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PROPERTY OF ISER , FILE COPY Do Not Remove REVIEW OF BUSINESS AND ECONOMIC CONDITIONS A UNIVERSITY OF ALASKA, INSTITUTE OF SOCIAL, ECONOMIC AND GOVERNMENT RESEARCH VOL. VI, NO. 2 AIR PASSENGER AND CARGO TRANSPORTATION IN ALASKA The air transportation industry in Alaska is undergoing dramatic changes, which are likely to further strengthen its economic value to the state. New technology and trans- port needs are increasing carrier competitiveness, while rising equipment and operating costs are lowering profit margins. These conditions, plus growing reluctance on the part of the federal government to subsidize less efficient operations, have resulted in attempts to increase efficiency through airline mergers . In 1967, Western Airlines International, plagued by an announced profit squeeze on its western continental U.S. and Mexican routes, purchased Seattle based Pacific Northern Airlines and expanded operations into Alaska. Alaska Airlines in the past two years acquired Cordova Airlines (the former Coastal and Ellis _ Airlines), extending its routes throughout Southeastern Alaska and into Dawson, Y.T., Canada. The two major intra-Alaska carriers, Wien Air Alaska, Alaska's oldest airline, and ·Nor:thern Consoli- dated Airlines, joined forces in 1968 to form Wien Consoli- dated Airlines. These combined major city and bush routes extend from Juneau to the Arctic Ocean and Bering Sea coasts. Settlement of the long standing Trans-Pacific Route Case, which has been in the works since the mid-1950's, · will bring additional changes in Alaskan aviation. President Richard Nixon, after rescinding and review- ing routes approved by the Johnson Administration, granted Pan American World Airways a route from New York to Tokyo via Fairbanks. Approval of a Western Airlines route from Anchorage to Honolulu is expected in the near future. The Pacific Northwest-California route case also affects Alaska. Growing interstate, intrastate and international traffic is putting great strains on aircraft facilities in Alaska. An upsurge in airport and facility construction is expected. The Civil Aeronautics Board, the federal regulatory agency concerning airline operations, announced late in March that they were beginning an Alaskan Service Inves- tigation . In an announcement to the airlines and other in- terested parties, the CAB stated; "The board has decided to undertake a comprehensive review of major route pat- terns serving Alaska. " It has been over ten years since the board completed an extensive examination of intra-Alaska air transporta- tion requirements and almost four years since we last ex- amined the need for realignment and rievision of the four- carrier air route complex between the Pacific Northwest and Alaska. Significant changes in recent years suggest that the time is now ripe for a broad-scale investigation into Alaskan air transportation requirements. A sound air transportation system is vital to the Alaskan economy and the board intends to examine the entire Alaskan air route structure to determine what changes are necessary to pro- vide for better service to the public, improved scheduling and operational flexibility for the carriers, elimination of uneconomic and wasteful competition, and reduction of federal subsidy payments.'' The coming introduction of jet aircraft that can carry more than 100 tons of freight or up to 400 passengers, plus the increasing cargo requirements resulting from oil ac- tivity on the Arctic Slope, are additional factors effecting major changes in the Alaska air transportation picture. HISTORY OF AVIATION IN ALASKA The era of the airplane in Alaska began on the Fourth of July, 1914,when a group of Fairbanks businessmen spon- sored an aerial circus and brought pioneer aviator James Martin north with his flying machine. The businessmen hoped to make a profit by selling seats in the ballpark to watch the take-off and landing . The undertaking was not a financial success . Few people came to the ballpark al- though hundreds climbed trees and sat on roofs, as Martin, for nine minutes, circled the gold rush city at an altitude of 400feet. Commercial aviation began in Alaska during the early

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PROPERTY OF ISER

, FILE COPY Do Not Remove REVIEW OF

BUSINESS AND ECONOMIC

CONDITIONS

A UNIVERSITY OF ALASKA, INSTITUTE OF SOCIAL, ECONOMIC AND GOVERNMENT RESEARCH VOL. VI, NO. 2

AIR PASSENGER AND CARGO TRANSPORTATION IN ALASKA The air transportation industry in Alaska is undergoing

dramatic changes, which are likely to further strengthen its economic value to the state. New technology and trans­port needs are increasing carrier competitiveness, while rising equipment and operating costs are lowering profit margins. These conditions, plus growing reluctance on the part of the federal government to subsidize less efficient operations, have resulted in attempts to increase efficiency through airline mergers .

