aviation comp analysis ada
TRANSCRIPT
-
8/2/2019 Aviation Comp Analysis Ada
1/62
Competitive AnAlysisof
virginiAs AviAtion industry
January2012
Revised edition 1: FebRuaRy10, 2
-
8/2/2019 Aviation Comp Analysis Ada
2/62
AcknowledgementsThe Performance Management Group in the L. Douglas Wilder School of Government and
Public Aairs at Virginia Commonwealth University would like to acknowledge the following
for their advice and consultaon:
Atlanc Airways
Delegate Joe May, Virginia House of Delegates
Liberty University
Naonal Air and Space Museum Steven F. Udvar-Hazy Center
Naonal Associaon of State Aviaon Ocials (NASAO)
Naonal Business Aviaon Associaon (NBAA)
New Kent County Airport
Virginia Aviaon Board (VAB)
Virginia Aviaon Business Associaon (VABA)
Virginia Airport Operators Council (VAOC)
Virginia Airport Owners Associaon (VAOA)
Virginia Department of Aviaon (DOAV)
Virginia Economic Development Partnership (VEDP)
Virginia Helicopter Associaon (VHA)
Virginia Naonal Defense Industrial Authority (VNDIA)
Virginias Region 2000 Partnership
Washington Airports Task Force (WATF)
This project could not have happened without the commitment of the excellent individuals
who are members of the aforemenoned groups. We all share a commitment to obtaining
quality data to understand the present and to guide us as we look toward the future.
Note: The opinions stated in this report are those of the Performance Management Group and do not necessarily
reect those of all enes and individuals who contributed to the report.
Photo Credit:
Front cover, pages 1, 5, 22, 32, 44, 45: Zhiela Ashanipour, Performance Management Group (PMG) at Virginia CommonwealthUniversity/Courtesy of the Naonal Air and Space Museum Steven F. Udvar-Hazy Center
Pages 7, 16, 17, 19, 21, 30, 39, 46, 47: Washington Airports Task Force
Pages 37, 38: Liberty University School of Aeronaucs
Page 40, 41: iStockPhoto.com
Graphic Design by Zhiela Ashanipour, Performance Management Group (PMG) at Virginia Commonwealth University
-
8/2/2019 Aviation Comp Analysis Ada
3/62Competitive Analysis of Virginias Aviation Industry
-
8/2/2019 Aviation Comp Analysis Ada
4/62| January 2012
Execuve Summary
1. Introducon
1.1 Background
1.2 Scope
1.3 Industry Denion
2. Compeveness of Virginias Aviaon Landscape
2.1 Scheduled Air Carrier Operaons - FAA Part 121
2.2 General Aviaon - Air Taxi/Air Charter - FAA Part 135
2.3 General Aviaon - General Operaons - FAA Part 91
2.4 Military
3. Compeveness of Virginias Aviaon Infrastructure
3.1 Airport Access
3.2 Airport Services and Ammenies Matrix
4. Compeveness of Virginias Aviaon Policy
4.1 Policy Environment
4.2 Comparison of Revenue Structure
5. Business Climate
5.1 Economic Development Iniaves
5.2 Comparison of Grant Programs, Incenves, And Tax Credits for Manufacturing and Logiscs Projects
6. Quality of Life
6.1 Factors Inuencing Employee Relocaon
6.2 Factors Inuencing Business Expansion7. Workforce Pipeline Analysis
8. Industry Landscape and Trends
8.1 Naonal Business Trends
8.2 Naonal Legislave Trends
8.3 NextGen Technologies
8.4 Internaonal Trends
9. Strategies for Moving Forward
Appendix 1: Airport Services and Amenies Matrix Data
Appendix 2: Aircra Personal Property Tax Rates - Localies with Public-Use Airports in Virginia
Appendix 3: State Aviaon Funding
Appendix 4: Public-Use Facilies by State and Ranking
Appendix 5: Airport System Economic Impact
Bibliography/Works Cited
Glossary of Acronyms
4
6
6
6
6
7
8
9
9
9
11
12
13
22
22
22
31
31
33
35
35
36
37
39
39
42
42
44
45
48
50
52
53
54
55
57
TABLE OF CONTENTS
-
8/2/2019 Aviation Comp Analysis Ada
5/62Competitive Analysis of Virginias Aviation Industry
TABLES AND FIGURES
Table 1.1: States Included in the Compeve Analysis
Table 2.1: Virginia Commercial Service Airport Services and Impact Informaon
Table 3.1: Virginia Air Transportaon System Plan: Airport Designaons
Table 4.1: Conguous States: Aircra Property Tax Regulaons
Table 4.2: Comparison of States Tax Revenues: States with Dedicated Aviaon Funds (In Thousands)
Table 4.3: Fuel Excise and Sales Tax Rates
Table 4.4: Policies, Programs, and Technical Services
Table 4.5: State Mandated Protecon of Public Use Airports: Incompable Land Use Measures
Table 5.1: Aviaon-Related Business Expansion 2005-2010
Table 5.2: Virginia Aviaon Projects - Sample of Missed Opportunies
Table 5.3: Targeted Industry Incenves
Table 6.1: Quality of Life Factors Inuencing Individual Relocaon
Table 6.2: Quality of Life Factors Inuencing Business Expansion
Figure 2.1: Military Aviaon Installaons in Virginia
Figure 3.1: Virginia Air Transportaon System - Airport Roles
Figure 3.2: Conguous States: Percentage of Airports with Specied Service/Amenies
Figure 3.3: Conguous States: Airports Services and Amenies Advantages and Opportunies
Figure 3.4: Comparable States: Percentage of Airports with Specied Service/Amenies
Figure 3.5: Comparable States: Airports Services and Amenies Advantages and Opportunies
Figure 3.6: Competor States: Percentage of Airports with Specied Service/Amenies
Figure 3.7: Competor States: Airports Services and Amenies Advantages and OpportuniesFigure 4.1: Virginias Aviaon Dollars at Work - Commonwealth Transportaon Fund
6
8
11
23
24
26
29
30
31
33
34
35
36
10
12
15
16
18
19
20
21
28
-
8/2/2019 Aviation Comp Analysis Ada
6/62| January 2012
EXECUTIVE SUMMARY
Virginias Air Transportaon System is a network of 66 public-use airports supporng a range of commercial and generalaviaon services. Virginias airports are economic engines,technology magnets, and tourism gateways. They generateover $28.8 Billion in economic acvity, support over 259,000
jobs, and provide access to more than 8.5 million visitors
annually. The Compeve Analysis of Virginias Aviaon In-dustrylooks for ways to be even more compeve and growthe Virginia Commonwealths aviaon industry by compar-
ing Virginias Air Transportaon System with its counterpartsin key states to idenfy areas of achievement, risk, and po-tenal improvement.
The Federal Aviaon Administraon (FAA) primarily denesthe United States aviaon operaons by three regulatorycodes: FAA Part 121, Part 135, and Part 91. FAA Part 121regulates all scheduled air carrier services, FAA Part 135
regulates general operaons relang to air charter and airtaxi services, and FAA Part 91 encompasses the remainderof general aviaon operaons that are not covered by theprevious two classicaons.
This study represents a collaborave eort between thePerformance Management Group (PMG) at Virginia Com-monwealth University, industry associaons, and individualindustry experts. Coordinaon and support was also pro-
vided by the Virginia Department of Aviaon (DOAV). Thereport focuses heavily on thirteen states, classied intothree categories for comparison conguous, comparable,
and competor. Virginia holds a number of compeve ad-vantages over the study states including disnct advantagesin the following areas:
Weather reporng systems
Integrated approach procedures
General aviaon terminals
Paved aircra aprons
Stable, diversied and dedicated special funding for
the aviaon system
These services and amenies have a substanal eect onaircra operator safety and security, and are main factorsin deciding where to base aircra and aviaon businesses.
Virginia lags behind a number of the key states in the fol-lowing areas:
Land use protecon for airports
Percentage of airports equipped with 5,000-footrunways
Readily available commercial hangars
Availability of 100LL and Jet A fuel at airports
Strategies for Moving Forward
The following recommendaons are intended to guide vestment in Virginias Air Transportaon System and abased upon the analysis contained within this study. Tstrategies are listed in order of priority.
1. Aviaon Program Funding - Ensure adequate aviaprogram funding by maintaining the Airport Capital Pr
gram and Aviaon Special Fund to provide and mainta
robust statewide aviaon infrastructure and support bu
ness development and expansion.
A. Runways Explore with the FAA the potenal f
further development of the runway infrastructuat appropriate airports lacking 5,000-foot runwaSurpassing the 5,000 foot runway threshold opethe airport to enhanced Part 135 business aviaoproviding beer access and services, while boo
ing a communitys economic potenal.
B. Hangars Work with airport sponsors and loca
es to increase awareness of the opportuniand funding available to construct hangars at tremaining six airports without such facilies.
C. Fuel Work with airport sponsers to promote aequip public-use airports with 24-hour or call oAvgas fueling staons, while increasing jet fuavailability at those airports with the capabilito support jet operaons.
D. Terminals While Virginia has an advantage
this area, advanced aviaon technologies such NextGen will provide more business opportuni
for the Commonwealths airports and commues. Facilies such as conference rooms, Wiand a business atmosphere should be promotedVirginia airports. Virginia airports may represe
a rst and last impression of the Commonweaand a deciding factor when determining if a bu
-
8/2/2019 Aviation Comp Analysis Ada
7/62Competitive Analysis of Virginias Aviation Industry
ness is going to invest in the state. Virginia shouldconnue to construct and refurbish terminals toencourage business growth.
2. Aviaon Technology - Establish Virginia as a leader in
NextGen and new aviaon technologies.
A. NextGen
I. Early implementaon of mature technologies PursueVirginia as an early adopter of technologies
that improve airport throughput and access to pro-vide communies more opportunies for businessand economic development.
II. Test bed for maturing technologies Connuetowork with the FAA to develop NextGen tesng pro-grams and demonstraons in the Commonwealth.
