National Academies Press: OpenBook

Common Use Facilities and Equipment at Airports (2008)

Chapter: Chapter Five - Airlines Operating in Common Use

« Previous: Chapter Four - Airports Implementing Common Use
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Suggested Citation:"Chapter Five - Airlines Operating in Common Use." National Academies of Sciences, Engineering, and Medicine. 2008. Common Use Facilities and Equipment at Airports. Washington, DC: The National Academies Press. doi: 10.17226/14164.
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Suggested Citation:"Chapter Five - Airlines Operating in Common Use." National Academies of Sciences, Engineering, and Medicine. 2008. Common Use Facilities and Equipment at Airports. Washington, DC: The National Academies Press. doi: 10.17226/14164.
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Suggested Citation:"Chapter Five - Airlines Operating in Common Use." National Academies of Sciences, Engineering, and Medicine. 2008. Common Use Facilities and Equipment at Airports. Washington, DC: The National Academies Press. doi: 10.17226/14164.
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Suggested Citation:"Chapter Five - Airlines Operating in Common Use." National Academies of Sciences, Engineering, and Medicine. 2008. Common Use Facilities and Equipment at Airports. Washington, DC: The National Academies Press. doi: 10.17226/14164.
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21 With a successful common use implementation, an airline has the potential of receiving benefits not available otherwise. With common use gates and ticket counters, the airline is able to grow more effectively because it is not constrained by the exclusive use model. An airline can work with the airport op- erator to find gates that are open at the times the airline would like to start new service. Instead of the local station manager having to contend with assigned flights in a limited number of gates, the airport operator is able to open the search for avail- able gate space to the entire airport. In reality, this is typically limited to available gates adjacent to the airline’s normal op- erational areas, resulting from ground service limitations and proximity to operations offices. At an airport that is fully com- mon use (i.e., common ground handlers in addition to com- mon use technology) however, an airline has the flexibility to use gates farther away from its normal operational areas. For any common use implementation to be successful, it must simplify the airlines’ operations. Airlines expect con- sistency in operations as well as invoicing and overall expe- rience. Airport operators should consider their common use implementations to ensure that these goals can be achieved. If the airline is able to simplify its operations and can expect consistent performance from the common use implementa- tion, then it will be more apt to support moving along the common use continuum. If an airport is implementing CUSS kiosks, airlines also stand to benefit. “IATA estimates that [CUSS] will save air- lines up to $2.50 per checked-in passenger through higher productivity of traditional check-in facilities” (Simplifying the Business Common Use Self Service 2006). Additional cost savings are found in the elimination of the maintenance of proprietary kiosks, redeployment of staff, and other oper- ating efficiencies. These gains, along with e-ticketing, are “...estimated to save an average of $14.50 on a typical return ticket” (Rozario 2006). Airlines also gain an advantage in entering a new market. If an airport has already moved along the common use con- tinuum, airlines have a lower cost of entry into that market. It no longer becomes necessary for an airline to install technol- ogy infrastructure, proprietary systems at gates and ticket counters, or proprietary kiosks in the airport. The airport is already configured to accept the new carrier. The carrier will be responsible for adding a direct connection from its host system to the common use system, also known as a circuit, and have the common use service configured to accept its application and log-ins. As airport operators move along the common use contin- uum, however, airlines that service these airports can be adversely affected in several areas. Research noted that air- lines can typically face an adverse impact from common use in the areas of: • Additional resources for planning, design, and imple- mentation; • Airline operations; • Common use hardware and software; • Additional costs; • Branding; and • Local support. ADDITIONAL RESOURCES FOR PLANNING, DESIGN, AND IMPLEMENTATION Experience has shown that, as common use is implemented, airport operators should engage the airlines that service their airport early in the process. It is obviously important to in- clude the airline local staff, such as the station manager, but it is also critical to include the corporate airline staff. It is es- pecially important for the airlines’ corporate technology staff to be involved in discussions for common use systems be- cause they are most knowledgeable about the impacts to the airline and have experience from implementing common use at other airports. It has been noted through interviews with airlines that there is a general lack of trust between airports and airlines. It is important that both parties present their rea- sons, issues, and approaches in an open and honest dialogue so that the parties can move beyond this distrust. Airlines should also expect to work more closely with air- ports in developing a common use strategy. As an airport con- tinues to analyze the growth in passenger traffic, it will need to make decisions for expending capital funds either to increase the number of gates or to move toward a common use strategy. It is important for airlines to participate with the airport in the design of the common use strategy. As they work coopera- tively, the strategy that is put in place can be beneficial to both. Airlines should also participate early on in the design phase for the common use strategy to ensure that business processes within the affected areas are taken into account. CHAPTER FIVE AIRLINES OPERATING IN COMMON USE

