Air Transport Research Society
Key Results of the 2007 ATRS Global Airport Benchmarking Report
Prof. Tae H. OumSauder School of Business, University of British Columbia
And The Air Transport Research Society (ATRS)
www.atrsworld.org
The ATRS Global Airport Benchmarking Task Force Asia Pacific: Peter Forsyth, Japhet Law, Yeong-Heok Lee, Jia Yan
Yuichiro YoshidaEurope: Jaap de Wit, Nicole Adler, Hans-Martin Niemeier, Eric Pels North America: David Gillen, Tae Oum, Bijan Vasigh, Chunyan Yu
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Outline
Objective of the Benchmarking Study Methodology Key Results on Efficiency and Costs Airport User Charge Comparisons Effects of Business Strategies and
Ownership forms Conclusions
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Objective of the Study
To provide a comprehensive, unbiased comparison of airport performance, including:– Productivity and Efficiency– Unit Cost Competitiveness– Aviation User Charges Levels– Financial Performance
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Objective of the Study – Cont’d
Identify effects of – Business environment within which an airport
operates– Ownership and Institutional forms– Extent of focus on non-aviation (commercial)
activities– Extent of outsourcing
On productivity, unit cost, financial performance, and Airport User Charges
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Many Previous Studies have one or more of
the following shortcomings Limited to analysis of airports in a certain country
or continent. Used less than comprehensive measures; Ignored Multiple Outputs/Services –especially
ignoring Non-Aeronautical Services (Commercial; Development, etc)
Ignored so-called soft-cost inputs including outsourcing services
Did not control for the factors beyond managerial control
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Airports Included in the 2007 Report*
Canada-U.S. 63 airportsEurope 43 airports and
10 airport groups
Asia 27 airports and 5 airport groupsAustralia and NZ 9 airports-------------------------------------------------------------Total 142 airports and
14 airport groups
***Need your help in order to include more airports; Can you help us with the data?
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Data Sources: 2001-05
Airport’s Annual Reports, Financial Statements, and direct data requests;
US FAA, DOT statistics; Association of European Airlines (AEA) Statistics ICAO Digest of Statistics:
– annual and monthly traffic data– annual financial data -- not for all airports
ACI; IATA– annual traffic statistics; Capacity information– general information surveys (Asia Pacific and Europe)
occasional and not complete IMF and World Bank – various price indices including
GDP deflators for service sectors and PPP
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Characteristicsof
Sample Airports
Passenger volumes – N. America Figure 3.4.1a: Passenger Traffic (2002/05) - North America
0
10
20
30
40
50
60
70
80
90
100
AT
LO
RD
LAX
DF
WD
EN
LAS
JFK
PH
XIA
HM
SP
DT
WM
CO
SF
OE
WR
PH
LM
IAY
YZ
SE
AC
LT IAD
BO
SLG
AC
VG
FLL
