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CHAPTER 4 Business Value Assessment When an airport operator is considering common use, it is necessary to first analyze the cost-benefit issues and considerations associated with common use. This chapter provides (1) information to help identify and analyze these cost-benefits and (2) tools for guiding an air- port operator through the initial steps of assessing the value that a common-use solution can pro- vide to the airport. Decisionmakers interested in common use need to understand the following high-level concepts: Each aspect of common use has specific costs associated with it and may provide different sets of benefits. Business drivers dictate the type of common-use solution that may be implemented. Different common-use solutions have different sets of benefits and costs associated with them. This chapter approaches common-use related cost-benefit issues with the following methodology: Establishing an understanding of cost considerations by common-use area. Breaking down specific benefits by business driver. Providing self-assessment tools to enable airports to assess Intangible factors to identify if an airport is a candidate for common use. Tangible factors to determine costs and provide the basis for the airport to determine if sufficient value can be obtained. To facilitate this approach, Chapter 4 has three sections: Cost Considerations by Area, Cost- Benefit Breakdown by Business Driver, and Business Strategy Assessment. Cost Considerations by Area Each key area of common use has a specific set of costs associated with it. However, many of these areas have overlapping or shared costs. To provide a thorough understanding of the cost factors affecting common use, this section provides independent discussions specific to planning and design as well as the primary common-use functions of check-in counters, curbside check- in, off-site check-in, gate areas, flight and baggage information displays, ramp control services, and ground handling services. Within each of these areas, costs are addressed in terms of assets, facility modifications, services, staff, and intangibles. These costs reflect a range of factors that should be considered for each area. Not all costs will be necessary for each implementation; additional costs, which may not be discussed here, could be incurred by the airport operator or other key stakeholders. 50

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Business Value Assessment 51 Planning and Design Planning and design consists of the effort required to take a common-use project from concept to implementation. Many of these costs will be necessary for any level of common-use implemen- tation. Appendix C1 has a more detailed breakdown. Services Consulting and design support is the primary cost associated with the planning and design effort. During this phase, consultants may be needed to help with business-level assessments, airport capacity planning, airport master planning, and other services so that the airport oper- ator can develop a clear understanding of the goals to accomplish. The following are typical key tasks for consultants: Identifying potential benefits Developing a business model Planning for and facilitating initial discussions with airlines Developing a common-use model that accommodates airlines' business models Conducting a study for how common use should be implemented Defining use criteria Establishing control responsibilities Assessing IT and facility infrastructure Assessing equipment assets to be transferred from airline to airport Preparing an RFP for the design project Developing schematic designs (possibly in conjunction with other disciplines) Developing functional requirements Developing construction drawings (possibly in conjunction with other disciplines) Developing technical specifications Preparing an RFP for installation of the system Once the planning and initial requirements are developed, the airport operator may need to engage design consultants, architects, engineers, and other professional services to create a design that may be installed or constructed. This section does not distinguish among delivery methods of projects. Additional costs related specifically to the delivery method may be incurred. Project deliv- ery methods include design-bid-build, design-build, and construction manager at risk, among other methods. Also, if the project is an upgrade to an existing terminal, the project could be done as a non-construction project, given that there may be no need for engineering or architectural services. Staff The airport operator's staff involvement throughout the planning and design phase is a sig- nificant cost that must be considered. Although a third-party design team can do much of the planning and design work, the direction and support required by the executive, management, and operational staff should not be underestimated. Executive Level. Executive-level staff must provide the planning direction and probably will need to attend meetings to address the following key issues: Changes in airport and airline culture An initial airport definition of a common-use business model Airlines as business partners Accommodation of airline business models How common use should be implemented Definition of use criteria Establishment of control responsibilities

