Sturgell Says One Billion Passenger Figure Will Slip One Year

Editor's Note: Below is the unedited transcript of FAA Acting Administrator Robert Sturgell's remarks at the opening of the 33rd Annual FAA Forecast Conference In Washington, DC. These remarks followed Sturgell's opening statements, in which he heatedly defended the agency's inspection process in the wake of suggestions of alleged collusion between FAA inspectors and the companies they oversee, stemming from news that Southwest Airlines continued flying some of its 737 Classic models past required inspection intervals for fuselage fatigue cracking.

Sturgell's opening comments are available here. Below, the Acting Administrator launches into the real reason for the annual conference -- to attempt to predict trends in the commercial aviation sector. And on that note, Sturgell says, economic factors will take their toll on the agency's previously predicted figure of one billion passengers carried worldwide by 2015.

He now says that figure will be delayed one year, to 2016 -- due to high oil prices, potential mergers, and financial woes stemming from the US credit crunch. But that doesn't mean passengers don't continue to flock to airline travel in record numbers... and Sturgell says the global market needs to take steps now to accommodate the predicted surge.

The FAA Aviation Forecast Conference is one of the most anticipated events on the FAA calendar. If you want to know where the pulse of aviation lies and where things are headed, it’s right here for the next two days.

The pulse is strong and healthy. Looking at the industry today, load factors remain high. Fact is, they’ve gone through the roof in the last five years. We’ve had an almost 10-point gain since 2002. That culminated in a record last year, with 765 million passengers, or more than 2 million a day. People want to fly.

There’s also an interesting development unfolding within different segments of the market. The airline business is solid in certain geographic areas. That, unfortunately, contributes to congestion. Meanwhile, the carriers are pulling back elsewhere.

These dynamics are forcing the industry as a whole to respond in ways to congestion we’ve never had to before. We’ll hear more about this in this morning’s first panel discussion.

And, later this morning, Secretary Peters will make a major announcement on the congestion front.

But, the story for 2008 is clear. The fundamentals of the industry — continued growth, cheap ticket prices — are vibrant down the road. With that said, in the near term, we’re seeing a definite pause in growth. We didn’t have one in last year’s forecast. But this year, it’s pretty clear. We’re talking flat growth in operations, and slow growth in passengers.

What that means is that our 1 billion mark slips a year, from 2015 to 2016.

So, the question there is "why?” Why the pause? Well, it’s a series of cascading events, really. A hundred dollars for oil, an economic picture that’s in flux, potential consolidations, and credit market woes. That credit crunch even spurred IATA to cut its global air traffic forecasts for ’08.

Even still, the demand for aviation services will continue to rise in the long run. Over the next few years, international markets will grow twice as fast as domestic markets.

We see a definite change in the regional carrier industry, with a trend to more larger RJs that have over 50 seats.

And, there’s still a big tailwind for corporate aviation.

All of this activity has implications for various airports. From an operations standpoint, we predict that, on average, every year, from now until 2025, we’re going to add the equivalent of JFK, LaGuardia and Newark combined into the system.

That means an already congested airspace has got to be able to accommodate that many more ops per year. When you say things like that, the cynics will tell you immediately that the sky is falling. That’s not the case, because we can meet the demand if we transform the way we do business. It’s called NextGen, the Next Generation of air traffic control.

It takes us from a ground-based operation into the satellite era, with a system that’s much more automated. The congestion, the delays, the inefficiency — they all add up to why we need to make this move. And now.

I’m proud of the fact that the journey to NextGen is already underway. It’s coming more into being each day.

We’re ramping things up. We’re accelerating NextGen routes — RNP and RNAV — into busy areas like Chicago, DFW, D.C. and New York.

Required navigation performance and area navigation are capabilities that use an aircraft’s onboard technology and GPS to fly more accurate and predictable flight paths. They increase navigation accuracy. They improve safety. And, they improve efficiency. It doesn’t get much better than that.

In fact, we’ve increased our production of RNP approaches this year, from 50 to 69.

Over in the Gulf of Mexico, we’re going to add ADS-B coverage so that planes can fly closer together without compromising safety. This ensures more efficiency and capacity.

What it means for the Gulf is this — for the first time, not only will we be providing air traffic control services to low-altitude helicopter operators, which go to and from the oil platforms. But we’ll also be setting up ADS-B high altitude routes as well.

From the Gulf we go to the busiest airspace in the country, New York.

We’re deploying the Traffic Management Advisor to JFK and LaGuardia and connecting it to the Washington, D.C. area.

This will allow us to sequence incoming planes more efficiently — from as far as 100 miles away — and achieve capacity gains of 3-5 percent.

We’re working with the Port Authority of New York and New Jersey to deploy what’s known as a Surface Management System at JFK. This will improve the airlines’ ability to plan ground operations, resulting in reduced noise, fuel and emissions.

I could go on. But I think you’ve got a good sense for what we’re doing in the here and now. We’re not waiting around for the Big Bang, or a flip of the switch. NextGen is a transformation and it’s happening now, and we’re moving ahead.

Despite the near-term pause in growth this year, we can’t afford to let up, and we’re not. People want to fly, plain and simple. And the FAA is doing everything we can to keep them flying and flying safely. The forecast for aviation? From where I stand, it’s strong indeed. Thank you.

That’s the big picture forecast for aviation.

FMI: www.faa.gov