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Intercity Air Transporation - Overview and Presentation of Alternative Policies for Intercity Air Transportation in Wisconsin - Wisconsin TransLinks 21



Click HERE for graphic.




MISSION STATEMENT

TRANSLINKS 21 -
Wisconsin's 21st century transportation plan - will outline a
comprehensive transportation system that will move people and goods
efficiently, strengthens our economy, protects our environment, and
supports our quality of life. Working with DOT, the public will
identify Wisconsin's transportation needs - and help to make
tomorrow's transportation choices.

Tommy G. Thompson,
Governor

Charles H. Thompson,
Secretary





                    Intercity Air Transportation


              An overview of issues and a presentation
                  of four alternative scenarios for
         intercity air passenger and freight transportation
                      in the state of Wisconsin


               Wisconsin Department of Transportation
                              July 1994





                           ACKNOWLEDGEMENT

This paper was created by the Wisconsin Department of
Transportation.  The principal author was Lawrence Getzler,
Multimodal Planning Unit.  Editor/publisher of this document was
Daniel Yeh, Multimodal Planning Unit.

Others providing significant input for this document include the
following: Franco Marcos, Multimodal Planning Unit; John Hartz,
Supervisor of the Multimodal Planning Unit; Randall Wade, Chief of
the Statewide System Planning Section; Robert Kunkel, Director of
the Bureau of Aeronautics; Dan Finkehneyer, Chief of the Airport
Program Section; Steven Coons, Airport Program Section.

A number of contracted consultant teams have been retained by
WisDOT to perform certain elements of intercity planning, including
planning for the air transportation system.  Their input was also
used in development of air scenarios.  These teams are as follows:

     The consultant team for intercity freight planning is
comprised of Wilbur Smith Associates of Columbia, South Carolina;
and Reebie Associates of Greenwich, Connecticut.

     The consultant team for intercity passenger planning is
comprised of KPMG Peat Marwick of Vienna, Virginia; HNTB
Corporation of Milwaukee, Wisconsin; and Thomas K. Dyer,
Incorporated of Lexington, Massachusetts.

     The consultant team for the State Airport System Plan Update
is headed by TAMS Consultants of Chicago, Illinois.  Other
consultant team members are The al Chalabi Group, Ltd. of Chicago;
Coopers & Lybrand of Boston, Massachusetts; and Larsen Engineers,
S.C. of Milwaukee.




 
                          TABLE OF CONTENTS


1. BACKGROUND INFORMATION                                          3

2. PLANNING ACTIVITIES UNDER TRANSLINKS 21                        13

3. TRANSLINKS 21 ALTERNATIVE SCENARIOS                            17

ATTACHMENT A: SUMMARY OF SCENARIOS                                20





                      1. BACKGROUND INFORMATION

Introduction

The Wisconsin Department of Transportation (WisDOT) is currently
engaged in a long range transportation planning process called
Translinks 21.  Translinks 21 outlines a comprehensive
transportation system which will move people and goods efficiently,
strengthen our economy, protect our environment, and support our
quality of life.

Translinks 21 includes analysis of intercity, multimodal
transportation, referring to longer-distance trips over a variety
of different modes of transportation.  Air services for both
passengers and cargo are important components of intercity
transportation.

This document is one of a series of similar documents discussing
the various freight and passenger modes of intercity
transportation.  The first part of this paper provides background
information and key issues dealing with air transportation.  The
second part discusses the various planning activities undertaken by
WisDOT for the air cargo and passenger modes.  The final section of
this document outlines specific alternatives to be considered for
future planning.

Defining air passenger service
For the purposes of this Translinks 21 analysis, intercity air
passenger service refers to scheduled commercial air service (as
opposed to general aviation involving private flights).  Commercial
air service provides possibly the most definitive form of intercity
transportation, as very few trips by air would be considered local
in nature.

Commercial air passenger service is the most heavily used form of
intercity public transportation in Wisconsin, with almost 3.6
million passengers enplaning at state airports in 1993.  About 375
commercial flights arrive and depart each day from Wisconsin at the
fourteen airports offering scheduled passenger service.

Defining air cargo service
Air transportation is also used to ship freight, especially mail
and small packaged shipments.  Air cargo services are extremely
important to Wisconsin businesses and consumers.  Since air freight
currently accounts for less than I % of the total revenue ton-miles
of freight shipped nationally, the mode may tend to be overlooked. 
However, the availability of quality air cargo services are
becoming increasingly important, for two key reasons:

    Cargo shipped by air tends to be low in weight, but high in
monetary value, and also extremely time sensitive; and

    Air cargo provides key freight services to international
markets, an important frontier for an expanding economy.