SLC BW
IH
NL
TP
AM
DW
DC
AS
AN
YV
RO
AK
ST
LP
DX
CLE
YU
LM
EM
SJC PIT
YY
CS
MF
MC
IS
NA
RD
UB
NA
IND
MS
YA
US
SA
TM
KE
ON
TP
BI
AB
QJA
XR
NO
YE
GY
OW
SD
FY
HZ
YW
GA
LB RIC
Mea
n
Mill
ion
s
2005 2002
Passenger Volumes - Europe
Figure 3.4.1b: Passenger Traffic (2002/04/05) - Europe
0
10
20
30
40
50
60
70
80
LHR
CD
GF
RA
AM
SM
AD
LGW
FC
O
MU
CB
CN
OR
YS
TN
MA
NC
PH
MX
PIS
TD
UB
ZR
HA
RN
BR
UO
SL
VIE
DU
SA
TH
TX
LLI
SH
EL
PR
GH
AM
CG
NB
HX
GV
AE
DI
WA
W CIA
MLA RIX
SO
FK
EF
TLL
BT
SLJ
UM
ean
Mill
ion
s
2005 2004 2002
Passenger Volumes : Asia-Pacific
3.4.1c: Passenger Traffic (2002/04/05) - Asia Pacific
0
5
10
15
20
25
30
35
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45
PE
KB
KK
HK
GS
INN
RT
SY
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GK
ICN
DX
BC
AN
PV
GK
UL
TP
EM
EL
SH
AS
ZX
MN
LB
NE
BO
MK
IXS
EL
DE
LA
KL
HA
KP
ER
XM
NC
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AD
LW
LG
MF
MC
NS
HK
TC
NX
PE
NH
DY
Me
a
Mil
lio
ns
2005 2004 2002
Concession Revenue Shares – N. America
Concession Revenue Share (2005) - North America
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
LAS
FLL
MCO
TPA
ABQ
PHX
SJC
YEG
SAT
CLT
LAX
BNA
PBI
YVR
SFO
SLC
SAN
ATL
MSY
YHZ
MDW
HNL
YUL
YYC
RIC
DTW
JAX
RDU
BWI
RNO
SNA
MSP
SEA
DCA
MKE
YOW
AUS
ONT
MIA
ALB
YWG
CVG
CLE
PHL
IAD
ORD
STL
SMF
DEN
MCI
PIT
SDF
IND
OAK
PDX
BOS
MEM
DFW
LGA
EWR
IAH
YYZ
JFK
NA-
Concession Revenue Shares – Europe
Concession Revenue Share (2005) - Europe
0%
10%
20%
30%
40%
50%
60%
70%
SOF
STN
GVA
CPH
LGW
DUS
HAM
EDI
MAN
ATH
LHR
AMS
ZRH
BRU
MLA
TLL
ARN
VIE
Mean DAA
BAA
CAA(
FIN) ADR
ANA
ADP
Frap
ort
Mean
(gr
oup)
Concession Revenue Shares – Asia-Pac
Concession Revenue Share (2005) - Asia Pacific
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
CHC
MEL
AKL
WLG
SYD
ADL
PER
BNE
CNS
Mean SIN
SEL
HKG
ICN
NRT
AOT
TPE
MAHB MFM
PEK
CAN
HAK
Mean
Share of Non-Aeronautical Revenue
YYZ
Figure S-5: Non-Aeronautical Revenue Share (2005)
0%
10%
20%
30%
40%
50%
60%
70%
80%
TP
AR
DU
FLL
MC
IR
ICS
MF
MC
OA
TL
RN
OB
NA
SJC
MK
EP
HX
JAX
SN
AP
BI
YU
LLA
SIN
DS
AT
LAX
SLC
CLT
HN
LM
SP
SA
ND
TW
IAD
OA
KY
WG
SD
FM
DW
YH
ZY
VR
ALB
DC
AA
US
YO
WO
NT
BO
SA
BQ
DF
WY
YC
CV
GS
EA
BW
IP
DX
PIT
LGA
SF
OO
RD
CLE
DE
NS
TL
YE
GM
SY
EW
RP
HL
MIA
JFK
IAH
ME
MY
YZ
MU
CS
TN
LJU
VIE
HA
MG
VA
LGW
MA
NO
SL
LHR
AT
HA
MS
CP
HS
OF
BH
XZ
RH
AR
ND
US
ED
IB
RU
TLL
PR
GM
LAC
GN
WA
WR
IXD
AA
Fra
port
AD
PB
AA
CA
A(F
AN
ALF
VA
DR
Ber
linP
PL
BN
EA
KL
ME
LP
ER
AD
LS
YD
CH
CC
NS
WLG
TP
EIC
NS
INH
KG
KIX
CA
NX
MN
SE
LH
AK
PE
KS
ZX
CE
IC
NX
HD
YH
KT
AO
TM
FM
NR
TM
AH
BP
TII
SA
A
North America
Europe
Asia Pacific
International Passenger Share
N. America
Europe
Asia-Pac
Share of International Passengers (2005)
0%
20%
40%
60%
80%
100%
120%
YUL
YYZ
YVR
MIA
JFK
EWR
LAX
YYC
YOW
SFO
HNL
IAD
IAH
YHZ
YEG
YWG
BOS
ORD PH
LDF
WFL
LSE
ADT
WAT
LM
CO CLT
LGA
MSP PH
XBW
ILA
SDE
NPD
XM
EM SAT
CLE
SJC
TPA
RDU
OAK PB
ISL
CDC
AO
NT STL
MKE PI
TSA
NM
DW ALB
BNA
MCI
SMF
MSY IN
DAU
SRN
OAB
QCV
GJA
XRI
CSD
FSN
AM
LAAM
SBR
UPR
GTL
LSO
FDU
BVI
EBT
SG
VA CIA
CPH
CDG
LHR
WA
LGW
FRA
STN
MAN
MXP LI
SBH
XHE
LDU
SM
UC ARN
ATH
IST
FCO
CGN
HAM
MAD TX
LO
SLBC
NO
RY ZRH
