The Piedmont Triad could become an aerotropolis

[cityboi]

http://www.digtriad.com/news/local/story.a...23&catid=57

Piedmont-Triad Partnership Pushes Aerotropolis In Raleigh......

"They want to create an "East Coast Center for Global Logistics" centered around PTI Airport and the FedEx Hub.

Partnership members pointed to the Triad's access to interstates, trained workforce and number of colleges. The proposal could be the key to our area's economy and thousands of jobs"

[Beany]

Here is a good article: http://www.news-record.com/content/2009/07...tropolis_awaits

Can the Triad work together on an aerotropolis? In my opinion it is the best bet we have as a region to be competitive. Sure, we continue to develop our research parks and such but logistics is where we could really compete. It plays to our strength.

[sax184]

Anybody who thinks the "Aerotropolis" idea is mistaken. In the chart above, aerotropolis proponents believe we're on the pink/purple trajectory, which is based off worldwide DEMAND for oil. We are far more likely on the yellow trajectory, which is based off worldwide SUPPLY of oil.

In one of these two scenarios, it is markedly more expensive to run anything on petroleum-based products than the other. In the other, we believe that we will be able to have the oil needed to sustain more petroleum-powered activities because we simply desire that this be the case.

It's like being locked in your basement with a friend for over a day, with nobody else at home, and no prospects of anyone coming by for weeks, and saying, "don't worry, as soon as we get really hungry the market will suddenly provide hamburgers for us!"

[Beany]

^^ That is a good point.

I would just add though that work is being done, although probably not enough yet, to provide alternative fuel sources. I would not precisely equate an aerotropolis with crude oil. Yes, they are tied together today but that doesn't mean they will always be.

[cityboi]

also consider that an aerotropolis will attract many companies/industries thats not closely related to the oil industry.

[sean]

you can't have an 'aerotropolis' without cheap abundant petro, unless you're willing to burn through money faster than fuel. alternative fuels do not offer the energy density needed to provide the propulsion required for jet travel.

will our communities go for subsidizing fuel costs needed to operate an 'aerotropolis'? i ask, because we know with absolute certainty what free-market, commercial interests will do if fuel costs overrun profits. entropy never sleeps.

[Beany]

Automobiles are not dependent on gasoline. As automobiles get away from oil it frees up oil for other uses. I do not know how all of this will play out. What I do know is that there will always be a need for the shipment of goods. It will happen one way or another. Even if air travel were to become extremely expensive, and thus too costly for the benefit, you would still be better served as a region having the Fed Ex's, Honda Jets, etc.. because they attract business and investment around them.

[sax184]

Automobiles are not dependent on gasoline.

This statement does not reflect the science in the energy sector. Hybrid vehicles are something like 0.5% of cars sold and alternative fuel vehicles are even smaller. The EROEI (energy return on energy invested) to make alt fuels like ethanol can even be a net loss depending on how the process is completed.

[krazeeboi]

So are some of you guys predicting the imminent end of air travel?

[beyonce245]

So are some of you guys predicting the imminent end of air travel?

I wouldn't say some. It appears to only be transitman.

[sax184]

So are some of you guys predicting the imminent end of air travel?

The end of air travel? No. The end of mass market air transportation by common carrier at PTI? Perhaps. While I'm not saying it's guaranteed, I believe that there is a better than 50% chance that PTI will not have common carrier passenger flights in 2020, and that anyone looking to make a long distance flight in NC will go to RDU, CLT, AVL, or Wilmington. (don't know the code) Were Wilmington and Asheville not tourist destinations, I believe their airports would close as well.

PTI will live on as a limited airport for business travel with either NetJets/Jet Taxi services or a few very expensive flights on legacy carriers. Overall prices at RDU and CLT to destinations like NYC, Boston, Chicago, and the west coast will be considerably more expensive today, and I expect the cost of flying to increase faster than the cost of inflation.

