AIRPORTS COUNCIL INTERNATIONAL - NORTH AMERICA AIRPORT INFRASTRUCTURE NEEDS 2017 - 2021 MARCH 2017 AIRPORT INFRASTRUCTURE NEEDS 2017 – 2021 ABOUT ACI-NA Airports Council International - North America (ACI-NA) represents local, regional, and state governing bodies that own and operate commercial airports in the United States and Canada. ACI-NA member airports enplane more than 95 percent of the domestic and virtually all the international airline passenger and cargo traffic in North America. Approximately 380 aviation-related businesses are also members of ACI-NA, providing goods and services to airports. Collectively, more than 1.3 million people work at a U.S. airport. Airports account for $1.2 trillion in economic activity—or seven percent of the total U.S. workforce and eight percent of GDP. Canadian airports support 405,000 jobs and contribute C$35 billion to Canada’s GDP. Learn more at www.aci-na.org. ACKNOWLEDGEMENTS ACI-NA thanks its member airports for their contribution and input to this report. Without their participation, ACI-NA would not have been able to create this report and the important information on the airport development costs required for the national airport system of the United States. ACI-NA staff contributors to this report include Liying Gu, Ashley Sng, Anda Husarciuc, Debby McElroy, Tom Devine, Greg Cota, Annie Russo, and Scott Elmore. For further information on this report, please contact Liying Gu at [email protected] or (202) 861-8084. © 2017 Airports Council Internationa1 - North America Airports Council International - North America 1615 L Street, NW // Suite 300 Washington, DC 20036 Phone: (202) 293-8500 // Fax: (202) 331-1362 www.aci-na.org facebook.com/airportscouncil twitter.com/airportscouncil Cover photos courtesy of Salt Lake City International Airport, Raleigh-Durham International Airport, and Louis Armstrong New Orleans International Airport. 2 // AIRPORTS COUNCIL INTERNATIONAL - NORTH AMERICA AIRPORT INFRASTRUCTURE NEEDS 2017 – 2021 MAKING AIRPORTS A NATIONAL PRIORITY In recent months, President Donald J. Trump and policy makers on both sides of the aisle have become outspoken advocates for America’s airports and the state of airport infrastructure. After all, our airports are powerful engines of economic growth and opportunity for local communities across the United States. At the same time, America’s airports have significant infrastructure needs that must be addressed in order to remain competitive in the global aviation system and support our economy. As such, airports stand ready to work with the Trump Administration and Congress to address airport needs in the most cost effective and sustainable way possible. But where do we begin? To help us better understand the real infrastructure needs of America’s airports and the impact our aging infrastructure has on our passengers and customers, we conducted a study of U.S. airports. The results, contained in this report, offers a comprehensive look at the scope of airport infrastructure needs and projects. Over the next five years, airports in the United States have nearly $100 billion in muchneeded infrastructure projects. These projects will allow airports to accommodate growth in passenger and cargo activity, rehabilitate existing facilities, and support aircraft innovation. The longer we delay, America’s airports will fall behind and our infrastructure needs become more expensive to fix. Time is of the essence. We must act immediately to get Washington out of the way and eliminate the outdated federal restrictions that hold America’s airports back. By giving airports the ability to meet their local infrastructure needs without relying on federal tax dollars, airports will be well positioned to maintain their leadership in the global aviation system. Warm regards, Kevin M. Burke President and CEO Airports Council International – North America THE VOICE OF AIPORTS® // 3 AIRPORT INFRASTRUCTURE NEEDS 2017 – 2021 TABLES Table 1: Airport Infrastructure Cost Estimates by Year and Airport Category........................... 11 Table 2: Average Annual Cost Estimate from Published ACI-NA Infrastructure Needs Reports............................................................................................................................ 11 Table 3: Development Costs by Project Location............................................................................. 15 Table 4: Development Costs by Project Type................................................................................... 17 Table 5: ACI-NA Sample Compared to Industry Total................................................................... 24 Table 6: ACI-NA Sample Infrastructure Development Costs Per Enplanement......................... 25 Table 7: Total Infrastructure Development Costs Estimate for Large, Medium, and Small Hub Airports............................................................................................................ 25 Table 8: Total Infrastructure Development Costs Estimate............................................................ 26 Table 9: ACI-NA Total Costs by Project Type.................................................................................. 27 FIGURES Figure 1: 5-Year Development Estimates from Published ACI-NA Infrastructure Needs Reports.............................................................................................................................. 12 Figure 2: Consumer Price Index (CPI) Indicates Continued Inflation......................................... 12 Figure 3: CCI Exceeds CPI Over the Next Five Years..................................................................... 13 Figure 4: FAA Projects Continued Strong Growth in Passengers.................................................. 14 Figure 5: FAA Projects Continued Growth in Air Cargo................................................................ 14 Figure 6: Airport Infrastructure Needs by Type of Development................................................. 16 Figure 7: Change in Development Cost from Last ACI-NA Report............................................. 