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Analysis and Implementation Considerations 33
facility issues in exclusive-use areas. In general, airport operators view this as part of their
responsibilities; however, many airport operators and airlines alike are attempting to track to
a greater detail the costs and assets associated with facility maintenance. To help with this,
airport operators are tracking the responsibilities through established and controlled means.
Table 3-1 is an example of a facility matrix used by one airport operator. Even with a matrix,
airport operators must regularly coordinate issues with airlines and monitor progress.
An increasing number of airport operators either have or are investigating the use of
sophisticated maintenance management systems. Airport operators generally noted that,
even with maintenance management systems, tracking staff and changes throughout a facil-
ity is challenging.
3. Staffing Considerations. In general, staffing requirements will vary from airport to airport,
depending on the level of outsourced providers and the level of airline-provided facility main-
tenance. Airport operators should plan for at least one additional staff member to conduct
regularly scheduled facility inspections.
Maintaining Major Equipment Used in
Common- and Shared-Use Facility Space
Description
This section discusses the issues and opportunities when airport operators assume responsibil-
ity for maintaining and perhaps ownership of major equipment used in common- or shared-use
applications (e.g., passenger boarding bridges and baggage conveyor systems). Maintenance of
the technology systems associated with common use is discussed in later sections of this Chapter.
Issues to Consider
1. Airline Issues and Opportunities. Most airlines agreed that the airport operator is in a good
position to provide maintenance services on the major equipment assets used in common
or shared use areas. In general, airlines think that airport operators charge too much for
preventive maintenance and general upkeep of these assets. In cases where one airline is the
predominant user of an asset, such as with bag belts or bag claim devices, the predominant
user generally favors maintaining ownership and/or maintenance of that asset.
2. Airport Issues and Opportunities. In most cases, airport operators prefer to assume main-
tenance of the major assets used in common- or shared-use functions. Airport operators
noted that the cost of ownership of the major assets typically was higher than planned. Air-
port operators typically consider that performing a Predictive or Preventive Maintenance
(PM)/monitoring program a best practice and, in the long run, saves money over a reactive
maintenance program. Maintaining a major piece of equipment operated by someone other
than the one responsible for maintenance can lead to issues with failure resolution ("who-
done-it"). As with general facility maintenance, airport operators typically agreed that using
a sophisticated maintenance monitoring system was important.
3. Staffing Considerations. As with general facility maintenance, staffing requirements will vary
from airport to airport. Staff requirements may include
· Monitoring assets
· Managing a preventive maintenance program
· Help desk and troubleshooting
· Problem resolution
· Managing contractor staff
Business Considerations
This section addresses business issues and opportunities that should be considered when eval-
uating common use. The discussion is a high-level overview of the financial decisions that will
need to be made, as well as a look at the results of research as to the common practices in the
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34 Reference Guide on Understanding Common Use at Airports
Table 3-1. Facilities maintenance matrix.
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Analysis and Implementation Considerations 35
industry today. Airline concerns and opportunities are noted first, followed by the concerns and
opportunities reflecting the experience of airport operators.
Airport areas of impact are as follows:
· Check-In Area
· Gate Area
· Shared-Use Facilities
· General Business Considerations
· Leasing Options for Common-Use Technology Support
Note: Detailed information on each of these operational areas can be found in Appendix B6.
Detailed and related costing information can be found in Chapter 4 of this Guide.
Check-In Area
Description
This section describes the business considerations for airport operators who assume the
responsibility of owning and assigning check-in counters in a common-use model.
Issues to Consider
1. Airline Issues and Considerations. Most airlines stated a preference for leasing the counter
exclusively, with airline-provided equipment. As with airport gate counters, most airlines do
not see the need to move to common use when the airport operator has sufficient check-in
counter space. Airlines stated a preference for a rates and charges model that distributed the cost
of the common-use system across only the airlines using the common-use system. Airlines find
themselves having to work in various business models, when it comes to check-in counters. Air-
lines maintain, as part of their business model, the ability to market themselves as terminal of
choice, starting at the airport terminal check-in area. Common use limits their ability to do so.
2. Airport Issues and Opportunities.
· Cost Distributions. Although no approaches for distributing costs to common-use assets are
defined, airports surveyed generally used a hybrid compensatory type model as shown in
Figure 3-8. The cost centers used in this model usually consist of a Terminal Area Cost Cen-
ter, Airfield Area Cost Center, and Ground Side/Support Area Cost Center (see Figure 3-9).
· Rates and Charges. Airport operators use various charging models to recover costs associ-
ated with common-use check-in counters. Some of these models include Per Time Use,
Per Passenger, Per Check-in Counter Position, Per Total Counters and Per Aircraft Turn.
Appendix B7 provides examples of use rates and the accompanying basis, or charge model,
currently in practice at various unidentified airports.
