Resource Guide to Airport Performance Indicators (2011)

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.

ACRP Report 19A: Resource Guide to Airport Performance Indicators is the third in a series of Air- port Cooperative Research Program (ACRP) publications designed to provide airports with tools for developing and implementing strategic planning and performance-measurement systems. ACRP Report 19A, the product of ACRP Project 01-09, has gathered into one place an extensive and categorized set of airport performance indicators (APIs) from which airports can select specific APIs to use in benchmarking, an important component of a successful performance- measurement system. Part 1 of this Resource Guide describes the process through which the APIs were developed, explains the system of categorization used to organize and present the APIs, and provides an overview of the Resource Guide itself. Part 2 presents descriptions of the APIs grouped by functional area and level of importance along with providing a short introduction to each functional area. Part 3 of the Resource Guide provides additional resources, including a glossary of terms, a bibliography, and an alphabetized index of APIs. To meet the needs of a variety of users, this Resource Guide is provided in print and as a hyper- linked PDF on CD-ROM (CRP-CD-94: Interactive Resource Guide for ACRP Report 19A). The print version will be useful to those who wish to read the material straight through or to obtain a more comprehensive understanding of the full array of APIs within each functional area. The hyper- linked electronic version will be useful for those who wish to quickly and easily find related APIs and groups of APIs. Types of Airport Performance Indicators In this Resource Guide, three categories of APIs are presented (see Exhibit 1): • Core APIs: Important for airport overall operation or otherwise important to the airport executive level (CEO and Aviation Director) and/or the airport’s governing board • Key (Departmental) APIs: Important for the operations of key airport departments or func- tions (e.g., Finance and Maintenance) • Other APIs: Not considered as useful for airport overall operation, to the executive level, or to key airport departments/functions. However, these APIs can be useful as secondary depart- mental unit APIs at or below the manager level Depending on the circumstances of an airport at a given time, APIs may transition among the categories of Core, Key, and Other. For example, Key and Other APIs dealing with fuel discharges may rise to the level of Core APIs after a significant discharge, particularly if it attracts media attention. Although some Core and Key APIs will apply to nearly all airports, others will be more limited. For example, APIs using Passengers as the denominator of the ratio (e.g., Concession Revenue to 1 S E C T I O N 1 Overview

the Airport per Enplanement), will not be applicable to general aviation airports and cargo airports. Some other indicators useful for commercial service airports will not apply to gen- eral aviation airports with different traffic bases, funding sources, and clientele. Among com- mercial service airports, larger airports will focus on different APIs than smaller airports. Even among airports with similar characteristics, managers will have different views on which APIs are most important, and over time these views are likely to change as new issues and challenges arise. These divergences are illustrated by poll results at two workshops conducted for ACRP Proj- ect 01-09, one held in Miami, Florida, and the other in Dallas, Texas. At the Miami workshop, there was 100% agreement on the classification of only a single indicator (out of 33 Core APIs and 50 Key APIs): Airline Cost per Enplanement. Everyone agreed it should be a Core API. At the Dallas workshop, there was not unanimity on the classification of any of the APIs polled. Individual airport managers will also take different approaches regarding the number of APIs to be used. Some will be comfortable using 20 or more Core APIs; others will be comfortable with less than 10. At the Miami workshop, the largest group of respondents thought airports should use between 11 and 20 Core APIs; the Dallas participants thought 6 to 10 Core APIs was optimal. See Exhibit 2 for a graph illustrating the results of the workshop polls. These considerations indicate that each airport director and manager will likely develop his/her own set of APIs. The function of this Resource Guide is to suggest choices airport man- 2 Resource Guide to Airport Performance Indicators Core APIs: Important for airport overall operation or otherwise important to the airport executive level (CEO and Aviation Director) and/or the airport’s governing board Key (Departmental) APIs: Important for the operations of key airport departments or functions (e.g., Finance and Maintenance) Other APIs: Not considered as useful for airport overall operation, to the executive level, or to key airport departments/ functions. However, can be useful as secondary departmental unit APIs, at or below the manager level Core (29) Key (132) Other (679) Exhibit 1. Core, Key, and Other APIs. % o f r es po nd en ts a gr ee in g 0% 10% 20% 30% 40% 50% ≤5 6–10 11–20 21–30 31–40 41–50 > 50 Miami Workshop Dallas Workshop Number of core APIs airports should use Exhibit 2. Results of workshop polls on the number of core APIs an airport should use.

