Towards an objective decision-making framework for regional airport site selection

Airport site selection requires consideration of several criteria constrained by complicated trade-offs. Airport literature and practice provide valuable insights in terms of influencing factors and multicriteria assessment methods, at the pace that reported siting processes follow non uniform decision-making structures. Current developments in geoinformation unveil a valuable opportunity of development of a structured methodology in the field of airport siting. Brazilian public sector decision-makers recognize that such methodology has the potential to improve the allocation of federal budget for new regional airports, in terms of implementation time and political friction. This research proposes a methodology termed MESA - Metodologia de Escolha de Sítios Aeroportuários (in Portuguese, Airport Site Selection Methodology). The purpose of MESA is to be sound under technical grounds and at the same time provide a more objective decision-making process. The proposed methodology consists of 4 phases: i) literature review of airport site selection criteria; ii) criteria systematization; iii) setting up of eliminatory criteria and their thresholds; and iv) setting up of scoring criteria and of an approach for their quantification. Eliminatory criteria reduce the original screening area, while scoring criteria are used for ranking purposes. MESA combines GIS (Geographic Information System) and classic AHP (Analytic Hierarchy Process) with direct assessment of alternatives through specific techniques. So far, the methodology has been applied to two real cases in the Brazilian context. In addition to effectively reducing subjectivity in airport site location decision, MESA has been demonstrating to be a powerful tool for mitigating environmental and social impacts associated to airport site selection. MESA is designed in such a way that simplifies improvements and adaptations, making it widely applicable.     

Estimating the impact of airport privatization on airline demand: A regression-based event study

This paper develops an empirical model of passenger demand for routes of airports subject to either imminent or recent privatization. We investigate whether the privatization process produces a sequential impact over traffic. By employing a regression-based event methodology and controlling for fixed effects, price endogeneity and sample selection, we perform an econometric analysis of pre-privatization and post-privatization dynamic patterns of demand to infer the demand consequences of the major change in airport governance. We examine recent Brazilian airport privatization experience as a case. The main results suggest that privatization produced an overall increase in airline demand and that the airport notably recognized with the greatest demand potential and with the largest market penetration of a fast-growing low cost newcomer had the highest estimated ceteris paribus effect of privatization on demand.     

Small is beautiful? The impact of economic crisis,low cost carriers,and size on efficiency in Spanish airports (2009–2011)

This paper carries out a comparative technical efficiency analysis of 35 Spanish airports using panel data for 2009–2011 with a data envelopment analysis (DEA) methodology. The results suggest that airport size has a positive impact on the technical and scale efficiency and that the presence of low cost carriers has positively affected the scale efficiency of the airports where they operate. The results also show that during the present economic crisis Spanish airports have experienced a dramatic productivity regress which is due to the reduction of their technological change component.     

Car parking management at airports: A special case?

The number of employees who daily commute to an airport represents, on average, one quarter to one half of the daily number of passengers. At UK airports it is rare for employees to pay for their car parking, with most employers absorbing the charges imposed by the airport authority. This paper details the main issues with offering free parking to employees drawing comparisons between a selection of case studies where parking management measures for employees have been introduced, and the airport sector. The paper then reports on a survey and a series of focus groups that were conducted with employees at a large UK airport in order to gauge their attitudes and likely behavioural responses to potential parking management strategies. Key findings are presented to show how airports may be able to learn from the experiences of others in the successful introduction of parking management strategies, but that there are also key barriers that are specific to airports that would need to be overcome.     

Governance structures and the market orientation of airports in Europe's peripheral areas

This paper investigates the relationship between governance structures and the market orientation of airports. The focus is on Europe's peripheral areas, where airports tend to be publicly owned and operated as an independent entity or as part of a regional or national airport system. This paper finds that market orientation is significantly higher at independently operated airports compared to system-operated airports and that independent governance structures, market opportunities and competitive intensity have a significant positive effect on airport market orientation.     

