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OCR for page 63
Business Value Assessment 63
· Lavatory maintenance
· Liaison with fuel suppliers
· Push back and towing
· Steps and air bridge service
· Water service
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 ground
handling services and probably will need to attend meetings to address the following key issues:
· Assumption of ground handling services
· Definition of ground handling stakeholder requirements, operating agreements and procedures
Management Level. At the management level, two full-time positions may need to be created
to address specific ongoing issues related to ground handling, if such responsibilities are not
being met by the airport operator's current staff:
· A manager to provide ground handling contract management and policy and procedures
development and enforcement
· A manager to work with the airlines to accommodate business processes
Operational Level. Operational staff members will be needed to provide the following:
· Legal counsel for liability issues.
· Financial support for account management.
Intangibles. Taking over ground handling services has intangible costs as well. Among these are
· Increased operational risk to the airlines because of the loss of control over ground handling
performance and functionality
· Increased risk to the airport because of the liability for impact on airline operations and
liability for safety.
Cost-Benefit Breakdown by Business Driver
The business driver or motive behind considering common use dictates the type of strategy
that may be appropriate. Each strategy has potential costs based on the elements or functions
that may be implemented. In addition, each strategy has primary and secondary benefits that
may be achieved. The primary benefits will result from the business driver specifically and the
secondary benefits will come as a result of intrinsic factors associated with the solution imple-
mented. In order to provide a thorough understanding of the potential cost factors affecting each
strategy, this section refers to the previous section for each of the common-use areas included.
Within this section, the primary benefits associated with each strategy are discussed in detail. The
secondary benefits achieved under each strategy are presented in greater detail in Appendix C2.
These benefits reflect a range of potential benefits that may be realized for each given strategy.
Not all benefits will necessarily be realized for each implementation based on varying circum-
stances. Additional benefits, not included here, may be realized.
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64 Reference Guide on Understanding Common Use at Airports
The ten strategies discussed here are as follows:
1. Maximize Existing Facility Utilization
2. Avoid or Defer Construction
3. Avoid or Defer Other Capital Costs
4. Maximize Facility Flexibility
5. Decrease Airport Cost of Doing Business
6. Decrease Airline Cost of Doing Business
7. Improve Quality of Service to Airlines
8. Improve Quality of Service to Passengers
9. Increase Opportunities for Airlines to Add or Expand Service
10. Gain a Competitive Advantage over Other Airports
Maximize Existing Facility Utilization
To maximize the existing facility utilization, an airport operator should consider the current
use of the facilities and the types of airlines operating there. This would include considering hub
versus non-hub operations, as well as frequency of flights and saturation of gate utilization. The
airport operator could consider implementing common use at as many gates, check-in counters,
flight information displays, baggage areas, kiosks, and curb-side locations as feasible and
assuming responsibility for providing ramp control and ground handling services for common-
use areas.
To determine if common use would provide sufficient value toward satisfying this motive, the
airport operator should compare the costs associated with implementing common use with the
benefit derived from the possible increased utilization. Although increased utilization is the pri-
mary benefit sought under this business driver, various secondary benefits may be recognized.
Costs
Potential costs associated with implementing common use so as to maximize the existing
facility utilization are described in detail in the previous section within the following areas:
· Planning and Design
· Terminal Check-in Areas
· Curbside Check-in
· Flight and Baggage Information Display Systems
· Gate Areas
· Ramp Control Services
· Ground Handling/Ramp Services
Benefits
The primary benefits of maximizing existing facility utilization are as follows:
· Creation of a competitive advantage for the airport operator by increasing the potential for
airlines currently at the airport to expand service in the airport and manage overflow flights
cost effectively
· Creation of cost savings and efficiency by enabling the airport operator to maintain greater
control of airport costs through optimization of current gates, which allows the airport oper-
ator to avoid or delay capital expenditures
· Resource maximization that allows constrained airports with low utilization for non-hub air-
lines to operate more efficiently, thereby enabling the airport operator to (1) reduce congestion
by distributing the arrivals and departures more evenly throughout the airport and (2) handle
airlines and passengers during future construction work
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Business Value Assessment 65
Avoid or Defer Construction
To avoid or defer construction of a new facility, an airport operator could consider imple-
menting common use at gate, check-in counter, and flight information display locations where
multiple airlines with a low level of daily utilization could be accommodated on a set of shared
gates, thereby increasing efficiency and alleviating the immediate demand for new facilities.