agers and other airport professionals will find useful. It does not, of course, “mandate” APIs for use at individual airports. The Research Team’s recommended Cores and Keys are just that— recommendations—to be employed and modified according to each user’s particular need. Selection of Airport Performance Indicators The process of selecting, categorizing, and analyzing individual APIs involved extensive research, interviews with over 40 industry experts, and two industry workshops where more than 75 participants evaluated dozens of APIs. The Research Team began by scouring articles, airport annual reports, strategic plans and budgets, and other information on airport performance measures, compiling an extensive list of APIs. This initial research work was accompanied by an outreach effort to trade associations, government agencies, and other experts in the field. This initial round of research produced a list of over 1,000 APIs. For each API, the Research Team collected preliminary information on the following: • Functional area (34 areas were originally developed, but were later reduced to 23) • Data sources • Ease or difficulty in obtaining data • Types of airports likely to be interested in the API The initial API list was reduced to 782, eliminating duplicates and near-duplicates. The surviving APIs were then divided into the following groups: • 100 APIs for consideration as possible Core APIs • 563 APIs for consideration as possible Key (Departmental) APIs • 119 APIs not warranting consideration as potential Core or Key APIs but of possible use as secondary departmental unit APIs After initial ACRP Project Panel review and comment, the Team reduced the Core and Key APIs to a more manageable number and presented its initial recommendations to the Project Panel—a set of 33 Core APIs and 150 Key APIs. These numbers were eventually reduced to the 29 Core APIs and 132 Key APIs found in this Resource Guide. The remaining APIs were put in the “Other” category and retained for future use; most were ultimately included in this Resource Guide as Other APIs. For each of the recommended Core and Key APIs, the Research Team developed a one-page description similar to those included in this Resource Guide with the following information: • Functional area • Name • Definition • Data sources • Applicability • Comments on usefulness in benchmarking and other issues After its initial recommendations for Core and Key APIs, the Research Team continued refin- ing the APIs and the one-page descriptions for each API. Feedback was obtained through tele- phone interviews with experts and the previously mentioned workshops in Miami and Dallas. Comments were solicited on the following: • Which APIs are most useful • Which APIs are less useful Overview 3

• Additional APIs to consider • Insights into data and definitional issues The workshop in Miami was held in conjunction with the ACI-NA Economics and Finance Con- ference in May 2010. Most of the 24 participants were chief financial officers (CFOs) of medium and large airports. The workshop in Dallas was held during the AAAE Annual Conference. Most of the 51 participants were operationally focused and from the full range of airport sizes; the workshop included at least 10 participants from general aviation airports. The two groups individually and together were not intended to be statistically representative of U.S. airports. Each of the recommended Core API templates was presented on a large screen and reviewed with the audience. The audience was asked whether each Core API should remain a Core API or be recategorized as Key or Other API. The Key APIs were reviewed in similar fashion. However, to allow more time for discussion, at the Dallas workshop, the Research Team presented lists of Key APIs grouped by function, prompt- ing comments from workshop participants on which APIs they thought were particularly useful and whichoneswerenot.Forthe more finance-oriented ACI-NA audience, the Research Team presented seven groups of Key APIs of most interest to that particular audience. For the more operations- oriented AAAE group, the Research Team presented 10 of the remaining groups of Key APIs. The electronic polling system used by the Research Team allowed each member of the audi- ence to key in his/her preference on an electronic keypad, including comments and reactions to individual APIs. The results were immediately displayed in numeric and graphic form. The Research Team was provided with a complete tally of the polling results after each workshop. Well over 120 airport professionals, including many leading practitioners of airport per- formance measurement, reviewed the APIs recommended in this Resource Guide. This review combined with the Research Team’s own expertise and judgment produced the 29 Core APIs, 132 Key APIs, and 679 Other APIs included herein. Ultimately, of course, the Research Team is responsible for the selection and content of the APIs recommended in this Research Guide. Core, Key, and Other Airport Performance Indicators Core Airport Performance Indicators Twenty-nine Core APIs are listed below and fully explained in Part 2 of this Resource Guide. Because of their importance, the Core APIs received the most detailed scrutiny from the Research Team and industry experts. Most airports are expected to use a number of these Core APIs, prob- ably in combination with some Key APIs and Other APIs that particularly fit their organization’s needs. Some airport managers may conclude that focusing on only a handful of Core APIs is the best way to address their most critical performance issues. Circumstances may force an API nor- mally of interest only at the department head level (a Key API) or even the manager level (Key APIs and Other APIs) into the spotlight and for a time make it a Core API. The 29 Core APIs listed below fall within 11 functional areas, which are among the 23 functional areas used to classify the larger set of Key and Other APIs. While all of the Core APIs fall within one of the 23 functional areas, not every functional area has an API that rises to Core API status. See Exhibit 3 for the complete list of Core APIs together with the two-letter designator for each functional area and the number of each individual API. Different types of airports will use different APIs. Exhibit 4 lists possible subsets of Core APIs for commercial service, general aviation, and cargo airports. These recommended APIs are sug- gestions, to be modified based on each user’s needs. 4 Resource Guide to Airport Performance Indicators Core APIs are performance indi- cators that are important for over- all airport operation or otherwise important to the airport executive level (CEO and Aviation Director) and/or the airport’s governing board.