The impact of national macro-environment exogenous variables on airport efficiency

Our paper tests the extent to which airport efficiency is affected by national macro-environmental factors. The literature on airport performance measurement is extensive but has tended to focus mainly on estimating the effects on efficiency from what are mostly endogenous variables. We undertake a two-stage analysis of 59 international airports observations in the Europe and Asia-Pacific regions. The first stage involves the use of Data Envelopment Analysis (DEA) to measure the efficiency of these airports. This is followed by a second stage, where we use a Truncated Regression model that incorporates the Simar and Wilson bootstrapping technique to test the extent to which a set of macro-environmental factors affect airport efficiency. Results reveal that a state's air transport sector output, institutional quality and robustness, the macro-economic environment, safety and security, and human development, all have a significant influence on the performance of airports. The result of this study fills the gap in the literature related to the non-discretionary variables affecting the performance of airports. It also suggests that policymakers and airport managers consider the identified factors when benchmarking airports.     

Brand perceptions of airports using social networks

The management of social media activities by airports is an emerging issue, and existing empirical literature on the measurement of brand perception in the airport industry is lacking. Usually, the measurement of brand perception is carried out by surveys, which are costly and rapidly become outdated. This study employs a newly developed algorithm to infer brand perceptions by mining the social connections of airports. Twitter accounts of 118 airports in the world are analysed by considering three emerging attributes in the airport industry: environment, disability and luxury. The paper shows how it is possible to identify the current positions of airports in the perception of the customers.     

Two-sided platforms in airport privatization

This paper develops an empirical model to examine the relationship between ownership change and two-sided-platform formation in the air transport industry. We investigate whether privatization enhances the dynamic capabilities of airports so that they more closely resemble a two-sided platform. We study the case of the recent privatization of Brazilian airports. We find evidence of a permanent, ceteris paribus increase in demand triggered after the privatization program. The results are consistent with a preemption of assets with a view to expanding operations and so benefiting from the network effects offered by a two-sided platform.     

Impact of airports on regional accessibility and social development

This study compares the impact that two airports in Norway have on regional accessibility and social development. One of the airports is a small-sized airport that serves a relatively remote region and has direct air services to other regions in Norway but not to the capital city of Oslo or to destinations abroad. The other is a medium-sized airport that serves a relatively accessible region and has direct air services to the capital city of Oslo and to a number of destinations in Norway and abroad. The study compares opinions of residents that live in the respective regions and is based on the findings of a postal survey that was completed by over 2000 residents. The Independent Samples t-test is used to investigate the significance of any differences in opinion. Significant differences were found to reflect the size and scope of services available at the airports and specific characteristics of the regions that they serve. Residents in the more remote region have a significantly higher frequency of travel by air to destinations in Norway but a significantly lower frequency of travel by air to destinations abroad. Trip frequency for holidays is significantly higher in the region that has an airport with direct international air services while trip frequency to access health services is significantly higher in the region that has limited local health services. The airport is significantly more important for resident location and retention in the remoter region.     

Passengers' airport choice and airports' catchment area analysis in cross-border Upper Adriatic multi-airport region

Although much research has been performed on passengers' origin airport choice, there is little research on airports' catchment area size and even less on airports' catchment areas in cross-border regions. This paper addresses passengers' airport choice and analyzes airports' catchment area size and its homogeneity in the Upper Adriatic region. Using the results of passengers' survey at three regional airports (Ljubljana Jože Pučnik Airport (LJU), Venice Marco Polo Airport (VCE) and Trieste Pietro Savorgnan di Brazza Airport (TRS)) we have estimated the airports' catchment areas and airports market shares therein using multinomial logit (MNL) model structure. To additionally explore the passengers' airport choice behavior considering the different sensitivity across travellers to regional, demographic and airports attributes and account for preference heterogeneity in airport choice a mixed logit model was used. The results indicated that the three airports have relatively small core catchment areas and that the market share rapidly decreases with the increasing access time to airport. Partially, the results reinforced earlier findings showing that access time to airport is the most important determinant in airport choice for all segments (business/leisure and cross-border/domestic), however the sensitivity to access time is more pronounced in business and domestic group. Additionally, the results indicated pronounced loyalty to domestic airports and generally low importance of ticket prices, and show that in market conditions where all airports in the region have a low-cost carrier (LCC) the effect of LCC on airport choice is limited. Finally, the results indicated that the borders might have an influence on airport choice and that overall, in the cross-border regions the passengers’ airport choice process is even more complex than in non cross-border regions.     