                                             Intercity air -- Page 3





The three methods of shipping freight via air are defined below:

    Packaged freight consists of hand loaded packages which are
carried in the belly of aircraft.  It is the most time consuming
method of loading and unloading aircraft.

    Igloos are pallets onto which packages are loaded and held in
place by a net, cover, or blanket.  This system allows for fast
loading and unloading, as the igloo shape fits the internal wall
contours of a narrow body airplane.

    Containers are metal or fiberglass boxes into which freight is
placed for fast loading and unloading.  Containers are produced in
a variety of sizes and are usually designed for a specific
airplane.  Placing freight in containers also reduces handling time
for intermodal transport.

Wisconsin airports
In all, there are over 700 aircraft landing facilities in
Wisconsin, including private, public, police and military
facilities which handle airplanes, helicopters and/or seaplanes. 
However, relatively few of these facilities handle air cargo
shipments of offer scheduled commercial passenger service.  These
airports are shown in Figure 1 (next page).


Passenger air service -- historical overview

In 1938, sixteen airlines operated scheduled passenger service in
the United States.  In that same year the Civil Aeronautics Board
(CAB) was formed to stabilize the industry.  CAB actions had
several objectives: good service and convenience, stability in
pricing, and above all, safety.  Safety was paramount because it
was believed that if airline profit margins were small, then
competitive pressures would discourage full financial attention to
safety.

The CAB certified the existing carriers and reorganized route
structures so that 90% of city-pair markets in the U. S. were
monopolies.  After World War 11, the CAB controlled entry into the
main routes.  While keeping out new entrants, it extended existing
firms' routes until by 1970 nearly all routes had two or three
airlines.  The CAB did permit entry into local and feeder service
routes.

Before 1976, fares were mainly set collusively in order to assure
uniform prices.  The airlines would present the CAB with agreed
prices.  The CAB altered the proposed rate levels on occasion, but
it enforced the uniform basis of the fares.  Airlines could only
compete by raising service quality, especially by offering more
frequent flights.  The diversion of competition to service tended
to induce rises in costs.  Planes flew more frequently, half empty,
and with fancier services.  Studies have suggested that costs were
raised some 30% to 40% as a result.  Unregulated intrastate
airlines in Texas and California, by contrast, had costs and fares
that were much lower.

Deregulation and its effects
In 1975, the CAB began permitting some fare discounting and market
entry.  Wholesale deregulation 

Intercity air -- Page 4





Click HERE for graphic.


occurred with the Airline Deregulation Act of 1978, which provided
for freedom of route choice and fares for airlines.  The act also
allowed for freedom of entry for new firms.  New carriers only
needed to be certified as qualified to provide common carrier
service.

In 1958, the CAB was dissolved.  Consumer protection and
international route award authority, formerly CAB responsibilities,
were transferred to the U.S. Department of Transportation.

                                             Intercity air -- Page 5



Deregulation has resulted in a large scale restructuring of airline
service in the U.S. and Wisconsin.  Given the option to choose
their own route structure, most major carriers have developed hub--
and-spoke systems.  In such systems airlines establish a few large
airports as their centers of operations and use connections to
other cities to feed those hubs.  Other smaller carriers often
provide feeder service to the large airlines' hubs.

Current air passenger service in Wisconsin
As of 1994, there are thirteen airports in Wisconsin which offer
scheduled commercial passenger flights (three offer service only on
a seasonal basis).  Passenger activity is dominated by Milwaukee's
General Mitchell International General Mitchell Int'l Airport
(GMIA) handling about 54% of all passenger flights and 63% of all
enplaned passengers in the state.  

Table 1 (at right) provides the number of daily departures and
indicates seasonal service enplaned passengers for Wisconsin
airports in 1993.

