Richard Golaszewski GRA, Incorporated 115 West Avenue • Jenkintown, PA 19046 • USA

1. DRAFT—Not for release or distribution Multidisciplinary Analysis of the Next Generation Air Transportation System (NextGen) Presentation to: Transportation Research Seminar University of South Florida April 20, 2009 Richard Golaszewski GRA, Incorporated 115 West Avenue • Jenkintown, PA 19046 • USA ' 215-884-7500 •7 215-884-1385 * richg@gra-inc.com Version: 9/14/2014 4:38 PM

2. Objective • Illustrate intersection of engineering, economic, business and public policy through review of analyses supporting Next Generation Air Transportation System • Some limitations • Does not explicitly consider rationing available capacity to highest and best uses • Does not consider “federalism” issues • Local land use • Federal pre-emption

3. GRA, Incorporated Overview • Questions addressed in International Portfolio and Systems Analysis (IPSA) analysis • How much delay without NextGen • Societal cost of delay • Value of additional capacity from NextGen • Benefits and costs to stakeholders (FAA, system users, passengers and shippers, and society • Impact on environment, energy use and quality of life—quantities of pollutants and monetized values Work described has been produced with collaborative effort among multi-organization team supporting the JPDO IPSA Division* *This briefing does not necessarily reflect the views of the JPDO or other team members.

4. Joint Planning and Development Office Multi-agency Body with Role to Coordinate NextGen R&D • FAA – Air Traffic, Airports and Safety Organizations • NASA Aeronautics • Department of Defense • Department of Commerce – NOAA • Department of Transportation • Department of Homeland Security/Transportation Security Administration • Office of Science and Technology Policy • Joint Planning and Development Office (JPDO) Structure • Divisions – IPSA, Policy, Net Centric Ops, Enterprise Architecture and Integration • Nine working groups – Air navigation services, aircraft, airport, environment, global harmonization, net-centric operations, safety, security and weather

5. IPSA Role • Develop analytic framework and tools to examine impacts (benefits and costs) of NextGen portfolio(s) • Help agencies formulate budgets that support NextGen requirements • Coordinate analyses with JPDO Working Groups and FAA NextGen Office • Understand business case and NextGen implications for each stakeholder group • Present integrated view to OMB, decision makers and stakeholders

6. Problem Structure 5

7. JPDO Investment Problem • Multiple objectives/multiple constraints—optimization not meaningful (no party controls all decisions)—very long time period adds to complexity • Users have differing wants/needs • Passengers/shippers  Airports • Aircraft operators ATM providers • Multiple societal objectives • Safety Reliability • Security Environmental • Efficiency Cost and availability of air travel • Multiple constraints • Physical Cost • Political/policy Acceptability • Even though outcomes can be monetized, some stakeholders will not agree with valuation, or that their issue can be valued in dollars

8. NextGen Deployment Decisions • Multiple parties have to take coordinated actions (partial list) • FAA ATO—Install ground equipment and offer NextGen services • FAA AVS—Safety certification of equipment and procedures for ATO, manufacturers and operators • Operators—Acquire/install on-board equipment—Train crews • Manufacturers—Develop, certify and sell equipment to ATO and operators • Airports—Expand capacity to meet higher ATM throughput • Other parties impacted but do not share in investment decisions • Passengers—Respond to fares and service quality and changes in them • Society—Incurs environmental impacts and changes in them • Sequential and sometimes irreversible decisions over long time periods—In many cases, actual solution, interactions and costs not known • Equipage/aircraft are long-term investments • Environmental impacts have long latency—GHG models consider 300 years

9. Capacity Problems Are In Few Key Areas • ASPM 77 Airports • OEP airports • All other airports Excludes airports in AK, HI and PR

10. Types of Risk • Performance Risk – affects the likelihood that the program as planned will be unable to deliver capabilities to satisfy the technical or performance requirements; • Schedule Risk – affects the likelihood that program actions may not be accomplished before the agreed upon date; • Cost Risk – affects the likelihood that the program may not accomplish planned tasks within the planned budget. • Policy Risk – affects the likelihood that the program may not meet planned cost, schedule, and performance due to policy concerns. • Strategic System-Wide & Organizational Risk – affects the likelihood that the program may not meet planned cost, schedule, and performance due to matters concerning multi-agency support, stakeholder participation and decision-making, particularly in focus areas critical to enabling policy, core infrastructure, capabilities, etc.

