(Source:  Time)

The International Air Transport Association (IATA), which represents 230 airlines worldwide, increased its loss estimate from the $4.7 billion it forecast in March, reflecting a “rapidly deteriorating revenue environment.”

Although there has been growing signs of a bottoming out of the recession, IATA said the industry was severely hit in the first quarter with 50 major airlines reporting losses of more than $3 billion. Weak consumer confidence, high business inventories and rising oil prices pose headwinds for future recovery, the association said during a two-day global aviation conference in Kuala Lumpur.

Revenues are expected to decline by $80 billion — an unprecedented 15% from a year ago — to $448 billion this year, and the weakness will persist into 2010, it said.

“There is no modern precedent for today’s economic meltdown. The ground has shifted. Our industry has been shaken. This is the most difficult situation that the industry has faced,” said IATA Chief Executive Giovanni Bisignani. The Geneva-based association also revised its estimated loss for last year to $10.4 billion from $8.5 billion previously.

It said passenger traffic for 2009 is expected to contract by 8% from a year ago to 2.06 billion travelers. Cargo demand will decline by 17% and some 100,000 jobs worldwide are at risk, it said.

The association expects the industry fuel bill to shrink by $59 billion, or 36%, to $106 billion this year, accounting for 23% of operating costs with an average oil price of $56 a barrel. But crude oil prices have rallied in recent weeks, breaching the $70 a barrel level on Friday on hopes of economic recovery.

IATA said carriers in all regions were expected to report losses, with Asia-Pacific to be the hardest hit amid a sharp slowdown in its three key markets — Japan, China and India. The region’s carriers are expected to post losses of $3.3 billion, worse than the previous forecast of $1.7 billion but better than the $3.9 billion losses last year.

North American carriers are expected to lose $1 billion, far better than its $5.1 billion losses in 2008, thanks to early capacity cuts and limited hedging by U.S. airlines.

(Source: Streetsblog & Wall Street Journal)

The Obama administration is working on a plan to fill the shortfall in the nation’s highway trust fund by August without adding to the federal deficit, Transportation Secretary Ray LaHood told Congress yesterday.

The highway trust fund, which relies mostly on gas-tax revenue, will need up to $7 billion in additional money by the end of summer to ensure states continue receiving payments, LaHood told the transportation subcommittee of the House Appropriations Committee. The fund also will need up to $10 billion in the 12 months after September to ensure its solvency, LaHood said.

“We believe very strongly that any trust fund fix must be paid for,” LaHood told members of the House Appropriations Committee’s transportation panel. “We also believe that any trust fund fix must be tied to reform of the current highway program to make it more performance-based and accountable, such as improving safety or improving the livability of our communities — two priorities for me.”

The administration’s quest to offset its trust fund fix, which will cost as much as $7 billion, could prove fruitless.  Rep. John Olver (D-MA), chairman of the panel that greeted LaHood today, put it simply when asked if the necessary spending cuts could be found. “That’d be very tough,” he said, noting that his own annual transportation spending is unlikely to become law before the highway trust fund runs out of cash.  Replenishing the trust fund with a cost offset, as LaHood suggests, requires a serious conversation about finding new long-term revenue sources for not just highways but all modes of transportation.

But he said the President Barack Obama administration has ruled out raising the gas tax to provide additional funding, saying an economic recession isn’t the time to make such a move.  “We are not going to raise the gasoline tax. I’ll just say that emphatically,” LaHood said.

Click here to read the entire article.

(Source: Government Accontability Office)

Ribbon Cutting Ceremony

The New Starts program is an important source of new capital investment in mass transportation. As required by the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users, the Federal Transit Administration (FTA) must prioritize transit projects for funding by evaluating, rating, and recommending projects on the basis of specific financial commitment and project justification criteria, such as cost-effectiveness, economic development effects, land use, and environmental benefits. To be eligible for federal funding, a project must advance through the different project development phases of the New Starts program, including alternatives analysis, preliminary engineering, and final design. Using the statutorily identified criteria, FTA evaluates projects as a condition for advancement into each project development phase of the program.

This testimony discusses the:

(1) key challenges associated with the New Starts program and

(2) options that could help expedite project development in the New Starts program.

This testimony is based on GAO’s extensive body of work on the New Starts program and ongoing work–as directed by Congress. For this work, GAO reviewed FTA documents and interviewed FTA officials, sponsors of New Starts projects, and representatives from industry associations. The FTA reviewed the information in this testimony and provided technical comments.

Previous GAO work has identified three key challenges associated with the New Starts program. First, frequent changes to the New Starts program have sometimes led to confusion and delays. Numerous changes have been made to the New Starts Program over the last decade, such as revising and adding new evaluation criteria and requiring project sponsors to collect new data and complete new analyses. Although FTA officials told GAO that changes were generally intended to make the process more rigorous, systematic, and transparent, project sponsors said the frequent changes sometimes caused confusion and rework, resulting in delays in advancing projects.