In 1967, Wes tern Airlines International, plagued by an announced profit squeeze on its western continental U.S. and Mexican routes, purchased Seattle based Pacific Northern Airlines and expanded operations into Alaska. Alaska Airlines in the past two years acquired Cordova Airlines ( the former Coastal and Ellis _ Airlines), extending its routes throughout Southeastern Alaska and into Dawson, Y.T., Canada. The two major intra-Alaska carriers, Wien Air Alaska, Alaska's oldest airline, and · Nor:thern Consoli­dated Airlines, joined forces in 1968 to form Wien Consoli­dated Airlines. These combined major city and bush routes extend from Juneau to the Arctic Ocean and Bering Sea coasts.

Settlement of the long standing Trans-Pacific Route Case, which has been in the works since the mid-1950's,

· will bring additional changes in Alaskan aviation. President Richard Nixon, after rescinding and review­

ing routes approved by the Johnson Administration, granted Pan American World Airways a route from New York to Tokyo via Fairbanks. Approval of a Western Airlines route from Anchorage to Honolulu is expected in the near future. The Pacific Northwest-California route case also affects Alaska.

Growing interstate, intrastate and international traffic is putting great strains on aircraft facilities in Alaska. An upsurge in airport and facility construction is expected.

The Civil Aeronautics Board, the federal regulatory agency concerning airline operations, announced late in

March that they were beginning an Alaskan Service Inves­tigation . In an announcement to the airlines and other in­terested parties, the CAB stated; "The board has decided to undertake a comprehensive review of major route pat­terns serving Alaska.

" It has been over ten years since the board completed an extensive examination of intra-Alaska air transporta­tion requirements and almost four years since we last ex­amined the need for realignment and rievision of the four­carrier air route complex between the Pacific Northwest and Alaska. Significant changes in recent years suggest that the time is now ripe for a broad-scale investigation into Alaskan air transportation requirements. A sound air transportation system is vital to the Alaskan economy and the board intends to examine the entire Alaskan air route structure to determine what changes are necessary to pro­vide for better service to the public, improved scheduling and operational flexibility for the carriers, elimination of uneconomic and wasteful competition, and reduction of federal subsidy payments.''

The coming introduction of jet aircraft that can carry more than 100 tons of freight or up to 400 passengers, plus the increasing cargo requirements resulting from oil ac­tivity on the Arctic Slope, are additional factors effecting major changes in the Alaska air transportation picture.

HISTORY OF AVIATION IN ALASKA The era of the airplane in Alaska began on the Fourth

of July, 1914, when a group of Fairbanks businessmen spon­sored an aerial circus and brought pioneer aviator James Martin north with his flying machine. The businessmen hoped to make a profit by selling seats in the ballpark to watch the take-off and landing . The undertaking was not a financial success . Few people came to the ballpark al­though hundreds climbed trees and sat on roofs, as Martin, for nine minutes, circled the gold rush city at an altitude of 400 feet.

Commercial aviation began in Alaska during the early

PAGE 2 UNIVERSITY OF ALASKA, INSTITUTE OF SOCIAL, ECONOMIC AND GOVERNMENT RESEARCH

ALASKA REVIEW OF BUSINESS AND ECONOMIC CONDITIONS

VOL. VI, NO. 2 April, 1969

Published by the Institute of Social, Economic and Government Research,

University of Alaska, College, Alaska

William R. Wood-President, University of Alaska Victor Fischer-Director, Institute of Social, Economic

James D. Babb, Jr. Institute Editor

and Government Research

Terry T. Brady - Author Judy M. Brady Review Editor

1920's, as pilots decided to try their luck on the last fron­tier. One of the foremost of these men was Carl Ben Eiel­son, a Fairbanks schoolteacher, who like other early bush pilots became a legend in his time.

Eielson inaugurated the first air mail service in Alas­ka, flying a DeHaviland between Fairbanks and McGrath during the winter of 1924. He covered the distance in a few hours, whereas it took dog team drivers three weeks to make the round trip. In 1928, Eielson, in company of Cap­tain George Wilkins, made the first airplane flight across the Arctic Ocean, from Alaska to Spitzbergen.

The route, over the northern tip of Greenland, pio­neered the way for World War II military flights and the much later commercial flights that began at the end of the 1950's. Eielson was only 32 years old when he crashed and was killed near Siberia in 1930, while going to the aid of the Nanuk, a fur trading ship frozen in the arctic pack ice.

Other pilots were also testing the airways of Alaska when Eielson was making his historic flights. Noel Wien, with his pilot's license signed by Orville Wright, came north in 1924 to join the Fairbanks Airplane Company. Later, with his brothers, he founded Wien Alaska Airlines which is now a major part of Wien Consolidated Airlines. In March 1929, Wien made the first flight between Alaska and Siberia.

Joe Crosson, A. A. Bennett, and Harold Gillam were others who pioneered commercial flying in Alaska. Cros­son, a veteran pilot, and Gillam, then a neophyte, flew open cockpit planes in search of Eielson in 1930. It was Gillam, himself to die following a crash in Southeastern Alaska during World War II, who found Eielson and his mechanic, Earl Borland, near the Siberian coastline.

