Transport

Modeling and Forecasting

NERA regularly undertakes modeling and forecasting in a wide range of contexts across the transport sector. We have extensive experience in financial modeling and profitability analysis, demand and revenue forecasting, and transport cost modeling. Our experts have worked for governments, regulators and transport operators across the aviation, rail, and road transport industries.

Our experience includes:

• Financial modeling. We have carried out detailed financial modeling in many different contexts, for example in airport regulation, business valuation, and evaluating the impact of different risk allocations. We also construct bespoke, regulatory financial models that can assist clients in assessing the implications of regulatory proposals, and making effective representations.
• Profitability analysis. NERA advises on a wide variety of profitability issues, including the economic definition of profits and asset valuation principles, and is a leading expert on the cost of capital. We have applied profitability analysis to many transport companies including bus operators, passenger train operators, rolling stock leasing companies, and airports.
• Demand and revenue forecasting. We have made important contributions to the development of the rail demand and forecasting literatures, and have applied standard industry tools to generate demand forecasts in other studies. NERA also acts as an independent reviewer of both demand forecasts and forecasting methodologies for investors, government, and other transport sector clients.
• Cost benefit and economic impact studies. NERA has carried out high-profile cost-benefit analyses, economic impact studies, and regulatory impact assessments for a wide range of transport sector clients. Many other projects have assessed the likely impacts of proposed new policies.
• Cost modeling. We have carried out a wide range of cost modeling projects, including forecasts of input price changes and future efficiency improvements, analysis of detailed cost allocation principles, and simulating the take-up of new technologies.