Overview 5 Core # Airfield Operations Aircraft Operations ................................................................................................ AO C-1 Air Service Cargo Tons – Change over Prior Period................................................................ AS C-2 Enplanements – Change over Prior Period ............................................................ AS C-3 Nonstop Destinations – Change in Number of Domestic & International ............ AS C-4 Passenger Flights – Change in Number of Domestic & International................... AS C-5 Concessions Concession Revenue to the Airport as % of Total Operating Revenue................. CN C-6 Concession Revenue to the Airport per Enplanement ........................................... CN C-7 Rental Car Revenue to the Airport per Destination Passenger .............................. CN C-8 Financial Airline Cost per Enplanement ............................................................................... FN C-9 Airport Cost per Enplanement ............................................................................... FN C-10 Bond Rating........................................................................................................... FN C-11 Days Unrestricted Cash on Hand........................................................................... FN C-12 Debt per Enplanement ........................................................................................... FN C-13 Debt Service Coverage Ratio................................................................................. FN C-14 Non-Aeronautical Operating Revenue as % of Total Operating Revenue ............ FN C-15 Non-Aeronautical Operating Revenue per Enplanement ...................................... FN C-16 Operating Cost per Enplanement........................................................................... FN C-17 General Aviation Based Aircraft........................................................................................................ GA C-18 Fuel Use/Sales – Change over Prior Period........................................................... GA C-19 Hangar Rental and Ground Lease Income............................................................. GA C-20 Human Resources M/W/DBE Participation Rate; Actual vs. Cost ..................................................... HR C-21 Salary + Wages + Benefits Cost as % of Total Operating Cost ............................ HR C-22 Salary + Wages + Benefits Cost per Airport Employee ........................................ HR C-23 Parking Parking Revenue to the Airport per Originating Passenger................................... PK C-24 Planning/Construction Construction Projects – Actual vs. Budgeted Costs of Significant Projects.......... PL C-25 Properties/Contracts Landing Fee Rate................................................................................................... PC C-26 Safety/Risk Management Employee Accidents and Injuries – Lost Work Days............................................ SR C-27 Runway Incursions ................................................................................................ SR C-28 Service Quality Customer Satisfaction with Airport ....................................................................... SQ C-29 Exhibit 3. Core APIs by functional area and number. Key (Departmental) Airport Performance Indicators This Resource Guide contains an extensive set of Key (Departmental) APIs, which are APIs important for the operations of key departments (e.g., Finance and Maintenance) or functions (e.g., energy management and safety/risk management). All 132 Key APIs are listed in Part 2 of this report. As with the Core APIs, a one-page description of each Key API is provided in Part 2. Key APIs are provided for each of the 23 functional areas. The two-letter designator for each functional area is listed as well as the number of each individual API. The functional areas, the two-letter designator for each area, and the number of Core, Key, and Other APIs within each functional area are listed in Exhibit 5. Key (Departmental) APIs are perform- ance indicators that are important for the operations of key departments (e.g., Finance and Maintenance) or functions (e.g., energy manage- ment and safety/ risk management).

