Friday, April 25, 2008

High Speed Rail and the Future of Air Travel

NOTE: We've moved! Visit us at the California High Speed Rail Blog.

I love flying. How could I not? It's in my blood. I have logged a few hours behind the yoke, up in my grandfather's 1949 Beechcraft Bonanza, and spent many more hours as a passenger in that plane watching the land shrink from thousands of feet in the air. Working in the airlines is almost a family tradition - the same grandfather flew 747s for TWA during the height of the Jet Age, several uncles worked in charter service, and a few of my aunts have, at one time or another, worked as flight attendants on the major US carriers.

So it is not with any particular pleasure that I watch the slow collapse of the American airline industry. Soaring fuel prices are squeezing the airlines into crisis - four smaller carriers declared bankruptcy in recent weeks, and the Delta-Northwest merger, brought on by rising fuel costs, may be followed by mergers of the other major carriers such as American, United, Continental, or US Airways. Delta and Northwest's CEOs are calling on all airlines to raise fees by as much as 20%.

The airline industry has been in varying forms of crisis for 30 years now, ever since it was deregulated in 1978. The low point came in 2001 when the US Congress approved a $15 billion bailout of the airlines - funny how the usual suspects never complain about those kinds of "subsidies." While that infusion was expected to help keep the airlines in business for many years to come, the unending increase in fuel costs is going to threaten their survival. Merge or die is not a sign of a healthy industry.

Fuel costs are not going to come down anytime soon - if ever. The current spike may continue or ease, but the underlying factors suggest long-term increases. Global demand is soaring, whereas supply is inelastic and many key oil fields are in decline. These factors alone suggest that the airline industry's troubles are only just beginning. Soaring fuel costs WILL eventually eliminate the cheap fares that so many anti-rail folks use to argue against high speed rail. Those low fares are not tenable in the face of permanently high fuel costs - especially when you also consider that by 2020 there will surely be some form of carbon tax or cap-and-trade induced carbon fees tacked on to those fares.

The high fuel costs cascade throughout the system. Less money is spent on maintenance and training - the recent grounding for inspection of hundreds of American Airlines planes was the result of deferred maintenance and sweetheart deals made between a captive FAA and the stressed carriers in 2003. Some airlines look to technology to save them, but Boeing's 787 Dreamliner, designed to be more fuel efficient, has been facing a steady stream of delays and angry customers.

Even if all these problems get ironed out, even if peak oil turns out to be a myth (it won't, of course), even if the US airlines become models of fiscal health and efficient service, here in California air travel faces other constraints - primarily a lack of space for new service. Few California airports have any room to grow:

SFO: No new runways possible as permits to fill bay will never be approved

OAK: Same problem as SFO - and both face serious threats from global warming and a rising bay

SJC: No room for expansion, with downtown San José on two sides, other development on the third, and US 101 on the fourth

LAX: Also no room for expansion, with powerful NIMBYs on one side, existing development on two others, and the Pacific Ocean on the fourth. LAX expansion plans have come and gone for over 20 years, and LA World Airports is now focusing on outsourcing growth to Palmdale and Ontario - which would be served by, you guessed it, high speed rail.

SNA: Also known as Orange County/John Wayne, this airport is forever limited to 14 gates and one runway, with development on three sides, the 73 freeway and some of California's wealthiest homeowners on the fourth. Plans to build a new, larger airport at the former El Toro MCAS were thoroughly killed in the late 1990s.

SAN: Like the others, San Diego Airport/Lindbergh Field has no room for expansion, with development on three sides and San Diego Bay on the fourth. Like Orange County, plans for a new and much larger facility, at the Miramar MCAS, appear to be dead.

Even if these problems could somehow be overcome, the cost of airport expansion is estimated by the CHSRA to be well over $40 billion - for a transportation system facing a fundamental and ongoing crisis. Spending billions on airport expansion would be like giving millions in subsidies to the horse and buggy industry in the early 20th century.

Air travel isn't going away anytime soon. But neither will it remain the backbone of intrastate travel in California for much longer. It will simply become unaffordable to the passenger, and the airlines will have trouble maintaining operations. Air travel will continue to carry most passengers across the oceans and across the continents (though a significant investment in Amtrak would help make cross-country rail travel a more useful option again), but within California, it is hard to see how air travel is going to be cheaper or more effective than high speed rail between our major cities.

For my grandfather's generation, as young adults in the late 1940s, it made sense to view air travel as the future of American transportation. But for our generation, here in the late 2000s, it seems clear we would be nuts to make the same assumptions. Our future will be a high speed rail future. It's time we got started on building that future.

8 comments:

Tony D. said...