18 4 // AIRPORTS COUNCIL INTERNATIONAL - NORTH AMERICA AIRPORT INFRASTRUCTURE NEEDS 2017 – 2021 TABLE OF CONTENTS TABLES......................................................................................................................................................4 FIGURES....................................................................................................................................................4 SURVEY SNAPSHOT.............................................................................................................................. 6 AIRPORT INFRASTRUCTURE NEEDS OVERVIEW......................................................................... 9 ACI-NA ESTIMATE OF AIRPORT INFRASTRUCTURE NEEDS..................................................... 11 PROJECT DEVELOPMENT COSTS BY LOCATION AND TYPE....................................................15 COMPARISON OF ACI-NA AND FAA ESTIMATES.........................................................................19 CONCLUSION.........................................................................................................................................21 APPENDIX 1: SCOPE AND METHODOLOGY..................................................................................22 APPENDIX 2: BACKGROUND.............................................................................................................23 APPENDIX 3: HOW ACI-NA CALCULATED INFRASTRUCTURE DEVELOPMENT COSTS...24 APPENDIX 4: FAA DEFINITIONS OF AIRPORT CATEGORIES...................................................28 APPENDIX 5: RESPONDENTS 2015 PASSENGER TRAFFIC STATISTICS................................ 30 ENDNOTES.............................................................................................................................................35 THE VOICE OF AIPORTS® // 5 AIRPORT INFRASTRUCTURE NEEDS 2017 – 2021 The Infrastructure Needs of America’s Airports SURVEY SNAPSHOT AIRPORT INFRASTRUCTURE NEEDS Terminal Buildings $38 Billion AIRPORT NEEDS BY HUB SIZE Between 2017 and 2021, America’s airports have nearly $100 BILLION in capital needs. That’s $20 BILLION Airfield Capacity and Standards $19 Billion a year. Reconstruction $15 Billion Where is that money needed most to make airports better for air passengers? Surface Access $13 Billion Large Hubs Medium Hubs Small Hubs Landside Terminal Airside 6 // AIRPORTS COUNCIL INTERNATIONAL - NORTH AMERICA AIRPORT INFRASTRUCTURE NEEDS 2017 – 2021 AIRPORT INFRASTRUCTURE UNMET NEEDS Annually, airports generate about $10 billion to fund infrastructure projects. That leaves airports more than $10 billion short when investing in local airport infrastructure. Airport Generated Net Income Airport Improvement Program Passenger Facility Charges Capital Contributions State Grants Unmet Needs THE GOAL OF INFRASTRUCTURE PROJECTS: IMPROVE, EXPAND, MAINTAIN AIRPORT NEEDS vs. PASSENGER TRAFFIC 80 Infrastructure Needs in Billions of Dollars Percentage of Passenger Traffic 70 60 50 40 30 20 10 0 Large Medium Small Non-Hub THE VOICE OF AIPORTS® // 7 AIRPORT INFRASTRUCTURE NEEDS 2017 – 2021 8 // AIRPORTS COUNCIL INTERNATIONAL - NORTH AMERICA Phoenix Sky Harbor International Airport AIRPORT INFRASTRUCTURE NEEDS 2017 – 2021 AIRPORT INFRASTRUCTURE NEEDS OVERVIEW The ACI-NA total estimate of U.S. airports’ infrastructure needs for 2017 through 2021, adjusted for inflation,1 is nearly $100 billion ($99.9 billion) or almost $20 billion annualized.2 Sixty-three percent of the development is intended to accommodate growth in passenger and cargo activity, and thirty percent is intended to rehabilitate existing infrastructure, maintain a state of good repair, and keep airports up to standards for the aircraft that use them. This estimate is a 31.9 percent increase over the 20153 estimate of $75.5 billion or $15.1 billion annualized for 2015 through 2019. The estimate for large, medium and small hubs only4 is a 41.8 percent increase over the last estimate. For non-hub, non-primary commercial service, reliever and general aviation airports, ACI-NA relied on the FAA National Plan of Integrated Airport System (NPIAS) 2016 estimate for development costs, which are expected to increase by 2.1 percent from the last report completed in 2014. The $20 billion in average annual funding needs for U.S. airports is significantly higher than the funding available through annual AIP grants, PFC revenue, and airport generated net income. It is clear that the existing federally mandated funding system cannot meet U.S. airport infrastructure needs for modernizing and expanding airport capacity which is critical for a safe, efficient and globally competitive aviation system. ACI-NA attributes the increase in airport infrastructure needs to several factors, including the need to upgrade aging infrastructure, the recovering U.S. economy and increasing traffic demand, and airline consolidation and concentration on hub operations. The ACI-NA total estimate includes all airport improvements that are planned within the next five years including those not eligible for AIP grants. Commercial service airports5, which accounted for 99.8 percent of passenger enplanements in 2015, account for $86.1 billion (86.2 percent) of the total $99.9 billion for planned investments, while non-commercial-service airports with 0.2 percent of the 2015 enplanements account for $13.8 billion (13.8 percent) of the total $99.9 billion. Within the commercial service airports: • large hub airports, with 72.6 percent of all enplanements, account for $60.4 billion (60.5 percent); • medium hub airports, with 15.4 percent of all enplanements, account for $11.7 billion (11.7 percent); • small hub airports, with 8.4 percent of all enplanements, account for $8.5 billion (8.5 percent), and; • non-hub airports, with 3.4 percent of all enplanements, account for $5.5 billion (5.5 percent). THE VOICE OF AIPORTS® // 9 AIRPORT INFRASTRUCTURE NEEDS 2017 – 2021 Commercial service airports reported a significant increase in infrastructure needs, with an overall increase of 38.4 percent while non-commercial service airports had a 1.7 percent increase. All airport categories showed growth from the previous estimate. Large hubs reported the most significant increase at 50.6 percent followed by medium hubs with a 28.8 percent increase. Large hubs reported an increase of 50.6 percent, from $40.1 billion to $60.4 billion, and increased their share of total development by 7.5 percent from the 2014 - 2015 survey. Significant development was identified at Detroit, San Diego, Portland, Los Angeles, Atlanta, Chicago O’Hare, Chicago