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Reference Guide on Understanding Common Use at Airports (2010)

Chapter: Chapter 2 - Common Use as Applied Throughout the Industry

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Suggested Citation:"Chapter 2 - Common Use as Applied Throughout the Industry." National Academies of Sciences, Engineering, and Medicine. 2010. Reference Guide on Understanding Common Use at Airports. Washington, DC: The National Academies Press. doi: 10.17226/14375.
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Suggested Citation:"Chapter 2 - Common Use as Applied Throughout the Industry." National Academies of Sciences, Engineering, and Medicine. 2010. Reference Guide on Understanding Common Use at Airports. Washington, DC: The National Academies Press. doi: 10.17226/14375.
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Suggested Citation:"Chapter 2 - Common Use as Applied Throughout the Industry." National Academies of Sciences, Engineering, and Medicine. 2010. Reference Guide on Understanding Common Use at Airports. Washington, DC: The National Academies Press. doi: 10.17226/14375.
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Suggested Citation:"Chapter 2 - Common Use as Applied Throughout the Industry." National Academies of Sciences, Engineering, and Medicine. 2010. Reference Guide on Understanding Common Use at Airports. Washington, DC: The National Academies Press. doi: 10.17226/14375.
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Suggested Citation:"Chapter 2 - Common Use as Applied Throughout the Industry." National Academies of Sciences, Engineering, and Medicine. 2010. Reference Guide on Understanding Common Use at Airports. Washington, DC: The National Academies Press. doi: 10.17226/14375.
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Suggested Citation:"Chapter 2 - Common Use as Applied Throughout the Industry." National Academies of Sciences, Engineering, and Medicine. 2010. Reference Guide on Understanding Common Use at Airports. Washington, DC: The National Academies Press. doi: 10.17226/14375.
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Suggested Citation:"Chapter 2 - Common Use as Applied Throughout the Industry." National Academies of Sciences, Engineering, and Medicine. 2010. Reference Guide on Understanding Common Use at Airports. Washington, DC: The National Academies Press. doi: 10.17226/14375.
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Suggested Citation:"Chapter 2 - Common Use as Applied Throughout the Industry." National Academies of Sciences, Engineering, and Medicine. 2010. Reference Guide on Understanding Common Use at Airports. Washington, DC: The National Academies Press. doi: 10.17226/14375.
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Suggested Citation:"Chapter 2 - Common Use as Applied Throughout the Industry." National Academies of Sciences, Engineering, and Medicine. 2010. Reference Guide on Understanding Common Use at Airports. Washington, DC: The National Academies Press. doi: 10.17226/14375.
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Suggested Citation:"Chapter 2 - Common Use as Applied Throughout the Industry." National Academies of Sciences, Engineering, and Medicine. 2010. Reference Guide on Understanding Common Use at Airports. Washington, DC: The National Academies Press. doi: 10.17226/14375.
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Below is the uncorrected machine-read text of this chapter, intended to provide our own search engines and external engines with highly rich, chapter-representative searchable text of each book. Because it is UNCORRECTED material, please consider the following text as a useful but insufficient proxy for the authoritative book pages.

7It is difficult to talk about common use without considering common use as a technology solution. The industry today is filled with acronyms that force the association of common use and technology, such as CUTE (Common-Use Terminal Equipment), CUSS (Common-Use Self Service), and CUPPS (Common-Use Passenger Processing Systems). Common use is a broad topic that covers many areas of the airport and affects airport and airline operations, leases, and facilities, to name a few. It is important to understand the current trends and applications at airports within the United States with respect to common use. These trends are affected by the overall trends in the avia- tion industry. To gain a good view of the overall trends in the industry, the research team inter- viewed airports in Canada and used research material gathered from European airports. Over the past 10 years, the aviation industry has seen dramatic volatility, including a passenger down- turn in 2001/2002, escalation of jet fuel prices in 2007/2008, and a decrease in passenger demand because of the economic downturn in 2008/2009. With each change in the market, the effect on airport facilities has been clear—lower traffic levels and reduced airline schedules which in turn reduce the need for capital construction projects. Prior to 2001, and between 2002 and 2007, airport capacity and airport capacity planning were high priorities. Increased passenger counts at most major U.S. airports, along with increased flight activity, were creating a demand for increased passenger facilities. During these times, construction of new gates, concourses, and terminals were considered. It was also during these times that com- mon use at U.S. airports began to be considered. Many U.S. airport operators were aware of the use of common use outside of the United States, and these strategies were starting to be considered at more U.S. airports. Airports such as Las Vegas McCarran International Airport, JFK Terminal 4 (shown in Figure 2-1), Toronto Pearson International Airport, and Vancouver International Air- port were esteemed as examples of common use in North America. Airports that implemented common use began implementing at limited locations, usually driven by international air traffic, and then began considering implementing common use at domestic gates and terminals. Although the main reason for these trends tended to be accommodating the growth of airlines while reducing, or at least deferring, capital costs, the volatility of the industry caused a shift in thinking. When jet fuel prices surpassed $180 per barrel in the summer of 2008, many airlines took immediate actions to reduce costs, reduce flight schedules, and reduce service. Some air- lines went out of business, while others filed for bankruptcy. These changes caused the industry to contract, which in turn affected the airports and their abilities to grow. Now, rather than plan- ning for increased traffic, airport operators were dealing with double-digit percent declines in passenger traffic. Some airports lost airlines, either because airlines went out of business or because of reallocation of service to different markets. Many airport operators were seeking ways to reduce expenses, while maintaining the high level of customer service their travelers had come C H A P T E R 2 Common Use as Applied Throughout the Industry

