Incorporating negative externalities into productivity assessments of US airports

This paper analyses the efficiency of 44 US airports for the period 2005–2009. In addition to the conventional outputs (i.e., passengers, flights and cargo), we consider three undesirable externalities of airport activities: delays, noise and local air pollution. We adopt a directional distance function approach and perform a second stage analysis to investigate potential determinants of efficiency. Our base case results with only the positive outputs show that the greater the average aircraft size serving an airport and the larger the dimensions of the airport, the higher the technical efficiency. However, our results are sensitive to the inclusion of the undesirable outputs. The implications are that the inclusion of these externalities into the calculation of efficiency may impact policy decisions.     

Determinants of airports’ environmental effects

Aviation is a fast growing sector with increasing environmental concerns linked to aircraft emissions at airports and noise nuisance. This paper investigates the factors affecting the annual environmental effects produced by a national aviation system. The environmental effects are computed using certification data for each aircraft-engine combination. Moreover, we also take into account for the amount of environmental effects that is internalized at the airport, mainly through noise regulation. We study a dataset covering information on Italian airports during the period 1999–2008. We show that a 1% increase in airport’s yearly movements yields a 1.05% increase in environmental effects, a 1% in aircraft size (measured in MTOW) gives rise to a 1.8% increase and a 1% increase in aircraft age generates a 0.69% increase in environmental effects. Similar results but with smaller magnitudes are observed if airport internalization is considered. Our policy implications are that the tariff internalizing the total amount of externality is about euro 180 per flight, while the tariff limiting only pollution is about euro 60 and the one reducing noise is about euro 110. Moreover, our airport examples show that managers should prefer to address additional capacity by increasing frequency rather than aircraft size, since the former strategy is more environmental friendly.     

Determination and Applications of Environmental Costs at Different Sized Airports – Aircraft Noise and Engine Emissions

With the increasing trend of charging for externalities and the aim of encouraging the sustainable development of the air transport industry, there is a need to evaluate the social costs of these undesirable side effects, mainly aircraft noise and engine emissions, for different airports. The aircraft noise and engine emissions social costs are calculated in monetary terms for five different sized airports, ranging from hub airports to small regional airports. The number of residences within different levels of airport noise contours and the aircraft noise classifications are the main determinants for accessing aircraft noise social costs. The environmental impacts of aircraft engine emissions include both aircraft landing and take-off and 30-minute cruise. The social costs of aircraft emissions vary by engine type and aircraft category, depending on the damage caused by different engine pollutants on the human health, vegetation, materials, aquatic ecosystem and climate. The results indicate that the relationship appears to be curvilinear between environmental costs and the traffic volume of an airport. The results and methodology of environmental cost calculation could be applied to the proposed European wide harmonised noise charges as well as the social cost benefit analysis of airports.     

A tool for calculating aircraft emissions and its application to Greek airspace

This paper quantifies the impact of aircraft emissions on local air quality and climate change. Aircraft emissions during the cruise cycle and the landing/take-off cycle are considered. A tool is developed that computes emission values using real-time air traffic data derived from various databases. Emissions include carbon dioxide, hydrocarbons, carbon monoxide and nitrogen oxides. The overall output is a detailed ‘emissions map’ of a given territory that enables the identification of critical emission spots including routes, airports, season, aircraft type and flight category. The method can be used for real-time monitoring of airline emissions and for policy analysis. The proposed tool and resulting outputs are illustrated in the case of the Greek airport system using domestic, international and overflights. Demand volatility driven mainly by tourism and its impact on emissions is assessed.     

An application of the directional distance function with the number of accidents as an undesirable output to measure the technical efficiency of state road transport in India

By using the directional distance function (DDF) of data envelopment analysis (DEA), this study measures the technical efficiency of 37 Indian state road transport undertakings (SRTUs) for the year 2012–13. We employ the DDF as a tool for analyzing a joint production function with both desirable and undesirable outputs (i.e., the number of accidents). A comparison between the results with and without accidents shows that several SRTUs have experienced significant changes in their efficiency scores as well as in their rankings after accounting for the undesirable output. This indicates the importance of including the number of accidents – a safety standard – as representative of the undesirable output in computing the efficiency scores of SRTUs. The results of the Tobit model indicate that SRTUs with greater vehicle productivity are more efficient under both conventional DEA and DDF approaches. We also employed zero-truncated negative binomial model to assess the factors influencing the number of road accident experienced by the Indian SRTUs and found that the accident count was significantly influenced by fleet utilization and vehicle productivity.     