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52 Reference Guide on Understanding Common Use at Airports After the planning phase, an executive staff member will be needed to oversee the design project as the project sponsor. Management Level. Management-level staff must provide input into the planning process and probably will need to attend meetings to address the following key issues: How common use should be implemented Definition of use criteria Establishment of control responsibilities Definition of IT and facility infrastructure requirements Definition of requirements for major equipment asset ownership After the planning phase, a management staff member will be needed to manage the design project, provide design coordination, and attend design review meetings. Operational Level. Operational-level staff must provide input into the planning process and probably will need to attend meetings to address the following key issues: How common use should be implemented Definition of IT and facility infrastructure requirements Definition of requirements for major equipment asset ownership After the planning phase, key operational staff members will be needed to provide ongoing support to the design project by attending design review meetings. Common-Use Implementation The primary common-use functions addressed here include terminal check-in area, curbside check-in, off-site check-in, gate areas, flight/baggage information displays, ramp control services, and ground handling services. Many of these functions will have costs in common that would not necessarily be replicated if multiple functions were implemented. Also, the ramp control and ground handling services would likely only be implemented in conjunction with a gate area common-use solution. Terminal Check-in Area This section addresses the terminal check-in area. For a detailed listing of cost breakdowns, see Appendix C1. Assets. Costs associated with new assets in the terminal check-in area depend heavily on the scale and scope of the common-use implementation. These costs could include General IT infrastructure upgrades CUTE/CUPPS hardware and software components Dynamic signage system hardware and software components Common-Use Self-Service (CUSS) Kiosks Voice over Internet Protocol (VoIP) System Millwork for check-in counters, display backwalls, dynamic signage cabinets, and CUSS kiosks Bag scales Baggage conveyers Facility Modifications. Modifications to existing facilities may be required in order to accommodate new passenger processing practices and new systems implemented in the terminal check-in area. Facility modifications may include Security checkpoints Hold rooms Check-in areas

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Business Value Assessment 53 Bag screening areas Baggage make up areas Telecommunication rooms Infrastructure pathways Services Outside services may be required to accommodate new passenger processing practices. These may include the following. Consultants and Designers. Consultants, and possibly designers, probably will be needed to provide the following support: Identifying maximum counter availability during peak-hour operations as compared with gate capacity Addressing passenger processing challenges System design and implementation Counter configuration and signage design Assessment of modifications needed Design and construction of modifications Contracts. Service contracts associated with the terminal check-in area may include Common-use systems warranty and maintenance Janitorial services Skycap services Wheelchair services Certifications. Technology systems that operate to an industry standard may require certifi- cations of the platforms and the applications in order for the solution to be considered a standard solution. These costs can affect both the airport operator and the airlines that use those solutions. Certification requirements associated with the terminal check-in area may include Common-use passenger processing certification CUSS certification Staff. Implementing common use will affect the airport operator's staff. The level of effect will reflect the scale and scope of the implementation and how common use will be supported and maintained. Executive Level. An executive staff member will need to serve as the project sponsor for the design and implementation of common use. Management Level. At the management level, two full-time positions may need to be created to address specific ongoing common-use-related issues, if such responsibilities are not being met by the airport operator's current staff. These positions would be A manager to oversee new service development, policy and procedures development and enforcement, and design and implementation project management. A manager to work with the airlines to accommodate business processes and understand pas- senger flow methodologies and to negotiate and manage contracts on behalf of the airport. In addition to new positions that may need to be created, management-level staff will need to be involved in defining rates and charges specific to the common-use implementation. Operational Level. Operational staff members will be needed to provide design and instal- lation project support as well as the following: Participation in design reviews Daily operations of new services (e.g., management of check-in counter assignments and monitoring of check-in counter usage)

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54 Reference Guide on Understanding Common Use at Airports Maintaining new assets Help desk support Legal counsel for liability issues Customer service support Marketing program development and implementation Environmental impact assessment and support Financial support for account management Technology support for infrastructure and systems Beyond the costs associated with staff time, at the operational level there will be additional costs for staff training to provide the necessary program support. Intangibles. Implementing common use in the terminal check-in areas has intangible costs as well. Among these are Minimization of the unique branding capability of airlines Increased operational risk to the airlines because of the loss of control over system perfor- mance and functionality Increased risk to the airport because of the financial uncertainty during low-utilization periods, liability for effect on airline operations, and liability for safety. Curbside Check-In Areas This section addresses the curbside check-in areas. For a detailed listing of cost breakdowns, see Appendix C1. Assets. Costs associated with new assets in the curbside check-in areas depend heavily on the scale and scope of the common-use implementation. These costs could include General IT infrastructure upgrades CUTE/CUPPS hardware and software components Dynamic signage system hardware and software components Millwork for curbside check-in counters and dynamic signage cabinets Bag scales Baggage conveyers Facility Modifications. Modifications to existing facilities may be required to accommodate new passenger processing practices and new systems implemented to support common-use curbside check-in. Facility modifications could include Bag screening areas Baggage make up areas Telecommunication rooms Infrastructure pathways Services Outside services may be required to accommodate new passenger processing practices. These may include the following. Consultants and Designers. Consultants will likely be needed to provide the following support: Addressing passenger processing challenges System design and implementation Counter configuration and signage design Assessment of modifications needed Design and construction of modifications