Other Airport Performance Indicators All the 679 Other APIs fall into one of the 23 functional categories previously listed for Key APIs. A list of Other APIs in each category, along with definitions, is included in Part 2 of this Resource Guide. Navigating the Resource Guide The heart of this Resource Guide is Part 2: Airport Performance Indicators Categorized by Functional Area and Type, which lists all the APIs, introduces each of 23 API functional areas, includes one-page descriptions of each Core and Key API, and provides cross-referencing infor- mation. This Resource Guide features several navigation aids to help the user. Each API is designated by a two-letter code indicating the functional area to which it belongs, a one-letter code designating whether it is a Core, Key, or Other API, and a number for easy ref- erence. The following describes this system in more detail. 6 Resource Guide to Airport Performance Indicators # Core Indicator C-1 Aircraft Operations C-2 Cargo Tons –Change over Prior Period C-3 Enplanements –Change over Prior Period C-4 Nonstop Destinations –Change in Number of Domestic & International C-5 Passenger Flights –Change in Number of Domestic & International C-6 Concession Revenue to the Airport as % of Total Operating Revenue C-7 Concession Revenue to the Airport per Enplanement C-8 Rental Car Revenue to the Airport per Destination Passenger C-9 Airline Cost per Enplanement C-10 Airport Cost per Enplanement C-11 Bond Rating C-12 Days Unrestricted Cash on Hand C-13 Debt per Enplanement C-14 Debt Service Coverage Ratio C-15 Non-Aeronautical Operating Revenue as % of Total Operating Revenue C-16 Non-Aeronautical Operating Revenue per Enplanement C-17 Operating Cost per Enplanement C-18 Based Aircraft C-19 Fuel Use/Sales –Change over Prior Period C-20 Hangar Rental and Ground Lease Income C-21 M/W/DBE Participation Rate; Actual vs. Cost C-22 Salary + Wages + Benefits Cost as % of Total Operating Cost C-23 Salary + Wages + Benefits Cost per Airport Employee C-24 Parking Revenue to the Airport per Originating Passenger C-25 Construction Projects –Actual vs. Budgeted Costs of Significant Projects C-26 Landing Fee Rate C-27 Employee Accidents and Injuries-Lost Work Days C-28 Runway Incursions C-29 Customer Satisfaction with Airport Commercial Service General Aviation Cargo Exhibit 4. General applicability of Core APIs to different airport types. Other APIs are per- formance indica- tors not considered as useful as Core or Key APIs for overall airport operation, to the executive level, or to key departments/ functions. How- ever, they will be useful as secondary departmental indi- cators, for exam- ple, at or below the manager level. In special circum- stances, individual Other APIs may rise to the level of Key or Core APIs.

Indicating Functional Area and Type of Airport Performance Indicator Each API is assigned to one of 23 functional areas designated by a two-letter code. Func- tional areas and their two-letter codes are presented in Exhibit 6. In addition to the two-letter code indicating functional area, each API is encoded to indicate its status as a Core, Key, or Other API: • Core APIs are designated with a “C” • Key APIs are designated with a “K” • Other APIs are assigned an “O” As an example, AS C-2 is a Core API in the functional area of Air Service. Numbering of Airport Performance Indicators The 29 Core APIs are numbered consecutively regardless of the functional area they fall within. The first Core API falls within the functional area of Airfield Operations and therefore is numbered AO C-1. Key and Other APIs are numbered consecutively beginning with K-1 and O-1. Therefore, the first Key API within the functional area of Airfield Operations is numbered AO K-1; the first Other API in that functional area is numbered AO O-1. Within each functional area, the Core, Key and Other APIs are listed alphabetically. For exam- ple, in the functional area of Airfield Operations, Key APIs are listed as shown in Exhibit 7. Overview 7 Number of APIs Department/Function Code Core Key Other Airfield Operations AO 1 6 22 Air Service AS 4 6 35 ARFF AR 5 15 Cargo CA 5 32 Concessions CN 3 4 38 Energy Management EN 8 32 Environmental EV 11 45 Financial FN 9 11 127 Fuel FL 1 17 General Aviation GA 3 1 3 Grants GR 3 5 Human Resources HR 3 10 39 Information Technology IT 2 21 Legal LG 2 9 Maintenance MN 6 40 Parking PK 1 7 18 Planning/Construction PL 1 4 24 Police/Security PS 7 44 Properties/Contracts PC 1 5 17 Public Affairs PA 4 8 Safety/Risk Management SR 2 10 31 Service Quality SQ 1 11 45 Terminal Operations TO 3 12 29 132 679 Exhibit 5. Number of APIs by function and type.

