Spanish airports performance and efficiency benchmark. A PESA-AGB study

This study uses a MCDA tool to analyse and improve Spanish airports performance and efficiency. Thus, a holistic study using MACBETH (with PESA-AGB) is used. This study has never been applied before in Spanish airports. Firstly, a literature review related to this study keywords is conducted, as well as about benchmarking concept applied specifically to airports. Secondly, several methodologies in used to benchmark airports are reviewed and compared. Thirdly, airport performance and efficiency issues are addressed and described. Finally, the MCDA-MACBETH (with PESA-AGB) tool is applied to 4 Spanish airports.Spanish airports belonging to AENA transported 263, 753, 406 passengers in 2018 with an increase compared to 2017 of 5.8%. General data enables to conclude that.Spanish air transportation system is growing annually and hence there is the need to improve airports performance and efficiency, also to maintain the high levels of quality to address the growing demand. Spanish air transportation system is growing annually and is it upmost important to maintain high levels of quality to address such demand. Through this study, performance and efficiency improvements are seek within several airport key areas such as Safety and Security, Quality Service, Productivity and Effectiveness, Financial and Environment.     

Sustainable airport development with performance evaluation forecasts: A case study of 12 Asian airports

This study evaluates airport performance from 2014 to 2021 with actual and forecasted data to help plan airport sustainability and establish sustainable airport development strategies. Eight Chinese airports (PEK, PVG, CAN, SZX, SHA, XMN, HAK, and HKG) and four representative Asian airports (HND, ICN, SIN, and DEL) are studied. Airport performance is evaluated from the process level (i.e. operational processes providing aeronautical service and financial processes providing commercial service) to the airport level using the Network DEA with actual and forecasted data from the grey model. Results indicate that HKG has been and will be efficient for the entire study period. There is an observed trend of an overall efficiency decrease during the forecast period of 2018–2021. This study classifies operationally efficient airports (PEK, HND, and XMN) and financially efficient airports (HAK, ICN, and DEL). Mainland Chinese airports show significantly higher operational efficiency than financial efficiency, and lower rankings in overall efficiency. It is expected that mainland Chinese airports will soon develop beyond the transportation center, possibly towards the aerotropolis, balancing economic, social, and environmental aspects for sustainable development. This study helps airport management to evaluate sustainable development strategies by assessing current and near future conditions affecting sustainability.     

Privatization,corporatization, ownership forms and their effects on the performance of the world's major airports

This paper focuses on measuring and comparing productive efficiency and profitability among airports owned and operated by government departments, 100% government-owned corporations, independent airport authorities, mixed enterprises with government majority ownership and mixed enterprises with private majority ownership. The analysis is based on a cross-sectional, time-series dataset (2001–2003) for the major Asia-Pacific, European and North American airports. There is strong evidence that airports with government majority ownership and those owned by multi-level of government are significantly less efficient than airports with a private majority ownership; there is no statistically significant evidence to suggest that airports owned and operated by US government branches, independent airport authorities in North America, or airports elsewhere operated by 100% government corporations have lower operating efficiency than airports with a private majority ownership; airports with a private majority ownership achieve significantly higher operating profit margins than other airports; whereas airports with government majority ownership or multi-level government ownership have the lowest operating profit margin; and generally, airports with a private majority ownership derive a much higher proportion of their total revenue from non-aviation services than any other category of airports while offering significantly lower aeronautical charges than airports in other ownership categories excluding US airports. The results suggest that private–public–partnership with minority private sector participation and multi-level governments’ ownership should be avoided, supporting the majority private sector ownership and operation of airports.     

Airport privatization with public finances under stress: An analysis of government and investor's motivations

The management model of airports has long stood as a central research area in the transport sector. There are a wide range of studies that focus on the potential benefits and pitfalls of private airport management. The results of these efficiency studies have not provided irrefutable evidence for the superiority of private management over public management, but the momentum towards privatizing airports is growing. The reason for privatization has been more related with privatization revenues for governments, rather than more efficient management. The search for maximizing the sale value can have negative impacts from a welfare perspective, for example, through excessive increases in tariffs for passengers. This research reflects on the motivations for governments to privatize, and is illustrated by a case study – Portugal – in which the privatization occurred as a result of three main large drivers: 1) a bailout programme by the IMF, the EU, and the ECB; 2) a revision of the regulatory model, and; 3) the need to increase the capacity of Lisbon's airport system in the medium term.     

Airport efficiency in the dawn of privatization: The case of Greece

Until recently, all airports in Greece were owned and managed by the state; however, the recent economic crisis led the Greek government to privatize 14 regional airports. This paper evaluates the performance of the 38 Greek airports open to civil aviation just before the privatization was concluded. It also aims to highlight that the majority of airports with high efficiency were selected to be privatized. The analysis was performed applying Data Envelopment Analysis (DEA) and Malmquist Productivity Index (MPI) using 2011 and 2015 operational and financial data. Results showed that, despite the economic crisis, overall efficiency improved between 2011 and 2015, mainly due to the spectacular increase in incoming international passenger traffic. Changes in efficiency can be attributed by and large to exogenous factors such as operations of low-cost carriers and charter operators along with the seasonal operations of established carriers at individual airports. Findings confirm that the majority of high efficiency airports were offered to private investors.     