Measuring the environmental efficiency of the global aviation fleet

This research analyses the environmental footprint of the airline industry in an attempt to highlight potential paths for improvement. We develop a directional economic-environmental distance function (DEED) which accounts for the production of both desirable and undesirable output and the potential for constrained increases in input utilization. This research applies the modeling framework to analyze the potential to reduce noise and airborne pollutants emitted by aircraft–engine combinations given the current state of aeronautical technology. The global aircraft–engine market is viewed from the regulatory perspective in order to compare the single environmental and operational efficient frontier to that of the airline carriers, and environmental objectives. The results of DEED are then applied in order to substitute the fleets serving Schipol, Amsterdam and Arlanda, Stockholm airports in June 2010 with the benchmark aircraft. The results highlight the inefficiencies of the current airline fleets and that the IPCC values of externalities are a magnitude of TEN too low to encourage changes in the global fleet hence the need for government intervention.     

The integration of Taiwanese and Chinese air networks for direct air cargo services

The two sides of the Taiwan Strait perform mutually dependent but complementary activities in the global manufacturing supply-chain. As a result, trade between Taiwan and China grew in double digits annually in the 1990s. With growing economic ties, direct air links are inevitable. In this research, we analyzed government documents and interviewed the air cargo carriers and airlines that currently serve the Taiwan–China air cargo market. This information enabled us to tabulate the trade, estimate the airport-to-airport air cargo demand and calibrate the international and domestic freight tariffs. We used a connectivity measurement and classified Chinese airports into national, regional and local classes in a hub-and-spoke air cargo network. We developed a mathematical model and a branch-and-bound algorithm. The results showed that at least two transit airports are economically necessary for a Taiwan–China air link. Shanghai and Xiamen were always the top two transit airports. The third airport would be Changsha if the decision becomes three air-links. These links are different from the top three passenger transit airports, Fuzhou, Xiamen and Shanghai, even though the cost saving is moderate.     

Measuring the Cost Effectiveness of Multimode Bus Transit in the Presence of Accident Risks

Abstract

This study employs the directional graph distance function and the multiactivity data envelopment analysis (DEA) approach, which incorporates both desirable and undesirable outputs, in order to provide a more complete representation of the multimode bus production technology from which environmentally and risk-sensitive cost effectiveness measures can be generated. We treat accident cost as the risky output in the sense that we wish to increase desirable outputs and decrease risky output and inputs. The approach is applied to the problem of measuring the cost effectiveness of 24 bus companies in Taiwan. An empirical illustration suggests that the overall cost effectiveness rankings turn out to be very sensitive to whether or not the graph multiactivity DEA approach is adopted. This implies that the conventional DEA cost effectiveness measure may be seriously misleading if it ignores the cost effectiveness of organizations that carry out various activities whilst sharing common resources.     

Airline’s choice of aircraft size – Explanations and implications

When facing a growth in demand, airlines tend to respond more by means of increasing frequencies than by increasing aircraft size. At many of the world’s largest airports there are fewer than 100 passengers per air transport movement, although congestion and delays are growing. Furthermore, demand for air transport is predicted to continue growing but aircraft size is not. This paper aims to investigate and explain this phenomenon, the choice of relatively small aircraft. It seems that this choice is associated mainly with the benefits of high frequency service, the competitive environment in which airlines operate and the way airport capacity is allocated and priced. Regression analysis of over 500 routes in the US, Europe and Asia provides empirical evidence that the choice of aircraft size is mainly influenced by route characteristics (e.g. distance, level of demand and level of competition) and almost not at all by airport characteristics (e.g. number of runways and whether the airport is a hub or slot coordinated). We discuss the implications of this choice of aircraft size and suggest that some market imperfections exist in the airline industry leading airlines to offer excessive frequency on some routes and too low frequency on others.     