An exploratory examination of additional ground access trips generated by airport ‘meeter-greeters’

A significant share of airport passengers are accompanied to and/or from the airport by friends and relatives to wave them off or greet them when they land. At some airports the number of these ‘meeter-greeters’ can be substantial, which can have important ground access planning, economic and environmental implications for the airport operator. Yet this group have received comparatively little attention in either the academic or industry literature. Consequently, to some extent ‘meeter-greeters’ have remained something of a ‘hidden’ element of ground access user. In an attempt to address this, the paper uses secondary data analysis of the UK CAA Passenger Survey Report to explore ‘meeter-greeters’ at five UK airports; Heathrow, Gatwick, Manchester, Stansted and Luton. Focus is given to assessing the scale of ‘meeter-greeter’ journeys and the role of a passenger's trip purpose (business/leisure) and resident status (resident/non-resident) in this process. A key finding from the analysis relates to the disproportionate impact of multi-person trips, where a number of different ‘meeter-greeters’ accompany a passenger to the airport. The implications of these findings are discussed and a number of recommendations for decision makers proposed. Namely, it is suggested that airport monitoring and assessment procedures should incorporate a measure of the additional trip generation by ‘meeter-greeters’ in order to present a more complete picture of the number of people accessing/egressing an airport.     

Impact of pandemic control over airport economics: Reconciling public health with airport business through a streamlined approach in pandemic control

Rapid aviation commercialisation and upsurge in worldwide affluence created a new avenue for disease proliferation across countries at an unprecedented rate. Epidemic and pandemic occurrences over the last decade demonstrate airports' role in disease transmission; while also exhibiting their importance as containment nodes. Tremendous amount of resources and effort are necessary to achieve the latter but inevitably, disrupt normal operations. The contrasting objectives between public health authorities and airport authorities result in compromising measures for both parties. Broadly similar controlling measures were adopted by various airports during outbreaks in the last decade. Their effectiveness have been analysed in terms of disease control; economic impact to airports were, however, not quantified. This paper concludes that more efficient airport pandemic control plans cause less severe economic impact on airports during pandemic and recommends a streamlined approach that improves overall effect of pandemic control while minimising economic impacts to airport businesses.     

Robustness of the air transport network

This paper presents a methodology for the detection of critical airports (those whose isolation would cause the largest losses in network connectivity) in the global air transport network (ATN), based on simulating an attack on selected ATN airports using different adaptive selection criteria. The performances of several node selection criteria are compared, together with a new criterion based on Bonacich power centrality. The results show that most critical airports can be detected with an adaptive strategy based on betweenness centrality. The detection of such airports may help the development of contingency plans to develop an appropriate response to any airport closure.     

Negotiate-arbitrate regulation of airport services: Twenty years of experience in Australia

Negotiate-arbitrate regulation has played a role in the economic regulation of airports in Australia since the introduction of a national access regime in 1995. Over a twenty year period there have been three cases where negotiate-arbitrate regulation (NAR) has been applied to airport services, two cases where a decision has been made to not apply negotiate-arbitrate regulation to services provided and a case where an airline has sought to apply NAR and then withdrawn its application. The experience of the application of NAR to airport services is examined against a background discussion on issues associated with countervailing power in airport services. Based on the experience, some observations are made which reflect advantages and disadvantages of the application of NAR to airport services. NAR has provided a targeted approach to economic regulation of airport services in Australia, involving negotiated outcomes and limited intrusion into the aviation markets.     

Do market-concentrated airports propagate more delays than less concentrated ones? A case study of selected U.S. airports

Airport congestion and widespread passenger discontent with airlines' poor on-time performance have recently led the Federal government to reduce peak-time operations at large airports such as Chicago O'Hare and New York John F. Kennedy. This paper proposes a methodology to compute delay propagation based on the discrete Fourier transform (DFT) at a sample of ten U.S. airports in summer 2000, 2007 and 2008. The sampled airports are different in terms of size, location and index of concentration.In this research, a flight is considered to be late if it arrives more than fifteen minutes past its schedule. Delay propagation is defined as the hourly ratio of two amplitudes: the one of late arrivals at a sampled airport to that of late arrivals at the final destinations served from that same sampled airport. The purpose of this study is to determine whether delay propagation differs at market-concentrated airports from less concentrated ones. Based on nonparametric tests and proximity analysis, there is no clear evidence that market-concentrated airports are different from less concentrated ones in terms of propagated delays.     

