Transcript The U.S. Open Skies Initiatives and Strategies

Key Results of the 2007 ATRS Global
Airport Benchmarking Report
Prof. Tae H. Oum
Sauder 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 Yoshida
Europe: Jaap de Wit, Nicole Adler, Hans-Martin Niemeier, Eric Pels
North America: David Gillen, Tae Oum, Bijan Vasigh, Chunyan Yu
 Air Transport Research Society
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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 Air Transport Research Society
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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 Air Transport Research Society
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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 Air Transport Research Society
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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 Air Transport Research Society
Airports Included in the 2007 Report*
Canada-U.S.
Europe
63 airports
43 airports and
10 airport groups
Asia
27 airports and 5 airport groups
Australia 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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 Air Transport Research Society
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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 Air Transport Research Society
Characteristics
of
Sample Airports
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 Air Transport Research Society
0
2005
2002
Mean
ATL
ORD
LAX
DFW
DEN
LAS
JFK
PHX
IAH
MSP
DTW
MCO
SFO
EWR
PHL
MIA
YYZ
SEA
CLT
IAD
BOS
LGA
CVG
FLL
SLC
BWI
HNL
TPA
MDW
DCA
SAN
YVR
OAK
STL
PDX
CLE
YUL
MEM
SJC
PIT
YYC
SMF
MCI
SNA
RDU
BNA
IND
MSY
AUS
SAT
MKE
ONT
PBI
ABQ
JAX
RNO
YEG
YOW
SDF
YHZ
YWG
ALB
RIC
Millions
Passenger volumes – N. America
100
Figure 3.4.1a: Passenger Traffic (2002/05) - North America
90
80
70
60
50
40
30
20
10
LHR
CDG
FRA
AMS
MAD
LGW
FCO
MUC
BCN
ORY
STN
MAN
CPH
MXP
IST
DUB
ZRH
ARN
BRU
OSL
VIE
DUS
ATH
TXL
LIS
HEL
PRG
HAM
CGN
BHX
GVA
EDI
WAW
CIA
MLA
RIX
SOF
KEF
TLL
BTS
LJU
Mean
Millions
Passenger Volumes - Europe
80
Figure 3.4.1b: Passenger Traffic (2002/04/05) - Europe
70
60
50
40
30
20
10
0
2005
2004
2002
0
PEK
BKK
HKG
SIN
NRT
SYD
CGK
ICN
DXB
CAN
PVG
KUL
TPE
MEL
SHA
SZX
MNL
BNE
BOM
KIX
SEL
DEL
AKL
HAK
PER
XMN
CHC
ADL
WLG
MFM
CNS
HKT
CNX
PEN
HDY
Mea
Millions
Passenger Volumes : Asia-Pacific
3.4.1c: Passenger Traffic (2002/04/05) - Asia Pacific
45
40
35
30
25
20
15
10
5
2005
2004
2002
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 – N. America
Concession Revenue Share (2005) - North America
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
Mean (group)
Fraport
ADP
ANA
ADR
CAA(FIN)
BAA
DAA
Mean
VIE
ARN
TLL
MLA
BRU
ZRH
AMS
LHR
ATH
MAN
EDI
HAM
DUS
LGW
CPH
GVA
STN
SOF
Concession Revenue Shares – Europe
Concession Revenue Share (2005) - Europe
70%
60%
50%
40%
30%
20%
10%