LJU
EDI
HKG
MFM SI
NTP
EIC
NNR
TBK
KKI
XM
NL AKL
PEN
MAA KU
LBO
MDE
LSY
DHK
TPE
RCN
SCH
CPE
KBN
EPV
GCG
KM
ELXM
NW
LG HDY
CNX
SEL
CAN
ADL
HAK
SHA
SZX
CEI
North America
Europe
Asia Pacific
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Airport Productivity
Outputs Inputs
• Aircraft movement• Passengers• (Cargo)• Other revenues
including concessions
• Labour
• Other non-capital (soft cost) inputs
• Runways
• Terminals
• Gates
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Methodology for productivity
MEASUREMENT Partial Factor Productivity (PFP) Measures:
– Labor Productivity– Capital Input Productivity - capital input accounting problem– Productivity of Soft Cost InputsPFP does not tell the whole story
Need to go beyond PFPs
Variable Factor Productivity (VFP)Total Factor Productivity (TFP: capital input
accounting problem) Unit Cost Competitiveness
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Methodology for productivity MEASUREMENT – cont’d
Multiple Outputs:Aircraft movements, passengers, Cargo Tonnes, and non-
aeronautical services output
The first step for computing any productivity is to aggregate these multiple outputs into a single output index
Similarly, airports use multiple inputs which need to be aggregated into a single input index.
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Efficiency Measurement Method:Our Choice
Index number approach:
Productivity = Output Index / Input Index
VFP = Output Index / Variable Input Index
Variable Factor Productivity– Revenue shares use as weights for output
aggregation– Cost shares are used as weights for input
aggregation.
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Potential Reasons for the Measured Productivity (gross VFP) Differentials
(A) Factors Beyond Managerial Control:– Airport size (Scale of aggregate output)– Average aircraft size using the airport– Share of international traffic– Share of air cargo traffic– Extent of capacity shortage - congestion delay– Connecting/transfer ratio
We compute ‘residual (net)’ productivity measures after removing effects of the Factors Beyond Managerial Control (A)
(B) Factors within Managerial Control:– Emphasis on commercial activities (non-aeronautical)– Quality of Service (incl. passenger satisfaction)– The Extent of outsourcing activities– Managerial and technical efficiency (which we are trying to measure)
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Results on Effects of Airport Characteristics on ‘gross’ VFP
(Airport size: some mixed results on the effects of airport output scale: larger airports are expected to have higher ‘gross’ VFP, however, the effects may level off once airports reach certain size);
%International: airports with higher proportion of international passengers are likely to have lower ‘gross’ VFP.
%Cargo: airports with larger proportion of cargo traffic are expected to have higher VFP.
Capacity Constraints: congested airports are likely to have higher ‘gross’ VFP.
These factors beyond airport’s managerial control have been removed from our VFP measure before computing the ‘residual VFP’.