III. Research consorum Collaborate with theaviaon and space community, universies, andindustry to establish a Virginia Aviaon and SpaceResearch Consorum to promote Virginia in the re-
search of emerging technologies.
B. Unmanned Aerial Systems (UAS)IncorporateUASdevelopment, manufacturing, tesng and support
into Virginias aviaon and space porolio. UAS area growing component of military aviaon and Next-
Gen research, and Virginia should support this re-search as part of its strategy to become a leader in
emerging technology tesng and implementaon.
3. Promoon - Promote the benets and compeve stand-
ing of Virginias Air Transportaon System in its support
for airports, businesses, and tourism. Virginia airports are
economic engines, technology magnets, and tourism gate-
ways for the Commonwealth.
A. Business Charter and Air Taxi Services HighlightDOAVs user-based funding programs and technicalservices to Part 135 and Fixed Base Operators alike.
B. High-Technology Business Connue to embark onan enhanced business aviaon campaign to raiseawareness of the capabilies of air charter and airtaxi to provide businesses and residents increased
mobility and eciency in traversing the state. The
message should center on the airports capacity technology magnets and economic engines thdrive economic development in the surrounding gions.
C. Tourism Promoonal eorts should also addre
the role that Virginias Air Transportaon Systeplays in advancing the Commonwealths tourism dustry, a major component of Virginias economvitality.
D. Land Use Protecon Promote compable land uaround airports and ensure adequate land use reulaons are in place to protect airport operao
and infrastructure investments from the threat encroachment by incompable uses.
4. Connuing Analysis - Conduct further research and an
ysis in the eort to beer posion Virginias Air Transpotaon System as a preferred transportaon choice amo
Virginia businesses and cizens.
In addion to the land use protecon, hangar, terminal, ruway, and fueling facility analysis outlined in earlier reco
mendaons, research should be conducted in the followisubject areas:
A. Educaon Promote an implementaon plan fthe recommendaons outlined in the Virginia Avon and Space Workforce Analysis and Strategy D
velopmentreport.
B. Access DOAV should connue to explore airpoaccess issues through the mulmodal planning
fort. Work should begin to relieve exisng acceproblems and to prevent future airport access prolems. A thorough transportaon analysis with tgoal to remediate ground access issues at the Co
monwealths commercial service airports is necesary in ensuring that these airports connue to obusinesses and residents convenient and mely a
cess to domesc and internaonal locaons.
C. Cargo Virginia should explore ways in which tCommonwealth can beer accommodate domesand internaonal cargo shipments within its majcommercial hubs.
-
8/2/2019 Aviation Comp Analysis Ada
8/62| January 2012
1. INTRODUCTION
1.1 BACKGROUND
Aviaon in the Commonwealth is a key provider of econom-ic opportunies for Virginias communies. The VirginiaAirport System Economic Impact Studyof 2011 showed that
Virginias Airport System supports $28.8 billion in economic
acvity in the Commonwealth and over 259,000 jobs. TheFederal Aviaon Administraon (FAA) forecasts signicantgrowth in the aviaon industry over the next 20 years and it
is important that the Commonwealth be a leader, providingwell-paying jobs to support the growing workforce and thecommunies in which these workers live.1 A strong aviaonsystem can provide the infrastructure for a prosperous Com-monwealth.
The Virginia Department of Aviaon (DOAV) contracted thePerformance Management Group (PMG) at Virginia Com-monwealth University, a full-service, public consulng rm
within the L. Douglas Wilder School of Government andPublic Aairs, to perform a compeve analysis of the Vir-ginia aviaon industry.
This report is the h installment in the DOAVs compre-hensive analysis of the Commonwealths aviaon and spaceindustry. The four previous reports are:
1. Virginias Aerospace Industry: An Economic Impact
Analysis (2010)
2. Virginia Airport System Economic Impact Study(2011)
3. Compeve Analysis of Virginias Space Industry
(2012)
4. Virginia Aviaon and Space Workforce Analysis and
Strategy Development(2012)2
1.2 SCOPE
This report explores Virginias legislave and tax policies,incenve measures, and workforce and educaonal devel-
opment eorts as they relate to aviaon business retenonand expansion. PMG compared these against other keystates aviaon incenve policies, legislave policies, andoccupaonal and industrial structures. This analysis pro-
1 FAA Forecast Fiscal Years 2011-2031, Retrieved from hp://www.faa.gov/
about/oce_org/headquarters_oces/apl/aviaon_forecasts/aerospace_fore-
casts/2011-2031/media/2011%20Forecast%20Doc.pdf
2 All reports can be accessed at the Performance Management Groups web-
site: hp://www.pmg.vcu.edu.
vides the basis for recommendaons to equip Virginia become even more naonally compeve for future puband private-sector investment in jobs to support the Comonwealths cizens and communies.
This report examines the aviaon industry in Virginia, coparing it to other conguous, comparable, and competstates as dened below in Table 1.1. The goal of this
port is to provide a comprehensive overview of Virginiacompeve standing to idenfy areas of achievement, riand potenal improvement. The aviaon industry is mdimensional, encompassing facets of air transportaomanufacturing, engineering and service.
1.3 INDUSTRY DEFINITION
Aviaon is a highly technical industry that overlaps with tspace industry in a number of ways; however, it is importato disnguish between the two because, while they shacertain funcons such as manufacturing, they operate ind
pendently. There is no naonal standard denion for taviaon industry, so it is dened by the FAA denions acodes that are relevant to this study. Aviaon, thereforedened as acvies related to mechanical ight, which
clude the operaon, maintenance, design and produconxed and rotary wing aircra.3 More specically, this stuexplores:
General Aviaon:
o Air Charter and Air Taxi Commercial ServicesFAA Part 135
o General Operaons FAA Part 91
Scheduled Air Carrier FAA Part 121
Military Aviaon Operaons
3 Compeveness of Virginias Aviaon Industry Steering Commiee deter-
mined industry denion.
TABLE1.1: STATESINCLUDEDINTHECOMPETITIVEANALYSISCONTIGUOUSSTATES COMPARABLESTATES COMPETITORSTATESAviationisanespecially
mobileindustry.Aircraft
ownersandoperators
relocateaircraft
across
countyandstatebordersto
takeadvantageofmore
aviationfriendlytaxand
legislativepolicies.
Kentucky
Maryland
NorthCarolina(Also
determinedtobea
CompetitorState)
Tennessee
WestVirginia
Comparablestates
encompassasimilarnumber
ofpublicuseair
carrier/relieverand
GA
airports,aswellashavea
dedicatedairportrevenue
fundsimilartoVirginia's.
Arizona
Colorado
Louisiana
Missouri
Washington
Competitorstatesa
thosewithwhichVir
oftencompetesfor
aviationrelated
eco
developmentinitiati
Alabama
Georgia
NorthCarolina
SouthCarolina
-
8/2/2019 Aviation Comp Analysis Ada
9/62
2. COMPETITIVENESS OF VIRGINIAS AVIATION LANDSCAPE
Competitive Analysis of Virginias Aviation Industry
Virginias aviaon industry is divided into three overarchingcategories: Scheduled Air Carrier (FAA Part 121), GeneralAviaon - Air Charter/Air Taxi (FAA Part 135) and GeneralAviaon - General Operaons (FAA Part 91) that, when an-alyzed concurrently, constute the bulk of aviaon opera-
ons.
Scheduled Air Carrier Service (FAA Part 121) Virginia has
nine airports that are designated by the Virginia Air Trans-portaon System Plan (VATSP) as Commercial Service.These airports provide travelers with regularly scheduledairline service to domesc and internaonal locaons. Dueto the role they serve, these airports are cered by the FAA
to Part 139 airport standards, which entail the highest levelof safety, including on-site crash, re, & rescue capabilies.4
General aviaon (GA) General aviaon refers to all civil
aviaon outside of scheduled passenger airlines and mili-tary aviaon.5 General Aviaon for the purposes of this re-port is broken down into two major categories, FAA Part 135refers to air charter/air taxi operaons, and FAA Part 91 to
all other general operaons.
General Aviaon - Air Charter/Air Taxi (FAA Part 135) All66 of Virginias public-use airports provide access to the Na-
onal Airspace System (NAS) and communies throughoutthe Commonwealth. FAA Part 135 regulated aircra opera-tors oer nonscheduled commercial air services referred toas air charters or air taxis. Charter and air taxi services are
typically oered in aircra with as few as four seats, but areoen own in business aircra that usually have a six to tenseat conguraon. This type of service allows a traveler toconduct trips on a point-to-point basis thereby providing
4 For all specicaons, see the FAAs 14 CFR Part 121 Air Carrier Cercaon,
available at hp://www.faa.gov/about/iniaves/atos/air_carrier[accessedDecember 7, 2011]5 Report to Congress: Improving General Aviaon Security, December 2011
Noise Polluon Clearinghouse, hp://www.nonoise.org/library/generalav/ (ac-
cessed 13 January 2012).
air access to all public-use airports and most communiwithin the Commonwealth. It also provides the capabilityaccess mulple locaons in the Commonwealth in a singday that, due to me constraints, may otherwise be imposible by automobile.
General Aviaon - General Operaons (FAA Part 91) Geeral operaons represent the broadest category of avia
acvies. Part 91 operaons include business aircra oeraons not covered by FAA Part 135, as well as recreaonight.6 Furthermore, Part 91 includes all police, Medevatrac reporng, crop dusng, aerial photogrammetric svices, and other forms of business acvies not pertaini
to fees for passenger carriage.7 VATSP designates 57 GA aports in Virginia, allowing over 99% of the populaon to within a thirty-minute drive of this caliber airport.
Department of Defense/Military Aviaon Operaons Tnal category that is especially relevant to Virginias aviaindustry is defense and military-related aviaon. Virginsupports roughly 26,000 uniformed, civilian, and contra
employees with funcons relang to military aerospacThe Commonwealth encompasses 11 installaons with mtary aviaon operaons. These installaons are discussedmore detail in Secon 2.4.