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Business Value Assessment 55 Contracts. Service contracts associated with the curbside check-in areas may include Common-use systems warranty and maintenance Janitorial services Skycap services Wheelchair services Certifications. Certification requirements associated with the curbside check-in areas may include Common-use passenger processing certification CUSS certification Staff. Implementing common use will affect the airport operator's staff. The level of effect will reflect the scale and scope of the implementation. Executive Level. An executive staff member will need to serve as the project sponsor for the design and implementation of the common-use solution. Management Level. At the management level, two full-time positions may need to be created to address specific ongoing common-use related issues, if such responsibilities are not being met by the airport operator's current staff: A manager to oversee new service development, policy and procedures development and enforcement, and design and implementation project management A manager to work with the airlines to accommodate business processes and understand pas- senger flow methodologies and to negotiate and manage contracts on behalf of the airport In addition to the positions that may need to be created, management-level staff will need to be involved in defining rates and charges specific to the common-use implementation. Operational Level. Operational staff members will be needed to provide design and instal- lation project support as well as the following: Daily operations of new services (e.g., management of check-in counter assignments and monitoring of check-in counter usage) Maintenance of new assets Help desk support Legal counsel for liability issues Customer service support Marketing program development and implementation Environmental impact assessment and support Financial support for account management Technology support for infrastructure and systems Beyond the costs associated with staff time, at the operational level there will be additional costs for staff training to provide the necessary program support. Intangibles. Implementing common use in the curbside check-in areas has intangible costs as well. Among these are Minimization of the unique branding capability of airlines Increased operational risk to the airlines because of the loss of control over system perfor- mance and functionality Increased risk to the airport because of the liability for impact on airline operations and liability for safety Cross-training on all airline applications for curbside operators

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56 Reference Guide on Understanding Common Use at Airports Off-Site Check-In Operations This section addresses off-site check-in operations. Costs may vary greatly. For example, a CUSS kiosk at a hotel or convention center may impose little or no cost to the airport operator, while a staffed check-in counter at an airport-owned rental car facility probably would be the full responsibility of the airport operator. For a detailed listing of cost breakdowns, see Appendix C1. Assets. Costs associated with new assets for off-site check-in operations reflect the scale and scope of the common-use implementation. These costs could include General IT infrastructure upgrades Dynamic signage system hardware and software components CUSS Kiosks Millwork for check-in counters, dynamic signage cabinets, and CUSS kiosks Facility Modifications. Modifications to existing facilities may be required in order to accommodate new passenger processing practices and new systems implemented in support of the off-site check-in operation. Facility modifications could include Bag screening areas (a new induction point may be necessary at the airport to support off-site operations) Baggage make up areas (a new induction point may be necessary at the airport to support off- site operations) Telecommunication rooms Services Outside services may be required to accommodate new passenger processing practices. These may include the following. Consultants and Designers. Consultants and designers probably will be needed to provide the following support: Addressing passenger processing challenges System design and implementation Counter configuration and signage design Assessment of modifications needed Design and construction of modifications Contracts. Service contracts associated with the off-site check-in operation may include Common-use systems warranty and maintenance Third-Party provider of off-site check-in operation Certifications. Certification requirements associated with the off-site check-in operation may include CUSS certification. Staff. Implementing common use will affect the airport operator's staff. The level of effect will reflect the scale and scope of the implementation. Executive Level. An executive staff member will need to serve as the project sponsor for the design and implementation of the common-use solution. Management Level. At the management level, two full-time positions may need to be created to address specific ongoing common-use related issues, if such responsibilities are not being met by the airport operator's current staff: A manager to provide oversight of new service development, policy and procedures develop- ment and enforcement, and design and implementation project management

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Business Value Assessment 57 A manager to work with the airlines to accommodate business processes and understand pas- senger flow methodologies and to negotiate and manage contracts on behalf of the airport. In addition to the new positions that may need to be created, there will need to be involve- ment from the management level to define rates and charges specific to the common-use implementation. Operational Level. Operational staff members will be needed to provide design and instal- lation project support as well as the following: Daily operations of new services Maintenance of new assets Help desk support Legal counsel for liability issues Customer service support Marketing program development and implementation Environmental impact assessment and support Financial support for account management Technology support for infrastructure and systems Beyond the costs associated with staff time, at the operational level there will be additional costs for staff training to provide the necessary program support. Intangibles. No costs have been identified. Gate Areas This section addresses gate and holdroom areas. For a detailed listing of cost breakdowns, see Appendix C1. Assets. Costs associated with new assets in the gate areas depend heavily on the scale and scope of the common-use implementation. These costs could include General IT infrastructure upgrades CUTE/CUPPS hardware and software components Dynamic signage system hardware and software components Local departure control system components Gate management system components VoIP System Millwork for gate counters, display back walls, boarding podiums, recheck podiums, and dynamic signage cabinets Holdroom furnishings Passenger boarding bridges Airport-provided utilities for aircraft (i.e., preconditioned (PC) air, power, water) Facility Modifications. Modifications to existing facilities may be required to accommodate new passenger processing practices and new systems or assets implemented in the gate areas. Facility modifications could include Security checkpoints Hold rooms Check-in areas Bag screening areas Baggage make up areas Telecommunication rooms

