Being Prepared for IROPS: A Business-Planning and Decision-Making Approach (2014)

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10 This chapter provides general guidance on business planning for IROPS. It discusses basic terminology, best practices, and limitations of traditional business case analysis methodolo- gies, such as the benefit-cost analysis. 2.1 Definitions In the context of economic analysis, the terms business planning and business case analysis refer to analyzing the economic value of an investment of funds in a particular project, such as the construction of an overflow apron at a regional airport. The purpose of this analysis is to assess, in economic terms, whether the value received from this investment is outweighed by its costs. The value, usually referred to as the benefit, considers the air transportation system as a whole. It incorporates benefits incurred by passengers (e.g., time savings from delay reduction), airlines (e.g., fuel savings), and airports (e.g., labor cost savings). Costs generally include the total costs throughout the investment’s lifecycle. These include initial acquisition costs, operations and maintenance (O&M) costs, and any required costs for mid-lifecycle technology upgrades (often called a tech refresh). Key business case analysis terms are defined in more detail below (Landau and Weisbrod 2009): • Benefit: The net value to society of all positive aspects of a construction project, acquisition, or other program, over the course of its lifecycle. Societal benefits cover all private, federal, and other public entities affected by the project. The term usually is used to focus on the economic value of such benefits, especially those that can be quantified. • Cost: The net value to society of all expenses of a project over the course of its lifecycle. Costs include capital costs, O&M costs, tech refresh costs, and any termination costs. Capital costs refer to the investment, construction, and acquisition costs associated with the initial implementation of the project. • Benefit-Cost Analysis: A business case analysis that evaluates the net economic value of an investment to society, by comparing the societal benefits associated with the project to its life- cycle costs. The term is usually used to mean a quantitative comparison of the economic value of benefits to costs, but can also include qualitative aspects. Because benefit-cost analyses consider future economic value, they are inherently uncertain and therefore typically include a risk analysis. This risk adjustment expresses benefits and costs as probability distributions and can be used to quantify the uncertainty, conduct sensitivity analysis, and incorporate varying degrees of pessimism or optimism. Because this guidebook focuses on business planning for IROPS, it is important to define, in workable terms, which events constitute IROPS events, what their impacts are, and what is meant by an IROPS mitigation. These definitions are needed to understand the research C H A P T E R 2 Business Planning for IROPS

Business Planning for IROPS 11 problem and to structure the development of the business-planning approach presented in the guidebook. The following definitions are used: • IROPS Event: Exceptional incidents that cause the airport to operate in off-nominal conditions that have not been planned for as part of the airport’s normal certification or emergency planning. These incidents disrupt flight schedules and the normal flow of passengers through the air transportation system. They require actions or capabilities beyond those considered usual by aviation service providers. An IROPS event typically lasts from a few hours up to 48 hours. • IROPS Impact: The resulting changes in operation from nominal conditions resulting from the IROPS event. • IROPS Mitigation: Proposed action for lessening or eliminating the negative impact(s) of an IROPS event. The IROPS event is the triggering incident that causes an abnormal condition not accounted for in the airport’s normal planning activities. The event is the cause of the IROPS situation, whereas the IROPS impact is the consequence. An example of an IROPS event might be a severe ice storm, and an impact might be extended tarmac delays. Multiple IROPS events can lead to the same impact, and each IROPS event can have multiple impacts. Furthermore, although the event → impact → mitigation initiative link is an important concept for framing the research problem, the decision support tool uses only the mitigation initiative as a direct input. Notice that the proposed definition for IROPS events focuses on passenger travel. Media, legislative, and regulatory responses have focused on disruptions to passengers, and that focus is reflected in this definition. The definition is consistent with ACRP Report 65, which provides tools for “commercial passenger service airports” (Nash et al. 2012, 1). The definition for IROPS used in ACRP Report 65 reads as follows (Nash et al. 2012, 99): Irregular Operations (IROPS): Exceptional events that require actions and/or capabilities beyond those considered usual by aviation service providers. Generally speaking, an impact of these events is the occurrence of passengers experiencing delays, often in unexpected locations for an undetermined amount of time. Examples include extreme weather events (such as snowstorms, hurricanes, tornados), geological events (such as earthquakes, volcanoes), and other events (such as power outages or security breaches). This definition refers to aviation service providers in general; however, the focus of both guidebooks is on passengers, specifically those faced with extended delays. It is important to note, however, that the decision support tool is not based on a predefined set of IROPS events. The user-defined IROPS investment portfolio allows flexibility and support for the broadest possible range of IROPS events (see Chapter 4 for more detail). Clearly, IROPS have the potential to affect all aviation users, including cargo operators, general aviation, military aviation, and operators of public aircraft. As an example, Table 1 lists a March 2009 IROPS event at Seattle- Tacoma (Sea-Tac) International Airport the main impact of which was the diversion of cargo aircraft. The business-planning approach and the IRIS decision support tool provide full support for IROPS events affecting cargo or general aviation operations, even though the guidebook and examples focus on commercial passenger operations. 2.2 Identifying IROPS Events and Their Impacts The definitions given in Section 2.1 were used to specify criteria for identifying IROPS events. These criteria include the following: 1. The event should be relatively rare. 2. The event should significantly impact passenger services.