Midway, San Francisco, Orlando, Houston InterContinental, Minneapolis, Salt Lake City, and Phoenix, with more than a 50 percent increase as these airports undertake major infrastructure improvement programs. In particular, Los Angeles International Airport alone reported $10 billion in infrastructure needs between 2017 and 2021, primarily for terminal redevelopment, landside access modernization, and runway safety area rehabilitation and reconstruction. Medium hubs reported an increase of 28.8 percent, from $9.1 billion to $11.7 billion, and maintained their share of total development needs at around 12 percent. Significant development was identified at Raleigh Durham, Ontario, Nashville, Jacksonville, Omaha, Cincinnati/Northern Kentucky, San Jose, Sacramento, Houston Hobby, Dallas Love Field, Kansas City, Austin, St. Louis, and John Wayne, with more than a 50 percent increase as these airports undertake major infrastructure improvement programs. Most small hubs reported single-digit increases in infrastructure needs. Major development at Des Moines, Yellowstone, Hawaii Lihue, Manchester-Boston, Burbank, Savannah, and Burlington airports resulted in an increase of over 50.0 percent in their infrastructure improvement programs. The overall increase shows that, as a result of the recovering economy and increasing traffic demand, coupled with airline consolidation and their strategic shift to focus on hub operations, large and medium hub airports have a particular need to invest in major infrastructure improvement projects. Despite a decrease in flights at many small airports, additional funding is still needed at these airports for upgrading aging infrastructure, meeting federal mandates, and improving the passenger experience. 10 // AIRPORTS COUNCIL INTERNATIONAL - NORTH AMERICA AIRPORT INFRASTRUCTURE NEEDS 2017 – 2021 ACI-NA ESTIMATE OF AIRPORT INFRASTRUCTURE NEEDS As shown in Table 1, total infrastructure needs for each year from 2017 through 2021 range from $17.3 billion in 2021 to $21.9 billion in 20186, with average annual needs of $20.0 billion as shown in Table 2. Large hub airports account for the majority of these costs with 60.5 percent of the total followed by non-commercial service/new airports and medium hub airports. TABLE 1 AIRPORT INFRASTRUCTURE COST ESTIMATES BY YEAR AND AIRPORT CATEGORY Millions of Current Year Dollars Airport Category 2017 2018 2019 2020 2021 2017-2021 Percent Large hub 12,627 13,502 13,778 10,929 9,539 60,375 60.5% Medium hub 2,376 2,766 2,545 1,953 2,078 11,718 11.7% Small hub 1,748 1,871 1,713 1,485 1,665 8,483 8.5% Non-hub 1,068 1,084 1,100 1,117 1,134 5,504 5.5% Other* 2,677 2,717 2,757 2,799 2,841 13,790 13.8% 20,496 21,940 21,895 18,283 17,256 99,869 100.0% Total Source: ACI-NA Survey and FAA NPIAS. *Note: “Other” includes non-commercial service airports and 8 proposed airports based on FAA NPIAS report (20172021). TABLE 2 AVERAGE ANNUAL COST ESTIMATE FROM PUBLISHED ACI-NA INFRASTRUCTURE NEEDS REPORTS Millions of Current Year Dollars Estimate Period Average Annual Infrastructure Needs Percent Change 2017 - 2021 19,974 31.9% 2015 - 2019 15,148 6.3% 2013 - 2017 14,254 -11.0% 2011 - 2015 16,015 -15.1% 2009 - 2013 18,861 8.0% 2007 - 2011 17,472 - Figure 1 below shows a significant increase in airport infrastructure needs in 2017 through 2021, in response to the increasing travel demand and the need to upgrade aging infrastructure. THE VOICE OF AIPORTS® // 11 AIRPORT INFRASTRUCTURE NEEDS 2017 – 2021 FIGURE 1 5-YEAR DEVELOPMENT ESTIMATES FROM PUBLISHED ACI-NA INFRASTRUCTURE NEEDS REPORTS 0 20 40 60 80 Total Airport Industry Infrastructure Needs (in Billions of Current Year Dollar) 100 ACI-NA adjusted its infrastructure development cost estimate by 1.5 percent to account at least partially for inflation. As shown in Figure 2, inflation is projected to continue in the 2017 through 2021 development cost estimate period. FIGURE 2 CONSUMER PRICE INDEX (CPI) INDICATES CONTINUED INFLATION Base year is 1982-1984 = 100 280 Consumer Price Index 265 250 Year Average Growth 1993 - 2002 2.5% 235 2003 - 2007 2.8% 220 2008 - 2014 1.7% FAA 2016 Forecast 205 190 0.9% 2.4% 2015 - 2036 2.3% 2021 2019 2020 2017 2018 2015 2016 2014 2011 2012 2013 2010 2009 2007 2008 2005 2006 2003 2004 2001 2002 160 2000 175 2015 - 2016 2015 - 2025 Source: Actual Consumer Price Index from the US Dept. of Labor, Bureau of Labor Statistics, Forecast from the FAA 2016 Forecast Report based on IHS Global Insight 30-Year Forecast, Fourth Quarter 2016 12 // AIRPORTS COUNCIL INTERNATIONAL - NORTH AMERICA AIRPORT INFRASTRUCTURE NEEDS 2017 – 2021 Compounding the general inflationary trend is the much higher inflation rate for construction materials and components. As shown in Figure 3, the “ENR Construction Cost Index (CCI)”7 data shows significant construction cost escalation in recent years. For the period 2017-2021, the predicted growth rate according to IHS Global Insight averages 3.1 percent.8 FIGURE 3 CCI EXCEEDS CPI OVER THE NEXT FIVE YEARS Base year 2007 = 1 Year Percent Change 1.5 2008 4.3 1.4 2009 3.1 2010 2.7 2011 3.1 2012 2.6 2013 2.6 2014 2.7 Construction Cost Index 1.6 1.3 1.2 1.1 1.0 Source: Engineering News-Record/IHS Global Insight 2015 2.3 2016 3.0 Forecast 2017 3.2 2018 2.5 2019 3.3 2020 3.3 2021 3.2 As FAA points out in the 2017-2021 NPIAS report, airport infrastructure development needs are driven by current and forecasted traffic; use and age of facilities; and changing aircraft technology that requires airports to update or replace equipment and infrastructure.9 The demand for passenger and cargo service will continue to grow, resulting in a corresponding increase in airport infrastructure development costs. The FAA’s Aerospace Forecast Fiscal Years 2016-2036 predicts that U.S. airlines will reach the one billion passengers-per-year mark by 2027. The industry is expected to grow from 785.8 million passengers in 2015 to 1.2 billion in 2036, as shown in Figure 4; and more than double the cargo traffic as measured by revenue ton miles, as shown in Figure 5. THE VOICE OF AIPORTS® // 13 AIRPORT INFRASTRUCTURE NEEDS 2017 – 2021 Scheduled Passenger Enplanements in Millions FIGURE 4 FAA PROJECTS CONTINUED STRONG GROWTH IN PASSENGERS Year Enplanements in Millions 1,400 2007 763.8 2008 759.1 1,000 2009 704.4 800 2010 712.1 2011 731.1 1,200 600 2012 736.6 400 2013 738.6 