· Leasing Considerations. The current trend is for shorter term airline agreements. Of the air-
port operators surveyed, only 27% currently used a term agreement over 10 years in dura-
tion (see Figure 3-10).
Gate Area
Description
This section describes the business considerations for airport operators who assume the
responsibility of owning and assigning gate counters and podiums in a common-use model.
Issues to Consider
1. Airline Business Issues and Opportunities. As with airport check-in counters, most airlines
do not see the need to move to common use when the airport operator has sufficient gate
capacity. Airlines stated a preference for a rates and charges model that distributed the cost
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36 Reference Guide on Understanding Common Use at Airports
Compensatory
Hybrid
58%
Residual
8%
Compensatory
34%
Figure 3-8. Cost distribution model.
Figure 3-9. Cost centers.
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Analysis and Implementation Considerations 37
10 or
more years
5 years
27%
28%
Ordinance
9%
30 days
18% Varies
18%
Figure 3-10. Term of use agreement.
of the common-use system across only the airlines using the common-use system. Airlines
maintain, as part of their business model, the ability to market themselves as an airline of
choice, starting at the airport terminal check-in area and continuing on to the gates. Com-
mon use limits their ability to do so.
2. Airport Performance Issues and Opportunities.
· Cost Distribution. As with the cost distribution methods described for check-in counters,
airport operators generally use a single Terminal Cost Center to distribute costs to gates,
typically applied by total square footage of common-use gate spaces, to obtain the
amount needed to recover for use of the spaces associated with a common-use gate.
· Rates and Charges. The most common rate model used to charge back expenses allocated
for use of a common gate is the Per Turn rate. Many airport operators further define a Per
Turn rate by aircraft class turned or by type of gate, such as with, or without, a loading
bridge. Other common rate models in practice include
Per landed weight
Per passenger
Per use
Per turn, versus other models. A per turn gate fee, as shown in Figure 3-11), may be
charged by dividing the allocated gate revenue requirement by the total estimated turns.)
Threshold for break-even on per-turn costs. In its fundamental application, the thresh-
old for break-even on a per-turn basis can be obtained by calculating the total cost applied
to all common use gates, which may include costs for gate equipment, dividing that total
cost among total common use gates to obtain the cost per gate. The cost per gate is then
Total Sq. Ft. Common- Terminal Revenue Rqmt for
X
Use Gates Common-Use Gates per Sq. Ft.
Estimated Total Turns
Figure 3-11. Gate fee per turn.
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38 Reference Guide on Understanding Common Use at Airports
Total Cost of
Common-Use Gates
Fee Charged
÷ Per Turn
Total Number of
Common-Use Gates
Figure 3-12. Number of turns needed for break-even
per gate.
Total Income Obtained -- Revenue Obtained from (Shortfall) /
=
From Per Turn Rates Estimated Gate Utilization Overage
Figure 3-13. Formula for (shortfall) /overage.
divided by the per turn fee charged by the airport operator to identify the number of
turns needed to recover the costs of the gate, as shown in Figure 3-12.
A shortfall or overage, as shown in Figure 3-13, can occur when the anticipated income
is greater or lesser than the revenue obtained from the per turn rate based on estimated
gate utilization. Based on the rates and charges provided by a major U.S. airport, the fol-
lowing 6-step example, as shown in Tables 3-2 through 3-7, presents a practical applica-
tion for analyzing break-even using a per turn rate reflecting different gauges of aircraft.
· Leasing Considerations. Such considerations include
Use of preferential gate assignment by a non-signatory airline
Grandfathering/preferred arrangements
Minimum use and take-back criteria (see Figure 3-14). Not all airports implement a for-
mal set of take-back criteria. In practice this is sometimes an unwritten policy such as if
an airline drops below a certain number of turns, the airport operator will evaluate and
take back use of the gate if needed. Figure 3-14 shows how surveyed airport operators
defined minimum use in connection with take-back evaluations.
Shared-Use Facilities
Description
This section describes the business considerations for airport operators who assume the
responsibility of owning and assigning shared-use facilities in a common-use model.
Table 3-2. Step 1: Identify costs
per gate.
Cost Per Gate
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Analysis and Implementation Considerations 39
Table 3-3. Step 2: Estimate turns.
Estimated Annual Turns Per Daily Turns Per Gate =
Estimated Annual
Estimated Turns Turns
Gate = Annual Turns (÷) No. Annual Turns Per Gate (÷)
of Gates (5) 365 Days
Table 3-4. Step 3: Establish charge per turn.
Weighted Annual Per Turn Rate (=) Total Cost
Estimated Assigned
Turns (=) Estimated Per Gate (÷) Estimated
Charge Per Turn Annual Turns Weight
per Gate FACTOR
Annual Turns per Annual Turns Per Gate (x)
Gate (X) Weight Assigned Weight Factor
Table 3-5. Step 4: Calculate anticipated income.