Functional Area Introductions Each functional area contains a one-page introduction with the following elements: • Brief description of the purpose of typical performance measures in that functional area • Listing of Core and Key indicators in that functional area • Listing of related Core and Key indicators in other functional areas • Listing of functional areas of Other APIs to see • Brief comments on major issues frequently encountered in that functional area A sample one-page functional area introduction is shown in Exhibit 8. One-Page Descriptions of Core and Key Airport Performance Indicators For each of the 29 Core and 132 Key APIs, a one-page description is provided. Each descrip- tion includes the following: • API Name • Definition • Data sources • Types of airports to which the API is applicable • Comments regarding the usefulness and limitations of the API, including whether it is useful for peer airport benchmarking or mainly for self-benchmarking over time • In some cases, examples of the API that show its use for benchmarking Exhibit 9 shows an example of an API description, in this case for the Core API Airline Cost per Enplanement. The API’s elements and other useful information are highlighted in the Com- ments section of the description. This Resource Guide refers users to FAA Form 127 and the ACI-NA Benchmarking Survey as data sources, as well as to other sources such as the airport’s own records. Form 127 is available to all. The ACI-NA Survey is widely used, but only ACI members who participate in the survey have access to it. The ACI-NA Survey includes more categories and definitions than does Form 127. In some cases, Form 127 and ACI-NA Survey definitions differ, but an industry effort is currently underway to reconcile the two. Self-Benchmarking and Peer Benchmarking Airport benchmarking consists of two separate activities: (1) self-benchmarking, in which the airport measures its own performance over time, and (2) peer benchmarking, in which the air- port measures its performance against the performance of airports with similar characteristics (“peers”), against an industry standard, or against an industry “best practice.” 8 Resource Guide to Airport Performance Indicators Functional Area Letter Code Two- Airfield Operations AO Air Service AS ARFF AR Cargo CA Concessions CN Energy Management EN Environmental EV Financial FN Fuel FL General Aviation GA Grants GR Human Resources HR Information Technology IT Legal LG Maintenance MN Parking PK Planning/Construction PL Police/Security PS Properties/Contracts PC Public Affairs PA Safety/Risk Management SR Service Quality SQ Terminal Operations TO Exhibit 6. API functional areas with two-letter codes. Closures for Adverse Weather AO K-1 FOD – Number of Items Found per Inspection AO K-2 Practical Hourly Capacity AO K-3 Runway Clearing Time – Average for Snow/Ice AO K-4 Taxi Time – Gate to Runway End, Peak vs. Unimpeded AO K-5 Wildlife/Bird Strikes AO K-6 Exhibit 7. Key APIs—Airfield Operations.

Overview 9 Airfield Operations (AO) Airfield Operations performance measures are used to track airfield operational issues, including factors affecting operational integrity, operations in adverse weather, capacity, delays, and safety. Core Indicators Annual Aircraft Operations........................................................................................AO C-1 Key Indicators Closures for Adverse Weather..................................................................................AO K-1 FOD – Number of Items Found per Inspection.........................................................AO K-2 Practical Hourly Capacity..........................................................................................AO K-3 Runway Clearing Time – Average for Snow/Ice.......................................................AO K-4 Taxi Time – Gate to Runway End, Peak vs. Unimpeded .........................................AO K-5 Wildlife/Bird Strikes...................................................................................................AO K-6 Related Core and Key Indicators Energy Management Airfield Energy Consumption – Change over Prior Period .......................................EN K-1 Safety/Risk Management Runway Incursions....................................................................................................SR C-28 Aircraft Accidents and Incidents ...............................................................................SR K-2 Service Quality Arrival Delay per Flight .............................................................................................SQ K-3 Departure Delay per Flight........................................................................................SQ K-5 Percent of Arriving Flights Delayed ..........................................................................SQ K-7 Percent of Departing Flights Delayed.......................................................................SQ K-8 See Other Indicators in ....................................... ARFF, Energy Management, Environmental, Fuel, General Aviation, Maintenance, Safety/Risk Management, Service Quality, Terminal Operations Comments Many of these measures are important and closely watched but largely beyond the control of the airport. These may include measures of capacity, delay, and airline/tenant safety. Exhibit 8. Sample functional introduction—Airfield Operations. It should be noted that industry terminology describing benchmarking activity is quite variable, including “internal benchmarking,” “external benchmarking,” “performance track- ing,” and “performance measurement,” among other usages. This Resource Guide will use the terms “self-benchmarking” and “peer benchmarking.” Both self-benchmarking and peer benchmarking help an airport assess and improve its performance. APIs are used in both techniques, with most APIs suited to self-benchmarking, others suited also to peer benchmarking, and some suited for both. APIs suited to peer benchmarking are those that lend themselves well to “apples-to- apples” comparisons. For example, the age and energy-efficiency of terminals will affect comparability of maintenance costs and utility costs; age will also influence the cost of serv- icing recently acquired debt. In order to peer benchmark terminal utility costs most effec- tively, it is necessary to select airports with terminals of comparable age. On a more “macro” basis, airports may be grouped according to criteria such as size (large hub, medium, small), type of governance (authority, city, state/county, private), or industry segment served (commercial service, general aviation, etc.).