200 2014 757.0 2015 785.8 0 FAA 2016 Forecast Source: FAA 819.1 2021 916.1 2026 997.9 2027 1,017.5 2031 1,111.0 2036 1,239.7 Year Revenue Ton Miles 80,000 2007 39,909 2008 38,829 60,000 2009 30,999 2010 35,888 FIGURE 5 FAA PROJECTS CONTINUED GROWTH IN AIR CARGO Air Cargo Revenue Ton Miles in Millions 2016 100,000 40,000 20,000 0 in Millions 2011 37,277 2012 36,509 2013 34,790 2014 35,180 2015 35,947 FAA 2016 Forecast Source: FAA 14 // AIRPORTS COUNCIL INTERNATIONAL - NORTH AMERICA 2016 37,565 2021 46,094 2026 54,493 2031 64,014 2036 74,844 AIRPORT INFRASTRUCTURE NEEDS 2017 – 2021 PROJECT DEVELOPMENT COSTS BY LOCATION AND TYPE To help provide a broad perspective on the various infrastructure development projects that airports are considering for 2017 through 2021, ACI-NA asked respondents to provide information on project costs by location and type. Project location indicates whether projects are for the airside, terminal, or landside areas of the airport. Project type indicates whether projects are for surface access, airfield capacity, airfield standards, terminal building development, environmental projects, airfield reconstruction, safety, security, or construction of a new airport. Development Costs by Location10 As shown in Table 3, for 2017 through 2021, terminal projects represent 54.1 percent of the total infrastructure development costs for responding airports11, followed by landside projects that represent 24.7 percent of total costs and airside projects that represent 21.1 percent of total costs. Compared to the 2014 - 2015 estimates, terminal projects now represent the majority of airports’ infrastructure needs, and there is a higher share of landside projects than reported two years ago. TABLE 3 DEVELOPMENT COSTS BY PROJECT LOCATION Percentage for all respondents Percentage for large hub respondents Percentage for medium hub respondents Percentage for small hub respondents 21.13% 15.95% 36.48% 50.34% Terminal 54.13% 59.58% 31.98% 35.38% Landside 24.74% 24.47% 31.54% 14.28% Total* 100.0% 79.6% 13.7% 6.4% Project location Airside Source: ACI-NA Survey. *Note: Summary excludes projects without a specified location code or projects located in multiple locations without breakdown. Development Costs by Project Type Figure 6 below shows based on ACI-NA survey data that terminal building projects account for 47 percent of the total development needs of all airports for 2017 through 2021. Such projects are needed to accommodate more passengers and larger aircraft, implement new security requirements, facilitate increased competition among airlines, and enhance the passenger experience. Surface access projects to improve access options and relieve landside congestion make up 16 percent of all projected airport development. THE VOICE OF AIPORTS® // 15 AIRPORT INFRASTRUCTURE NEEDS 2017 – 2021 FIGURE 6 AIRPORT INFRASTRUCTURE NEEDS BY TYPE OF DEVELOPMENT Terminal Building Security Airfield Capacity Safety Environment New Airports Standards Surface Access Reconstruction Other Source: ACI-NA Survey As shown in Table 4, for 2017 through 2021 for large hub airports, terminal building projects are the dominant project type representing 51.9 percent of all projects, followed by surface access projects at 18.0 percent and capacity projects at 8.0 percent. Additionally, Salt Lake City reported having a terminal redevelopment program categorized as “new airport” to replace existing terminal facilities that were constructed 30 to 50 years ago and have reached the end of their useful life. For medium hub airport respondents, terminal building projects are the dominant project type, representing 26.7 percent of all projects followed by reconstruction projects at 21.4 percent. New Orleans reported having a long-term infrastructure development plan that includes airport redevelopment categorized as “new airport”. Small hub airport respondents reported that their dominant project type is terminal building projects at 29.6 percent, followed by capacity projects at 24.9 percent. 16 // AIRPORTS COUNCIL INTERNATIONAL - NORTH AMERICA AIRPORT INFRASTRUCTURE NEEDS 2017 – 2021 Security Reconstruction Standards Environment Capacity Terminal Building Access New Airports Other Total Large 1.4% 1.3% 6.4% 1.5% 1.3% 8.0% 51.9% 18.0% 4.3% 6.0% 100.0% Medium 3.3% 1.4% 21.4% 1.8% 2.5% 8.9% 26.7% 9.9% 6.4% 17.7% 100.0% Small 6.5% 2.5% 17.0% 2.5% 4.2% 24.9% 29.6% 3.9% 0.0% 8.8% 100.0% Non-hub 6.0% 1.0% 36.5% 34.3% 2.8% 3.3% 12.6% 3.3% 0.0% 0.2% 100.0% Other 1.9% 2.5% 34.7% 49.7% 0.8% 4.2% 0.9% 2.1% 2.4% 0.8% 100.0% Total 2.3% 1.5% 14.6% 10.1% 1.7% 8.8% 37.8% 12.8% 3.7% 6.6% 100.0% Airport Category Safety TABLE 4 DEVELOPMENT COSTS BY PROJECT TYPE Sources: ACI-NA Survey and FAA NPIAS. Louis Armstrong New Orleans International Airport THE VOICE OF AIPORTS® // 17 AIRPORT INFRASTRUCTURE NEEDS 2017 – 2021 Figure 7 below shows that almost all projects have increased with the exception of projects to bring an existing airport to design criteria recommended by FAA. Additionally, the FAA 20172021 NPIAS report identifies eight proposed airports that are anticipated to be developed over the five-year period, including four new general aviation airports, two non-primary commercial service and two new primary airports. FIGURE 7 CHANGE IN DEVELOPMENT COST FROM LAST ACI-NA REPORT 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0 Source: ACI-NA Surveys. Note: see Table 9 for total cost by project type. 18 // AIRPORTS COUNCIL INTERNATIONAL - NORTH AMERICA 2017 - 2021 2015 - 2019 AIRPORT INFRASTRUCTURE NEEDS 2017 – 2021 COMPARISON OF ACI-NA AND FAA ESTIMATES The ACI-NA Infrastructure Needs Survey is far more comprehensive than the FAA NPIAS survey, which is also issued every two years. It is important to understand the differences between the ACI-NA and FAA estimates because of the importance of the data in both surveys in developing federal policy for funding airport development. The ACI-NA estimate of $99.9 billion is greater than the FAA NPIAS estimate of $32.5 billion for several reasons:12 First, the ACI-NA estimate includes all future projects, while the FAA estimate includes only future AIP-eligible projects. Additional projects captured in the ACI-NA estimate but not included in the NPIAS report include: • Development eligible under the PFC program but ineligible under the AIP grant program, such as terminal areas