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# Benefit/Cost Analysis For Ait Traffic Control Towers Presentation

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### Benefit/Cost Analysis For Ait Traffic Control Towers Presentation

1. 1. uadrex Associates, Inc Benefit/Cost AnalysisBenefit/Cost Analysis forfor Air Traffic Control TowersAir Traffic Control Towers Understanding the Background,Understanding the Background, Theory, Data RequirementsTheory, Data Requirements && Procedural MethodologiesProcedural Methodologies
2. 2. uadrex Associates, Presentation OverviewPresentation Overview  What is theWhat is the B/C in context of ATCT?in context of ATCT?  Why is aWhy is a B/C analysis required?analysis required?  How is theHow is the B/C calculated?calculated?  What Data is used for theWhat Data is used for the B/C??  How is theHow is the B/C used?used? Disclaimer: The following represents the views of Quadrex and notDisclaimer: The following represents the views of Quadrex and not necessarily those of the FAA or any other responsible agency and isnecessarily those of the FAA or any other responsible agency and is solely responsible for the contents.solely responsible for the contents.
3. 3. uadrex Associates, Who needs a B/C Ratio?Who needs a B/C Ratio?  Fully funded ATCT Facilities (B/CFully funded ATCT Facilities (B/C  1.0)1.0)  Cost-Share ATCT Facilities (B/C < 1.0)Cost-Share ATCT Facilities (B/C < 1.0) – B/C represents FAA share of total costB/C represents FAA share of total cost – Example: B/C = .9 means FAA will fund 90%Example: B/C = .9 means FAA will fund 90%  New ATCT Facilities (B/C = 1.0 or greater)New ATCT Facilities (B/C = 1.0 or greater) – Establishment Criteria with deductionsEstablishment Criteria with deductions
4. 4. uadrex Associates, FAA Report APO 90-7FAA Report APO 90-7 Guidance for MethodologyGuidance for Methodology
5. 5. uadrex Associates, What Exactly is the B/C Ratio?What Exactly is the B/C Ratio?  FAA Report APO 90-7 sets rationale andFAA Report APO 90-7 sets rationale and methodologymethodology  Benefits – the Safety and Efficiency savings (livesBenefits – the Safety and Efficiency savings (lives & property) of ATC Tower operation& property) of ATC Tower operation  Cost - Annual expenses for Tower OpsCost - Annual expenses for Tower Ops  Calculated on the FAA Data & DefaultsCalculated on the FAA Data & Defaults
6. 6. uadrex Associates, B/C EquationB/C Equation  TheThe BenefitBenefit Side of the B/C Equation:Side of the B/C Equation: – Collisions AvoidedCollisions Avoided – Preventable AccidentsPreventable Accidents – Flight EfficienciesFlight Efficiencies  TheThe CostCost Side of the B/C EquationSide of the B/C Equation – Annual ATC (Contractor) CostAnnual ATC (Contractor) Cost  Both figures calculated out for 15 yearsBoth figures calculated out for 15 years – Discount rate = 7 percentDiscount rate = 7 percent
7. 7. uadrex Associates, B/C VariablesB/C Variables Aircraft OperationsAircraft Operations  Operations TypeOperations Type – Air Carrier/Air Taxi (Scheduled AT = AC)Air Carrier/Air Taxi (Scheduled AT = AC) – General AviationGeneral Aviation – MilitaryMilitary  Historical/ForecastHistorical/Forecast – ATC Ops Counts / Surveys (ATC Ops Counts / Surveys (new Startsnew Starts)) – Terminal Area Forecast (TAF)Terminal Area Forecast (TAF)
8. 8. uadrex Associates, B/C VariablesB/C Variables Aircraft MixAircraft Mix  Establishes Values for Operations “at-risk”Establishes Values for Operations “at-risk” – Average Occupants (Passenger/Crew)Average Occupants (Passenger/Crew) – Average A/C Hull ValuesAverage A/C Hull Values  Default ValuesDefault Values – Air Carrier - Official Airline Guide (OAG)Air Carrier - Official Airline Guide (OAG) – GA - Based Aircraft Mix (5010/TAF)GA - Based Aircraft Mix (5010/TAF) » Nat’l Distribution = (2.45 Occupants/\$557K)Nat’l Distribution = (2.45 Occupants/\$557K)  Site Specific ValuesSite Specific Values – GA Based Aircraft – represent Itinerant OpsGA Based Aircraft – represent Itinerant Ops