Revenue Per Gate Per Aircraft Class
Anticipated Income (=) Per Turn Rate (x) Estimated
Annual Turns per Gate
Table 3-6. Step 5: Calculate potential
income (100% utilization).
Potential Income (100% Utilization)
Table 3-7. Step 6: Calculate anticipated
(shortfall)/overage.
Anticipated (Shortfall)/Overage
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40 Reference Guide on Understanding Common Use at Airports
Seats
33%
Passengers
Per Gate 8%
Other
Operations 17%
Per Gate
Per Day
17%
Departures
Per Gate Per Day
25%
Figure 3-14. Criteria used to define minimum use.
Issues to Consider
1. Airline Business Issues and Opportunities. Airlines typically recognize the need for shared-
use facilities, such as with baggage claim areas. Airlines did express concern about how air-
port operators attempted to recover costs.
2. Airport Performance Issues and Opportunities.
· Cost Distribution. Costs for the maintenance, operation, and capital recovery of shared-use
facilities may be prorated among the airlines according to a shared-use formula or based
on their respective share of airline-leasable square footage.
· Rates and Charges. Various rate mechanisms are used to recover costs for use of shared facil-
ities, including the 90/10 split formula, per passenger fee, leased square footage, 10/45/45
formula, and other formulas.
General Business Considerations
Description
This section describes business considerations applicable across all aspects of common use.
Issues to Consider
1. Leasing Considerations. When establishing a leasing agreement for common use, the follow-
ing items should be considered:
· The airport operator's right to relocate the airline operation
· How damage to common-use assets will be charged
· Whether the airline may use either its own printer stock or airport-supplied common stock
· Rules and allowances for modifications to airport-owned common-use equipment
· Network usage requirements and any other airport-owned special systems supporting the
common-use operation
· Allowances on airline deployment of technologies
· Placement of airline-owned signage
2. Liability and Safety. When asked about liability and safety issues directly associated with the
check-in counter area, airport operators stated that there have not been any significant issues.
Issues are generally addressed through standard liability clauses maintained in the Lease
Agreement.
3. Assets. Because common-use assets are shared by all airlines, airport operators should build
budget contingencies for damaged assets that cannot be charged directly to the responsible
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Analysis and Implementation Considerations 41
party. Having a lease or operating agreement that clearly defines how damage to common-
use assets will be charged is also operationally important.
4. Competitive Factors. From the airline perspective, common use often removes a competi-
tive advantage. If not planned and implemented properly, common-use installations
can adversely affect an airline's ability to process passengers (both at check-in and at board-
ing) in the means it sees best, thus giving a very important advantage to its competitors.
5. Customer Service. Airport operators view common use as a means to improve customer
service. For the airline, common use can hinder the ability to provide customer service at the
level the airline requires. Unlike the airport operator, who is concerned about only the cus-
tomers using its facility, the airline must address customer service across all facilities it ser-
vices. To address the different perspectives, airport operators should include customer service
issues as one of the key early planning items with airlines.
6. Marketing. Airport operators generally market common use as a means of lowering the
airline's cost of entry. For some airlines, common use is becoming a decision point for
entering a new market, while other airlines view common use as a deterrent to entering
the market.
7. Environmental/Sustainability. Common use is enabling airport operators to use new and
sometimes creative ways to improve the sustainability of the airport environment. Common
use provides the ability to consolidate resources from many airlines, to one, thereby promot-
ing resource reductions in the following:
· Power consumption
· The footprint of physical machines
· Thermal output (cooling requirements)
· The costs of disposal hardware
Some of the examples noted included
· Technology:
Consolidation of communication infrastructure (e.g., copper, fiber, electronics) from
many airline systems into one
Overall server and personal computer reductions
Reductions in telecommunication rooms
Reduction of emissions by providing a common source for aircraft pre-conditioned air.
This allows planes to shutdown their auxiliary power units, which expend CO2 gases and
cost the airlines fuel to run. Significant cost savings and significant reductions in emis-
sions are expected.
· Through a common means of aircraft trash collection, one airport recycles coffee grounds,
saving several tons of refuse a year.
Leasing Options for Common-Use Technology Support
Description
Airport operators typically lease technology maintenance service (and sometimes equipment)
through one of the following means:
· The airport operator purchases equipment and provides maintenance services (either through
contracted services, or in-house staff, or a combination of the two).
· The airport operator purchases equipment and airlines establish and pay for third-party main-
tenance service through a Common-use Local Users Board (CLUB) arrangement.
· Airlines lease equipment and maintenance services through a CLUB arrangement.
· Individual airlines lease equipment and maintenance services directly with third-party
providers.
