Airport Bench Marking -global Perspective

AIRPORT BENCHMARKING-GLOBAL PERSPECTIVE

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Introduction An economic benchmark is a standard by which business performance is measured.  The report measures and compares the performance of several pivotal aspects of airport operations. Ø Productivity Ø employee productivity, Ø capital productivity Ø Revenue generating efficiencies of the respective airports 

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IDENTIFICATION OF PROBLEM  Indian

airports besides having adequate resources are not able to make proper utilization of such resources.

Objectives To study and compare the performance of several important aspects of airport operations.  To examine the relationships between various performance measures and airport characteristics to provide better understanding of the observed differences in airport performance.  To identify best practices for possible incorporation into the organization’s procedures to increase efficiency, quality and customer satisfaction. 

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Contd... Identify effects of Ø Ownership and Institutional forms Ø Extent of focus on non-aviation (commercial) activities Ø Extent of outsourcing on productivity, unit cost, financial performance, and Airport User Charges o To provide Indian airports with meaningful global comparison of airports. 

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Scope  Nine

airports each have been selected from three different geographical regions these are Asia Pacific, Europe, and North America.  For individual analysis the airports with consistent data on number of runways have been selected taking into consideration number of gates as well as terminal size to reveal efficiency.  In some cases data are only available for a group of airports instead of an individual airport. 6

PARAMETERS

Economic variables  LABOUR

PRODUCTIVITY

2) Passenger per employee 3) Aircraft movement per employee 4) Workload unit per employee 5) Aggregate output per employee

© SOFT COST INPUT PRODUCTIVITY 8) Passenger per unit of soft cost inputs 9) Aggregate output per unit of soft cost input

 FINANCIAL

RESULTS

2) Total revenue per passenger 3) Revenue per employee 4) Revenue per movement

Capacity variables  TERMINAL

PRODUCTIVITY MEASURES

2) Passenger per gate 3) Passenger per square meter terminal area

© RUNWAY PRODUCTIVITY 6) Aircraft movement per runway

ECONOMIC PARAMETERS : LABOUR PRODUCTIVITY

•Reveals that its employees are more efficient as they are imparted with regular training to handle passengers. Another reason for this is more automated systems being practiced inside the airport terminals •La Guardia’s terminals are operated directly by airlines which reduces the need for more number of employees.

•Efficient employees •Technically advanced processes •Aircraft movements for this airport are 5 times in comparison to Oslo and Brisbane and also has efficient staff to manage it.

•Flat governance and management structure. •Less international traffic hence demands for less employees to handle domestic passengers as they require to be served with less number of facilities.

•Technologically advanced as compared to other airports for performing it operations. •Being part of Europe it gets updated to new technologies every now and then. •Winner of the award for punctuality three times by association of European airlines (AEA).

SOFT COST INPUT

•Airport provides wide range of passenger and aircraft handling services by its own. •Enjoys economies of scale and feels no need to outsource these activities.

•3 new airlines and 23 new non stop destinations have been added which exploit the added capacity with the new terminal. •Increased route network by low cost carriers and traditional network have realized the potentials of the airport. •Business and tourist travel has grown in recent past.

FINANCIAL RESULTS:

•Most of the Terminal Activities are performed directly by the Airlines and Major operations are concessioned. •More share of non aeronautical revenue.

•Passenger has to pay on his/her ticket for international service or domestic service as the case may be. •Best airport worldwide makes the airport earn by facilitating larger number of passengers.

•Minimum landing charges is Rs 150000 even when discount is offered during off peak period. •The airport has more frequent flights with smaller aircrafts which provides advantage by charging the minimum landing fees. •Total operating revenue is very high with high operating margin i.e. 67%

TERMINAL PRODUCTIVITY MEASURES

•Practices swing area concept so makes best utilization of its gates. •Most of the airlines make use of aerobridges which makes sure that passengers of particular flight pass through the airline by which they are going to travel and avoids confusion.

•The airport handles less number of total passengers and also only 3% of international traffic which uses terminal for more time. •It has huge space available as compared to passengers it handles, this ensures passengers to feel comfortable inside the terminal building.

RUNWAY PRODUCTIVITY

•LHR is the third largest airport worldwide the airport and is able to handle maximum aircrafts per runway because of the parallel runways facilitate simultaneous operations. •Being the busiest airport in passenger traffic handling it is well equipped with technologies in the airside to speed up the operations.. •It has rapid exit taxiways makes possible maximum utilization of the runways.

 La

Guardia International Airport ranks CONCLUSION highest in 4 parameters which makes the airport an overall benchmark for practicing strategies worldwide.

RECOMMENDATIONS  Airports

contract with third party terminal operators as maximum number of employees are required in terminal to handle passenger operations.  Outsourced to airlines which is operating from that terminal as this would resist an airline to deteriorate the services and it would provide services more efficiently for the reason to improve the operations for its own airline passengers being served.

 Runways

built are able to operate simultaneously as this would make sure that available staff is utilized properly at given point of time.  Multitasking manpower.  Indian airports need to take make or buy decision carefully.  Provide passengers with varied services of better quality.  Increase retail space as it involves negligible cost on the part of the airport operator but provides greater revenue.

 Airport

operator can charge premium charges if the regulatory authority allows.  Develop competition among airlines to use the airport.  Practice swing area concept.  Rapid exit taxiways to speed up the operations per hour to meet growing demand in future.

OVERALL SUGGESTIONS  Market

India, by building a powerful and unique position for the reliable, safe, value-for-money, tourist-friendly brand.  Initiate by playing on volumes to reap the benefits of economies of scale.  Development of real estate, services, cargo operations, lounges, basics, F&B outlets.

Bibliography        

Air Transport Research Report (ATRS)-2007 Part I Summary report Part II Full Results and Analysis Part III Airport Profiles, Methodologies and Data description www.indiastat.com Research methodology methods & techniques-C.R. Kothari www.atrsworld.org- Airport Benchmarking Report by Prof. Tae H. Oum Airport Benchmarking To Maximize Efficiency 6 July 2006 by Airport Council International

 

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