Page 149

Suggested Citation: "Appendix A: Glossary of Key Terms and Abbreviations." National Academies of Sciences, Engineering, and Medicine. 2024. Incorporating Shock Events into Aviation Demand Forecasting and Airport Planning. Washington, DC: The National Academies Press. doi: 10.17226/27987.

APPENDIX A

Glossary of Key Terms and Abbreviations

Aeronautical Revenue	Revenues generated by airports derived from flight operations (e.g., landing fees, terminal fees, ground handling).
Airport Master Plan	A document that describes long-term development concepts for an airport and provides the strategy for future airport development capable of serving forecast air traffic demand.
Bellyhold	Vacant space in the bellyhold of passenger aircraft used for the shipment of freight.
Black Swan	High-impact events that are deemed impossible to predict prior to them occurring. Also called an “unknown unknown.”
Capital Cost	Costs and fixed expenses incurred on the purchase of land, buildings, and construction.
CARES Act	Coronavirus Aid, Relief, and Economic Security Act (2020). Specific to the aviation industry, the CARES Act provided financial support through grants to U.S. airports and airlines to help offset the negative impacts of the COVID-19 pandemic. Aviation sector grants administered by the FAA.
Connecting Passengers	Passengers who are only stopping at an airport to conduct a transfer (changing planes) or a same-plane transit as part of their itinerary’s routing. Connecting passengers are counted in airport statistics as enplaning passengers, but not in Origin/Destination passenger volumes.
CRRSA	The Coronavirus Response and Relief Supplemental Appropriations Act (2020). A second set of financial support to the economy including the aviation industry. Airports were supported primarily in the payment of ongoing expenses and debt servicing. Aviation sector grants administered by the FAA.
Enplaned/Deplaned (E/D)	A measure of passenger traffic of all passengers enplaning (boarding) or deplaning (getting off) aircraft at an airport. Includes passengers where the airport is the start of the journey or final destination and passengers who are connecting (changing planes) at an airport. E/D passenger traffic by sector is based on the passenger’s immediate inbound or outbound destination, not the ultimate origin or destination.

Page 150

Enplanements	The total number of passengers boarding aircraft at an airport over a specified period of time.
ERM	Enterprise Risk Management, a framework for risk management within organizations. May take many forms to identify, assess, and prepare for risks but ERM is a generalized term for risk management processes.
ERP	Emergency Response Plan, a safety and security response plan for airports. Required by regulation in the United States.
Ex Post Evaluation	Evaluation of an event after it has happened. Typically concerned with analyzing what actually happened in contrast to what was planned or expected.
Full-Service Carrier	An airline that provides multiple classes of service (e.g., business class, premium economy, and economy) with fares that typically include standard options, such as complimentary checked bags or in-flight meals. In contrast to a low-cost carrier (LCC). Most network carriers operate under a full-service model but offer the option to unbundle fares to compete with LCCs.
General Aviation (GA)	GA is a civil aircraft operation such as business aviation, private aircraft operation, flight training, air ambulance, and aerial surveying.
Grey Rhino Event	Event with a high impact and high probability that should have been easily foreseen but was ignored.
GDP	Gross Domestic Product is a measure of the total output of an economy.
High-Impact, Low-Probability Event	See Shock Event.
Hub Airport/Hubbing	A hub airport is one that an airline (or many airlines) uses as a transfer point for passengers within their network. Part of an airline’s hub-and-spoke model, hubs facilitate the transfer of passengers along their itineraries when a passenger’s desired route is not served non-stop.
Known Unknown	An uncertainty that is deemed to have some possibility of occurring but may lack information or historical precedent.
Legacy Carrier	One of the three largest network carriers operating in the United States: American Airlines, Delta Air Lines, and United Airlines. Also refers to flag carriers and major international network carriers from other countries such as Air Canada, British Airways, Lufthansa, or Emirates.
Low-Cost Carrier (LCC)	A type of airline that operates a low-cost model, typically including low base fares, a single class of travel, unbundled fares, high aircraft utilization, and quick turnaround times. LCCs, and especially ultra-low-cost carriers (ULCCs), tend to operate on a point-to-point network model rather than a hub-and-spoke model to serve direct routes not always served by legacy network carriers. LCCs and ULCCs operating in the United States include Southwest Airlines, JetBlue, Frontier Airlines, Spirit Airlines, and Allegiant Air.

Page 151

Monte Carlo Simulation	A computerized analytical process creating thousands of simulations of a model (e.g., a traffic forecast or financial model) using randomized values of model inputs and assumptions defined by probability distributions. Often used to quantify uncertainty of a model or event.
Network Carrier	A network carrier is typically a full-service carrier that operates on a hub-and-spoke network model. The airline may include a regional feeder to serve smaller markets from their hubs. Network carriers in the United States include Alaska Airlines, American Airlines, Delta Air Lines, and United Airlines.
Nonaeronautical Revenue	Revenues generated by airports derived from sources other than flight operations (e.g., car parking, terminal concessions, land leases).
Operating Cost	Costs associated with ongoing operations of a business such as salaries, taxes, utilities, marketing, and debt servicing.
Origin/Destination (O/D)	The measure of traffic between two cities or countries where the origin is the starting point of an air journey, and the destination is the passenger’s final trip destination regardless of the routing. Does not include connecting passengers. The O/D journey and sector define a passenger demand market. For example, a passenger traveling from the United States to the UK is an international O/D passenger, but that same passenger may need to make a connection at a domestic airport as part of their routing.
Real Options	A real option is the right but not the obligation to take a certain course of action. The concept of real options is based on and developed from financial options.
Risk Register	Documentation of risks and uncertainties of a business, forecast, or model that includes a quantification of estimated risk impacts and likelihood.
Scenario Analysis	A process of analyzing the impacts of future events by considering alternative possible outcomes.
Sensitivity Analysis	Varying forecasting inputs and assumptions one at a time to measure the resulting changes in outcomes.
Shock Event	Events whose likelihood, magnitude, and timing are hard to predict or anticipate and have significant impacts on business should they occur. May also be referred to as high-impact, low-probability events; black swans; or unknown unknowns.
Stakeholder	An individual or organization that has an interest in an airport. Key stakeholders for airports may include airport management, airlines, local businesses, destination management organizations and the tourism industry, and local communities.
Ultra-Low-Cost Carrier	See Low-Cost Carrier.
What-If Analysis	A form of scenario analysis where a single event or assumption is forecast relative to its baseline value.