Firstly, the exponential model in 2000 predicts almost the same
growth (5.84% instead of 5.87%), but with a down-shifted curve
(starting at 3.22 million passenger movements per year instead of
3.26 in the year 1966, compared with 2.70 mpy actual in 1966). Over
the period to 2025, this lowers the prediction from 110 mpy to 100
mpy. The few extra years data don't make much difference. Adding
the two years 2001/2002 make barely 1% difference, lowering the
2025 prediction down to 99 mpy.
Logistic Model Updated
Updating the logistic model shows less drastic change. Using
data to 2000 raises the 1997 logistic predicted 2025 demand by 5.4%
from 37 mpy to 39 mpy , and 42 mpy using data to 2002. This is a
It would seem that the extra few years of good growth is
overcoming the two bad years in 90/91. But interpreting the changes
to 2002 is risky - as it's difficult to determine how much of the
2001 spike was due to the Olympics effect and how much of the 2002
fall is due to the Sept 11 2001 decline in air travel. The 1990/91
dips corresponded to a widespread recession in Western economies,
and some of the decline in 2002 may be due to the onset of a
similar recession (which of course are never admitted by
politicians of the day). Nevertheless, it seems that KSA will have
reached it's peak capacity by 2020.
There was a lull in demand in 1999 preceding the Olympics, made
up for by strong growth in 2000. Financial Year 2001 should also be
expected to show strong growth (as this is when the Olympic
occured). While tourism chiefs are hoping for this growth to be
sustained, the Olympics brought fewer people than expectations, and
it would not be surprising to see 2002 demand to fall back to the
underlying levels. The Olympics produced a peak international
passenger movement that was only 8% higher than a two-years earlier
figure (so average peak growth is around 4%). Together with the
fact that 42% of the Olympic peak day were arrivals, this suggest
that growth isn't that spectacular.
The DOT's latest (Final EIS) forecast shows it was
clearly expecting some attenuation of the growth rate. This is
tantamount to saying the future will be different to the past. It
really then becomes a matter of guesswork as to what the "death
rate" may turn out to be.
By fitting a logistic equation to the historical data, plus the
DOT Final EIS future, you can produce an estimate of the
death rate they have implicitly guessed. A logistic curve with
b = 0.0673, d
= 0.000948, and P0 = 3.44 gives the best fit, and the
upper limit for long term travel demand is 71.4 mpy. This logistic
curve fit to the Final EIS predictions has a mean square
error of 0.94 on the historical data, compared to the best (least
square error) logistic fit to the actual data which has mse of 0.86
and gives b = 0.0582, d = 2.32 x 10-6, and P0 =
The Final EIS guess could be an underestimate. Any second
airport may need to be much larger than presently thought, and KSA
may need substantial expansion.
KSA Under-Utilization ?
The Second Airport
Final EIS, Appendix J, has forecast (see column T) that KSA
will have a capacity of 40 million passengers per year. Is this
Doubling KSA would undoubtedly disturb the vast hordes living
under its approaches. But it seems feasible.
Take the peak international passenger movements (from October
2nd, 2000) of 45,000, and multiply it by 365 days per year, you get
a theoretical capacity of 16.4 million international passenger
movements; as of July 2000, all we'd achieved was 8.04 million. So
KSA is running at about 49% of its theoretical capacity -
suggesting there is room for doubling - without aircraft getting
any bigger than they are today.
This raises two interesting point: can peak lopping manage
airport capacity better, and what if aircraft get smaller than they
are today ?
Expanding Airports v's Peak-Lopping
The EIS forecasting has been based on coping with an
ever-expanding total passenger movements per year. But what is
really critical is the peak capacity. The question needs to be
faced: can we afford to be building airports to suit the worst few
days of peak holiday periods ? Can the users afford to pay for
something that's only going to be used a few days a year ?
A similar question has arisen in the electricity industry -
generators (particularly the privatised ones) are claiming it's not
economic to build power stations to cope with a few peak days in
winter and summer. The suggestion is that load-shedding (brown-outs
and if necessary black-outs) should be accepted by the public
The public includes some people who need electricity to maintain
their health (e.g. kidney dialysis machines), or others who'd freak
out if caught in lifts in city buildings. If you can suggest
peak-lopping for something as critical as electricity, why not for
air travel ?
Travelling by air is a luxury - and not one of life's
essentials. Airlines already get "fully booked" at peak periods,
and don't try to provide enough planes for whoever might want to
travel on a few particular days.
So why not plan to allow airport capacity to restrict travelling
capacity at peak times ? It might even be smart to do it,
especially if supported with surcharges on landing rights at peak
times. This would provide funding for capacity expansion, and
ensure that monopoly rents are not inefficiently captured by lazy
airlines. The regulation of the airport operators return on assets
will ensure the funds find their ways into capital works, whereas
there's no such restraint on the airlines.
Air ticket prices are already substantially higher at peak
holiday period times (as indeed is accomodation and everything else
related to the travel industry).
Why the hell aren't airport landing charges
structured to reflect this too ? This is a serious
deficiency in the airport pricing proposals put to the ACCC in 1999
and 2000, which nobody seems to have cottoned onto.