Aviation Industry Environment - Essay Example

Aviation industry environment Student Name: Tutor’s Name: Course: College Name: Aviation industry environment Introduction Air transport is the mode of transport that has experienced rapid growth. It has become one of the most important modes of travel around the world. It must however overcome the problem of saturated infrastructures. It is one of the best prototypes of the future of human lives where all activities will be integrated. An air transport system should combine conflicting interests such as noise acceptable for airport neighbors, safety and low fares. The system will need regulations where the problem will be to identify the regulations that needed and those that actually protect special interests. The paper will provide a brief history of the airport in question and gives the rationale behind the curfews. The paper will also provide the rationale behind the number of movements allowed by the Acts put in place. Air transport has been associated with a wide variety of meanings, ideas and representations. The industry has the capacity of driving economic growth both in a national, regional and global context. The industry has become an instrument of globalization. To some people, the air transport has been seen to represent destructive forces that threaten integrity of environments and communities (Daley, 2010, p.1). Debates have emerged about environmental impacts brought about by the industry. Sustainable development means developing balances among social, economic, and environmental costs and benefits. This is both for the industry and for communities living in close proximity to the airports. The industry contributes to the economy of any nation due to its performances and investment. The industry however has adverse effects if regulations are not imposed. The communities living near the airports can be affected by the noise, carbon emissions and other kinds of pollutions. The authorities have therefore introduced curfews and limited number of movements. Adelaide airport This is the principal airport of Adelaide and the fifth busiest in Australia. It has the capability of serving above 7 million passengers a year. The dual domestic/international terminal was opened in 2005 and has since received numerous awards. One award is that of being the world’s second-best airport. The number of passengers increased in 2008-09 even though the number of aircraft movements decreased (Airport monitoring report 2008-09, p. 73). Charges for aeronautical facilities and services increased. Return on aeronautical assets increased because of lower asset values and higher margin. A curfew from 11pm to 6am has constrained the airport’s operations. Sydney airport is one of Australia’s busiest airports both internationally and domestically. Sydney airport is Australia’s main gateway to the nation and world’s premier airport (Sydney Airport, 2010-2015, p. 5). The airport connects Sydney to local and global cities across the world. It provides access to benefits of global aviation network. Air transport industry has been on the rise and has been noted to be the fastest growing industry in the national, regional and global level. The growth of air transport has yielded many advantages on social and economic impacts at the global and local scale. Economic regulation of the international air transport has undergone changes because of increasing competition, globalization of the world economy, trans-nationalization of business and emergence of regional economic groups (Senguttuvan, 2006, p. 3). Curfews and restriction of movements increase air traffic especially during peak times. This is because of the airports want to maximize on the time available. Rationale behind the curfews Noise concerns arise because of the benefits and costs of operating a certain flight are not solely by airlines, but by spillover noise costs that have an effect on the surrounding community. These costs need to be factored into decision of operating a flight if optimal levels of flight activity at an airport are to be registered. The Sydney airport curfew Act 1995 was enacted to regulate the number of flights per week. Curfews attempt to reduce inconveniences that are experienced by residents living close to the airport, resulting from noise caused by aircrafts (Chapter 13, p. 343). Noise externality causes loss of amenity of those living in close proximity to the airport. Community wellbeing can be improved if external costs (such as those being experienced by residents close to the airport) are factored into the initial decision by airlines to go into flight operations. While considering such additional costs, the quantities of flights have a likelihood of reducing. This means there will be a balance of costs experienced by the community with benefits of flying. A way for the government to reduce the loss of welfare that is caused by the negative externality is through imposition of tax on the use of the good in question. Taxes will raise costs of services and goods, with the resulting increase in price reducing the quantity consumed. This will thus reduce the loss of wellbeing to the surrounding community (Chapter 13, p. 343). In practice, it can be hard to get tax levels right especially so that the level of noise occurring