Crosson, who worked for Eielson, helped merge Eiel­son's company and several other early Alaskan flying services into Pacific Alaska Airways, a subsidiary of Pan American World Airways. The Pan American combine helped establish local scheduled routes in Alaska, and in 1940, inaugurated the first scheduled service between Alas­ka and Seattle. Some charter type services had been operat-

ing between the lower states and the Territory of Alaska since 1929, beginning with the first flight in a Lockheed Vega of Ancel Eckmann for Alaska Washington Airways.

The 1930's witnessed a steady growth in the use of air~ craft in the Northland. It was the era when men like Fred Moller decided the plane could be used as a prospecting tool, when Harold Gillam proved that radios and instru­ments would make planes useful in bad weather, and when Bob Reeve, now president of Reeve Aleutian Airways, pio-

It was an era when planes were identified by the men and the exploits of the men who flew them. Sig Wien, Art Woodley, Ray Peterson, John Cross, Jim Dodson, Sam 0. White, Merle "Mudhole" Smith, Shell Simmons, Alex Hol­den, Russell Merrill, Bob Ellis, and Archie Ferguson are but a few of those who brought the air age to Alaska prior to World War II. Several of these former pilots are still active in aviation as executives of the combines that have succeeded the small operators of that time.

The 1920's and 1930's was also the period when global air pioneers realized the strategic importance of Alaska, both in military and civil aviation. General Billy Mitchell sponsored a flight of the Black Wolf Squadron, U.S. Army Air Service, from New York to Alaska in 1920. Mitchell had previously served in Alaska with the Signal Corps. It took the squadron, in four open DeHaviland planes, six weeks to make the trip to Fairbanks. From Fairbanks they flew to Nome, and would have pioneered a route to Siberia, if the Army had allowed it.

The route from Alaska westward to Siberia was to be flown by thousands of lend lease planes entering Russia from the United States by the "back door" during World War II. The Cold War that has enveloped the world since World War II has also made Alaska an important military basing area for aircraft. Defensive interceptors, surveil­lance aircraft, and huge tankers have all been used along the Soviet Arctic frontier.

However, it is in world wide civil aviation that Alaska has come into its own. Since the late 1950's when Scandi­navian Airlines System, the giant co-operative airline of Sweden, Norway and Denmark, made its maiden polar flight from Europe to Japan via Anchorage, Alaska has been referred to as the "air crossroads of the world." Anch­orage now has one of the world's most important interna­tional airports, with multi-daily flights stopping enroute to and from the continental United States and the Orient, and from the Orient to Europe.

Groundwork for this key position began early in the aviation history of Alaska. The flight of the Black Wolf Squadron, Carl Ben Eielson and George Wilkin's pioneer flight across the Arctic, the early operations of Pan American World Airways in Alaska and the exploits of

UNIVERSITY OF ALASKA, INSTITUTE OF SOCIAL, ECONOMIC AND GOVERNMENT RESEARCH PAGE 3

Wiley Post and famed humorist Will Rogers (who were killed near Barrow in 1935 on a round the world flight) all contributed.

Today, the booming oil business is making great de­mands on speedy, large capacity cargo planes. Increased international flights are adding to the need for additional stopover facilities in the state, and intrastate travel con­tinues to keep bush pilots busy, though they are now flying turbine-powered Pilatus Porters and DeHaviland Otters, rathrr than th<? old

PASSENGER TRAFFIC The number of persons moving to, from, through and

within Alaska by air has grown substantially since the end of World War II. Alaskans log on an average several times more airline trips per year than the U.S. population as a whole. In Alaska, the airplane has virtually taken the place of busses and trains in intercommunity transportation. Since World War II airlines have supplanted ships as the primary transportation mode for passengers to and from Alaska.

By the mid-1950's, during the military construction per­iod when the DEW Line and White Alice systems were built, air transportation of passengers came into its own in Alaska. In 1955, 264,700 passengers enplaned within Alaska on scheduled U.S. flag carrier flights. By 1957, enplane­ments had increased to 364,000. In 1958, toward the end of the construction period, this dropped to 334,000, and took a further drop to 331,000 in 1959, the first year of statehood. Since then the number of enplanements on U.S. flag car­riers has grown steadily, and reached an estimated 887,949 during 1968. (See Table 1.)