0%
Concession Revenue Shares – Asia-Pac
Concession Revenue Share (2005) - Asia Pacific
50%
45%
40%
35%
30%
25%
20%
15%
10%
5%
Mean
HAK
CAN
PEK
MFM
MAHB
TPE
AOT
NRT
ICN
HKG
SEL
SIN
Mean
CNS
BNE
PER
ADL
SYD
WLG
AKL
MEL
CHC
0%
60%
0%
TPA
RDU
FLL
MCI
RIC
SMF
MCO
ATL
RNO
BNA
SJC
MKE
PHX
JAX
SNA
PBI
YUL
LAS
IND
SAT
LAX
SLC
CLT
HNL
MSP
SAN
DTW
IAD
OAK
YWG
SDF
MDW
YHZ
YVR
ALB
DCA
AUS
YOW
ONT
BOS
ABQ
DFW
YYC
CVG
SEA
BWI
PDX
PIT
LGA
SFO
ORD
CLE
DEN
STL
YEG
MSY
EWR
PHL
MIA
JFK
IAH
MEM
YYZ
MUC
STN
LJU
VIE
HAM
GVA
LGW
MAN
OSL
LHR
ATH
AMS
CPH
SOF
BHX
ZRH
ARN
DUS
EDI
BRU
TLL
PRG
MLA
CGN
WAW
RIX
DAA
Fraport
ADP
BAA
CAA(F
ANA
LFV
ADR
Berlin
PPL
BNE
AKL
MEL
PER
ADL
SYD
CHC
CNS
WLG
TPE
ICN
SIN
HKG
KIX
CAN
XMN
SEL
HAK
PEK
SZX
CEI
CNX
HDY
HKT
AOT
MFM
NRT
MAHB
PTII
SAA
Share of Non-Aeronautical Revenue
Figure S-5: Non-Aeronautical Revenue Share (2005)
80%
Europe
70%
Asia Pacific
North America
YYZ
50%
40%
30%
20%
10%
0%
YUL
YYZ
YVR
MIA
JFK
EWR
LAX
YYC
YOW
SFO
HNL
IAD
IAH
YHZ
YEG
YWG
BOS
ORD
PHL
DFW
FLL
SEA
DTW
ATL
MCO
CLT
LGA
MSP
PHX
BWI
LAS
DEN
PDX
MEM
SAT
CLE
SJC
TPA
RDU
OAK
PBI
SLC
DCA
ONT
STL
MKE
PIT
SAN
MDW
ALB
BNA
MCI
SMF
MSY
IND
AUS
RNO
ABQ
CVG
JAX
RIC
SDF
SNA
MLA
AMS
BRU
PRG
TLL
SOF
DUB
VIE
BTS
GVA
CIA
CPH
CDG
LHR
WA
LGW
FRA
STN
MAN
MXP
LIS
BHX
HEL
DUS
MUC
ARN
ATH
IST
FCO
CGN
HAM
MAD
TXL
OSL
BCN
ORY
ZRH
LJU
EDI
HKG
MFM
SIN
TPE
ICN
NRT
BKK
KIX
MNL
AKL
PEN
MAA
KUL
BOM
DEL
SYD
HKT
PER
CNS
CHC
PEK
BNE
PVG
CGK
MEL
XMN
WLG
HDY
CNX
SEL
CAN
ADL
HAK
SHA
SZX
CEI
International Passenger Share
Share of International Passengers (2005)
120%
Europe
100%
Asia-Pac
Asia Pacific
Europe
North America
80%
60%
N. America
40%
20%
Airport Productivity
Outputs
•
•
•
•
Aircraft movement
Passengers
(Cargo)
Other revenues
including concessions
Inputs
• Labour
• Other non-capital (soft
cost) inputs
• Runways
• Terminals
• Gates
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 Air Transport Research Society
Methodology for productivity
MEASUREMENT

Partial Factor Productivity (PFP) Measures:
– Labor Productivity
– Capital Input Productivity - capital input accounting problem
– Productivity of Soft Cost Inputs
PFP 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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 Air Transport Research Society
Methodology for productivity MEASUREMENT – cont’d
 Multiple
Outputs:
Aircraft movements, passengers, Cargo Tonnes, and nonaeronautical 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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 Air Transport Research Society
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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 Air Transport Research Society
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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 Air Transport Research Society
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’.