As petroleum prices rise inexorably, demand for air freight will considerably decline as the energy intensity for air shipping compared to rail and water transport will not make the economic sense it makes today. Click here to see both the energy use to carry 1 ton of cargo 1 kilometer of distance.

Between oil depletion (the graph above) and carbon pricing regulation of some form likely coming, the Triad is pinning its economic development hopes on a very rickety proposition going forward.

[neon9]

I wouldn't say some. It appears to only be transitman.

I read through the thread and there seems to be some confusion as to what he is talking about. It has nothing to do with oil companies being involved in this 'aerotropolis', it has to do with the fact air travel requires oil, lots of cheap oil. And while 'alternative fuel' is great, currently there is no way any combination of currently available alternative fuels is going to propel all of our vehicles the distances they currently go, much less provide for the millions (billions?) who want to use some of the 25% of the worlds oil that the US currently uses.

People that think this area, or any other area, is going to become a future 'aerotropolis' are, as far as I'm concerned, similar to those that think we're going to be growing food in skyscrapers. The math is a little different, but look at the current state of the air travel industry. Look at the current state of the oil industry. Look at the options available for fueling airplanes.

One more thing regarding alternative fuel, and mitigation for 'peak oil'....1st, only 14 of 54 oil producing countries and regions are still increasing production. 2nd, we should have started preparing for this a long time ago.....

http://en.wikipedia.org/wiki/Hirsch_report

"The peaking of world oil production presents the U.S. and the world with an unprecedented risk management problem. As peaking is approached, liquid fuel prices and price volatility will increase dramatically, and, without timely mitigation, the economic, social, and political costs will be unprecedented. Viable mitigation options exist on both the supply and demand sides, but to have substantial impact, they must be initiated more than a decade in advance of peaking."

The question isn't 'will air travel go away'. It's 'will air travel somehow continue to expand and get cheaper, or will current trends continue'? Will air travel once again become an expensive novelty?

[Beany]

I think the misconception is that being a so called "aerotropolis" means building a region's entire economy around the airline industry. I think what people who are promoting the aerotropolis idea are saying is simply lets use our assets to go after new industry. One of our assets is an airport with two nearly 10,000 foot runways with low traffic. Another is a good location on the eastern seabord. Another is a great network of highways. We are talking about promoting these assets and targeting those companies who will find those beneficial. These are companies who are going to be building operations somewhere. Why not the Triad? Honda Jet was going to build their planes somewhere, why not PTI? If another airline builder wanted to build a new facility why not go after them and sell them on what we have? With these specific airline related jobs comes a lot of other development unrelated to it but sparked by it.

I don't see PTI losing commercial flights like some would probably hope. I think this talk is related to the whole Greensboro being listed for the airport name. I think that is why some from W-S may feel threatened by an aerotropolis campaign. What they would really like to see is PTI be like Smith Reynolds so that they can feel equal. It doesn't make sense why you would predict PTI to lose all commercial airlines but because of the tourist industry Asheville and Wilmington would stay afloat. PTI has a lot more flights now than either of those cities. If it becomes that expensive to fly I don't see demand all of sudden being greater in those places than here.

For another perspective on this running out of fuel thing 20/20 did a piece on it.

[monsoon]

I've predicted this myself in the Charlotte forum. The current airline business in the USA is based on a model that assumes vast quantities of cheap oil is available. In turn they make profits off the business and first class travelers, use the excursion traveler to fill otherwise empty seats. The system expends vast amounts of energy and produces huge amounts of pollution to move relatively few people and it completely dependent upon massive subsidies from the federal, state and local governments. (in running the civil air traffic control system, building airports and runways, handling customs, and so forth)

This worked right after deregulation and in the hey day of the cheap oil of the 80s when the hub and spoke system was built out and Reaganism had taken full hold in the USA. However these days there are issues I don't think they can solve. First is the disappearance of the business traveler. Battered businesses have cut back hugely on air travel as it is an easy way to cut costs, and technology has made a great deal of it unnecessary. The airlines lose money on excursion travelers so they have hit this bunch with endless fees, inconveniences and just plain bad service. As a result, many people will choose to take other means now to travel. Finally the first class traveler is still there, somewhat, but this isn't enough to run the current hub and spoke system. Furthermore for short haul flights, there isn't much first class business.

