Airport Development Reference Maneal Forecasting and Planning sections produced in collaboration with ACI.pdf

Airport Development
Reference Maneal
[ Effective March 2014
AIRPORTS COUNCIL
INTERNATIONAL
Forecasting and Planning sections
produced in collaboration with ACI Edition

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Airport Development Reference Manual
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ISBN 978-92-9252-226-1
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Montreal— Geneva

Table of Contents
IATA
Acknowledgements............................................................................................................................................vi
Section 1—Introduction...................................................................................................................................... 1
1.1 lATA-Who We Are; What We Do.......................................................................................................1
1.2 lATA's Airport Activities........................................................................................................................1
1.2.1 Airport Consultative Committees (ACCs).............................................................................. 2
1.2.2 IATA Consulting Services for Airports.....................................................................................2
1.2.3 International Industry Working Group....................................................................................3
1.3 Other IATA Airport Activities................................................................................................................4
1.4 Airports Council International (ACI) Collaboration............................................................................. 4
1.4.1 Introduction to Airports Council International (ACI)...............................................................4
1.5 Purpose of the Airport Development Reference Manual....................................................................5
1.6 How to Use the ADRM ........................................................................................................................6
1.7 ADRM: New Format............................................................................................................................ 7
Section 2—Forecasting....................................................................................................................................... 9
2.1 Introduction and Definition................................................................................................................ 10
2.2 Economic Base for Air Travel............................................................................................................ 12
2.2.1 Airport Catchment Area.........................................................................................................12
2.2.2 Socioeconomic Base............................................................................................................13
2.2.3 Transfer Traffic..................................................................................................................... 14
2.2.4 Airline Yields......................................................................................................................... 14
2.2.5 Tourism................................................................................................................................ 15
2.2.6 Trade.................................................................................................................................... 17
2.2.7 Intermodal Transportation....................................................................................................17
2.2.8 Economic Base Data Analysis.............................................................................................17
2.3 Historical Aviation Activity................................................................................................................. 18
2.3.1 Data Collection...................................................................................................................... 19
2.3.2 Airport Role..........................................................................................................................23
2.3.3 Historical Passenger Volumes.............................................................................................23
2.3.4 Top Domestic and International Destinations..................................................................... 23
2.3.5 Historical Market Share by Airline....................................................................................... 24
2.3.6 Historical Air Cargo Tonnage...............................................................................................24
2.3.7 Historical Movements by Segment...................................................................................... 25
2.3.8 Forecast Impact Factors.......................................................................................................25
2.4 Competitive Analysis......................................................................................................................... 26
10TH EDITION, MARCH 2014

IATA Airport Development Reference Manual
2.5 Review of Existing Forecasts............................................................................................................26
2.6 Common Forecasting Techniques....................................................................................................26
2.6.1 Trend/Time Series................................................................................................................27
2.6.2 Consensus Forecasts...........................................................................................................27
2.6.3 Market Share Forecasts.......................................................................................................28
2.6.4 Econometric/Regression Model...........................................................................................29
2.7 Passenger Activity Forecast..............................................................................................................32
2.7.1 Passenger Activity Segments..............................................................................................32
2.7.2 Passenger Activity Benchmarking........................................................................................33
2.7.3 Passenger Activity Alternative Scenarios............................................................................ 34
2.8 Baggage Forecast............................................................................................................................. 34
2.9 Air Cargo Activity Forecast................................................................................................................35
2.9.1 Air Cargo Supply and Demand............................................................................................36
2.9.2 Cargo Data Analysis.............................................................................................................37
2.9.3 Cargo Market Forecast Benchmarking............................................................................... 38
2.9.4 Cargo Activity Forecast........................................................................................................39
2.10 Air Transport Movement Forecast.....................................................................................................40
2.10.1 ATM Segments.....................................................................................................................40
2.10.2 Passenger ATMs..................................................................................................................41
2.10.3 Freighter ATM Forecast.......................................................................................................44
2.10.4 General Aviation ATM Forecast..........................................................................................45
2.10.5 Military/Government ATM Forecast..................................................................................... 47
2.10.6 Total ATM Forecast..............................................................................................................47
2.11 Peak Period Forecast........................................................................................................................47
2.11.1 Peak Period Traffic Measure................................................................................................48
2.11.2 Incorporating Directionality into Peak Hour Analysis.........................................................49
2.11.3 Peak Period Forecasts.........................................................................................................49
2.11.4 Conclusions Regarding Peak PeriodAnalysis......................................................................50
Section 3—Planning......................................................................................................................................... 52
3.1 Introduction........................................................................................................................................ 52
3.2 Master Planning................................................................................................................................ 52
3.2.1 Introduction........................................................................................................................... 53
3.2.2 Consultation......................................................................................................................... 57
3.2.3 The Master Planning Process..............................................................................................62
3.2.4 Preplanning..........................................................................................................................65
3.2.5 Traffic Forecasts...................................................................................................................69
3.2.6 Data Collection, Site Evaluation andFacility Potential.........................................................70
3.2.7 Requirements Analysis.........................................................................................................76
3.2.8 Development of Options.......................................................................................................92
IV 10TH EDITION, MARCH 2014

Table of Contents
3.2.9 Environmental Responsibility.............................................................................................107
3.2.10 Land Use Planning............................................................................................................. 117
3.2.11 Outline Development Plan.................................................................................................. 124
3.2.12 Financial Assessment........................................................................................................ 128
3.2.13 Reporting/Deliverables....................................................................................................... 128
3.2.14 Master Planning on a Greenfield Site................................................................................133
3.2.15 References......................................................................................................................... 146
3.3 Airside Infrastructure......................................................................................................................146
3.4 Passenger Terminal........................................................................................................................ 146
3.4.1 Introduction......................................................................................................................... 146
3.4.2 Terminal Design Considerations........................................................................................147
3.4.3 Terminal Planning Concepts.............................................................................................. 164
3.4.4 Terminal Capacity and Level of Service............................................................................183
3.4.5 Level of Service Concept and Planning Guidelines...........................................................191
3.4.6 Demanc-Capacity Assessment.........................................................................................195
3.4.7 The “Optimum” Solution and Balanced Capacity...............................................................199
3.4.8 Passenger Process............................................................................................................200
3.4.9 Segregation and Security Requirements in Airport Terminals..........................................204
3.4.10 Vertical and Horizontal Circulation.....................................................................................206
3.4.11 Departures.......................................................................................................................... 208
3.4.12 Transfers............................................................................................................................ 270
3.4.13 Arrivals............................................................................................................................... 273
3.4.14 Commercial and Retail Opportunities................................................................................303
3.4.15 Access :o Air Travel for Persons with Reduced Mobility.................................................. 311
3.4.16 Toilet Provisions................................................................................................................. 319
3.4.17 Passenger Wayfinding and Signage..................................................................................322
3.4.18 Landside Access Systems and Forecourts........................................................................326
3.5 Cargo Terminal................................................................................................................................ 334
3.6 Airport Support Elements................................................................................................................ 334
3.7 Surface Access Systems................................................................................................................ 334
Glossary...........................................................................................................................................................335
Acronyms.........................................................................................................................................................342
10TH EDITION, MARCH 2014 V

Acknowledgements
IATA and ACI gratefully acknowledge the technical assistance and input provided by IATA Members, ACI
Members and the organizations and individuals listed below.
IATA Members Document Review Panel:
• Mr. Alessandro D'Amico Air Canada
• Mr. Tony Edwards British Airways
• Mr. Hans Smeets KLM
• Mr. Allan Young Virgin Atlantic
ACI Members Document Review Panel:
• ACI World Facilitation and Services Standing Committee
Content Contributions:
Forecasting Section
• Mr. Russell Blanck Landrum & Brown
• Mr. Dilwyn Gruffydd Landrum & Brown
• Mr. Mark Heusinkveld
Master Planning Chapter
Landrum & Brown
• Mr. Gordon Hamilton
Passenger Terminal Chapter
SNC Lavalin
• Ms. Nathalie Martel AECOM
• Ms. Marion White HOK
• Ms. Nicola Morton HOK
• Mr. Jeffry Fucigna HOK
• Mr. Alan Lamond Pascall+Watson
• Mr. Hendrik Orsinger Pascall+Watson
• Mr. Martin Leprohon Airbiz
IATA and ACI also wish to thank the following individuals, through the Airport Consultants 1
their document reviews.
ACC Members Document Review Panel:
ACC Review Team Leaders
• Mr. Steve Riano Bechtel Corporation [Review Team Leader]
• Mr. TJ Schulz
Forecasting Section
Airport Consultants Council [Staff Liaison]
• Mr. Steve Riano Bechtel Corporation
• Dr. Michel Thomet Bechtel Corporation
• Mr. Ian Kincaid InterVISTAS Group
VI 10TH EDITION, MARCH 2014