8 Reference Guide on Understanding Common Use at Airports to expect. Consideration was given to how airports could operate most efficiently, which, in some cases, meant shutting down portions of the airport, while still maintaining concession revenues. Airlines and airport operators are now looking at common use in view of this changing eco- nomic environment. Rather than looking at common use to help with the growth of passenger traffic, airlines and airport operators must consider how, or if, common use can help in light of the current reduction in passenger traffic. All of this information is important in understanding the current state of the industry, and in helping decision making about whether or not to pur- sue common use at an airport. According to the International Air Transport Association (IATA), airlines operating in the U.S. region are the only airlines that have been able to shrink capacity in line with the decrease in demand and are currently forecast to turn a small profit in 2009 (IATA, 2009). The Air Transport Association (ATA) reports that the total number of passengers travelling on U.S. airlines con- tinues to decline (ATA, 2009). The FAA forecasts that the overall mark of one billion passengers is now at 2021, rather than 2016 as forecast in 2008 (FAA, 2009a). The FAA is also interested in common-use facilities in relation to the FAA’s NextGen imple- mentation plan. On the NextGen website, NextGen is defined as follows: The Next Generation Air Transportation System (NextGen) is a transformation of the National Airspace System (NAS), including our national system of airports, using 21st century technologies to ensure future safety, capacity and environmental needs are met—FAA, 2009b. In particular, during the landing, taxi, and arrival phases of the NextGen plan, there is a need to provide aircraft with gate assignments and how optimal use of gates and airport facilities will affect the efficient flow of traffic into and out of ramp areas. How common use is applied in the current environment is discussed in the following sections: • U.S. Applications (General) • U.S. Airport Applications (Considerations) Figure 2-1. JFK—Terminal 4.

Common Use as Applied Throughout the Industry 9 • U.S. Application (Airport Characteristics) • Current Range of Common-Use Facilities and Services within the United States • Cost-Benefit (Overview) • Other Industries U.S. Application (General) Many U.S. airport operators are taking the building-block approach to common use, starting with international facilities, and possibly airport-operator-owned/controlled facilities, and then determining how to progress from there. Very few airport operators have implemented full com- mon use throughout their airports. Several airport operators have implemented common use at their international gates. Operators managing smaller airports are beginning to implement com- mon use at their domestic gates. Other airport operators have implemented common use in a single terminal, which serves both international and domestic flights. When an airport operator is considering implementing common use, the operator must con- sider many factors, including the airport’s specific carrier allocation, the size of the airport, the use of current facilities, and planned future use of facilities. These and many more considerations are discussed in Chapter 3 and the associated appendixes. Current research indicates that there are various ways to analyze these factors. Some airport operators, based on the carrier allocation, choose not to implement common use at all. Other airport operators choose to implement com- mon use in their non-hub gates and terminals. The research revealed that a current trend in U.S. airports is that implementation of com- mon use in areas primarily used by hub carriers is not normally considered. If an airport is con- sidered a hub for an airline, that airline generally is using the current facilities to full capacity and may even require additional facilities. In addition, an airline with a large number of gates at a particular airport can control the growth, or contraction, of services within the scope of their lease space. Another trend is to implement common use at primarily international gates. This is seen as helpful in gaining international service for an airport, given that the international airlines are more accustomed to common-use systems at airports and their service to a U.S. city tends to be a limited number of flights per day or week. Airport operators provide common use at their international gates to make it more attractive for international airlines to provide service to their airports. Examples of airport operator approaches to common use can be found in the case studies included in Appendixes A1 through A4. These case studies highlight specific airports and the rea- sons for, and experiences with, their implementation of common use. U.S. Airport Applications (Considerations) In considering common-use implementations, airport operators must work closely with the airlines servicing their airports. When considering common use, an airport operator, working with the airlines, needs to determine if the common-use resources will cost less than, or at least equal to, the cost of using dedicated resources. As airlines move toward lowering their overall costs to keep in line with the market, airport operators become an important source of cost savings for the airlines when considering where they are going to provide service, reduce service, or simply cease operations. An airport operator should consider many aspects when looking at whether or not to move to common use. Examples, based on the case studies in Appendixes A1 through A4, include