is socially desirable. Curfews are a blunt tool when dealing with the issue of externality. This is because they constitute total banning of flights during that curfew period. The government should have however, determined the times of day and night when certain amount of noise is acceptable. In such a case, a curfew may have the same outcome as the tax that is levied at the rate that prevents flights at the specified times at night. There is also a restriction on the number of movements by aircrafts per hour during the times they are allowed to operate. The move limits effective capacity of the airport artificially. The long-term capacity of the airport is therefore limited. Another consequence of the move is the strategic slot hording in the evening as well as morning peaks occurs or results (Chapter 13, p. 343). The rationale for the move and the enactment of the Act was solely to promote the wellbeing of the residents living in close proximity to the airport. Noise and fuel pollution can affect adversely the health and wellbeing of the community. Each airline has considerable scope and flexibility in deciding the capacity management policy. There are however challenges when ensuring the achievement of the issue. The first is the issue of curfews that have proved difficult for some airlines to cope with. Another is how the airlines decide to deploy capacity that is seats and frequencies offered in order to respond to the seasonal varieties in demand. Airlines hope that larger passenger volumes and higher airfares during peak periods will be able to compensate for the off peak or curfew periods (AERO2381, 2013, p. 21). The curfew came into being taking account the increased sensitivity of noise at night. Noise taking place from 7pm to 7am is said to have four times the impact of daytime. Airlines have the potential to improve the noise outcomes in the communities that are in close proximity. This can be done through use of modern and less noisy aircraft. Impact of the Adelaide Airport curfew There has been increased competition for airfreight services. Most of South Australia’s airfreight is trucked to Sydney and Melbourne airports. The curfews imposed on some airports will mean that appropriate infrastructure and charges accompanying have to be put in place to make certain sufficient competition (Adelaide airport, 2001, p. 9). This is so that South Australia’s airfreight is attracted back to Adelaide airport. The result may be higher charges on the side of passengers in a bid to cover for the expenses. This proves to be very challenging especially because the airport is known for its price-taker rather than price-maker strategy. The airport has been noted to be having attempts to keep their prices down in order to attract international and domestic traffic. Their landing charges are also the lowest among the airports in Australia. This is especially in terms of domestic charges and international passengers. The impact of curfews could therefore pose a challenge to the management. Demand for airports services that have put constraints on access and enjoy strategic importance such as Melbourne or Sydney is likely to be more price inelastic when compared to Adelaide airport. Major airlines would require substantial disincentives restricting them from flying to those destinations. Adelaide airport does not have the advantage. This means that the airport has to maintain low aeronautical charges so as to encourage other airports to enhance and maintain aircraft and passenger volumes (Adelaide airport, 2001, p. 14). This is essential because of the fact that profit is driven by passenger volumes not price changes. The airport is boasting of larger passenger volumes. The curfews can be very challenging especially for those passengers who want to travel at night. The limited number of flights could also have an effect on the airport as flights will have to be redirected to other airports. Impact of the Sydney Airport maximum hourly number of aircraft movements and curfew Practically, there is no straightforward measure of the capacity of an airport. Demand varies across non-peak and peak periods. Operational capacity is affected by several factors, which include environmental constraints, physical attributes of the infrastructure, airspace configuration, weather conditions, and operational choices of operators. The factors change all the time (Joint Study on aviation capacity in the Sydney region, 2012, p. 4). Capacity pressures build up increasingly and the effects are not obvious. They however include lost opportunities for new services and delays. Because of Sydney’s geographic position, international demand is inevitable and is characterized by early morning arrivals. Curfews has restricted the reception of such flights because of the availability of other connections at hub airports, curfews in Europe and Asia, crew and aircraft rotations and the number of movements per day. The Sydney airport curfew Act 1995 only allows a specific number of movements. The movements are 35 weekly arrivals between 5am and 6am, and 14 between 11pm and midnight. The total numbers of movements per year are 1248 and maximum curfew shoulder levels are 2548 allowed per year (Joint Study on aviation capacity in the Sydney region, p. 217). Movements prescribed