       Table 1: 1993 Passenger activity at Wisconsin airports

Airport                       Daily flights       Pass. enplaned

Austin-Straubel (Green Bay)             122              272,910
Central Wisconsin (Mosinee)              22              128,711
Dane County (Madison)                    47              564,571
Eagle River                               1*       not available
Eau Claire                                8               25,977
General Mitchell Int'l. (Milwaukee)     204            2,264,402
La Crosse                                15              107,574
Marinette/Menominee                       8        not available
Minocqua                                  2*       not available
Outagamie County (Appleton)              22              186,724
Rhinelander                              13               30,943
Sturgeon Bay                              1*               1,500
Wittman (Oskosh)                          2                9,607

* indicates seasonal service

Links to the nation
While the hub-and-spoke system has provided some productivity gains
for the airlines, the effect on many non-hub airports was a
reduction in nonstop, direct flights.  In Wisconsin, the only
airport with medium hub operations as defined by the Federal
Aviation Administration is GMIA.  Aside from the limited hub
operations at GMIA, most air service to an from Wisconsin is routed
through major national air hubs.  Key Midwestern hubs are
Minneapolis/St.  Paul, St. Louis, Detroit, and Chicago's O'Hare
International Airport.

As shown in Table 2 (next page), GMIA's status as a medium hub
airport means that it offers nonstop service to a number of
national origins and destinations.  Nonstop flights from other
state airports are almost exclusively to destinations in the
Midwest.

Passenger enplanements
Scheduled air carrier enplaned passengers for 1993 totaled nearly
3.6 million for the state of Wisconsin.  This is a 2.2 % increase
over 1992 levels, and continues an overall increase in Wisconsin
enplanements since 1984.  Since this figure indicates enplaned
passengers only, total

Intercity air -- Page 6





     Table 2: Nonstop destinations from Wisconsin airports, 1994

To/from GMIA (Milwaukee)                         To/from all other
                                                 Wisconsin airports

Atlanta                  Boston                  Chicago
Cedar Rapids, Iowa       Charlotte               Cincinnati
Chicago                  Cincinnati              Detroit
Cleveland                Columbus                Duluth, Minn.
Dallas                   Denver                  Escanaba, Mich.
Des Moines               Detroit                 Indianapolis
Flint, Mich.             Fort Lauderdale*        Ironwood, Mich.
Fort Myers*              Grand Rapids            Kalamazoo, Mich.
Indianapolis             Kalamazoo, Mich.        Marquette, Mich.
Kansas City              Las Vegas               Minneapolis/St. Paul
Los Angeles              Memphis                 Muskegon, Mich.
Miami*                   Minneapolis/St. Paul    Pittsburgh
Muskegon, Mich.          Nashville               Rochester, Minn.
New York City            Newark                  Rockford
Orlando*                 Philadelphia
Phoenix                  Pittsburgh
Rockford                 Saginaw, Mich.           
San Diego                San Francisco
South Bend, Indiana      St. Louis
Tampa*                   Toronto
Traverse City, Mich.     Washington, D.C.

                              *indicates seasonal nonstop service


passenger traffic at state airports would be approximately double
this number to reflect those passengers deplaning.

Statewide enplanements for 1993 increased at six Wisconsin airports
over 1992 levels.  Milwaukee's GMIA, the busiest of the state's
airports, registered a 3.4% increase in passenger enplanements over
1992.

Future prospects for air passenger service

A number of issues at the national, regional and state levels could
affect the future of air passenger service in Wisconsin.

National issues
In August of 1993, the U.S. Commission on Airline Competitiveness
outlines several recommendations to President Clinton and the U.S.
Congress concerning the future of air passenger services.  Among
the recommendations issued by the Commission are these:

    Ticket and cargo waybill taxes should be reduced to their pre-
1990 levels.  If implemented, the levels of demand for passenger
service should increase.

                                             Intercity air -- Page 7





    The Civil Reserve Air Fleet (CRAF), which provides civil
transport to meet emergency airlift requirements, should be
maintained and fostered, to help support charter flight firms.

    The goal of changing the present air traffic control (ATC)
system to a satellite-based navigation system should be pursued. 
Also, implementation of a technology called Global Positioning
System (GPS) should be accelerated.  GPS will allow for more direct
routes, savings in fuel, and safer navigation, and is already used
by waterborne carriers and the trucking industry.

    Aviation should be exempt from any increase in federal fuel
taxes; aviation did receive a two year waiver.

Regional issues
Certain airports in Wisconsin, especially Wittman Field in Oshkosh,
have suffered cuts in service from ownership and operational
changes by air carriers.  Of particular concern is the practice of
some airlines using slots at Chicago's O'Hare Airport -- the major
national hub -- to service long distance routes, instead of
servicing feeder routes from small Wisconsin airports and other
regional airports throughout the Midwest.