The following subsecons provide a snapshot of Virginiaviaon industry landscape through the analysis of eachthe industry facets. This snapshot sets the foundaon
subsequent analysis of the parameters that measure tindustrys compeveness naonally and internaonal
6 Federal Aviaon Administraon, Cercaon Informaon for Operang Un
der Part 135 (PDF le), n.d., available at hp://www.faa.gov/licenses_cercat
airline_cercaon/media/n135toc.pdf [accessed December 7,2011]
7 For complete informaon about Part 91, visit FAA website, Title 14, Part 9
General Operang and Flight Rules: hp://ecfr.gpoaccess.gov/cgi/t/text/text-
?c=ecfr&sid=3efaad1b0a259d4e48f1150a34d1aa77&rgn=div5&view=text&nod
14:2.0.1.3.10&idno=14 [December 8, 2011]
8 PMG, Virginias Aerospace Industry: An Economic Impact Analysis, Nove
ber 2010. Available on DOAV website.
-
8/2/2019 Aviation Comp Analysis Ada
10/62
-
8/2/2019 Aviation Comp Analysis Ada
11/62Competitive Analysis of Virginias Aviation Industry
2.2 GENERAL AVIATIONAIR TAXI/AIR
CHARTERFAA PART 135
FAA Part 135 regulated aircra are at the foundaon of busi-
ness development throughout much of the Commonwealth.In recent years, the connecons between Part 135 aircraservice and business operaons have become more of a fo-
cal point in policymakers economic development eorts.Virginia, via a program pursued by the Virginia SATSLab,Inc. (VSATS), has in place the rst iteraon of an internet-
accessed customer reservaons tool for air taxi and charterservices.
VirginiaAirTaxi.com is a web portal that provides a user-
friendly interface enabling travelers to price and book airtravel via Part 135 service providers from any of the over5,000 GA airports in the naon. In 2011, the Air Taxi/AirCharter Associaon (ATXA) introduced for beta tesng a
booking service via one of the worlds largest Global Dis-tribuon Systems (GDS) connecng to thousands of travelagents and on-line travel agents.21 This provides easier ac-cess for businesses and individuals to schedule air taxi ights
from local airports.22
Originally designed for the emerging air taxi industry, Vir-giniaAirTaxi.com also seeks the parcipaon of long-me
established small aircra charter services. The web portalwill be able to handle inquiries from all types of businessin the nonscheduled air service sector. VSATS is monitor-ing the tesng of this system and if successful, DOAV will be
hosng a Part 135/air taxi summit in 2012, to promote thisopon of air travel in the business community.
2.3 GENERAL AVIATIONGENERAL
OPERATIONSFAA PART 91
FAA Part 91 regulates the operaon of all aircra, but mostspecically all aviaon acvity outside of scheduled air car-rier and military operaons. Virginia benets from 66 air-
ports oering services to the public, 57 of which are generalaviaon airports supporng Virginias business, personal,and recreaonal needs.
Virginias general aviaon airports contributed $728 millionin economic acvity to the state economy in 2010.23 At the
heart of this acvity is the business-related aviaon madepossible by the Commonwealths network of public-use air-
ports. As the Naonal Business Aviaon Associaon (NBAA)reports:
Business aviaon reaches 10 mes the number of U.S. air-
ports (over 5,000 public-use facilies) than the airlines do.
The majority of U.S. airline ights only go to and from 70
major airports, and the total number of U.S. desnaons21 See Air Taxi / Air Charter Associaon (ATXA) website for more informaon:
22 Ibid.
23 DOAV, Virginia Airport System Economic Impact Study: Execuve Summary
(PDF le), p. 3.
served by air carriers has declined.24
In some cases, general-use airports provide the only meafor businesses to conduct operaons in a cost-eecve aecient manner. In recent years, Virginia, in line with
number of other states, has begun to approach investmein public-use, GA airports as a driver to ence businedevelopment throughout the Commonwealth. Virginieorts to equip all public-use airports with instrument a
proach procedures (IAPs) and weather reporng are twsuch examples of this.
Helicopter Operaons - Beyond the network of gene
aviaon airports, Virginias Air Transportaon System oesubstanal infrastructure to support helicopter operaothroughout the state. The Commonwealth encompass65 hospital heliports, evidence of the strong public bene
associated with Medevac and general helicopter operaoVirginia was also the rst to create a statewide helicopter asociaon, Virginia Helicopter Associaon (VHA), to promohelicopter operaons, training and safety according to H
licopter Associaon Internaonal (HAI). VHA was also oof the rst organizaons to join the Virginia Volunteer PiloGroup to provide helicopter transport to Virginians duriemergencies.
Aside from operaons within the Northern Virginia SpecFlight Rules Area (SFRA), an area which restricts helicoter operaons for security purposes, Virginia as a wholenot restricve in its rotary aircra policy and acknowledg
these benets in its support for helicopter operators. Itnoted however, that a number of Virginia localies have a
opted or are considering zoning ordinances that may inhihelicopter operaons beyond the regulaons and guidanprovided by the FAA. Members of the Virginia General A
sembly are considering legislaon that will ensure safe hlicopter operaons in accordance with the FAA guidelinand thereby expand services to Virginia cizens and oppotunies for helicopter businesses.
2.4 MILITARY
Virginia hosts a variety of military aviaon assets belongito all four branches of service under the Department of Dfense, and the Coast Guard under the Department of Homland Security. Although these assets include Army a
Marine Corps helicopter units, the presence of Air CombCommand and the First Fighter Wing at Joint Base LangleEuss and the Master Jet Base at Naval Air Staon Oceamake combat aviaon the primary focal point of milita
aviaon in the Commonwealth.
24 Naonal Business Aviaon Associaon, Business Aviaon: Just the
Facts, 2010 NBAA Business Aviaon Fact Book, bullet #7, available at hp://
www.nbaa.org/business-aviaon/fact-book/facts/ [accessed December 5, 201
-
8/2/2019 Aviation Comp Analysis Ada
12/620 | January 2012
Most military aviaon in Virginia is located in HamptonRoads. Naval Air Staon (NAS) Oceana, in Virginia Beach,hosts ve carrier air wings (over 100 aircra) and Naval Sta-on Norfolk is home to the Navys Air Cargo Transport Hub.NAS Oceana is home to 10,987 military personnel and 3,407
civilians with an annual payroll of roughly $1 billion.25
Joint Base Langley-Euss (Hampton and Newport News) is
the home staon for Air Combat Command, the 1st Fight-er Wing, and the Army Aviaon Logiscs School.26 The 1stFighter Wing incorporates 20 F-15 and 42 F-22 aircra. TheArmy Aviaon Logiscs School trains incoming soldiers tomaintain and load cargo on the Armys eet of helicopters.
In all, Joint Base Langley-Euss houses 14,500 military per-sonnel and 5,500 civilian workers, though not all performaviaon-related funcons.27
Naval Air Staon Norfolk (Chambers Field)encompasses 134aircra in 17 squadrons. It is the Navys Air Cargo TransportHub. Also located at Chambers Field is the Aircra Inter-mediate Maintenance Detachment (AIMD), which provides
the rst line of component repair support for the Atlanc
25 Informaon contributed by Virginia Naonal Defense Industrial Authority
(VNDIA).
26 Ibid.
27 Ibid.
Fleets Airborne Early Warning Wing, Helicopter TaccWing, USMC helicopter squadrons, USN reserve squadroand other operang units both aoat and ashore. AIMD hnine ocers and 650 enlisted personnel.28
Virginias military aviaon assets are not, however, connto Hampton Roads. The Defense Supply Center in Richmohouses the Defense Logiscs Agency, supporng more th
1,300 major weapons systems as the militarys primasource for roughly 1.3 million repair parts and operasupply items.29 More than 444,000 of these repair parts asupply items are aviaon-oriented, ranging from airframand landing gear to ight safety equipment and ghter, c
go, and bomber aircra engines.
The Presidents helicopter eet, encompassing more th30 aircra, is staoned at Marine Corps Base Quanco
Staord, Virginia. A xed-wing and helicopter Coast Guaunit is based out of Ronald Reagan Washington NaonAirport. Finally, Fort Picke has recently become a primastaging facility for Unmanned Aerial Systems (UAS) resear
and development.30
28 Ibid.
29 Ibid.
30 Ibid.
Figure 2.1: Military Aviaon Installaons in Virginia
*Figure by the Performance Management Group
-
8/2/2019 Aviation Comp Analysis Ada
13/62Competitive Analysis of Virginias Aviation Industry |Competitive Analysis of Virginias Aviation Industry |
3. COMPETITIVENESS OF VIRGINIAS AVIATION INFRASTRUCTUR
TABLE3.1:VIRGINIAAIRTRANSPORTATIONSYSTEMPLAN:AIRPORTDESIGNATIONSAirportType FunctionCOMMERCIAL SERVICE
Providescheduledaircarrierand/orcommuterservicetodomestic
and,insomecases,internationaldestinationsforsurrounding
communities.
RELIEVER
Generalaviationairportsinmetroareasintendedtoreduce
congestionatlargecommercialserviceairportsbyprovidinggeneral
aviationpilotswithcomparablelandsideandairsidefacilities.
GENERALAVIATIONREGIONAL
ServiceareasforRegionalairportsareoftenmultijurisdictionaldue
togeographicisolationortherelativescarcityofotherairport
servicesandfacilities. Theyservealargemarketarea,providinga
fullrangeofaviationfacilitiesandservicestothegeneralaviation
flyingpublic,includingjetfuel,instrumentapproaches,fullservice
fixedbasedoperations,corporatehangarsandgeneralaviation
terminalfacilities.
GENERALAVIATIONCOMMUNITY
Providegeneralaviationfacilitiesandservicestobusinessand
recreational
users.
They
typically
serve
their
respective
communities
orasmallermarketarea. Servicesincludeaircraftrental,flight
training,andaviationgasoline(AvGas)sales.
LOCALSERVICE
Generallylowactivityfacilitiesthatprovidelimitedgeneralaviation
facilitiestotheirrespectivecommunities. Theytypicallyhave
developmentconstraintsthatprecludesubstantialexpansion,
includingairspaceconflicts,environmentalconcerns,topography,
competingaeronauticalservices,surroundinglandusepatternsand
ownershipstatus.