I ATA Acknowledgements
Master Planning Chapter
• Dr. Alexander Ising
• Mr. Steve Riano
• Mr. Paul Puckli
• Mr. Mike Arnold
• Mr. Doug Goldberg
• Mr. John van Woensel
AviAlliance GmbH
Bechtel Corporation
CHA Consulting, Inc.
ESA Airports
Landrum & Brown
Parsons Brinckerhoff
Passenger Terminal Chapter
• Mr. Andy Griffiths
• Mr. Steve Riano
• Mr. Pat Askew
• Mr. Keith Thompson
• Mr. Bruce Anderson
• Mr. Mark Lang
• Mr. Stephen Harrill
Bechtel Corporation
Bechtel Corporation
Gensler
Gensler
Landrum & Brown
Lang & Associates, LLC
RS&H
If you would like to contribute to the update of the Airport Development Reference Manual, please submit your
request to adrm@iata.org.
10TH EDITION, MARCH 2014 VII

Introduction— lATA's Airport Activities
Section 1-Introduction
1.1 lATA-Who We Are; What We Do
International air transport is one of the most dynamic and fast-changing industries in the world. The
International Air Transport Association (IATA) is the industry's responsive and forward-looking trade
association. IATA operates at the highest level of global professional standards.
Founded in 1945, IATA brings together approximately 240 airlines, including the world's largest. Flights by
these airlines comprise more than 84 per cent of all international scheduled air traffic.
IATA airlines recognize that cooperation helps them meet the needs of a rapidly changing aviation industry.
This cooperation allows airlines to offer a seamless service at the highest possible levels of quality to
passengers and cargo shippers. Much of this cooperation is expressed through IATA, whose mission is to
“represent, lead and serve the airline industry”.
IATA helps to ensure that its members' aircraft can operate safely, securely, efficiently and economically
under clearly defined and understood rules. Continual efforts by IATA ensure that people, freight and mail can
move around the intricate global airline network as safely, simply and cost-effectively as possible.
IATA proactively supports joint industry action essential for the sustainable development of the air transport
system. lATA's role is to identify issues, help establish industry positions and communicate these to
governments and other relevant authorities.
1.2 lATA's Airport Activities
The Airports and Fuel (AF) section of lATA's Airports, Passenger, Cargo and Security (APCS) division aims to
influence airport planning and development projects worldwide to ensure that the needs of the airports'
primary business partners, the airline community, are recognized and incorporated into the planning, design
and development of airports. These needs are expressed in terms of appropriateness, efficiency and cost-
effectiveness. The revised IATA Airport Development Reference Manual (ADRM) provides guidelines and
recommendations that enhance airport planning and design. Where major airport capital programs are being
planned or are underway, IATA supports the aviation industry by convening Airport Consultative Committees
(ACCs). The purpose of ACCs is to help gather airline requirements and recommendations and to centralize
this input for the benefit of airport operators and owners. IATA also provides specialized commercial airport
consultancy services worldwide.
10TH EDITION, MARCH 2014 1

1.2.1 Airport Consultative Committees (ACCs)
Consultation with airport authorities via the Airport Consultative Committee (ACC) mechanism brings together
the airlines' airport planning expertise, the IATA secretariat and airport authorities worldwide. ACCs serve as a
focal point for consultation concerning the planning, delivery and cost-effectiveness of airport expansions, the
development of new airports or enhancements to the airport experience for both passengers and staff.
The airports selected for such intervention are determined by Regional Airport Steering Groups (RASGs) and
by the IATA World Airport Group (WAG).
For more information, click on WAG & RASGs.
1.2.2 IATA Consulting Services for Airports
IATA offers a wide range of consulting services to assist airports in their successful development. Airport
development is cyclical, with very different needs at each step of the cycle. IATA Consulting addresses the
specific challenges associated with each step, assisting airport operators, airport shareholders and/or
regulatory bodies successfully deliver their project.
Exhibit 1.2.2: Consulting services for each stage of the airport lifecycle
Transactions
Airport Development
Capacity/demand analyi
Master plan review and
Airport land-use plan
Terminal concepts
Commercial concepts
Airport charges regulato
Buyer Due Diligence
Vendor Due Diligence
Privatization program
for governments
Operational performance KPI
Commercial performance KPI
n
Source: IATA Consulting
2 10TH EDITION, MARCH 2014

Introduction— lATA's Airport Activities
1.2.2.1 Planning and Construction Phase
In the planning and construction phase, IATA Consulting offers airport development solutions to facilitate the
planning and design of airport infrastructure. The primary element of this phase is the definition of the airport
master plan. It is important to note that IATA Consulting does not take part in construction projects and will
not supervise any construction work.
1.2.2.2 Commercialization Phase
In the next phase of the airport lifecycle, the commercialization phase, IATA Consulting offers a complete
portfolio of business development solutions. Among the most popular are air services and airport commercial
revenues.
1.2.2.3 Optimization Phase
When airports are in the optimization phase, IATA Consulting provides solutions to monitor and improve
operations, performance and level of service. Demand and capacity analysis studies are key solutions in this
phase.
1.2.2.4 Change in Ownership Phase
Eventually, for those airports that may experience a change in ownership, IATA Consulting offers solutions for
privatization. Airport due diligence is the most popular service for both vendors and buyers. Included in this
privatization support offering is the design of the regulatory regime applicable to the new owners and the
environment.
For more information, please contact us at consulting@iata.org.
1.2.3 International Industry Working Group
The IIWG brings together IATA, Airports Council International (ACI) and the International Coordinating Council
of Aerospace Industries Associations (ICCAIA). The IIWG was founded in 1970 and its main goal is to review
airport/aircraft compatibility issues in order to improve the development of the air transport system.
For more information, click on IIWG.

1.3 Other IATA Airport Activities
In addition to its airport planning and development activities, lATA's APCS division participates actively in
many other airport-related areas such as charges and tariffs, fuel, taxation, ground handling, security,
passenger experience and cargo services. Special working groups constituted from various committees may
also be formed on an ad hoc basis to address specific industry issues (i.e., introduction of the A380-800).
1.4 Airports Council International (ACI) Collaboration
The new edition of the ADRM is being released in joint collaboration with our colleagues at ACI. The interests
of airlines and airports are very closely linked. The success of one group contributes to the success of the
other. As such, airlines and airports are very close business partners.
A close and collaborative working relationship with ACI ensures that the ADRM meets the needs of the
aviation community as a whole. Intrinsically, best practice airport planning, including the affordability of major
airport developments, is beneficial for airline customers and passengers.
1.4.1 Introduction to Airports Council International (ACI)
Airports Council International (ACI), the only worldwide association of airports, has 573 member airport
authorities that operate over 1,751 airports in 174 countries. It advances the collective interests of, and acts
as the voice of, the world's airports and the communities they serve.
ACI's mission is to promote professional excellence in airport management and operations. This mandate is
carried out through the organization's multiple training opportunities, its customer service benchmarking
program as well as a wide range of conferences, industry statistical products and best practice publications.
ACI’s main objectives and roles are to:
• Maximize the contributions of airports to maintaining and developing a safe, secure, environmentally
compatible and efficient air transport system.
• Achieve cooperation among all segments of the aviation industry and their stakeholders, including
governments and international organizations.
• Influence international and national legislation, rules, policies, standards and practices based on
established policies representing airports' interests and priorities.
• Advance the development of the aviation system by enhancing public awareness of the economic and
social importance of airport development.
• Maximize cooperation and mutual assistance between airports.
• Provide members with industry knowledge, advice and assistance, as well as foster professional
excellence in airport management and operations.
• Build ACI's worldwide organizational capacity and resources to serve all members effectively and
efficiently.

IATA Introduction— Purpose of the Airport Development Reference Manual
ACI pursues airports' interests in discussions with international organizations. The most important relationship
is with the International Civi Aviation Organization (ICAO), where international standards for air transport are
debated and developed.
ACI has five regional offices that play a very important role in the relationship with ACI members and the
spread of best practices. The five regional offices are:
• ACI Africa in Casablanca (Morocco)
• ACI Asia-Pacific in Hong-Kong (China)
• ACI Europe in Brussels (Belgium)
• ACI Latin America-Caribbean in Panama City (Panama)
• ACI North America in Washington, DC (USA)
ACI has six standing committees (Airport IT; Economics; Environment; Facilitation and Services; Safety and
Technical; and Security) mandated by the ACI Governing Board to provide guidance and council, as well as
help shape current policy issues for Governing Board endorsement in their areas of expertise. They are also
required to assist the Governing Board, Executive Committee and Secretariat, as appropriate.
1.5 Purpose of the Airport Development Reference Manual
The IATA Airport Development Reference Manual (ADRM) is recognized as one of the aviation industry's
most important guides for airlines, airports, government authorities, architects, engineers and planning
consultants engaged in planning new airports or extending existing airport infrastructure. The ADRM brings
together aviation industry best practices with respect to the development of world-class airports through better
comprehension, briefing and design. Its content represents the consolidated recommendations of world-
renowned industry specialists and organizations seeking to promote the development of sustainable world-
class airport facilities.
The previous edition of the ADRM (9thEdition published in 2004) was published in traditional bound paper
format. The traditional format has some obvious constraints; most notably the difficulty of responding quickly
to what is an inherently dynamic, fast-changing industry as well as the editorial need to limit the published
material to manageable proportions. The latest edition adopts a different approach that allows for more
regular updates and linkages to a vast array of material contained in other relevant articles and publications
prepared and monitored by recognized industry specialists, authorities and organizational partners.
In order to take full advantage of the opportunities offered by this new approach, the structure of the new
manual has been completely revised and reformatted. Material contained in earlier editions that continues to
be relevant has been revamped and expanded to address the quickly evolving nature of the aviation industry.
One of the key aspects of the new manual is the ability to offer a comprehensive overview of the many
complex topics that are involved in any airport project, especially at large international airports. However, the
complexity associated with all airport developments means that the information contained within this manual
must be carefully considered. As with any complex concept, there are many variables that are subject to
different interpretations and can lead to significantly different conclusions.