Residual (Net) Variable Factor Productivity: Overall operating efficiency measure – Asia-Pacific
Figure S-4c Residual Variable Factor Productivity (2005) - Asia PacificHKG=1.0
0.0
0.2
0.4
0.6
0.8
1.0
1.2
SY
D
BN
E
AD
L
ME
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CH
C
PE
R
CN
S
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G
Me
an
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G
SIN
ICN
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T
CA
N
SZ
X
MF
M
SE
L
MA
HB
KIX
PE
K
SA
A
NR
T
Me
an
HK
G=
1.0
Residual (Net) Variable Factor Productivity: Overall operating efficiency measure - Europe
Figure S-4b Residual Variable Factor Productivity (2005)- EuropeCPH=1.0
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
1.6
OS
LA
TH
GV
AB
RU
ZR
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PH
BH
XA
MS
ED
IL
JUH
AM
LG
WT
LL
LH
RM
AN
MU
CW
AW
DU
SV
IER
IXM
LA
SO
FC
GN
PR
GM
ea
n
CA
A(F
IN)
AN
AA
DR
AD
PL
FV
BA
AF
RA
PP
LD
AA
Be
rlin
Me
an
(g
rou
p)
CPH
= 1.
0
Residual (Net) VFP: Overall operating efficiency measure – North America
Figure S-4a, Residual Variable Factor Productivity (2005), North AmericaYVR = 1.0
0.0
0.5
1.0
1.5
2.0
2.5
AT
LR
DU
TP
AM
CO
FLL
MS
PLA
SY
VR
CLT
BN
AY
OW
YU
LA
BQ
RN
OY
YC
MC
IP
DX
AU
SM
KE
HN
LB
OS
IND
OA
KP
BI
DC
AIA
DS
EA
SM
FS
DF
PH
XD
EN
ME
MS
NA
IAH
YH
ZY
WG
SLC
JAX
SF
OS
AN
DF
WR
ICD
TW
MD
WC
VG
LAX
ST
LY
EG
SJC
OR
DC
LEP
HL
LGA
MS
YB
WI
ALB P
ITY
YZ
MIA
EW
RO
NT
JFK
SA
T
YV
R=
1.0
Global Comparison – Net VFP
Figure S-4, Residual Variable Factor Productivity (2005)
0.0
0.5
1.0
1.5
2.0
2.5
AT
LR
DU
TP
AM
CO
FLL
MS
PLA
SY
VR
CLT
BN
AY
OW
YU
LA
BQ
RN
OY
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MC
IP
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SM
KE
HN
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OS
IND
OA
KP
BI
DC
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DS
EA
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DF
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EN
ME
MS
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YH
ZY
WG
SLC JA
XS
FO
SA
ND
FW
RIC
DT
WM
DW
CV
GLA
XS
TL
YE
GS
JCO
RD
CLE
PH
LLG
AM
SY
BW
IA
LB PIT
YY
ZM
IAE
WR
ON
TJF
KS
AT
OS
LA
TH
GV
AB
RU
ZR
HC
PH
BH
XA
MS
ED
ILJ
UH
AM
LGW
TLL
LHR
MA
NM
UC
WA
WD
US
VIE
RIX
MLA
SO
FC
GN
PR
GC
AA
(A
NA
AD
RA
DP
LFV
BA
AF
RA
PP
LD
AA
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linS
YD
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ME
