of cussion of national trends and outlooks previous forecasts, determination of data for the economy and what it means for needs, identification of data sources, col- the airline industry. Local and regional lection of that data, selection of forecast socioeconomic trends are then discussed. methods, preparation of the forecasts, Each factor into the subsequent forecast and evaluation and documentation of the analyses for enplanements and opera- results. tions. The following forecast analysis for the Airport was produced following these NATIONAL AVIATION TRENDS basic guidelines. Other forecasts dating back to the 2003 Aviation Facilities Plan Each year, the FAA updates and publishes were examined and compared against a national aviation forecast. Included in current and historic activity. The histori- this publication are forecasts for the large cal aviation activity was then examined air carriers, regional/ commuter air carri- along with other factors and trends that ers, general aviation, and FAA workload could affect demand. The intent is to pro- measures. The forecasts are prepared to vide an updated set of aviation demand meet budget and planning needs of the projections for the Airport that can be in- constituent units of the FAA and to pro- corporated into the facility needs analysis vide information that can be used by state of the Master Plan. and local authorities, the aviation indus- try, and the general public. For the record, this forecast effort was completed in the first quarter of 2012, The current edition when this forecast using 2011 as its base year. This chapter was prepared was FAA Aerospace Fore- reflects the conditions at that time, as well casts - Fiscal Years 2012-2032, published as utilizes socioeconomic and aviation in- in March 2012. The FAA forecasts used dustry forecasts in effect at that time. the economic performance of the United States as an indicator of future aviation industry growth. Similar economic anal- PASSENGER SERVICE FORECASTS yses were applied to the outlook for avia- tion growth in international markets. To properly evaluate airport needs and impacts related to present and future passenger airline activity, two basic ele- Economic Outlook ments must be forecast: annual enplaned (boarded) passengers and annual aircraft The aviation industry in the United States operations. Annual enplaned passengers has experienced an event-filled decade. are the most basic indicator of demand Since the turn of the century, the industry for commercial service activity. From a has faced impacts of the events of Sep- forecast of annual enplanements, aircraft tember 11, 2001, scares from pandemics operations can be projected based upon such as SARS, the bankruptcy of five net- work air carriers, all-time high fuel prices, 2-2 DRAFT FINAL and a serious economic downturn with Economic growth on the global scale is global ramifications. The Bureau of Eco- expected to be higher with emerging nomic Research has determined that the markets in Asia/Pacific and Latin America worst economic recession in the post- leading the way. The global GDP was World War II era began in December projected to grow at an average of 3.3 2007. Eight of the world’s top 10 econo- percent over the 20-year forecast period. mies were in recession by January 2009. The following subsection examines the As the recession began, unemployment in FAA’s forecasts for commercial air ser- the United States was at 5.0 percent. vice. Later, in their appropriate sections, While it grew through 2008, unemploy- the FAA forecasts for air cargo and gen- ment intensified in 2009 until peaking at eral aviation will be discussed. 10.1 percent in October, although the re- cession officially ended in June of that year. As of the end of 2011, unemploy- Commercial Aviation Industry Forecast ment stood at 8.6 percent of the labor force. Although the recession has been officially over for more than two years, carriers This recession did not face the high infla- continue to deal with economic uncer- tionary environment of the recession in tainties with business travel budgets still the early 1980s or the high-energy costs strained and unemployment still above of the mid-1970s recession. While reces- eight percent. Capacity reductions in re- sions during the post-war era have aver- cent years helped to counter fuel costs aged 10 months in duration, this one last- and reduce demand. Load factors and ed 19 months. Continued levels of high trip lengths have increased while availa- debt, a weak housing market, and tight ble seats per aircraft mile (capacity) de- credit, are expected to keep the recovery creased. The reduction in capacity did modest by most standards. The resolu- allow the carriers to raise air fares when tion of those factors will determine the demand began to return. This has al- future path of the recovery. lowed the industry to post net profits the past two years. The nation’s gross domestic product (GDP) is the primary measure of overall With capacity beginning to improve, the economic growth. The FAA forecasts FAA projects the domestic available seat- were based upon a 3.1 percent annual av- miles (ASM) to increase at an average an- erage growth in GDP from federal fiscal nual rate of 2.7 percent through the fore- year (FY) 2013 through FY 2017. For the cast period with regional carrier capacity long term, the FAA forecasts are based growing slightly faster than the mainline upon real GDP growth slowing to 2.5 per- carriers. Revenue passenger miles (RPM) cent annually. GDP growth rate in 2011 are projected to increase at a slightly was 2.1 percent with signs at the end of higher rate (2.8 percent) resulting in load the FY showing pent-up demand coming factors continuing to grow in the future at back with growth in consumer spending, an average rate of 0.6 percent. Domestic a turn-around in the housing market, and enplanements are projected to grow at an traction in the labor market. annual average rate of 2.4 percent through 2032. 2-3 DRAFT FINAL The cost of air fare to the passenger is re- using Embraer 120 aircraft which pro- lated to revenue per passenger mile vides seating for up to 30 passengers (yield) for the airlines. The nominal yield from Santa Maria Public Airport to Los on domestic flights is projected by the Angeles. Allegiant Air provides two daily FAA to average 1.2 percent annually. The departures from Santa Maria Public Air- real (inflation-adjusted) yield will actually port to Las Vegas using an MD-83 aircraft continue to decline at 0.8 percent annual- which provides seating for up to 150 pas- ly. sengers. Airlines at Santa Barbara Airport have a combined 13 daily departures to Aircraft size increased for both mainline Los Angeles; however there is presently and regional carriers during 2011, result- no service to the City of Las Vegas. ing in an average aircraft size of 122.6 seats. The overall mainline carrier do- Oxnard Airport (OXR), located to the mestic seats per aircraft are projected by south of Santa Barbara Airport in Ventura FAA to rise at 0.1 percent annually, while County, is also classified in the NPIAS as a regional carrier seats per aircraft are pro- commercial service airport; however jected to grow by 0.8 percent annually. United Express discontinued its service from Oxnard Airport to Los Angeles. In response to globalization, international Oxnard Airport does not presently offer passenger traffic between the U.S. and the scheduled airline service, but is actively rest of the world is projected to grow at a seeking to re-establish airline service. faster rate than domestic passengers. The Los Angeles area airports, including Bob FAA forecasts domestic enplanements to Hope Airport, a medium-hub airport in grow at an average annual rate of 2.4 per- Burbank, and Los Angeles International cent over the forecast period with region- Airport, a large-hub airport, influence al carrier enplanements growing faster Santa Barbara Airport’s service area as than mainline carriers (2.6 percent versus they offer an array of domestic and inter- 2.3 percent respectively).