Recommendation: Required Expertise
It is recommended that all commissioning airlines, airports and government authorities select experienced
professionals to assist them.
1.6 How to Use the ADRM
The ADRM should be used by airport planners worldwide as a complementary source of best practice airport
design guidance. Other key ICAO references include Annex 14 (in particular for airfield and apron design), the
Airport Planning Manual (Doc 9184), the Aerodrome Design Manual (Doc 9157), and the Airport Services
Manual (Doc 9137).
IATA recognizes that international standards will vary from region to region around the world. While the
ADRM should be the initial source of design guidance for airport development, the airport design professional
should always seek to clarify national standards and decide appropriately on any potentially conflicting
requirements. Professional engineering and architectural guidance should be used to assess and resolve
differences between the ADRM and national standards.
The ADRM should be used in conjunction with relevant international and national legislation, regulations and
standards. Examples include, but are not limited to:
• International and national government aviation and security authorities:
o International Civil Aviation Organization (ICAO)
o European Civil Aviation Conference (ECAC)
o Federal Aviation Administration (FAA)-Jrited States of America
o Transportation Security Administration (TSA)-United States of America
o Department for Transport (DfT)-Jnited Kingdom
o Transport Canada
o Canadian Air Transport Security Authority (CATSA)
• National and international legislation defining design and engineering standards published by:
o American National Standards Institute (ANSI)
o British Standards Institute (BSI)
o International Organization for Standardization (ISO)
• Best practice engineering and architectural standards and codes of best practices:
Architectural:
o American Institute of Architects (A!A)
o Royal Institute of British Architects (RIBA)
o Royal Architectural Institute of Canada (RAIC)

Introduction—ADRM: New Format
Engineering:
o Institution of Civil Engineers (ICE)
o Institution of Structural Engineers (IStructE)
o Institution of Mechanical Engineers (IMechE)
Building Services:
o The Chartered Institute of Building Services Engineers (CIBSE)
Fire Mitigation Engineering:
o Institution of Fire Engineers
There are many instances around the world where even competent professionals have misunderstood or
misinterpreted the range of complex data provided in the ADRM due to the lack of specific experience with
airport design projects and have consequently delivered wholly inappropriate solutions. Therefore, as stated
above, it is recommended that all commissioning airlines, airports and government authorities select
experienced professionals to assist them. ACI and IATA are able to assist with Requests for Proposals
(RFPs) and assist with evaluations and/or recommendations where deemed appropriate.
1.7 ADRM: New Format
The revised format allows the new ADRM to adopt a flexible structure that can be adjusted as and when
required. The ADRM currently has two primary sections:
• Forecasting
• Planning
A third section, Economics/Finance, is under consideration. This new edition of the ADRM is provided in an
electronic format that will facilitate ongoing updates and additions. Sub-sections are referred to as chapters. In
the first release of the 10thedition, the chapters focus on:
• Forecasting
o Economic Base for Air Travel
o Historical Aviation Activity
o Competitive Analysis
o Review of Existing Forecasts
o Common Forecasting Techniques
o Passenger Activity Forecast
o Baggage Forecast
o Air Cargo Activity Forecast

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U Airport Development Reference Manual
o Air Transport Movement Forecast
o Peak Period Forecasts
• Planning
o Master Planning
o Passenger Terminal (including Levels of Service and Capacity Calculations)
The initial release will be followed by a roll out of additional Planning topics that will include:
• Airside Infrastructure
o Runways, Taxiways, Aprons/Stands, Air & Ground Navigation and Air Navigation Aids
• Baggage Handling and Services
• Cargo Terminals
o Apron Areas, Terminals, Expedited and Express Facilities, Mail, Perishable Handling, Access,
Security
• Surface Access Systems
• Support Facilities
o Administration, Aircraft Maintenance, Aircrew Briefing and Reporting, Aviation Fuel, Consolidated Car
Hire Facilities, Crisis Management Centres, Flight Catering, General Aviation, Ground Service
Equipment Storage/Maintenance, Hotels, Airport Maintenance, Meteorological Services, Rescue and
Fire Services, Security, Utilities
Any comments or questions about the ADRM should be addressed by email to adrm@iata.org.

Forecasting
Section 2-Forecasting
Vision
Airport forecasts should produce:
• A set of professional long-term traffic forecasts that drive the long-term development of airports; and
• Airport traffic forecasts that encompass both market demand and airline capacity, addressing two
fundamental questions:
o What will be the future air travel demand for a given airport?
o How will this demand be served by airlines at this airport?
Policy
Airport forecasts should consider that:
• Each airport requires a specific forecasting approach to be defined depending on multiple factors,
such as:
o Airport size;
o Relationship between capacity and demand;
o Airport traffic dynamic; and
o Anticipated changes in the nature of the demand.
• Econometric models are well suited in most circumstances, however they may not be sufficient to capture
non economic factors like the interaction between market demand and airline capacity.
• Airport forecasts are not simple recipes. A robust forecast relies on:
o Traceable and transparent assumptions;
o Explicit models and equations; and,
o A comprehensive review of economic and non economic changes in the airport business
environment. Typical long-term changes to be considered include airline strategies, airport
competition, modal competition and regulation.
• Annual traffic forecasts are used to determine the scale and timing of facility expansion buy means of an
Airport Master Plan. Forecasts should generate a range of data that can be used by planners to
determine floor area, building footprint and plot sizes.
• Peak hour passenger forecasts are appropriate for sizing individual facility subsystems (e.g., immigration,
check-in, and baggage claim.
• Forecasting air traffic movements (ATM) is important to determine runway and airside capacity
requirements).

2.1 Introduction and Definition
Forecasts of future levels of aviation activity form the basis for effective decisions in airport infrastructure
planning. Forecasts should provide a plausible and robust guide to future activity levels based upon the latest
available data. Forecasts should:
• Use appropriate forecasting techniques;
• Be supported by information in the study; and
• Provide an adequate justification for airport planning and development.
Any activity that could potentially create a facility need should be included in the forecast.
The level of effort required to produce a planning forecast will vary significantly from airport to airport and
project to project. The use of elaborate forecasting tools and techniques may be warranted in the case of
large airports and more complex projects. An existing forecast may be all that is required for simpler projects.
Stakeholders should agree on the appropriate level of forecasting effort required in the pre-planning and
scoping phase of the study.
Aviation activity forecasts used for airport infrastructure planning are typically developed for a 20- to 30-year
time horizon due to the capital intensive nature of airport infrastructure projects and their life cycle. Forecasts
are usually presented in five-year increments. Annual forecasts may be desirable for the first five-year period.
Aviation forecasts provide the basis for:
• Determining the airport's role in the aviation system;
• Determining the improvements to the airfield, terminal facilities, apron areas, landside access, car rental,
and parking facilities needed to accommodate growth in demand;
• Estimating the potential environmental effects, such as noise and air quality, of the airport's operation on
the surrounding community
• Assessing market risk; and
• Evaluating the financial feasibility of alternative airport development proposals.
This section provides an overview of the information required and approach to developing airport forecasts for
passenger volumes, air cargo tonnage, and air transport movements (ATMs). The section is organized into
the following key chapters:
• Chapter 2.2 Economic Base for Air Travel provides a summary of the key socioeconomic indicators
that drive the underlying or latent demand for air travel.
• Chapter 2.3 Historical Aviation Activity provides an overview of the types of aviation activity data and
their sources. The purpose of this chapter is to provide a context for how air carriers have added supply in
response to the latent demand for air travel (passenger demand) and the need to ship goods (air cargo
demand).
• Chapter 2.4 Competitive Analysis describes the competitive position of the subject airport including
strengths and weaknesses that may affect future aviation activity volumes.