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58 Reference Guide on Understanding Common Use at Airports Infrastructure pathways Passenger boarding bridges Services Outside services may be required to accommodate new passenger processing practices. These may include the following. Consultants and designers. Consultants and designers probably will be needed to provide the following support: Identifying maximum gate availability during peak-hour operations Addressing passenger processing challenges System design and implementation Counter configuration and signage design Assessing modifications needed Design and construction of modifications Contracts. Service contracts associated with the gate areas may include Common-use systems warranty and maintenance Janitorial services for holdrooms, FIS inspection area, jet bridges, ramps and walkways Wheelchair services Certifications. Certification requirements associated with the gate areas may include common-use passenger processing certification. Staff. Implementing common use will affect the airport operator's staff. The level of effect will reflect the scale and scope of the implementation. Executive Level. An executive staff member will be needed to serve as the project sponsor for the design and implementation of the common-use solution. Management Level. At the management level, two full-time positions may need to be created to address specific ongoing common-use related issues, if such responsibilities are not being met by the airport operator's current staff: A manager to provide oversight of new service development, policy and procedures development and enforcement, and design and implementation project management A manager to work with the airlines to accommodate business processes and understand passen- ger flow methodologies and to negotiate and manage contracts on behalf of the airport. In addition to the new positions that may need to be created, there will need to be involve- ment from the management level to define rates and charges specific to the common-use implementation. Operational Level. Operational staff members will be needed to provide design and instal- lation project support as well as the following: Participation in design reviews Daily operations of new services (e.g., management of gate assignments, monitoring of gate usage, monitoring and inspection of passenger boarding bridges, and maintaining communi- cations on an operational level with the airport operator's staff, airlines, and ground handlers) Maintenance of new assets Help desk support Legal counsel for liability issues Customer service support Marketing program development and implementation Environmental impact assessment and support

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Business Value Assessment 59 Financial support for account management Technology support for infrastructure and systems Security support for access control Beyond the costs associated with staff time, at the operational level there will be additional costs for staff training to provide the necessary program support. Intangibles. Implementing common use in the gate areas has intangible costs as well. Among these are Minimization of the unique branding capability of airlines Increased operational risk to the airlines because of the loss of control over system perfor- mance and functionality Increased risk to the airport operator because of the financial uncertainty during low utiliza- tion periods, liability for impact on airline operations, and liability for safety Flight and Baggage Information Display Systems This section addresses flight and baggage information display systems. For a detailed listing of cost breakdowns, see Appendix C1. Assets. Costs associated with new assets in support of the flight and baggage information display systems depend heavily on the scale and scope of the common-use implementation. These costs could include General IT infrastructure upgrades Flight and baggage information display system hardware and software components Millwork for information display cabinets Facility Modifications. Modifications to existing facilities may be required to accommodate new systems and assets implemented in support of the flight and baggage information display systems. Facility modifications may include Telecommunication rooms Infrastructure pathways Structural changes to the facility to support large-format displays Services Outside services may be required to accommodate new passenger processing practices. These may include the following. Consultants and designers. Consultants and designers probably will be needed to provide the following support: Conduct of studies to determine quantity and placement of information displays System design and implementation Assessment of modifications needed Design and construction of modifications Contracts. Service contracts associated with the flight and baggage information display sys- tems may include Common-use systems warranty and maintenance Display device warranty and maintenance Certifications. Technology systems that operate to an industry standard may require cer- tifications of the platforms and the applications in order for the solution to be considered a standard solution. These costs can affect both the airport operator and the airlines that use those solutions.

