Economic Forecasts
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AD1-A265 611 . ý~ UN 7F I 2 U - - p.-1 93-12954 ~ - z~..' I1 'l~l'I t'lltill' i 1 to- .l DiSLAIMER NOTICE THIS DOCUMENT IS BEST QUALITY AVAILABLE. THE COPY FURNISHED TO DTIC CONTAINED A SIGNIFICANT NUMBER OF PAGES WHICH DO NOT REPRODUCE LEGIBLY. Technical Report Documentation Page 1. Report No. 2. Government Accession No. 3. Recipient's Catalog No 4. Title and Subtitle 5. Report Date February 1993 FAA Aviation Forecasts-Fiscal Years 1993-2004 6. Performing Organization Code FAA APO- 110 7. Author(s) 8. Performing Organization Report No FAA-APO-93-1 9. Performing Organization Name and Address 10. Work Unit No (TRAIS)d Department of Transportation Federal Aviation Administration Fisca Yr Grant20o4 Office of Aviation Policy, Plans, and Management Analysis 14. Sonsor Genc Cod Washington, DC 20591 12. Sponsoring Agency Name and Address 13. Type of Report and Period Covered National Aviation Department of Transportation Activity Forecasts Federal Aviation Administration Fiscal Years 1993-2004 Office of Aviation Policy, Plans, and Management Analysis 14. Sponsoring Agency Code Washington, DC 20591 15. Supplementary Notes 16. Abstract This report contains the Fiscal Years 1993-2004 Federal Aviation Administration (FAA) forecasts of aviation activity at FAA facilities. These include airports with FAA control towers, air route traffic control centers, and flight service stations. Detailed forecasts were made for the major users of the National Aviation System: air carriers, air taxi/ commuters, military, and general aviation. The forecasts have been prepared to meet the budget and planning needs of the constituent units of the FAA and to provide information that can be used by state and local authorities, the aviation industry, and the general public. The lethargy of both the U. S. and world economies during the past several years has caused the aviation industry to experience continuing financial losses. However, the outlook for the 12-year f oratio sr moderate economic growth, stable real fuel prices, and modest inflation. Based on these assumptions, aviation activity for fiscal year 2004 is forecast to increase by 24.6 percent at towered airports and 27.0 percent at air route traffic control centers. The general aviation active fleet and hours flown are forecast to increase by 7.0 and 18.1 percent, respectively, during the same time period. Scheduled domestic revenue passenger miles (RPMs) are forecast to increase 583 percent, scheduled international RPMs are forecast to increase by 115.3 percent, and regional /commuter RPMs are forecast to increase by 145.1 percent. 17. Key Words 18. Distribution Statement Air Carrier, Aviation Statistics, Commuter/Air Document is available to the public through the Taxi, Aviation Activity Forecasts, National Technical Information Service Federal Aviation Administration, General Springfield, Virginia 22151 Aviation, Military 19. Security Classif.(of this 120. Security Classff.(of this 21. No. of Pages 22. Price report) ipage) Unclassified Unclassified Form DOT F 17'00.7 (8-72) Reproductio)n of comp leted page authorized For uale by the U.S. Goveemment Pnnung Office Supenmendenl of Documents. Mail Stop: SSOP. Washington. DC 20402-9328 ISBN 0-16-036114-1 PREFACE I am pleased to submit to the aviation Briefly, the forecast predicts a community FAA Aviation Forecasts, Fiscal moderate recovery and continued Years 1993-2004. These forecasts are expansion of both the U.S. economy developed annually by Robert L. Bowles and U.S. aviation activity following and his staff in the Statistics and 2 years of large industry losses. Forecast Branch for use by the agency in Internationally, aviation is its planning and decision-making anticipated to grow more rapidly than processes. In addition, the forecasts in the United States, especially are used extensively within the aviation along the Pacific Rim and in Latin and transportation communities as the America. industry looks to and prepares for the future. Based on economic projections provided by the Office of Management This year's report consists of nine and Budget and by DRI/McGraw-Hill, chapters, discussing in detail three Evans Econometrics, and the WEFA major areas: (1) the economic environ- Group, we expect the U.S. economy (as ment, assumptions, and predictions that measured by real gross domestic are used to develop the forecasts; (2) product) to grow at an average historical data and forecasts of future annual rate of 2.6 percent between traffic demand and aircraft activity for 1992 and 2004, with higher increases each of the major nonmilitary user projected for many major foreign groups--commercial air carriers, countries and regions. Combining regional/commuter airlines, general information on economic