This trend may be reversed through national legislation.  Lobbying
by the state of Wisconsin to preserve and possibly increase
commuter slots at O'Hare that are used for servicing Wisconsin may
be advisable.  Another alternative is the establishment of an
essential service program.

State issues
Each individual airport in Wisconsin faces a number of local
concerns and issues regarding commercial air service.  On a
statewide basis, however, the introduction of more direct or
nonstop flights to national destinations may be desirable.  The
development of GMIA as an alternative to the congestion at O'Hare
is also a strategy which may need further development.


Air cargo service -- historical overview

Air cargo services and regulation
Air cargo did not become a significant competitor in the freight
industry until after World War 11, when several new firms were
formed.  Trained pilots and surplus aircraft were abundant, making
entry into the industry easy and inexpensive.  Many of these
entrepreneurs knew little about business, leading to several
bankruptcies among the plethora of new firms.

In 1948, the CAB imposed regulations upon air cargo similar to
those that existed for the air passenger industry.  The CAB
controlled which firms could transport air cargo, the routes each
firm could serve, and the rates charged.  Regulation of the air
cargo industry also extended beyond air carriers, as trucking
companies were not allowed to transport cargo by air.  Freight
forwarders were not permitted to own and operate their own
aircraft, and were required to contract with carriers to provide
lift.

Intercity air -- Page 8





The CAB regulations did allow a provision that exempted planes
under 7,500 pounds from the various regulations.  In 1973, Federal
Express was formed and operated with planes meeting the size limit. 
However, the small aircraft had high costs per revenue ton of cargo
and were unable to transport large items.  Even with these
limitations, Federal Express was able to implement routes and
develop a hub-and-spoke system.

Deregulation
In 1977, the federal government lifted the CAB regulations on the
air freight industry.  Route choices, aircraft sizes, rates, as
well as the participation of freight forwarders were no longer
restricted.  Many carriers benefitted greatly from deregulation. 
Federal Express bought larger planes, advertised heavily, and
greatly expanded its business.  Other freight forwarders such as
Airborne, Emery, and Purolator purchased aircraft and became, like
Federal Express, integrated air carriers.

Freight forwarders
Freight forwarders, such as those listed above, were impacted
significantly by deregulation.  Prior to deregulation, freight
forwarding services fulfilled three primary functions:

    To pick up and distribute shipments within a 25-mile radius of
an airport;

    To consolidate small shipments to take advantage of lower
rates for bulk movements; and To market air cargo services within
their geographic area.

Although forwarders could charter cargo aircraft, they were not
permitted to provide their own lift by owning and operating
aircraft.  Surface transport beyond a 25-mile radius was reserved
for Interstate Commerce Commission (ICC) regulated motor carriers,
which were often not accustomed to providing the quick and flexible
response required for ground support of air cargo.  Such motor
carriers were also prohibited from owning and operating cargo
aircraft.

While under regulation, one freight forwarder, United Parcel
Service (UPS), did receive authority from the ICC to extend service
beyond the 25-mile limit.  After deregulation, these service
restrictions no longer hindered any freight forwarders.

As a combined result of air cargo deregulation in 1977 and motor
carrier regulatory reform in 1980, the distinctions among the
participants in freight transportation were diminished.  One result
has been for some of the larger air freight forwarders to operate
their own cargo aircraft.

An emerging pattern for freight forwarders with their own lift is
to operate aircraft in hub-and-spoke route networks similar to
those of commercial passenger airlines.  As examples, Airborne
operates a hub at a former Air Force Base in Ohio; Purolator
operates a hub in Indianapolis; Emery has a hub in Dayton; and UPS
has established a hub in Louisville.

                                                Intercity air Page 9





For air cargo operators, and particularly for those operators
offering package express service, such hubs offer advantages
similar to those for passenger airlines.  Specifically, with a hub-
and-spoke network, more city pairs and lower traffic density
markets can be served with the same fleet than could be served if
only single-plane direct service were offered.

Air cargo and air passenger services
In 1978, deregulation also occurred for the air passenger industry,
leading to a number of changes for passenger carriers.  One change
was a focus on boosting revenue by filling the bellies of passenger
flights with cargo.

The marginal cost of adding weight in the form of cargo to
scheduled passenger flights is relatively small.  In contrast, all-
cargo carriers must cover the entire operational cost of a flight
through cargo revenue.  Hence, the passenger airlines can often
undercut the all-cargo firms in price.


