by: nan shellabarger date: february 28, 2006 federal aviation administration faa 2006-2017 forecast

By: Nan Shellabarger

Date: February 28, 2006

Federal AviationAdministrationFAA 2006-2017

Forecast

FAA 2006-2017 Forecast2Federal Aviation

AdministrationFebruary 28, 2006

Agenda

• 2005 Review • Assumptions• Forecast Overview



Review of 2005• Traffic growth strong

• RPMs up 8.0%– Domestic +6.9%, International + 11.6%

• Passengers up 7.1%– Domestic +6.6%, International + 12.1%

• Real yield decline• Domestic down 4.8%• International up 1.1%

• Workload Growth• En-Route Traffic up 2.8%

– Commercial + 3.7%, Non Commercial + 0.3%• Tower Ops down 0.1%

– Commercial +3.7%, Non Commercial - 2.6%– OEP 35 Commercial + 3.9%



Assumptions 2006-17

• External Environment– Economic growth about 3% per year– Higher Oil Prices in near term

• Industry – Domestic capacity shrinks in FY 2006

• DL and NW in bankruptcy – shrink 10% to 20%• AA, US announced reductions

– RJ fleet growth slows in near term• Production of 50 seat RJs stopped• At least 107 aircraft to be grounded in FY 2006• Significant 70/90 seat aircraft demand



Domestic Capacity Trends

-8.00%

-6.00%

-4.00%

-2.00%

0.00%

2.00%

4.00%

6.00%

Jan-

05

Feb-

05

Mar

-05

Apr

-05

May

-05

Jun-

05

Jul-0

5

Aug

-05

Sep

-05

Oct

-05

Nov

-05

Dec

-05

Jan-

06

Feb-

06

Mar

-06

Apr

-06

May

-06

Jun-

06

Jul-0

6

Month

Y/Y

Ch

g

Departures Seats ASMs

Current

Source: Official Airline Guide (OAG)



Assumptions 2006-17 cont.

• Industry– Domestic Yield

• Increases in 2006, then resumes long run decline– Y/Y turned positive in May 2005 and is increasing

– Tight capacity with current demand => prices up

– Competition and productivity increases drive long term decline

– Load factor increasing• Domestic above 78% by 2017• International approaching 80% by 2017



Domestic Yield Trends

-12%

-8%

-4%

0%

4%

8%

12%Ja

n-04

Mar

-04

May

-04

Jul-0

4

Sep

-04

Nov

-04

Jan-

05

Mar

-05

May

-05

Jul-0

5

Sep

-05

Nov

-05

Jan-

06

Month

Y/Y

Ch

g

Monthly 12 Month Ending

Current

Source: Air Transport Association (ATA)



Forecast Overview FY 2006-17

• Slow growth in 2006, rebound in 2007, return to historical trends after that

• Demand continues to grow• Passengers: +3.1% per year

– Domestic +2.9%, International + 5.0%

• RPMs: +4.1% per year– Domestic +3.6%, International + 5.5%

• Load Factor Higher• Domestic: 78.1% in 2017

• International: 79.4% in 2017

• Aircraft size continues to shrink• Domestic seats/mile falls until 2011



Forecast Overview FY 2006-17

• Real Yield continues long term decline• Domestic: - 0.8% per year• International: -0.8% per year

• Cargo continues to grow• System 5.2% per year; Domestic 3.2%, International 6.3%

• General Aviation fleet and activity rising• New products stimulate growth

• Workload continues to increase• En-Route Aircraft Handled + 3.0% per year

– Commercial + 3.2%, Non-Commercial + 2.4%

• Tower Ops: + 2.0% per year– Commercial +2.4%, Non-Commercial + 1.8%



System Enplanements

600,000

650,000700,000

750,000800,000

850,000

900,000950,000

1,000,0001,050,000

1,100,000

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

Fiscal Year

En

pla

nem

ents

(00

0)