In otherwords, this is an industry that has significant long term issues for continuing to run on the 80s model of air travel. All of the major airlines have basically done everything they can, such as using the bankruptcy laws to dump their labor obligations on the federal goverment, to cut costs. Furthermore, Reaganism has resulted in a huge part of the USA's wealth making being transferred to other countries, and there just isn't the money here now for people to casually fly on a jet plane. It is simply too expensive to maintain at the macro level vs what this country can afford.

[beyonce245]

Everyone keeps talking about personal air travel. But as I understand it, the aerotropolis goal, at least with respect to the Triad, is less about air travel and more about air cargo and excellent siting and existing infrastructure.

Certainly, the PTI board would like to attract more low cost passenger flights. But that is not what is meant when you hear leaders talking about an aerotropolis.

Its about being ideally located between major interstates, near existing FedEx and UPS hubs, and near the new FedEx air cargo hub.

Certainly, I think more aviation related jobs are headed for the airport area. But it's my hope, and I would imagine also the hope of regional leaders, that a well developed aerotropolis around the airport area will lead to economic and job growth among industries that depend on fast and reliable delivery of services and goods...hence their development and relocation to be closer to facilities at an airport like PTI.

[sax184]

I read through the thread and there seems to be some confusion as to what he is talking about. It has nothing to do with oil companies being involved in this 'aerotropolis', it has to do with the fact air travel requires oil, lots of cheap oil. And while 'alternative fuel' is great, currently there is no way any combination of currently available alternative fuels is going to propel all of our vehicles the distances they currently go, much less provide for the millions (billions?) who want to use some of the 25% of the worlds oil that the US currently uses.

The question isn't 'will air travel go away'. It's 'will air travel somehow continue to expand and get cheaper, or will current trends continue'? Will air travel once again become an expensive novelty?

Bravo! neon9 gets exactly what I am talking about.

I don't see PTI losing commercial flights like some would probably hope. I think this talk is related to the whole Greensboro being listed for the airport name. I think that is why some from W-S may feel threatened by an aerotropolis campaign. What they would really like to see is PTI be like Smith Reynolds so that they can feel equal. It doesn't make sense why you would predict PTI to lose all commercial airlines but because of the tourist industry Asheville and Wilmington would stay afloat. PTI has a lot more flights now than either of those cities. If it becomes that expensive to fly I don't see demand all of sudden being greater in those places than here.

This is hilarious. Nobody in Winston-Salem wants to see PTI die. It's their commercial airport. Smith Reynolds is done as a common carrier airport, and everyone understands that.

As to the AVL/WLM split, it's routine economics. Airports have fundamentally four categories of traveler: Business In, Business Out, Leisure In, and Leisure out. The issue for any airport under a rising fuel price scenario is "how easily can another airport steal any of your categories?"

With PTI, the central location of the airport is its weakness. If you live in the PTI catchment area, you probably already price compare flights at RDU or CLT for certain destinations because the prices at PTI tend to be less competitive. Therefore, when prices creep up at PTI, more people look to RDU or CLT for flights, which lowers demand for flights at PTI, which makes it more costly for planes to land there, which drives up ticket prices...the cycle goes on. So this is PTI losing "Leisure Out" seats to RDU and CLT.

There's not a lot of tourism that people will fly to in the PTI area. I love Old Salem, but it's not the mountains or the beach. So PTI is already weak on "Leisure In" travel.

On to business. For "Business Out," except for the largest firms, small to medium sized businesses also look for cost savings, so if the Leisure Out traveler increasingly looks to CLT and RDU, so will business class travelers unless a NetJets/Jet Taxi/minijets operation takes off at PTI. If I were PTI, I would work hard to cultivate this sector.