related to the movement of passengers and their baggage, but leased by airlines (holdrooms, baggage claim, baggage makeup, etc.) • AIP-ineligible projects, including parking facilities, hangars, cargo buildings, the revenue producing portions of passenger terminals, and certain improvements to highway and transit airport access systems; • AIP-eligible projects that airports did not report to the FAA because the airport believes there is a low probability of obtaining additional AIP discretionary grants; and • Airport-funded air traffic control facilities and airport or TSA-funded security projects such as the in-line checked baggage screening system. Second, the ACI-NA estimate includes both projects that have identified and not identified funding sources, while the FAA estimate only includes projects that do not have identified funding sources. This results in current projects with approved PFC collections not being included in the NPIAS report.13 Third, the ACI-NA estimate uses more recent data than that used by the FAA. Fourth, the ACI-NA estimate is adjusted for inflation, while the FAA estimate is not. 14 Fifth, the ACI-NA estimate includes contingency costs (provision for increases in costs based on changes in design or construction uncertainty) while the FAA estimate does not.15 THE VOICE OF AIPORTS® // 19 AIRPORT INFRASTRUCTURE NEEDS 2017 – 2021 For example, the cost for projects at large hub airports in the NPIAS totals $6.8 billion while the ACI-NA estimate totals $60.4 billion. Within this category, the NPIAS totals $0.4 billion for terminal building type projects while the ACI-NA estimate totals $37.8 billion. The difference in this case is because the NPIAS generally does not include gates and related areas, or the revenue generating portions of terminals such as development of facilities for nonaeronautical revenue. Additionally, even though FAA estimates that about 50 to 60 percent of the overall costs of terminal projects are eligible for AIP grants, airports do not typically report terminal projects to FAA due to the low probability of getting federal grants for such projects. The ACI-NA and FAA estimates are the two main sources for Congress and other stakeholders to review in considering the funding necessary for airport infrastructure development going forward as part of the FAA reauthorization process. As in the past, decisions on funding reach well beyond the actual authorization period and impact the infrastructure improvements that can be achieved to address aviation demand. Additionally, these decisions have a direct and long-term bearing on the ability of communities to generate jobs and commerce as well as ensure our nation’s competitive position in the global economy. 20 // AIRPORTS COUNCIL INTERNATIONAL - NORTH AMERICA AIRPORT INFRASTRUCTURE NEEDS 2017 – 2021 CONCLUSION The infrastructure development cost estimate for 2017-2021 shows an increase of 41.8 percent from the estimate for 2015-2019 for large, medium and small hub airports combined and a 2.1 percent increase for non-hubs and non-commercial service airports. The improving economic environment, increasing passenger travel, and aging infrastructure have caused airports to plan or begin infrastructure projects that were previously postponed or canceled. Airport infrastructure development needs are driven by current and forecast aviation activity; use and age of airport facilities and the need to modernize aging infrastructure; and changing aircraft technology that requires airports to update or replace equipment and infrastructure. Airport infrastructure needs are not only correlated with passenger and cargo activity levels, but are also affected by how airlines use airport infrastructure. Airport operators have a responsibility to make needed investments in modernizing aging airport facilities so that they can ensure efficient, safe and secure operations for aeronautical users and the traveling public as well as facilitate airline competition. Failure to make adequate investments in infrastructure will diminish the ability of airports to fully serve as growth engines for the public and communities across the United States. It is important to understand that the existing federally-mandated funding system fails to meet U.S. airport infrastructure needs for modernizing and expanding airport capacity. Failure to meet the future infrastructure needs of airports will impair the ability of the U.S. economy to grow and compete globally. THE VOICE OF AIPORTS® // 21 AIRPORT INFRASTRUCTURE NEEDS 2017 – 2021 APPENDIX 1: SCOPE AND METHODOLOGY The 2016/17 ACI-NA Survey was based on the 2014/15 survey instrument that was developed with input from the FAA and the GAO. This included the various definitions in the survey, such as project type codes. ACI-NA surveyed all of its airport members in the United States. One hundred (100) airports responded. ACI-NA staff followed-up with respondents as necessary to answer questions about the survey and ensure the accuracy of respondents’ answers. Respondents were asked to identify all infrastructure development projects and associated costs for calendar years 2017 through 2021, and to report these costs in 2016 constant year dollars. Costs included interest, construction and management costs, architectural and engineering costs, and contingency costs. Costs for multi-year projects were listed in the year when the money was expected to be spent. Information on costs for infrastructure development projects were divided into two sections: committed and uncommitted. For each section, airports were requested to list the ten largest projects in terms of costs and list the rest of the project costs as “all other projects.” Committed projects included those projects for which financing was secured or was expected to be secured, and environmental and other required approvals had been obtained or were expected to be obtained. These are projects that airlines supported or will not block through such actions as Majority in Interest (MII) veto/disapproval. Uncommitted projects included projects in airport master, layout, or capital plans that are essential to meet current or future air traffic growth and facility demand, but that could not proceed due to inadequate funding. Respondents were specifically asked to include only projects they expected the airlines would support or