LA
KL
CH
CP
ER
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LGH
KG
SIN
ICN
AO
TC
AN
SZ
XM
FM
SE
LM
AH
BK
IXP
EK
SA
AN
RT
North America
Europe
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Cost Competitivenessconsists of:
Productive Efficiency – Residual (Net) VFP
Input Prices:– Labor price– Soft cost input price (incl. outsourcing
price)
Figure 5.4a Cost Competitiveness 2005 - North AmericaYVR=0.0
AT
LR
DU
TP
AF
LLM
CO
LAS
YU
LC
LTA
BQ
HN
LB
NA
MC
IY
VR
AU
SS
MF
MS
PY
YC
RN
OS
DF
IND
RIC
PH
XP
BI
YO
WM
KE
SLC
PD
XO
AK
DC
AM
EM
SN
AS
EA
BO
SJA
XM
SY
DF
WY
HZ
YW
GS
AN
LAX
DE
NA
LB CLE
ST
LD
TW
IAD
YE
GO
RD
MD
WC
VG PIT
PH
LS
AT
BW
IIA
HS
JCLG
AS
FO
ON
TY
YZ
EW
RJF
KM
IAN
A-M
ean
-1
-0.8
-0.6
-0.4
-0.2
0
0.2
0.4
0.6
0.8
1
1.2
Figure 5.4b Cost Competitiveness 2005 - EuropeCPH =0.0
AT
H
TL
L
SO
F
LJU
RIX
WA
W
ED
I
BR
U
PR
G
ML
A
OS
L
LG
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BH
X
CP
H
LH
R
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S
MA
N
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H
GV
A
HA
M
MU
C
DU
S
VIE
CG
N
me
an
CA
A(F
IN)
AN
A
PP
L
BA
A
AD
R
FR
A
AD
P
LF
V
DA
A
Be
rlin
Me
an
-0.6
-0.4
-0.2
0
0.2
0.4
0.6
0.8
Figure 5.4c Cost Competitiveness (2005) - Asia PacificHKG=0.0
WL
G
AD
L
CN
S
BN
E
CH
C
ME
L
SY
D
AK
L
PE
R me
an
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N
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PE
K
MA
HB
SA
A
MF
M
ICN
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L
SIN
HK
G
KIX
NR
T
Me
an
-1
-0.8
-0.6
-0.4
-0.2
0
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0.4
0.6
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Top PerformersTop Operating Efficiency Performers based on Net
VFP (Labor + Soft cost inputs only): Canada/US: Atlanta, Raleigh-Durham , Tampa, Europe: Oslo, Athens, Geneva Asia: Hong Kong, Singapore Oceania: Sydney, Brisbane
Top Performers Based on Unit Cost Competitiveness Index
Canada/US: Atlanta, Raleigh-Durham, Tampa Europe: Athens, Tallinn, Sofia Asia: Guangzhou, Shenzhen, AOT, Oceania: Wellington, Adelaide
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Outline
Objective of the Benchmarking Study Airports Included Methodology Key Results on Efficiency and Costs Airport User Charges
Comparison Conclusions
Landing Charges for Boeing 747 - North America 2005
0
2000
4000
6000
8000
10000
12000
BNA
ATL
CLT
SLC
TPA
RD
UFL
LM
SY SAT
PHX
RIC
LAS PB
IM
CO
OAK SD
FSJ
CM
DW
CVG RN
OM
SPM
EMSN