After appropriate peer definition and selection, an API may be used with confidence to peer benchmark against other airports. When in doubt, however, the API is best limited to self- benchmarking. The Core and Key API descriptions in this Resource Guide provide further dis- cussion of comparability and peer group issues. Another key issue for self-benchmarking and peer benchmarking is the amount of influence or control the airport has over the factors being measured. The airport will not have any signif- icant control over the denominator of certain APIs, such as Airport Total Cost per Enplanement or Per Operation. However, the airport may have substantial control over the numerator, in this 10 Resource Guide to Airport Performance Indicators FN C-9 Financial Ai rline Cost per Enplanement Definition Comm only referred to as CPE (C ost per Enp la nem ent). Av er age of wh at ai rlines pa y pe r enp lan em ent to the ai rport fo r use of airf ie ld (la ndin g f ees , ra mp /apron f ees ) and term in al space (space renta ls net of an y credi ts an d re im burse m ents, plus gate charges). Includes pa ym en ts fo r aircra ft park ing pos iti ons (e.g., har d stan ds, tie-downs), f ederal inspecti on fees, and securi ty re im burse m ents pa id by the ai rline wh ether to the airp ort or a not her age nc y. Ty pi ca ll y ex cl ud es special airline fa cili ti es se lf -fi nanced by an ai rline (e.g., term inal fa cili ti es to be op erated by th e air line) . E xcl ud es ground or fa ci lity renta ls for anci llar y bu il dings (e.g., cargo bui ld ings , ha ngars); ai rl in e se lf -f unded construc tion (e.g ., build- ou t of term inal space); other co sts in curred by t he airline to operate at th e ai rp ort (e.g. , f uel, ma int enance, personnel, serv ic es, suppli es an d eq ui pm ent) except where th e airpor t pr ov ides t hes e se rv ic es di rect ly (e.g., deicing se rv ices at so me airports). Does no t include dela y co sts. Data Sources Airp ort records, or FA A Fo rm 127. Ap pl icability All co mm ercial service ai rports. Comments Becom es a dif fi cu lt m eas ur em ent where ai rl ines self-invest in ter mi nal fa ci lities — includi ng entire term inals or pa rt ia l (e .g., certain concourses) a nd di ffe ri ng le vel s of ai rl i ne in vestm ent in fi t- up a nd e quipm ent. Such prac ti ce s re mo ve si gn ificant parts of the term inal fr om the rate bas e. C an attem pt to a dd back the nom inal cos t of such excluded rental fees to approach a m eaningful AP I fo r the ai rport. Ai rport CP Es are of ten a f uncti on of the ai rport's capital dev elopm ent ph ase, as ex pansion program s are mo st li ke ly to in crease an ai rport's CPE when in it ially co mp le ted. CP E is hi gh ly s ensit iv e to ch anges in t he leve l of en pl ane m ents. Ver y im portant fo r se lf -bench ma rk ing, in cl uding th e tren d over ti me . Be caus e di ff icult to obta in tr ue "a pp le s-to-apples" m easure, le ss re lia ble fo r peer-benchm ar ki ng, but this API is one of the mo st wi de ly us ed com parative m eas ure am ong airp orts. Example API number (Core APIs are C-….) and Functional Area Name of API Definition Data sources A pplicability to what t yp es of air p orts Comments on issues regarding definition, data, benchmarking, degree of airport control, etc. Examples (for some APIs) Estimated CPEs for Airports over 100,000 Enplanements $0 $5 $1 0 $1 5 $2 0 $2 5 $3 0 Range of Airports Source: FAA Form 127 and Oliver Wyman analysis Exhibit 9. Annotated API description.