Because each airline may have different business processes, and may use different equipment and peripherals to support those business processes, open and honest communication is necessary. Airlines and airport operators need to ensure that the airline technology people communicate with the airport technology people, and not, as is often the case, have airline properties people attempting to communicate technical is- sues to their technology staff. Some airlines interviewed noted that the start-up of a com- mon use system at an airport is always a labor-intensive effort. It was also noted that many of the same functions that are cur- rently available in their proprietary systems have not yet been made available in their common use systems, thereby reducing the functionality that the agents need to perform their tasks. Airport operators should also consider that an airline may have multiple airports that need the commitment and service of the corporate staff, and should have other methods of open communication available for airline staff to participate in the dialogue. It would be of value for airport operators to seek other technical methods to facilitate communication and meetings, such as conference calls, collaborative Internet- based tools, and other solutions. There is no substitute for face-to-face meetings; however, these can be augmented by other methods to ease the burden on those who may have to travel from one site to another. Likewise, it is good practice to schedule the design meet- ings around the flight schedules of the carriers that are going to participate, so that the airlines can control their costs and travel arrangements during the process. Airport operators should also consider the evolutionary approach that airlines have taken toward common use. As airlines refresh their technologies, they will consider com- mon use approaches. This will be particularly important to the CUPPS initiative, as the airlines that are updating their technology will be more likely to adopt the CUPPS applica- tion approach. AIRLINE OPERATIONS Any common use strategy implemented by an airport affects an airline’s operations at that airport. Fiscally, an airline is af- fected by the change in rates and charges that can arise from the common use strategy. Airports may choose to charge back to the airlines the costs associated with the common use strategy, effectively increasing the rates and charges to that airline. Conversely, the argument can be made that imple- mentation of a common use environment (in the long term) can actually reduce the rates and charges to existing airlines by increasing the number of signatories that share the costs of doing business at the airport. A common use strategy may also change the “remain over night” practices at an airport. Airlines that park aircraft at 22 gates at a common use airport may need to move the air- planes off-gate at any given time. Some common use airports do not allow aircraft parking at gates, but require all aircraft to be parked off-gate. This change could result in more movements of aircraft to and from the gates, and off-gate parking can sometimes be some distance from the gates. COMMON USE HARDWARE AND SOFTWARE With the common use implementation at a specific airport, airlines are faced with hardware and software systems that typically may not be supported by the airline. As a result, the airline must be aware of and prepared to use the supported hardware in a common use system to facilitate its business process. It was noted through interviews with airlines that each airport operator creates its own “unique” common use platform, thus causing the airlines to modify their applica- tions to support the unique requirements of the local installa- tion. It was noted that this occurs even if the same vendor solution is used at multiple airports. Unique requirements in- clude network connectivity, hardware preferences, and soft- ware application functionality, to name a few. The airline must also make accommodations for software certifications required by each common use vendor at each airport. Airlines need to decide how much common use they will use at the airport. In most instances, airlines do not en- gage common use in their back offices. This means that their local staff will need to use two sets of systems. Also, airports in a common use environment usually do not support the air- lines’ proprietary back office systems; therefore, the airline will need local support for these systems. ADDITIONAL COSTS Although the potential for cost savings exists with the com- mon use implementation, airlines noted that hidden or additional costs often outweigh the cost savings. These costs can include additional training for the agents, additional soft- ware maintenance and upgrades for separate applications, certification and deployment costs under common use, and delay costs in releasing software updates through the existing common use processes. Airlines also indicated that there are additional “soft” costs that have not yet been quantified. These include the cost of time delays to distribute common use applications versus proprietary applications, support of more than one set of applications for multiple environments, and costs associated with the certification process to gain the ability to operate in a common use environment. Under- standing the true cost of doing business in a common use implementation is a primary concern of many of the airlines. It is therefore important for airports to consider the impacts to airlines with respect to these costs. The airport operator must consider the message that is conveyed when imple- menting a common use strategy and the charges that are added to the airlines. If an airport presents an honest picture

