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Scanning the Environment and Predicting Developments 63 Fifty-seven percent of the respondents to the online survey indicated that when assessing future uncertainties, collaboration with external stakeholders, such as airlines, regional govern- ment, and regulatory agencies, is required. Airline passenger surveys, for instance, can be used to capture accurate measures of the organization's performance with regard to customer satis- faction. These surveys can also be used to identify which services should be offered to match pas- senger needs, collect information on passenger characteristics, and identify system breakdown. The data collected generally include information on passenger trip origins and destinations (i.e., market data); demographic characteristics; travel characteristics (trip purpose, wait time at the ticket counters and security screening checkpoints, number of passengers traveling together, and so forth); and access and egress characteristics (travel modes, parking location and cost, and so forth). Online respondents also indicated that they used historical trend analysis, future market analysis, SWOT analysis, benchmarking, and life cycle analysis. This chapter is intended to assist the planning team with the following strategic planning elements: Assessing the organization's internal strengths and weaknesses Identifying the organization's external opportunities and threats Defining competitor and peer airports Conducting a benchmarking analysis of other airports Developing a scenario analysis Determining the degree to which the organization's vision is realistic Developing strategic initiatives that account for a range of, or the most-likely, scenarios 6.1 Internal Assessment The first component of the situational analysis is the internal assessment. The internal structure, processes, and operations of the organization are assessed to identify its strengths and weaknesses. The internal assessment also reveals the paradigms and values that represent the organization's current philosophy and drive or that disrupt current operations. 6.1.1 Areas to Be Considered Among the areas to be considered as part of the internal assessment are management prac- tices, human resources, external relations, planning and development, operations, safety and security, environmental, customer satisfaction, and finance. Questions to consider in each area are provided below: Management practices Does the organization use a multiyear strategic planning process that links the planning process with the annual budget review? Does the organization use a variety of external and internal checks, such as audits, to ver- ify that its processes are performed as required? Does the organization critically examine its business processes in an effort to increase pro- ductivity, reduce waste and duplication, and improve the quality of services provided to its internal customers, including tenants and passengers? Human resources Does the organization have a written personnel handbook/policy? Does the organization have current job descriptions including qualifications, duties, reporting relationships, and key performance indicators? Does the organization conduct employee performance appraisals? Does the organization periodically review compensation plans, salary ranges, and benefits?

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64 Strategic Planning in the Airport Industry Does the organization provide opportunities for employee professional development and training within their job skill areas? What is the employee turnover rate? Does the organization have a program in place to reward or compensate outstanding employees? Are employees given the freedom to express their opinions, ideas, and suggestions? External relations Does the organization have a clear perception of primary community concerns and a defined administrative process to react to those concerns? Does the organization have a sense of the effectiveness of its public relations program, including publicity and participation in local/community events? Do the organization's CEO, department leaders, and managers have a clear appreciation of community interests and concerns? Do the organization's purpose and activities meet community needs? Is the organization's strategic plan communicated to external stakeholders and the general community? Planning and development Have the board and staff developed and adopted a written strategic plan to achieve the stated vision of the organization or airport? Does the strategic plan include a review of the organization's strengths, weaknesses, oppor- tunities, and threats? Has the planning process identified the critical issues facing the organization? Does the strategic plan include goals and measurable objectives that address the critical issues? Are all of the organization's activities integrated around a focused mission in the strate- gic plan? Are the organization's projects/programs congruent with the organization's mission and strategic plan? Are the projects/programs congruent with the organization's vision? Are the timeframes and cost estimates for each project/program realistic? Has a risk management plan been established for every major development project? Operations, safety, and security Does the airport meet the requirements of 14 CFR Part 139, "Certification and Operations: Land Airports Serving Certain Carriers," and is the Airport Operations Manual up-to-date? Are the responsibilities for complying with security and safety regulations clearly allocated to individual managers and staff? Is a security training program in place for all personnel with direct responsibilities for security? Are employees at all levels within the organization required to attend a training course or a security awareness presentation adapted to the particular needs of the various levels? Are occasional risk and vulnerability assessments conducted to determine how to improve airport security? Environmental Have the board and CEO developed and adopted a clear environmental policy? Are new employees, tenants, and major contractors made aware of the organization's envi- ronmental policy as part of their induction program? Has the organization established key environmental issues and objectives? Does the organization assess all current and new tenants, retail concessionaires, contractors, and so forth on the basis of their actual or potential environmental aspects and impacts? Are meetings conducted regularly with major tenants to discuss environmental initiatives, review past environmental accidents and incidents, and share information on the latest technologies and approaches to environmental management?

