Ian Humphreys

Airports' perspectives on the growth of low-cost airlines and the remodeling of the airport-airline relationship.

Abstract This paper explores the way in which airports have responded to the apparent opportunities afforded them by the growth of low-cost airlines. The adoption of a so-called low-cost model by airlines has made many airports fundamentally reconsider who their customers are. The low-cost model impels airlines to negotiate contracts which significantly reduce aeronautical charges by the airport, consequently seeking to make up this short fall by commercial revenues from the increased passenger numbers. This is not however without consequences for the airports, their passengers and the relationship between the airport and its existing airline operators. The recent growth of low-cost airlines has naturally attracted the attention of airport managers as a source of volume to alleviate commercial pressures; however, due to low-cost airlines’ unwillingness to pay high airport fees there is the difficulty of translating any increased volume of passengers into increased revenue. This paper reviews the behaviour of a number of different airports in Europe and identifies important issues for airport management to consider when negotiating with low-cost airlines.

AIRPORT-AIRLINE INTERACTION: THE IMPACT OF LOW-COST CARRIERS ON TWO EUROPEAN AIRPORTS

This paper uses case studies to look at the impact of low-cost airlines on two European airports. Low-cost airlines continue to exert an influence in air transport markets and small airports face pressures to compete for their business. The low-cost model motivates airlines to negotiate contracts that significantly reduce aeronautical revenues, leaving airports to compensate by seeking commercial revenues from the increase in passengers. This has consequences for the airports, their passengers and the relationship between the airport and its existing operators. It is found that it is important for airport management to see both passengers and airlines as customers and to understand the resultant revenue streams, before negotiating preferential contracts with low-cost carriers.

The benchmarking of airport performance

This paper examines how benchmarking is being used by airport managers as a means of internal performance comparison and improvement. Drawing on interviews with airport managers and a questionnaire survey of the worlds top 200 busiest passenger airports, the paper discusses the nature, prevalence and consequences of current benchmarking practices in airports. The authors also include a review of the literature on airport benchmarking and a discussion of the characteristics and relevance of Best Practice Benchmarking.

PERFORMANCE MEASUREMENT: A REVIEW OF AIRPORTS

Abstract This paper considers the past, present and future of airport performance measurement. The authors examine the changing nature of the performance measurement of airports. Airport performance measures are important for day to day business and operational management, regulatory bodies, Government and other stakeholders such as passengers and airlines. Measurement systems have been forced to develop in response to changing organisational contexts. With pressures for change coming from changing ownership patterns, an increased commercial focus, regulation, rapid passenger growth, increased concern for the natural environment and technical innovation, the experiences shared and lessons to be learnt highlighted in this paper will be of interest to both academics and practitioners.

POLICY ISSUES AND PLANNING OF UK REGIONAL AIRPORTS.

Abstract The principal motivation for this paper is to examine the policy issues for UK regional airports within the air transport system with particular reference to airport airline relationships. The geography of airline route networks is considered a key factor that determines location of the pressure for infrastructure development. Regional airports policy is considered in this context. The problems of the resultant concentration of air traffic has largely been ignored up until now and so this paper seeks highlight the issues this presents to policy makers. The paper reviews the changing regional airport ownership patterns and examines a range of implications. It then explores the policy implications for the future regulation and development of the air transport system. The authors contend that regulation and the planning system are the only two remaining policy levers for government to guide privately owned airlines, privately owned airports and commercialised airports towards national policy goals.

Traditional Airport Performance Indicators: A Critical Perspective

Airport managers require effective performance measures to enable them to plan and manage within the context of rapid passenger growth and the trend toward an expansion of commercial activities. Airport performance measurement in various ownership patterns from Europe and the United States is reviewed, bringing together a rich picture of different practices. The need to be aware of contingent circumstances to evaluate airport performance objectively is emphasized. Many measures currently in use are output variables and are usually quantitative and based on what is easy to measure instead of what is important to measure. The problems of discrepancies in the definition of key variables and of attempts to achieve direct comparability between airports are examined. Consideration is given to the dysfunctional effects of measurement systems and how they can be adapted to encourage innovation and organizational learning through such techniques as best-practice benchmarking. Airport planners, managers, and academics who have an interest in performance measurement and who wish to question the role of traditional measures will be interested in the discussion. Lessons from European experience in a postprivatization environment are considered. The research recommends the adoption of a performance measurement system for airports that examines processes as well as results and that considers antecedent variables as well as outcome variables. The conclusions indicate how airport planners and managers can gain new insight into the underlying processes behind quantitative indicators and how an understanding of these processes can stimulate organizational learning and innovation.

Benchmarking in civil aviation: some empirical evidence

Purpose – This paper aims to explore the use of best practice benchmarking in civil aviation.Design/methodology/approach – Evidence was gathered from two international questionnaire surveys of the top 200 airlines and the top 200 airports. Supplementary evidence included interviews with airline and airport managers.Findings – The profile of responses was a good match to the samples. Benchmarking was identified as the most used performance improvement technique for both airlines and airports. Larger airlines were more likely to engage in benchmarking. Ease of usage and the cost relative to other performance improvement techniques were important factors in determining benchmarking uptake. Problems of data comparability and competitive sensitivity were raised. Airports had a greater tendency to concentrate on benchmarking with similar organisations and placed a relatively greater emphasis on its use for performance measurement over process improvement.Research limitations/implications – Further research shou...

Airport Regulation: Reflecting on the Lessons from BAA plc

This article discusses the implications of airport privatization and regulation with reference to the case of BAA plc. It concludes that regulation should be implemented in a coordinated manner which is consistent with wider policy goals and which respects the outcomes for all stakeholders. The need for countries to have a strategic airports policy to guide development towards national economic and environmental goals is highlighted. The implications of the regulation of BAA to protect public interest is both timely and topical given that the next government airports policy is due to be released in 2002 and current plans for the privatization of air traffic control. Regulation may be the only policy lever to shape a privatized and commercialised airport system and its role within a wider integrated transport strategy.

A review of the airport-low cost airline relationship

This paper seeks to review the airport-airline relationship in the light of the growth in the low cost sector, identifying important issues that airport management should consider when negotiating with low cost airlines. Airports have responded to the potential opportunities that have arisen from the growth of low cost airlines. The low cost model has implications for the airline-airport relationship, forcing airports to negotiate contracts which significantly reduce aeronautical revenues whilst seeking to address this short fall by commercial revenues via increased passenger numbers. Airports have sometimes found it difficult to turn increased passenger volume into additional revenue.

International Survey of Performance Measurement in Airports

The seemingly relentless growth in air traffic and the introduction of commercial and private models of airport ownership have changed the scope and significance of performance measurement for airport management, regulators, and stakeholders. The findings of a questionnaire survey are reported. The survey examined the nature and prevalence of the performance measurement of airports. Previous studies have examined specific airports or groups of airports and compared performance. This research assesses the way in which performance measures are used by management at the world’s busiest passenger airports using empirical evidence collected principally through the means of a worldwide questionnaire survey of the 200 largest passenger airports. A rich picture of various performance measurement practices was discovered.