would not block through such actions as MII disapproval, and for which they expected to obtain all environmental and other approvals. For both committed and uncommitted projects, respondents were asked to identify projects by location and type. Location codes included whether a project was airside, terminal, or landside. Type codes included whether a project was access, airfield capacity, airfield standards, environment, new airport, airfield reconstruction, safety, terminal, or security. To ensure the ACI-NA data was fully comparable with the FAA, ACI-NA used the same definitions for project type as the FAA uses in its NPIAS. In cases where multiple codes applied for either project location or type, respondents were asked to provide the cost percentage for each code. 22 // AIRPORTS COUNCIL INTERNATIONAL - NORTH AMERICA AIRPORT INFRASTRUCTURE NEEDS 2017 – 2021 APPENDIX 2: BACKGROUND Airports Council International-North America (ACI-NA) regularly updates its estimate of infrastructure development needs for the airports that comprise the national airport system of the United States, as defined by the Federal Aviation Administration (FAA). The national airport system is composed of 3,340 airports, ranging from the largest commercial service airports to small general aviation airports. Development projects at these airports generally fall within five categories: (1) expanding an airport’s capacity beyond its current design to meet growth in demand for aviation services; (2) upgrading infrastructure to accommodate the introduction of different aircraft types; (3) reconstructing aging airport infrastructure; (4) bringing an airport up to FAA-mandated design standards to achieve full productivity of aircraft using the airport; and (5) addressing safety, security, and environmental concerns. ACI-NA conducts its assessment using the FAA’s airport classifications. Definitions of the FAA’s airport classifications used in this report are included in Appendix 4. THE VOICE OF AIPORTS® // 23 AIRPORT INFRASTRUCTURE NEEDS 2017 – 2021 APPENDIX 3: HOW ACI-NA CALCULATED INFRASTRUCTURE DEVELOPMENT COSTS ACI-NA calculated airports’ infrastructure development needs using the ACI-NA survey and the FAA NPIAS. Specifically, ACI-NA used its survey data to calculate costs for large, medium, and small hub airports and used the FAA NPIAS data to calculate costs for nonhub, commercial service, reliever, and general aviation airports. ACI-NA also used FAA 2015 enplanement data, which is the latest available information, to make calculations. The total infrastructure development costs for large, medium, and small hub airports were based on responses from 29 large hub, 27 medium hub, and 36 small hub airports. As shown in Table 5, this represents 97 percent of all passengers enplaned at large hubs, 91 percent of all passengers enplaned at medium hubs, and 58 percent of all passengers enplaned at small hubs in 2015. TABLE 5 ACI-NA SAMPLE COMPARED TO INDUSTRY TOTAL Respondents percentage of total 2015 enplanements Large hub 29 30 97% 97% 70.5% Medium hub 27 31 87% 91% 14.1% Small hub 36 72 50% 58% 4.9% All other 8 3,207 0.2% 1% <0.1% 100 3,340 - - 89.5% Total // Respondents percentage of total 2015 enplanements in the category Number of respondents Airport Category 24 Respondents percentage of all airports in the category Total number of airports in the category AIRPORTS COUNCIL INTERNATIONAL - NORTH AMERICA AIRPORT INFRASTRUCTURE NEEDS 2017 – 2021 As shown in Table 6, ACI-NA then calculated the total infrastructure development costs per 2015 enplanement for the respondent large, medium, and small hub airports. TABLE 6 ACI-NA SAMPLE INFRASTRUCTURE DEVELOPMENT COSTS PER ENPLANEMENT Total costs for 2017-2021 in millions of 2016 constant dollars Total 2015 enplanements by category Cost per enplanement in 2016 constant dollars Large hub 56,250 564,277,659 99.68 Medium hub 10,268 112,568,577 91.21 Small hub 4,694 38,980,461 120.41 Airport Category As shown in Table 7, this cost per enplanement in 2016 constant dollars was then used as the unit cost to estimate the infrastructure development costs for all large, medium, and small hub airports. TABLE 7 TOTAL INFRASTRUCTURE DEVELOPMENT COSTS ESTIMATE FOR LARGE, MEDIUM, AND SMALL HUB AIRPORTS 2016 Constant Dollars Airport Category Large hub Total 2015 Enplanements Cost per enplanement in 2016 constant dollars Total 2017-2021 infrastructure development costs in millions of 2016 constant dollars 580,568,021 99.68 57,874 Medium hub 123,217,532 91.21 11,239 Small hub 67,449,117 120.41 8,122 THE VOICE OF AIPORTS® // 25 AIRPORT INFRASTRUCTURE NEEDS 2017 – 2021 Table 8 shows the total infrastructure development costs for all airports in the national airport system in 2016 constant dollars using the ACI-NA estimate for large, medium, and small hub airports and the FAA NPIAS data for non-hub, commercial service, reliever, and general aviation airports. ACI-NA used the NPIAS data due to the small number of non-hub, commercial service, reliever, and general aviation airports in the ACI-NA survey sample. TABLE 8 TOTAL INFRASTRUCTURE DEVELOPMENT COSTS ESTIMATE 2016 Constant Dollars Total number of airports by category in national airport system Total 2017-2021 infrastructure development costs in millions of 2016 constant dollars Percentage of Total 30 57,874 60.5% Medium hub 31 11,239 11.7% Small hub 72 8,122 8.5% Airport Category Large hub Non-hub 249 5,262 5.5% Other 2958 13,185 13.8% Total 3,340 95,671 100% Taking the escalation of construction costs into consideration, ACI-NA made a 1.5 percent inflation adjustment to the total estimate in 2016 constant dollars to reflect total infrastructure needs in current year dollars. As shown in Table 1, total industry infrastructure needs are estimated to be $99.9 billion in current year dollars. Average annual infrastructure needs for the years 2017 through 2021 as shown in Table 2 are 31.6 percent higher than for the years 2015-2019 estimated in the ACI-NA survey done almost two years ago. Besides calculating the total developments costs, ACI-NA also calculated development costs by project type. To do this ACI-NA first determined the percentage distribution by project type using ACI-NA survey results for large, medium, and small hub airports and using the NPIAS data for non-hub and all other airports. As shown in Table 9, the project type