IATA Forecasting— Introduction and Definition
• Chapter 2.5 Review of Existing Forecasts evaluates the previous forecasting efforts in order to
understand available data, assumptions, and methodologies.
• Chapter 2.6 Common Forecasting Techniques provides a narrative summary of aviation forecasting
methodologies used to develop aviation forecasts, including time series, econometric/regression, market
share, and consensus techniques.
• Chapter 2.7 Passenger Activity Forecast discusses the key segments of passenger traffic: domestic
versus international, Origin and Destination (O&D) versus transfer, and segmentation.
• Chapter 2.8 Baggage Forecast provides guidance on how to derive baggage forecasts from the
passenger forecasts using bags-per-passenger ratios.
• Chapter 2.9 Air Cargo Activity Forecast discusses the primary demand and supply factors, impact
factors, and key activity segments (e.g., belly versus freighter, import, export, and transfer) that should be
considered when developing an air cargo forecast.
• Chapter 2.10 Air Transport Movement (ATM) Forecast summarizes how to develop ATM forecasts for
key segments of activity (i.e., passenger, cargo, general aviation, and military) and provides guidance on
how to develop aircraft *leet mix forecasts.
• Chapter 2.11 Peak Period Forecast provides an overview of methodologies employed to convert annual
forecasts into peak hour equivalents. The chapter also discusses the importance of understanding peak
hour flows by direction and the development of day flight schedules.
This chapter significantly expands on the previous version of the ADRM by providing more guidance and
concrete examples. While most of the metrics used in the ADRM edition 9 remain the same, it is anticipated
that further updates to recommended practices may be made as feedback is collected from the airlines and
ADRM users.
The approach described in the following chapters provides guidance on how to develop forecasts of market-
driven aviation demand for air service. These forecasts are considered “unconstrained”. In other words, for
the purposes of estimating demand, the approach assumes facilities will be provided to meet the forecast
demand. However, when there are financial, capacity or regulatory constraints, these specific cases should be
applied to the outcome of the unconstrained passenger or ATM demand forecast.
Several other reference publications provide guidelines on airport traffic forecasting. The main ones are:
• UK Aviation Forecasts, DfT (2013)
• Airport Traffic Forecasting Manual, ACI (2011)
• Airport Aviation Activity Forecasting, ACRP (2007)
• Manual on Air Traffic Forecasting, doc 8991, ICAO (2006)
• Advisory Circular on Airport Master Plans, FAA (2005)
• Forecasting Aviation Activity by Airport, FAA (2001)

2.2 Economic Base for Air Travel
The intrinsic links between the level of aviation activity and economic growth are well documented. Simply
put, growth in population, income, and business activity typically lead to increased demand for air travel and
the shipment of goods by air. An individual's demand for air travel is often referred to as “underlying demand”
or “latent demand” in that it cannot be realized without the presence of air service at a price that results in a
decision to fly.
Consequently, one of the first steps in developing an aviation activity forecast is to collect data relating to the
business, economic, trade, and tourism characteristics of the regions served by the subject airport. These
help to explain the economic basis for air travel at the airport. In most cases, economy and tourism are the
primary drivers of air passenger traffic while economy and trade are the main stimulus for air cargo traffic.
These variables identify historical and/or future trends that can potentially stimulate growth at the airport. Air
passenger demand depends on the combination of trends in the:
• Airline industry;
• National and international economies (especially at major transfer hubs); and
• Socioeconomic conditions within the airport catchment area.
2.2.1 Airport Catchment Area
The airport catchment area is the geographic region where the majority of originating passengers (or goods
for cargo) begin their journey prior to arriving at the subject airport. When developing an economic base, it s
essential to determine the catchment area of the airport. Understanding the region where passengers
originate prior to arriving at the airport will help determine what economic data best describes the underlying
market potential. Catchment areas range in size depending on the airport, its accessibility and its surrounding
environment. The passenger and cargo catchment areas of a given airport are often different. Cargo activities
tend to be more concentrated in the vicinity of the airport, but cargo payloads are often transported over long
distances to reach the airport.
Although it can be time consuming and costly, a passenger survey is the best method of identifying the
catchment area for an airport by determining where a local passenger's trip originated from. Catchment area
passenger surveys most commonly ask passengers if they are:
• A resident or visitor to the region;
• Where they came from prior to arriving at the airport;
• Mode of transportation io the airport;
• Reason for travel; and
• Length of stay.
Alternatively, specialized databases (such as PaxIS/AirportlS) provide information on where a ticket was
issued. This gives a high-level indication of the origin of a passenger's trip.

IATA Forecasting— Economic Base for Air Travel
Catchment areas also depend on competing airports as well as the geographic and economic characteristics
of the surrounding region. It should be noted that it is common to find overlapping airport catchment areas,
particularly in large metro areas served by multiple airports.
In overlapping catchment areas with more than one choice of airport, passengers typically decide to use a
specific airport based on:
• Price;
• Nonstop service;
• Frequency of flights;
• Destinations served; and
• Proximity to their point of origin or destination.
All other variables being equal, theory dictates that passengers will tend to choose the closest airport. In
reality, homogeneity in airport choice rarely occurs. As a result, it is important to not assess the subject airport
in isolation, but to understand the catchment area dynamics of the region as a whole.
It should also be noted that catchment areas are dynamic and change over time, particularly in multi-airport
regions. Examples of factors that could cause a catchment area to shift are:
• A new model airline initiates service at the subject airport causing a higher proportion of traffic to be
captured from a neighboring airport due to attractive low fares that outweigh the increased ground travel
time;
• A new or expanded highway results in shorter travel times to a competing airport; and
• Urban sprawl puts an increasing proportion of a metropolitan area's population in proximity to the subject
airport.
2.2.2 Socioeconomic Base
Once the catchment area has been determined, the next step is to collect relevant historical and forecast
socioeconomic indicators.
Socioeconomic historical trends and forecasts are key indicators of air service activity. Examples include:
• Population;
• Employment;
• Per capita personal income (PCPI);
• Trade; and
• Gross domestic product/gross regional product (GDP/GRP).
Growth in population and employment are important indicators of the overall health of the local economy.
Population and employment changes tend to be closely correlated as people migrate in and out of areas

largely depending on their ability to find work in the local economy. Income statistics such as PCPI and
GDP/GRP are broad indicators of the relative earning power and wealth of the region. Thus, inferences can
be made relative to a resident's ability to purchase air travel. PCPI is calculated by dividing total income by
total population. Trade and GDP/GRP are important determinants of air cargo activity.
When working with socioeconomic variables over time, all currency values should be converted to constant
units to eliminate any distortions resulting from inflation. The specification of the currency units (US$, Euro or
local units) is also critical and should be made consistently.
Sources for socioeconomic data and statistics include:
• Woods & Poole;
• The World Bank;
• The International Monetary Fund;
• IHS Global Insight;
• Moody's economy.com;
• The Economist Intelligence Unit;
• Consensus Economics; and
• Government agencies.
When choosing a source for socioeconomic data, it is important to check its coverage, both in terms of scope
and time range (historical and forecast). When organizing the socioeconomic data to serve as input to various
projections, historical and forecast data should be arranged in compatible formats.
2.2.3 Transfer Traffic
Unlike origin/destination traffic, transfer traffic has little relevance to the catchment area and its dynamic. The
factors that influence the number of transfer passengers at an airport will differ from those affecting the
number of originating/terminating passengers. Therefore, airport forecasters will often analyze and forecast
these traffic segments separately. Forecasts of transfer passengers at an airport are particularly sensitive to
the strategies, networks and service densities of the carriers at the airport.
2.2.4 Airline Yields
Understanding the cost of air travel and its associated affects is the next step in developing an economic
base. Airline passenger yields are the aviation industry's measure for average ticket prices. Yield is defined as
the average revenue an airline obtains from carrying a passenger one mile or one kilometer. It reflects fare,
length of haul, level of competition, carrier costs, and other factors. Yield is a commonly accepted measure of
the price of air travel, but excludes airport taxes and charges.