12 Being Prepared for IROPS: A Business-Planning and Decision-Making Approach 3. The event should, at least in part, fall outside the airport’s normal planning for incidents, accidents, emergencies, and severe weather. 4. The event should generally range in duration from a few hours up to 48 hours. The third criterion reflects the broad range of planning and preparation that airports conduct to respond to emergencies and other disruptive events that occur or have occurred with sufficient frequency that they are anticipated. This planning is conducted in accordance with best industry practices, notably FAA Advisory Circular 150/5200-31C, Airport Emergency Plan (FAA 2010). For example, a wheel well fire would be covered in the airport’s Airport Emergency Plan and the mitigations needed for an effective response (e.g., aircraft rescue and firefighting equipment) would be justified by the requirement to meet airport certification standards. Although overlap exists, planning for IROPS focuses on events that fall outside the scope of normal emergency planning and preparation. The results of the process of identifying IROPS events are shown in Table 2. The identification of IROPS events is based on past incidents, the review of existing literature and best practices, and the research team’s professional experience in airport planning and operations. Event/Event Subtype Event/Event Subtype Infectious Diseases Individual carrier Epidemic Pandemic Security Checkpoint security breach Navigation system jamming/spoof Hijacked aircraft Laser attack Perimeter security breach Terrorist attack Unattended/suspicious luggage Construction/Mechanical Air conditioning failure Damaged cable Damaged pipeline Heat failure Power failure Water line break Airline Operations Flight reservation system/IT outage Labor Disruption Air traffic control labor disruption Airline labor disruption Airport labor disruption Security/Federal Inspection Services labor disruption Very Important Person (VIP) VIP/sports team arrival/departure Severe Weather Events High wind Tornado Hurricane/tropical cyclone Heat wave Extreme cold Dense fog Thunderstorm/heavy rain/flooding Electrical storm Snow/blizzard Damaging hail Ice storm Dust storm Natural Disasters Earthquake Volcanic eruption Landslide Dam break Tsunami Wildfire Solar storm Man-made Disasters Hazardous materials release Military aircraft/ordnance issue Discovery of explosives Aircraft and Vehicle Accidents/Emergencies Aircraft accident Structural fire Access road accident Railway/people mover accident/ mechanical problem Medical Emergency Aircraft medical emergency Terminal medical emergency Table 2. IROPS events.

Business Planning for IROPS 13 To organize the list of IROPS events, a two-layered categorization scheme was employed placing sub-events within broader event categories. The identification of IROPS events was used for structuring the development of the decision support tool by taking into account the range of events that might be addressed by an IROPS-related investment; however, the list is not meant as an exclusive or complete identification of possible IROPS events. The next step was to identify potential impacts that can be linked to the IROPS events that were identified in Table 2. The results of this step are shown in Table 3. Specific IROPS impacts can be mapped to the causal IROPS event(s). It is important to remember that one event can have multiple impacts, and different events often lead to the same impact. Consequently, there is not a one-for-one mapping between events and impacts. Table 4 displays a notional example of mapping of IROPS events to impacts. 2.3 Identifying Mitigation Initiatives As described in Section 2.1, a mitigation initiative is an alternative or option, associated with some cost, to reduce or eliminate the negative impacts of an IROPS event. IRIS uses user-defined mitigation initiatives and can incorporate virtually any investment initiative associated with IROPS Impact (Consequence) IROPS Event (Cause) Extended Passenger Delay (Terminal) Extended Tarmac Delay Excessive Queue Lengths (Check-in) Excessive Queue Lengths (Security) Passenger Surge (Terminal) High winds Airline labor disruption Table 4. Notional example of mapping of IROPS events to impacts. Table 3. IROPS impacts. Aircraft recalled to gate Disrupted communications Diverted flights to airport Excessive queue lengths (check-in) Excessive queue lengths (security) Extended passenger delay (generated off-airport) Extended passenger delay (terminal) Extended tarmac delay Power outage and/or utility disruptions Quarantined aircraft/passengers Unanticipated need for Federal Inspection Services Unexpected closure of control tower/approach control facility Unexpected closure of runway Unexpected closure of terminal/concourse Unexpected passenger surge (terminal)

