AVIA3851

Airport Management 2 Presentation by Dickson Chan

(3132079)

Presentation Topic

On your recent appointment as manager of a regional airport, one of the Shire councillors commented to you “nothing seems to happen at the airport when it should. In fact, to be honest, nothing seems to happen. I don’t understand it – we spent a lot of money getting a Master Plan done”. You take this comment to heart and

prepare a proposal designed to convince the Council that the airport needs a Business Plan as well as a Master Plan.

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Outline of the Presentation

- Master Plan & Business Plan – What are the differences? - A Need for a Business Plan? – Some unique issues faced by Regional Airports What’s in a Business Plan? – What information should they contain - How can a Business Plan help airport management?

– What are the advantages in having one?

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Business Plan & Master Plan

What is a Business Plan?

A Plan for any business (e.g. airports, airlines) How the airport will carry out its business Looks at what the airport will do in 3 to 5 years A living / breathing document Reflects the airport’s business environment

(Ashford & Moore, 1999, Airport Finance 2 nd Edition)

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Business Plan & Master Plan

What is a Master Plan?

A Document by airport managers Informs others of the airport’s future Outlines Airport’s future vision List stages of future developments A picture of the airport in 20-25 yrs time

(IATA ADRM, 2004)

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Business Plan & Master Plan

Why do airports need two plans?

Master Plan alone is insufficient Plans for different purposes and time-frame Needed for Short-term and Long-term planning Business Plan is linked to the Master Plan 6

A Need for a Business Plan?

Commercialisation of Airports Public Utility vs Private Companies (Graham 2002) Expected to make profit Airports should be run like a business

“The philosophy of the airport is to run the facility like a business, and develop both landside and aeronautical activities… that’s the only way that we feel we can generate the revenue and put it back into the airport to get things where they need to go and be an asset to the community.”

(Quoted from Tim Whitman, Director of Winder-Barrow Airport, Atlanta / Georgia)

From “Two Plans of Attack”, Airport Business Jan 2006

.

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A Need for a Business Plan?

Ownership of Regional Airports Privatisation of Airports in Australia Owned by Local Governments / Councils (e.g. Coffs Harbour City Council etc.) Many Councils manage their regional airports 8

A Need for a Business Plan?

Unique Challenges for Regional Airports Under-utilisation / very few traffic & demands Significantly less income compared to capital city airports Lack of funding for facilities and infrastructures Not a lot of customers e.g. airlines and GA activities Income generated mostly from aeronautical sources 9

A Need for a Business Plan?

Why do Airports need one?

The points mentioned previously Identify where you are and where you’ve been Increases competitive awareness Explores alternative courses Pro-active, not re-active Measure Progress 10

What is in a Business Plan?

Preparing an Airport Business Plan Statement of business aims and objectives Market Analysis of demand / Identifying Trends Assessment of competition Evaluation of Strengths & Weaknesses (SWOT) Determine services to be offered / sector of the market to attack Statement of how it will market / sell its services Determine the impact of proposed measures Preparation of financial forecasts Estimation of required resources / how they will be used

(Ashford & Moore, 1999, Airport Finance 2 nd Edition)

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What is in a Business Plan?

Structure of a regional airport business plan:

Case Study: Coffs Harbour Airport

Financial Objectives Management Overview Management Structure Operating Strategy Marketing Strategy Financial Management Plan Financial Strategy Other necessary information

(Coffs Harbour City Council 2005 Regional Airport – Associated Policies)

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How can a Business Plan help airport management?

What are the advantages?

A Management Tool A Strategic Direction Identifying threats pro-actively 13

How can a Business Plan help airport management?

A Management Tool

- Used to ensure continued success of Airport - Important reference document - Establishes clear understanding of business missions, plans & goals - Detailed evaluation on financial matters e.g. financial modelling - Measures Progress e.g. Are objectives met?

- Ensure actions are consistent with resources and constraints 14

How can a Business Plan help airport management?

A Strategic Direction

- Presents a case of planned growth - Identifying opportunities, objectives and strategies - Establishing goals and objectives and strategies to reach them - Ensure that the airport vision & master plan is realised - Implement the operating / marketing strategies identified in the business plan 15

How can a Business Plan help airport management?

Identifying Possible Threats

- Business Plans must be flexible - Consider what might happen

(Edwards, 2005)

(e.g. Airline Collapse, Natural Disasters, competition from other forms of transport) - Identify ways of how they may threaten the business - Identify strategies to overcome these problems 16

Conclusion

“Failing to Plan… is a Plan to Fail” !!

- Regional Airports need to have business plans in place - Business Plans help ensure Visions & Master Plan are realised - Business Plan is an integral part of the overall Corporate Plan.

- A continued process and requires frequent re-examination.

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References

Ashford, N & Moore, C A 1999,

Airport Finance 2 nd

Leics UK.

Edition

, Loughborough Airport Consultancy, - Coffs Harbour City Business Units, Airport / Management, 2005,

Regional Airport – Associated Policies (Business Plan)

, Coffs Harbour City Council, Coffs Harbour.

- Edwards, B (Manager, Coffs Harbour Airport) 2006, [Phone conversation]. April 9 th .

Graham, A 2001,

Managing Airports – An international perspective

, Butterworth & Heinemann, London.

- Hodges, M A, 2000,

‘Developing your airport’s flight plan – Business Planning’

, Airport Business Solutions, Tampa, Florida.

- Hodges, M A, 2000,

Airport Business Plan Outline,

viewed April 15th 2006

,

< http://www.aaae.org/government/200_Regulatory_Affairs/300_General_Aviation_Office/300_Docume nt_Library/BpOutline.pdf

> International Air Transport Association (IATA) 2004,

Airport Development Reference Manual

(ADRM) 9th Edition,

Airport Development and Infrastructure Consultancy Services, Montreal.

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