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Scanning the Environment and Predicting Developments 65 Are contractors advised of sensitive environmental features of the airport and informed of necessary emergency action procedures should these features be threatened? Customer satisfaction Are the organization's customer satisfaction rankings adequate? Does the organization have a clear, written customer satisfaction program? Does the organization participate in national and worldwide surveys that recognize and rank overall passenger/customer satisfaction? Does the organization conduct regular passenger surveys? Does the organization have a set of training methods for all airport employees to provide consistent service to customers? Does the organization assess all current and new service providers, including retail conces- sionaires, on the basis of customer satisfaction? Does the organization have procedures to review, address, and respond to customer comments/requests in a timely manner? Finance What is the airport's debt service coverage ratio? Is the organization's cost per enplaned passenger in line with that of the industry? What is the organization's bond rating? Are the organization's operating expenses per enplaned passenger in line with that of the industry? Does the organization have suitable insurance coverage, which is periodically reviewed to ensure that appropriate levels and types of coverage are in place? Do the organization's departments develop annual comprehensive operating budgets, which include costs for all programs and applicable sources of funding? To assess the performance of an organization and identify its key strengths and weaknesses, complete Worksheet 6.01, "Internal Assessment." 6.1.2 Data Collection Techniques The planning team should conduct the internal assessment in collaboration with staff and department leaders. Most often, staff and department leaders fail to honestly identify their organ- ization and staff weaknesses. If possible, the planning team should seek assistance from an exter- nal source skilled at assessing organizations. Data collection techniques that will help airport organizations identify their strengths and weaknesses include surveys and interviews (including Internet surveys), inspections and observations, focus groups, and audits. 6.1.2.1 Surveys and Interviews As noted by Caves and Gosling: "The most direct way of checking service quality to the ulti- mate consumers is to survey achievement against standards."45 By continuously surveying pas- sengers, employees, and tenants, airport operators can easily check on the level of satisfaction of their passengers, employees, and tenants. Through passenger surveys and interviews, the planning team can inquire about terminal cleanliness, queue lengths, wait times, comfort, level of satisfaction with concessions, conges- tion, airport staff behavior, and so forth. Similarly, airport operators can gauge their employees' 45 Robert E. Caves and Geoffrey D. Gosling, Strategic Airport Planning (Amsterdam and New York: Pergamon, 1999).

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66 Strategic Planning in the Airport Industry and tenants' levels of contentment by conducting surveys or interviews addressing criteria such as overall job satisfaction, pay/benefits satisfaction, promotions/career advancement, super- visory promotion of teamwork and participation, supervisory instruction/guidance, communi- cation, job stress, and so forth. These surveys and interviews can provide valuable information on how employees view the organization and can be conducted by a neutral third party. Another alternative for obtaining feedback on airport organization performance is the use of an Internet-based survey. This type of survey allows data collection on customer satisfaction, process times, passenger characteristics, and so forth. CASE STUDY Conducting Surveys and Interviews--Bob Hope Airport In 2008, Bob Hope Airport (the Airport) served approximately 5.3 million passengers.a The Airport also generated a total economic impact of $3.9 billion in Southern California, gen- erated 2,400 airport positions, and indirectly accounted for an additional 34,000 full-time jobs in the broader economy.b The Burbank-Glendale-Pasadena Airport Authority prepared a Customer Satisfaction Assessment in July 2007 to obtain a profile of the passengers who utilized Bob Hope Airport. The passenger survey determined passen- gers' demographic and economic characteristics; their use of the airport's facilities; use of local facilities such as hotels and transportation; and the passengers' overall impression of the airport. This study was conducted in conjunction with the Airport's economic impact report, and both were published in May 2008. Prior to the data collection, the Airport's airline market shares were analyzed to determine the optimal days and times to collect data. Interviewers collected data by distributing questionnaires to departing passengers waiting to board their flights. Data were collected over a 3-day period using a self-administered questionnaire. The questionnaire was designed to obtain specific information from both local residents and visiting departing passengers about their experiences at the airport. The questionnaire contained approximately 60 questions and collected relevant information in three areas: (1) trip