First time post on this site. I've been checking out this blog for the past two weeks and love it! Big time HSR supporter! Now living in Gilroy after living in SJ for the past 38 years, I can tell you that a perfect spot for a new "SJC" would be between Gilroy and Hollister. There's a lot of open land out there to build a new, state-of-the-art airport. It could have two, well spaced out runways for simultaneous take offs and landings. The runways could also be built to handle the next generation Airbus 380 superjumbo. As for the distance from San Jose, the new terminals could be connected to SJ/Silicon Valley proper via the proposed HSR line (with a spur line from the Gilroy area), or a dedicated Maglev line from the current SJC North Concourse now under construction. A transit/train line could even be built from the Monterey/Salinas area (Talk about an airport for San Jose, Silicon Valley and the Central Coast!). We currently see similar arrangements, remote airport connected to major city via transit line, in Honk Kong and Shanghai. Such a project would certainly cost billions and might run into environmental issues. Gilroy and Hollister NIMBY's might protest as well. But there are benefits to certainly consider: a larger airport with greater capacity than the current SJC, economic benefits (hospitality, retail, service) for South County and San Benito County, and a new/money making reuse development at the current San Jose airport site (Offices, residential, urban park, etc.). Again, this site is awesome and can't wait for the campaign to begin for HSR! Hope you like the thinking out of the box idea for SJC.

bmfarley said...

^^^ HSR would mitigate some of the need to expand airports because it would assume many of the in-state trips that would otherwise occur via the air.

I was unaware that SJ airport needed to be expanded. Does it really need to be? And, what portion of flights out of San Jose are to other in-state airports? Riders?

Anonymous said...

@tony d -

welcome to the blog. As I understand it, HSR could capture as much as 50% of the main intrastate corridor, freeing up a lot of slots for long-haul destinations at Bay Area and SoCal airports. Therefore, I believe a brand-new airport near Hollister is not needed. Also, the location you propose is right on top of the San Andreas fault.

Fresno Yosemite airport (FAT) has runways as long as SFO's, its air corridor is to the south. There is an old freight rail spur immediately south of the access road to the terminal, E MCKinley Ave. With a 1/4 mi extension directly to the terminal building plus a turnoff at S East Ave and E California Ave, a regular-speed diesel-powered shuttle train to downtown should be feasible. Even so, FAT's growth potential is constrained by residential development, noise and air quality issues - the city is downwind of the Bay Area.

To better serve Merced, Stanislaus and San Joaquin counties and provide relief for Bay Area airports, I'd suggest expanded use of Castle Airport (MER) in Merced County. The air corridor there extends north - away from the city of Merced. In terms of future expansion potential, a second two mile runway may be feasible. An HSR spur into Castle Airport could lead passengers directly into a new terminal building - putting it on par with Palmdale and Ontario.

At night, Castle Airport could support cargo flights carrying priority mail, premium produce and cut flowers. La Poste in France owns several TGVs, so HSR is suitable for light, high-value freight as well as passengers.

Note that Castle Airport is a former Superfund site. EPA considers the cleanup effort to have been completed.

Btw: San Benito, Monterey and Santa Cruz counties ought anyhow to combine forces to secure supplemental funding for HSR feeder services to Gilroy. The November ballot allocates $950 million for those and, there's more in the kitty in DC. Except for an extension/spur to downtown Monterey, the tracks already exist - albeit in a poor state of repair, thanks to heavy freight rail use.

But please: no maglev pipedreams, we get enough of that from Sen. Reid of Nevada.

BART originally picked broad gauge to keep trains from getting blown off the Golden Gate bridge, but after Marin county pulled out, that service was never implemented. Nevertheless, it's why there are now two incompatible and competing regional rail systems in the Bay Area.

Spain's national railways (RENFE) have a huge legacy broad gauge network. To end their splendid isolation from the rest of the EU, they developed variable gauge bogies. However, BART rolling stock does not feature these - in addition to incompatible gauges, there are grade separation, crash safety, non-existent or incompatible electrification and funding politics issues to contend with. At least those are solvable, at least in theory, maybe, one fine day in the distant future.

By contrast. Maglev cannot be made compatible with standard gauge infrastructure at all, ever.

Robert Cruickshank said...

bmfarley, my point in this post wasn't to argue that specific airports needed to or should expand - but that if we were to continue to rely on air travel, and if those airports wanted to expand, there is no room to do so. SFO and OAK cannot add runway capacity, leaving SJC to handle any potential Bay Area airport expansion - and since SJC can't do it either, the Bay Area is going to have to look to other methods to provide transportation, like HSR.

The Gilroy-Morgan Hill area is under pretty tight land use rules to prevent sprawl and maintain farmland. It would therefore be very difficult to put a major airport there, and I don't believe it's necessary anyhow.

As to anonymous' point about feeder lines to the Gilroy station: the Transportation Agency of Monterey County has been working to bring Caltrain to Salinas for some time now. They need $90 million to do this and are close to reaching that goal. Obviously increased state and federal support would help.

And even a share of that $950 million would help provide rail service to Santa Cruz along the line they're about to buy, and down to Monterey along the TAMC-owned Monterey Branch Line. The tracks go as far as Sand City and the ROW is being maintained all the way to downtown Monterey in an expectation that rail service will resume (sometime soon, we hope!)

davisgrad said...

Interesting article on how the airlines are cutting back on domestic routes to focus on more profitable (and more energy-effecient) international routes. This gives a perfect opportunity for HSR to expand to fill the gap.

