Analysis of Cost at FAA’s En Route Centers: An Empirical Perspective

In this paper, an empirical framework is developed using economic theories to examine the relationships between variable costs and levels of activities at the Federal Aviation Administration's (FAA) en route centers. Using data for three fiscal years and employing time-series pooled cross section econometrics, we have found that the Air Traffic Organization's (ATO) service provisions in the en route centers have some economies of scale. Furthermore, we have found that while controllers' wage is important, it is not statistically significant in unit cost measured in aircraft flight operation counts. However, it is statistically significant when unit variable cost is measured and estimated in terms of aircraft flight operation hours. We have also found that degree of complexity, a measure of service attributes, does not impact cost. These findings, combined with on-going policy discussion on users' fees, imply that ATO may be well positioned to implement average cost pricing if cost is to be fully recovered for en route services. The implementation of marginal cost pricing may require external funding, perhaps from general funds of the U.S. Treasury

Analysis of Cost at FAA’s En Route Centers: An Empirical Perspective

In this paper, an empirical framework is developed using economic theories to examine the relationships between variable costs and levels of activities at the Federal Aviation Administration's (FAA) en route centers. Using data for three fiscal years and employing time-series pooled cross section econometrics, we have found that the Air Traffic Organization's (ATO) service provisions in the en route centers have some economies of scale. Furthermore, we have found that while controllers' wage is important, it is not statistically significant in unit cost measured in aircraft flight operation counts. However, it is statistically significant when unit variable cost is measured and estimated in terms of aircraft flight operation hours. We have also found that degree of complexity, a measure of service attributes, does not impact cost. These findings, combined with on-going policy discussion on users' fees, imply that ATO may be well positioned to implement average cost pricing if cost is to be fully recovered for en route services. The implementation of marginal cost pricing may require external funding, perhaps from general funds of the U.S. Treasury

Analysis of Cost at FAA’s En Route Centers: An Empirical Perspective

In this paper, an empirical framework is developed using economic theories to examine the relation-ships between variable costs and levels of activities at the Federal Aviation Administration’s (FAA) en route centers. Using data for three fiscal years and employing time-series pooled cross section econometrics, we have found that the Air Traffic Organization’s (ATO) service provisions in the en route centers have some economies of scale. Furthermore, we have found that while controllers’ wage is important, it is not statistically significant in unit cost measured in aircraft flight operation counts. However, it is statistically significant when unit variable cost is measured and estimated in terms of aircraft flight operation hours. We have also found that degree of complexity, a measure of service attributes, does not impact cost. These findings, combined with on-going policy discussion on users’ fees, imply that ATO may be well positioned to implement average cost pricing if cost is to be fully recovered for en route services. The implementation of marginal cost pricing may require external funding, perhaps from general funds of the U.S. Treasury

Requirements Document for the Aviation Environmental Portfolio Management Tool

03-C-NE-MITThe Federal Aviation Administration's Office of Environment and Energy (FAA-AEE) is developing a comprehensive suite of software tools that will allow for thorough assessment of the environmental effects of aviation. The main goal of the effort is to develop a new capability to assess the interdependencies between aviation-related noise and emissions effects, and to provide comprehensive cost analyses of aviation environmental impacts. The economic analysis function of this suite of software tools has been given the rubric Aviation Environmental Portfolio Management Tool (APMT). This function will ultimately be derived from existing tools, tools currently under development, and new tools that must be developed

Benefits and costs of four approaches to improving rollover stability of cargo tank motor vehicles

Four broad approaches to decreasing the number of cargo tank rollovers were evaluated: driver training, electronic stability aids, improvements in design of the vehicle itself, and highway design. A study of rollover crash statistics confirmed many expectations, but a few of the factors were not as strong as might have been expected. The portion of rollovers that occur on freeways is 15 to 20. A driver error of one kind or another (e.g., decision or performance error) figures in about three-fourths of cargo tank rollovers. Inattention and distraction account for about 15. Evasive maneuvers were a factor in 5 to 10 of rollovers. Drivers must be trained to appreciate the diverse causes for rollovers and to anticipate the situations that lead to them. Adherence to viable work and rest schedules is crucial. Electronic stability aids automatically slow the truck when it rounds a curve too fast. They can be remarkably effective in preventing this scenario. However, crash statistics and anecdotal accounts consistently show many other factors that can lead to rollovers. Significant reductions in rollover rates can be achieved with modest changes in vehicle stability. Cargo tank trailers of improved stability are currently available for some cargoes. When mountainous terrain or other factors dictate highway designs that can contribute to rollovers, drivers need to be made aware through signage or dispatch instructions. A comprehensive benefit-cost analysis, conducted from a societal point of view during a 20-year window, projected that the improvements will be cost beneficial

Architecture Study for the Aviation Environmental Portfolio Management Tool

03-C-NE-MITThe Federal Aviation Administration's Office of Environment and Energy (FAA-AEE) is developing a comprehensive suite of software tools that will allow for thorough assessment of the environmental effects of aviation. The main goal of the effort is to develop a new capability to assess the interdependencies between aviation-related noise and emissions effects and associated environmental costs, and to provide comprehensive cost analyses of aviation environmental impacts. The economic analysis function of this suite of software tools has been given the rubric Aviation Environmental Portfolio Management Tool (APMT)1. This function will ultimately be derived from existing tools, tools currently under development, and new tools to be developed