Study Forecasts Future Costs of Air Traffic Delays; Modernization of Air Transportation Infrastructure Linked to Economic Health

9/30/2002

From: Janet Neale of the Aerospace Industries Association, 202-371-8548 or e-mail: neale@aia-aerospace.org

WASHINGTON, Sept. 30 -- Looking beyond the current downturn in air traffic, an economic impact study on civil aviation forecasts that in the next few years, air travelers returning to the skies at rates exceeding pre-9/11 levels will experience significant delays. Without aggressive investment in the nation's air infrastructure, these delays will have considerable impact on the U.S. economy, according to a study prepared by DRI-WEFA, Inc. and the Campbell-Hill Aviation Group. The study forecasts cost of delays to passengers for each state for the next ten years and presents data establishing the economic benefits to the nation -- a return of almost 5:1 for every dollar spent on civil aviation infrastructure.

The study finds that in 2000 aviation contributed to 9 percent of the nation's gross domestic product and 11.2 million jobs, with roughly 60 percent of those jobs arising from other industries. It also reports that air passengers and the shipment of air cargo could be spared delays of nearly 64 million hours per year if the government pursued early completion of runway and airway infrastructure improvements over the next ten years.

AIA President and CEO John W. Douglass said the report clearly establishes the link between a nation's air transportation system and its economic health. "We had ample evidence after 9/11 that our nation's economic well-being is closely tied to its air infrastructure," he said, "But this analysis provides data proving that the costs of delays far outweighs the costs of building a new, more efficient system." He said that a constrained infrastructure will adversely affect manufacturers of commercial and business aircraft, reduce the growth of global air transport and ultimately, imply a decrease in U.S. global competitiveness.

Douglass, a member of the Commission on the Future of the U.S. Aerospace Industry, added that the study demonstrates the need for a high level, multi-agency task force to develop an integrated plan to transform our air transportation system called for in the commission's March 20, 2002, interim report.

Douglass said the administration and the congress should increase and prioritize FAA and NASA research and development efforts, the critical building blocks for future developments in our national air transportation system. "NASA aeronautics funding should be tripled over five years to $2.8 billion and FAA R&D funding doubled to $500 million. Increasing our R&D funding will ensure efficiencies and leverage among government programs to take the next step beyond the FAA's current effort to improve the national air transportation system," Douglass said.

The Aerospace Industries Association was one of six organizations that sponsored the study. The study is available at http://www.dri-wefa.com/aviation. More information on AIA's recommendations to improve the nation's air infrastructure and a guide to the cost of air traffic delays to each state for the next 10 years is available at http://www.aia-aerospace.org.

DRI-WEFA, http://www.dri-wefa.com, a subsidiary of privately held Global Insight, Inc., provides the most comprehensive economic coverage of countries, regions and industries available from any source. DRI-WEFA brings a unique combination of expertise, models, data and analytical software together with a common analytical framework and a consistent set of assumptions. DRI-WEFA collects and delivers financial information to clients and also provides a broad range of consulting capabilities covering market analysis, business planning, investment strategy, risk assessment, infrastructure analysis, policy evaluation, and economic development. The company has more than 3,000 clients in industry, finance and government around the world with $70 million in revenues, over 500 employees and 23 offices in 12 countries covering North and South America, Europe, Africa, the Middle East and Asia.

The Campbell-Hill Aviation Group, Inc. (Campbell-Hill) is a U.S. consulting firm providing a wide range of economic consulting services to the aviation industry. Campbell-Hill's client base includes passenger and all-cargo/express airlines, airports, industry associations, and city, state, and federal government agencies as well as financial institutions.