9. 9. uadrex Associates, B/C VariablesB/C Variables CostsCosts  ATC Cost = \$300,000 – \$500,000+ATC Cost = \$300,000 – \$500,000+  Regional Contractor BidRegional Contractor Bid – Based on Hours of OperationBased on Hours of Operation – DOL Wage DeterminationDOL Wage Determination – Regional Cost of LivingRegional Cost of Living – Staffing Levels/Extra HoursStaffing Levels/Extra Hours
10. 10. uadrex Associates, B/C Program DefaultsB/C Program Defaults Establishment CriteriaEstablishment Criteria  Ops covered = 92.5% of Total OpsOps covered = 92.5% of Total Ops  Ops Mix = Nat’l/Local Based AircraftOps Mix = Nat’l/Local Based Aircraft  Establishment CoefficientsEstablishment Coefficients – Assumes No Prior ATC servicesAssumes No Prior ATC services – Use Statistical “Mean” of DataUse Statistical “Mean” of Data  ATC Costs = \$400KATC Costs = \$400K (average CTP facility)(average CTP facility)  New starts get only Establishment B/CNew starts get only Establishment B/C (FAA Policy to only allow for B/C(FAA Policy to only allow for B/C 1.0)1.0)
11. 11. uadrex Associates, B/C Program DefaultsB/C Program Defaults Discontinuance CriteriaDiscontinuance Criteria  Ops covered = 100% of Total OpsOps covered = 100% of Total Ops  Discontinuance CoefficientsDiscontinuance Coefficients – Considers Safety Aspect of Losing ATCConsiders Safety Aspect of Losing ATC ServicesServices – Use Statistical “Upper Limits” of Data (95%Use Statistical “Upper Limits” of Data (95% confidence level)confidence level)  All Other Factors Same as EstablishmentAll Other Factors Same as Establishment
12. 12. uadrex Associates, Input Data RecommendationsInput Data Recommendations Accuracy vs ExpediencyAccuracy vs Expediency  Based Aircraft CensusBased Aircraft Census – Establishes mix of local trafficEstablishes mix of local traffic  Aircraft Operations Level & Ops MixAircraft Operations Level & Ops Mix – Itinerant vs LocalItinerant vs Local – Master Plan Inventory/ForecastsMaster Plan Inventory/Forecasts – A/C Surveys & EstimatesA/C Surveys & Estimates – Other empirical evidenceOther empirical evidence » Fuel FlowageFuel Flowage » IFR Traffic handled by ATC Approach/Departure ControlIFR Traffic handled by ATC Approach/Departure Control » Flight tracking (subscription)Flight tracking (subscription)
13. 13. uadrex Associates, Estimating Aircraft OperationsEstimating Aircraft Operations at Non-Towered Airportsat Non-Towered Airports CORRELATION OF ACTIVITY BASED ON ON-SITE DATA ANDCORRELATION OF ACTIVITY BASED ON ON-SITE DATA AND OTHER LOCAL GA AIRPORTS WITH AIR TRAFFIC CONTROLOTHER LOCAL GA AIRPORTS WITH AIR TRAFFIC CONTROL TOWERSTOWERS Input DataInput Data – Aircraft Activity SurveyAircraft Activity Survey » Phase I (8 days – 2 weekends)Phase I (8 days – 2 weekends) » Phase II (21 days) June 16 - July 7Phase II (21 days) June 16 - July 7 – Based AircraftBased Aircraft
14. 14. uadrex Associates, Estimating Aircraft OperationsEstimating Aircraft Operations at Non-Towered Airportsat Non-Towered Airports Traffic Counts & ObservationsTraffic Counts & Observations – Similar to manual vehicle traffic countsSimilar to manual vehicle traffic counts – On-site trained & equipped observersOn-site trained & equipped observers – OperationsOperations » Take-offs (1 operation per)Take-offs (1 operation per) » Landings (1 operation per)Landings (1 operation per) » Touch & Go’s (2 operations per LTO cycle)Touch & Go’s (2 operations per LTO cycle) » Local vs Itinerant (N-number)Local vs Itinerant (N-number) » Sky dive sortiesSky dive sorties » Hourly totals & peaking characteristicsHourly totals & peaking characteristics
15. 15. uadrex Associates, Survey ResultsSurvey Results   AC* GAL GAI Annualized for 10 Hour Operations  8,142 46,779 62,238 say 8,100 46,800 62,200 * less 20%   ATC   Est Annual   Hours Days Ops           14 365 117,160     Min Ops 83,655     Max Ops 150,665
16. 16. uadrex Associates, DED B/C CalculationsDED B/C Calculations   Base Ops Establish Discontinue  Base Case 77,000    0.53 0.93  Alternate Case 117,200 + 1.48 2.79  Flat-line Forecast 117,200 1.09 2.00 Break-Even  95,600 + 1.00 1.82 Cost based on \$450,000