Air cargo traffic statistics

Over the last twenty years, air freight carried nationwide grew
slowly during the years of regulation.  Then, after sustaining a
low period during the early 1980's, the amount of air cargo carried
in the nation increased by 80% from 1985 to 1992 (as shown in
Figure 2 at right) Throughout these years, U.S. Postal Service mail
traffic showed very steady growth, with annual fluctuations being
the result of changes in other freight movements.


Click HERE for graphic.


At the same time, air cargo activity in Wisconsin has been more
volatile and has grown less than the nation as a whole (Figure 3,
next page).  After declines in the 1970's and early 1980's,
Wisconsin saw tremendous growth in air cargo activity from 1985 to
1992.  Wisconsin air cargo tonnage increased by 163 % between these
years, primarily due to increasing activity at GMIA.  As with the
national trends, mail traffic remained relatively steady through
the years, with the major increases and decreases being felt in the
general freight services.


Intercity air -- Page 10





Click HERE for graphic.


There were a number of significant events that contributed to the
rapid growth of the air cargo market in Wisconsin starting in 1986,
including these:

    Integrated air express carriers such as Federal Express
started serving Wisconsin in 1986.  This new industry, which is
even newer to Wisconsin, is creating its own demand for overnight
freight and mail under 70 pounds.  

    Air express services enable companies such as Land's End and
other retailers in Wisconsin to compete nationally and
internationally for consumer demand on a whole new basis of
shopping and delivery.  The growth of businesses in Wisconsin such
as Land's End has affected the demand for air cargo.

    The advent of just in time strategies of product delivery,
especially in such Wisconsin businesses as automotive parts and
medical products.

    The greater operating efficiency and lift capacity of newer
aircraft, and the increasing competition among air carriers for
freight services in recent years has created additional demand. 
Likewise, trucking companies and railroads are still learning how
to compete with air express and have fallen behind competitively
especially in guaranteed and overnight delivery services.  Also,
long haul trucking has declined in competitiveness due to rising
costs and a shortage of drivers.

In 1992, over 32,000 tons of freight were enplaned at Wisconsin
airports, according to the Federal Aviation Administration (FAA). 
Nearly 77% of this total was attributed to air cargo services using
GMIA.  Other important airports for air cargo in the state are Dane
County (Madison), Outagamie County (Appleton) and Austin-Straubel
(Green Bay).


Future prospects for air cargo activity

Continued growth in the industry
Many indicators point to continued growth nationally for air cargo
activity.  Air freight ton-miles


                                           Intercity air -- Page 11 





as reported by membership of the Air Transportation Association
(ATA) were up by about 4.5% in 1993 compared to the same months in
1992 (reported in an ATA news release, April 2, 1993).  UPS reports
double digit growth in its small package air express business. 
Other key industry representatives foresee future growth in air
cargo activity.

Management at Boeing, a major airplane manufacturer, sees several
factors indicating expansion of the market (reported in Jet Cargo
News, February, 1993):

     The world gross domestic product is expected to grow at about
     3% annually; fuel prices should remain level in constant
     dollars; airline costs are declining because of efficiencies
     in equipment and operation; competitive pricing (lower yields)
     will provide market stimulus; and airline and air express
     networks are cooperating better, which portends even higher
     standards for traditional air cargo.

The rate of future air cargo growth in Wisconsin is contingent to
some degree by the growth or arrival of industries within the state
that manufacture time-sensitive commodities.

Government actions
Although re-regulation of the air cargo industry appears an
unlikely prospect at this time, other government actions can have a
significant effect on this transportation mode.  Changes in federal
taxes will affect operating costs in transportation, especially
concerning any competitive relationships between modes.  Also,
government initiatives for airport construction or improvements
could also have a direct impact on air cargo services.

Continued role for air passenger carriers
The trend of passenger carriers using air cargo services as a
source of revenue may also continue or even grow.  This change
reflects the retirement of many freight-only planes, while the
number of wide-body passenger planes -- with higher cargo hold
capacities -- may increase during this time.

Expanding international markets
The advent of the North American Free Trade Agreement (NAFTA) will
increase opportunities for products to be shipped to and from
Canada and Mexico.  The removal of trade barriers may also mean
that firms primarily serving domestic consumers (a declining
portion of firms) could be more likely to import inputs used to
manufacture their goods.