To determine if common use would provide sufficient value toward satisfying this motive,
the airport operator should compare the costs associated with implementing common use
with the savings derived from avoided or deferred construction projects. Although cost sav-
ings are the primary benefit sought under this business driver, various secondary benefits may
be recognized.
Costs
Potential costs associated with implementing common use so as to avoid or defer capital costs
specifically associated with new facility construction are described in the previous section within
the following areas:
· Planning and Design
· Terminal Check-in Areas
· Flight and Baggage Information Display Systems
· Gate Areas
Benefits
The primary benefits of avoiding or deferring new facility construction costs are as follows:
· Cost savings and/or increased efficiency by strategically placing common use in areas that
will permit the sharing of terminal check-in areas and gates by multiple airlines, resulting in
an increased capacity for current operations, holiday season spikes, scheduled charters, and
future growth without having to build new gates
· Resource maximization that allows constrained airports with low utilization for non-hub air-
lines to operate more efficiently
Avoid or Defer Other Capital Costs
To avoid or defer capital costs not specifically associated with construction of a new facility,
an airport operator could consider implementing common use at gate, check-in counter, flight
information display locations, and baggage areas to alleviate the need for infrastructure and sys-
tems replacements and significant renovations.
To determine if common use would provide sufficient value toward satisfying this motive, the
airport operator should compare the costs associated with implementing common use with the
savings derived from avoided or deferred non-construction capital projects. Although cost sav-
ings are the primary benefit sought under this business driver, various secondary benefits may
be recognized.
Costs
Potential costs associated with implementing common use so as to avoid or defer capital costs
not specifically associated with new facility construction are described in detail in the previous
section within the following areas:
· Planning and Design
· Terminal Check-in Areas
· Flight and Baggage Information Display Systems
· Gate Areas
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66 Reference Guide on Understanding Common Use at Airports
Benefits
The primary benefits of avoiding or deferring capital costs not associated with construction
are as follows:
· Cost savings and/or increased efficiency by reducing the capital requirements of infrastructure
and system replacements and facility renovations associated with accommodating airlines
starting new service, increasing service during peak or holiday seasons, terminating service, and
merging with other airlines
· Resource maximization that allows constrained airports with low utilization for non-hub air-
lines to operate more efficiently, thereby enabling the airport operator to (1) reduce congestion
by distributing the arrivals and departures more evenly throughout the airport and (2) handle
airlines and passengers during future construction work
Maximize Facility Flexibility
To maximize the existing facility flexibility, an airport operator could consider implementing
common use at as many gates, check-in counters, flight information displays, baggage areas,
kiosks, and curb-side locations as feasible and assuming the responsibility for providing ramp
control and ground handling services for common-use areas.
To determine if common use would provide sufficient value toward satisfying this motive, the
airport operator should compare the costs associated with implementing common use to the
benefit gained from increased flexibility. Although increased flexibility is the primary benefit
sought under this business driver, various secondary benefits may be recognized.