TABLE 1 Airline Passenger Enplanements

(On Scheduled U.S. Flag Air Carriers Only)

Fiscal Year Alaska Anchorage Fairbanks

1955 264,700 70,109 35,110 1956 320,400 87,368 46,795 1957 364,400 101,160 54,739 1958 334,000 88,791 41,507 1959 331,200 91,834 41,181 1960 367,800 96,803 43,566 1961 423,000 120,994 52,330 1962 522,990 143,640 70,622 1963 566,950 163,300 68,731 1964 605,107 187,920 80,530 1965 656,564 202,609 78,118 1966 704,850 223,700 75,871 1967 777,944 261,174 81,084 1968* 876,000 325,000 95,000

* Preliminary Estimate Source: Federal Aviation Administration, and individual airport statistics

TABLE 2 Forecast of Total Passenger Enplanements on

Scheduled U.S. Flag Air Carriers in Alaska

Ratio: Forecast Fiscal Total Rate of Enplanements/ Year Enplanements Increase Population

1969 969,000 3.25 1970 1,072,000 10.6 3.47 1975 1,635,000 8.8 4.46 1980 2,400,000 8.0 5.45 1985 3,400,000 7.5 6.42

Source: Federal Aviation Administration

The greatest growth has been in Anchorage, the state's largest city, where 70,109 U.S. flag carrier enplanements were recorded in 1955. This grew to an estimated 325,000 in 1968. At Fairbanks, the number grew from 35,110 in 1955 to an estimated 106,949 in 1968.

The Federal Aviation Administration predicts that U.S. flag carrier enplanements in Alaska will continue to grow at a rapid rate, and recently revised estimates put the number for the entire state at 3,400,000 in 1985 - 1,585,000 at Anchorage alone. This forecast growth rate would far out­strip the predicted population gain, and would result in 6.42 enplanements per person. In 1966, Alaska had 2.47 en­planements per capita, while the rate for the U.S. popula­tion as a whole was 0.59. (See Table 2.)

Enplanements on U.S. flag carriers alone do not tell the entire story of the growth, past and predicted, of pas­senger air service in Alaska. Table 3 depicts the total utili­zation growth of both the Anchorage and Fairbanks Inter­national Airports during the period 1955 to 1966.

That there was a growth in passenger traffic, while at the same time the number of aircraft operations at the two major airports remained nearly stable, can be explained in large part by the introduction of bigger and faster pro­peller aircraft in the 1950's and the use of big jets begin­ning in the early 1960's. The bigger prop planes (Douglas DC-6's and 7's and Boeing Stratocruisers) during the 1950's allowed the carriers to move more passengers. The jets (Douglas DC-S's, Boeing 707's and 720's, Convair 880's) which began flying in the 1960's, further explains the growth.

Also, bigger and faster planes were being introduced in­to intra-Alaska service about the same time, allowing local carriers to move more passengers with less total opera­tions. The Fairchild F-27 prop jets went into service in the late 1950's, taking over the work done earlier by small planes and the older transports, Douglas DC-3's and Curtis C-46's.

PAGE 4 UNIVERSITY OF ALASKA, INSTITUTE OF

TABLE 3

Air Carrier Passengers and Aircraft Operations, Anchorage International Airport: 1956-66

Aircraft Operations

Air Carrier General

Year Passenger Total Air Carrier Aviation Military

1956 167,380 114,972 29,396 32,081 53,495

1957 194,102 121,464 29,679 32,885 58,900

195t, 192,Wb 1959 225,986 73,230 21,585 32,708 18,937

1960 232,266 95,910 28,364 45,678 21,868

1961 255,212 90,440 35,958 33,945 20,537

1962 276,197 85,594 35,420 35,412 14,762

1963 306,693 73,858 30,022 34,525 9,291 1964 365,752 59,924 19,490 34,198 6,236 1965 581,063 82,481 23,723 52,647 6,111 1966 447,113 104,181 30,254 68,903 5,024

Source: Department of Public Works, State of Alaska; and FAA records

Air Carrier Passengers and Aircraft Operations, Fairbanks International Airport: 1956-66

Aircraft Operations

Air Carrier General

Year Passenger Total Air Carrier Aviation Military

1956 77,618 61,593 15,774 36,009 9,810

1957 88,784 53,724 12,496 34,117 7,111 1958 84,819 68,359 12,047 49,929 6,383 1959 98,139 59,597 14,156 40,423 5,018 1960 111,349 49,048 25,336 31,068 2,644 1961 141,585 48,788 22,126 24,667 1,999 1962 122,130 44,446 16,292 24,406 3,748 1963 128,647 37,948 14,408 20,883 2,657 1964 136,878 39,595 11,381 25,641 2,573 1965 145,119 42,639 9,020 30,642 2,977 1966 151,598 57,982 9,221 47,419 1,324

Source: Department of Public Works, State of Alaska; and FAA record 0

The recent introduction of newer Convair prop-jets and medium range pure jets (Boeing 727's and 737's) into intra­Alaska service will aid the airlines in further increasing the ratio of passengers to flights, though this will be some­what offset by the number of pure cargo flights to the oil areas of the north. Another contributing factor to the sta­bility in operations at the two major airports has been the considerable decline of military operations at the civilian fields. Both Anchorage and Fairbanks international air­ports were heavily used by military aircraft during the mid-1950's construction period.