Modal shift toward air
The forces that have led to rapid growth in air freight in
Wisconsin since the mid 1980's are likely to continue for some
time.  The modal shift we have seen toward air freight for high
value, time sensitive commodities, for mail, as well as for
international shipments will not stop soon.  The air express market
itself is becoming heavily competitive which will drive down prices
and increase services, creating an even larger shift in modal
choices.


Intercity air -- Page 12





             2. PLANNING ACTIVITIES UNDER TRANSLINKS 21

Concurrent airport planning activities

Translinks 21 includes air passenger and cargo services as part of
its analysis of the statewide, multimodal transportation system. 
However, WisDOT also is currently engaged in concurrent planning
activities focusing specifically on the airport system.

The State Airport System Plan Update
WisDOT is charged by state statutes with preparing an airport
development plan and modifying the plan in recognition of changing
conditions.  In 1986, the Wisconsin Department of Transportation
published a comprehensive State Airport System Plan (SASP)
entitled, Wisconsin Airport System Plan: 1986-2010.  A separate
plan for the seven southeastern Wisconsin counties was completed
concurrently in 1986 by the Southeastern Wisconsin Regional
Planning Commission (SE@C) and was subsequently incorporated into
the SASP by WisDOT.

Since the preparation of the plans in 1986, factors affecting
airport system development have changed significantly.  These
factors include projections of population growth, economic growth,
scheduled air carrier operations, air cargo operations, critical
aircraft, and new federal and state initiatives.  In response to
these changes, the SASP is being update with the following purposes
in mind:

    to provide a long-range perspective for investment decisions;

    to examine the advantages and disadvantages of various levels
of service; and
     
    to evaluate investment issues best addressed from a system's
perspective, such as minimum funding requirements to maintain
existing facilities.

WisDOT has contracted a consultant team to perform certain elements
of the SASP update.  Some of the individual tasks and activities of
the SASP update include an update of demographic, economic and
aviation forecasts; an airport classification system review; a
facility needs analysis; an internodal and multimodal analysis; an
environmental evaluation; an air cargo study; and a reliever
airport study.

Southeast Wisconsin regional airport plan
In addition to the elements of the SASP update being performed on a
statewide basis, SEWRPC is developing elements of the plan
specifically for the seven county southeastern region of Wisconsin. 
This regional focus includes analysis of commercial air passenger
services, general aviation, system level facility needs, and a
reliever airport study.

The consultant team is preparing the four elements mentioned above
for the non-SEWRPC counties, and is also conducting the air cargo
study for the entire state.  SE@C is using the descriptive

                                            Intercity air -- Page 13





air cargo data, forecasts, and facility recommendations provided by
the consultant team for developing integrated system level facility
recommendations for southeastern Wisconsin.


Translinks 21 planning issues

Passenger planning issues
With respect to the air modes, the focus of Translinks 21 is on
scheduled air carrier service to and from the state, with other
aviation issues being addressed in the SASP update.  Among the
issues addressed under Translinks 21 are the role of air passenger
service in the statewide, regional and national transportation of
Wisconsin citizens; and potential methods to enhance air passenger
service in the state, possibly through increasing the number of
direct and nonstop flights serving Wisconsin airports.

Cargo planning issues
WisDOT's planning through Translinks 21 includes consideration of
the state's air cargo activity, and whether there are any roles for
state policies and programs for this industry.  Many issues and
questions have been raised and are addressed in Translinks 21:

    Current airport capacity and the ability to handle predicted
growth in air cargo activity;

    The effectiveness of Wisconsin's air assistance programs in
responding to needs based on air cargo activity, as opposed to
general aviation or commercial passenger traffic;

    The ability of air passenger carriers serving Wisconsin to
provide concurrent air cargo services, given the current shortage
of nonstop and direct flights to national destinations; and

    The ability of Wisconsin airports to meet the needs of
international air cargo, particularly in light of NAFTA or other
events which could increase the potential for international
traffic.

Current state aid program for airports
Translinks 21 will analyze these and other issues in the context of
determining potential roles for the state in regards to air
transportation.  WisDOT's role in air assistance programs include
administration of the federal Airport Improvement Program (AIP) and
a state aid program for airports.  These programs provide capital
improvement funding for airports in the state.