Finally, "Business In" travel is dependent on the larger economy. Textiles and furniture are declining in this area. Broadly speaking, while the Triad is doing much better than the Rust Belt, it is not poised for economic growth like Charlotte and the Triangle.

Now back to the AVL/WLM airports. They have a base of "Leisure In" travelers that help support their operations, particularly Asheville. You cannot move CLT, PTI, or RDU closer to the mountains, so it's harder for CLT to steal inbound flights when the convenience of landing in Asheville from places like New York is so great. Same thing with the beach.

If there is another $140/barrel price spike, and the graph above suggests this is not a far-fetched notion, there will be immense pressure on global air trade as a longer price spike than we felt in 2007 would shift significant amounts of cargo to boat and rail.

My point in this whole discussion is that the aerotropolis strategy ignores the possibility that all the infrastructure for air cargo is potentially unable to amortize its capital costs because long-haul air freight may be a declining business.

[Beany]

Bravo! neon9 gets exactly what I am talking about.

As to the AVL/WLM split, it's routine economics. Airports have fundamentally four categories of traveler: Business In, Business Out, Leisure In, and Leisure out. The issue for any airport under a rising fuel price scenario is "how easily can another airport steal any of your categories?"

With PTI, the central location of the airport is its weakness. If you live in the PTI catchment area, you probably already price compare flights at RDU or CLT for certain destinations because the prices at PTI tend to be less competitive. Therefore, when prices creep up at PTI, more people look to RDU or CLT for flights, which lowers demand for flights at PTI, which makes it more costly for planes to land there, which drives up ticket prices...the cycle goes on. So this is PTI losing "Leisure Out" seats to RDU and CLT.

There's not a lot of tourism that people will fly to in the PTI area. I love Old Salem, but it's not the mountains or the beach. So PTI is already weak on "Leisure In" travel.

On to business. For "Business Out," except for the largest firms, small to medium sized businesses also look for cost savings, so if the Leisure Out traveler increasingly looks to CLT and RDU, so will business class travelers unless a NetJets/Jet Taxi/minijets operation takes off at PTI. If I were PTI, I would work hard to cultivate this sector.

Finally, "Business In" travel is dependent on the larger economy. Textiles and furniture are declining in this area. Broadly speaking, while the Triad is doing much better than the Rust Belt, it is not poised for economic growth like Charlotte and the Triangle.

Now back to the AVL/WLM airports. They have a base of "Leisure In" travelers that help support their operations, particularly Asheville. You cannot move CLT, PTI, or RDU closer to the mountains, so it's harder for CLT to steal inbound flights when the convenience of landing in Asheville from places like New York is so great. Same thing with the beach.

I understand what you are saying but I fundamentally disagree. People in the Triad area have been and continue to shop RDU and CLT for cheaper flights. We know this has been going on for some time and likely to continue. But in spite of this PTI still sees a lot more traffic than either Asheville and Wilmington. If airline prices go up because of an increase in fuel cost they will go up everywhere. Thus there wouldn't be anymore incentive for people to fly out of CLT and RDU than here because the prices would be higher there as well.

If it were that popular for tourist to fly into places such as Asheville and Wilmington both of those airports would be a buzz now. Myrtle Beach airport should be really hopping. I think the overwhelming majority of people who visit these areas drive.

Leisure out includes people who live here who are taking trips for tourism and visiting friends and family. We know this number is greater here b/c of the population. These same numbers of people will become leisure in passengers when they return. Leisure in also includes people who may not be coming here for tourism purposes but they are coming here to visit friends and family. These same numbers of people will be leisure out when they return home. So despite the number of tourists there is still a large leisure in/out based on the population of the area.