10 Reference Guide on Understanding Common Use at Airports effects on planning, facilities, business, airside and landside operations, design and construction, and curbside and off-site operations. Additionally, airport operators must consider technology implications, because technology is a major element of enabling common-use resources. Airport operators that implemented common use needed to consider the effects to the facilities. In some cases, airport operators needed to take over maintenance operations traditionally managed by the airlines. In these cases, the airport operators either took over the work them- selves or put contracts in place to provide those services. These maintenance services included millwork, equipment such as bag scales and bag belts, janitorial services within traditionally airline-leased space, passenger boarding bridges, and other equipment. Many airport operators already provided at least some of these services; in such cases, the effects are to increase these existing services. Airport operators also had to consider business effects when implementing common use. These effects included taking over assignment of resources, such as gate counters, check-in coun- ters, baggage claims, and other common-use resources. Other effects included asset ownership, leasing changes, and management of resource assignments to support existing food and retail concessions. These business effects were the most challenging areas to deal with and required a good working relationship with the airlines operating at the airport. In many of the interviews and research, it was clear that an early working relationship with the airlines was key to the suc- cess of the common-use implementation. In most cases, if an airline is using their gates at full capacity, then the airport operator needs to consider what benefit implementing common use will bring. At many airports, full gate uti- lization is defined as six to eight turns per gate—sometimes this is because of noise restrictions that limit the hours of operations and sometimes other factors are involved. An airport opera- tor needs to determine what criteria will be used to identify full gate utilization. Even with full gate utilization, some airport operators may determine that a common-use implementation is still appropriate and continue to move forward. Other factors relevant to making that determi- nation are discussed in Chapter 4. Operational effects also needed to be carefully examined when considering a common-use implementation. On the airside, airport operators became responsible for many elements that they had not been responsible for in the past. Airport operators had to keep in mind that if a gate had been moved to common use, the airport operator needed to take ownership of passenger boarding bridges (see Figure 2-2) if they did not already own them. Thus, a financial cost had to be considered that might not normally have been considered in plans to move to a common-use implementation. Airport operators also became responsible for gate striping. Many airport operators developed a common gate striping schema to support multiple airlines and multiple aircraft types at common-use gates. Gate assignment responsibilities also had to be managed for all airlines using the common-use gates. This management was performed by the airport operator, airline consortium, third-party contract, or other management process that allowed all airlines fair and reasonable access to these resources. Airport operators needed to consider the cost implications, service levels, and staffing implications of managing gate assignments. In assigning gates, other resources such as check-in desks and baggage claims were managed through the same mechanism. Landside operations were being affected because of the possible movement of airlines from one area of an airport to another. In practical application, airlines generally were not moved around an airport; however, the management of the curb and curbside resources (e.g., curb-side check-in) were considered. Common use also affected the design and construction of new facilities at an airport. Design- ers considering implementing common use in a new construction project needed to consider

Common Use as Applied Throughout the Industry 11 effects to passenger flows, facility usage, and aircraft gate utilization. All of these considerations are discussed further in Chapter 3. Airlines had to be able to have a guaranteed level of service, because in a common-use imple- mentation they did not necessarily have control of the maintenance and repair of those facilities. Airport operators had to consider providing a service level agreement for all services which the airport operator provided. Airport operators had to remember that the airlines needed these resources for core business operations such as checking in passengers, boarding planes, and other mission-critical tasks. Although the airport operator was the facility owner, the airline had their business model affected when common-use resources did not function properly. For careful air- port operator considerations, Chapter 3 presents the issues and opportunities presented by the airlines, broken out per divisional section. U.S. Application (Airport Characteristics) When looking at common use at airports, the type of airport (i.e., hub, non-hub, or origin and destination airport) is important. Implementing common use at each of these types of airports has different considerations and success factors. Hub Airports Hub airport operators that have implemented common use have tended to implement it at international gates and check-in counters, if they have them, and at non-hub airline locations, in some limited cases. Implementing common use at the international gates enables the airport operator to create flexibility for international traffic and gain an understanding of common-use resources with airlines more commonly using these types of resources outside of the United Figure 2-2. Passenger boarding bridge.