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 Air Transport Research Society
Residual (Net) Variable Factor Productivity:
Overall operating efficiency measure – Asia-Pacific
Figure S-4c Residual Variable Factor Productivity (2005) - Asia Pacific
HKG=1.0
1.2
1.0
0.6
0.4
Mean
NRT
SAA
PEK
KIX
MAHB
SEL
MFM
CAN
AOT
ICN
SIN
HKG
Mean
WLG
CNS
PER
CHC
AKL
MEL
ADL
BNE
0.0
SZX
0.2
SYD
HKG=1.0
0.8
Residual (Net) Variable Factor Productivity:
Overall operating efficiency measure - Europe
Figure S-4b Residual Variable Factor Productivity (2005)- Europe
CPH=1.0
1.6
1.4
1.2
0.8
0.6
0.4
0.0
CAA(FIN)
ANA
ADR
ADP
LFV
BAA
FRA
PPL
DAA
Berlin
Mean (group)
0.2
OSL
ATH
GVA
BRU
ZRH
CPH
BHX
AMS
EDI
LJU
HAM
LGW
TLL
LHR
MAN
MUC
WAW
DUS
VIE
RIX
MLA
SOF
CGN
PRG
Mean
CPH = 1.0
1.0
0.0
ATL
RDU
TPA
MCO
FLL
MSP
LAS
YVR
CLT
BNA
YOW
YUL
ABQ
RNO
YYC
MCI
PDX
AUS
MKE
HNL
BOS
IND
OAK
PBI
DCA
IAD
SEA
SMF
SDF
PHX
DEN
MEM
SNA
IAH
YHZ
YWG
SLC
JAX
SFO
SAN
DFW
RIC
DTW
MDW
CVG
LAX
STL
YEG
SJC
ORD
CLE
PHL
LGA
MSY
BWI
ALB
PIT
YYZ
MIA
EWR
ONT
JFK
SAT
YVR=1.0
Residual (Net) VFP: Overall operating efficiency
measure – North America
Figure S-4a, Residual Variable Factor Productivity (2005), North America
YVR = 1.0
2.5
2.0
1.5
1.0
0.5
2.0
0.0
ATL
RDU
TPA
MCO
FLL
MSP
LAS
YVR
CLT
BNA
YOW
YUL
ABQ
RNO
YYC
MCI
PDX
AUS
MKE
HNL
BOS
IND
OAK
PBI
DCA
IAD
SEA
SMF
SDF
PHX
DEN
MEM
SNA
IAH
YHZ
YWG
SLC
JAX
SFO
SAN
DFW
RIC
DTW
MDW
CVG
LAX
STL
YEG
SJC
ORD
CLE
PHL
LGA
MSY
BWI
ALB
PIT
YYZ
MIA
EWR
ONT
JFK
SAT
OSL
ATH
GVA
BRU
ZRH
CPH
BHX
AMS
EDI
LJU
HAM
LGW
TLL
LHR
MAN
MUC
WAW
DUS
VIE
RIX
MLA
SOF
CGN
PRG
CAA(
ANA
ADR
ADP
LFV
BAA
FRA
PPL
DAA
Berlin
SYD
BNE
ADL
MEL
AKL
CHC
PER
CNS
WLG
HKG
SIN
ICN
AOT
CAN
SZX
MFM
SEL
MAHB
KIX
PEK
SAA
NRT
Global Comparison – Net VFP
Figure S-4, Residual Variable Factor Productivity (2005)
2.5
North America
Europe
1.5
1.0
0.5
Cost Competitiveness
consists of:

Productive Efficiency – Residual
(Net) VFP

Input Prices:
– Labor price
– Soft cost input price (incl. outsourcing
price)
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 Air Transport Research Society
0.6
0.4
0.2
0
-0.2
-0.4
-0.6
-0.8
-1
AUS
SMF
MSP
YYC
RNO
SDF
IND
RIC
PHX
PBI
YOW
MKE
SLC
PDX
OAK
DCA
MEM
SNA
SEA
BOS
JAX
MSY
DFW
YHZ
YWG
SAN
LAX
DEN
ALB
CLE
STL
DTW
IAD
YEG
ORD
MDW
CVG
PIT
PHL
SAT
BWI
IAH
SJC
LGA
SFO
ONT
YYZ
EWR
JFK
MIA
NA-Mean
1
ATL
1.2
RDU
TPA
FLL
MCO
LAS
YUL
CLT
ABQ
HNL
BNA
MCI
YVR
Figure 5.4a Cost Competitiveness 2005 - North America
YVR=0.0
0.8
0
-0.2
-0.4
-0.6
ADR
FRA
ADP
LFV
DAA
Berlin
Mean
0.2
LHR
AMS
MAN
ZRH
GVA
HAM
MUC
DUS
VIE
CGN
0.4
ANA
PPL
BAA
mean
CAA(FIN)
ATH
0.6
TLL
SOF
LJU
RIX
WAW
EDI
BRU
PRG
MLA
OSL
LGW
BHX
CPH
Figure 5.4b Cost Competitiveness 2005 - Europe
CPH =0.0
0.8
SAA
MAHB
PEK
0.6
AOT
