FAA Aviation Noise Abatement Policy (continued)


2. How Noise Affects People

Aircraft noise disturbs the normal activities of airport neighbors--their conversation, sleep, and relaxation -- and degrades their quality of life. Depending on the use of land contiguous to an airport, noise may also affect education, health services, and other public activities.

Although there may be indirect and subtle social and psychological harms, aircraft noise is predominantly an annoyance problem. It does not present any direct physical health danger to the vast majority of people exposed.


3. Whom Does Noise Affect and Where Do They Live?

Approximately six million U.S. citizens currently reside on 900,000 acres of land exposed to levels of aircraft noise that create a significant annoyance for most residents.* Of this number, approximately 600,000 citizens reside within areas that are severely impacted by aircraft noise; that is, areas in excess of NEF 40.

The subjective reactions of individuals to aircraft noise vary substantially.** These differences become increasingly apparent in the comparison of noise problems surrounding specific airports, taking into consideration the number and kind of local complaints about noise. the political pressures on the airport operator to take unilateral action to restrict use of the airport, and the environmental and social contexts-climate, lifestyles, community concern -- in which noise is perceived.


* Over NEF 30.

** The 1973 Annual Housing Survey conducted by the Bureau of the Census for the Department of Housing and Urban Development, indicated that of those surveyed:

20.2 percent experienced noise from airplane activity in the vicinity of their home. Of those experiencing noise, 34.2 percent considered the noise to be disturbing, harmful or dangerous; 6.3 percent felt airplane noise to be so objectionable that the household would like to move from the neighborhood.

In some communities, people's reaction to aircraft noise is increasingly being expressed in the courtroom where homeowners are receiving awards for nuisance and for diminution of property value (inverse condemnation). Over the past five years, airport proprietors have paid out over $25,000,000 in legal judgments or settlements in noise-related suits and have spent over $3,000,000 in legal fees, expert testimony and similar defense efforts.

The absence of lawsuits in some severely impacted areas and the recent occurrence of the most significant court precedents cause some observers to consider the pending suits to be merely the "tip of the iceberg," with substantial potential liabilities yet to arise. Others consider the concentration of lawsuits in certain areas to be an indication of the diversity in community response to aircraft noise, concluding that noise is not yet perceived as a substantial problem around many airports.

Partly as a reaction to such lawsuits, some airport proprietors have acquired substantial residential areas near their boundaries. The largest such programs have been undertaken by Seattle Tacoma International and Los Angeles International Airports. Los Angeles alone has spent over $130 million to purchase private residences and plans to spend $21 million on soundproofing schools and other public buildings near the airport.

Because the magnitude of the noise problem at any particular airport is a function of many factors, there is not any single criterion that defines a "noisy" airport. Depending on which criteria are used, the number of airports that are categorized as: "noisy", "noise sensitive", "noise problem", or "impacted by excessive noise", will vary. For example, the Air Transport Association (ATA) has identified 26 airports as "noise sensitive." On the other hand, the Airport Operators Council International has indicated that all airports receiving jet air carrier service now are or soon will be "noise impacted." By any definition, however, it is clear that an acute noise problem exists at many airports located in metropolitan areas.

Based on an analysis of citizen and Congressional complaints, the imposition of airport use restrictions, litigation and the number of people affected, the FAA has identified 100 airports where noise is in varying degrees an issue. A 1974 DOT study of 23 major U.S. airports identified eight airports that have neighboring populations of over 25,000 residing within the NEF 40 contour (extremely serious problem), and 13 airports with at least 100,000 residing within the NEF 30 contours (considerable annoyance).* For the 23 airports surveyed, five million people live within NEF 30 and a half a million within NEF 40. Clearly the vast majority of people exposed to serious levels of noise live near the major metropolitan airports.**

These airports, in the order of the number of people affected, are: LaGuardia, O'Hare, Kennedy, Newark, Boston, Los Angeles, Miami, Denver, Cleveland, San Francisco, Seattle, Buffalo, and St. Louis. "Airport Noise Reduction Forecast," Report DOT-TST-75-3, October 1974.

The following chart tabulates the number of people exposed to serious aircraft noise within the NEF 30 and 40 contours around the 23 airports included in DOT's study.



