NIPC BULLETIN

September 17, 1998

DISCUSSION OF AVIATION NEEDS

NIPC accomplished a long-standing objective of bringing together the State of Illinois and the City of Chicago to present their respective information on aviation forecasts and regional aviation needs. Kirk Brown, Secretary of the Illinois Department of Transportation, and Mary Rose Loney, Commissioner of Chicago's Department of Aviation, each presented research on aviation needs as well as their respective proposals for meeting those needs.

The NIPC Commissioners then engaged the State and City representatives in a wide ranging discussion of issues including: alternatives to aviation travel such as high speed rail, the effects of high density aviation rules, access to both existing and proposed airports, the role of airports in the region's future urban development patterns, and the economic pro's and con's of their respective aviation forecasts. This NIPC BULLETIN has been prepared to summarize the information gained from the June 30th discussion, to share that information more widely in the region, and to allow broader public discussion.

The table on the following page summarizes the two regional aviation views, as presented by Kirk Brown on behalf of the State of Illinois, and by Mary Rose Loney on behalf of the City of Chicago. The two views differ considerably. The following are highlights of their presentations.

Regional Aviation Vision - The State of Illinois believes that there will be substantial new commercial aviation activity growth and that the region's current system of airports is not adequate to meet future demands. The State proposes a new supplemental airport in the south suburbs to satisfy future needs. It does not propose a replacement airport for any existing facilities. By the year 2020, the proposed South Suburban Airport would accommodate 30.7 million passengers, occupying nearly 24,000 acres, and utilizing 4 parallel runways, one cross-wind runway, and 120-gate passenger terminal.

The City of Chicago, on the other hand, forecasts an aviation growth rate not as high as the State of Illinois', and concludes that improvements to existing airports will be sufficient to meet future aviation demands. Chicago's vision extends to the year 2012 and emphasizes maximizing the existing facilities at O'Hare and Midway airports. An expansion at Midway is currently underway with increased terminal capacities, more gates and increased parking. O'Hare is proposed to expand by adding 5 new gates, improving roadway access, utilizing the former military lands for commercial purposes, improving air traffic control by adding global positioning satellite capabilities combined with flight simulator technologies, increasing parking by 2200 spaces, adding additional people mover cars, and promoting the acquisition of new aircraft with quieter Stage IV engines and larger aircraft that will allow higher load factors.

Aviation Forecasts - The representatives presented significantly different pictures of aviation forecasts for the metropolitan area. The State of Illinois concludes that by the year 2020 there will be both modest growth at existing airports (O'Hare, Midway, and Mitchell) and enough additional demand to accommodate 30.7 million passengers at a new south suburban airport. Chicago's aviation forecasts focus on O'Hare and Midway airports with growth out to the year 2012 of 45.1 million enplanements at O'Hare and 8.5 million enplanements at Midway.

It is difficult to compare the two forecasts because each was developed using different parameters. As noted, the horizon years differ with the State using the year 2020 and Chicago using 2012. The geography used for each of their forecasts differed as well. The State used a 14 county area including 5 counties in Wisconsin, 7 counties in Illinois, and 2 counties in Indiana. Chicago's forecast geography was a 13 county area including 1 county in Wisconsin, 10 counties in Illinois, and 2 counties in Indiana.

The forecasts also differed in their use of underlying demographic assumptions. The State used forecasts consistent with those endorsed by NIPC in 1997. The City used forecasts prepared by a national firm which are significantly lower than those of the NIPC. A comparison of the underlying demographic assumptions is shown in the accompanying table. The annual population growth rate assumed by the State of Illinois (.73%) is more than double that used by Chicago(.30%). Annual employment growth rates also differed with the State's (.96%) again being higher than that used by Chicago (.60%).

JUNE 30 NIPC DISCUSSION

After both Mary Rose Loney of Chicago and Kirk Brown of the State of Illinois presented their information on aviation system needs and forecasts, the members of the Northeastern Illinois Planning Commission discussed various aspects of the analyses and conclusions presented.

Both Commissioner Loney and Secretary Brown supported the concept of high speed rail for a network of Midwest cities, but did not see passenger rail service as a replacement for aviation service. Regarding "the high density" rule, and its potential limiting effect on O'Hare capacity, Loney disputed this conclusion by saying that capacity increases were possible through landslide improvements including terminal, roadway, and parking expansions. Brown differed by saying that while some capacity improvements were possible, capacity issues at O'Hare were now causing delays and the curtailment of service to some Midwestern cities.

Regarding competitive fares, Loney and Brown disagreed, with Loney touting O'Hare's ranges of service options combined with the role Midway plays by providing discounted fares. Brown countered by citing an GAO study which found higher fares at O'Hare. In response to a question on western access to O'Hare, both Loney and Brown agreed on the need to relieve congestion on I-90 and to add access to the airport. Both said, however, that progress on these proposals was being held up as part of the discussions regarding O'Hare expansion.

Loney and Brown further disagreed on the question of whether this region would lose economic activity because of capacity constraints. Loney firmly stated that it is Chicago's plan to keep O'Hare as the nation's preeminent airport, meeting all future aviation demands. Brown differed sharply saying that some losses are already occurring and it will be tantamount to an economic death warrant by not providing sufficient regional aviation capacity for the future. He suggested, at a minimum, purchasing the land for the South Suburban Airport site so as not to foreclose this as an option.

The City and the State expressed different views of the effect their respective airport proposals would have on the pattern of urban development in the region. Kirk Brown expressed his view that the proposed South Suburban Airport would check the outward growth of the region to the north and northwest, by reinforcing the economy in the south part of the region. Mary Rose Loney expressed the City view that existing communities would be benefited by utilizing existing airport facilities.

NIPC Commissioners asked what the consequences would be if their forecasts were wrong. Loney said that because the airlines are critical for financing improvements, it was important to stay close to the market conditions and update forecasts frequently and then respond accordingly. Brown agreed that airlines must be involved in the building of airports, but said that there is a tremendous economic risk if we are not prepared for the long term future, a risk he estimated at a potential loss of 400,000 jobs for the region.