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Airport Demand Forecasting for Long-Term Planning

image of Airport Demand Forecasting for Long-Term Planning

Decisions on expanding airport capacity are often controversial. Environmental impacts mean airport planning decisions are subjected to thorough public scrutiny even when financed by private investors. Where public funds are to be invested, issues of competition between airports and between the regions they serve can be as important as efficient use of public funds. Demand forecasts are central to the case for investment.

Air passenger markets are highly dynamic and strongly influenced by the regulatory environment. Markets that have been de-regulated have seen rapid growth as prices fell and new, low-cost business models emerged. Liberalisation also stimulated re-organisation of network services with concentration of demand on a few hub airports. Demand for air services increases rapidly as incomes rise, but the market is not homogenous and understanding the drivers of each market is critical. Runway assets are relatively long lived and planning for the long term has to account for the risks entailed by these dynamics.

This report reviews the state of the art in forecasting airport demand. It focuses particularly on addressing demand risk, passenger behavior and uncertainty and discusses how to make more effective use of such analysis in planning decisions.

 

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Executive summary

International Transport Forum

Decisions on expanding airport capacity are often controversial. Good transport infrastructure is of key importance for productivity and economic growth but airport capacity that is highly accessible to central city areas means that residents suffer more noise, air pollution and landscape degradation. In addition, airport assets are often long-lived with long lead times. Forecasts of future demand are thus a key tool for the consideration of extra capacity as well as to measure the economic benefits and costs of this extra capacity.

English

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