Source: VirginiaAirTransportationSystemPlan VirginiaDepartmentofAviation
Airport Infrastructure:
The VATSP addresses airports as either Commercial Service or General Aviaon. The VATSPcategorizes commercial and geeral aviaon airports in ve groups: commercial service, relievers, general aviaon regional, general aviaon community, alocal service. Each serves a dierent funcon, shown in Table 3.1.
-
8/2/2019 Aviation Comp Analysis Ada
14/622 | January 2012
Figure 3.1: Virginia Air Transportaon System - Airport Roles
*Figure courtesy of Virginia Airport Operators Council
3.1 AIRPORT ACCESSAn aviaon system is only as eecve as its means of ac-cess. Virginias goal is to provide all cizens access to one ofthe nine public-use, commercial service airports within a 45minute drive, and less than a 30 minute drive to a general
aviaon airport.31 Currently, 87% of the populaon can ac-cess a commercial services airport in a 45-minute period,not factoring trac congeson or any other impediment.32When general aviaon airports are included in these calcu-
laons, 99% of the populaon is within a 30-minute driveto at least one of Virginias 66 public-use airports. Virginiasaviaon system provides Virginias businesses and cizensaccess to the greater NAS. Accessibility to the public is amajor factor in an airports ability to be an eecve alter-
nate means of transportaon. Airports primarily rely on astrong network of roadways to connect to their customers.Crical is not only the number and placement of the high-ways, but also the level of congeson experienced to and
from the airport.
Virginia is acvely addressing commercial service airportaccess issues associated with trac congeson. The Gov-
ernors Mulmodal Strategic Plan for the Commonwealth
of Virginia outlines measures to plan for a statewide mul-modal transportaon network.33 The congeson associated
31 DOAV. Virginias Flight to 2025: An Aviaon Vision for the Commonwealth
(PDF FILE), p. 3, 2011, available at hp://www.doav.virginia.gov/Downloads/Stud-
ies/Vision%202025/Vision%202025.pdf[accessed December 5, 2011]
32 87% refers to Virginians living within 37.5 miles around Virginia and congu-
ous states commercial services airports. The 37.5-mile buer was determined
based on traveling 45 minutes at an average speed of 50 mph.
33 Oce of Intermodal Planning and Investment, Governors Mulmodal Stra-
tegic Plan For the Commonwealth of Virginia (PDF le), Prepared by Mulmodal
Strategic Transportaon Planning Team, December 2010, available at hp://
with automobile use, especially in relaon to the Commowealths primary commercial airports, is becoming a hdrance or liability to future economic growth. The followairports currently experience ground access issues:
Norfolk Internaonal Airport (ORF): Access to Norfolk Intnaonal is especially hindered by trac congeson assoated with the Interstate 64 to Norview Avenue interchangNon-airport trac and business patronage at the interseon of Military Highway and Norview Avenue also contr
utes to ORFs ground access issues.
Newport News-Williamsburg Internaonal Airport (PH
PHF experiences similar congeson-related access issuas ORF. Newport News-Williamsburg Internaonals acceroad originates at the Interstate 64 to Jeerson Avenue terchange. Also converging on this intersecon are acceroads servicing a commercial corridor, and a large reside
al development, contribung to the congeson that limaccess to the airport terminal.
Washington-Dulles Internaonal Airport (IAD): Washingto
Dulles Internaonals operaons over the past y yea
have equated to growth in the high-tech industries surounding the Interstate 66 corridor. However, the airpois now experiencing negave eects of the congeson a
tributed to these businesses. In response, the Commowealth Transportaon Board (CTB) idened a North-SouCorridor of Statewide Signicance, which will beer link tairport to the Interstate 95, Interstate 66, Route 29, and terstate 81. Planning for this new corridor is projected
begin in early 2012.
vtrans.org/resources/Strategic_Plan_12_01_10%20FINAL.pdf
-
8/2/2019 Aviation Comp Analysis Ada
15/62Competitive Analysis of Virginias Aviation Industry |
Virginias Air Transportaon System accessibility issues arenot conned to the previous three airports. Eorts to im-prove access to the Commonwealths naonal and interna-
onal hubs, as well as the corridors immediately surround-ing them, are at the heart of ensuring that these airportsremain a preferred opon for internaonal travel and cargoshipping, providing Virginias high-technology businesses
the opportunies to expand in an ever-globalizing market-place. The ulmate goal for these access improvements is amulmodal system that enables people and freight to movedoor-to-door between any Virginia locality and any worldmarket in a 24-hour period.
3.2 AIRPORT SERVICES AND AMMENITIES
MATRIX
Amenies, as described for the purposes of this study, areairport features and services that can inuence the use andsuccess of a parcular facility. Representaves within Virgin-ias aviaon industry determined the following services and
amenies to be signicant when considering how an airport
facility competes against other desired facilies.
Runway Length of 5,000-Feet or Greater
A 5,000-foot runway is a threshold aribute that allowsmany corporate/business aircra to consider aircra opera-ons at that facility. The ability to support business jet traf-
c can greatly enhance the ulizaon and success of an air-port and the surrounding community. According to a recentstudy by the Naonal Business Aviaon Associaon (NBAA),business aviaon contributes $150 billion to U.S. economicoutput and employs more than 1.2 million people.34 Pilots
consider many factors when determining an aircras suit-ability for operaon at parcular airports. These include theaircras operaon handbook, insurance requirements, air-port elevaon, wind velocity, etc., but runway length is oen
the determining factor for corporate and business aircra.
Instrument Approach Procedures (IAPs)
Instrument approach procedures are published for theulizaon of either ground-based or satellite navigaonalequipment and enable aircra to operate at an airport un-der hazardous weather condions, or Instrument Meteoro-
logical Condions (IMC). Pilots are oen required to le anInstrument Flight Rules (IFR) plan, even when condions arebeer than IMC, due to insurance or ight management re-quirements. IAPs oer pilots an airport-specic navigaonalguide for more ecient IFR ight plan development, thus
enhancing the use of an airport in all weather condions.
34 NBAA, 2010 NBAA Business Aviaon Fact Book, bullet #1: hp://www.nbaa.
org/business-aviaon/fact-book/facts/ [accessed December 12, 2011]
Precision Instrument Approach Procedures (PIRs)
While IAPs allow greater use of an airport, the availabilitya precision instrument approach procedure further enhanes the ulizaon of any given airport. Precision approa
procedures enable pilots to y at the lowest of IFR mimums, allowing pilots to ulize a facility under extremepoor weather condions.
Weather Reporting
Due to safety and insurance policy consideraons, on-sweather reporng is oen a major factor in deciding to u
a parcular airport. The business aircra community aprefers to have weather reporng capabilies at airpothat they ulize. Therefore, the services and amenies mtrix in Appendix 1 includes a count of airports with weath
reporng capability from an on-site automated weather oserving staon (i.e., Automated Weather Observing SysteAWOS III or beer). The Naonal Airspace Data InterchanNetwork (NADIN) only acknowledges AWOS III or beer
cilies, making them the only weather reporng systemavailable to aircra in ight when the aircra are equippwith modern avionics. Having an FAA-cered weather son on the eld enables the lowest possible IAP minimumfor that facility. In addion, an on-eld weather staon p
vides airport users the enhanced safety benet of knowithe weather condions at that parcular eld.
General Aviation Terminals
Terminal buildings provide the benets of shelter, igplanning areas, and rest facilies for pilots and passenge
They also provide a valuable rst impression of the commnity that frequently inuences business decisions and tpercepons of the community. Terminals also provide adonal necessies such as fueling, maintenance, and localinformaon for services such as car rental, hotel, businetourist and restaurant locaons.
Paved Aircraft Aprons
Paved aircra aprons provide a solid, stable surface for tmaneuvering of both transient and based aircra. Haviadequate paved parking apron space also allows for fu
ing operaons, e-downs, and taxiing operaons to occunder all weather condions. The size of the aircra parki
apron is always a consideraon for larger business aircroperators.
-
8/2/2019 Aviation Comp Analysis Ada
16/624 | January 2012
Hangars
Hangars allow for aircra storage at a parcular airport.Hangars provide private/corporate operators with another
degree of safety, security, and protecon from the elementswhen storing aircra. Many businesses oen look for thesecurity and safety provided by hangar facilies, even onshort stays. Having the ability to provide storage to bothbased, as well as transient aircra, is an added feature of
hangars on the eld. Aircra owners will oen evacuate air-cra to airports with hangar facilies in preparaon for badweather condions. The Virginia Economic DevelopmentPartnership (VEDP) explained that the availability of corpo-rate hangars is a key factor in encouraging businesses and
ight departments to locate within the Commonwealth.35
100 LL and Jet Fuel
Most piston-driven GA aircra use 100 low lead (100LL)aviaon fuel. Turboprop and jet aircra ulize variaons ofjet fuel. Fuel availability is always considered when mak-
ing ight plans, as aircra operators determine the nearestairports with fueling facilies. Those without fueling facili-es are oen not considered proper rest stops for meals,lodging, or to wait out weather delays.
Weight-Bearing Capacity
In addion to runway length, runway weight-bearing capac-
ity (maximum repeve aircra loading capability) is an im-portant factor when pilots consider the use of any parcularairport. Runways that are undersized for the aircra fre-quently using them will likely experience premature runway
pavement failure. Weight-bearing capacity tabulaons forairports range from the upper-end of the FAAs designaonof small aircra (12,500 lbs.), single-wheel-conguraon,to those having a dual-tandem wheel conguraon capacitygreater than 300,000 pounds. 36 37
Analysis of Services and Amenities
This secon displays Virginias ranking in the categories
outlined above compared to three preselected comparisongroups: conguous states, comparable states, and compe-tor states. To reiterate, these groups are dened as follows:
35 Virginia Department of Economic Development input as part of the studys
steering and technical commiees.
