The effect of adopting the Next Generation Air Transportation System (NextGen) on air travel performance

Abstract

The US Federal Aviation Administration (FAA) has implemented a large-scale multi-year infrastructure program called the Next Generation Air Transportation System (NextGen) to improve air transportation efficiency. To assess its efficacy, we estimate how NextGen projects completed between 2014 and 2017 affected air travel time and delays using an event study approach. We find sizable time savings in air travel time and delays from implementing NextGen. The time savings are more substantial for flights that experience unexpected shocks, such as poor weather and prior delays. In contrast, while NextGen seemed to close the performance gap between the hub and non-hub carriers generated by market power, the effect was short-lived and quickly reversed. Although we also find some small social benefits from carbon emission reductions, we cannot rule out that aggregate carbon emissions may have increased due to a rebound effect.