11. Portfolio Challenges Reflect Uncertainty/Risk “Known” “Risk/Opportunity/Uncertainty” Evolving NAS Architecture NextGen Trade Space Successive capabilities Capability Cost of fuel Technology Resolution of Future Trade Space Policy options Fleet mix Demand Environmental constraints etc. R&D, Capital Investments Successive decisions Research Portfolio 2009 2015 2025 Time

12. Summary of Analysis Approach • Future demand scenarios are generated using FAA forecasts • Future baseline and NextGen airport capacities are estimated based on an airport capacity constraints analysis and performed in coordination with FAA and Mitre for the years 2015 and 2025 • NextGen performance related to capacity is evaluated using NAS-wide airspace and airport capacity simulations • Airport capacities based on the airport constraints analysis • En route capacities based on prior FAA, NASA, Mitre and IPSA analyses • NextGen performance related to environment is evaluated based on the NAS-wide analysis using a suite of environmental modeling tools—Aviation Environmental Design Tool and Aviation Portfolio Management Tool • Metrics of interest are derived from the NAS-wide analysis of throughput, delays, and environmental impacts • Iterate analysis to refine architecture given R&D portfolio, trade space and policy decisions

13. Technology Trade Space IPSA Integrated Modeling Suite m2 f1 f2 b2 m1 Risk b1 Time 0 Benefit Full Portfolio Trade Space Policy/Key Decision Models m2 f1 Dec. 4 Dec. 1 m1 Dec. 5 Dec. 2 b1 Risk Dec. 6 Dec. 3 Dec. n Time 0 Benefit Iterative Approach to Developing Architecture JPDO Enterprise Architecture Alternatives 2 1 3 Updated JPDO Enterprise Architecture 4 5

14. IPSA Modeling and Analysis Approach

15. Modeling Approach 14

16. Key Modeling Assumptions for NextGen Performance Improvements • Flight Trimming (Feasibility of Airport Throughput) • Future demand is based on FAA TAF airport forecasts, and then ‘constrained’ to throughput levels determined by upper limits on demand/capacity ratios at each airport, preventing the growth of delay to unreasonable levels (choice that can be varied) • Demand is ‘trimmed’ primarily from OEP airports which are largest contributors to delays • Airport Capacity Improvements • Airport capacity improvements based on bottom-up analysis of impacts • NextGen results in significant improvements in airport capacities (AAR/ADR) in all weather conditions (IMC/MVMC/VMC) • En Route Airspace Capacity Improvements • Based on prior government and industry research as well as IPSA analyses • NextGen capabilities such as improved traffic flow management and dynamic airspace capabilities result in increased en route capacities both NAS-wide and in congested airspace • Weather-related ATM Improvements • NextGen capabilities related to mitigating the impact of bad weather are primarily captured through improved ATC/ATM/TFM capabilities • Improved ATC capability in weather mitigates weather impact on airspace and airports • Environmental impacts reflect best technology and consider change in noise and emissions over baseline

17. Integrate Modeling Tools for Holistic Analysis Airport Weather En Route Weather Airports FAA Benchmark,FACT-2 capacities Flights ETMS Current demand Current airport capacities FAA ATODemand Tool Boeing Airport Capacity Constraints Model,LMI Airport Capacity Model Future unconstraineddemand Sensis AvDemand Future airport capacities SensisProbTFM Delay Estimates LMI Queuing Model Projected Throughput Alternate future demand scenarios (fleet mix, demand level, demand distribution) ACESSimulator (Sensis) Ventana NextGen Portfolio Simulator GRA Security Screening Model LMI Safety Model Costing Env . Impacts (APMT) ENV Modeling (Metron)

18. Evaluating NextGen Performance • Prior analyses of NextGen performance have primarily focused on a single dimension or goal such as capacity, environment, safety, security, etc. • NextGen is a complex, multi-dimensional effort that will involve tradeoffs between the NextGen goals based on: • Technology • Policy • Costs • Benefits • We have developed a notional decision framework to represent how these tradeoffs could be evaluated • Safety and environment could be portrayed as quantity constraints

