Flexible Design of Airport System Using Real Options Analysis - MIT

12/14/2007
1.231 Planning and Design of Airport System Dai Ohama
Table 4-2 Comparison of 10-year forecasts of international
passengers to Japan with actual results
Forecast Passengers (millions) Percent error
For Done in Actual Forecast Over actual
1980 1970 12.1 20.0 65
1985 1975 17.6 27.0 53
1990 1980 31.0 39.5 27
1995 1985 43.6 37.9 (13)
Source: R. de Neufville, A. Odoni, Airport Systems: Planning, Design, and Management[12]
However, when assessing the real options analysis, it is necessary to rely on some
forecasts, although they are nothing but estimation. Thus, in this case study, the demand
curve that is based on the estimation of the total population and the estimation of GDP in
Japan should be considered. The important thing is to recognize that this forecast is just an
assumption and to evaluate this by using various demand scenarios with volatility.
In this case study, the demand forecast is estimated based on the estimation of
population [14] and the estimation of GDP [15] in Japan by conducting regression analysis.
[16] The table and the graph below show the estimation of the number of passenger for the
next 20 years in Tokyo Int’l Airport.
Year
Population
(Thousands)
GDP
(in trillion)
Passengers
(million)
1985 121.05 ¥350.3 24.27
1986 121.66 ¥360.8 25.88
1987 122.24 ¥374.5 28.19
1988 122.75 ¥400.0 30.28
1989 123.21 ¥421.2 34.96
1990 123.61 ¥443.1 38.09
1991 124.10 ¥458.2 40.06
1992 124.57 ¥462.7 39.98
1993 124.94 ¥463.7 39.12
1994 125.27 ¥468.8 41.44
1995 125.57 ¥477.7 43.02
1996 125.86 ¥489.9 45.08
1997 126.16 ¥496.8 47.43
1998 126.47 ¥488.0 49.91
1999 126.67 ¥487.0 52.27
2000 126.93 ¥501.3 54.77
2001 127.32 ¥503.2 57.01
2002 127.49 ¥503.9 59.49
2003 127.69 ¥512.8 59.41
2004 127.79 ¥524.6 59.05
2005 127.77 ¥538.9 59.47
2006 127.76 ¥544.8 61.08
2007 127.69 ¥550.8 62.23
2008 127.57 ¥556.9 63.37
2009 127.40 ¥563.0 64.49
2010 127.18 ¥569.2 65.59
2011 126.91 ¥578.9 67.35
2012 126.60 ¥588.7 69.11
2013 126.25 ¥598.7 70.87
2014 125.86 ¥608.9 72.63
2015 125.43 ¥619.3 74.39
2016 124.96 ¥629.8 76.14
2017 124.46 ¥640.5 77.89
2018 123.92 ¥651.4 79.64
2019 123.34 ¥662.4 81.38
2020 122.73 ¥673.7 83.12
2021 122.10 ¥683.1 84.46
2022 121.43 ¥692.7 85.80
2023 120.74 ¥702.4 87.11
2024 120.01 ¥712.2 88.42
2025 119.27 ¥722.2 89.70
2026 118.50 ¥732.3 90.98
2027 117.71 ¥742.6 92.24
2028 116.90 ¥753.0 93.48
2029 116.07 ¥763.5 94.71
2030 115.22 ¥774.2 95.92
Demand (PAX in million)
120
100
80
60
40
20
0
Demand Forecasting
Projected Demand (Government)
Projected Demand (This Project)
1982 1987 1992 1997 2002 2007 2012 2017 2022 2027
Time (Year)
PAX = 2 * A * { - 0.1818 + 0.0077 * B }
(A: Estimated Population, B: Estimated GDP)
Figure 4-3 Demand Forecast of Number of Passengers in Tokyo Int’l Airport
Term Project: Flexible Design of Airport System Page 16 of 22