Costs
Potential costs associated with implementing common use to maximize facility flexibility are
described in detail in the previous section within the following areas:
· Planning and Design
· Terminal Check-in Areas
· Curbside Check-in
· Gate Areas
· Flight and Baggage Information Display Systems
· Ramp Control Services
· Ground Handling and Ramp Services
Benefits
The primary benefits of maximizing facility flexibility are as follows:
· Increased operational flexibility, thereby allowing the airport operator to control how check-
in counters and gates are being used. This enhances the airport's ability to respond to irregular
operations, peaks due to seasonal air traffic, and consolidation due to airline mergers
· Enablement of the airport operator to accommodate new business in a more timely and cost
effective manner for both the airport operator and the airline due to the lack of need for facil-
ity, infrastructure, and system modifications
Decrease Airport Cost of Doing Business
To decrease the airport's cost of doing business, an airport operator could consider imple-
menting common use at gates, check-in counters, flight information displays, baggage areas,
kiosks, and curb-side locations where operational cost reductions can be shown.
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Business Value Assessment 67
To determine if common use would provide sufficient value toward satisfying this motive, the
airport operator should compare the costs associated with implementing common use to the
savings realized from increased efficiency of airport operations. Although operational costs sav-
ings for the airport are the primary benefit sought under this business driver, various secondary
benefits may be recognized.
Costs
Potential costs associated with implementing common use in order to decrease the cost of
doing business for airport operators are described in detail in the previous section within the
following areas:
· Planning and Design
· Terminal Check-in Areas
· Curbside Check-in
· Flight and Baggage Information Display Systems
· Gate Areas
Benefits
The primary benefits of decreasing the airport operator's cost of doing business are as follows:
· Potential cost savings because the airport operator can optimize gate and check-in counter
usage, thereby enabling the temporary shutdown of a concourse during a downturn in air traf-
fic or the delay of capital expenditures associated with new construction
· Standardization of equipment for the airport operator, thereby resulting in lower acquisition
and maintenance costs
· Cost savings as a result of reducing the capital requirements of infrastructure and system
replacements and facility renovations associated with accommodating airlines' starting new
service, increasing service during peak or holiday seasons, terminating service, and merging
with other airlines
Decrease Airline Cost of Doing Business
To decrease the cost of doing business for airlines, an airport operator could consider imple-
menting common use at gates, check-in counters, flight information displays, baggage areas,
kiosks, and curb-side locations and assuming responsibility for providing ramp control and
ground handling services for common-use areas where airlines believe operational cost reduc-
tions can be shown. Typically, this would include gates in a specific terminal area that can be
easily serviced by a specific check-in counter area through which multiple airlines with low
utilization could be accommodated.
To determine if common use would provide sufficient value toward satisfying this motive, the
airport operator should compare the costs associated with implementing common use with the
savings realized from increased efficiency of airline operations. Although operational costs sav-
ings for the airlines is the primary benefit sought under this business driver, various secondary
benefits may be recognized.
Costs
Potential costs associated with implementing common use so as to decrease the cost of
doing business for airlines are described in detail in the previous section within the follow-
ing areas:
· Planning and Design
· Terminal Check-in Areas
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68 Reference Guide on Understanding Common Use at Airports
· Curbside Check-in
· Gate Areas
· Flight and Baggage Information Display Systems
· Ramp Control Services
· Ground Handling and Ramp Services
Benefits
The primary benefits of decreasing the airlines' cost of doing business are as follows:
· Potential cost savings because the airport operator can optimize gate and check-in counter usage,
thereby enabling the avoidance or delay of capital expenditures associated with new construction
· Cost savings resulting from reducing the capital requirements of infrastructure and system
replacements and facility renovations associated with accommodating airlines starting new
service, increasing service during peak or holiday seasons, terminating service, and merging
with other airlines
· Cost savings for both domestic and international carriers with a low number of flights per day
by enabling them to pay for only the resources that they need, including shared gate and
check-in counter usage, baggage systems, communications infrastructure, passenger process-
ing equipment, and technical support
· Potential cost savings for carriers with a large number of flights per day by enabling them to
accommodate overflow flights efficiently, reduce the number of gates required as operations
change, and sublease gate and check-in counter time when not needed
Improve Quality of Service to Airlines
To improve the quality of service provided to the airlines, an airport operator could consider
implementing common use at gates, check-in counters, flight information displays, baggage
areas, kiosks, curb-side locations, and off-site check-in locations and assuming the responsibility
for providing ramp control and ground handling services for common-use areas where airlines
believe an increased quality of service can be achieved.