19. BaselineCapacity NextGen Capacity Average Delay Capacity WITHOUT INVESTMENT: Baseline Projected Delay/Throughput Increase Due to Investment 1 Level of NAS Activity (Ops, flights, RPMs,….) Feasible Projected Throughput, Baseline Future w/o NextGen NextGen Allows NAS Users to Both Reduce Delay and Increase Throughput Accommodate Growth 3 Reduce Delay AFTER NEXTGEN INVESTMENT: Increased Throughput is Possible with No Additional Average Delay 2.5 2 AFTER NEXTGEN INVESTMENT: Reduced Delay is Possible for Unchanged Throughput Operating Point Analyzed Feasible Projected Throughput with NextGen Investment Stakeholders can employ the increased capability offered by NextGen in a range of ways. Infrastructure and simulation parameters chosen for this analysis result in the system operating at “point 2.5” which combines increased throughput with decreased average delays

20. Using Analyses in “Business Case” 19

21. JPDO is Developing the NextGen Business Case in Support of the President’s FY2011 Budget • Based on the OMB Passback, JPDO seeks to: • Improve NextGen cost and benefit estimation ability, including the ability to quantify the benefits and performance of various levels of investment. • Work with the NextGen agencies to develop a more systematic methodology to estimate the cost of NextGen investments. • Improve the transparency of NextGen initiatives in each agency’s budget request, i.e. identifying your agency’s NextGen initiatives in OMB and Congressional justification materials. The JPDO has constructed the following business case and analysis information to address OMB requests • JPDO is currently: • Developing an analysis of alternatives for the OMB that captures benefit-cost ratios and returns on investment, to be submitted in time for agencies’ FY 2010 budget request in September 2009.

22. Assumes That Stakeholders Will Use Operational Improvements to Create Value in the Following Ways

23. NextGen Business Case Analysis Components • Key stakeholders: • FAA/ANSP; Commercial Airlines and High Performance General Aviation; Society/ Passengers; Airports • Key Features: • Estimate life-cycle costs and benefits by major stakeholder • Focus this year is air navigation services • Does not include DOD, DHS. Some NASA and DOC • Begin to identify alternative scenarios and portfolios and collect data to evaluate trade-offs between stakeholders and NextGen goals • Caveats: • Costs – increased fidelity and scope from last year. Estimates do not currently include risk adjustment • Benefits – based on IOC dates. Estimates do not reflect performance and technology risks • Results reflect FAA FY 2008 forecasts and do not reflect 2008Q4 – 2009Q1 downturn in traffic and economy • Alternatives: Baseline versus the NextGen Alternative • Baseline Alternative • NextGen Alternative - One alternative or portfolio of investments that can generate the capabilities and satisfy the goals as identified in the NextGen Integrated Plan; • Major assumptions: • The following estimates reflect NextGen as described in the JPDO Integrated Work Plan (IWP) • All aircraft fully equipped with necessary avionics • Engine upgrades improve with projected fleet evolution • All capabilities realized by 2025 • Same level of air traffic services offered across the National Airspace System (NAS) • New Runway costs are reported as necessary to achieve NextGen

24. Modules for Economic and Financial Analysis Note: Models need to address specific time periods and traffic levels with and without NextGen.

25. Existing Flow of Infrastructure Funds Airlines Passengers High Performance GA Fares Taxes Landing Fees Fuel Flow Other Noise Emissions (no money) PFC Concessions Parking FAA-ARP Airport and Airway Trust Fund FAA-ATO Airports AIP Landing Fees Rentals Other Society General Fund FAA Regulation and Certification Taxes

26. Wrap Up • Business case reflects financial impacts on stakeholders • Financial structure • Intermediate transactions among stakeholders • Rate of return • Does business case close overall and for each party? • Incentives needed • Transfers of benefits and costs • Non-monetary impacts • Absolute constraints

27. Back Up 26

28. Economic and Environmental Criteria • Economic • Life-cycle costs • Willingness to pay/price responsiveness • Affordability • Financial risk exposure • Environmental • Resource utilization • Service provision • Environmental impact Source: Peter Pearson and Tim Foxon. Multi Objective Decision Making: A Guidebook Approach. Presented at the workshop “Multi Objective Decision Making and Socio-Economical Aspects in Sustainability Assessment Methods,” COST Action 624: Optimal Management of Wastewater Systems, Meeting of Working Group 3: Evaluation Tools, 9-11 March 2000, Dundee, Scotland.