36 All state-by-state data is located in Appendix 1.
37 Due to the complexity of the weight-bearing capacity data, it was not
included in the state-by-state services and amenies analysis. Raw state-by-state
data is available in Appendix 1.
Conguous states States adjoining the Commonweathat are compeve for aircra housing and stopovers dto proximity. These include:
Kentucky
Maryland
North Carolina
Tennessee
West Virginia
Comparable states States chosen for their similarity the number of public-use airports and aviaon system re
enues. These include:
Arizona
Colorado
Louisiana
Missouri
Washington
Competor states States idened as competors in av
on specic economic development opportunies. Theinclude:
Alabama
Georgia
North Carolina
South Carolina
Conguous States: Services and Amenies CompeStanding
Figure 3.2 graphically illustrates Virginias standings in tcategories discussed relave to its conguous states.
Virginias relave strengths lie in the infrastructure designto enhance safety, providing pilots the highest level of infmaon available to guide ight plans, especially in prepaon for hazardous ying condions. These safety preca
ons provide pilots and the charters employing these pilo
a higher degree of condence in ying during IMC weater condions. At 93.9% and 68.2%, respecvely, Virgiequips the highest percentage of its public-use airports wIAPs and AWOS III, or beer, weather reporng systems.
-
8/2/2019 Aviation Comp Analysis Ada
17/62Competitive Analysis of Virginias Aviation Industry |
0 20 40 60 80 100
Maryland
West Virginia
Tennessee
Kentucky
North Carolina
Virginia
Figure 3.2: Contiguous States: Percentage of Airports with Specified
Service/Ammenities
Airports w/ Jet A
Airports w/ 100 LL
Airports w/ Hangars
Airports w/ Paved
Parking Area
Airports w/ GA
Terminal Bldgs
Weather Reporting
Airports
Airports w/
Precision IAPs
Airports w/ IAPs
Airports w/ Runways
>/= 5000'
Commercial Service
Airports
*Virginia will have IAPs at 100% of its public-use airports by April 2012.
**Virginia has iniated a program to put AWOS III weather reporng at 100% of public-use airports not currently served
by weather reporng capability.
***Yellow outline and star denote leader in category
****Terminal percentages account for both aended and unaended facilies
-
8/2/2019 Aviation Comp Analysis Ada
18/626 | January 2012
Competitive Advantages
Safety Infrastructure
Installed
IAPs
AWOS III
Amenities
GA Terminal
Buildings
Paved
Aircraft
Aprons
Opportunities
Fuel Service
100 Low
Lead Fueling
Facilities
Jet A Fueling
Facilities
Runway
Length
5,000 foot
or Greater
Runway
Length
Figure 3.3: Conguous States: Airport Services and Amenies
Advantages and Opportunies
As seen in Figure 3.3, Virginias aviaon system ranks favor-
ably in comparison to its conguous states. Virginia holds aclear compeve advantage in public-use airports equippedwith IAPs. The second ranked state, Tennessee comes inroughly ten percentage points lower at 83.3%. Virginias ex-cellence in this capacity is the product of programs funded
by the Aviaon Special Fund (ASF) to equip every public-use,paved runway with IAPs by April 2012. Virginia also recentlyiniated a program to put AWOS III systems at the 20 air-
ports not currently served by weather-reporng capability.This will complete the iniave to have weather-reporngcapability at all of the Commonwealths 66 public-use air-ports. Taking the lead in areas similar to IAP-equipped air-ports helps Virginia remain compeve in aracng avia-on operaons and aviaon-dependent business.
Beyond its network of instrument approach and weatherreporng infrastructure, Virginias aviaon system caters
to Part 91 and 135 operators. Among its conguous states,Virginia ouits the highest percentage of public-use airportswith general aviaon terminal facilies (91%). Addionally,Virginia ranks rst among conguous states in the percent-age of airports with paved aircra parking aprons (97%).
Although the Commonwealth ranks rst in four of the tenservices and amenies categories, there is room to expandupon the current infrastructure at the public-use airports.
Tennessee represents Virginias greatest compeon, rank-ing rst in categories relang to:
100 low lead and jet fuel facilies
5,000-foot runways
The combined eect of these rst-place rankings may factinto corporate jet operators locang in Tennessee due the relave ease of access to its public-use airports.
-
8/2/2019 Aviation Comp Analysis Ada
19/62Competitive Analysis of Virginias Aviation Industry |
Comparable States: Services and Amenies Compe
Standing
Figure 3.4 compares Virginias aviaon services and ame
es to a group of comparable states chosen for their simility in the number of public-use airports and aviaon systerevenues. Virginia ranks higher than any of the comparabstates in the percentage of:
Public-use airports with IAPs and precision IAPs
Weather reporng systems
General aviaon terminals
Paved aircra aprons
100 Low Lead and Jet A fueling facilies
The categories in which Virginia lags behind Colorado, Azona, and Louisiana, respecvely, are in the percentage o
Airports oering scheduled commercial services
5,000-foot runways
Hangar facilies
-
8/2/2019 Aviation Comp Analysis Ada
20/628 | January 2012
0 20 40 60 80 100
Arizona
Colorado
Louisiana
Missouri
Washington
Virginia
Figure 3.4: Comparable States: Percentage of Airports with
Specified Service/Amenities
Airports w/ Jet A
Airports w/ 100 LL
Airports w/ Hangars
Airports w/ Paved
Parking Area
Airports w/ GA
Terminal Bldgs
Weather Reporting
Airports
Airports w/ Precision
IAPs
Airports w/ IAPs
Airports w/ Runways
>/= 5000'
Commercial Service
Airports
*Virginia will have IAPs at 100% of its public-use airports by April 2012.
**Virginia has iniated a program to put AWOS III weather reporng at 100% of public-use airports not currently se
by weather reporng capability.
***Yellow outline and star denote leader in category
****Terminal percentages account for both aended and unaended facilies
-
8/2/2019 Aviation Comp Analysis Ada
21/62
Competitive Advantages
Safety Infrastructure
IAPs and
Precision
IAPs
AWOS III
Amenities
GA
Terminal
Buildings
Paved
Aircraft
Aprons
Jet A
Fueling
Facilities
100 Low
Lead
Fueling
Facilities
Opportunities
AircraftStorage
Hangar
Facilities
RunwayLength
5,000 foot
or Greater
Runway
Length
Competitive Analysis of Virginias Aviation Industry |
Figure 3.5: Comparable States: Airport Services and Amenies
Advantages and Opportunies
-
8/2/2019 Aviation Comp Analysis Ada
22/620 | January 2012
0 10 20 30 40 50 60 70 80 90 100
North Carolina
South Carolina
Georgia
Alabama
Virginia
Figure 3.6: Competitor States: Percentage of Airports with
Specified Service/Amenities
Airports w/ Jet A
Airports w/ 100 LL
Airports w/
Hangars
Airports w/ Paved
Parking Area
Airports w/ GA
Terminal Bldgs
Weather Reporting
Airports
Airports w/
Precision IAPs
Airports w/ IAPs
Airports w/
Runways >/= 5000'
Commercial Service
Airports
Competor States: Services and Amenies Compeve Standing
According to the VEDP, Virginia oen competes with North Carolina, South Carolina, Georgia, and Alabama for aviaon-rlated economic development opportunies. Figure 3.6 shows how Virginia compares to these states in aviaon services aamenies.
*Virginia will have IAPs at 100% of its public-use airports by April 2012.
**Virginia has iniated a program to put AWOS III weather reporng at 100% of public-use airports not currently served
by weather reporng capability.
***Yellow outline and star denote leader in category
****Terminal percentages account for both aended and unaended facilies
-
8/2/2019 Aviation Comp Analysis Ada
23/62
Competitive Advantages
Safety Infrastructure
Installed
IAPs
AWOS III
Amenities
GA
Terminal
Buildings
Paved
Aircraft
Aprons
100 Low
Lead
Fueling
Facilities
Jet A
Fueling
Facilities
Opportunities
Aircraft
Storage
Hangar
Facilities
Runway
Length
5,000 foot
or Greater
Runway
Length
Competitive Analysis of Virginias Aviation Industry |
Figure 3.7: Competor States: Airport Services and Amenies
Advantages and Opportunies
Virginia leads its economic development competors in seven of the ten services and amenies categories. Georgia ran
second holding compeve advantages in the percentage of airports with 5,000-foot runways and airports equipped wprecision IAPs. Alabamas public-use airports benet from a higher percentage of airports with hangar facilies. Of the thrclassicaons of competor states, Virginia excels in its network of airport services and amenies.
-
8/2/2019 Aviation Comp Analysis Ada
24/622 | January 2012
4. COMPETITIVENESS OF VIRGINIAS AVIATION POLICY
4.1 POLICY ENVIRONMENT
Commercial Aviation
Regulaons governing commercial aircra and air carrierairport operaons are largely federal and do not, therefore,
vary greatly from state-to-state. Many of the policies andregulaons dictang commercial aviaon originate with
the FAA and are administered with lile state input. TheFAA regulates the various types and uses of aircra, air-port safety and security, airport environmental impact, andalso administers various airport improvement grants andfunds. Federal dollars are allocated to eligible public-use
airports to guide airport planning, design, and construconof aviaon infrastructure and facilies.38 In order to meeteligibility, airports must serve a role in the Naonal Planof Integrated Airport Systems (NPIAS). NPIAS airports are
also determined to have a signicant impact on naonal air
travel and warrant federal dollars to ensure that they oper-ate at elevated standards. The majority of the key statesanalyzed within this study, including Virginia, provide NPIASairports varying levels of funding to assist in their develop-
ment. However, while aviaon regulaons are administeredfrom a federal top-down approach, states retain the abilityto inuence their air transportaon systems compeve-ness in their taxing and program funding policies.