To determine if common use would provide sufficient value toward satisfying this motive, the
airport operator should compare the costs associated with implementing common use to the
benefit gained from increased quality of service to the airlines. Although increased quality of
service for the airlines is the primary benefit sought under this business driver, various secondary
benefits may be recognized.
Costs
Potential costs associated with implementing common use so as to improve the quality of ser-
vice to airlines are described in detail in the previous section within the following areas:
· Planning and Design
· Terminal Check-in Areas
· Curbside Check-in
· Off-site Check-in Operations
· Gate Areas
· Flight and Baggage Information Display Systems
· Ramp Control Services
· Ground Handling and Ramp Services
Benefits
The primary benefits of improving the quality of service to airlines are as follows:
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Business Value Assessment 69
· Improved customer service for the airlines by improving control over ground handling oper-
ations airport-wide, thereby creating greater organization and reducing the need for airlines
to manage ground handling contractors, improving baggage handling performance in airports
with congested baggage systems, providing greater ramp control, enabling more timely tech-
nical support, and creating new opportunities for curbside services.
· Improved flexibility and convenience for the airlines by enabling airlines to move within the
airport if desired, making it easier and more cost-effective for an airline to start new service,
allowing operational expansion and reduction capabilities, better facilitating irregular opera-
tions and seasonal air traffic, and creating less disruption to airlines during future construc-
tion work.
· Minimized risk to airlines by reducing the requirement for airlines to lock into a long-term
agreement.
Improve Quality of Service to Passengers
To improve the quality of service provided to the passengers, an airport operator could con-
sider implementing common use at gates, check-in counters, flight information displays, baggage
areas, kiosks, curb-side locations, and off-site check-in locations where the airport operator and/
or the airlines believe an increased quality of service can be provided to the traveling public.
To determine if common use would provide sufficient value toward satisfying this motive,
the airport operator should compare the costs associated with implementing common use with
the benefit gained from increased quality of service to the passengers. Although increased qual-
ity of service for the passengers is the primary benefit sought under this business driver, various
secondary benefits may be recognized.
Costs
Potential costs associated with implementing common use in order to improve the qual-
ity of service to passengers are described in detail in the previous section within the follow-
ing areas:
· Planning and Design
· Terminal Check-in Areas
· Curbside Check-in
· Off-site Check-in Operations
· Flight and Baggage Information Display Systems
· Gate Areas
Benefits
The primary benefits of improving the quality of service to passengers are as follows:
· A more convenient check-in process resulting from the creation of alternatives for check-in
through curbside services, self-service kiosks, and reductions in wait times due to the ability
to add check-in counter space as needed
· Greater availability of information through common-use flight and baggage information sys-
tems and dynamic signage
· Fewer gate changes because of irregular operations
· Improved performance in baggage handling at airports with constrained baggage systems
· Greater quality control over skycap and janitorial services
· A more pleasant environment for passengers as a result of a standardized look and feel within
the airport, reduced congestion as a result of balancing arrivals and departures throughout the
airport, and less disruption during future construction work
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70 Reference Guide on Understanding Common Use at Airports
Increase Opportunities for Airlines to Add or Expand Service
To increase the opportunities for airlines to add or expand existing service to an airport,
an airport operator could consider implementing common use at gates, check-in counters,
and flight information displays to enable expansion of utilization by existing carriers and
new service for new carriers. Typical locations would include shoulder gates and counters
for existing carriers likely to expand and small blocks of gates and counters to attract new
carriers.
To determine if common use would provide sufficient value toward satisfying this motive, the
airport operator should compare the costs associated with implementing common use with the
benefit gained from increased utilization from existing and new carriers. Although increased uti-
lization is the primary benefit sought under this business driver, various secondary benefits may
be recognized.