29. Problem Definition Intelligence Phase Evaluation Criteria Constraints GIS Decision Matrix Alternatives Decision Maker’s Preferences MCDA Design Phase Decision Rules Sensitivity Analysis MCDA/GIS Choice Phase Recommendation Decision Framework Organizes Steps Framework for spatial multicriteria decision analysis (Malczewski, 1999).

30. Decision Theory Close to Existing IPSA Framework Process Modeling Decisions Multi- Criteria Analysis Sustainability Indicators/ Criteria Scenarios System Modeling Social Analysis Source: Peter Pearson and Tim Foxon. Multi Objective Decision Making: A Guidebook Approach. Presented at the workshop “Multi Objective Decision Making and Socio-Economical Aspects in Sustainability Assessment Methods,” COST Action 624: Optimal Management of Wastewater Systems, Meeting of Working Group 3: Evaluation Tools, 9-11 March 2000, Dundee, Scotland.

31. Underlying Operational Performance Impacts for the Overall Society/Passenger Business Case

32. Trade-space for NextGen Capacity and Environmental Performance Alternative 1 Alternative 2 ILLUSTRATIVE Alternative 3 Alternative 4 • The trade-space is constructed using combinations of technologies and policies that impact capacity and environment • We posit likely outcomes/combinations based on prior analyses and experience with prior programs

33. Integrated Work Plan 2008 NextGen Business Case Includes the Assessment of Total Lifecycle Costs, Benefits, and Risks Assess Benefits, Costs, & Risks Document and Compare Results 2 Identify Scope 3 1 • Define two alternatives for the business case: the baseline and the NextGen Alternative • Determine the scope of the NextGen Alternative based on the Integrated Work Plan v1.0 Risks Costs Benefits B C A • Place side-by-side the uncertainty and risk-adjusted discounted costs, monetized benefits, and non-monetized benefits of the Baseline and the NextGen alternative • Identify, quantify and aggregate risks • Risk-adjust cost estimates • Coordinate with partner agencies to aggregate all lifecycle costs (capital and operating costs) for NextGen related programs and activities • Apply uncertainty analysis to develop cost ranges • Run forecast simulations to estimate monetized and non-monetized benefits of NextGen Analysis Documentation “Target Portfolio” Subset of Operational Improvements (OIs) – modeled in the benefits analysis JPDO NextGen Business Case Analysis Report Generate Results by Stakeholder • Breakout by Stakeholder • Government/ANSP • Commercial Airlines • High-Performance GA • Airports • Society/Passengers Enablers – grouped into Cost Proxy Programs (CPPs) for costing purposes Illustrative

34. Gap Observations: Criticality versus Difficulty Risk Wx-1 Wx-2 Arch-2 High ATM-7 Sec-4 ATM-5 ATM-3 ATM-1 Envt-1 Cross-2 Risk includes technical risks, institutional feasibility, and schedule considerations. Criticality reflects the level of benefits at risk or the overall level of investment that may be impacted. Cross-1 Cross-4 Cross-6 ATM-9 Sec-2 Medium Sec-1 Arch-1 ATM-6 ATM-4 Sec-3 ATM-2 Cross-2 Cross-3 Cross-5 Low Criticality Low Medium High ATM = air traffic management; Sec = security; Wx = weather; Arch = architecture; Envt = environment; cross = cross cutting

35. Stakeholders and Key Benefits • Society/Passengers • By accommodating additional flights to meet projected demand, NextGen helps to maintain a competitive commercial environment; • Fares remain affordable, while reducing delay • Commercial Airlines • NextGen improvements enable increased fuel and operational efficiencies, reducing airline operating costs, and creating opportunities for airlines to grow their operations while maintaining or improving their delay performance. • Government/Air Navigation Service Provider • Productivity of controllers increases in the NextGen Alternative • Potential reduction in systems operations and maintenance costs • Airports • Additional flights increases revenues to the airport from flight fees, concessions, and other associated airport activities • High Performance General Aviation • Improved equipage provides increased flying time and access to more airports while enhancing safety