One of the biggest factors contributing to the growth of facilities at the Anchorage International Airport has been the increasing use of the field as a stop-over for interna­tional airlines flying between the United States and Asia,

SOCIAL, ECONOMIC AND GOVERNMENT RESEARCH

Europe and the Far East, and the Military Airlift Command flights that refuel at Anchorage. (See Table 4.) In calen­dar year 1959, 41,080 through passengers used the Anchor­age facility. This increased to 360,631 by 1967, and is pre­dicted to reach 2,000,000 through passengers a year by 1985. (See Table 5.) These figures do not take into consideration tne past use of Fairbanks International Airport for through passengers as an alternate stop to Anchorage nor the use of Fairbanks as a regular through passenger stop in the

Also of military

charter) stopped at the Cold Bay facility on flights to the Far East in the past. Increased use of the Cold Bay facility is predicted for the future, both as a primary gateway jet airport for Alaska, and as a primary alternate to the Anch­orage airport on the Great Circle route from the continental United States to Asia.

As more large capacity aircraft become available to the airlines, and as Fairbanks, and perhaps other Alaskan air­ports become part of through route systems, the import­ance of the state on the worldwide route systems will be magnified. Subsonic jet aircraft carrying 400 passengers (the Lockheed 1011 and the Boeing 747) will be operational within the next few years, and supersonic planes with 200 passengers (the Boeing SST and the British-French Con­corde) will begin operating by the mid-1970's. Pre­dictions that by 1985 Alaska will be hosting more than 3.5 million through passengers, with many of them enjoying stop-over privileges, may not be too excessive. Adding these figures to the predicted 3.4 million Alaskan enplane­ments on U.S. flag carriers for the same year, it is readily apparent that passenger traffic on the airlines serving the state is a large and growing business.

TABLE 4

Through Passengers at Anchorage International Airport

(1959 - 1967)

Ratio: Through

Calendar Ratio: Through Passengers to

Through Passengers to Total Scheduled U.S. Year Passengers Outgoing Passengers Carrier Enplanements

1959 41,080 0.36 0.45 1960 54,210 0.46 0.56 1961 122,483 0.94 1.01 1962 121,209 0.86 0.84 1963 171,763 1.10 1.05 1964 180,900 0.98 0.96 1965 167,853 0.80 0.83 1966 359,943 1.60 1.61 1967 360,631 1.20 1.41

Source: Federal Aviation Administration

UNIVERSITY OF ALASKA, INSTITUTE OF SOCIAL, ECONOMIC AND GOVERNMENT RESEARCH PAGE 5

AIRFREIGHT

The movement of freight by air in Alaska began with the first commercial flights in the territory. Trappers, pros­pectors, surveyors, and sportsmen all made use of the early day planes to move gear into the wilderness and be­tween towns and villages.

However, unlike passenger service, in which the air­lines took an early lead over other transportation modes, air freighting has consistently lagged far behind railroads,

from, and within Alaska.

In 1950, of 3.2 million tons of Alaskan cargo handled by the different transportation modes, only 13,100 tons were handled by the airlines. By 1964, 9.9 million tons of Alaskan cargo was handled by all transport means. The air freight total only neached 52,000 tons that year. (See Table 6.)

There are several reasons for the airlines being last among cargo transportation modes. Until recently, air­planes have not been large enough to handle the big, bulk cargoes. Also, in the past, plane design allowed only nar­row doors in the airframes, restricting the size of cargo carried to that which could be taken in through the doors. In addition, the airlines, while promoting passenger serv­ice, did not put equal planning effort into cargo handling.

All these points resulted in high unit costs that could only be offset by handling specialized cargo into remote areas where other transport means were not available, or by promising delivery in a short time.

However, due to advanced design, size and capabilities of newer aircraft, and demand for air freighting, there is a change underway in the air freight industry. Terminal facilities are being expanded, and methods of speeding completion of the paperwork accompanying cargo handling are being developed.

Where but a few years ago air cargoes were limited to a few thousand, and in many cases a few hundred pounds, present planes (Lockheed 100 series "Hercules," for example) can handle 25 tons of freight, and the next

TABLE 5 Forecast of Through Passengers Anchorage International Airport

Year Forecast of

Through Passengers

1969. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 403,000 1970 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 440,000 1975. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 760,000 1980 .................................. 1,400,000 '1985 .................................. 2,000,000

Source: Federal Aviation Administration

TABLE 6 Alaskan Air Cargo Compared to Cargo Handled by Other Transportation Modes

(In Tons)

Year Commercial Airlines Total All Modes

1950 13,100 3,200,000 1955 39,000 5,500,000 1960 31,200 7,200,000 1982 83,300 9,500,000 1963 55,700 9,900,000 1964 52,000 9,900,000

Source: Alaska Trade Study, Federal Maritime Commission, 1967

generation of aircraft (Lockheed 500 and Boeing 747) will be able to carry up to 160 tons of cargo.