General Aviation
The FAA centrally regulates general aviaon acvity at the
federal level, though many states have recently taken theiniave to enact promoons and policies that increaseawareness of its funcons and benets. Virginia leadersare adversing the connecons between a strong network
of general aviaon airports and economic vitality in theprivate industry. Acknowledging these connecons is nota principle that is conned to Virginia, as shown by recentpromoonal and policy iniaves in states with comparablegeneral aviaon infrastructure. Business growth through
general aviaon stands as a top trend in the industry. Virgin-ia became the most recent state to call for aviaon-relatedawareness when Governor Bob McDonnell declared August
2011 Virginia Aviaon Month.39 With this proclamaon,Virginia joins the majority of the other conguous, compa-rable, and competor states that have formally allocated
38 DOAV,Airport Program Manual(PDF le), p. 4, August 2011, available at
hp://nyurl.com/72uznma [accessed December 5, 2011]
39 Aviaon Across America. Cercate of Recognion: Virginia Aviaon
Month. Available at hp://www.aviaonacrossamerica.org/uploadedFiles/
News/Press_Releases/VA%20Cercate%20of%20Recognion%202011.pdf [ac-
cessed 7 December 2011]
dates to acknowledge the jobs and economic benet prvided by the states aviaon system. Of the three categorof key states, only Louisiana, Arizona, and Alabama have nformally recognized the job growth and economic beneof the states aviaon system.40
4.2 COMPARISON OF REVENUE STRUCTURE
While airport and aircra regulaons originate at the fedelevel, funding policy and programs vary from state-to-staThe revenue structure of a states public aviaon opera
is a crical factor in determining the success and compeveness of the aviaon industry. Tax revenue structurean especially salient factor for the industry due to the hicosts and numerous regulaons associated with aviaon avity. To determine a states compeve standing rela
to its revenue structure, analyses must include an examinon of the state administered programs funded through t
revenues. The following secon highlights Conklin and Deckers State Aviaon Tax and Funding Study contract
as a part of this overall study, to help determine Virginistanding among the various classicaons of competoregarding tax structure and levels of annual revenue.
40 Alliance for Aviaon Across America Proclamaon-Signing Celebraon w
Georgia Governor Sonny Perdue Recognizing the Value of General Aviaon,
AAAA press release, October 7, 2009, on AAAA website,
-
8/2/2019 Aviation Comp Analysis Ada
25/62Competitive Analysis of Virginias Aviation Industry |
TABLE4.1: CONTIGUOUSSTATES: AIRCRAFTPROPERTYTAXREGULATIONSState AircraftPropertyTaxRegulations
Virginia Taxonaircraftvariesfrom0.00001%to8.5%dependingonthelocality.Kentucky Aircraftnotusedinthebusinessoftransportingpeopleorpropertyforcompensationorhirearesubjecttoannualadvaloremtaxof1.5centsper
$100ofvalue.
Maryland Aircraftareexemptfrompropertytax.NorthCarolina Airplanesaretaxedattheirtruemonetaryvaluebythecountyinwhichtheyaredomiciled. Qualifiedantiqueaircraftarespeciallyclassifiedandaretaxed
atthelesseroftheiractualvalueof$5,000.
Tennessee Aircraftarevaluedat30%fairmarketvalueanddepreciatedassuminga13yearlife. Thepropertytaxratesinthecountiesrangefrom1.33%to7.21%.
WestVirginiaAircraftarevaluedaccordingtoanationallyrecognizedaircraftvaluation
guideoftheTaxCommissionerschoice. Thevaluationofaircrafttakesinto
accountthevalueofthenavigationalandradioequipmentinstalledonthe
plane.
The
property
tax
rate
is
between
1.5%
and
2%
of
this
value,
depending
onthelocality.
Personal Property Tax on Aircraft*
Personal property tax is an important component of a com-peve aviaon industry for several reasons. Personalproperty tax, which is assessed annually (aircra are mostoen taxed in this category), can be more signicant to the
aircra owner than the state sales tax which is paid onlyonce at the point of purchase. This revenue can be cricalin the decision to move aircra to a city, county, or town-ship that charges lower personal property tax or none at all.For example, when an aircra is located near a state line,
there is an incenve for aircra owners to base the aircrain a state that does not impose a local personal propertytax (i.e. Maryland). There are approximately 199 localies
in Virginia that administer some type of personal propertax. Of these, 71 (36%) levy property taxes on aircraWithin the Virginia localies with a public-use airport, focurrently do not levy a property tax or impose a marginal ton aircra.** These localies include:
Fauquier County (Warrenton-Fauquier Airport - HW
Loudoun County (Leesburg Execuve Airport - JYOand Dulles Internaonal Airport - IAD)
Manassas City (Manassas Regional Airport - HEF)
Staord County (Staord Regional Airport - RMN)
41 John L. Knapp, and Stephen Kulp, Virginia Local Tax Rates, 2010, Weldon
Cooper Center for Public Service: University of Virginia, 29th edion, p. 142.
*Revised Edion 1: February 10, 2012
**Although Arlington County levies a property tax, aircra at Ronald Reagan Washington Naonal
Airport are tax exempt because the airport is considered federal property.
-
8/2/2019 Aviation Comp Analysis Ada
26/62
-
8/2/2019 Aviation Comp Analysis Ada
27/62Competitive Analysis of Virginias Aviation Industry |
cates that the value of Virginias Air Transportaon Systemis especially high.
Virginia is ranked third when compared to conguous,comparable, and competor states in total, state aviaon-related revenue levied in FY 2010 collecng roughly $31million.44 Maryland topped the list of 14 states, drawing
$193.8 million from its transportaon trust fund. Colora-do ranked second with $38.9 million in total state revenue.
While Virginia received $71 million in federal funding in FY2010, these gures, as is the case with the remainder of the
key study states, are not included when ranking according tostate-specic revenue.45
Dedicated Aviation Funding
Conklin and de Deckers State Aviaon Tax and FundingStudyexplains that of the states included in this compe-ve analysis, typically those operang under dedicated avia-
on funds are fed through fuel taxes and aircra registraonfees. As 4.2 shows, Virginia follows this trend while also em-
ploying a one-me, 2% sales and use tax on aircra leviedupon purchase or registraon within the Commonwealth.This segment of the ASF amounted to roughly 68% of the
funds revenue and 31% of the total aviaon system revenuein 2010. The bulk of Virginias total revenue came from theCommonwealths Transportaon Trust Fund (TTF) at $18.7million in FY 2010. The Virginia aviaon fuel sales tax con-
tributes $.015 per gallon of fuel sold in Virginia to the Com-monwealths TTF. 2.4% of the TTF is then allocated to DOAVin operaon of the Commonwealths aviaon system.46
Although Virginia ranks third in total revenue compared toall of the states analyzed, it ranks second behind Coloradowhen compared to states with dedicated aviaon funds.
Important to note are the dierences in the componentsthat constute Virginia and Colorados dedicated aviaonfunds. Virginias ASF revenue structure is more diversied,encompassing three sources of tax funding. They are:
Aircra sales and use tax
Aircra registraon fees
Jet fuel and Avgas excise taxes
Colorado on the other hand is strictly dependent on theamount of aviaon fuel purchased within the state. Fluctu-
ang market trends therefore heavily inuence the opera-on of Colorados aviaon system. While the discovery ofa one-me lump sum arcially inated Colorados FY 2008total revenue, commercial service cutbacks and rising fuel
44 Nel Stubbs, State Aviaon Tax and Funding Study, performed for the
Virginia Department of Aviaon by Conklin and de Decker
45 DOAV, Finance and Administraon,mhp://www.doav.virginia.gov/-
nance_admin_division.htm [accessed December 12, 2011]
46 Virginia Department of Aviaon
prices helped to contribute to the nearly 25% decreasetotal revenue for 2010.
Tennessee provides another example of the eect thuctuang market trends can have on an aviaon systefunded strictly through fuel taxes. From FY 2008 to FY 201Tennessees total aviaon system revenue dropped 53
Tennessees dedicated fund inherently double-taxes avon fuel through excise and sales and use levies. When t
commercial air services market contracted between 20and 2010, fuel consumpon dropped, causing Tennesse
aviaon system to take a major revenue loss. Over the samperiod, Virginias revenues grew 9.5%, while aviaon futax revenue grew at 6%.47
Sales and Use Tax
Virginia compares favorably with the three classicaoof competor states in the various facets of tax policy r
lang to aviaon system operaon. At 2% of the value the aircra, Virginias sales and use tax rate is ed with A
bama for being the lowest of all fourteen states includin the analysis. Naonally, only four states and the Distrof Columbia do not levy this tax. These states are Alas
Montana, New Hampshire, and Oregon.48 Of those stattaxing aircra sales and use, only Delaware levies a lowpercentage than Virginia and Alabama at .384% of the acra value. Important to note, however, is that North a
South Carolina place a $1,500 and $300 respecve cap the tax, which may result in a lower tax overall.49
Fly Away Exemption
In 2011, Virginia enacted a Fly Away exempon, alloing aircra purchased by a nonresident to be removwithin 60 days of purchase to forego registraon and sa
and use taxes.50 Virginia is one of seven states includedthe study to grant this exempon, and aside from Tennesee, the only among the conguous states. Virginia is aone of ten states to exempt certain aircra labor costs.
most cases, Virginia, Alabama, Arizona, Colorado, GeorgKentucky, Maryland, Missouri, North Carolina, and SouCarolina exempt labor costs on aircra if the labor is statseparately on the work invoice, and given that the labornot of a manufacturing or fabricaon nature.51
47 Virginia Department of Aviaon, Monthly Revenue Collecons-Major
Revenue Sources-Fund.
48 Virginia Department of Aviaon, Public Facilies by State and Ranking,
the enre list in Appendix 3.
49 Nel Stubbs, Tax and Funding Study, completed for the Virginia Departm
of Aviaon by Conklin and de Decker
50 Virginia Department of Aviaon, Aircra Licensing, hp://www.doav.
virginia.gov/licensing_aircra.htm [accessed December 12, 2011]
51 Nel Stubbs, Tax and Funding Study, completed for the Virginia Departm
of Aviaon by Conklin and de Decker.