If prices decline, passengers can better afford to fly and traffic typically increases. Indeed, potential travelers
make air travel decisions based primarily on the following three factors:
1. Availability of air service;
2. Price; and
3. Distance of an airport from point of trip origin/destination.
Competitive prices will often cause travelers to select airports that are not necessarily the closest to where
their trip begins or ends. Yields have a direct impact on the associated level of air travel demand. When data
is available, understanding historical yield trends and making inferences regarding their future direction is an
important component in the forecasting process.
Similarly, businesses looking to ship goods will examine the cost of shipping by air versus other transportation
modes (i.e., truck, rail, sea) balanced against the required timeframe for shipment delivery. Air freight is
typically the most expensive form of transportation, but also the most time efficient. Therefore, it will generally
be used for high-value commodities (per unit weight) or time-sensitive goods such as fruits or fashion apparel.
Forecast analysts must understand how the cost of shipping air freight affects air cargo volumes at the subject
airport versus other airports and other modes of transportation. It is important to note, however, that the
availability of data makes understanding air cargo shipping costs difficult to evaluate.
As with socioeconomic data, when working with historical yield and average air fares, all currency values
should be converted to constant units to eliminate any distortions resulting from inflation. Historical yield
values should be arranged in the same format as the other socioeconomic variables in order to be compatible
with various projection techniques.
2.2.5 Tourism
Airports play a critical role in facilitating tourism. Collecting statistics about tourism trends in the airport
catchment area is an important part of the forecasting process. Tourism indicators include:
• Number of visitors to the region;
• Nationality or world region of origin of foreign visitors;
• Number of hotel room nights and average duration of stay; and
• Seasonality of visitor travel.
2.2.5.1 Number of Visitors
Quantifying changes in the number of visitors to a region provides an indication of how attractive the airport
catchment area is as a place to visit. Attractions that often bring visitors to a region include:
• Theme parks;
• National/state parks;
• Beaches;

• Prevailing climate;
• Historic/heritage sites;
• Convention centers;
• Museums;
• Religious sites;
• Professional sports;
• Concert venues;
• College campuses, and more.
Visitors to airports also drive facility requirements such as nonresident Customs and Border Protection (CBP),
car rentals, hotels, restaurants, retail outlets, etc.
2.2.5.2 Nationality/World Region of Foreign Visitors
When an airport is knowledgeable about the nationality or home region of foreign visitors, the airport will have
a better understanding of how the world economic climate may affect the airport's traffic volumes. Indeed,
these trends can be explicitly modeled in aviation forecasts if the visitor data is available by city, country or
world region. Moreover, the airport can also target emerging markets that have been historically less well
linked to the airport's surrounding catchment area.
2.2.5.3 Number of Hotel Room Nights and Average Duration of Stay
To support visitor travel and tourism, hotels and conference facilities are critical for any airport. Understanding
the number of hotel room nights and the average length of stay of passengers gives airports insight into the
economic impact of tourism on the region as well as the need for development of new facilities in the future.
2.2.5.4 Seasonality of Visitor Travel
The traffic demand patterns experienced by an airport are subject to seasonal variations that are monthly,
daily, and even hourly. All airports experience seasonal highs and lows in terms of their volume of activity.
Airports that cater to a high percentage of tourist traffic often exhibit more variability in their monthly traffic
volumes. For example, airports near popular ski venues are used more often in winter than in the summer
months. Understanding peaking patterns and seasonality characteristics is critical in the assessment of the
ability of existing facilities to accommodate forecast increases in passenger and aircraft activity. The objective
of these forecasts is to size facilities so they are neither underutilized nor overcrowded too often.

2.2.6 Trade
Air cargo plays a critical role in the world economy by facilitating trade, especially international trade. As
previously mentioned, air cargo tends to be oriented toward high-value or time-sensitive goods. Indeed, air
cargo is estimated to account for less than 10 percent of the world's freight volume, but over a third of the
value of goods exchanged worldwide.
The forecast analyst should seek to understand historical trade patterns, estimate future growth in trade, and
evaluate the implications of trade growth for air cargo volumes at the subject airport.
2.2.7 Intermodal Transportation
Intermodal transportation involves the use of two or more modes of transport within a given trip, whether it is
for individuals or freight. The Air Transport Action Group (ATAG) considers intermodal transportation for
passengers to be a combination of:
• Access to airports: local transport services between the airport and the neighboring city (e.g., commuter
train, metro, bus or even boat);
• Complementary feeder services between the airport and various destinations in the surrounding region
(mainly provided by train, high-speed rail, bus, or ferry);
• Competing services between major city centers of neighboring regions (i.e., a passenger uses air
transport for one leg of the trip and rail or bus for a second leg); and
• Alternative services that fully replace airline feeder services to airports (in general, for trips of less than
three hours).
It is clear that other modes of transport have the potential to affect air traffic volumes at the subject airport in
both complementary and competitive manners. It is incumbent on the forecast analyst to quantitatively or
qualitatively evaluate whether or not changes in the ground transportation infrastructure and/or multimodal
offerings are likely to impact air traffic volumes at the subject airport.
2.2.8 Economic Base Data Analysis
The final step in developing the economic base is analyzing the key data collected. The forecast analyst
should:
• Tabulate the key socioeconomic and demographic data in a format compatible with forecast models so
they can serve as inputs to various projection techniques;
• Create compound annual growth rates for each economic category in order to summarize trends over tne
historical period; and
• Document socioeconomic and regional demographic data in a narrative assessment to better explain how
these variables affect airport activity.

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IATA OIL Airport Development Reference Manual
This collection and analysis of socioeconomic and demographic data will be key when developing models for
the aviation forecast.
2.3 Historical Aviation Activity
The past is not always a perfect predictor of the future; however, an analysis of historical data provides the
opportunity to understand factors that may have caused traffic to increase or decrease and how those factors
may change in the future. Understanding the historical relationships between the economy (demand) and
aviation activity (supply) at the subject airport will help form the building blocks of the forecast.
The objective of this chapter is to discuss the updating and compiling of historical data for passengers, air
cargo, and aircraft movements. Passenger activity data should include all segments:
• Domestic;
• International;
• Origin and Destination (O&D);
• Transfer (connecting); and
• Transit.
Air cargo data should include all volumes for:
• Import;
• Export; and
• Transfer.
Aircraft movement data should include:
• Domestic and international commercial passenger movements;
• Cargo;
• Air taxi;
• General aviation;
• Military/government; and
• Total movements.
As discussed in the previous chapter, when evaluating historical activity, the analysis should include an
evaluation of the importance of the airport's role in the region as well as an overview of current domestic and
international air service offered at the subject airport. The analysis should also include an evaluation of the
competing air service offered at other airports serving the same catchment area.

IATA Forecasting— Historical Aviation Activity
2.3.1 Data Collection
The data sources available from which to develop the historical time series will vary depending on the subject
airport. Recommended sources for historical aviation activity data include, but are not limited to:
• Airport records;
• Airline schedules (such as the Official Airline Guide or SRS Analyzer);
• Airline data/information;
• Airports Council International publications;
• ICAO publications;
• Civil Aviation Authority and government reports;
• Surveys, such as:
o U.S. DOT Schedule T-100;
o U.S. DOT Air Passenger Origin-Destination Survey; and
o FAA ATADS;
• IATA PaxIS/AirportlS;
• CargolS; and
• MIDT.
The importance of these data sources are described below.
2.3.1.1 Airport Records
The first place to look when collecting data of historical aviation activity is the airport itself. Airport data is
considered the most accurate source for historical aviation activity. It is assumed that the airport has access
to historical activity statistics as well as previous forecasts that can be easily provided to the forecaster.
Additionally, any future air service initiatives being implemented or considered should have been discussed
with the airport.
Not all airports will have the same level of detail available. At minimum, the forecast analyst should gather
historical activity data for monthly and annual enplanements by carrier as well as aircraft movements and total
cargo tonnage. The following is the suggested list of items that should be requested from the airport (and/or
the Air Navigation Service Provider) when conducting an aviation forecast:
• Total passengers (annual: 20 years): domestic, international, transit and transfer, and total; by world
region and by direction (resident/visitor), if available;
• Passengers by carrier (monthly: five years): domestic, international, transit and transfer, and total;
• Total air cargo tonnage (annual: 20 years): domestic, international, O&D, transshipment, and total;
• Air cargo tonnage by carrier (monthly: five years): domestic, international, and total; import, export, and
transshipment; passenger belly and freighter;

I ATA Airport Development Reference Manual
• Total aircraft movements (annual: 20 years): commercial passenger domestic, international, and total;
by aircraft type and/or category;
• Aircraft movements (monthly: five years): commercial passenger, cargo, general aviation,
military/government, and total;
• Based aircraft (annual: 10 years): by category;
• Radar data/ATC flight strips
o Daily flight activity for the peak month for the past three to five years; and
• Other forecast-related studies
o Recent aviation forecasts;
o Air service development studies;
o Air service marketing or strategy reports;
o Visitor counts by world region;
o Leakage studies;
o Economic impact studies;
o Passenger surveys;
o Prior master plan(s);
o Financial feasibility studies/bond documents; and
o Regional tourism/economic development studies.
2.3.1.2 Airline Schedules
There are a number of comprehensive global data sources for historical and planned airline schedules1. The
forward-looking flight schedules provide data up to 12 months in advance.
Airline schedules are valuable sources for understanding air service trends at an airport in terms of:
• Airline market share;
• Destinations served;
• Route frequency;
• Route competition;
• Aircraft fleet mix; and
• The profile of activity across the day.
It is important to note that airline schedules capture scheduled activity (i.e., what was planned to happen)
rather than what actually occurred. They do not take into account flight delays or cancelations.
1 SRS Analyzer, OAG, Innovata.