CAN
0.8
SZX
Figure 5.4c Cost Competitiveness (2005) - Asia Pacific
HKG=0.0
Mean
HKG
SEL
SIN
0
ICN
WLG
0.2
MFM
0.4
-1
KIX
PER
SYD
MEL
CHC
BNE
mean
NRT
-0.8
AKL
-0.6
CNS
-0.4
ADL
-0.2
Top Performers
Top 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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 Air Transport Research Society
Outline
Objective of the Benchmarking Study
 Airports Included
 Methodology
 Key Results on Efficiency and Costs

Airport
User Charges
Comparison
 Conclusions
32
 Air Transport Research Society
0
BNA
ATL
CLT
SLC
TPA
RDU
FLL
MSY
SAT
PHX
RIC
LAS
PBI
MCO
OAK
SDF
SJC
MDW
CVG
RNO
MSP
MEM
SNA
MCI
JAX
ONT
MKE
HNL
PHL
IND
IAD
PIT
SAN
BWI
MIA
ABQ
DCA
SMF
PDX
ALB
LAX
ORD
SEA
AUS
BOS
YUL
DTW
IAH
SFO
YOW
YWG
DEN
YEG
YHZ
YVR
YYC
STL
DFW
JFK
EWR
LGA
YYZ
US$
Landing Charges for Boeing 747 - North America
2005
12000
10000
8000
6000
4000
2000
$0
LGW-off peak
Man-Off Peak
TXL
LGW-Peak
STN
LHR-off peak
MXP
FCO
CIA
BRU
DUS
FRA
LHR-peak
MLA
PRG
ATH
GVA
CGN
MUC
LIS
HAM
ZRH
IST
Man-Peak
VIE
HEL
ARN
EDI
MAD
BCN
OSL
CDG
ORY
CPH
MBX
DUB
WAW
TLL
BTS
AMS
LJU
BHX
US$
Landing Charges for B747 - Europe
2005
$8,000
$7,000
$6,000
$5,000
$4,000
$3,000
$2,000
$1,000
Landing Charges for B747 - Asia Pacific
2005
$8,000
$7,000
$6,000
$4,000
$3,000
$2,000
$0
 Air Transport Research Society (ATRS)
MAA
DEL
BOM
MFM
BNE
TPE
AKL
HKG
ICN
PEK
PVG
SHA
CAN
SZX
NRT
KIX
$1,000
KUL
DXB
BKK
CNX
HDY
HKT
CEI
ADL
CNS
CGK
CHC
SIN
MNL
PER
US$
$5,000
8000
BNA
ATL
CLT
SLC
TPA
RDU
FLL
MSY
SAT
PHX
RIC
LAS
PBI
MCO
OAK
SDF
SJC
MDW
CVG
RNO
MSP
MEM
SNA
MCI
JAX
ONT
MKE
HNL
PHL
IND
IAD
PIT
SAN
BWI
MIA
ABQ
DCA
SMF
PDX
ALB
LAX
ORD
SEA
AUS
BOS
YUL
DTW
IAH
SFO
YOW
YWG
DEN
YEG
YHZ
YVR
YYC
STL
DFW
JFK
EWR
LGA
YYZ
LGW-off peak
Man-Off Peak
TXL
LGW-Peak
STN
LHR-off peak
MXP
FCO
CIA
BRU
DUS
FRA
LHR-peak
MLA
PRG
ATH
GVA
CGN
MUC
LIS
HAM
ZRH
IST
Man-Peak
VIE
HEL
ARN
EDI
MAD
BCN
OSL
CDG
ORY
CPH
DUB
WAW
TLL
BTS
AMS
LJU
BHX
KUL
DXB
BKK
CNX
HDY
HKT
ADL
CNS
CGK
CHC
SIN
MNL
PER
MAA
DEL
BOM
MFM
BNE
TPE
AKL
HKG
ICN
PEK
PVG
SHA
CAN
SZX
NRT
KIX
US$
B747 Landing fee -2005
Figure S-8a Landing Charges for Boeing 747, 2005
12000
10000
NRT
North America
KIX
Europe
Asia Pacific
6000
4000
2000
0
0
BNA
ATL
CLT
SLC
TPA
RDU
FLL
MSY
SAT
PHX
RIC
LAS
PBI
MCO
OAK
SDF
SJC
MDW
CVG
RNO
MSP
MEM
SNA
MCI
JAX
ONT
MKE
HNL
PHL
IND
IAD
PIT
SAN
BWI
MIA
ABQ
SFO
DCA
SMF
PDX
YYC
YUL
ALB
LAX
YOW
ORD
YWG
SEA
YEG
AUS
YHZ
BOS
DTW
YVR
IAH
DEN
STL
DFW
JFK
EWR
LGA
YYZ
US$
Landing Charges for Airbus 320 - North America
2005
2500
2000
1500
1000
500
$0
TXL
MXP
FCO
CIA
LGW-off peak
FRA
MLA
ORY
GVA
STN
LIS
DUS
ARN
ZRH
HEL
CDG
HAM
BRU
IST
MAN-OffPRG
MAD
BCN
EDI
WAW
ATH
LGW-Peak
AMS
MUC
LHR-off peak
CPH
DUB
CGN
MAN-Peak
VIE
TLL
BTS
LHR-peak
OSL