characteristics, including trip purpose, length of stay in the local area, local and airport facilities used (e.g., hotels and transportation), type of check-in, security checkpoint wait-time, and spending habits at the airport; (2) the customer's experience of the airport (e.g., get- ting to the airport, checking in at the airport, security check, and airport facilities); and (3) customer character- istics, including gender, age, education, income, zip code, the customer's perception of the importance of "convenience," and customer comments and suggestions on what they would like to see at the airport and how the airport could better serve them. A minimum sample goal of 1,000 passenger questionnaires was set to provide an accurate customer profile. Over 1,200 questionnaires were collected.c Survey results indicated that 74 percent of passengers were influenced by convenience in their decision to use Bob Hope Airport, especially area residents. Based on convenience, passengers rated Bob Hope Airport highest in comparison with John Wayne Airport, Long Beach Airport, Los Angeles International Airport, and LA- Ontario International Airport.d Since convenience is such an important factor for passengers selecting Bob Hope Airport, airport management weighs most decisions in terms of how they affect passenger convenience. aBurbank-Glendale-Pasadena Airport Authority, Aviation Statistics, www.burbankairport.com/ (accessed May 28, 2009). bBurbank-Glendale-Pasadena Airport Authority, The Economic Impact of Bob Hope Airport 2006, prepared by Unison Maximus Consulting Solutions in association with UCG Associates, Inc. (May 2008), www.burbankairport.com/documents/BobHopeAirport EconomicImpactReport_000.pdf (accessed May 28, 2009). cBurbank-Glendale-Pasadena Airport Authority, Bob Hope Airport--Customer Satisfaction Assessment Report, prepared by Unison Maximus Consulting Solutions in association with UCG Associates, Inc. (May 2008), www.burbankairport.com/documents/ BobHopeAirportCustomerSatisfactionReport_000.pdf (accessed May 28, 2009). dIbid.

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Scanning the Environment and Predicting Developments 67 6.1.2.2 Inspections and Observations Inspections and observations can also be used to measure the organization's performance rel- ative to terminal cleanliness, level of service, and other physical or operational factors. To be a suitable performance measure, the results of the physical observation must be measurable and reliable on a scale that identifies several variations of the condition to be measured (e.g., never, seldom, sometimes, often, always). As such, different observers at different times can give the same or similar ratings to similar defined levels of service. 6.1.2.3 Focus Groups Focus groups are small, facilitated sessions designed to gather in-depth information on spe- cific topics. Information and ideas are generated by the interactive nature of the group discus- sion. Focus groups provide qualitative insights and can often be dominated by the opinions and viewpoints of the participants. Focus groups also provide data from a group of people at a lower cost than individual interviews and provide the flexibility to examine a wide range of topics and subjects. Focus groups can be used to discuss passenger satisfaction programs and other passenger- related topics, but they can also be used to better understand how airport services affect tenants such as airlines, concessionaires, and FBOs, and vice versa. Focus groups can also be used to establish benchmarks of future performance measures. 6.1.2.4 Audits Audits are key elements of an organization's internal assessment. For the majority of airports, however, audits focus on factors related to the organization's finances and are aimed at identi- fying and verifying the main financial flows and opening and closing fund balances. These audits are conducted to determine an organization's compliance with the requirements of laws, regu- lations, contracts, and grant assurances applicable to its major federal program, as described in the U.S. Office of Management and Budget (OMB) Circular A-133: Audits of States, Local Gov- ernments and Nonprofit Organizations.46 These financial audits are conducted by an independ- ent auditor in accordance with generally accepted auditing principles covering financial audits and standards as presented within Circular A-133. System audits covering the areas listed below also provide key information regarding the organization's performance. While the majority of airports may not have the resources to conduct such comprehensive reviews and assessments of the adequacy, efficiency, and effec- tiveness of their organization, these audits generally provide key input to the assessment of an organization's strengths and weaknesses. Areas that can be monitored and audited include the following: Legal framework Organizational structure Human resources and payroll Working environment Use of contractors Concessions, including rental cars, hotels, parking, and retail Contract and change order compliance (including labor, material, equipment, and billings) Internal performance Planning and budgetary control mechanisms 46 Office of Management and Budget, "Circular No. A-133--Revised to show changes published in the Federal Register June 27, 2003." Available online at www.whitehouse.gov/omb/rewrite/circulars/a133/a133.html.