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Region 2 UNIVERSITY TRANSPORTATION RESEARCH CENTER Final Report Reaching the Potential: The Imperative for Forming National Aviation Policy in a Post 9/11 Environment Prepared by Michael Lahr Center for Urban Policy Research Edward J. Bloustein School of Planning and Public Policy Martin E. Robins Alan M. Voorhees Transportation Center Edward J. Bloustein School of Planning and Public Policy & Robert Checchio Edward J. Bloustein School of Planning and Public Policy Rutgers, the State University of New Jersey November, 2009 Disclaimer The contents of this report reflect the views of the authors, who are responsible for the facts and the accuracy of the information presented herein. The contents do not necessarily reflect the official views or policies of the UTRC or the Federal Highway Administration. This report does not constitute a standard, specification or regulation. This document is disseminated under the sponsorship of the Department of Transportation, University Transportation Centers Program, in the interest of information exchange. The U.S. Government assumes no liability for the contents or use thereof. TECHNICAL REPORT STANDARD TITLE PAGE 1. Report No. 2. Government Accession No. 3. Recipient’s Catalog No. 4. Title and Subtitle 5. Report Date Reaching the Potential: The Imperative for Forming National November, 2009 Aviation Policy in a Post 9/11 Environment 6. Performing Organization Code 7. Author(s) 8. Performing Organization Report No. Michael Lahr, Martin E. Robins & Robert Checchio, Rutgers-SUNY 49777-21-05 9. Performing Organization Name and Address 10. Work Unit No. Rutgers, The State University of New York 33 Livingston Avenue 11. Contract or Grant No. New Brunswick, NJ 08901 13. Type of Report and Period Covered 12. Sponsoring Agency Name and Address Final Report University Transportation Research Center 1/1/07 – 4/30/09 The City College of New York 14. Sponsoring Agency Code New York, NY 10031 15. Supplementary Notes 16. Abstract The air travel industry is in turmoil. Bankruptcies of commercial air carriers has become commonplace. Increasing fuel costs make profitability wishful thinking for many carriers, and many cities are losing scheduled air service as carriers focus on only the most profitable routes. Complaints about delays are the norm. The benefits that will result from technological improvements are years away. Many in both the private and public sectors describe the system as “broken” and call out for changes in national aviation policy. Why should we care about the state of the aviation system? By connecting cities with quick and affordable transportation, economies expand from cities to regions to mega regions, creating jobs and improving quality of life, even for people who never board a commercial airliner. Regions with access to airports leads experience greater job growth compared to regions without airports. In a little over a century, air travel grew from a curiosity to the source of over five percent of the U.S. Gross Domestic Product. Few question the need for a robust U.S. air transportation system. With general agreement as to the need for access to air transportation, why is it so difficult to develop federal level policy that would help forward the goals of a safe, effective and efficient air transportation system? Differences in political agendas, perspectives towards government roles and diverse vested interests make policy formation a challenge at best, impossible at worst. Developing solutions to the seemingly intractable problems faced by the aviation industry is so difficult that Department of Transportation Secretary Ray LaHood has recently called for the formation of a Federal Advisory Committee on the Future of Aviation. Policymakers need to address the challenges of developing a national aviation policy before global events relegate the U.S. aviation system to second rate status. 17. Key Words 18. Distribution Statement Aviation Policy, Air Travel, Air Transportation, Federal Advisory Committee, Capital Cost, Flight Delays. 19. Security Classif (of this report) 20. Security Classif. (of this page) 21. No of Pages 22. Price Unclassified Unclassified 200 Form DOT F 1700.7 (8-69) REACHING THE POTENTIAL: THE IMPERATIVE FOR FORMING NATIONAL AVIATION POLICY IN A POST 9/11 ENVIRONMENT Project UTRC 4-29466 Michael Lahr, Professor Center for Urban Policy Research Edward J. Bloustein School of Planning and Public Policy Martin E. Robins Senior Fellow, Alan M. Voorhees Transportation Center Edward J. Bloustein School of Planning and Public Policy Robert Checchio Edward J. Bloustein School of Planning and Public Policy Rutgers, the State University of New Jersey 33 Livingston Avenue, New Brunswick, NJ 08901 November 2009 TABLE OF CONTENTS Introduction..................................................................................................................................... 1 PART 1: What Are The Issues?...................................................................................................... 3 Why is this Study Important? ..................................................................................................... 4 Troubles in the Skies................................................................................................................... 6 The Importance of Air Travel to the U.S. Economy, Firms, and Regional Economic Development............................................................................................................................... 9 Research Objectives and Importance........................................................................................ 34 PART 2: The Economic Imperative for a National Aviation Policy............................................ 41 The Need for the Debate........................................................................................................... 41 Regional Economic Studies ...................................................................................................... 48 A Different Perspective on Airports ......................................................................................... 53 Why Firms Use General Aviation............................................................................................. 70 The Communications Challenge............................................................................................... 71 Multi-establishment Challenges and Solutions......................................................................... 74 Innovation Adoption and the Air Taxi Industry ....................................................................... 92 Final Thoughts on the Economic Imperative............................................................................ 97 PART 3 – Paradigms for Aviation Policy Formation................................................................. 150 Policy Success: The Federalization of Airline Security Workers........................................... 151 CAPPS-II and Privacy – A Policy Failure.............................................................................. 179 Final Thoughts: Where Do We Go From Here?......................................................................... 196 Introduction This report looks at one of the key issues faced by policymakers today. Does the United States need a national aviation policy, and, if so, what are the major challenges faced by policy makers. Part 1 presents the issues facing the air travel industry today. Hardly a day goes by without one key issue or another being reported in a newspaper: flight delays are rampant, airlines face enormous financial problems (typically caused by skyrocketing fuel costs), passengers demand better treatment after being confined on an airliner for hours without access to the most basic services. The Federal Aviation Administration, responsible for the management of the air traffic system, finds itself without a permanent and reliable source for financing current operations, let alone the billions of dollars needed to make the improvements needed to handle expected increases in passenger air traffic. Aviation advocacy groups find themselves at odds as different financing schemes seemingly favor one group over another. In the spite of this turmoil, the air travel system continues to serve over 700 million passengers annually. That number is expected to increase to over 1.1 billion by 2010. As demonstrated in Part 2, the economic imperative for a national aviation policy is overwhelming. The impact of aviation on jobs is so substantial that the failure to develop a national aviation policy that can effectively guide policymakers at federal, state and local levels threatens our economic future. Unfortunately, airline security has dominated aviation policy formation, almost to the exclusion of all other issues, at least in regard to the public eye. The events of September 11, 2001, were so traumatic that an entirely new cabinet level department, Homeland Security, was formed. A major new administration – the Transportation Security Administration – was formed to oversee all aspects of transportation security, but air travel security has garnered most of the TSA’s attention, at least, that which can be seen with the public 1 eye. Part 3 provides some insight into how air travel security has dominated the policy arena by presenting two examples of policy formation, one successful and the other not. One objective of this report is to stimulate a national debate on the need for a national aviation policy by demonstrating