Brazilian airport economics from a geographical perspective

This paper discusses the revenue and expenditure functions of a sample of Brazil’s airports administered by Infraero, the Brazilian State enterprise responsible for administering the country’s major airports. It aims to identify what volume of movement at the airports associates with positive net earnings, i.e., the break-even point between revenue and expenditure, in view of aspects of airport movement and geographical factors. It examines airports serving regular airlines and with movement of up to 8 million passengers in 2010. Revenues and expenditures are explained by total passengers embarked and disembarked at each airport and by the potential of the airport’s ‘anchor city’. Multiple regression analysis achieved a high level of explanation for the dependent variables studied, i.e., revenues and expenditures. The model explains 81% and 91% of the variations in revenues and expenditures, respectively. The analysis shows that, considering the ranking of cities, Brazilian airports with less than 2 million passengers tend to operate at a financial loss, those with between 2 and 3 million passengers are at the transition stage between positive and negative earnings, while airports with more than 3 million passengers tend to make gains. However, the simulation modelling shows that the break-even point between expenditure and revenue functions can vary considerably when different ‘city potentials’ are considered. In this respect, the modelling offers investors a tool for analyzing passenger demand risk in the light of expectations for Brazilian cities’ potential.     

Effect of concentration in airline market on Spanish airport technical efficiency

This paper tries to measure the effect of airline market concentration on airport technical efficiency. With this aim, a Stochastic Frontier Analysis (SFA) is applied, estimating with a one-step procedure technical efficiency and the effect of airlines' market power on that efficiency. Results suggest that when airports are lowly concentrated increasing concentration reduces such inefficiencies. However, this effect practically disappears when airports are highly concentrated. Additionally, the government's policies to improve airports' performance seems to have a positive effect in the short run.     

Airport and route classification by modelling flight delay propagation

Flight delay can be divided into the root and propagated delays for identification and analysis of airports/routes that have a great influence on actual flight delay using flight operations raw data (tower logs) for South Korean domestic flights. In addition, the presented concept of “generated delay” classifies airports as affecting other airport delays or affected by other airport delays. The generated delay refers to the delay time at a particular airport/route, and this delay thereafter actually propagates to other airports/routes. In this study, the generated and propagated delays were displayed on a two-dimensional graph, and the airports/routes were grouped according to delay characteristics. Group A represented airports with high generated and propagated delays, and group B represented airports that are highly affected by delays of preceding airports/routes. Group C represents airports where newly formed delays affect other airport delays, but these airports mitigate delays from other airports. Airports in group D have relatively low delays and propagation. Thus, we targeted airports belonging to groups A and C because of their delay propagation impact on other routes/airports, which must be reduced by decreasing the root delay from targeted routes/airports. Among the airports, Jeju international airport (CJU) had the highest average delay time and propagated flight delay time with similar averaged generated delay times. Among the routes, departure flights from various airports to CJU had significant propagation effects on the subsequent flights. CJU and related routes have a very large impact on domestic flight delays because South Korean domestic airline routes are concentrated on CJU. However, there has been no quantitative analysis, and it is meaningful that the quantitative analysis results were presented in this study. In addition, we suggest that other airports such as GMP (Gimpo), CJJ (Cheongju), WJU (Wonju), and KUV (Gunsan) have a significant impact on domestic flight delays.     

Antecedents and consequences of passenger satisfaction with the airport

There is a growing interest in the passenger experience at the airport. Particularly, the relevance of passenger satisfaction has been emphasized. However, although different research approaches have been used, there is still a gap related to understanding the several relationships between aspects associated with passenger satisfaction with the airport. In this study, a comprehensive conceptual model, which includes the relationships between key antecedents and consequences of passenger satisfaction, was developed and examined. Using structural equation modeling analysis, several findings concerning passenger expectations, airport service quality, switching costs for changing airports, and passenger loyalty towards the airport are stressed.     

The importance of concession revenues in the privatization of airports

We investigate the tradeoff between the airport’s concession and aeronautical revenues—two complementary services. Increasing the frequency of flights may result with congestion which could stimulate demand for concessions, but may also harm the demand for flights. When passengers have a low valuation for the concession good, the opportunity for concession revenue is small and the airport focuses its revenue on the aeronautical (i.e., landing) fees. With a sufficiently large valuation for concession goods, the airport may lower the aeronautical charges to stimulate greater flight frequency in order to lower airfares thereby attracting more passengers ultimately to increase concessions revenues. It is in the latter case where we observe minimal loss of aeronautical welfare when airports are privatized. Thus, our research could help guide decision makers in the airport privatization process. Namely, we find that privatization is not recommended unless the potential for concession revenues is sufficiently large.