percentage distribution was then multiplied by the total industry estimate for each category of airport to determine the total costs by project type. 26 // AIRPORTS COUNCIL INTERNATIONAL - NORTH AMERICA AIRPORT INFRASTRUCTURE NEEDS 2017 – 2021 TABLE 9 ACI-NA TOTAL COSTS BY PROJECT TYPE Airport Category Safety Security Reconstruction Standards Environment Capacity Terminal Building Access New Airports Other Total Percent In Millions of Current Year Dollars Large 819 765 3,845 911 789 4,854 31,309 10,853 2,610 3,620 60,375 60.5% Medium 383 167 2,507 209 287 1,041 3,133 1,159 752 2,079 11,718 11.7% Small 556 215 1,442 213 360 2,111 2,513 329 - 744 8,483 8.5% Non-hub 327 55 2,009 1,886 153 184 692 183 - 14 5,504 5.5% Other 257 342 4,782 6,850 116 584 128 285 336 111 13,790 13.8% Total 2,342 1,544 14,585 10,070 1,705 8,773 37,774 12,809 3,698 6,568 99,869 100.0% Percent 2.3% 1.5% 14.6% 10.1% 1.7% 8.8% 37.8% 12.8% 3.7% 6.6% 100.0% THE VOICE OF AIPORTS® // 27 AIRPORT INFRASTRUCTURE NEEDS 2017 – 2021 APPENDIX 4: FAA DEFINITIONS OF AIRPORT CATEGORIES FAA defines airports by categories of airport activities, including commercial service, primary, reliever, and general aviation airports, as shown below: TABLE 10 FAA AIRPORT CATEGORIES Hub Type: Percentage of Annual Passenger Boardings Airport Classifications Common Name See Definitions of Airport Categories below for more information. Commercial Service: Publicly owned airports that have at least 2,500 passenger boardings each calendar year and receive scheduled passenger service §47102(7) Primary: Have more than 10,000 passenger boardings each year §47102(11) Nonprimary Nonprimary (Except Commercial Service) Large: 1% or more Large Hub Medium: At least 0.25%, but less than 1% Medium Hub Small: At least 0.05%, but less than 0.25% Small Hub Non-hub: More than 10,000, but less than 0.05% Non-hub Primary Non-hub: At least 2,500 and no more than 10,000 Nonprimary Commercial Service Not Applicable Reliever §47102(18) Definition of Airport Categories 1. Commercial Service Airports are publicly owned airports that have at least 2,500 passenger boardings each calendar year and receive scheduled passenger service. Passenger boardings refer to revenue passenger boardings on an aircraft in service in air commerce whether or not in scheduled service. The definition also includes passengers who continue on an aircraft in international flight that stops at an airport in any of the 50 States for a non-traffic purpose, such as refueling or aircraft maintenance rather than passenger activity. Passenger boardings at airports that receive scheduled passenger service are also referred to as Enplanements. 28 // • Nonprimary Commercial Service Airports are Commercial Service Airports that have at least 2,500 and no more than 10,000 passenger boardings each year. • Primary Airports are Commercial Service Airports that have more than 10,000 AIRPORTS COUNCIL INTERNATIONAL - NORTH AMERICA AIRPORT INFRASTRUCTURE NEEDS 2017 – 2021 passenger boardings each year. Hub categories for Primary Airports are defined as a percentage of total passenger boardings within the United States in the most current calendar year ending before the start of the current fiscal year. For example, calendar year 2001 data are used for fiscal year 2003 since the fiscal year began 9 months after the end of that calendar year. The table below depicts the formulae used for the definition of airport categories based on statutory provisions cited within the table, including Hub Type described in 49 USC 47102. 2. Reliever Airports are airports designated by the FAA to relieve congestion at Commercial Service Airports and to provide improved general aviation access to the overall community. These may be publicly or privately-owned. 3. General Aviation Airports are the largest single group of airports in the U.S. system. The category also includes privately owned, public use airports that enplane 2500 or more passengers annually and receive scheduled airline service. THE VOICE OF AIPORTS® // 29 AIRPORT INFRASTRUCTURE NEEDS 2017 – 2021 APPENDIX 5: RESPONDENTS 2015 PASSENGER TRAFFIC STATISTICS Code 30 // Airport Name Hub CY2015 Enplanements CY2014 Enplanements ATL Hartsfield - Jackson Atlanta International Large 49,340,732 46,604,273 BWI Baltimore/Washington International Thurgood Marshall Large 11,738,845 11,022,200 CLT Charlotte/Douglas International Large 21,913,166 21,537,725 DCA Ronald Reagan Washington National Large 11,242,375 10,115,546 DEN Denver International Large 26,280,043 26,000,591 DFW Dallas-Fort Worth International Large 31,589,839 30,804,567 DTW Detroit Metropolitan Wayne County Large 16,255,520 15,775,941 EWR Newark Liberty International Large 18,684,818 17,773,405 FLL Fort Lauderdale/Hollywood International Large 13,061,632 12,031,860 HNL Honolulu International Large 9,479,094 9,463,000 IAD Washington Dulles International Large 10,363,974 10,415,948 IAH George Bush Intercontinental/Houston Large 20,595,881 19,772,087 JFK John F Kennedy International Large 27,782,369 26,244,928 LAS McCarran International Large 21,857,693 20,620,248 LAX Los Angeles International Large 36,351,272 34,314,197 LGA LaGuardia Large 14,319,924 13,535,372 MCO Orlando International Large 18,759,938 17,278,608 MDW Chicago Midway International Large 10,830,850 10,311,996 MIA Miami International Large 20,986,349 19,471,466 MSP Minneapolis-St Paul International/WoldChamberlain Large 17,634,273 16,972,678 ORD Chicago O'Hare International Large 36,305,668 33,843,426 PDX Portland International Large 8,340,252 7,878,760 PHL Philadelphia International Large 15,101,349 14,792,339 PHX Phoenix Sky Harbor International Large 21,351,504 20,344,867 SAN San Diego International Large 9,985,763 9,333,152 SEA Seattle-Tacoma International Large 20,148,980 17,888,080 SFO San Francisco International Large 24,190,560 22,770,783 SLC Salt Lake City International Large 10,634,538 10,139,065 TPA Tampa International Large 9,150,458 8,531,561 ANC Ted Stevens Anchorage International Medium 2,525,893 2,381,826 AUS Austin-Bergstrom International Medium 5,797,562 5,219,982 BDL Bradley International Medium 2,926,054 2,913,380 BNA Nashville International Medium 5,715,205 5,396,958 BUF Buffalo Niagara International Medium 2,336,431 2,378,469 AIRPORTS COUNCIL INTERNATIONAL - NORTH AMERICA AIRPORT INFRASTRUCTURE NEEDS 2017 – 2021 Code CLE Airport