While the majority of large commercial passenger airlines file schedules with the schedule aggregators, many
non scheduled and charter operators do not due to the ad hoc nature of their operations. Freighter activity is
also typically underrepresented in the airline schedules.
2.3.1.3 Airline Data/lnformation
Airlines are key stakeholders in airport development across the globe. As such, airline consultation is an
important element in aviation forecasting. Airlines can provide input on market potential and how they plan to
deploy aircraft in the market over the forecast period. Airline consultation is particularly important at transfer
hubs where a significant proportion of the airport passenger base is a function of the dominant airline's
strategy versus the economics of the local market.
2.3.1.4 Airports Council International
Airports Council International (ACI) publishes an annual world traffic report in which total passengers, total
cargo, and total movement statistics from member airports are reported and ranked in an internationally
comparable format. This report is particularly useful when benchmarking the subject airport to other airports of
interest.
2.3.1.5 Civil Aviation Authority/Government Publications
National Civil Aviation Authorities and National Transportation Departments often publish an array of statistics
and reports for the airlines and airports under their jurisdiction. Available information may overlap what can be
gathered from each airport, but it ensures a higher level of accuracy and consistency. The United States
Department of Transportation collects arguably the most detailed set of aviation activity statistics. It requires
all operating U.S. and foreign carriers to report passenger, cargo, and air traffic movements (ATMs) at the
aircraft and segment level on a monthly basis. Large U.S.-certificated air carriers conducting scheduled
domestic and international passenger operations are also required to complete a quarterly Origin &
Destination survey. This is a 10 percent sample of U.S. carrier tickets. The Origin & Destination survey allows
the forecast analyst to understand itinerary level passenger flows from the subject airport and the associated
fares paid. In countries where this level of detail is not available, the analyst can use the other data sources
listed in this sub-chapter.
ICAO also publishes passenger, cargo and ATM-related statistics by world region and sub-region.
2.3.1.6 PaxIS/AirportlS Data
Passenger Intelligence Services (PaxlS)/Airport Intelligence Services are products developed by lATA's
Business Intelligence Service. This program is a comprehensive airline passenger market intelligence
database that captures airline data through the IATA Billing and Settlement Plan (BSP). The IATA BSP is the
central point through which data and funds flow between travel agents and airlines. Instead of every agent

having an individual relationship with each airline, all of the information is consolidated through the BSP
database. The PaxIS/AirportlS database is able to provide detail on the:
• Location of ticket issuance;
• Point of origin/final dest nation airport;
• Connecting airports;
• Fare category;
• Average fare value;
• Month of ticket issuance/travel.
PaxIS/AirportlS also provide statistical estimates to cover:
• Direct sales;
• New model airlines (NMA);
• Charter flight operators;
• Under represented BSP markets; and
• Non-BSP markets, including the United States.
2.3.1.7 CargolS Data
Millions of air waybill (AWB) records feed into CargolS's database every month. They are sourced from
lATA's Cargo Accounts Settlement Systems (CASS) global freight billing systems. Airlines and freight
forwarders settle billions of dollars' worth of airfreight charges into CASS. Because CargolS reflects actual
transactions between carriers and their forwarders, the accuracy of that intelligence is indisputable.
CargolS provides information on more than 100,000 airport-to-airport lanes covering over 500 airlines and
15,000 agents.
2.3.1.8 MIDT Data
Marketing Information Data Transfer (MIDT) is a database that provides detailed information about the
worldwide booking activities of airlines and travel agencies. MIDT data is sourced from the Global Distribution
Systems (GDS). This database captures booking transactions from passenger name records to provide
detailed information about the worldwide booking activities of airlines and travel agencies. MIDT was designed
to provide airlines with competitive information to enable them to make well-informed decisions regarding
existing and new route opportunities. Data available through MIDT includes:
• Directionality;
• Booking itineraries on a monthly basis;
• Yield per kilometer; and
• Average fares.

2.3.2 Airport Role
The next step in developing the historical aviation activity is to define the airport's role, or primary uses. The
following factors need to be considered and examined when defining an airport's role:
• Historical passenger activity;
• Cargo;
• Fractional jet operators;
• General aviation; and
• Military.
During this exercise, other airports in the region should be considered and studied to have a better
understanding of their roles and competition within the catchment area. Defining airport roles provides insight
into the capabilities of the subject airport and other airports in the region.
2.3.3 Historical Passenger Volumes
As a first step in organizing the passenger forecast, time series should be developed to display historical
domestic and international passenger data. The purpose of this table is to determine trends over the historical
period to use as context for developing the passenger forecast. To the extent data is available and reliable,
the domestic and international passenger segments should be further disaggregated into historical originating
and transfer (connecting) passengers.
When analyzing historical passenger trends, it is essential to keep in mind that numerous factors may have
caused demand to fluctuate over the historical period including:
• Economic cycles such as expansions and recessions on the local, national and global levels;
• Fuel price spikes;
• Airline capacity changes resulting from new entrants, new business models, bankruptcies or cessation of
operations;
• Price changes for air travel and shipment; and
• Exogenous shocks (e.g., terrorist attacks, war, pandemics, and natural disasters).
It is incumbent on the forecast analyst to provide not only the data time series, but also to tell the story of why
demand and supply have changed over the historical period. This will provide context for the forecasts.
2.3.4 Top Domestic and International Destinations
As mentioned above, the purpose of the historical activity analysis is to build a context for the forecast. It
answers questions such as what markets are served from the airport and why. It is imperative to research the
airport's key domestic and international markets to have a better understanding of the current and future
direction of air service at the airport. This analysis also provides a geographic context for the forecast. The

mix and range of domestic and international markets will inform what types of aircraft are deployed over the
forecast period.
2.3.5 Historical Market Share by Airline
The analysis of historical market share by passenger airline and/or airline segment provides insight into the
recent history of the main carriers at the airport, including shifting shares between new model airline (NMA)
and legacy carrier segments. The allocation of traffic between NMA and legacy segments is an important
consideration from both a physical planning and financial feasibility perspective. NMAs typically exhibit higher
utilization, require fewer amenities, and place a significant emphasis on their costs (including airport costs).
2.3.6 Historical Air Cargo Tonnage
Air cargo is shipped in three ways:
1. In the cargo compartment, or belly, of passenger aircraft;
2. On all-cargo aircraft (freighters); and
3. In “combi” aircraft (where the main deck is shared between passengers and cargo).
Most passenger airlines accommodate air cargo as a by-product to the primary activity of carrying
passengers. They fill belly space in their aircraft that would otherwise be empty. The incremental cost of
carrying cargo in a passenger aircraft is negligible, and includes only ground handling expenses and a modest
increase in fuel consumption.
Road and sea substitution have become major components in the evolution of air cargo activity in the past
few years. At the continental level, trucks have nearly replaced regional air freight service due to cost savings
and increased efficiency. Truck services have expanded to provide transport of freight to gateway airports for
consolidation. A number of air carriers also transport cargo by truck to build their own volumes. Many air
cargo facilities are operating more and more as truck terminals, yet requirements to report truck-to-truck
tonnage are rare. At the intercontinental level, improved containerization has allowed sea shipments to
become more competitive in terms of transportation time and reliability. Technology advances in containerized
shipping and the increasing speed of ocean-going vessels have been eroding the time advantage of air
freight. Before the 2008 financial crisis, the tonnage carried by containerized ships grew at an average rate of
around eight percent (i.e.. twice the pace of air freight ton kilometers).
To determine historical trends for cargo tonnage at the subject airport, the forecast analyst should compile
historical cargo tonnage in a time series, displaying domestic and international cargo for belly and freighter
tonnage separately. It should be noted that cargo volumes are very different from passenger volumes when it
comes to directionality. Obviously, cargo does not require return flights. Many airports observe very
imbalanced import/export cargo flows reflecting the mono-directionality of cargo shipments and the nature of
the local economy.

2.3.7 Historical Movements by Segment
For purposes of developing the air transport movements (ATM) forecast, historical movements should be
classified into the following categories:
• Commercial passenger;
• All-cargo;
• General aviation;
• Military; and
• Total.
ATM forecasts will be developed separately for each segment; therefore, historical trends will need to be
analyzed in the same manner. A time series should be developed for historical ATM volumes in each
category.
2.3.8 Forecast Impact Factors
Factors that may affect aviation demand need to be addressed when developing the passenger, air cargo and
ATM forecasts. Forecast impact factors could include, but are not limited to:
• Economic cycles;
• New aircraft types;
• Fuel prices;
• Airline industry changes;
• Alliance initiatives;
• Airline costs;
• Addition/removal of airlines;
• Regulatory changes (e.g., air services agreements, travel policy, and trade policy); and
• Airport initiatives.
Other impact factors to consider include seasonal trends and special events that stimulate air travel. It is
recommended that all factors be considered and documented when analyzing historical trends and
fluctuations at the subject airport.
Defining historical and anticipated impact factors will improve the assumptions and accuracy of the aviation
forecast. A summary discussion should also be included to describe the trends and anticipated changes that
may affect the development of projections of aviation activity at the airport.