[sax184]

I understand what you are saying but I fundamentally disagree. People in the Triad area have been and continue to shop RDU and CLT for cheaper flights. We know this has been going on for some time and likely to continue. But in spite of this PTI still sees a lot more traffic than either Asheville and Wilmington. If airline prices go up because of an increase in fuel cost they will go up everywhere. Thus there wouldn't be anymore incentive for people to fly out of CLT and RDU than here because the prices would be higher there as well.

If it were that popular for tourist to fly into places such as Asheville and Wilmington both of those airports would be a buzz now. Myrtle Beach airport should be really hopping. I think the overwhelming majority of people who visit these areas drive.

Leisure out includes people who live here who are taking trips for tourism and visiting friends and family. We know this number is greater here b/c of the population. These same numbers of people will become leisure in passengers when they return. Leisure in also includes people who may not be coming here for tourism purposes but they are coming here to visit friends and family. These same numbers of people will be leisure out when they return home. So despite the number of tourists there is still a large leisure in/out based on the population of the area.

Yes, I would include visiting family and friends in the Leisure Out/Leisure In categories.

But is PTI "buzzing" any more than AVL or ILM? Let's take a look.

These enplanements are from Wikipedia, so I'm not sure if they are super-accurate. But they seem to pass the reasonableness test looking at them.

CLT: 14,749,568

RDU: 4,706,587

PTI: 1,082,846

ILM: 312,600

AVL: 289,550

Now, for MSA populations:

CLT: 1,701,799

RDU: 1,088,765

PTI: 1,173,808 (705,684 + 468,124) (GSO + WS)

ILM: 347,012

AVL: 408,436

Now, for enplanements per population:

CLT: 8.7

RDU: 4.3

PTI: .92

ILM: .90

AVL: .71

On a population basis, PTI and ILM are virtually identical and AVL is not too far behind. AVL may lose some Leisure Out travelers to CLT.

Getting back to the original discussion, the bottom line is there are two high-performing airports in the state, and PTI is not one of them. Of the non-major airports, two other destinations hold a market segment that PTI does not; namely attracting wealthier Leisure In travelers who may still travel as the middle class chooses to fly less and businesses switch to teleconferencing.

You're naturally free to disagree, but I think that the threat to PTI's mass-market air travel service is real, and that the aerotropolis idea as an economic development strategy is equally troubling because of the supply/demand equation for petroleum-based fuels at a global level.

[Beany]

Thanks for posting the numbers. I do respect your opinion and understand your point, I just see it differently.

[neon9]

I've predicted this myself in the Charlotte forum. The current airline business in the USA is based on a model that assumes vast quantities of cheap oil is available. In turn they make profits off the business and first class travelers, use the excursion traveler to fill otherwise empty seats. The system expends vast amounts of energy and produces huge amounts of pollution to move relatively few people and it completely dependent upon massive subsidies from the federal, state and local governments. (in running the civil air traffic control system, building airports and runways, handling customs, and so forth)

This worked right after deregulation and in the hey day of the cheap oil of the 80s when the hub and spoke system was built out and Reaganism had taken full hold in the USA. However these days there are issues I don't think they can solve. First is the disappearance of the business traveler. Battered businesses have cut back hugely on air travel as it is an easy way to cut costs, and technology has made a great deal of it unnecessary. The airlines lose money on excursion travelers so they have hit this bunch with endless fees, inconveniences and just plain bad service. As a result, many people will choose to take other means now to travel. Finally the first class traveler is still there, somewhat, but this isn't enough to run the current hub and spoke system. Furthermore for short haul flights, there isn't much first class business.

Good point...the recession is one thing that allows people to overlook what is happening to air travel...that and natural human optimism, I guess. It's easy to blame the current problems on the economy, and if we have a economic recovery without a corresponding increase in oil prices, the air travel industry may indeed appear to look healthy again for a short time. Surely all the fees and charges that would have been unthinkable 10-20 years ago would help with that. But, I personally don't think we're going to get a sustained recovery that allows corporations and people to go back to spending the amounts they used to on leisure and business travel, without a major increase in oil prices. See the previous quote about increasing oil price volitility....

