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PREFACE AND OVERVIEW This guidebook was prepared as part of Airport Cooperative Research Program (ACRP) 03- 19: Passenger Value of Time, Benefit-Cost Analysis and Airport Capital Investment Decisions. The purpose of this research is to provide an up-to-date understanding of how recent airport developments, such as changes in security measures since 9/11, the proliferation of airside passenger amenities, and the adoption of new technology (e.g., Internet, mobile phone, wireless devices, and portable computers), have changed the way travelers value efficient air travel. For example, technology enhancements allow business travelers to conduct business on cell phones or computers while waiting for flights at airport gates. What was once âwasted timeâ can now become productive time. Similarly, air travelers can now often find a wider array of restaurants, products, and services available near gates than in the past. At the same time, security procedures have introduced new sources of uncertainty in time required to get to gates. Altogether, these types of technological and service shifts have the potential to change the way aviation system users value airport services and the airport capital necessary to provide efficient travel. Travel time is often a significant consideration in benefit-cost analysis (BCA) for transportation projects and policies, and in recent years, there has been greater emphasis on use of BCA for airport capital investment. The Federal Aviation Administration (FAA) requires benefit-cost analysis for airport capacity enhancement projects funded through the Airport Improvement Program (AIP). Similarly, US Department of Transportation (USDOT) considers the result of cost-benefit analysis when selecting projects for discretionary funding programs, such as the recent TIGER (Transportation Investment Generating Economic Recovery) Program grant rounds. The Office of Management and Budget (OMB) has also long required the USDOT to estimate the incremental costs and benefits during Regulatory Impact Analysis (RIA) for rulemaking, such as occurred for the 2009 Enhanced Airline Passenger Protections (or âPassenger Bill of Rightsâ) rule. The same need to understand the benefits and costs of investments applies to airport managers. Airports invest billions of dollars in infrastructure and service investments, yet airport owners and operators have relatively limited information on how customers value the impact of these investments. In addressing the question of how to best allocate limited resources, one can ask âwould air travelers prefer improvements to the airport access roads, improved security processing times, or a people-mover connection between terminals?â This guidebook provides a method for airport owners and operators to determine how their customers value the travel time impacts of efficiency improvements. The economic values presented in this guidebook are derived from a review of past research studies and a survey of air travelers conducted during the spring of 2013. The survey respondents comprised 1,260 travelers who made flights between 172 distinct origin airports and 148 distinct destination airports throughout the country. The results of the survey provide estimates of how travelers value their time for different segments of an air Page ii
trip. A detailed description of the data collection methodology and results can be found in ACRP Web-Only Document 22: Passenger Value of Time, Benefit-Cost Analysis, and Airport Capital Investment Decision, Volume 2: Final Report at www.trb.org/Main/Blurbs/172473.aspx. The value of time estimates presented in this guide represent a significant improvement over existing estimates. The latest FAA guidance on economic values for investment and regulatory benefit-cost analysis is dated October 3, 2007.1 Yet, the values in that guidance are even older. The recommended hourly values of time savings are in 2000 dollars and derived from a 2003 Office of Aviation Policy and Plans (APO) bulletin2 and a 2003 USDOT memorandum.3 The USDOT guidance has since been revised, but even so the underlying research has not been updated. The guidance thus does not reflect the circumstances of contemporary travelers and it does not recognize the different valuations that occur at important stages of customersâ airport experiences. This guide provides updated travel time values that are specific to ten different segments of airport trips, differentiate between business and leisure travelers, and allow income levels to be taken into consideration. It describes a process for using travel time valuations in estimating the relative benefit or cost effectiveness of proposed airport capital investments. The process allows for decision makers to screen whether particular airport projects warrant the use of the more detailed values of time presented in this guide and to identify the types of travel time savings that are likely to occur for particular types of projects. The guidebook also provides three examples of applying the guidance that are based on different types of airport improvements, and provides recommendations for further research to improve and update the values of travel time savings and to enhance airport planning and investment analysis. 1 GRA Incorporated, Economic Values for FAA Investment and Regulatory Decisions, A Guide, prepared for FAA Office of Aviation Policy and Plans, Contract No. DTFA 01-02-C00200, Final Report, Revised October 3, 2007. 2 FAA Office of Aviation Policy and Plans, Treatment of Values of Travel Time in Economic Analysis, APO Bulletin APO-03-1, March 2003. 3 USDOT Office of the Secretary of Transportation, Revised Department Guidance â Valuation of Time in Economic Analysis, memorandum, February 11, 2003. Page iii