Costs
Potential costs associated with implementing common use in order to expand opportu-
nities for airlines to enter the market are described in detail in the previous section within the
following areas:
· Planning and Design
· Terminal Check-in Areas
· Flight and Baggage Information Display Systems
· Gate Areas
Benefits
The primary benefits of increasing opportunities for airlines to add or expand service are as
follows:
· Airlines can enter the market more rapidly, test the market, and grow operations with mini-
mal capital outlay for facility, systems, and infrastructure modifications.
· Cost savings for both domestic and international carriers with a low number of flights per day
by enabling them to pay for only the resources that they need, including shared gate and
check-in counter usage, baggage systems, communications infrastructure, passenger process-
ing equipment, and technical support.
· Expansion of services by carriers with a large number of flights per day by enabling them to
efficiently accommodate overflow flights and seasonal spikes in air traffic without needing to
pay for dedicated gate and check-in counter space.
· Minimized risk to airlines by reducing the requirement for airlines to lock into a long-term
agreement.
Gain a Competitive Advantage over Other Airports
To gain a competitive advantage over other airports, an airport operator could consider
implementing common use at gates, check-in counters, flight information displays, baggage
areas, kiosks, curb-side locations, and off-site check-in locations and assuming the responsibility
for providing ramp control and ground handling services for common-use areas to create a com-
bination of cost savings, flexibility, quality of service, and expansion of utilization capabilities so
as to attract passengers and airlines from competing airports.
To determine if common use would provide sufficient value toward satisfying this motive, the
airport operator should compare the costs associated with implementing common use with the
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Business Value Assessment 71
benefit gained from additional carriers and passengers. Although an increase in carriers and/or
passengers is the primary benefit sought under this business driver, various secondary benefits
may be recognized.
Costs
Potential costs associated with implementing common use in order to gain a competitive
advantage over other airports are described in detail the previous section within the following areas:
· Planning and Design
· Terminal Check-in Areas
· Curbside Check-in
· Off-site Check-in Operations
· Gate Areas
· Flight and Baggage Information Display Systems
· Ramp Control Services
· Ground Handling and Ramp Services
Benefits
The primary benefits of gaining a competitive advantage over other airports are as follows:
· Reduced barriers to entry and expansion for airlines by enabling airlines to enter the market
more rapidly, test the market, and grow operations with minimal capital outlay for facility,
systems, and infrastructure modifications
· Cost savings for both domestic and international carriers with a low number of flights per day
by enabling them to pay for only the resources that they need, including shared gate and
check-in counter usage, baggage systems, communications infrastructure, passenger process-
ing equipment, and technical support
· Expanded services by carriers with a large number of flights per day by enabling them to effi-
ciently accommodate overflow flights and seasonal spikes in air traffic without needing to pay
for dedicated gate and check-in counter space
· Minimized risk to airlines by reducing the requirement for airlines to lock into a long-term
agreement
· Greater quality of service for the airlines by creating customer service improvements to the
airlines by improving control over ground handling operations airport-wide thereby creating
greater organization and reducing the need for airlines to manage ground handling contrac-
tors, improving baggage handling performance in airports with congested baggage systems,
providing greater ramp control, enabling more timely technical support, and creating new
opportunities for curbside services
· Improved flexibility and convenience for airlines by enabling airlines to move within the airport
if desired, making it easier and more cost-effective for an airline to start new service, allowing
operational expansion and reduction capabilities, better facilitating irregular operations and
seasonal air traffic, and creating less disruption to airlines during future construction work
· Minimized risk to airlines by reducing the need for airlines to lock into a long-term agreement
· Greater quality of service to the passengers through a more convenient check-in process as a
result of creating alternatives for check-in through curbside services, self-service kiosks, and
reductions in wait times because of the ability to add check-in counter space as needed.
· Greater availability of information and navigation through common-use flight and baggage
information systems and dynamic signage
· Reduced gate changes due to irregular operations
· Improved performance in baggage handling at airports with constrained baggage systems
· Greater quality control over skycap and janitorial services
