Logan Airport

Memorandum

To: Dr. Camby

From: Jason Kidd

Date: Thursday, November 4th, 2010

Re: Solution Delays at Logan Airport

Problem

Boston’s Logan airport is facing low performance being ranked as the fifth most delayed airport in the United States. Increasing demand and delays due to adverse weather conditions are causing an increase in wait times and missed connections. This problem has been brought to head with the possibility of adding a new runway or to apply peak period pricing (PPP) to reduce delays.

Conclusion and Recommendations:

Boston’s Logan airport should construct a new runway to provide a long term increase in service capacity.

At current conditions (2000), the new runway will reduce the costs associated with delays by $5,934.2/hour, $6527.63/hour, and $14,5431.78/hour for an average arrival rate of 50 planes/hour, 55 planes/hour, and 59 planes/hour accordingly (Appendix). The time needed to break even is 782 days (Appendix) plus the additional savings of $393,288/hour and $280,920/hour in moderate or severe weather conditions where some runways cannot be utilized (Appendix).

Projected conditions (2015) suggest that, the new runway will reduce the delay costs by $8,120.47/hour, $8,912.82/hour, and $193,905.43/hour with an average arrival rate of 50 planes/hour, 55 planes/hour, and 59 planes/hour accordingly(Appendix). There will be additional savings of $534,690/hour and $388,350/hour in moderate or severe weather conditions (Appendix).

This addition allows for increased savings and capacity, retaining the airport’s ability to service all current customers. In addition, this provides a long term solution as peak period pricing will require further increments to maintain its effectiveness and while its capacity remains the same.

Evaluation Criteria:

Cost minimization: The solution must reduce the time of delays and subsequently reduce the cost associated with delays. Initial costs also determine the funds required to begin...