International airports: financing methods in Japan

Capacity shortages at international airports in Japan are the most serious impediment to liberalization and free competition in international aviation. Here, we deal with the causes of this shortage, Japanese institutional systems of airport improvement and new financing methods for international airport capacity expansion in metropolitan areas. We emphasize the effectiveness of the joint-stock corporation system as a financial device. The introduction of the joint-stock corporation is one kind of airport privatization, but its characteristics completely differ from those of privatized airports in some European countries and in New Zealand.     

Air transport liberalisation and airport dependency: developing a composite index

Air transport liberalisation in Europe has produced some major changes to the networks operated by airlines and the services available at airports. Within this context the degree of airport dependency in terms of market, spatial and temporal concentration is important to know from an economic geography and risk management perspective. A composite index called the Airport Dependency Index (ADI) is developed to measure airport dependency based on the concept of the relative Gini coefficient. Liberalisation has had varying impacts depending on the size and type of airport and so a comparison is made of the degree of dependency at a large sample of European airports using the ADI. The ADI has the potential to provide insight on the sustainability and worthiness of financing airport projects, and on whether airports should diversify further their activities by investing in the growth and expansion of their network.     

Airport quality and productivity changes: A Malmquist index decomposition assessment

This paper analyses the productivity of 20 Italian airports management companies during the period 2006–2008 using a DEA Malmquist index that includes a quality component. The proposed methodology is applied for the first time to the airport industry. In doing so, we directly assess the impact of the quality of services delivered by an airport on its productive performance. The study shows that, while Italian airports possess an acceptable level of quality in terms of their infrastructure, their managerial/administrative procedures must be strengthened in order to better deal with both technological modernization and passenger waiting time at the airports.     

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.     

Estimating airport efficiency of New Zealand airports

New Zealand's airport industry has experienced substantial growth over recent years, but few studies have analysed the operational efficiency of New Zealand airports. This paper aims to extend the study of Francis and Lyon (2007) by exploring the efficiency and productivity changes of New Zealand's major airports between 2010 and 2012, using slacks-based measure (SBM) model and the Malmquist productivity index (MPI). The findings suggested that the majority of New Zealand airports increased efficiency and productivity during the period under investigation, but should decrease scale of operations in order to operate at their most productive size. Decomposition of the MPI showed that most New Zealand airports experienced gains in efficiency but, in terms of technology, they have regressed. Four significant factors (i.e. airport hub status, airport operating hours, airport ownership, and the Rugby World Cup 2011) were identified by the Simar–Wilson bootstrapping regression analysis as explaining variations in airport efficiency. Importantly, the significant effect of the Rugby World Cup 2011 (a major sport tournament) on New Zealand's air transport demand and airports' efficiency has been demonstrated in this research.     

Airport ownership and financial performance: Evidence from Italy

In the past few decades many countries have increased the presence of various forms of private sector involvement in airport ownership and management. This paper focuses on the financial performance of Italian airport companies. We present empirical evidence separately for two groups where public or private management majority prevails. The main findings indicate that companies with a private majority outperform the others in terms of financial indicators that are related to operating income.     

Japanese-airport benchmarking with the DEA and endogenous-weight TFP methods: testing the criticism of overinvestment in Japanese regional airports

As aviation demand increased constantly along with the rapid economic growth in Japan and surrounding East Asian countries over the last several decades, Japanese government promoted airport construction since 1950s. However, the recent change in the economic background has made rise to a criticism toward the inefficient public investment, especially the transportation infrastructure. In this criticism, it has been argued that some of the small regional airports are indeed suffering the issue of overinvestment. Thus this paper attempts to verify the validity of such criticism by statistically measuring the efficiency of Japanese airports and conducting comparative analysis. For this objective, the paper employs two distinct methods namely data-envelopment analysis and endogenous-weight TFP methods. The results from these methods consistently indicates that the efficiency of regional airports in mainland Japan are lower than others, and that those airports constructed in the 1990s are relatively inefficient.     

Airport partial and full privatization in a multi-airport region: Focus on pricing and capacity

This paper studies the capacity and pricing choice of two congestible airports in a multi-airport metropolitan region, under transition from a pure public, centralized airport system to partial or full privatization. We develop analytical models to investigate three privatization scenarios: public–private duopoly, private–private duopoly, and private monopoly. We find that, airports follow the same capacity investment rule as prior to privatization when capacity and pricing decisions are made simultaneously. Pricing rule after privatization becomes more complicated, with additional factors having an upward effect on the privatized airport(s) and a downward effect on the remaining public airport.     