Second, the current New Starts evaluation process measures do not capture all project benefits. For example, FTA’s cost-effectiveness measure does not account for highway travel time savings and may not capture all economic development benefits. FTA officials have acknowledged these limitations, but noted that improvements in local travel models are needed to resolve some of these issues. FTA is also conducting research on ways to improve certain evaluation measures.

Third, striking the appropriate balance between maintaining a robust evaluation and minimizing a complex process is challenging. Experts and some project sponsors GAO spoke with generally support FTA’s quantitatively rigorous process for evaluating proposed transit projects but are concerned that the process has become too burdensome and complex.

In response to such concerns, FTA has tried to simplify the evaluation process in several ways, including hiring a consulting firm to identify opportunities to streamline or simplify the process. As part of ongoing work, GAO has preliminarily identified options to help expedite project development within the New Starts program. These options include tailoring the New Starts evaluation process to risks posed by the projects, using letters of intent more frequently, and applying regulatory and administrative changes only to future projects.

While each option could help expedite project development in the New Starts process, each option has advantages and disadvantages to consider. For example, by signaling early federal support of projects, letters of intent and early systems work agreements could help project sponsors use potentially less costly and time-consuming alternative project delivery methods, such as design-build. However, such early support poses some risk, as projects may stumble in later project development phases. Furthermore, some options, like combining one or more statutorily required project development phases, would require legislative action.

Click here to download the entire report.

(Source: Wall Street Journal)

If you thought legroom on commercial airlines was already cramped, get set to be squeezed some more.

New Boeing 737-800s now being delivered to American Airlines have the same-size cabins as the existing 737-800s in American’s fleet. But the new planes have 12 more coach seats, pushing the total number of seats to 160. Delta Air Lines Inc. has also added 10 seats to its 737-800s, raising the total to 160. So has Continental Airlines Inc.

Image Courtesy: Wall Street Journal

The seat squeeze shows how airlines are aggressively cramming more seats into jets. The trend has been going on for years, but has picked up momentum of late as airlines take food galleys out of airplanes since they’ve stopped serving free meals. Some carriers also are replacing seats with new ones made with slimmer frames and cushions, creating additional rows.

In American’s case, some customers will lose some legroom. The airline says it standardized the “seat pitch” — the distance from a point on one seat to the same point on the seat in the next row — at 31 inches throughout the coach cabin. Some rows in the old configuration had as much as 33 inches of seat pitch, and American’s Web site says the old configuration averaged 32 inches.

Exit rows still have more legroom in the new layout — about the same 39-40 inches as in the old configuration. But “bulkhead” seats in the first row of the coach cabin won’t be as roomy as frequent fliers are accustomed to. A spokesman for American says there’s a “slight reduction” in legroom for the first row of the economy section.

Despite the squeeze, American believes the new seats won’t feel more crowded to travelers. The seat bottoms pivot forward a bit like movie-theater seats to give the person behind you more knee room when reclining.

Still, seat pitch at 31 inches may well feel tight to many travelers. American once had 34 inches in coach when it marketed itself as the “More Room” airline from 2000-2005. The MD-80s being phased out in favor of the 737-800s will replace MD-80 jets that have 31- to 33-inch pitch in coach.

While some low-cost airlines still offer 32-34 inches of seat pitch on planes, 31 inches has become the standard in coach at many carriers. Delta, for example, had 32 inches in its 737-800s when it had 150 seats. A reconfiguration completed last summer on all 71 737-800s in Delta’s fleet pushed that to 160 seats, using slimmer seats. But seat pitch did decline: The first seven rows in coach have 32-inch pitch, but the 15 rows behind the exit doors have 31-inch pitch.

More passengers on a plane means more travelers competing for the same overhead bin space. And bathrooms, too. Most 737-800s are delivered from Boeing with three bathrooms — one in the front for first-class passengers and two in the rear for coach customers.

Continental and Alaska Airlines are notable exceptions. Continental opted to add an extra mid-cabin bathroom to some of its 737-800s and use those planes primarily on trans-continental flights. That version also has an extra row of first-class seats and carries a total of 155 seats.

Click here to read the entire article.

(Source: ENR.com & Wall Street Journal)

The Obama administration said as much as $17 billion in additional federal money is needed to maintain roads and bridges over the next two years, underscoring the challenges policy makers face as driving habits change.

Image Courtesy; Stateline.org via Gmanet.com

The recession and gas-price increases over the past two years have caused many consumers to drive less and switch to more fuel-efficient cars. The result has been a fall in revenue from taxes on gasoline and vehicle purchases, which are used to fund state and local transportation projects.