2.4 Competitive Analysis
It is beneficial to include a competitive analysis of the airport and its surrounding competition when developing
a forecast. A competitive analysis assesses the strengths and weaknesses of current and potential
competitors, including other modes of transportation. It may be necessary to carry out different competitive
analyses for each specific air traffic segment. For example:
• Origin/Destination passengers may choose between several airports serving the same catchment area.
Markets such as New York, Tokyo, London, Los Angeles, Shanghai, Chicago, and Washington D.C. have
multiple major airports within the same catchment area that passengers could select based on air service,
price and/or location;
• Connecting passengers may be offered multiple routings through competitive hubs;
• Short-haul passengers may travel by air, road or rail depending on their travel purpose, budget or
schedule; and
• Depending on cargo yields, the logistics chain and available cargo capacity, freight may be trucked for
hundreds or even thousands of kilometers before being loaded on an aircraft.
The purpose of this analysis is to display the competitive position of the subject airport versus other airports in
the catchment area. When developing a competitive analysis, consideration should also be given to the
potential advantages, disadvantages, and practical limitations from the point of view of airline passengers
using this airport.
An effective competitive analysis within a forecast document should provide a narrative overview with
supporting graphics describing the competitive market within the region and nationally.
2.5 Review of Existing Forecasts
Before developing models and assumptions for the passenger forecast, it may be valuable to review prior
forecasts developed for the airport. This is done in order to obtain an understanding of previous forecasting
efforts, available data, the assumptions made, and the methodology employed. In particular, comparing the
actual results with the forecast will show its predictive accuracy and validate the methodology used.
2.6 Common Forecasting Techniques
There are a number of approaches and techniques to develop aviation forecasts. The most common
techniques include:
• Time series/trend analysis;
• Consensus forecasts;
• Market share forecasts; and
• Econometric/regression models.

IATA Forecasting—Common Forecasting Techniques
These techniques can be used to develop forecasts at the airport level, at the multi-airport level, or at the
regional level.
Each of these techniques has its own set of advantages and drawbacks, and they may be used independently
or in combination. The following sub chapters demonstrate appropriate forecasting techniques for various
uses.
2.6.1 Trend/Time Series
Time series analysis projects historical trends into the future using time as the independent variable. As time
series forecasts are “one variable” models, they require only the data for the variable to be forecast.
In general, time series data can be described by trends, seasonal effects and cyclical effects. The first step in
putting together a time series forecast is to analyze a time series of historical data for the specific market in
order to determine the growth trend. The easiest procedure for isolating the trend in a time series is to plot the
historical data in graphic form, on an x and y axis. The traffic data is plotted on the vertical (y) axis. Time, the
independent variable, is ploited on the horizontal (x) axis. Then a best-fit curve is obtained by minimizing the
sum of the errors squared. Different curves may be tried to find the best fit, such as linear or exponential. In
simple forecasts, it is possible to extend this line into the future to estimate future traffic. Growth rates,
positive or negative, can be calculated from the slope of the line.
The time series technique is useful for the following situations:
• When detailed data is not available;
• When the financial and technical resources required for a more rigorous forecast are not available;
• When the anticipated growth is expected to be relatively stable; and
• When the operating and economic environment is expected to be relatively stable.
Time series analysis is a relatively expedient forecasting technique and, as such, is commonly used.
However, one of the major limitations of a time series forecast is that there may be factors that can
reasonably be expected to affect aviation activity at the subject airport in the future that are not reflected in the
historical time series. For example, many aviation markets have historically been tightly controlled by
government policy and regulation, which has in turn limited growth in aviation activity. A future policy
loosening these restrictions could result in aviation activity growing at a faster rate than has been experienced
historically. A basic time series analysis is not able to reflect these changes in the underlying aviation
environment.
2.6.2 Consensus Forecasts
This approach involves applying aggregate aviation market growth rates developed by a third party (or third
parties) to the subject airports traffic base. This approach is often used when there is a lack of historical
information for the subject airport. It is also useful to provide a context or cross-check to validate a subject
airport's forecast that has been developed using more airport-specific techniques.

Governments, aviation authorities, non governmental organizations and aircraft manufactures publish their
own national and/or regional forecasts for aviation activity, including growth rates for a defined period of time.
While these forecasts are typically not developed at the airport level, they may provide a consensus outlook
for aviation activity as a whole for the region where the subject airport is located.
The U.S. Federal Aviation Administration (FAA), for example, publishes an annual aerospace forecast that
contains forecasts for passengers, air cargo, and air traffic movements (ATMs) for the U.S. as a whole over a
twenty-year horizon. The growth rates promulgated in the annual forecasts are often used by planners,
particularly at small U.S. airoorts where general aviation is a higher percentage of the activity, to provide a
guide as to how activity might change at the subject airport.
Similarly, Airports Council International, Boeing and Airbus publish twenty year market outlooks for passenger
and cargo volumes by world region. The growth rates published in these forecasts can be used as a guide as
to how aviation demand may develop at the subject airport given its location and traffic mix.
It is important to be prudent when developing a forecast using the consensus forecast method. Industry
forecasts may be predicting higher growth than is reasonable for the subject airport. The forecast analyst
should adjust the industry growth rates accordingly when there is a disconnect between industry forecasts
and historical activity at the airport.
The Delphi Method is a specific type of consensus forecast whereby a panel of experts is requested to
provide their views on the future market growth through structured questionnaires. Several rounds of
questionnaires are sent out. Responses are aggregated and shared anonymously with the panel after each
round. The experts are invited to adjust their answers in subsequent rounds based on the answers from the
panel. The Delphi Method seeks to reach the “correct” response through consensus.
2.6.3 Market Share Forecasts
Market share forecasts project airport activity as a percentage of a larger aggregate forecast (i.e., national-,
state- or regional-level forecasts). This approach is used when the forecast for the larger market is more
readily available or easy to produce than for the airport itself. This includes the case of large metropolitan
areas with multiple airports.
The market share for a specific airport can be calculated by taking the historical dataset for a specific period
and dividing it by the amount of the total market over the same period. If the share of the subject airport has
exhibited relatively little variation over the historical period, extrapolating this share into the future is a
reasonable and relatively efficient way of developing a forecast for the subject airport. Equally, if the share
analysis indicates increasing or decreasing shares of the larger benchmark that are readily explainable, the
forecast analyst can estimate future changes in market share and apply these to the aggregate level forecast.
Forecast impact factors, industry trends, and market outlooks should be considered when developing the
market share forecast.

IATA Forecasting— Common Forecasting Techniques
2.6.4 Econometric/Regression Model
On a worldwide scale, demand for passenger air travel (or air cargo) is intrinsically linked to the performance
of the global economy. By comparison, exogenous shocks such as political turmoil, terrorist attacks, weather-
related disruptions (e.g., hurricanes, volcanic ash clouds), and pandemics (e.g., severe acute respiratory
syndrome, SARS) tend to have a shorter transitory impact on air travel demand. Air travel demand typically
increases during periods of economic expansion and declines during economic contractions. Due to the
strong correlation of air travel (or air cargo) demand with economic conditions, econometric or regression
modeling is one of the most robust and commonly applied aviation forecasting techniques.
The purpose of an econometric or regression model is to quantify the relationship between a single
dependent variable (e g , O&D domestic passenger traffic or international air cargo traffic) and one or more
independent variables (e.g., per capita income and air fares).
Econometric forecasting is used to demonstrate how predicted changes in the independent variables would
affect future traffic. The following steps are used when developing an econometric forecast:
1. Specify the independent variables for testing;
2. Collect data;
3. Select a statistical model;
4. Determine the model's ability to accurately predict historical values;
5. Evaluate combinations of independent variables in context of historical traffic patterns;
6. Use the model to derive forecast traffic values;
7. Evaluate the results in the context of historical traffic patterns;
8. Introduce adjustments to the forecasts to reflect anticipated changes in the airport environment (e.g.,
regulation, competition, airline strategies); and
9. Compare with benchmarks (i.e., Boeing, Airbus, FAA).
2.6.4.1 Specify Independent Variables
Prior to selecting a model, the forecaster must determine what combination of independent variables should
be considered in the forecast. The following is a list of potential independent variables that the forecaster may
consider:
• Population;
• Output (gross domestic or regional product);
• Personal income;
• Per capital personal income;
• Employment;
• Exchange rates;