Analyzing airport security checkpoint performance using cognitive agent models

Modern airports operate under high demands and pressures, and strive to satisfy many diverse, interrelated, sometimes conflicting performance goals. Airport performance areas, such as security, safety, and efficiency are usually studied separately from each other. However, operational decisions made by airport managers often impact several areas simultaneously. Current knowledge on how different performance areas are related to each other is limited. This paper contributes to filling this gap by identifying and quantifying relations and trade-offs between the detection performance of illegal items and the average queuing time at airport security checkpoints. These relations and trade-offs were analyzed by simulations with a cognitive agent model of airport security checkpoint operations. By simulation analysis a security checkpoint performance curve with three different regions was identified. Furthermore, the importance of focus on accuracy for a security operator is shown. The results of the simulation studies were related to empirical research at an existing regional airport.     

Spain's airport infrastructure: adaptations to liberalization and privatization

This paper gives an overview of Spanish airports and their traffic and identifies Spain's infrastructure needs. The advantages and disadvantages of public and private management of airports in Spain are discussed. Moreover, key legislative reforms are suggested in anticipation of the structural and administrative changes needed to permit private investment in the development of Spain's airports. Investment proposals for the busiest Spanish airports are examined, including handling services. To conclude, global trends in the development of airport infrastructures are compared with those shaping the present and future growth of Spanish airports.     

Meetings facilities at airports

This paper investigates the extent to which airports act as venues, the importance that airports place on this type of activity, and whether it is certain categories of airport that are involved in this type of activity. Airports have always been a vital element of business travel in providing access to a destination where business can be conducted or where meetings, conferences and events can be held. In this situation it is largely the availability of air services at the airport that will attract passengers rather than the airport itself. However in recent years airports have become more than just facilitators of access and have developed infrastructure and services (’meetings facilities’) that allow them to become meeting venues in their own right.     

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.     

Connectivity levels and the competitive position of Spanish airports and Iberia’s network rationalization strategy, 2001-2007

This paper examines the connectivity of the Spanish airport system between 2001 and 2007. Over the period, network carriers considerably strengthened the connectivity between Spanish airports and major European hubs. Although OneWorld is still the dominant alliance in Spain, SkyTeam and Star achieved a larger connectivity share through the growth of indirect services provided through their northern European hubs. In addition, the network rationalization strategy of Iberia and its decision to concentrate operations at Madrid-Barajas had important implications for the connectivity of other Spanish airports. Low-cost carriers have boosted direct connectivity from secondary Spanish airports.     

Evaluating the multi-period operating efficiency of international airports using data envelopment analysis and the Malmquist productivity index

For the most part, airports are publicly or semi-publicly owned and operated with fixed assets. As such, airports have been often considered little more than infrastructure providers for airlines. However, as airports have begun to offer a variety of ancillary services including passenger transfers, re-fueling, parking, and shopping, they no longer play second fiddle to airlines. To come into their own, a growing number of airports realized their need to develop competitive strategies that can attract more air traffic and generate greater revenue. Such strategies start with the assessment of their competitiveness in terms of operating efficiencies relative to others. To help airport authorities identify major drivers for enhancing the airport operational efficiency and the subsequent competitiveness, this paper evaluates the comparative efficiencies of international airports for a multi-year period (2006–2011) using data envelopment analysis intended for dynamic benchmarking and Malmquist productivity index built on time-series analysis. Our study indicates that the productivity of an airport was influenced by exogenous factors such as shifts in government policies and technological advances rather than endogenous factors driven by improvements in managerial practices.     

Supply-and-demand models for exploring relationships between smaller airports and neighboring hub airports in the U.S.

Airport passenger leakage is the phenomenon of air passengers choosing to travel longer distances to access more extensive air services offered by airlines at an out-of-region hub (or, substitute) airport, instead of using their local airports. Airport leakage can cause further reduction in services offered by airlines at a local airport, thereby causing even further leakage, and so on, which can significantly impact an airport's role in the growth of the local economy. This paper explores the geographic and operational attributes of local-and-substitute airport pairs in the United States, explicitly accounting for the interactive feedback relationship between passenger volumes and air service characteristics that contribute to the onset, persistence, and exacerbation of airport passenger leakage. A two-stage least squares regression model of air passenger demand at small- and medium-sized airports is first presented, where local passengers may travel by vehicle to larger, out-of-region hub airports. The results confirm that airfare and passenger volume relationships exist between the local and substitute airport pairs included in the dataset, and that lower airfares at the substitute airport have a greater impact on airport choices made by larger travel groups. They also suggest the existence of positive feedback in that if an airport attracts increasingly smaller passenger numbers with fewer air services and fewer air services with fewer passengers, without external intervention airport leakage impacts may be irreversible and exacerbate over time. A conceptual market share equilibrium analysis is used to illustrate the mechanisms of a direct two-way feedback relationship between passenger volumes at a local airport and air service characteristics at both the local and substitute airports. With data, this quantitative framework can help guide airport planners in further assessing and verifying suspected passenger leakage issues at their airport. The results suggest that without intervention, airport leakage impacts may be difficult to reverse; further exacerbating the trend are technological advancements that make driving cheaper and easier (connected and autonomous vehicles). However, the results can also guide planners in choosing the types and degrees of infrastructure investments and airline incentives that may be used to expand or retain air services to attract passengers.