Airports capable of handling the Lockheed "Hercules" four engine turboprop planes will also be able to take the bigger jets. Considering the size of the new aircraft, the increasing demand for air services, and the predicted drop in ton-mile costs, the Federal Aviation Administration has predicted that by 1985, 1,150,000 tons of freight will be handled by aircraft in Alaska. (See Table 7.) The same source predicts Anchorage International Airport will be handling about 575,000 tons of this 1985 freight. (See Table 8.)

The FAA acknowledges these air freight predictions are only broad estimates, based partly on past growth factors in Alaska and air freight predictions made for the United States as a whole, and taking into consideration some of the special features of Alaska. The tremendous in­crease in air freight moving through Fairbanks and Anch­orage for the North Slope oil development in the Arctic, foretells what may be in store for the Alaskan air freight industry.

Even though surface and water transportation are to be used in the development of the area, the use of air

Year

1964 1970 1975 1980 1965

TABLE 7 Projection of Air Cargo in Alaska

(In Tons)

Showing Annual Rate of Increase Between Key Years (In Per Cent)

FMC Alaska FAA National Air Industry FAA Aviation Trade Study Projection Projection Forecast for

Rate Rate Rate Alaska

52,000 52,000 52,000 52,000 105,000 12.4 155,000 20 155,000 20 131,000 189,000 12.4 365,000 20 365,000 20 325,000 340,000 12.4 960,000 20 765,000 15 655,000 610,000 12.4 2,400,000 20 1,250,000 10 1,150,000

Source: Compiled from FAA Data and FMC Alaska Trade Study

Rate

16-18 20 15 12

PAGE 6 UNIVERSITY OF ALASKA, INSTITUTE OF SOCIAL, ECONOMIC AND GOVERNMENT RESEARCH

TABLE 8

Forecast of Air Cargo Activity in Anchorage (1969 - 1985)

Year

1969 1970 1975 1980 1985

Tons of Cargo Annual Rate of Growth

56,000 66,000

165,000 330,000 575,000

Source: Federal Aviation Administration

18 20 15 12

freighting for the oil industry is expected to continue to grow in importance. Several new, private airfields are under construction on the North Slope, and more are ex­pected to be built as the industry expands its operations.

Proposed development, not only for oil, but minerals, timber, and other purposes in remote regions of Alaska, will undoubtedly affect the air cargo industry. As an ex­ample, air cargo is being used extensively for the Amchitka Island Atomic Energy Commission project in the Aleutian Islands, even though the area can be served year around by water borne carriers. The Kandik region of the upper Yukon River area, the lower Kuskokwim, Bristol Bay, Gulf of Alaska and the Seward Peninsula are all likely areas for resource development in the future. Air freight­ing can be expected to play a major role in each of these areas, though the air carriers will have competition from other transportation modes.

However, unless air freighting can become more com­petitive with other modes in more circumstances, all the gains predicted for the industry might not materialize. Lowering rates, speeding cargo handling from pickup to delivery, and in some cases, changing federal and state rulings to allow the airlines (both combination passenger­freight, and pure cargo lines) to be more competitive, are all needed. These are not only Alaskan concerns but are problems facing the industry nationwide.

Answering these problems will determine the makeup of the companies handling most of the air freight. While there will be need for all-cargo flights and combination passenger-cargo flights, the scheduling and frequency of these flights over certified air routes, or off-line contract hauls, will be determined in part by economics and in part by political pressures.

Each category of carrier is faced with different prob­lems. For combination carriers the problem is one of pleas­ing and handling passengers while at the same time mak­ing room, with little delay for cargo, on scheduled flights over certified routes. For the federally certified all-cargo carriers, the problem is how to speed up cargo handling

both on the ground and in the air, and over certified routes, in volumes justifying modern equipment at low enough cost to be competitive. The last category, that of the contract charter carrier, must be available to handle varied types of cargo under different conditions, in competition with the certified carriers. Like any other carrier, the contractor must be efficient and must find volumes suitable to keep expensive equipment in operation.

At the present time, Alaska is served only by combina-tion rontnid 11/fost of ths

within the state under state certification, though in some cases (i.e., Alaska Airlines) a combination carrier per­forms outside contract work. Other contract carriers and all cargo carriers fly through Alaska and use Alaska fa­cilities (primarily Anchorage International and Cold Bay) on flights to and from the Orient.