AM
CI
JAX
ON
TM
KEH
NL
PHL
IND
IAD PIT
SAN
BWI
MIA
ABQ
DC
ASM
FPD
XAL
BLA
XO
RD
SEA
AUS
BOS
YUL
DTW IA
HSF
OYO
WYW
GD
ENYE
GYH
ZYV
RYY
CST
LD
FW JFK
EWR
LGA
YYZ
US$
Landing Charges for B747 - Europe2005
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
LGW
-off
peak
Man
-Off
Pea
k TXL
LGW
-Pea
kS
TNLH
R-o
ff pe
ak MX
PFC
OC
IAB
RU
DU
SFR
ALH
R-p
eak
MLA
PR
GA
THG
VA
CG
NM
UC
LIS
HA
MZR
HIS
TM
an-P
eak VIE
HE
LA
RN
ED
IM
AD
BC
NO
SL
CD
GO
RY
CP
HM
BX
DU
BW
AW TL
LB
TSA
MS
LJU
BH
X
US
$
Landing Charges for B747 - Asia Pacific2005
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000K
UL
DX
BB
KK
CN
XH
DY
HK
TC
EI
AD
LC
NS
CG
KC
HC
SIN
MN
LP
ER
MA
AD
EL
BO
MM
FMB
NE
TPE
A
KL
HK
GIC
NP
EK
PV
GS
HA
CA
NS
ZXN
RT
KIX
US
$
Air Transport Research Society (ATRS)
B747 Landing fee -2005
Figure S-8a Landing Charges for Boeing 747, 2005
0
2000
4000
6000
8000
10000
12000
BN
AA
TLC
LTS
LCTP
AR
DU
FLL
MS
YS
AT
PH
XR
ICLA
SP
BI
MC
OO
AK
SD
FS
JCM
DW
CV
GR
NO
MS
PM
EM
SN
AM
CI
JAX
ON
TM
KE
HN
LP
HL
IND
IAD
PIT
SA
NB
WI
MIA
AB
QD
CA
SM
FP
DX
ALB LA
XO
RD
SE
AA
US
BO
SY
UL
DTW IA
HS
FOY
OW
YW
GD
EN
YE
GY
HZ
YV
RY
YC
STL
DFW JF
KE
WR
LGA
YY
ZLG
W-o
ff pe
akM
an-O
ff P
eak TX
LLG
W-P
eak
STN
LHR
-off
peak MX
PFC
OC
IAB
RU
DU
SFR
ALH
R-p
eak
MLA
PR
GA
THG
VA
CG
NM
UC LIS
HA
MZR
HIS
TM
an-P
eak
VIE
HE
LA
RN
ED
IM
AD
BC
NO
SL
CD
GO
RY
CP
HD
UB
WA
W TLL
BTS
AM
SLJ
UB
HX
K
UL
DX
BB
KK
CN
XH
DY
HK
TA
DL
CN
SC
GK
CH
CS
INM
NL
PE
R
MA
AD
EL
BO
MM
FM BN
ETP
E
AK
L H
KG
ICN
PE
KP
VG
SH
AC
AN
SZX
NR
TK
IX
US
$
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
KUL
DXB BK
KC
NX
HD
YH
KT CEI
ADL
CN
SC
GK
CH
CSI
NM
NL
PER
M
AA DEL
BOM MF
BNE
TPE
AKL
HKG IC
NPE
KPV
GSH
AC
AN SZX
NR
TKI
X
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
$1,800
KUL
HKT
CN
XBK
KH
DY
DXB AD
LC
GK
SIN
MAA DEL
BOM
MN
LC
NS
TPE
BNE
MFM AK
L IC
NPE
R
HKG SH
AC
AN PVG
SZX
PEK
CH
CN
RT
KIX
North AmericaEurope
Asia Pacific
NRTKIX
Landing Charges for Airbus 320 - North America2005
0
500
1000
1500
2000
2500
BNA
ATL
CLT
SLC
TPA
RD
UFL
LM
SY SAT
PHX
RIC
LAS PB
IM
CO
OAK SD
FSJ
CM
DW
CVG RN
OM
SPM
EMSN
AM
CI
JAX
ON
TM
KEH
NL
PHL
IND
IAD PIT
SAN
BWI
MIA
ABQ
SFO
DC
ASM
FPD
XYY
CYU
LAL
BLA
XYO
WO
RD
YWG
SEA
YEG
AUS
YHZ
BOS
DTW
YVR IAH
DEN ST
LD
FW JFK
EWR
LGA
YYZ
US
$
Landing Charges for Airbus 320 - Europe2005
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
TX
LM
XP
FC
OC
IALG
W-o
ff pe
ak FR
AM
LAO
RY
GV
AS
TN
LIS
DU
SA
RN
ZR
HH
EL
CD
GH
AM
BR
UIS