Through these programs, WisDOT provides assistance to airports for
a variety airport-related improvement projects.  The goals of
WisDOT's airport development strategy are to:

    maintain existing facilities of the state's airport system;

    expand facilities to meet the needs of commercial passenger
airlines, cargo carriers and companies doing business in the state;
and

Intercity air -- Page 14





    provide a balanced state air transportation system.

Airport owners must "petition" the Secretary of Transportation by
formal resolution for participation in the state and/or federal aid
programs for capital improvement projects.  A priority ranking
system is used to select specific projects for funding from the
requests by the airports competing for state and federal funds. 
Publicly funded airport development in Wisconsin is financed by
federal and state user fees and municipal airport owner funds. 
Municipal sponsors' funds are normally derived from a combination
of general revenues and airport revenues.

Federal entitlement funds (from the Federal Aviation Trust Fund)
are designated to primary commercial service airports based on the
number of passengers enplaned at the airport.  Additional
discretionary funds are also available to these airports.  Non-
primary commercial service airports can compete on a national basis
for discretionary funding within their category.  General aviation
airports must compete for a share of funds allocated to the state
under a weighted FAA formula based one-half on area and one-half on
population.  Reliever airports are eligible to compete on a
national basis for funds allocated to reliever airport projects
only (such airports may be privately owned, but must be open to the
public).

Funding of the state aid program comes from the unified state
transportation fund, which includes revenues from registration
fees, fuel taxes paid by general aviation users and property taxes
paid by commercial airlines.  Currently, Wisconsin allocates $10.4
million annually to the state aid program.  The federal AIP is
funded at approximately $24 million annually.


Benefits and costs of air service

The Translinks 21 analysis includes determination of the benefits
and costs of public investment in the state's air transportation
system.

Benefits of investing in air services
There are numerous benefits to improving cargo and passenger air
service in Wisconsin.  Local firms are more likely to expand and
create new jobs in Wisconsin.  New or national firms are more
likely to locate within the state.  National organizations are more
likely to choose Wisconsin for their conventions and events. 
Wisconsin tourism is likely to benefit with easier access for
distant potential visitors.

The primary reason shippers use the air mode is for its speed in
delivering their product.  Many Wisconsin shippers currently send
their freight by truck to O'Hare in Chicago.  Increased air
services in terms of number of flights and capabilities (size
limitations, refrigeration, etc.) as well as easier and quicker
access to those services at state airports will enable Wisconsin
shippers to increase their use of Wisconsin airports and save time. 
Increased passenger service reduces travel time for Wisconsin
passengers (both business travellers and tourists).

                                            Intercity air -- Page 15





Consistency in service is also of great importance for shippers. 
Modem aeronautic facilities with sufficient capacity are essential
for reliable service.  Investing in air infrastructure is needed to
provide the reliability of service demanded by shippers.

Costs and other impacts of investing in air services
The actual monetary costs of constructing and improving air
facilities are high.  Greater state spending on aviation may reduce
the funds available for other modes.

In addition to the monetary costs, air service has impacts on other
aspects of transportation and society.  For example, increased air
service can create more frequent noise problems for citizens who
reside near airports.  Also, increased air passenger service could
compete with other intercity passenger modes, causing passengers to
leave other modes.


Intercity air -- Page 16





               3. TRANSLINKS 21 ALTERNATIVE SCENARIOS

Through the analysis of Translinks 21, four alternative scenarios
have been developed

    Alternative #1: Maintaining current policies and programs --
this alternative essentially continues current state programs at
current funding levels.

    Alternative #2: Taking new directions with current funding --
this alternative shifts a certain portion of transportation funds
from their current allocation for the highway program to other
modal programs.

    Alternative #3: Financing better transportation and more
choices -- under this option, new revenue is generated to allow
expansion of both highway and non-highway programs.

    Alternative #4: Paying for premium mobility -- for this final
alternative, even more new revenue is generated in order to develop
a broader array of highway and non-highway transportation services
in Wisconsin.

Each of these alternatives has specific implications for the air
transportation system in Wisconsin.  The air transportation
portions of each alternative are discussed below.  All of the costs
for each alternative are discussed in terms of Wisconsin's share on
an annual basis, and as a 25-year total to cover the Translinks 21
planning horizon (1995-2020).  Following the text is a one-page
summary outlining all of the air program-related actions along with
their associated costs for Wisconsin (Attachment A).