projections aviation, and helicopters; and (3) (e.g., GDP growth and oil prices) and workload measures for FAA towers, industry assumptions (e.g., industry centers, and flight service stations, capacity and yield management) with The report concludes with a discussion of analyst expertise results in an our forecast accuracy and year-by-year anticipated average annual growth data for our individual forecasts of rate (as measured in revenue aviation activity. -A -e-o-- For NTIS CRA&I DTIC TAB Urannowlced 0u Jlistificatlri_ n_ 01stjrfibut ionj By_. Av.iolab;itv Codes Dis -cla Iti to~Ior passenger miles) of 4.7 percent from 1992 projections and those of the various to 2004. Annual domestic growth is econometric forecasting services, expected to average 3.9 percent and Federal policy and programs may annual international growth is projected change. Such shifts could result in to be 6.6 percent. changes to the short-term economic outlook, altering the demand for In reading and using the information in aviation services. this book, it is important to recognize the limits of forecasting. That is, If in using this document you see forecasting is not an exact science. Its opportunities for improvement, I accuracy depends heavily on underlying would appreciate hearing from you. economic and political assumptions. You are encouraged to send your While there is basic agreement between comments to me at the Federal Avition the Administration's short-term economic Administration, 800 Independence Avenue, SW., Washington, DC 20591. Dale E. McDaniel Acting Assistant Administrator for Policy, Planning, and International Aviation ii * >~ ACKNOWLEDGMENTS This document was prepared by the Statistics and Forecast Branch, under the leadership of Mr. Robert L. Bowles. The following individuals were responsible for individual subject areas: Economic Environment: Thomas Henry Commercial Air Carriers: Jack Smith Regionals/Commuters: Charles Moles General Aviation: Forecasts - James Veatch Data - Patricia Beardsley and Shung Huang Helicopters: Mike Hartmann FAA Workload Measures: Forecasts - Forecast Team Staff Data - Nancy Trembley Terminal Area Forecasts: Thomas Henry Statistical Assistance: Virginia Price and Diane Green Text and Table Preparation - Prudance Morris-Dance The guidance and critical reviews provided by the senior staff of the Office of Aviation Policy, Plans, and Management Analysis and the Acting Assistant Administrator for Policy, Planning, and International Aviation are gratefully acknowledged. iii TABLE OF CONTENTS Page Preface ........................ ............................. i Acknowledgments ................................................ iii Table of Contents .................. ......................... .. V List of Figures .................. ..... .......................... ix List of Tables ................... .......................... xiii Chapter I: EXECUTIVE SUMMARY Avation During the Early 1990's Down--But Not Out ..... ....... - Review of 1992 ................. ........................ 1-3 Economic Forecasts ............... ...................... 1-4 A.iation Activity Forecasts .......... .................. .. 1-6 FAA Workload Forecasts ....... .................... 1-8 Chapter II: ECONOMIC ENVIRONMENT Review of 1992 ....................... ........................ II-1 United States ...................... ........................ II-1 World ..................... ........................... 11-3 U. S. Economic Outlook ............. .................... 11-3 Gross Domestic Product ........... ................... 11-3 Consumer Price Index ............. .................... 11-5 Oil and Gas Deflator ........... .................... 11-5 World Economic Outlook ............. .................... 11-5 Gross Domestic Product ........... ................... .. 11-5 Consumer Price Index ............ ................... I.-7 Europe .................. .......................... 11-7 Japan ................... .......................... 11-7 Latin America ............... ...................... 11-7 Dollar Exchange Rate ............. .................... 11-8 Affirmation of Change .............. .................... 11-8 Short-term Expectations ........... ................... H.-8 Long-term Changes ..................... ...................... II-10 Effects on Aviation .................... ..................... II-11 Summary ..................... ............................ 11-12 Chapter III: COMMERCIAL AIR CARRIERS Review of 1992 ...................... ........................ - Financial Results ................... ..................... - Scheduled Passenger Traffic and Capacity ... .......... .. 111-4 Domestic Passenger Traffic and Capacity ............... 111-5 International Passenger Traffic and Capacity .. ....... 111-7 Atlantic Routes ...........