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• Tourism factors such as hotel rooms;
• Air fares/yield; and
• Exogenous shocks (e.g, terrorist attacks, weather-related events, transportation mode shift).
A few additional variables may be used for air cargo, including:
• Regional trade (imports and exports)
• Global trade
• Manufacturing activity
2.6.4.2 Collect Data
As discussed in Chapter 2.2 Economic Base for Air Travel, economic data to be used as independent
variables must be collected. All data should be collected as a time series. Economic data sets, including
forecasts, can be obtained from a number of sources, such as:
• The International Monetary Fund;
• World Bank;
• Bureau of Labor Statistics;
• U.S. Census;
• Woods & Poole;
• National Bureau of Economic Research;
• Moody's economy.com;
• IHS Global Insight;
• Economist Intelligence Unit, and
• Consensus Economics.
It is preferable to obtain the historical and forecast data from the same source.
2.6.4.3 Select a Statistical Model
There are many kinds of econometric or regression models. Common types are expressed either in linear or
logistic format, as shown in the equations below:
Linear Regression Model: Y = a + b1
X1+ b j(2+ ••• + b j(k
Logistic Regression Model: Log(Y) = a + b^LogfXJ + + ... + bkLog(X,J

IATA Forecasting—Common Forecasting Techniques
The forecast analyst may develop multiple models to forecast different segments of traffic (e.g., domestic
versus international, visitor versus resident, length of haul, or world region) in order to apply a targeted set of
independent variables.
2.6.4.4 Determine Model's Ability to Accurately Predict Historical Values
The fit of the equation is measured by the R2statistic (called the coefficient of determination). The R2statistic
ranges from 0 to 1, with 1 indicating a perfect fit.
The calculated predicted output of the regression model can be charted against the actual historical values for
the dependent variable to provide a visual of how well the model predicts actual traffic. There are also a
number of statistical outputs that the forecast analyst should check when developing an econometric model to
ensure its robustness:
• Directionality of the co efficient (e.g., yield is typically negative, reflecting a reduction in fares leading to
growth in passenger demand);
• Adjusted R2;
• T-statistics;
• P-Value;
• Multicollinearity;
• Autocorrelation (Durbin-Watson Test);
• Normality (Anderson-Darling Test);
• Presence of outliers;
• Homoscedasticity (Brown-Forsythe Test); and
• Violations of linearity.
2.6.4.5 Evaluate Combinations of Independent Variables in Context of Historical
Traffic Patterns
Econometric modeling is an iterative process and a variety of independent variables may need to be tested
and results reviewed before a model equation is settled upon. The goal is not necessarily to get the model
with the best statistical fit, but to provide a model that is defensible based on a logical set of input
assumptions (independent variables) and an overall understanding of the drivers of passenger demand at the
subject airport.
Specific models may be developed for different airport segments. For instance, it is often observed that
resident and visitor air traffic are driven by different variables.

2.6.4.6 Use Model to Derive Forecast Traffic Values
By entering the predicted values for the independent variables into the model (e.g., GDP and fare forecasts),
the forecaster will derive the forecasted passenger traffic.
2.6.4.7 Compare with Benchmark Forecasts
As a final step to ensure the forecasts are reasonable, benchmark or other existing forecasts can be used as
a comparison to confirm the projected growth is realistic.
2.6.4.8 Introduce Adjustments to the Forecasts to Reflect Anticipated Changes in
the Airport Environment
The airport forecaster should critically review the ability of the forecasting model to reflect anticipated changes
in the airport business environment. Regulation, airline strategies, airport competition and modal competition
are a few of the many changes that may affect the airport future traffic. For instance, open-skies
implementation or high-speed rail construction are likely not reflected in any forecasting model based on
historical observations.
Therefore, the airport forecaster will identify and characterize changes that are not factored in the baseline
traffic projections and study their potential impact in terms of traffic gain or loss compared to the baseline.
2.7 Passenger Activity Forecast
Once the methodology of the forecast is decided, the assumptions and key findings of the forecast model
should be described in narrative and tabular formats. For long-term forecasts, the forecaster should use the
most recent year reported as the base year and focus the report on planning level years, usually in five-year
increments until the end of the forecast period. For short-term forecasts (less than five years), a forecast
should be developed for each year.
2.7.1 Passenger Activity Segments
For planning purposes, the passenger activity forecast should emphasize the following segments:
• Domestic O&D;
• Domestic transfer;
• International O&D;
• International transfer; and
• Transit.

IATA Forecasting— Passenger Activity Forecast
The sum of these categories results in the total passenger forecast for the subject airport.
Overlaps/dependencies between segments should be closely studied when summing up the traffic of each
individual segment. Typically, a strong growth of O&D demand may result in fewer seats for transfer
passengers. It is important to identify the domestic and international breakdown between originating and
transfer passengers to better evaluate the impact on the different terminal facilities at the airport (i.e., check
in, airport security, baggage claim, emigration and immigration, and customs).
The level of originating passengers, both domestic and international, reflects the attractiveness of the air
service region as a place to live and visit, and as a place to work and conduct business. The originating
passenger forecast is a critical input to assess future demand for terminal and landside facilities (i.e., ticketing,
baggage claim, automobile parking, and access roadways). The volume of connecting passengers reflects the
quality and quantity of air service offered by domestic hub airlines and international gateway carriers, and is
typically gauged by the frequency of departures and the number of destinations served.
When analyzing the results of the passenger activity forecast, the airport forecaster should incorporate:
• Compound annual growth rates over the forecast period;
• Market shares for each passenger activity segment;
• Comparisons to historical trends; and
• Overall validation of the forecast assumptions and results.
These factors will help explain the outcomes of the forecast and determine which passenger segments are
being affected the most over the forecast period.
2.7.2 Passenger Activity Benchmarking
When developing the passenger activity forecast, industry forecasts such as ones made by ACI, Boeing and
Airbus can be used as benchmarking tools. The current Boeing Current Market Outlook and Airbus Global
Market Forecast passenger growth rates can be reviewed to identify benchmark forecast growth rates. In
these forecasts, passenger and cargo tonnage growth is forecast by world region. These forecasts are
particularly helpful when determining reasonableness for growth of international traffic, keeping in mind that
they may be somewhat optimistic.
For airports in the U.S., the FAA Terminal Area Forecast (TAF) can be used as a benchmarking tool. The
FAA TAF provides projected growth by airport for air carrier, commuter, total enplanements and aircraft
movements by category.
For a near-term global benchmark, IATA develops an annual airline industry forecast that can be used to
analyze the latest passenger and freight traffic growth expectations for over 3,000 country pairs. This data
source includes individual assessments of global and regional economic conditions, detailed rankings, and
annual projections for the next five years. Available in this data are detailed passenger and freighter volumes
for international and domestic country pairs as well as aggregated values for region, sub-region, and country
levels.

2.7.3 Passenger Activity Alternative Scenarios
All forecasts are subject to uncertainty, especially long-term forecasts. Consequently, it is prudent to develop
alternative scenarios that define the likely upper and lower ranges of potential demand at the subject airport.
This approach brings flexibility to the planning process and allows stakeholders to assess a range of
outcomes for an infrastructure program should demand be realized sooner or later than anticipated.
Assumptions commonly used for optimistic scenarios include:
• Faster than anticipated economic growth;
• The airport captures increasing market share;
• An airline expands hub service, and
• Lower oil prices result in a decline in air fares stimulating traffic.
The inverse of these assumptions can be used for a low-end scenario. Scenarios that consider a material
change in the character of the traffic base at the subject airport, such as the transition from an O&D airport to
a transfer hub, should be developed in a manner that allows planners to evaluate the implications of shifts in
the individual market segments. Evolving aircraft types is another example of material change that requires
detailed attention as there may be implications on runway capacity requirements as well as the size and
number of parking stands.
Other approaches may be used to reflect uncertainty in airport demand forecasting. The simplest ones are
“what-if analysis” and “sensitivity analysis”. These approaches estimate the impact of a single event or
modified assumptions on the baseline traffic projection. More sophisticated methodologies can be used to
incorporate uncertainties. The main ones are:
• Prediction intervals;
• Distribution fitting and Monte Carlo simulation; and
• Extrapolation of empirical errors.
2.8 Baggage Forecast
Not all airports process the same amount of baggage per passenger. Checked baggage tends to increase
when passengers are traveling internationally or for longer periods of time. Leisure travelers tend to check
more bags than business travelers, even for trips of a similar duration. As a result, the air service and type of
passenger at the subject airport will have a large effect on total baggage per passenger. The baggage
forecast should be developed on a case-by-case basis dependent on the airport, its respective air service,
and the profile of the typical passenger. The amount of checked baggage has decreased over recent years
due to additional security requirements as well as fees on checked baggage. The amount of checked
baggage per passenger also tends to vary by world region based on cultural factors.
Average bags per passenger ratios are most often determined based on final destination. The baggage
forecast will be developed by multiplying the forecast passenger volumes by the forecast passenger bag
ratios for the various categories of passenger (i.e., international, domestic, transfer).

Airport Development Reference Maneal Forecasting and Planning sections produced in collaboration with ACI.pdf

Airport Development Reference Maneal Forecasting and Planning sections produced in collaboration with ACI.pdf

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