-
8/2/2019 Aviation Comp Analysis Ada
28/62
-
8/2/2019 Aviation Comp Analysis Ada
29/62Competitive Analysis of Virginias Aviation Industry |
Common Carrier Sales and Use Tax Exemption
There are a number of areas in which Virginia does not com-pete as closely with the three classicaons of competorstates. First, all conguous states oer common carrier sales
and use tax exempons for Part 135 aircra. These stateseither exempt Part 135 aircra operang in the conveyanceof persons or property, interstate, or foreign commerce, orin North Carolinas case, make no disncon between Part
135 and 121 and merely cap the tax at $1,500.
52
Marylandis the most lenient of all states analyzed by not requiringaircra to be commercially cered, only that the aircrabe used principally in interstate commerce, be it Part 121,135, or 91.53
Of the 14 states analyzed, Virginia, Alabama, and Arizonaonly exempt airline (Part 121) operators from paying any
sales and use tax on aircra. South Carolina does not ex-empt any aircra, but caps its sales and use tax at $300 peraircra. Finally, the remaining states exempt Part 135 air-cra operang principally or exclusively in interstate or
foreign commerce. Missouri is the only excepon, makinga disncon between common carriers (Part 121) and con-tract carriers (Part 135). It oers the exempon to commoncarrier aircra and non contract carriers.54
Over the six-year period, from 2005-2010, Virginia broughtin $2,109,104 in sales taxes, ranging from $1,362 in FY 2008,a slow year in aircra sales and registraons, to $1,448,490in FY 2009. These taxes were levied from ten of the 35 Part
135 cered companies registered with DOAV.55
DOAVs sales and use tax gures represent those aircra thatare owned by the Part 135 charter operaon companies;
they do not factor in aircra that are leasedby the chartercompanies. Because many aircra charter companies alsoperform aircra management funcons, a large percent-age use their eet for on-demand charter services. In most
cases, other individuals and businesses own aircra in themanagement eet. These operators arrange lease agree-ments with the management companies to share charterrevenues, oseng ownership expenses.
One challenge of enacng and enforcing a Part 135 sales anduse tax exempon is that many of the Part 91 companiescan potenally aain Part 135 cercaon that might resultin a signicant decrease in the amount of (ASF) revenue to
be invested back into Virginias aviaon system. A large rev-enue reducon in the 2% sales and use tax would negavelyimpact the Commonwealths ability to provide funding forits airport programs, as it accounts for 68% of the ASF.56
52 Ibid.
53 Ibid.
54 Ibid.
55 Data provided by the Virginia Department of Aviaon.
56 Nel Stubbs, Tax and Funding Study, completed for the Virginia Department
of Aviaon by Conklin and de Decker Associates, Inc.
Resale/Lessor Exception
A second area in which Virginias tax policy does not aliwith the thirteen states examined for this study is in a rsale/lessor excepon. Virginia is the only state not to o
a blanket resale/lessor excepon, which states that a singenty can purchase an aircra for lease or resale and colleand remit the sales and use tax on the lease payments. Vginia does, however, oer this excepon for registered de
ers, which includes those in the regular business of selliaircra. Registered dealers must own ve or more aircrat any me during the calendar year for which the excepis employed. The excepon is one that benets the lessolessee in that the lessor, the single purpose enty, leases t
aircra to an operang enty for their use and collects aremits the use tax on the lease payments. This opon beets the lessee by enabling them to spread the sales/use tout over a period of me, allowing both to manage costs.
In consulng with Virginias Taxaon Department, DOAfound that the statute is currently wrien in a way that r
duces the propensity for single enes to abuse their beets. Allowing an enty to purchase a single aircra, eempt for resale, and collect the 2% aircra tax on the leapayments creates a loophole to essenally avoid the taCreang a leasing company is a commonly used techniq
to defer payment of sales and use tax. This allows for a tdeferral, as the sale of the aircra to the leasing companyexempt from inial sales tax. Sales tax is then charged the lease payments.58
Programs and Services Funded Through Tax Revenue
Virginias ASF is a user-pay, user-benet system. The Ais enrely based on taxes levied on aircra operators ulizaon of the Commonwealths Air Transportaon SysteThe ASF, in its enrety, then returns to operators in the forof programs and technical services to the benet of all thulize the Commonwealths public-use airports. In FY 201
Virginias ASF provided $12.2 million in collected fuel taaircra sales and use tax, and aircra registraon fees fund the program categories described in Figure 4.1.
Programs made possible by the ASF include:
The Facilies and Equipment (F&E) Program; Maintenance Program;
Security Program;
Aviaon Promoon Program;
And the Air Service Development and Enhancemen
Program
57 Nel Stubbs, Tax and Funding Study, performed for the Virginia Departm
of Aviaon by Conklin and de Decker Associates, Inc.
58 Informaon provided by DOAV Aircra Licensing Manager.
-
8/2/2019 Aviation Comp Analysis Ada
30/628 | January 2012
Figure 4.1: Virginias Aviation Dollars at Work - Commonwealth Transportation Fund
Aviation Fuels
State Sales & Use Tax Motor
Vehicle Sales & Use Tax Motor
Vehicle Rental Tax
Motor Fuel Tax
Motor Vehicle License Fees
Aviation Fuel Tax
Aircraft Sales & Use Tax
Aircraft Operating Revenue
Miscellaneous Licenses/ Fees
Commonwealth
Airport Fund
Aviation System
Capital
Improvement
Aviation Special
Fund
Facilities & Equipment (NAVAIDS)
Airport Maintenance
Air Transportation System Planning
Aircraft Operation
Air Service Development
Promotion & Public Relations
Licensing & Safety
5 gal.
On 1st
100,000 gal.
1/2/gal. Amts. In an
excess of 100,000 gal.
1/4 1/4
Transportation
Trust Fund
Aviation Fuel Tax
2.4% to
Aviation
4
1
Aviation
Motor Fuel
5/ gal.
Jet Fuel
100 Low Lead Fuel
Facilities and Equipment (F&E) Program
Virginias highly compeve standing in the percentage ofairports serviced by AWOS and IAP systems can be arib-uted to the facilies and equipment (F&E) program. The
F&E program provides funding for the installaon of elec-
tronic communicaon, navigaon, and informaon systemsto enhance aircra operator safety while also encouragingthe ulizaon of Virginias air transportaon system. These
infrastructure improvements are either owned and oper-ated under by DOAV or are the responsibility of the airportsponsor. DOAV owns and operates facilies such as dis-tance measuring equipment (DME), nondireconal beacons(NDB), and Instrument Landing Systems (ILS), while visual
aids, AWOSs and ground communicaon outlets are underthe airport sponsors responsibility.59
Maintenance Program
The maintenance program is designed to fund nonrecurringmaintenance and to encourage airport sponsors to under-take preventave maintenance, extending the useful life
of airport infrastructure and reducing the frequency withwhich this infrastructure must be replaced. Eligible projectsinclude obstrucon removal, pavement maintenance and
59 Ibid.
repairs, repairs to fueling staons and airport lighng sytems, as well as repairs to terminal buildings.60
Security Program
Virginias voluntary security program oers a best-prac
approach to enhancing general aviaon security. VirginiASF provides airport sponsors with 100 percent of the funing to conduct security audits and to develop security plafor public-use, GA airports. The ASF then provides 90 pcent of the necessary funding to design and install secur
improvements to address the deciencies reported in tsecurity audits and plans. Beyond the audit and securplan development, the ASF funds terminal area fencing, primeter fencing, electronically controlled entry gates, sveillance systems, security signage, lighng, and barriers.
Aviation Promotion Program
The aviaon promoon program exists to boost awaness among the business community and public sector the economic benets associated with the ulizaon Virginias aviaon system. Annual state funding for airpo
sponsors promoonal endeavors is capped at $25,000 pair carrier airport and $10,000 per general aviaon airpoThese funds support promoonal eorts, which include
60 Ibid.
61 Ibid.
-
8/2/2019 Aviation Comp Analysis Ada
31/62
-
8/2/2019 Aviation Comp Analysis Ada
32/62
-
8/2/2019 Aviation Comp Analysis Ada
33/62
-
8/2/2019 Aviation Comp Analysis Ada
34/62
-
8/2/2019 Aviation Comp Analysis Ada
35/62
-
8/2/2019 Aviation Comp Analysis Ada
36/62
-
8/2/2019 Aviation Comp Analysis Ada
37/62
-
8/2/2019 Aviation Comp Analysis Ada
38/62
-
8/2/2019 Aviation Comp Analysis Ada
39/62Competitive Analysis of Virginias Aviation Industry |
7. WORKFORCE PIPELINE ANALYSIS
Competitive Analysis of Virginias Aviation Industry |
Current Workforce
The aviaon and space industry have signicant economicdevelopment potenal for the communies and cizensof the Commonwealth. This is a point made apparent inVirginias Aerospace Industry: An Economic Impact Analy-
sis (2010), and the Virginia Airport System Economic ImpactStudy (2011). The latest aviaon and space-related im-pact studies show that Virginia directly employs more than28,000 employees and contributes $7.6 billion in directannual economic output.78 Addionally, Virginias airports
have a profound eect on the Commonwealths economicvitality, accounng for 4.4% of the states total economicoutput. Virginia ranked 11th in the naon in aviaon andaerospace employment in 2009 and increased to 10th in
2010. According to the FAA industry growth projecons,this impact is desned to grow in the next 20 years. To takeadvantage of aviaon and space growth potenal, Virginia
must ensure a ready and trained workforce is there to meetthe industry. With its world-renowned centers for aviaon
and space educaon and whos who list of companies, itis important to obtain detailed informaon on Virginias cur-rent workforce landscape and idenfy any changes neededin the educaon system and workforce training programs to
ensure that Virginia remains compeve into the next de-cade and beyond.
78 Virginia Department of Aviaon (DOAV), Virginia Airport System Economic
Impact Study: Technical Report(PDF le), p. 1, report prepared by ICF SH&E,
2011, available online at http://tinyurl.com/7usgrf[accessed December 2, 2011].