The really sad thing is, although not for the airlines I suppose, is that besides a car, we don't have a lot of options for long haul travel. Train travel is a joke in most places. Getting back to the idea of a aerotropolis, for all but the most time sensitive goods train freight should be sufficent.

Jet fuel demand hasn't been this low in 15 years.

But, again, if it was just a recession we could surely muddle along. But there is more to it than that....

For another perspective on this running out of fuel thing 20/20 did a piece on it.

I would respectfully suggest you do a little more research into this issue than a popular TV news show on Youtube saying that we'll get all our oil from the tar sands. $15 a barrel? More oil than Saudi Arabia? This is, at best, a little disingenous. The values I see online say the oil sands could be profitable at $50 a barrel. This seems about right, since when oil dipped below this level some projects were canceled or postponed (I don't know what their assumptions about natural gas and water prices are). This also brings up 2 myths about peak oil-that it's about 'running out' and that the size of reserves are = to the rate of production.

The Alberta gov't says that oil sands production COULD reach 5 million barrels per day by 2030

This is about half of the production of Saudi Arabia just a year or so ago, and about enough to supply the US with 1/4 of our daily needs....assuming Canada doesn't want to keep some. Meanwhile, US oil depletion will continue, and if our production goes down another 40%, like it did over the past 20 years, we'll be producing 3 million BPD instead of the 5 million we do today.

In other words, these 2 developments will pretty much cancel each other out. And you don't even want to look at Mexican and Venezuelan production....2 other major suppliers to the US. Let's put it this way, Mexico will become a net oil importer long before 2030.

[beyonce245]

May I suggest that if several of you want to debate the sustainability of the airline industry, you do so in another, more appropriate forum.

[Beany]

I think our oil discussion is a good one and very much has to do with an aerotropolis topic. I had never given oil much thought before when talking about an aerotropolis. But now I can see oil is a big concern for some people and it very well could have a huge impact on things. I personally do not believe there will be a devastating blow to the airline industry but I am at least aware now that there are concerns out there.

[sax184]

I know a lot of people here reject my thesis on air travel and PTI's vulnerability. However, an author who has written a book on life at $20/gallon fuel, having run some of the stats, took Q&A on the Freakonomics blog this week. I have emphasized one point in bold and italics.

Excerpt:

Q: How much will I have to save up for a round-trip flight from New York to France? What airline would I most likely fly on? How about from New York to Disney World?

A: At $8, a trip from JFK to Paris will cost around $2,000. When gas prices reached $4 last year, jet fuel comprised 40 percent of most big airlines

[beyonce245]

I know a lot of people here reject my thesis on air travel and PTI's vulnerability. However, an author who has written a book on life at $20/gallon fuel, having run some of the stats, took Q&A on the Freakonomics blog this week. I have emphasized one point in bold and italics.

Excerpt:

I don't think anyone is outright rejecting your thesis. It's just not on point with respect to this thread. The thread topic is "The Piedmont Triad could become an aerotropolis." Do some reading about what it means to be an aerotropolis and you'll discover it's economic impact is based not on personal air travel, but cargo shipping and the quick delivery of goods and services.

Start talking about statistics pertaining to air cargo and you might get more constructive discussion. But if you're only going to cite passenger statistics and the cost of personal air travel, perhaps you should redirect your comments to the Triangle or Charlotte threads, whose airports' economic impact are currently based more heavily on personal air travel than PTI.

[cityboi]

The Piedmont Triad Partnership is presenting a slideshow to city council on positioning and branding the Piedmont Triad as the Center for Global Logistics on the United States East Coast and becoming a major aerotropolis. pgs 5 -10 in the pdf

http://edcone.typepad.com/files/ifyi-12.03.10.pdf

The master plan shows adding a fourth runway to Piedmont Triad Intl Airport

more info

http://piedmonttriadnc.com/flipbooks/Logistics_4_2_09/index.html