Alternative #1: Maintaining current policies and programs

Under this alternative, the state would continue the state aid
program, retaining present project eligibility requirements.  The
state would continue to fund the program at a level roughly
equivalent to the revenues generated by the ad valorem tax on
commercial air carriers.  Currently, the state's annual budget for
this program is $10.4 million, yielding a 25-year Wisconsin total
cost of $260 million.  No additional funds are provided under this
alternative.

This alternative also assumes that the state would continue to
administer the AIP, and that federal funding for the AIP would
remain at current levels.  At $24 million annually, the 25-year
federal total is $600 million.


Alternative #2: Taking new directions with current funding

Although Translinks 21 proposes a broad shift of funds from highway
to certain non-highway modes under Alternative #2, Wisconsin's
state aid program for airports would continue at present

                                             Intercity air --Page 17





funding levels and eligibility requirements, as described in
Alternative #1.  Again, this would require an annual cost of $10.4
million for the state of Wisconsin, and a 25-year total of $260
million.  Again, the state would continue to administer AIP funds,
with the $600 million federal commitment to the AIP over 25 years
being assumed.

Alternative #3: Financing better transportation and more choices

Under Alternative #3, Translinks 21 proposes a number of new
actions for the state in regards to promoting and improving air
transportation:

    Preserve slots for air feeder service from key Wisconsin
airports at O'Hare through proactive intervention at the national
level;

    Increase direct air connections between Wisconsin and national
and international markets through state marketing, lobbying and
promotional activities;

    Continue to develop GMIA as the third regional airport for the
Milwaukee-Chicago-Gary metropolitan area, and expand its facilities
as appropriate;

    Work with the Department of Development to market and promote
the contribution of Wisconsin's airports in fostering economic
development;

    Improve the interface between air and surface modes to provide
a seamless system;

    Assist in the development of noise abatement plans and
measures.

    Develop air cargo service standards for use in airport master
planning.

    Develop specific air cargo related criteria for classifying
airports and establishing funding priorities in the SASP Update.

Most of these initiatives involve administrative functions, and
would generally not be funded through the state aid program or the
AIP.  However, for Alternative #3, the state aid program would be
expanded to include improvements specifically related to air cargo
needs.  Examples of projects would include construction of entrance
roads, terminals or storage structures, and acquisition of cargo
handling equipment.

To support this eligibility expansion, the state aid program funds
would be increased to $11.4 million annually.  Over the 25-year
planning horizon, the total Wisconsin cost is $285 million, or a
$25 million increase over the current 25-year allocation.  State
administration of the AIP would also continue, with federal AIP
funding assumed to remain constant at $24 million annually, or $600
million over 25 years.

Intercity air -- Page 18





Alternative #4: Paving for premium mobility

Alternative #4 includes all of the proposed actions of Alternative
#3.  In addition, several new initiatives would also be pursued:

    An essential service program would be created to provide or
expand commercial passenger service to areas not presently served,
or areas with a perceived service deficiency.

    The state would fully fund an additional parallel runway at
GMIA to facilitate its development as a national and regional hub.

    Over the long-term, the state would develop an intermodal
facility to link GMIA to planned high speed rail passenger services
in the Chicago-Milwaukee corridor.

Again, expansion of state funding for air transportation would be
required to achieve these initiatives.  For the GMIA runway, an
estimated $91.6 million would be required to cover onetime capital
costs.  The air/high speed rail connection at GMIA would also
require capital expense, but an estimate of this cost has not yet
been made.

For the other program actions, annual state funding for air
transportation would be increased from the present $10.4 million to
$12.4 million.  This results in a Wisconsin 25-year cost total of
$401.6 million for Alternative #4 (not including the air/high speed
rail station), a 25-year increase of $141.6 million over current
funding levels.  Again, the federal AIP is assumed to remain at
$600 million over the 25-year planning horizon, with the state
administering the program.


                                            Intercity air -- Page 19




Click HERE for graphic.





                                                           WISCONSIN
                                                       TRANSLINKS 21




FOR MORE INFORMATION ON THIS TOPIC 21, CONTACT:
JOHN HARTZ
SUPERVISOR, MULTI-MODAL PLANNING UNIT
WISCONSIN DEPARTMENT OF TRANSPORTATION
PO BOX 7913
MADISON, WI 53707-7913

608/267-7751

FOR ADDITIONAL COPIES, CALL:
OFFICE OF PUBLIC AFFAIRS, 608\266-3581







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