FY 06 Fcst FY 05 Fcst

Current

2005-2006: 0.3%

2006-2007: 3.9%

2007-2017: 3.4%

Actual Forecast



System Enplanements

0100,000200,000300,000400,000500,000600,000700,000800,000900,000

1,000,0001,100,000

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

Fiscal Year

En

pla

nem

en

ts (

000)

Mainline Dom Regional Dom International

Actual Forecast

2005-17 Avg. Annual Growth

Mainline Domestic: 2.5%

Regional Domestic: 4.2%

International: 5.0%



System Revenue Passenger Miles

600,000

700,000

800,000

900,000

1,000,000

1,100,000

1,200,000

1,300,000

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

Fiscal Year

RP

Ms

(Mil.

)


Current

2005-2006: 1.5%

2006-2007: 4.8%

2007-2017: 4.3%

Actual Forecast



System Revenue Passenger Miles

0

300,000

600,000

900,000

1,200,000

1,500,000

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

Fiscal Year

RP

Ms (

Mil

.)

Mainline Dom Regional Dom International

Actual Forecast


Mainline Domestic: 3.1%

Regional Domestic: 6.7%

International: 5.5%



System Load Factor

70

71

72

73

74

75

76

77

78

79

8020

00

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

Fiscal Year

L.F

. (%

)


Current

2005-2006: 0.5 Points

2006-2007: 0.2 Points

2007-2017: 0.1 Points

Actual Forecast



Domestic Aircraft Size

116

118

120

122

124

126

128

13020

00

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

Fiscal Year

Sea

ts/M

ile


Current

2005-2006: -1.4 Seats

2006-2007: -0.6 Seats

2007-2017: 0.1 Seats

Actual Forecast



Domestic Real Yield

9.00

10.00

11.00

12.00

13.00

14.00

15.00

16.00

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

Fiscal Year

20

04

Ce

nts

Pe

r R

PM


Current

2005-2006: 0.4%

2006-2007: -1.0%

2007-2017: -0.9%

Actual Forecast



Cargo RTMs

0

10

20

30

40

50

60

70

80

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

Fiscal Year

RT

Ms i

n B

illi

on

s

Domestic International

Actual Forecast


Domestic: 3.2%

International: 6.3%



Total General Aviation Fleet

200

210

220

230

240

250

260

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

20

16

20

17

Fiscal Year

Air

cra

ft(0

00)

FY 06 Fcst FY 05 Fcst2005-2006: 1.0%

2006-2007: 1.8%

2007-2017: 1.4%

Actual Forecast



Total General Aviation Flight Hours

24,000

27,000

30,000

33,000

36,000

39,000

42,000

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

Fiscal Year

Fli

gh

t H

ou

rs(0

00)

FY 06 Fcst FY 05 Fcst2005-2006: 2.5%

2006-2007: 3.1%

2007-2017: 3.2%

Actual Forecast



General Aviation Flight Hours

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

Fiscal Year

Fli

gh

t H

ou

rs (

000)

Piston Turbine

Actual Forecast


Piston: 1.8%

Turbine: 6.4%



En-Route Aircraft Handled

40,000

45,000

50,000

55,000

60,000

65,000

70,000

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

Fiscal Year

A/C

Han

dle

d (

000)


Current

2005-2006: -0.6%

2006-2007: 2.7%

2007-2017: 3.4%

Actual Forecast



FAA and Contract Tower Operations

60,000

65,000

70,000

75,000

80,000

85,000

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

Fiscal Year

Op

erat

ion

s (0

00)


Current

2005-2006: -0.4%

2006-2007: 2.7%

2007-2017: 2.2%

Actual Forecast



Forecast Risks

• Terror attacks/Pandemic• Impact of high oil prices• Mainline carrier financial woes• Growth of VLJ’s and impact on workload• Sufficient Capacity



Forecast Summary

• Slow growth in 2006, rebound in 2007, return to historical rates afterwards

• Demand continues to grow in line with economy

• Real yield continues to fall• Aircraft continue to get smaller• Workload gets higher

by: nan shellabarger date: february 28, 2006 federal aviation administration faa 2006-2017 forecast

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