Officials from the  Obama administration and U.S. Dept. of Transportation have said that the trust fund will not have enough cash to cover commitments to states for highway projects, according to Senate Environment and Public Works Committee Chairman Barbara Boxer (D-Calif.) and the panel’s top Republican, James Inhofe of Oklahoma.

According to administration and DOT officials, $5 billion to $7 billion will be needed by August to avert having to slow down Federal Highway Administration reimbursements to state DOTs, Boxer and Inhofe said on June 2. The lawmakers added that a further $8 billion to to $10 billion will be needed in fiscal year 2010 to maintain the highway program at its current level. Congress has set the 2009 federal highway program obligation limit at $40.7 billion.

Boxer and Inhofe discussed the trust fund’s problem at a June 2 committee hearing on the nomination of former Arizona DOT Director Victor Mendez to be the new head of the Federal Highway Administration.

Inhofe raised the possibility of tapping the interest on the Highway Trust Fund balance as one solution. That interest goes to the general Treasury, not the trust fund.

The administration has resisted calls to increase the 18.4-cent federal tax on a gallon of gas; the tax hasn’t been raised since 1993.

Last year, Congress transferred $8 billion from the government’s general fund to the highway trust fund in response to a similar shortfall, allowing states to move ahead with hundreds of job-creating transportation projects. Congress may do that again this year.

Lawmakers could also consider tweaking the economic-stimulus law so states could use some of their stimulus money to compensate for other budget shortfalls. In most cases, states can’t use stimulus funds to compensate for budget deficits in their transportation-spending plans.

Congress and the administration are crafting legislation that would determine how the federal government funds transportation projects over the next several years. With the White House opposed to a gas-tax increase, lawmakers are trying to identify new money sources to maintain the nation’s infrastructure.

One hint of their approach could come later this month when Rep. James Oberstar (D., Minn.), chairman of the House Transportation and Infrastructure Committee, is slated to unveil his blueprint for transportation spending.

(Source: AP via Yahoo News & CNN)

Fears of stalled commerce and travel didn’t materialize at U.S. border crossings Monday as people stayed home or were gently warned on the first day of stricter identification requirements for Americans returning from Mexico and Canada.

Traffic generally moved smoothly as those without proper identification stayed home or immigration officials let them pass through with a reminder to get a passport or other accepted ID.

Those crossing the Hidalgo-Reynosa International Bridge in South Texas described the light traffic Monday morning as normal, with cars and pedestrians facing short lines.

“There was nothing. Everything is all right,” said Yvonne Rivera, a U.S. citizen who lives in Reynosa, Mexico, and commutes to work in Texas. The 22-year-old said she got her passport in anticipation of the rule change.

There were some hiccups.

Rosario Aragon said she got into a heated, 30-minute discussion with a border agent demanding a passport for her 9-year-old girl, even though U.S. and Canadian children under the age of 16 only have to present a birth certificate.

The agent at an El Paso crossing let her through after taking her daughter’s name and warning her to get an official ID from local police.

“I’m angry because he held us up for 30 minutes,” the U.S. citizen said after she crossed into Ciudad Juarez, Mexico.

The new security rules for land and sea border crossings require U.S. citizens to show a passport, passport card or enhanced driver’s license, which use a microchip to store a person’s information. Some citizens may also use a trusted traveler document, which require background checks and are generally used by peoplecrossing the border regularly for business.

At the busiest passenger crossing along the northern border, the Peace Bridge between Buffalo, N.Y., andFort Erie, Ontario, traffic flowed smoothly with Customs and Border Protection officers reporting a 95 percent compliance rate with the new ID requirement. The Peace Bridge handled 8.9 million autos and 47,100 commercial buses in 2008.

Jessica Whitaker of London, Ontario, didn’t have a passport but was allowed in to the U.S. after showing her birth certificate and driver’s license. “They were very nice, very polite,” she said.

Kevin Corsaro, U.S. Customs and Border Protection spokesman in Buffalo, N.Y., said it’s been a “routine Monday” with officers seeing a compliance rate as high as 95 percent throughout the Buffalo field office.

“We want to see 100 percent but we know that will take some time,” he said. “We won’t refuse entry to a Canadian if their only violation is they are noncompliant today, as long as we can verify their citizenship.”

The new rules for land and sea ports under the Western Hemisphere Travel Initiative were supposed to have gone into effect in 2008 but were delayed a year over concerns about the impact on commerce. The requirement for re-entering the country by air went into effect in 2007.

Click here to read the entire article.

