Portfolio Analysis of Air Transportation Infrastracture Investment

The air transportation system is a significant “engine” of the national economy providing cost-effective transportation of goods and services. This form of transportation is heavily reliant on a large, distributed, and capital-intensive infrastructure that must be maintained and enhanced in a timely manner to ensure a reliable transport service. Researchers have shown that the national air transportation infrastructure must be enhanced to meet the growing demand. This paper describes the results of an analysis of alternative investment strategies for increasing the capacity of the National Airspace System (NAS). The dynamic system analysis shows that there exists a tradeoff between the cost of any unutilized capacity that is added, and the cost of congestion not addressed by additional capacity. Net Present Value (NPV) is maximized for risk-averse decision makers when capacity is increased moderately (25%) with lead-times less than 5 years.

Language

  • English

Media Info

  • Media Type: CD-ROM
  • Features: Figures; References; Tables;
  • Monograph Title: TRB 86th Annual Meeting Compendium of Papers CD-ROM

Subject/Index Terms

Filing Info

  • Accession Number: 01043990
  • Record Type: Publication
  • Report/Paper Numbers: 07-1591
  • Files: TRIS, TRB
  • Created Date: Feb 8 2007 6:14PM