23 of why it is going toward common use, it can better account for the costs of the common use strategy. If an airport operator’s goal is to increase airport service by increasing the number of airlines at the airport, it should evaluate how it divides the total charges of the common use strategy among the current carriers. It is also important to consider the federal definitions and expectations of an airport and the types of improvements that can be made, how those improvements can be charged back, and how that could af- fect other sources of federal funding. According to Section 601, “Terminal Development,” in FAA Order 5100.38C— Airport Improvement Program Handbook (2005, p. 107), except as noted, terminal development is defined as “devel- opment for non-revenue-producing public-use areas that are directly related to the movement of passengers and baggage in terminal facilities within the boundaries of the airport.” With few exceptions, FAA funding eligibility requirements for terminal development through the Airport Improvement Program (AIP) limit the provision of federal financial sup- port to areas of the terminal that are for public use and do not produce revenue for the airport or its exclusive users and commercial tenants. For example, Section 601, “Terminal Development,” des- ignates parts of the airport terminal ineligible for AIP fund- ing, including “areas that are primarily revenue producing such as restaurants, concession stands, and airline ticketing areas” (p. 108). Section 606, “Expanded Eligibility under the Military Airport Program (MAP)” specifies that, “Some expanded eligibility at MAP locations will facilitate the transition of military facilities to civil airports.” Accordingly, with respect to AIP funding eligibility for passenger terminal buildings, “Section 47118(e) of the Act makes eligible the construction, improvement, or repair of a terminal building facility, in- cluding terminal gates used for revenue passengers getting on or off aircraft. The gates must not be leased for more than 10 years. The gates must not be subject to majority in inter- est clauses” (p. 111). Section 611, “Eligibility Limitations” of the FAA hand- book further substantiates “eligibility is limited to non- revenue producing public-use areas that are directly related to the movement of passengers and baggage in air carrier and commuter service terminal facilities within the boundaries of the airport” (p. 113). Airport operators noted that a more rea- sonable charging model was based around the percentage of use by each airline. Airport operators must have a clear communication path to the airlines, and present an honest and open dialogue. Through this open dialogue, items such as cost can be discussed and worked through so that both the airport and the airlines bene- fit. Many airlines understand that the cost of implementing a common use strategy can be a cost savings, but they are leery of the implementation of common use because many non-U.S. airport operators, where common use is more prevalent, tend to view the common use continuum as a revenue stream, rather than a service. Because of this concern, airlines are less likely to support a common use strategy, especially if the airport operator does not include them in the discussions during the design phase of the common use strategy. BRANDING During interviews, airlines noted concern with loss of airline- specific branding. Although not as prevalent an argument as in times past, an important facet of airline marketing remains in its ability to use its facility locations as a means of “sell- ing” its name. Airlines view common use as taking away their branding ability. Many airports that implement com- mon use are also seeking ways to address these branding con- cerns. Airports are more commonly implementing digital signage along with their common use strategies to facilitate branding opportunities in a common use environment. The digital signage can be added, as required, to ticketing coun- ters, gates, and other areas in the airport that are temporarily used as airline space in a common use environment. In addi- tion to the gates and ticket counters, airports are using digital signage to address branding issues on CUSS kiosks. Many airports that have implemented common use and provided digital signage also allow the airlines to provide their own branding during the time that they are occupying the common-use space. Some airports, such as JFK’s Termi- nal 4, allow the airlines to customize the common use space with as much branding as they would like, providing a sort of marketplace feel to the environment. Other airports provide distinct locations for additional branding, such as additional signage locations. In any event, common use airports continue to look for ways to allow air- lines the ability to market their brand within the common use space. LOCAL SUPPORT As an airport operator assumes responsibility for maintenance support, it is noted that maintenance costs for the specific air- line should decline. It is far less expensive for an airport to provide dedicated maintenance personnel, able to respond rapidly to failed devices, printer jams, and other maintenance issues, whereas airlines typically must fly in maintenance sup- port from their central headquarters, thus spending signifi- cantly more time and money to achieve a repair. Because airport common use implementations are still relatively few and quite different from airport to airport, the elimination of an airlines maintenance support require- ments at a specific airport becomes a “one-off” scenario.

This scenario often results in the airline wasting money be- cause it must treat a particular airport as unique. Some air- lines have large maintenance and support contracts that are based on the number of stations that need to be supported. As airports implement common use, the short-term effect 24 could be a rise in support costs as the number of stations de- crease. Overall, however, airlines should be able to experi- ence lower maintenance and support costs as more airports convert to common use, moving the costs of support from the airline to the individual airport.

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TRB’s Airport Cooperative Research Program (ACRP) Synthesis 8: Common Use Facilities and Equipment at Airports explores common use technology that enables an airport operator to take space that has previously been exclusive to a single airline and make it available for use by multiple airlines and their passengers.

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