(Source: AP, NY Times, The Infrastructurist, The Atlantic)

The U.S. transportation secretary says Spain’s bullet train system is a model to follow as America plans how it will spend its stimulus package. Ray LaHood says the $8 billion allocated for high-speed railways in the United States will improve the country’s infrastructure, spur economic growth and reduce greenhouse gas emissions. As part of his visit to Spain, he took a ride on the AVE from Madrid to Zaragosa and then hung around in a railway control center with the transport minister for a while. On Saturday he met with Prime Minister Jose Luis Rodriguez Zapatero, the guy who’s has really been the force behind Spain’s recent investment.

When President Obama announced in April his $13 billion plan to propel the United States into the age of high-speed rail, he tipped his hat to the trains that zip between the cities of the Old Continent at up to 217 miles an hour.  Spain opened its first Alta Velocidad Española, or AVE, high-speed train route in 1992, between Madrid and Seville. The network has grown to nearly 2,000 kilometers and stretches from Malaga on the south coast to Barcelona, which is north and east.

Spain, an enthusiastic latecomer to high-speed rail, on Friday will complete a six-day tour of European transit systems that it presented to the American transportation secretary, Ray H. LaHood. Officials say the Spanish experience could hold lessons in what works and what does not.

Supporters say the AVE has begun to transform the country, binding remote and sometimes restive regions to Madrid and leading traditionally homebound Spaniards to move around for work or leisure.

“Spaniards have rediscovered the train,” said Iñaki Barrón de Angoiti, director of high-speed rail at the International Union of Railways in Paris. “The AVE has changed the way people live, the way they do business. Spaniards don’t move around a lot, but the AVE is even changing that.”

Such is the train’s allure that politicians of different stripes have made extravagant promises to lace the country with a sprawling network. Under a plan devised by Prime Minister José Luis Rodríguez Zapatero, Spain will have 10,000 kilometers (more than 6,200 miles) of high-speed track by 2020.

(Source: Autobloggreen & Royal Automobile Club Foundation)

A new study by the Royal Automobile Club Foundation found that as many as 6.75 million British drivers are thinking about or could consider buying an electric vehicle – once they become available, of course. RAC surveyed 1,000 motorists over two weekends this month and asked the question: “Would you consider or are you planning on purchasing an electric car within the next five years?” Twenty percent picked either “Yes, would consider” or “Yes, planning on purchasing an electric car.” We’re right there with you, says the UK government, which will offer incentives worth up to £5,000 for EVs starting in 2011.

Also, the RAC points out that 20 percent of 33.8 million drivers means there could be a lot of people who want but can’t buy an EV. They say, “The RAC Foundation has discovered that by the Government’s own reckoning electric vehicles won’t be available on the mass market until at least 2017, leaving millions of potential buyers frustrated.”

Commenting on the findings, the director of the RAC Foundation Professor Stephen Glaister had the following words:

• “What the Government is in danger of doing is putting the cart before the horse. It is actively promoting the purchase of electric vehicles long before there is any chance of manufacturers making them widely available.”
• “It has gone out of its way to encourage people to make green choices, yet these choices are not yet realistic.”
• “Ministers’ thinking on green technology is all over the place. They talk of incentives of up to £5,000 for prospective buyers of electric cars from 2011. Yet at that stage there will be almost nothing in the showroom for people to purchase.”
• “The RAC Foundation fully supports the introduction of green vehicles. But electric cars are not the short-term solution. What the Government should be doing is improving the road network and encouraging manufacturers to refine existing technology. That means increasing road capacity to cut congestion and CO2 emissions; focussing on producing leaner petrol and diesel engines; and making smaller and lighter cars.”

On Friday, June 19, America 2050 will be co-hosting the next “Rebuilding and Renewing America” forum, focused on infrastructure strategies for the Southwest Megaregion, encompassing Southern California, the Las Vegas metropolitan area and Baja California.    The forum will aim to build support for a national infrastructure plan needed for America to respond to the big challenges of rapid population growth, our dependence on foreign oil, climate change, global competitiveness, and deteriorating infrastructure, and identify the major transportation, energy and water infrastructure priorities in the Southwest Megaregion that are issues of national significance. 

Likewise, we hope to find common ground among metropolitan areas in the Southwest Megaregion on programs and policies that would help regions and subregions meet their core infrastructure challenges.  The forum marks the first major convening of the west coast office of America 2050, housed at the USC Bedrosian Center. The forum aims to establish a network of business, civic, government and academic organizations through the America 2050 west coast office who will continue to work on building the Southwest Megaregion and pushing its collective agenda.    

The forum will take place at the Davidson Conference Center on the campus of the University of Southern California in Los Angeles on Friday, June 19 from 8:00am to 3:30pm. There is a fee of $25.00 to attend.  Register online here.