in the regulations have been increased to the maximum number allowed by the Act. Effectiveness of the option to cater for capacity would be driven by levels of demand for those movements allowed in the curfew shoulder hours. Considering the increased demand for international landings especially in the morning peak, there is likelihood that the 5am to 6am shoulder would attract demand as well as interest from international airlines (Joint Study on aviation capacity in the Sydney region, p. 217). The measure will see a reduction of pressure on international terminal as well as airport infrastructure in the 6am to 7am hour. This is the hour where passenger facilitation processing is currently experiencing peak and demand pressures. Current demand for international landings early in the morning may prompt the airport to redirect the landings to the nearest airport. In the night shoulder period, demand may be limited for movements. The potential benefit that comes with increasing permitted movements especially in the evening curfew shoulder is that it can heavily reduce pressure on departures at night. Currently, there is pressure on the said slots as long haul airlines have to allow for buffer period in movements especially during the period. This is all in a bid to avoid breaching the curfew (Joint Study on aviation capacity in the Sydney region, p. 217). The changes including limited movements and curfews would likely to delay capacity issues for those aircrafts that are accessing Sydney airport. There can be variations to the above-mentioned options. The variations will give the airports options on how they can handle the pressures. One variation would be to increase permitted movements in the morning curfews shoulder period to the maximum number allowed by the Act. This would add 11 weekly slots to the international landings in the early morning curfew shoulder. This results in an additional 572 slots annually. Another variation would be to increase permitted movements in the midnight curfew to the maximum allowed by the Act. This means the number of slots per year will increase by 728. The committee is aware that the options will include increased movements early in the morning and late in the evening (Joint Study on aviation capacity in the Sydney region, p. 218). The chosen periods are those when sensitivity to noise and aircraft over flight is greater than other times of the day. The limitation of movements and curfews will have an impact on the regional centers that heavily rely on the convenient aviation links. The links are often to the state capital for a range of economic and social activity. Regional passengers will also feel the impact, a high proportion of who transfer onto international and domestic flights at Sydney. The impact will also affect the viability of regional aviation operators (Joint Study on aviation capacity in the Sydney region, p. 205). There will be increased growth in congestion in the airport’s networks. This is because the airport’s management will be striving to maximize the time they have to provide services. This means that the management will have to invest heavily on its infrastructure to ensure timely and effective departures and landings. Impact of the Sydney Airport maximum hourly number of aircraft movements Sydney has a natural advantage that of being in the best location. The airport is eight kilometers from the central business district making it extremely efficient in terms of transport times and costs. This means emission of carbon is low and they keep ground transport for users to a minimum. The airport is confident of the fact that it has the capability to meet demands of the rapidly growing economy. This means that the number of flights leaving and coming to the airport is large (Sydney airport, 2008, p. 5). The airlines serving Sydney Airport’s passenger and air cargo customers will be affected in that they will have to be redirected to other nearby airports. What the initiative will mean is that customers living near the airport will have to incur extra expenses of travelling to and from the alternative airport. Airlines will have to incur additional costs and time concerned in travelling to a far away or a more distant airport. There are other environmental costs, which in turn increase carbon emissions (Sydney airport, 2008, p. 5). The emissions are caused by the long distances that have to be travelled between the new airport and the central business district. The diversions can lead to lose of passengers. This is because passengers would not want to incur so much hustle while they can just use alternative airports that could be much convenient. The airport’s resources will have to be diverted to the alternative airport in a bid to keep the passengers comfortable. Diversion of resources does not mean that passengers will be accorded the same treatment offered by the Sydney airport. This could result in wastage of resources without necessarily achieving the desired goal. The alternative airport will pose a challenge for the Sydney airport. Airlines are increasingly moving to global and regional catchments. Most airlines now have the ability to fly directly to any airport due to the permission granted to them. This means that airlines could as well decide to fly to the