TM
AN
-Off-
PR
GM
AD
BC
NE
DI
WA
WA
TH
LGW
-Pea
kA
MS
MU
CLH
R-o
ff pe
ak CP
HD
UB
CG
NM
AN
-Pea
kV
IET
LLB
TS
LHR
-pea
kO
SL
LJU
BH
X
US
$
Landing Charges for Airbus 320 - Asia Pacific2005
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
$1,800
KU
LH
KT
CN
XB
KK
HD
Y
DX
BA
DL
CG
K
SIN
MA
AD
EL
BO
MM
NL
CN
S
TPE
B
NE
MFM
AK
L
ICN
PE
R
HK
GS
HA
CA
NP
VG
SZX
PE
KC
HC
NR
TK
IX
US
$
A320 Landing Fees - Global
Figure S-8b, Landing Charges for Airbus 320, 2005
0
500
1000
1500
2000
2500
BN
AA
TL
CLT
SLC
TP
AR
DU
FLL
MS
YS
AT
PH
XR
ICLA
SP
BI
MC
OO
AK
SD
FS
JCM
DW
CV
GR
NO
MS
PM
EM
SN
AM
CI
JAX
ON
TM
KE
HN
LP
HL
IND
IAD
PIT
SA
NB
WI
MIA
AB
QS
FO
DC
AS
MF
PD
XY
YC
YU
LA
LBLA
XY
OW
OR
DY
WG
SE
AY
EG
AU
SY
HZ
BO
SD
TW
YV
RIA
HD
EN
ST
LD
FW
JFK
EW
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AY
YZ
TX
LM
XP
FC
OC
IALG
W-o
ff pe
ak FR
AM
LAO
RY
GV
AS
TN
LIS
DU
SA
RN
ZR
HH
EL
CD
GH
AM
BR
UIS
TM
AN
-Off-
PR
GM
AD
BC
NE
DI
WA
WA
TH
LGW
-Pea
kA
MS
MU
CLH
R-o
ff pe
akC
PH
DU
BC
GN
MA
N-P
eak
VIE
TLL
BT
SLH
R-p
eak
OS
LLJ
UB
HX
K
UL
HK
TC
NX
BK
KH
DY
DX
BA
DL
CG
K
SIN
MA
AD
EL
BO
MM
NL
CN
S
TP
E
BN
EM
FM
AK
L IC
NP
ER
H
KG
SH
AC
AN
PV
GS
ZX
PE
KC
HC
NR
TK
IX
US
$
Landing Charges for B747 - Europe
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
LGW
-off
peak
Man
-Off
TX
LLG
W-P
eak
ST
NLH
R-o
ff pe
akM
XP
FC
OC
IAB
RU
DU
SF
RA
LHR
-pea
kM
LAP
RG
AT
HG
VA
CG
NM
UC LIS
HA
MZ
RH
IST
Man
-Pea
kV
IEH
EL
AR
NE
DI
MA
DB
CN
OS
LC
DG
OR
YC
PH
MB
XD
UB
WA
WT
LLB
TS
AM
SLJ
UB
HX
US
$
Landing Charges for Airbus 320 - Europe
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
TX
LM
XP
FC
OC
IALG
W-o
ff pe
akF
RA
MLA
OR
YG
VA
ST
N LIS
DU
SA
RN
ZR
HH
EL
CD
GH
AM
BR
UIS
TM
AN
-Off-
PR
GM
AD
BC
NE
DI
WA
WA
TH
LGW
-Pea
kA
MS
MU
CLH
R-o
ff pe
akC
PH
DU
BC
GN
MA
N-P
eak
VIE
TLL
BT
SLH
R-p
eak
OS
LLJ
UB
HX
US
$
North America Europe Asia Pacific
NRTKIX
Ave. Terminal Fee per Pax – N.America- 2005
Average Terminal Fee per Passenger - North American
0
1
2
3
4
5
6
AT
LC
LTM
KE
DF
WC
VG
MC
IM
DW
DT
WM
SP
SLC
SM
FR
NO
FLL
LAX
RD
UB
WI
SA
NS
AT
JAX
OR
DY
WG
PH
XO
AK
LAS
ME
MS
JCS
DF
LGA
MC
OB
NA
IND
ST
LA
US
MS
YT
PA
YE
GH
NL
PB
IY
HZ
ALB
AB
QY
UL
IAH
CLE
SN
AY
YC
BO
SR
ICY
VR
PH
LY
OW
IAD
JFK
SE
AO
NT
DC
AY
YZ PIT
PD
XE
WR
DE
NS
FO
MIA
US
$
Air Transport Research Society
42
User Charge vs. Service Quality Trade Off
Airport should be run as efficiently as possible But when it comes to
User Charge vs. Service Quality trade-off ?