Airport privatization in congested hub–spoke networks

This paper investigates the airport privatization issue. One congested hub and two linked local airports serve symmetric hub carriers. Passengers valuate the congestion delay cost and benefit from greater frequencies. The government considers privatizing either the hub or local airports. We find that in each privatizing scenario, welfare-maximizing public airport(s) set a charge below their operating costs in order to fully coordinate the high charge of privatized airport(s). If this fiscal deficit is not allowed, each scenario causes distortion. Interestingly, the distortion—and hence welfare losses—in privatizing a hub are smaller (larger) than those in privatizing both local airports when both passengers’ valuations are small (large); this is exactly the case when privatized local airports are strategic substitutes (complements). We also surprisingly find that retaining the hub airport as public and privatizing one or both local airports achieves the same market outcomes. We further find that if all airports are privatized, welfare becomes worse than the other scenarios; the hub airport charges lower (higher) prices than local airports when both local airports are strategic substitutes (complements).     

Performance based clustering for benchmarking of US airports

Managing service operations is gaining significant attention in both academic and practitioner circles. In this broad area, performance evaluation and process improvement of airlines and air carriers has been the focus of several studies. Although efficient airport operations are critical for improved performance of airlines and air carriers, few studies have focused on airport performance measurement. This study evaluates the operational efficiencies of 44 major US airports across 5 years using multi-criteria non-parametric models. These efficiency scores are treated by a clustering method in identifying benchmarks for improving poorly performing airports. Efficiency measures are based on four resource input measures including airport operational costs, number of airport employees, gates and runways, and five output measures including operational revenue, passenger flow, commercial and general aviation movement, and total cargo transportation. The methodology presented here can be generalized to other industries and institutions.     

Aircraft noise social cost and charge mechanisms – a case study of Amsterdam Airport Schiphol

The increasing trend of charging for aircraft noise nuisance to encourage the sustainable development of the air transport industry has resulted in a need to evaluate the real social costs of such externalities for the formulation of effective charge mechanisms. After comparing the current charge mechanisms at world airports as well as reviewing existing externality measurements, mathematical models are developed to calculate the noise social cost in monetary terms, and noise charge mechanisms are subsequently established. The hedonic price method is applied to calculate the annual social cost of aircraft noise during the landing and take-off stages of the flight. This is done by estimating the implicit costs of aircraft noise imposed through a decline in property values in the vicinity of the airport. The empirical results, using Amsterdam Airport Schiphol as the case study, show that the current noise charge level imposed by the Dutch Government is lower than the actual noise social cost resulting from aircraft movements. Several noise charge mechanism scenarios are derived according to the modelling results, as well as the environmental objectives of the airport related authorities.     

Flight schedule punctuality control and management: a stochastic approach

The insufficiency of infrastructure capacity in an air transport system is usually blamed for poor punctuality performance when implementing flight schedules. However, investigations have revealed that ground operations of airlines have become the second major cause of flight delay at airports. A stochastic approach is used in this paper to model the operation of aircraft turnaround and the departure punctuality of a turnaround aircraft at an airport. The aircraft turnaround model is then used to investigate the punctuality problem of turnaround aircraft. Model results reveal that the departure punctuality of a turnaround aircraft is influenced by the length of scheduled turnaround time, the arrival punctuality of inbound aircraft as well as the operational efficiency of aircraft ground services. The aircraft turnaround model proposed is then employed to evaluate the endogenous schedule punctuality of two turnaround aircraft. Model results, when compared with observation data, show that the operational efficiency of aircraft ground services varies among turnarounds. Hence, it is recommended that the improvement of departure punctuality of turnaround aircraft may be achieved from two approaches: airline scheduling control and the management of operational efficiency of aircraft ground services.     

The punctuality performance of aircraft rotations in a network of airports

The aim of this paper is to investigate the influence of aircraft turnaround performance at airports on the schedule punctuality of aircraft rotations in a network of airports. A mathematical model is applied, composed of two sub-models, namely the aircraft turnaround model (turnaround simulations) and the enroute model (enroute flight time simulations). A Markovian type model is featured in the aircraft turnaround model to simulate the operation of aircraft turnarounds at an airport by considering operational uncertainties and schedule punctuality variance. In addition, stochastic Monte Carlo simulations are employed to carry out stochastic sampling and simulations in both the aircraft turnaround model and the enroute model. Results of simulations show the robustness of the aircraft rotation model in capturing uncertainties from aircraft rotations. The propagation of knock-on delays in aircraft rotations is found to be significant when the short-connection-time policy is used by an airline at its hub airport. It is also found that the proper inclusion of schedule buffer time in the aircraft rotation schedule helps control the propagation of knock-on delays and, therefore, stabilize the punctuality performance of aircraft rotations.     