AIRPORTS AND FACILITIES Alaska's increased needs for airports and facilities

that can handle the present and future jet and turboprop aircraft with their larger passenger and cargo loads has already become apparent to the planners. The addition of new international and territorial routes will place heavier demands on the existing major gateway airports. Increased intrastate traffic will affect many more facilities. Demand will be accelerated when the new "jumbo" jets become op­erational in 1971. Nearly all the airlines utilizing Alaskan facilities have placed orders for the new aircraft. Some are already using "stretched" versions of the present day jets.

The jumbo jets will carry as many as 400 passengers, while the supersonic aircraft that will follow them into operation will carry approximately 200. In addition, intra­state jet travel has begun, and in order for the planes to be fully utilized, more fields must be made available for their use. This not only includes runways and landing facilities, but passenger stopover facilities, cargo handling and stor­age facilities, and in some cases, increased fueling facili­ties. The state and federal governments and private indus­try are currently working to meet these needs. (See Table 9 for partial listing of current projects.)

While more than 300 communities in Alaska receive scheduled air service, it has been estimated that until 1985 the priority needs for jet aircraft may be met with a minimum of 37 jet airports. Many non-jet fields and facili­ties will need upgrading, and some new ones will have to be built to serve smaller prop and turboprop aircraft, par­ticularly in the northern and western areas.

Following is a listing of the minimum jet airport needs for Alaska by the year 1985. The compilation was made by Robert A. McEwing, of the Airports Division, Federal Avia­tion Administration, in the report Aviation Forecasts for Alaska, published in April 1968.

UNIVERSITY OF ALASKA, INSTITUTE OF SOCIAL, ECONOMIC AND GOVERNMENT RESEARCH PAGE 7

Most of Alaska's airports serve more than a primary purpose. For example, Fairbanks and Anchorage Interna­tional Airports serve as gateway airports, international stop airports, distribution hubs, and also as resource air­ports, in that they are necessary for the tourist industry and supply points for resource development projects. The McEwing report takes this into consideration.

ALASKA'S MINIMUM JET AIRPORT NEEDS BY 1985

Alaska's jet airport locations can be loosely grouped into three categories which identify the primffi'y purpose of the airport. These are:

1. Gateway Airports - which serve as major hubs on the routes of international and interstate air carriers.

2. Major Distribution Hub Airports - which serve as transportation and distribution centers for a section of the state.

3. Resomce Airports - which serve as airports necessary to promote the development and expan­sion of one or more of Alaska's major resources (pe­troleum, mining, tourism, fisheries and timber).

SOUTHCENTRAL ALASKA

1. Anchorage International Existing primary gateway jet port in Alaska; major distribution hub for Southcentral and Western Alaska; resource airp01it for tourism, petroleum and government. By 1985, there may be a new location for Anchorage In­ternational Airport either on the west side of Cook or the south side of Turnagain Arm. The present In­ternational Airport will become a general avia­tion and resource airport for tourism and com­muter flight activity.

2. Kenai - Resource airport for tourism, petroleum. 3. Homer - Resource airport for tourism, petroleum

and fisheries. Possibly by 1985 a new major air­port fo11 the Kenai Peninsula, and the airports at communities on the Kenai peninsula, will be devel­oped in the Kenai/Soldotna/Homer area. This new airport would then act as the major distribution air­port for the Kenai Peninsula and the airports at Kenai and Homer will serve the increased activity associated with general aviation and local resource development.

4. Kodiak - Resource airport for tourism, fisheries, and timber. Distribution airport for Kodiak Island and eastern side of Alaska Peninsula. By 1985 a major new airport to serve the Kodiak area may be planned or constructed on the island.

5. Cordova - Resource airport fori tourism, petrol­eum, minerals and fisheries. Distribution airport for southeastern portion of Southcentral Alaska.

6. West Cook Inlet - Resource airport for petrol­eum and minerals in the Chenik-Pile Bay area of Southern Cook Inlet.

INTERIOR ALASKA

1. Fairbanks International - Existing gateway jet port serving central Alaska. Major distribution and resource airport for central and northern portion of the state. By 1985, the Fairbanks area may

ing airport used primarily for air-taxi and general aviation activity.

2. Fort Yukon - Distribution hub for Northeastern Alaska and resource airport for tourism.

3. Border Airport - Resource airport for tourism and mineral development along Alaska-Canada bor­der. Primary port of entry for general aviation fly­ing into Alaska.

NORTHERN AND NORTHWEST ALASKA*

1. Banow - Distribution hub for northern coast. Resource airport for tourism, petroleum, and arctic fisheries. Possible gateway jet port for polar flights if petroleum resources are tapped and refined lo­cally.

2. Umiat Area-Resource airport for petroleum and mineral activity on the north slope of Brooks Range. Airport will be located near site of northern terminus of Alaska Railroad ( Gubik Extension).