12 Reference Guide on Understanding Common Use at Airports States. As hub airport operators gain a better understanding of how to operate in a common-use environment, they may consider implementing in non-hub gates. Non-Hub Airports Non-hub airports have different needs and different operating requirements than hub airports. Non-hub airports are smaller than hub airports and often do not have one carrier that dominates a large percentage of the air traffic at that airport. In the case of non-hub airports, factors involved in determining whether or not to implement common use are different than at hub airports. Origin and Destination Airports Origin and destination airports may be hub or non-hub airports. Most of the passenger traffic for the local market starts at that airport and ends at that airport. As a rule, there are fewer through-passengers. These airports are usually in destination cities (e.g., Las Vegas and Orlando), where there is high demand for passenger service. Factors that must be considered in these loca- tions are space constraints, efficient utilization of the facility and resources, and the need to sup- port a larger number of air carriers. Current Range of Common-Use Facilities and Services within the United States Many airport operators are considering the implementation of common use at various levels of operation as follows: • Wireless for Operations: 39% implemented or to implement within 2 years. An additional 28% to implement in 3–5 years. • Common Ramp Display Information (RIDS): 50% implemented or to implement within 2 years. An additional 14% to implement in 3–5 years. • Managed Campus-Area Network for All Tenants: 48% implemented or to implement within 2 years. An additional 15% to implement in 3–5 years. • Passenger Self-Boarding Gates: 10% implemented or to implement within 2 years. An addi- tional 35% to implement in 3–5 years. • Off Airport Check-In: 24% implemented or to implement within 2 years. An additional 32% to implement in 3–5 years. • Common Bag Drop: 18% implemented or to implement within 2 years. An additional 33% to implement in 3–5 years. • Baggage Tracking Services: 26% implemented or to implement within 2 years. An additional 30% to implement in 3–5 years. Figure 2-3 illustrates the information above (ACI, 2009). These results reflect a building-block approach to common use that allows airport operators to implement portions of common use over time while achieving the most value for all parties involved. In many cases, airport operators implement a common cabling backbone as one of the first elements of common use. This allows the airport operator to better manage the cabling infra- structure installed in the airport, while positioning the airport operator to add services in the future. With any major shift in process, there is also a shift in culture. Airport operators need to be prepared to address cultural changes, which not only affect the airport operator, but the local airline station personnel as well. To address this issue, Appendix A5 discusses some fundamen- tal concepts when managing organizational change. Technology is an important enabler for any common-use implementation. Technology does not drive these changes, but the use of technology facilitates the move to a common-use facility.

Common Use as Applied Throughout the Industry 13 As with any technology, costs, changes in staffing needs and customer service, and training and providing the right level of service for the facilities must be addressed. Cost-Benefit (Overview) An airport operator considering common use must also consider the costs and benefits associ- ated with common use. Chapter 4 reviews the costs and the benefits of common use in detail. Some of the costs that an airport operator should consider are summarized in the following subsections. Services When an airport operator is beginning to determine whether or not to pursue common use, it may be valuable to hire a consultant who understands the industry and common-use facilities and can provide help ranging from an initial set of business-level assessments through technical system design. Staff Any change in how an airport is operated will affect the airport operator’s staff. This includes existing staff, as well as any new staff required to support the new operations. Common-use facilities affect all levels of the airport operator, including senior management, management, and operational staff. Facilities Modifications Changes to existing facilities may be required for a common-use facility implementation. An airport operator will need to carefully consider how, or if, a common-use facility implementation Figure 2-3. Common-use considerations (in %).

will affect the existing facilities and account for those costs accordingly. This may also require design and construction services. Assets Depending on the type of common-use implementation, the airport operator may need to procure additional assets. Assets could be purchased from the airlines (e.g., with passenger boarding bridges) or could be procured to replace airline assets (e.g., flight displays or ground servicing equipment). Business Drivers The following business drivers need to be considered when looking at common-use imple- mentation: • Maximize existing facility utilization • Avoid or defer capital costs • Maximize facility flexibility • Decrease the airport’s cost of doing business • Decrease the airline’s cost of doing business • Improve the quality of service to airlines • Improve the quality of service to passengers • Increase opportunities for airlines to add or expand service • Gain a competitive advantage over other airports Other Industries When considering common use, it is also valuable to look at what industries outside the aviation industry are doing that might be related to common use. This section summarizes the research conducted by the research team in understanding similar efforts in related industries. A more detailed discussion of this section is provided in Appendix A6. Examples of the industries considered are • Banking and finance • Transportation (road, rail, air, and water transportation infrastructure, including computer- controlled just-in-time delivery systems, optimization of distribution through hubs, and traffic and operations centers consolidated into key locations, and regulation of the transport of hazardous materials) • Public works (water supply, drainage, and wastewater) • Power (electricity, oil, gas, and nuclear materials and power) • Information and communications (telecommunications and information technology) • Emergency services (emergency health services and public health) • Fire departments and law enforcement agencies • Agriculture and food (meat, poultry, and egg products) • National monuments and icons Among the industries researched, transportation, public works, and power share many similarities: • Heavy emphases on facility and infrastructure operations and maintenance • Strong regulatory oversight • Increasingly sophisticated, knowledgeable, and more demanding customers • External effects of economy and energy costs greatly affect operational costs 14 Reference Guide on Understanding Common Use at Airports