March 25, 2008
On the Road
More Delay and Frustration, and All at a Higher Fare
By JOE SHARKEY

OF the eight trips I have booked or taken in the last two months, two were scuttled, either by a missed connection or by an interminable delay that made the journey pointless.

Last week, I waited for hours in a departure lounge in the dreary Terminal A at Newark Liberty International Airport for a delayed AirTran flight to Atlanta, and for hours more the next afternoon in Atlanta for the delayed return flight home. The total time I invested for a mere three-hour meeting: 31 hours. The cost was about $800, including airfare, hotel and parking.

Last year was, as we know, the worst ever for flight delays. There is no hard data yet for this year, but every business traveler I know says the situation has gotten worse. And the peak business and leisure travel time of the year is only now starting.

Fares, meanwhile, are rising, it seems, by the week. Since January, major airlines have adopted six across-the-board increases in domestic ticket prices, according to Rick Seaney, chief executive of FareCompare.com. He predicts that the incremental increases will continue.

With oil prices soaring, the airlines say they are barely managing to keep their heads above water, even with the higher fares and fuel surcharges. For business travelers, this is already shaping up as one tough year.

For one thing, the domestic system already has almost no slack to handle disruptions of any sort. Most major airlines, meanwhile, are busily reducing domestic seating and flights — sidelining smaller, less fuel-efficient aircraft and diverting the bigger planes to international routes where there still is ample money to be made.

Last week, Edward H. Bastian, the president and chief financial officer of Delta Air Lines, gave an informative presentation at the JPMorgan Aviation and Transportation Conference in New York.

Mr. Bastian outlined Delta’s aggressive plan to expand internationally while shrinking domestically. Most other major airlines are doing the same. By the summer, he said, 41 percent of Delta’s available seats will be on international routes.

By the second half of this year, Delta’s domestic capacity will be “down a full 10 percent over where it was just last year,” he said. By this summer, international capacity will be 77 percent higher than it was in the summer of 2005, he added.

“A considerable amount” of Delta’s international growth is coming out of the domestic system, he said.

Delta will further reduce its domestic capacity by 5 percent by August, when the airline will have removed from its fleet (by sale, re-leasing or simply parking in storage) 15 to 20 larger aircraft and 20 to 25 smaller regional jets.

Regional jets, I do not need to remind many of you, provide most of the service at small and even some big airports.

Many airports could be facing sharp cutbacks in service, unless those cities happen to provide what Mr. Bastian called “better asset flights.” Those are flights whose passengers are headed to a hub in the United States to make an international connection.

“Domestic capacity is increasingly being pointed toward feeding international destinations,” he said.

By the way, remember that international flights go both to and from the United States. That is, even if international business travel from the United States slows (and Mr. Bastian and others say they see no clear sign of it yet), business travel to the United States from overseas may remain robust.

“Our offshore bookings are growing substantially in terms of euros” compared with the relatively weak dollar, Mr. Bastian noted.

Domestic demand, meanwhile, seems to be holding up — so far. Ovation Corporate Travel, a travel management company, analyzed some of its clients’ spending patterns and found that travel and spending were up from December through mid-March of this year, compared with the same period last year.

But Mr. Seaney said that in the last week or so, corporate travel managers and travel agents and some industry stock analysts have been telling him they are now expecting at least some cuts in domestic travel spending this spring.

“I’m surprised it hasn’t occurred yet,” he said. “I keep waiting every week.”

Robert Cruickshank said...

Whereas in Spain, RENFE will refund part of all of your ticket if the train is 5 minutes late - a guarantee which rarely ever has to be paid out.

Built properly, an HSR line will be affordable and extremely reliable. It would be a huge boon for business travelers in particular, who would be able to get work done easily on the train (which would presumably have WiFi) than on the plane, where no effective method of providing internet to passengers has yet been found. Boeing had a project to provide WiFi on planes but it was very buggy and was scrapped a year or two ago.

And the Delta stats given in that article are making exactly the point I did - that for domestic travel, *especially* within the state, air travel is not going to be a useful option for much longer. From a market perspective alone it seems HSR is needed to take up the coming slack from the major carriers.

Robert said...

Here is an article from the LA Times in the April 23rd edition of the business section:
http://tinyurl.com/5xj3d8

It talks about United's $512 million loss and how airlines will need to immediately raise their fares 15% across the board to stop hemorrhaging money.

Right at the bottom we see this bit of wisdom: "Heavily traveled shuttle markets, such as L.A.-San Francisco and New York-Washington are prime targets for schedule cuts, analysts said."

Schedule cuts mean higher prices, and thats on top of the fuel surcharges they already have in place and are increasing.

The macro-economic forces that favor HSR versus airplanes on short haul routes are already starting to play out. Airlines are cutting unprofitable short flights. Now is the perfect time for HSR to step into the picture and gobble up that segment, just like in Europe.

Robert

Robert Cruickshank said...

Thanks for that catch, other robert. I glanced at that headline earlier today but didn't read the actual article. That's a huge piece of information and will become the basis of a post here tomorrow, which will get crossposted to Calitics and some other sites.