2011 ROBERT A. CHECCHIO ALL RIGHTS RESERVED CRISIS IN THE SKY: THE CHALLENGES OF DEVELOPING A UNITED STATES NATIONAL AVIATION POLICY By ROBERT A. CHECCHIO A Dissertation submitted to the Graduate School-New Brunswick Rutgers, The State University of New Jersey in partial fulfillment of the requirements for the degree of Doctor of Philosophy Graduate Program in Planning and Public Policy written under the direction of Professor Michael Lahr and approved by ______________________________________________ Michael Lahr, Ph.D. ______________________________________________ Joseph Seneca, Ph.D. ______________________________________________ Jocelyn Crowley, Ph.D. ______________________________________________ Alain Kornhauser, Ph .D. New Brunswick, New Jersey January 2011 ABSTRACT OF THE DISSERTATION CRISIS IN THE SKY: THE CHALLENGES OF DEVELOPING A UNITED STATES NATIONAL AVIATION POLICY By ROBERT CHECCHIO Dissertation Director: Michael L. Lahr This dissertation examines the issues militating in favor of a national aviation policy and the obstacles standing in the way of such a policy. In spite of the impact that the nation's air transportation system has on the United States' economy, the U.S lacks a comprehensive national aviation policy that takes into account the diverse challenges that issues such as the need for the free flow of people and goods, national security, environmental sustainability, and financial stability place upon the nation's air transportation system. The absence of a comprehensive aviation policy comes at a critical time. The economic activity associated with air transportation accounts for over five percent of the U.S. Gross Domestic Product, yet congested airports, declining commercial airline service to small cities, and the stresses of enhanced security processes combine to make commercial air travel less and less convenient. In spite of these issues, firms increasingly ii depend on effective and efficient air transportation to interact with customers and suppliers. The value of being able to travel for face-to-face meetings is reflected in how access to both large and small airports affects job growth, shown in a study of 113 metropolitan statistical areas along the United States east coast. The importance of convenient air travel is seen further in the introduction of air taxi services providing convenient travel to regional and community airports. Experts in the private and public sectors indicate that a comprehensive national aviation policy must address five broad areas: national interest and international leadership, aviation and economic development, national and international connectivity, energy sustainability and environmental protection, and aviation safety and security. They note, however, that obstacles preventing the development of a national aviation policy include ambiguous national interests, government institutions, financing of the aviation system, and competing industry interests. These obstacles combine to make policymaking difficult in the absence of a national crisis. After an examination of attempts in the UK and the United States to address aviation issues comprehensively, the final chapter recommends a new process for creating national aviation policy in the United States: a national aviation policy oversight commission. iii ACKNOWLEDGEMENTS I would like to thank my dissertation chair, Michael Lahr, for his support, guidance, and patience throughout the time it took me to complete my research and write this dissertation. In spite of unforeseen obstacles which resulted in my totally redirecting the direction of my research, his continuing willingness to guide my efforts were instrumental in seeing my ideas and efforts result in a completed contribution to policy research. I would also like to thank the other members of my dissertation committee, Professors Joseph Seneca, Jocelyn Crowley, and Alain Kornhauser, who generously gave their time to see that my work was as professional and scholarly as possible. Finally, I want to thank my family, especially my wife Linda Jadach, for their support and patience during the long and often stressful Ph.D. process. iv TABLE OF CONTENTS Abstract of the Dissertation............................................................................................. ii Acknowledgements ....................................................................................................... iv Table of Contents ............................................................................................................v List of Tables................................................................................................................. vi List of Charts ................................................................................................................ vii List of Figures ............................................................................................................. viii Chapter 1. The Evolution of Aviation Issues ..................................................................1 Chapter 2. Why Firms Fly ........................................................................................... 41 Chapter 3. An Economic Rationale for National Aviation Policy ................................. 66 Chapter 4. New Paradigms in Air Travel ..................................................................... 91 Chapter 5. Air Transportation: The Policy Perspective .............................................. 120 Chapter 6. The Role of Crisis in the Evolution of National Policy ............................. 176 Chapter 7. A Framework for U.S. Aviation Policymaking ......................................... 239 Appendices .................................................................................................................. 261 Acronyms .................................................................................................................... 279 References ................................................................................................................... 281 Curriculum Vita ........................................................................................................... 289 v LIST OF TABLES Table 1-1: Very Light Jet Comparison ........................................................................... 40 Table 3-1: Initial Regression Model ............................................................................... 87 Table 3-2: Descriptive Statistics .................................................................................... 88 Table 3-3: Correlation Results ....................................................................................... 89 Table 3-4: Regression Results ........................................................................................ 90 Table 5-1: Air Travel Taxes and Fees .......................................................................... 174 vi LIST OF CHARTS Chart 1-1: U.S. Commercial Carrier Enplanements ........................................................ 16 Chart 1-2: Delayed Flights ............................................................................................. 18 Chart 1-3: Cost of Delay per Minute .............................................................................. 22 Chart 1-4: Annual Cost of Airline Delays ...................................................................... 23 Chart 1-5: Annual Deliveries of VLJs ............................................................................ 31 Chart 2-1: Media Hierarchy of Communications ............................................................ 51 Chart 2-2: Message and Media Mix ............................................................................... 52 Chart 2-3: Manager Performance and Media .................................................................. 53 Chart 4-1: Frequent Destinations ................................................................................. 100 Chart 4-2: General Air Travel Factors .......................................................................... 102 Chart 4-3: Positive Air Travel Factors.......................................................................... 104 Chart 4-4: Negative Air Travel Factors ........................................................................ 105 Chart 4-5: Worst Air Travel Factors ............................................................................ 106 Chart 5-1: Air Transportation Taxes and Surcharges as Percentages ............................ 175 Chart 6-1: Congressional Record Search Term Results ................................................ 178 Chart 6-2: Flights Delayed by Three Hours or More .................................................... 180 Chart 6-3: Percentage of Long-Delayed Flights ........................................................... 180 Chart 6-4: Recent Long-Delayed Flights by Month ...................................................... 181 Chart 7-1: Aviation System Users ................................................................................ 244 Chart 7-2: Air Travel Operating Models ...................................................................... 245 Chart 7-3: Aviation System Oversight Level ................................................................ 246 Chart 7-4: Marketplace Models.................................................................................... 247 vii LIST OF FIGURES Figure 1-1: Hub and Spoke Routing ..............................................................................