The research reflects a combination of a literature review and interviews. For focus, the researcher team considered the following questions: • What external drivers might influence another sector or industry to consider alternative ser- vice delivery options and/or business arrangements? • What business functions and/or processes would most likely be considered for improvement? • What role does technology play and what types of technology are considered in improve- ment initiatives? • What underlying decision-making framework and considerations were in play with regard to change initiatives? External Drivers External drivers (e.g., increasing regulations, increasing customer demands, and increasing operational costs) lead industries to consider new ways to increase efficiency and effectiveness, thereby leading to increased customer service and satisfaction and decreased operating costs. Business Functions and/or Processes All of the above-mentioned industries have or are engaged in creative re-thinking and deci- sion making relative to service provision and delivery. These decisions involve a recognition and determination of the core business and/or services and trying to determine the best ways to con- tinue and move forward. Industries considered alternative service delivery or provision options and optimization in response to an ever-changing business environment. Research indicates that the term “common use” is not readily used outside the aviation industry; however, there were many examples of industries implementing common-use types of arrange- ments and actively considering alternative service delivery options. These arrangements typically were described in terms of contractual language and included outsourcing, strategic partnerships, collaborative partnerships, strategic alliances, inter-organizational relations, collaborative entre- preneurships, coalitions, and joint ventures, as well as inter-agency, inter-regional, and shared services. These arrangements also included public-private partnerships of which there are many forms (e.g., contract operations, concession, design-build, design-build-operate, build- own-operate-transfer, and asset sale). Technology Types and Role Information technology was viewed as integral to overall operations and in being able to meet business demands. Five prevailing strategies for information technology, as shown in Figure 2-4, were identified: • Business Driven • Real Time • Mobile • Integrated • Secure Decision-Making Framework and Considerations Decision-making frameworks and considerations for change management were consistent across industries. Industries operate within a framework for improving performance with appropriate consideration for assessing and analyzing current performance, identifying key opportunities to Common Use as Applied Throughout the Industry 15

maintain effectiveness while improving efficiency, and developing a strategy for action. Key con- siderations include • An effective improvement process • Considering change management principles • Assessment • Strategic planning • Tools for improvement No universal solution was identified within any industry or example reviewed. Organizations assessed their existing situations, cultures, and business to determine response to factors affect- ing their business. Plans and courses of action were tied to organizational strategies and business objectives. Action ranged from process improvement, training or re-skilling, and/or technology implementation to outsourcing to public-private partnerships. 16 Reference Guide on Understanding Common Use at Airports Figure 2-4. Technology types and roles.

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TRB’s Airport Cooperative Research Program (ACRP) Report 30: Reference Guide on Understanding Common Use at Airports is designed to assist airports and airlines exploring the possibility of and evaluating the appropriateness of integrating “common use” in their operations. The report’s accompanying CD-ROM provides an alternative source of and approach to the information found in the reference guide and includes spreadsheet models that can be used in analyzing and evaluating how to integrate common use.

“Common use” most generally refers to a technological method that airlines use to process passengers: at the ticket counter, at self-service kiosks, or at the gates. In this report, however, “common use” is also discussed as an operating philosophy that an airport can use in managing and administering the airport--representing a paradigm shift in the traditional tenant-landlord relationship.

The CD-ROM is also available for download from TRB’s website as an ISO image. Links to the ISO image and instructions for burning a CD-ROM from an ISO image are provided below.

Help on Burning an .ISO CD-ROM Image

Download the .ISO CD-ROM Image

(Warning: This is a large file that may take some time to download using a high-speed connection.)

View information about the February 9, 2010 TRB Webinar, which featured this report.

The October 2013 ACRP Impacts on Practice explores how the San Diego County Regional Airport Authority applied ACRP Report 30 to develop new business models for common use systems at its airport.

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