LJU
BHX
US$
Landing Charges for Airbus 320 - Europe
2005
$1,400
$1,200
$1,000
$800
$600
$400
$200
Landing Charges for Airbus 320 - Asia Pacific
2005
$1,800
$1,600
$1,400
$1,000
$800
$600
$400
$200
HKG
SHA
CAN
PVG
SZX
PEK
CHC
NRT
KIX
TPE
BNE
MFM
AKL
ICN
PER
SIN
MAA
DEL
BOM
MNL
CNS
$0
KUL
HKT
CNX
BKK
HDY
DXB
ADL
CGK
US$
$1,200
1500
BNA
ATL
CLT
SLC
TPA
RDU
FLL
MSY
SAT
PHX
RIC
LAS
PBI
MCO
OAK
SDF
SJC
MDW
CVG
RNO
MSP
MEM
SNA
MCI
JAX
ONT
MKE
HNL
PHL
IND
IAD
PIT
SAN
BWI
MIA
ABQ
SFO
DCA
SMF
PDX
YYC
YUL
ALB
LAX
YOW
ORD
YWG
SEA
YEG
AUS
YHZ
BOS
DTW
YVR
IAH
DEN
STL
DFW
JFK
EWR
LGA
YYZ
TXL
MXP
FCO
CIA
LGW-off peak
FRA
MLA
ORY
GVA
STN
LIS
DUS
ARN
ZRH
HEL
CDG
HAM
BRU
IST
MAN-OffPRG
MAD
BCN
EDI
WAW
ATH
LGW-Peak
AMS
MUC
LHR-off peak
CPH
DUB
CGN
MAN-Peak
VIE
TLL
BTS
LHR-peak
OSL
LJU
BHX
KUL
HKT
CNX
BKK
HDY
DXB
ADL
CGK
SIN
MAA
DEL
BOM
MNL
CNS
TPE
BNE
MFM
AKL
ICN
PER
HKG
SHA
CAN
PVG
SZX
PEK
CHC
NRT
KIX
US$
A320 Landing Fees - Global
Figure S-8b, Landing Charges for Airbus 320, 2005
2500
NRT
North America
Europe
KIX
2000
Asia Pacific
1000
500
0
0
ATL
CLT
MKE
DFW
CVG
MCI
MDW
DTW
MSP
SLC
SMF
RNO
FLL
LAX
RDU
BWI
SAN
SAT
JAX
ORD
YWG
PHX
OAK
LAS
MEM
SJC
SDF
LGA
MCO
BNA
IND
STL
AUS
MSY
TPA
YEG
HNL
PBI
YHZ
ALB
ABQ
YUL
IAH
CLE
SNA
YYC
BOS
RIC
YVR
PHL
YOW
IAD
JFK
SEA
ONT
DCA
YYZ
PIT
PDX
EWR
DEN
SFO
MIA
US$
Ave. Terminal Fee per Pax – N.America- 2005
Average Terminal Fee per Passenger - North American
6
5
4
3
2
1
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
42
 Air Transport Research Society
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
43
 Air Transport Research Society
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
44
 Air Transport Research Society
Summary – Landing Charges (cont’d)
 European
Results:
– Highest charges for B747: Brimingham; Amsterdam,
Bratislava, Tallinn, Warsaw
– Highest charges for A320: Ljubljana, Oslo, HeathrowPeak, 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, Gatwickoffpeak, Frankfurt, Malta
45
 Air Transport Research Society
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
46
 Air Transport Research Society
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
47
 Air Transport Research Society
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.
48
 Air Transport Research Society
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
49
 Air Transport Research Society
Thank You
 Air Transport Research Society
Please Note

The ATRS Global Airport Performance
Benchmarking Report : 3 volumes, 400+ pages
with valuable data and analysis
Can be purchased by visiting
www.atrsworld.org
 2008 ATRS World Conference: July 6-9, 2008 to
be hosted by Hellenic Aviation Society, Athens,
Greece
51
 Air Transport Research Society