EXTENT OF NOISE PROBLEM AT 23 MAJOR AIRPORTS

1972

Number of People**

(1000)

Court
Airport NEF 30 NEF 40 Suits Restriction
1.*Atlanta 99.8 27.0 Yes
2.*Boston 431.3 32 Yes
3.*Buffalo 113.8 9.7
4.Chicago-Midway 38.5 1.8
5.*Chicago-O'Hare 771.7 66.6
6.Cleveland 128.7 11.2
7.*Denver 180.3 28.3
8.Dulles 3.5 0
9.*J.F. Kennedy 507.3 111.5
10.*LaGuardia 1057.0 17.1
11.*Los Angeles 292.4 51.1 Yes
12.*Miami 260.0 29.7 Yes
13.Minneapolis-St.Paul 96.7 8.8 Yes Yes
14.Newark 431.9 27.5
15.New Orleans 32.5 8.9 Yes
16.Philadelphia 76.9 0.3
17.*Phoenix 20.5 6.2
18.Portland 1.2 0.3 Yes Yes
19.*San Diego 77.3 24.0 Yes
20.*San Francisco 124.1 11.4
21.*Seattle 123.2 17.3 Yes Yes
22.St. Louis 100.0 8.5 Yes
23.*Washington National 24.4 2.0 Yes Yes
TOTAL 5.0M 0.5M
All other airports 1.1M .1M
GRAND TOTAL 6.1M 0.6M

* Identified by Air Transport Association as being "noise sensitive." Other airports on the current ATA list but not included in the study are: Detroit, Honolulu, Memphis, Las Vegas, Tampa, Ft. Lauderdale, San Juan, Oakland, and San Jose.

** Estimated from 1970 Census data


In response to public opposition to noise, some airports have imposed or are considering various use restrictions.* These measures include curfews, restrictions on the use of certain equipment, and limitations on operations. Such restrictions may have a substantial effect on interstate commerce and on the air navigation system.


* Major examples of completed or proposed actions by airport owners to reduce noiselevels by restricting the use of the airport are:

In some of the above cases, the restrictions have been developed voluntarily through operator/users agreements, while in others they have been imposed unilaterally by the airport proprietor.


Curfews at large, medium and small hubs could have very serious effects. New York City is an illustration:

Other disbenefits are also likely if curfews are widely adopted. A substantial number of airplane operations might have to be shifted to earlier hours, which, while eliminating noise at night, would result in congestion and delays and an increase in the noise exposure during daylight and evening hours. Airlines would require more aircraft, more expensively operated, to overcome positioning problems if even one or two major hubs were curfewed. Time zone differences would cause additional scheduling problems. A curfew at O'Hare, for example, would cause a major restructuring of most of the domestic air transportation system.


4. The Source of Aircraft Noise: Composition of the Fleet

Some have argued that normal attrition will eventually take care of the aircraft noise problem, as the older, noisier planes are phased out of the fleet. The evidence indicates, however, that unless federal action is taken, the problem of airport noise will remain and, with increasing operations occurring at more airports, will be exacerbated. At the end of 1975, only 494 of the 2,148 jet airplanes in the U.S. aircarrier fleet (about 23 percent) complied with the noise levels of-Part 36. It bears repeating that the 77 percent of the fleet that exceed Part 36 levels were not required to meet those standards since they were produced prior to the effective date of Part 36. Of the 1,654 aircraft in the fleet that do not meet Part 36 noise levels, 523 or 30 percent are the noisiest, four-engine models (Boeing 707s and 720s, Douglas DC-8s). Assuming normal attrition, the FAA projects that in 1990 48 percent of the air carrier fleet still will not meet Part 36.*


* Details concerning the aircraft currently operating that do not meet Part 36 noise levels and an FAA projection of the non-Part 36 aircraft that will remain in commercial service in 1984 is set forth in the environmental Impact Statement issued in conjunction with the Part 36 compliance regulation.

Since 1972, there has been a reduction in cumulative aircraft noise exposure around airports due in part to the introduction of new quieter jet aircraft and in part to the slowed rate of increase in passenger growth. Because of forecasted aviation growth, the airport noise problem is expected to increase in the future despite the introduction of quieter aircraft. Between 1975 and 1990, annual air carrier operations are estimated to increase from 10 million to 16 million, creating additional noise exposure that, without federal action, could more than offset the reduction in noise levels resulting from the replacement of the older airplanes by newer, quieter models. The major reason why progress in the replacement of older airplanes has been slow is the financial condition of the air carrier industry, to which we now turn.