case, Airport Total Cost. Another example is runway incursions. The airport is responsible for control of its own vehicles, but the airport has no direct control over aircraft or ground vehicles operated by airport tenants. Yet even then, since the airport is responsible for providing clear and effective signage, in some incidents the airport may indeed have an element of responsibil- ity. In cases where airport management has little control over the activities involved, an API may still be used to track results over time (self-benchmark). Core and Key API descriptions discuss management control of the factors affecting a particular API. Many important APIs are expressed in the form of a ratio; airport management has the great- est influence over APIs where both values are substantially within their control. However, some important measures are not expressed as ratios but as absolute values. These absolute values can be used as APIs to measure performance over time. This Resource Guide, including the Glos- sary of Terms, contains many such “absolute value” or non-ratio APIs. For example, measur- ing nonstop destinations, especially international ones, can help airport management identify strengths and weaknesses and know where to direct air service marketing resources. The trend of this service level over time is vital and if it is seen to be moving in the wrong direction, there should be intervention. The airport’s bond rating is another example of a non-ratio perform- ance measure whose performance over time is of interest to airport management, users, and governing bodies. Other cautions in attempting to peer benchmark include the ease or difficulty of obtaining data, ambiguities, and inconsistent definition of terms. The Glossary of Terms in this Resource Guide provides standard definitions, using those found in the ACI-NA Benchmarking Survey or FAA Form 127 wherever possible. This definitional resource should facilitate using the APIs for peer benchmarking. Used in isolation, the results of individual APIs may be incomplete and misleading, and a com- bination of APIs may lead to a more complete understanding. For example, Airport A may notice that its Personnel Cost (Salaries + Wages + Benefits) per Enplanement is at a certain level and trending higher, while (having performed a peer benchmarking analysis) it knows that its peer airport, Airport B, has a lower Personnel Cost per Enplanement that is trending downward. So far so good, but more analysis is needed to interpret this API accurately. First, of course, it would be important to understand and normalize the trend of enplanements. Then, looking at the absolute level and trend of Personnel Cost and Airport A’s absolute number of employees, Air- port A may discover its Personnel Cost per Employee is trending higher mainly because it is mak- ing do with fewer employees than Airport B. Having discovered this, Airport A should next look at its practice of contracting work out (another relevant benchmark here is Contract Services Cost as a Percentage of Airport Operating Cost). If Airport A is making significantly greater use of contract services than Airport B, Airport A shouldn’t congratulate itself on its performance in controlling employee costs. The cost of contract services needs to be factored in as well. The les- son here is that often several APIs must be examined together and in relation to the absolute val- ues involved, to gain an accurate picture of what is going on. Coming at the situation from a number of angles aids understanding. Airports have many measures of success and multiple stakeholders who care differently about different issues, and to whom different APIs will be important. The local Chamber of Commerce and frequent fliers will welcome added flights and destinations, but airport neighbors concerned about noise and air quality may disagree. The mayor may view an increase in city police and fire salaries at the airport with equanimity while the airport director worries about how to pay for their services. Pointing to cost and fee benchmarks, the airlines will say their costs are too high, so a big terminal project should be delayed or scrapped, while passengers complain about antiquated facilities. Exhibit 10 compares the multiple measures of success commonly used by airports with the more limited measures of success used by the airlines. Overview 11

In short, it is normal and to be expected that different airport stakeholders will evaluate the same benchmarked results in very different terms. The challenge for those doing the benchmarking is to present clean data, analyze it responsibly, and describe it clearly. The less time spent arguing over data and methodology issues, the more the benchmarking exercise can help an airport deal with the real issues. 12 Resource Guide to Airport Performance Indicators Exhibit 10. Typical measures of success for airports and airlines. * Non-privatized U.S. airports Source: Oliver Wyman Airlines and other Airport TenantsU.S. Airports* Enplanements - volume and growth O&D passengers- volume and growth Breadth of nonstop service Availability of low fares International service Competitive revenue/cost per enplanement Customer-friendly facilities Good neighbor, good employer Economic development Profitability –Revenue maximization –Cost control –Market share Driven by multiple independent metrics Profit-driven