3. Upper Kobuk River - Distribution hub for West­ern Interior. Resource airport for minerals de­velopment along southern slope of Brooks Range. Airport may be located in vicinity of existing cop­per development or near possible railroad terminus of western extension of Alaska Railroad.

4. Kotzebue - Resource airport for tourism and Chukchi Sea fisheries. Distribution hub for north­western shore area of Alaska.

5. Nome Area - Existing jet port resource airport for minerals, tourism, and North Bering Sea fisher­ies. Distribution hub for Seward Peninsula area. Major airport may be located near deep water port at Teller and possibly could be gateway jet port serving polar or U.S. - Siberian routes.

6. Galena - Galena is an existing jet airport and may possibly continue to exist as a distribution hub on the Central Yukon.

7. Unalakleet - Possible location for a resource airport for tourism and distribution hub for Eastern Norton Sound communities.

* Additional resource-use-airports capable of handling Jets are now available in the Prudhoe Bay - Sagwon area, in support of oil operations, and more are anticipated.

PAGE 8 UNIVERSITY OF ALASKA, INSTITUTE OF SOCIAL, ECONOMIC AND GOVERNMENT RESEARCH

SOUTHWESTERN ALASKA

I. Andreafsky - Distribution hub for Yukon delta communities. Resource airport for tourism.

2. Bethel - Distribution hub for lower Kuskokwim area. Resource hub for tourism and Bering Sea fish­eries.

3. Dillingham - Distribution hub for northern Bris­tol Bay area. Resource airport for tourism, fisheries (fresh and salt), and petroleum.

source airport for tourism, petroleum, Bristol Bay fisheries and minerals. Distribution hub for upper Alaska Peninsula.

5. Cold Bay - Existing gateway jet port on great circle route. Primary alternate field in eastern Aleutian area. Distribution hub for lower Alaska Peninsula. Resource airport for fisheries.

6. Dutch Harbor - Distribution hub for central Aleutians and major port of Dutch Harbor. Resource airport for fisheries and tourism.

7. Adak - Existing jet port serving military facility. Resource airport for fisheries.

8. Other Aleutian Airports Other jet ports may continue to exist at government facilities and locations along the Aleutian Chain. Examples would be Amchitka, Attu, Umnak and Shemya.

9. Upper Kuskokwim - A jet airport to serve as a distribution hub and resource airport (minerals and possibly petroleum) in the upper Kuskokwim area is probable. The location would probably be at some point south and west of McGrath.

10. Port Heiden - Resource airport for fisheries, tourism and petroleum.

11. St. Paul Island - Resource airport for fisher­ies and tourism. Distribution hub for Pribiloffs.

SOUTHEASTERN ALASKA

1. Juneau - Resource airport for tourism, timber and minerals. Distribution point for northern portion of Tongass National Forest and Glacier Bay National Monument. New jet port to serve Juneau area will probably be constructed on Douglas Island to serve this area and to serve as a gateway jet port.

2. Yakutat - Resource airport for fisheries, timber, mineral, tourism and petroleum.

3. Sitka - Resource airport for fisheries, timber, tourism and minerals. Distribution hub for Baranof Island, southern portion of Chichagof Island, and ad­jacent areas.

4. Petersburg - Resource airport for fisheries, timber, tourism and minerals. Distribution hub for adjacent areas and islands.

5. Wrangell - Resource airport for fisheries, tim­ber, tourism and minerals.

6. Ketchikan - Resource airport for fisheries, tim­ber, _tourism and minerals. Gateway jet port for southern entrance into Alaska. Distribution hub for southern Tongass Forest area.

7. Haines/Skagway - Resource ai11port for tour­ism and minerals. Distribution hub for northern portion of Lynn Canal region.

TABLE 9

Status Current Federal-Aid Airports Program

(As of November 1968)

LOCATION

Recenlly Completed

Anchorage International Merrill Field Nenana Juneau Palmer Homer Cordova Kotzebue Wrangell Kenai Grayling Petersburg

Ur.der Construction

Anchorage International Barrow Bethel Kenai King Cove Manakotak

TOTAL COST (Millions of Dollars)

$6.00 0.21 0.26 0.01 0.23 0.55 1.18 0.46 2.24 0.74 0.14 2.33

Total $14.35 Million

$3.34 2.86 0.45 0.14 0.44 0.11

Total $7.34 Million

Projects Ready to Start Construction (Under Tentative Allocation)

Anchorage International Bethel Homer Ketchikan Kotzebue

Tolal of Current Projects

FAAP Share State Share

$1.48 0.37 0.71 1.61 1.88

Total $6.05 Million

$17,400,000 10,440,000

Total $27,840,000

Source: Federal Aviation Administration