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24 CHAPTER THREE REVENUE SOURCES--AIRPORT PRACTICES AND INNOVATIONS With costs of construction increasing, airlines filing for bank- Premium Parking Services ruptcy, and periodic economic downturns affecting the indus- try, airport operators find themselves continually looking for There are a variety of premium parking services (or products) additional revenue sources to fund capital projects and sustain available to enhance parking revenues, improve customer ser- operations. vice, and maintain or enhance an airport's share of the park- ing market. Although each of these services has been used and Figure 20 shows the distribution of operating revenues proven at several airports, there does not appear to be any air- for large-, medium-, and small-hub airports. Because air- port that has implemented all of the following premium park- line revenues are governed by airport-specific conditions ing services: that often include an airportairline lease and use agree- ment, and airfield-related fees are governed by federal laws Valet parking--Many airports have offered or currently and FAA regulations that prohibit revenues from exceeding offer valet parking that allows a customer to drop off costs, this report focuses on nonairline revenue services. their car at the terminal curbside (or other convenient These revenues may be used to reduce airline payments, location) and, upon the customer's return, retrieve their fund new capital projects, or develop airport equity and car at this same location. Valet services are typically reserves. popular among business travelers and can benefit airport operators if vehicles are stored in underutilized portions The ideas presented are not intended to represent revenue of a garage or lot. Furthermore, more valet-parked vehi- streams available to all airports nationwide. Instead, these cles can be "squeezed" into an area than self-parked summaries should illustrate creative options that are available vehicles. However, many airport operators have found to airport operators. The decision of undertaking a revenue- that valet parking operations do not generate significant enhancement initiative at a particular airport should ulti- additional net revenues because of their labor-intensive mately be made after careful consideration and evaluation of nature (compared with self-parking operations), increased local needs and financial viability. liability costs, and other costs. Many airports have found that valet parking operations produce less net revenue For particularly unique nonairline revenue sources case than do an equivalent number of standard parking spaces studies are presented documenting the discovery, develop- offered at standard rates. ment, and annual operations of the specific revenue source. Monthly or corporate reserved parking--Several airports Topics discussed in this chapter include: sell monthly or corporate access cards and guarantee that card holders can always find an empty space in the con- Airport parking revenues, venient parking area reserved for their use. Card hold- Rental car revenues, ers are charged a premium rate--often a monthly fee-- Terminal concessions, to gain access to these reserved spaces. Airports have Advertising programs, found that this service is popular with patrons and can Commercial development and land use, and generate significant additional revenues compared with Other innovative revenue enhancement concepts. standard rates, but do not use spaces every day. Airports where monthly or corporate reserved parking is offered include those serving Atlanta, Houston, Sacramento, San AIRPORT PARKING REVENUES Francisco, and Seattle. Discount parking coupons and loyalty programs-- As shown in Figure 20, parking revenues are the most signifi- Private airport parking companies have offered discount cant source of nonairline revenue at airports. Although park- coupons and loyalty (frequent parking) programs for ing has long been a revenue source for airport operators, recent many years. Discount coupons are typically distributed innovations provide further opportunity to enhance parking through travel agents, corporate (in-house) travel desks, revenues. Some innovative ideas for enhancing parking rev- newspapers, household mailers, or other sources, and enues that are being used in airports around the country today now through the Internet. For competitive reasons, are outlined here. private operators may accept coupons issued by other

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25 FIGURE 20 Distribution of airport operating revenues. Source: FAA, AAS-400, CATS Report 127, 2005. companies (or the airport). In the past, few airports port parking companies allow the frequent parking points offered discount coupons; however, recently airports to be translated into airline frequent flyer miles. such as San Francisco International are using the Internet Remote lot parking service enhancement--To improve to offer such coupons. Coupons allow an airport to customer service and better compete with off-airport develop an electronic database of their frequent cus- parking companies, several airports offer frequent shut- tomers (and long-duration, high-ticket-value customers) tles that pick up and drop off remote lot customers at or and to better compete with off-airport lots. near their car. To complement these shuttle services, Parking-based loyalty programs are similar to frequent some airports clear the snow from parked cars, wash flyer programs in that they offer repeat patrons reduced windshields, and offer amenities such as free bottles of rate parking. Alternatively, the frequent parking points water and newspapers. Others have tested pilot programs can be applied to goods and services available at the air- that allowed a patron's vehicle to be washed, serviced, or port (e.g., discounts on concessions). Several private air- repaired. Some airport operators offer shuttle services