alternative airport and avoid the hustle. The airport will then be a competitor instead of being a secondary airport to Sydney. When an airport has the incentive and ability to misuse market power and then goes ahead to do so, then the concern is that airlines will pass the inflated charges on the passengers. This means demand for air travel will be dampened. The outcomes will be adverse to the passengers and community as a whole. The passengers will look for alternatives and the airport can incur losses due to reduced passenger volumes. Canberra Canberra is the only curfew-free airport providing services to South Wales and hence it has the chance to play a significant role. It can serve as a hub for overnight freight and low-cost carrier base. This is so because of the right environment in which it is situated. Adelaide’s overflow can then be redirected to the airport (TTF Australia, 2012, sp. 3). This is the only airport that can be considered by Sydney as being its secondary airport especially in the first half of the century. Canberra is far from the Sydney market to be considered appropriate to serve as Sydney’s second major airport. Despite this, the airport will grow and will be able to serve the southern region. It is the only airport considered capable of accommodating the overnight airfreight operations for the region (Joint Study on aviation capacity in the Sydney region, 2012, p. 7). It is therefore necessary to protect Canberra’s curfew-free status as well as expansion plans. The reason why the airport is curfew-free is that the airport has been proactive in assisting the surrounding community to reduce noise impact (Canberra international airport, 2006, p. 5). The airport has voluntarily worked with government agencies and the government such as air services Australia to ensure the implementation of noise abatement measures is done. The airport has taken measures to ensure that the community surrounding it lives in harmony with them. They have ensured that no residential development is built under the flight paths. This meant that residential areas were grouped away from the airport’s major traffic routes. The residential areas were also grouped away from the flight path that approaches the Canberra airport (Canberra international airport, 2006, p. 7). By so doing, the community is shielded away from the noise and pollutions from the airport. This further explains why the airport will be receiving more flights meant for the Adelaide airport. Conclusion The aviation industry is very diverse and is also regulated in many ways. The Sydney airport curfews Act 1995, Adelaide curfew regulations 2000, Adelaide airport curfew Act 2000 are available to restrict the way operations are done in the airports. The regulations have an impact on the airlines serving the airports. The airlines serving the airport are affected in their operations, network strategies, fleet deployment, passengers and cargo customers. The curfews and limitation of movements have proven to be a challenge to the affected airports. They have had to cut down on the number of flights at the specified times. The changes have to be followed and embraced to avoid breaching the Act. Breaching of regulations can result in penalties, which may affect the operations of the airport. The changes have also affected those airports close to the Sydney airports because they sometimes have to act as secondary airports. This means that they have to develop a modern infrastructure to be able to accommodate the changes. References list AERO2381, 2013, Part C learning guide: Aviation industry environment, School of aerospace, mechanical and manufacturing engineering. Airport monitoring report 2008-09, Adelaide airport, Adelaide airport price monitoring results. Retrieved 9 May 2013 . Adelaide airport, 2001, Inquiry into price regulation of airport services, Submission to the productivity commission from the Adelaide airport limited. Retrieved 9 May 2013 . Australian government 2012, Joint Study on aviation capacity in the Sydney region, Retrieved 9 May 2013 . Canberra international airport 2006, Submission by Canberra international airport to Queanbeyan land release inquiry: NSW’s only 24-hour curfew-free international airport, Retrieved 9 May 2013 . Chapter 13, Broader aviation issues, Economic regulation of airport services, Retrieved 9 May 2013 . Daley, B 2010, Air transport and the environment. Aldershot, UK: Ash gate Publishing Ltd. Joint Study on aviation capacity in the Sydney region, Options to better utilize Sydney (Kingsford-Smith) airport to gain capacity to meet forecast demand, Retrieved 9 May 2013 . Sengettuvan, P 2006, Economics of the airport capacity system in the growing demand of air traffic- a global view. Transport research annual forum, Retrieved 9 May 2013 . Sydney airport 2008, Towards a national aviation policy statement: Issues paper, Submission to the department of infrastructure, transport, regional development and local government, Retrieved 9 May 2013 http://www.infrastructureaustralia.gov.au/public_submissions/published/files/109_sydney_airport_SUB2.pdf. Sydney airport 2010-15, Sydney airport environment strategy, Retrieved 9 May 2013 . TTF Australia 2012, Sydney’s aviation future: meeting the challenge of growing demand, Retrieved 9 May 2013 . Read More