B. The Financial Problem

1.Ability of Airlines to Finance Aircraft Replacement

As older noisier airplanes are modified or replaced with new planes that meet or better Part 36 standards, the cumulative noise exposure around major airports will be reduced. The degree and speed with which this occurs depends upon the financial capability of the air carriers to modify or replace their older airplanes. Since additional noise reduction and other benefits accrue from,replacement rather than retrofit of these planes, replacement appears to be a more desirable goal. But since replacement requires a much greater capital outlay than retrofit, the forecasted economic environment for the airline industry becomes doubly important.

In recent years many major airlines have experienced very serious difficulty in obtaining from private capital markets the financing necessary for equipment and other needs. Some have found themselves short even of working capital to continue operations. Between 1970 and 1975, the trunk carriers spent $14.6 billion on capital needs: $8.7 billion for aircraft, equipment and property; $1.7 billion for leases of aircraft and engines; and most of the rest for debt service. The sources of this financing were mainly depreciation ($5 billion to $7 billion) and new long term debt ($4 billion), with earnings contributing only about $400 million. Equity financing was insignificant in this period, and low earnings and existing high debt levels forced some carriers to lease rather than purchase new aircraft. In addition, because of their recent earnings records, conventional sources of debt financing also have been effectively foreclosed to some carriers. Insurance companies and banks have been unwilling or unable to make further financing commitments and in recent months have stated publicly that, until the airlines' financial situation is sufficiently improved, new loans will not be forthcoming. In this financially strained economic environment, some carriers have been forced to resort to existing revolving credit arrangements to raise working capital.

The 1974/1975 period was particularly difficult for the industry. The sudden and substantial increase in fuel prices that began in 1974, accompanied by inflation in other cost categories, forced carriers to raise fares sharply. This coincided, unfortunately with the economic recession of 1974-75 when demand was already softening, and traffic levels were driven down even further. Moreover, many airlines in the late 1960s had purchased equipment to meet a predicted demand growth that never occurred, leaving them for a time with substantial excess capacity. The airlines' financial problems were exacerbated by the existing economic regulatory system which does not normally allow for timely fare increases, and denies airlines the pricing and management freedom available to other industries.

The airline industry's financial performance has been showing steady improvement since the end of the recession, however, and prospects for increased earnings over the next few years are good. Traffic growth is expected to resume, though at a long-term rate about equal to GNP growth, in contrast to more rapid growth rates in the past. Since, at present, the airlines have relatively few new aircraft on order, any near term traffic growth will be accommodated largely through increases in aircraft productivity. Load factors are likely to increase, earnings should remain fairly stable at a relatively high level, and new capital needs should be relatively modest until 1980.

After 1980, however, traffic growth will begin to press against the fleet's capacity, and airlines will begin to require new capital to' finance the replacement of aging aircraft and to meet the growth demand. Leaving aside the new noise requirements, the Department estimates that between 1976 and 1985 the trunk carriers will need from 700 to 800 new aircraft and will require between $22 and $30 billion dollars to finance this acquisition (based on estimates by Government and private sector financial analysts). About $6 billion will be needed for debt repayment and other uses. A mid-range estimate of total capital needs, therefore, would be $32 billion.

Depreciation and sales of used aircraft can be expected to generate about $15 billion of this amount, leaving $17 billion to be financed through earnings and external sources. If earnings in the period were to rise to $6 billion which implies a 9'percent return on equity, as contrasted with the average 2.8 percent return of the past five years, external financing needs would be $11 billion. The airlines would probably be able to obtain this financing from conventional financial sources. The following table summarizes these estimates:

Sources and Uses of Funds (Mid-range Estimate)

Uses of Funds: ($ Billions)
Property, Plant and Equipment $26
Debt Repayment and Other 6
$32
Source of Funds:
Depreciation and Sales of Used Aircraft $15
Amount Required from Earnings and External Sources $17
Earnings Assumption 6
External Financing Requirement $11

Document Continued