Within the transportation community, there is a growing recognition of the need to consider decisions addressing future investments in the transportation system from a multimodal perspective. This viewpoint has been given added weight by the passage of the Intermodal Surface Transportation Efficiency Act (ISTEA) in 1991, which not only recognized the importance of viewing the transportation system from an intermodal perspective, but also stressed the need to address the efficiency with which the system meets the transportation needs of its users. This approach was reinforced with the reauthorization of the surface transportation legislation in the 1998 Transportation Equity Act for the 21st Century (TEA-21), which added concepts of fairness in the distribution of resources to those of the efficiency of the transportation system. It is clear that to make investment decisions on a rational multimodal basis, it is necessary to be able to assess the performance of each of the modes in a consistent way, so that resources can be allocated across the modes in a way that maximizes their contribution to the overall performance of the entire transportation system. Of course, in practice existing programs and institutional arrangements have tended to remain focused on a specific mode, and thus efforts to compare performance across modes, much less to allow this to shape investment decisions, are still in their infancy. However, the California Transportation Commission has embarked on an effort to approach its capital investment decisions from such a perspective, and recent state legislation (Senate Bill 45) requires that all Regional Transportation Plans (RTPs) shall address the coordination of aviation facilities and services with other elements of the transportation system. In addition, the RTPs in any region that contains a primary air carrier airport shall include an airport ground access improvement program. As part of the current update of the California Transportation Plan (CTP), the California Department of Transportation (Caltrans) commenced work on a System Performance Measures module of the CTP, the goals of which are to develop a set of measures to assess the performance of the multi-modal transportation system so as to support informed transportation decision making, and to establish a coordinated and consistent process for performance measurement throughout the state (Caltrans, 1998c). This report addresses one aspect of that effort -- the definition of performance measures for the aviation system. This system, particularly the investment in airports, navigation aids, and air traffic management infrastructure, exists to serve its users, and indirectly to support the economic activities in which those users engage. Therefore, any attempt to measure the performance of the aviation system must consider the needs of the users and the extent to which the system satisfies those needs. From a broader perspective, the state is also interested in the extent to which the aviation system contributes to and supports the economic development of the state, as well as the adverse environmental impacts that result from aviation activities. Many of the current controversies surrounding major airport expansion or conversion proposals in the state focus not on the benefits to the users or the economy but on the impacts on the local communities or natural environment. The report examines the range of considerations that arise in measuring transportation system performance, and summarizes the results of a recent conference that addressed performance measures for the state transportation system. It reviews the recent literature on measuring aviation system performance and discusses system performance from the perspectives of the aircraft operator and traveler or shipper, respectively. It then presents a third perspective, that of the effect of the performance of the aviation system on the larger economy, particularly that of California, as well as the impact on the environment. The report then shifts its focus to the state interest in monitoring transportation system performance, and discusses the role of the state in enhancing the performance of the aviation system, and how an effective performance monitoring system can contribute to that role. Based on these considerations, the report presents a proposed set of aviation system performance measures, and discusses the steps necessary to implement an effective performance monitoring process for the state aviation system, including directions for further study to strengthen the role of performance measures in the development of the state aviation system. The report identifies 74 potential aviation system performance measures in ten categories corresponding to the system performance outcomes defined in the CTP System Performance Measures module. These are divided into 48 potential measures that address the commercial aviation sector and 26 potential measures that address the general aviation sector, as shown in Table ES-1.