A Heuristic Algorithm for the Allocation of Airport Runway System Capacity

Abstract

This paper develops a heuristic algorithm for the allocation of airport runway capacity to minimise the cost of arrival and departure aircraft/flight delays. The algorithm is developed as a potential alternative to optimisation models based on linear and integer programming. The algorithm is based on heuristic (‘greedy’) criteria that closely reflect the ‘rules of thumb’ used by air traffic controllers. Using inputs such as arrival and departure demand, airport runway system capacity envelopes and cost of aircraft/flight delays, the main output minimises the cost of arrival and departure delays as well as the corresponding interdependent airport runway system arrival and departure capacity allocation. The algorithm is applied to traffic scenarios at three busy US airports. The results are used to validate the performance of the proposed heuristic algorithm against results from selected benchmarking optimisation models.     

Living with aircraft noise: Airport proximity,aviation noise and subjective wellbeing in England

Airport expansion is an issue of intense public debate due to the potential impacts on climate change and the quality of life of affected local communities. This paper is the first study to analyse the relationships between airports and multiple subjective wellbeing measures, by merging national-level population statistics with noise measurement maps for seventeen English airports. The presence of daytime aviation noise was found to consistently negatively impact on five subjective wellbeing measures. We found a marginal negative association with every additional decibel of aircraft noise. We found no significant association between wellbeing and living within night-time noise contours or living in close airport proximity. We conclude that living under air traffic flight paths has a negative effect on peoples’ overall and momentary wellbeing, equivalent to around half the effect of being a smoker for some wellbeing measures. The subjective wellbeing method findings support wider revealed preference literature showing lower market demand in areas affected by aviation noise.     

The economics of airport noise: How to manage markets for noise licenses

This paper discusses various issues in the implementation of a local market for aircraft noise licenses to solve the noise externalities harming the residents located near airports. The design of such markets is affected by aircraft heterogeneity, wind contingencies, peak times, runways capacity constraints, hub strategies, and airport planning is discussed.     

Air traffic assignment to reduce population noise exposure using activity-based approach

Aircraft noise has been regarded as one of the major environmental issues related to air transport. Many airports have introduced a variety of measures to reduce its impact. Several air traffic assignment strategies have been proposed in order to allocate noise more wisely. Even though each decision regarding the assignment of aircraft to routes should consider population exposure to noise, none of the air traffic assignment strategies has addressed daily migrations of population and number of people exposed to noise. The aim of this research is to develop a mathematical model and a heuristic algorithm that could assign aircraft to departure and arrival routes so that number of people exposed to noise is as low as possible, taking into account temporal and spatial variations in population in an airport’s vicinity. The approach was demonstrated on Belgrade airport to show the benefits of the proposed model. Numerical example showed that population exposure to noise could be reduced significantly by applying the proposed air traffic assignment model. As a consequence of the proposed air traffic assignment, overall fuel consumption increased by less than 1%.     

Experience sampling in and around airports. Momentary subjective wellbeing,airports, and aviation noise in England

We explore the wellbeing of people in and around English airports using real-time data from a large spatial positioning experience sampling dataset (Mappiness). We analyze the association between subjective wellbeing reported in the moment and aviation, in terms of airport location, aircraft noise, and activities within airports. This is the first time that a large Experience Sample Method (ESM) of momentary wellbeing measurements has been used to quantify the associations between aviation and subjective wellbeing. Being within areas of high levels of aircraft noise is associated with lower levels of happiness and relaxation. Those surveyed in proximity to airports report significantly lower levels of relaxation. These findings have important implications to policy. Exploiting the panel nature of the ESM data provides the strongest causal claims to date of the negative association between aviation activities and subjective wellbeing. The Mappiness application also allows us to assess the association between airports and wellbeing on those inside them, and divide activities within airports between those who work there and those who are passing through for travel purposes, as well as the effects of aircraft noise beyond airports. This gives us a broader insight into the range of impacts, both positive and negative, that aviation has on peoples’ momentary wellbeing, which may be used to inform aviation noise mitigation and compensation policies in the future.