Future Workforce
Rerements among aging baby boomers are expected to signicant in the coming years. The impact will be sligly alleviated as more of the populaon aged 65 and ovis projected to remain in the workforce. Workers aged
and older accounted for an esmated 4.3% of workers in tstate in the second quarter of 2010 and is expected to groto 7.3% in 2020. The number of workers under the age of is forecast to decrease over the next ten years, from 469,3to 431,849.
Another signicant trend is that the average educaonaainment of the workforce is expected to increase. Tnumber of employed workers in Virginia with a high scho
diploma or less is expected to drop over the next ten yeaby 4.4%, while over the same period, the number of worke
with some college is expected to grow 14.9%. Even larger creases are expected for other aainment levels: associat
degrees (+36.3%), bachelors degrees (+16.9%), and gradate degrees (+34.0%).
Aviation Workforce Shortage
A number of aviaon-specic technical occupaons wecited as crical to the success of the aviaon industry in2011 survey conducted by Chmura Economics & Analy
that targeted businesses in the aviaon and space indu
-
8/2/2019 Aviation Comp Analysis Ada
40/628 | January 2012
try.79 The occupaons that capture much of this group areaircra mechanics and service technicians, as well as gen-
eral maintenance and repair workers.
80
Roughly 25% ofaviaon respondents menoned these among those mostimpacul upon their business success. Other technical oc-cupaons that appear to be crical to the success of theaviaon industry include avionics technicians, air trac con-trollers and aireld specialists, rst-line supervisors/manag-
ers of mechanics, installers, repairers, and machinery main-tenance workers.81
Aviaon and related business respondents menoned cri-
cal employee shortages in several occupaons. One is thebroad occupaon of pilots, including airline pilots, copilots,
ight engineers, and commercial pilots. Several respon-dents reported that pilots were not in sucient supply for
their organizaon. Engineers were also frequently cited tobe in short supply, especially aerospace engineers and elec-tronics/electrical engineers.
79 Chmura Economics & Analycs, Virginias Aviaon and Aerospace State of
the Workforce: 2011
80 Ibid., p. 70
81 Ibid.
Respondents also menoned that certain skill sets amonew hires were in short supply, especially program ma
agement skills, crical thinking, decision making, and woethic. Aviaon respondents most oen cited a short suppof crical thinking and decision making skills. Among sparespondents, STEM skills were most oen lacking. Nine twelve skills were designated in short supply by 32% more of respondents.
Respondents were asked how they expected their emploment to change over the coming twelve months and ovthe coming three years. Over the next year, about half (49
expected to stay the same with 30% expecng job growand 12% expecng a decline.82 Space rms were especia
opmisc, with ve of seven expecng growth and the maining two expecng to hold steady. An in-depth analy
regarding the current workforce can be found in the Vginias Aviaon and Aerospace State of the Workforce: 20
report, available on the DOAV website.
82 Ibid. p. 73
-
8/2/2019 Aviation Comp Analysis Ada
41/62Competitive Analysis of Virginias Aviation Industry |
8. INDUSTRY LANDSCAPE AND TRENDS
8.1 NATIONAL BUSINESS TRENDS
Consumers have beneted from airline deregulaon, withprices for domesc roundtrip airfare decreasing by 8.6%,while the Consumer Price Index has increased by 24.6%
from 2000 to 2009. Airlines, however, have lost $58 billion,
with operang revenues dropping 16.9% in 2009, leading toa loss of over 150,000 jobs.83
According to the FAA, there are three trends shaping thecommercial air carrier industry. They are:
The proliferaon of ancillary revenues
The convergence of the network and low cost carrier
business models
Industry consolidaon and restructuring84
The past decade, with the 9/11 terrorist aacks, an eco-nomic recession, and soaring fuel prices, has presentedmany challenges to the airline industry. These factors have
pressured aviaon companies to look at their pracces andadapt the industry in order to prosper. The response con-sisted of cung unprotable routes; grounding older, lessfuel-ecient aircra; and charging separately for servicessuch as checked luggage, meals, etc.
The FAA is opmisc that this new focus will help create sus-tainable prots as opposed to the boom-and-bust businesscycles of the past. The FAA noted that available seat miles
(ASMs) will increase 4.5% [in 2011] aer posng a 0.5% de-crease for 2010, and will then grow at an average annualrate of 3.6% through 2031.85 Growth is also expected inregard to commercial air carrier domesc revenue as, Com-
mercial air carrier domesc revenue passenger miles (RPMs)are forecast to grow 3.5% in 2011, and then grow at an aver-age of 3.1% per year through 2031; domesc enplanementsin 2011 will grow 3.0%, and then grow at an average annualrate of 2.5% for the remainder of the forecast.86
Both trip length and airline capacity are expected to increase
in regional markets. To maintain protability, the FAA deter-mined that the U.S. carriers must have a stable environ-ment for fuel prices, an increase in demand for corporate
83 James C. May, Focus Needed on Compeveness,Aviaon Daily,
July 13, 2010, hp://www.aviaonweek.com/aw/generic/story_channel.
jsp?channel=comm&id=news/avd/2010/07/13/11.xml&headline=May:%20
Focus%20Needed%20On%20Compeveness [accessed December 7, 2011]
84 Ibid.
85 Federal Aviaon Administraon, FAA Aerospace Forecast: Fiscal Years 2011-
2031 (PDF le), p. 5, n.d., available at hp://www.faa.gov/about/oce_org/
headquarters_oces/apl/aviaon_forecasts/aerospace_forecasts/2011-2031/
media/2011%20Forecast%20Doc.pdf[accessed December 7, 2011]
86 Ibid.
air travel, the ability to pass along fare increases to leisutravelers, and the generaon of ancillary revenues.87 U
carriers are also expected to connue to drive down opering costs by beer matching supply (ight frequencies aroutes) with demand, delaying the sale of newer aircraand/or grounding older aircra, and pressuring regional liates to accept lower fees for contract ying.88
Mainline carriers are switching to more ecient aircraresponse to fuel costs and the need to rere an aging ewhile regional carriers are going from 50-seat aircra to 790 seat aircra in order to handle the increased dema
caused by mainline carriers cung unprotable routesThe focus has gone from increasing an airlines market sha
to increasing prot. The regional carriers were the only sement to report a net loss in 2010 of $0.6 billion. Avia
manufacturers are suering due to the downturn in teconomy and the airlines strategy of delaying new aircrdelivery and rering older aircra rather than paying for tparts and labor to repair them.90
87 Ibid., p.6
88 Ibid., p. 5-6.
89 Ibid., p. 23
90 Ibid., p. 7
-
8/2/2019 Aviation Comp Analysis Ada
42/620 | January 2012
The latest eort to improve eciency comes in the use of
biofuels in a number of Connental and Alaska Airline ights.In early November 2011, Connental Airlines and AlaskaAirlines became the rst major airlines to fuel a ight usingbiofuels; algae in the case of Connental, and used cookingoil in Alaska Airlines.91 The move to introduce biofuel capa-
bilies within the U.S. airline industry comes in response tothe industrys eort to increase operaonal eciency whilereducing emissions. However, current biofuels only reduceemissions by 10% over convenonal jet fuel, and the infra-structure to support the bulk of the airlines fueling needs is
at least 15 years away.92 Addionally, biofuels are currentlysix mes the price of convenonal fuels.
Representave of a greater trend in the industry, the capac-
ity of regional carriers has grown 150% since 2000. Overthe same period mainline carrier capacity has fallen 15.5%.This increase can be aributed to the switch from turbopropplanes to regional jets, perming regional carriers to y lon-
ger routes. In addion, mainline carriers have been cunglow-demand routes, freeing up demand from travelers toregional carriers.93 The move toward larger regional aircrais a factor for airports to monitor when considering whichinfrastructure improvements might need to be made to con-
nue to serve, or become a player in, the market. Largerregional jets that can hold around 90 passengers are replac-ing older turboprop and 50-seat aircra; this speaks to themore expansive consolidaon trend aecng the scheduled
air services market.
91 Bellamy Pailthrop, Biofuels Start to Take O in the Airline Industry,
NPR.com. November 9, 2011. Accessed 12/5/2011. < hp://www.npr.
org/2011/11/09/142129847/biofuels-start-to-take-o-in-the-airline-industry>
92 Ibid.
93 FAA Aerospace Forecast, Fiscal Years 2011-2031, p. 15
2010 saw a lot of acon in consolidaon and restructuri
with operaons at Northwest Airlines folding into Delta Alines, and operaons at Midwest Airlines folding into Froer Airlines. Among regional carriers, Delta Airlines soits subsidiaries, Compass and Mesaba, to Trans States aPinnacle, respecvely, and Arcc Circle Air merged with E
Aviaon.94 The merger of Connental Airlines with UnitAirlines, and Southwest Airlines with Air Tran, as well as tacquision of ExpressJet by SkyWest Airlines were also anounced in 2010.
Virginia is not immune to such airline consolidaon and t
overall eect that it has on business and personal travel oof the state. Lynchburg Regional Airport (LYH) provides example of a case in which airline consolidaon is advers
ly aecng business travel. Lynchburg supports a growhigh-technology cluster, including a number of establishnuclear engineering and wireless communicaon rmCrucial to these businesses operaon in the new econ
my is having scheduled air access to internaonal airporLynchburg currently oers scheduled regional ight serves through U.S. Airways Express to Charloe InternaonAirport in North Carolina. Charloe, however, does not ofer the degree of internaonal ingress and egress to ad
quately support the Lynchburg-based businesses. Addioally, Lynchburg Regional has been experiencing the eeof regional carrier consolidaon since January 2011, whDelta disconnued regional services from Lynchburg to A
lanta. The Virginia Department of Transportaon recenawarded LYH a $700,000 federal grant via the small comunity air service development program to ence AirTrto commence regional commercial service to and from tairport.95 While this will assist in expanding LYHs opera
94 Ibid.
95 Tabitha, Cassidy, Lynchburg airport receives grant money to lure new
airline, November 1, 2011. Available at
-
8/2/2019 Aviation Comp Analysis Ada
43/62Competitive Analysis of Virginias Aviation Industry |
area, the grant can only