Go for providing high service quality to airlines and passenger even if you raise user charges
Air Transport Research Society
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Summary – Landing/Takeoff Charges
Global Results: Airports charging highest aircraft movement charges:– Boeing 747: Toronto, Narita, Kansai, Birmingham– Airbus 320: Toronto, Kansai, Narita, Birmingham
North American Results (both B747 and A320):– Highest charges: Toronto, LaGuardia, Newark, JFK– Lowest aircraft movement charges: Nashville,
Atlanta, Charlotte, Tampa, Salt Lake City
Air Transport Research Society
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Summary – Landing Charges (cont’d)
Asia-Pacific Results:– Highest charges for B747: Kansai, Narita,
major Chinese airports, Incheon; – Highest charges for A320: Kansai, Narita,
Chrischurch, Major Chinese airports, Hong Kong
– Lowest charges: Kuala Lumpur, Thailand airports, Dubai, Adelaide, Jakarta Soekarno-Hatta, Singapore
Air Transport Research Society
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Summary – Landing Charges (cont’d)
European Results:– Highest charges for B747: Brimingham; Amsterdam,
Bratislava, Tallinn, Warsaw– Highest charges for A320: Ljubljana, Oslo, Heathrow-
Peak, Vienna
– Lowest charge for B747: Gatwick-offpeak; Manchester-offpeak; Berlin Tegal, Gatwick-offpeak, Stansted; Heathrow-offpeak;
– Lowest charges for A320: Berlin Tegal, Milan Malpensa, Rome Fiumicino, Rome Ciampino, Gatwick-offpeak, Frankfurt, Malta
Air Transport Research Society
46
Outline
Objective of the Benchmarking Study Airports Included Methodology Key Results on Efficiency and Costs Airport User Charge Comparisons Effects of Business Strategies and
Ownership Forms Conclusions
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Results on Business Strategies Diversification of Revenue Source is good:
– Airports with larger share of non-aeronautical revenue achieves higher Net VFP (efficiency)
Outsourcing: – Airports who contract out their terminal
operations to outside operator achieve higher efficiency
– Outsourcing entire terminal operations to expert firms improve efficiency
Air Transport Research Society
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Effects of Ownership and Institutional
Forms of Airport Organization
Method: Advanced econometric work: translog stochastic cost frontier method which allows for individual heterogeneity in the cost frontiers
Alternative methods: Residual VFP, DEA, conventional SFM, etc.
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Empirical Results on Ownership Forms
Cost Efficiency Ranking: 1. Airports with private majority ownership (>50%);
BAA, Australia, some NZ, Copenhagen, Rome, etc. 2. U.S. & Canadian Airport Authority 3. 100% Public Corporation (Crown Corp.) 4. U.S. City Run Airports 5. Mixed enterprise with government majority ownership 6. Airports with shared multiple govt ownership 7. U.S. Port Authority run Airports – the least efficient
form (3 NY-NJ; Boston; Seattle; Portland; Oakland) Airports with private majority ownership achieves
highest profit margin, and pays employees well
Air Transport Research Society
Thank You
Air Transport Research Society
51
Please Note
The ATRS Global Airport Performance Benchmarking Report : 3 volumes, 400+ pages with valuable data and analysisCan be purchased by visiting
www.atrsworld.org
2008 ATRS World Conference: July 6-9, 2008 to be hosted by Hellenic Aviation Society, Athens, Greece