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60 Reference Guide on Understanding Common Use at Airports Staff. Implementing common use will affect the airport operator's staff. The level of effect will reflect the scale and scope of the implementation. Executive Level. An executive staff member will be needed to serve as the project sponsor for the design and implementation of the common-use solution. Management Level. At the management level, two full-time positions may need to be created to address specific ongoing common-use related issues, if such responsibilities are not being met by the airport operator's current staff: A manager to provide oversight of new service development, policy and procedures development and enforcement, and design and implementation project management A manager to work with the airlines to accommodate business processes and understand pas- senger flow methodologies and to negotiate and manage contracts on behalf of the airport In addition to the new positions that may need to be created, there will need to be involve- ment from the management level to define rates and charges specific to the common-use implementation. Operational Level. Operational staff members will be needed to provide design and instal- lation project support as well as the following: Participation in design reviews Daily operations of the flight and baggage information display system Maintenance of new assets Help desk support Customer service support Marketing program development and implementation Financial support for account management Technology support for infrastructure and systems Beyond the costs associated with staff time, at the operational level there will be additional costs for staff training to provide the necessary program support. Intangibles. Implementing a common-use flight and baggage information display system has intangible costs as well. Among these are Minimization of the unique branding capability of airlines Increased operational risk to the airlines because of the loss of control over system perfor- mance and functionality Increased risk to the airport because of the financial uncertainty during low utilization periods and liability for impact on airline operations Ramp Control Services This section addresses ramp control services. For a detailed listing of cost breakdowns, see Appendix C1. Assets. Costs associated with new assets in support of ramp control services depend heav- ily on the scale and scope of the common-use implementation. These costs could include Ramp control vehicles Gate management system User workstations Cabling infrastructure Backup generator Radio equipment

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Business Value Assessment 61 Facility Modifications. Modifications to existing facilities may be required to accommodate ramp control services. Facility modifications could include Ramp control tower construction Gate modifications Infrastructure pathways Extension of systems from the terminal Services Outside services may be required to accommodate new passenger processing practices. These may include the following. Consultants and designers. Consultants and designers probably will be needed to provide the following support: Evaluation of the opportunity to take over ramp control Definition of ramp control stakeholder requirements, operating agreements and procedures System design, installation, and configuration Assessment of modifications needed Design and construction of modifications Contracts. Depending on the airport operator's management strategy, the airport operator may choose to provide the full ramp control operation with in-house staff or use a combination of in-house staff and contract staff to provide ramp control services. Certifications. Technology systems that operate to an industry standard may require cer- tifications of the platforms and the applications in order for the solution to be considered a standard solution. These costs can affect both the airport operator and the airlines that use those solutions. Staff Implementing common use to any degree will affect the airport operator's staff. The level of effect will reflect the scale and scope of the implementation. Executive Level. The executive level staff must provide direction in the assumption of ramp control services and probably will need to attend meetings to address the following key issues: Assumption of ramp control services Definition of ramp control stakeholder requirements, operating agreements and procedures Once beyond the planning phase, an executive staff member will need to oversee the design project as the project sponsor. Management Level. At the management level, five full-time positions may need to be created to address specific ongoing ramp-control-related issues, if such responsibilities are not being met by the airport operator's current staff: A manager to provide ramp control management, policy and procedures development and enforcement, and design and implementation project management Three controllers (to cover three shifts) to coordinate and administer ramp control and gate management and serve as the liaison for the airport operations staff, tenants, and the FAA Air- port Traffic Control Tower for administering flow management staging of departing aircraft and strategic gate management for arriving aircraft A manager to work with the airlines to accommodate business processes, understand standards for aircraft movement and separation, and handle labor contract issues

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62 Reference Guide on Understanding Common Use at Airports Operational Level. Operational staff members will be needed to provide design and instal- lation project support as well as the following: Daily operations of monitoring ramp operations (may be full-time airport operator's staff or contract) Maintenance of gate striping Maintenance of new assets Help desk support Legal counsel for liability issues Financial support for account management Technology support for infrastructure and systems Security support for closed-circuit television (CCTV) and access control Beyond the costs associated with staff time, at the operational level there will be additional costs for staff training to provide the necessary program support. Intangibles. Taking over ramp control services has intangible costs as well. Among these are Increased operational risk to the airlines because of the loss of control over ramp control operations Increased risk to the airport because of the liability for impact on airline operations and lia- bility for safety Labor issues between the airport operator, airline, and others sharing ramp control facilities and services Ground Handling/Ramp Services This section addresses ground handling and ramp services. This section assumes that the air- port operator will contract out the actual ground handling and ramp services work and will not require procurement of any real assets. If an airport operator chose to provide these services using airport-owned assets, those costs would have to be accounted for. For a detailed listing of cost breakdowns, see Appendix C1. Assets. No costs have been identified. Facilities Modifications. No costs have been identified. Services Outside services may be required to accommodate new passenger processing practices. These may include the following. Consultants and designers. Consultants probably will be needed to provide the following support: Evaluation of the opportunity to take over ground handling services Definition of ground handling stakeholder requirements, operating agreements and procedures Contracts. The most likely scenario for an airport providing ground handling services would be through an outsourced contract. Contracted services may include Air starter and ground power units Baggage handling Catering handling Aircraft cleaning Aircraft de-icing