Name Cleveland-Hopkins International Hub CY2015 Enplanements CY2014 Enplanements Medium 3,916,922 3,686,315 CMH John Glenn Columbus International Medium 3,312,496 3,115,501 CVG Cincinnati/Northern Kentucky International Medium 3,054,991 2,875,844 DAL Dallas Love Field Medium 7,040,950 4,522,341 HOU William P Hobby Medium 5,937,990 5,800,726 IND Indianapolis International Medium 3,889,567 3,605,908 JAX Jacksonville International Medium 2,716,473 2,589,198 MCI Kansas City International Medium 5,135,127 4,982,722 MKE General Mitchell International Medium 3,229,897 3,228,607 MSY Louis Armstrong New Orleans International Medium 5,329,711 4,870,569 OAK Metropolitan Oakland International Medium 5,506,687 5,069,257 OGG Kahului Medium 3,220,753 3,019,338 OMA Eppley Airfield Medium 2,046,179 2,020,354 ONT Ontario International Medium 2,089,801 2,037,346 PBI Palm Beach International Medium 3,113,591 2,926,242 PIT Pittsburgh International Medium 3,890,681 3,827,860 RDU Raleigh-Durham International Medium 4,954,735 4,673,869 RSW Southwest Florida International Medium 4,159,215 3,948,006 SJC Norman Y Mineta San Jose International Medium 4,822,480 4,621,003 SMF Sacramento International Medium 4,714,729 4,384,616 SNA John Wayne Airport-Orange County Medium 4,945,209 4,584,147 STL Lambert-St Louis International Medium 6,239,248 6,108,758 ACY Atlantic City International Small 587,967 594,346 ALB Albany International Small 1,276,793 1,210,825 BLI Bellingham International Small 447,693 543,346 BOI Boise Air Terminal/Gowen Field Small 1,487,777 1,378,352 BTV Burlington International Small 581,143 602,932 BUR Bob Hope Small 1,973,897 1,928,491 BZN Bozeman Yellowstone International Small 512,042 482,683 CAE Columbia Metropolitan Small 533,575 498,151 DAY James M Cox Dayton International Small 1,041,759 1,120,842 DSM Des Moines International Small 1,156,462 1,141,172 ELP El Paso International Small 1,381,392 1,395,363 FAT Fresno Yosemite International Small 695,008 710,353 GEG Spokane International Small 1,515,351 1,445,572 GRR Gerald R Ford International Small 1,280,803 1,174,821 GSO Piedmont Triad International Small 848,249 851,157 GSP Greenville Spartanburg International Small 955,097 945,477 THE VOICE OF AIPORTS® // 31 AIRPORT INFRASTRUCTURE NEEDS 2017 – 2021 Code Airport Name // CY2015 Enplanements CY2014 Enplanements 519,785 523,248 HSV Huntsville International-Carl T Jones Field Small ITO Hilo International Small 627,171 626,950 IWA Phoenix-Mesa Gateway Small 666,187 669,807 JAN Jackson-Medgar Wiley Evers International Small 497,042 537,821 KOA Kona International at Keahole Small 1,485,777 1,403,559 LIH Lihue Small 1,491,688 1,340,014 MEM Memphis International Small 1,873,716 1,800,268 MHT Manchester Small 1,026,349 1,032,964 MSN Dane County Regional-Truax Field Small 826,640 833,634 ORF Norfolk International Small 1,515,200 1,488,114 PIE St Pete-Clearwater International Small 819,974 663,810 PSP Palm Springs International Small 947,728 953,607 PVD Theodore Francis Green State Small 1,763,676 1,764,828 RNO Reno/Tahoe International Small 1,669,876 1,611,572 SAV Savannah/Hilton Head International Small 980,531 932,416 SDF Louisville International-Standiford Field Small 1,640,297 1,634,983 SFB Orlando Sanford International Small 1,209,382 1,064,133 SRQ Sarasota/Bradenton International Small 607,449 598,219 SYR Syracuse Hancock International Small 987,732 987,169 TUS Tucson International Small 1,549,253 1,597,247 HND Henderson Executive Non-hub 53,551 65,209 IAG Niagara Falls International Non-hub 121,616 111,212 LCK Rickenbacker International Non-hub 83,466 49,486 VGT North Las Vegas Non-hub 15,434 26,955 EFD Ellington None 470 983 MKC Charles B Wheeler Downtown None 2,969 2,422 TZR Bolton Field None 7 3 HWO North Perry #N/A #N/A #N/A Source: FAA 32 Hub AIRPORTS COUNCIL INTERNATIONAL - NORTH AMERICA AIRPORT INFRASTRUCTURE NEEDS 2017 – 2021 Please note that in this report, ACI-NA defines airport category based on FAA calendar year 2015 enplanements, while the latest FAA NPIAS report for 2015-2019 categorized airports based on FAA Calendar Year 2014 enplanements. Airport Category 2015 2014 Large Hub 30 30 Medium Hub 30 31 Small Hub 72 72 250 249 Nonprimary Commercial Service 121 127 Reliever 259 259 General Aviation 2,564 2,564 Subtotal 3,326 3,332 Non-hub THE VOICE OF AIPORTS® // 33 AIRPORT INFRASTRUCTURE NEEDS 2017 – 2021 // City AIRPORTS COUNCIL INTERNATIONAL - NORTH AMERICA Salt34Lake International Airport AIRPORT INFRASTRUCTURE NEEDS 2017 – 2021 ENDNOTES ACI-NA used a 1.5 percent inflation adjustment. 1 The ACI-NA total estimate of airports’ capital development needs for the period 2017 through 2021, in 2016 constant dollars, not adjusted for inflation, is $95.7 billion or $19.1 billion annualized. 2 Estimates reflect the dollars at the time the report was prepared. The 2015 report reflects 2014 dollars. 3 Development costs for large, medium and small hubs are based on ACI-NA Survey data. Development costs for non-hub, non-primary commercial service, reliever and general aviation airports are based on FAA 2017-2021 NPIAS report. 4 ACI-NA used the FAA definitions for categories of airports. See Appendix 4. 5 See appendix 3 for an explanation of how ACI-NA calculated airports’ infrastructure development costs. 6 ENR Construction Cost Index, U.S. 20 City Average, Engineering News Record. 7 IHS Global Insight Non-residential Construction Cost Index forecast as of November 2016. 8 Executive Summary, FAA 2017-2021 NPIAS report. 9 Includes all projects in this location. For example, projects located in terminal include all those in the terminal building including security projects. 10 See Appendix 5 for a full list of airport respondents. 11 Both the ACI-NA and the FAA estimates are for 2017 through 2021. The ACI-NA survey was completed in 2017 and the FAA estimate is based on airport master and state system planning documents available through FY2015. 12 See page vii of the FAA NPIAS report 2015-2019. 13 See page vi of the FAA NPIAS report 2017-2021. 14 See page vi of the FAA NPIAS report 2017-2021. 15 THE VOICE OF AIPORTS® // 35 Airports Council International - North America 1615 L Street, NW // Suite 300 Washington, DC 20036 Phone: (202) 293-8500 // Fax: (202) 331-1362 www.aci-na.org facebook.com/airportscouncil twitter.com/airportscouncil
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