14 Being Prepared for IROPS: A Business-Planning and Decision-Making Approach a measurable lifecycle cost. A set of specific mitigation initiatives was identified in support of testing and developing the business case analysis approach. The process used to identify specific mitigation initiatives and their outcomes is described here. In the context of ACRP Project 10-14, IROPS mitigation initiatives are categorized as either capital or O&M cost items intended to reduce the negative impacts of IROPS events. For each initiative, an initial identification is made as to whether the mitigation would represent a capital cost or O&M cost, using the following working definitions: • Capital: Fixed, one-time expense for a durable good (typically equipment, buildings, or other facilities). • O&M: Recurring expenses (typically labor costs, utilities, or consumables). Categorization as a capital cost versus an O&M cost does not affect the design or functionality of the business-planning approach of IRIS. The categorization of the cost does, however, determine whether the related lifecycle costs are specified only as recurring costs (for O&M items) or as both fixed and recurring costs (for capital items). Given this categorization, the IROPS mitigation initiatives were then selected using the following two criteria: 1. The objective of the initiative must be to mitigate the impact of IROPS that disrupt passenger services. 2. The mitigation initiative must be associated with a measurable cost that is substantial enough to justify the effort of formal business planning. The first requirement was meant to ensure that the mitigation initiatives were selected in accordance with the definition of an IROPS event. The second requirement was necessary given that the focus of the project was on developing a quantitative approach to business planning. Initiatives that lack tangible, measurable costs necessarily fall outside the scope of this study. Initiatives with measurable but very low costs do not justify the effort required to set up and execute the analytical approach; however, this does not necessarily exclude planning and coordination activities using the airport’s own staff. In these cases, the cost can be represented as the costs associated with the staff hours dedicated to the project. The main sources used for the initial identification of IROPS mitigation initiatives were the following: • Individual airport tarmac delay contingency plans. • Best industry practices for managing IROPS. • The research team’s experience and subject matter expertise. The airport tarmac delay contingency plans are required by the U.S.DOT in accordance with the FAA Modernization and Reform Act of 2012 (U.S.DOT 2012b). A sample of 50 airport contingency plans was collected and reviewed by the research team. These airports are identified in Table 5. The resulting list of identified IROPS mitigation initiatives is shown in Table 6 in alphabetical order. Notice that some of the initiatives listed mitigate IROPS through an indirect mechanism. For example, airports that use their own staff to perform ground-handling services under con- tractual arrangements with airline tenants have potentially greater flexibility in assigning staff resources in response to IROPS events.

Business Planning for IROPS 15 Antonio B. Won Pat International Airport (Guam) Billings Logan International Airport (Billings, MT) Bob Hope Airport (Burbank, CA) Boise Airport (Boise, ID) Casper/Natrona County International Airport (Casper, WY) Charlotte Douglas International Airport (Charlotte, NC) Chicago Midway International Airport (Chicago, IL) Corpus Christi International Airport (Corpus Christi, TX) Colorado Springs Airport (Colorado Springs, CO) Cincinnati/Northern Kentucky International Airport (Hebron, KY) Daytona Beach International Airport (Daytona Beach, FL) Dane County Regional Airport (Madison, WI) Dallas/Fort Worth International Airport (DFW Airport, TX) Denver International Airport (Denver, CO) Dubuque Regional Airport (Dubuque, IA) Fort Lauderdale-Hollywood International Airport (Fort Lauderdale, FL) Fresno Yosemite International Airport (Fresno, CA) General Mitchell International Airport (Milwaukee, WI) George Bush Intercontinental Airport (Houston, TX) T. F. Green Airport (Warwick, RI) Houghton County Memorial Airport (Calumet Township, MI) Huntsville International Airport (Huntsville, AL) Jacksonville International Airport (Jacksonville, FL) John F. Kennedy International Airport (New York, NY) Lehigh Valley International Airport (Allentown, PA) Lexington Blue Grass Airport (Lexington, KY) Long Island MacArthur Airport (Ronkonkama, Town of Islip, NY) Mammoth Yosemite Airport (Mammoth Lakes, CA) Minneapolis-St. Paul International Airport (Minneapolis and St. Paul, MN) Missoula International Airport (Missoula, MT) Newark Liberty International Airport (Newark, NJ) Norman Y. Mineta San Jose International Airport (San Jose, CA) Northwest Florida Regional Airport (Fort Walton Beach, FL) Oakland International Airport (Oakland, CA) Outagamie County Regional Airport (Appleton, WI) Pensacola International Airport (Pensacola, FL) Pittsburgh International Airport (Pittsburgh, PA) Portland International Airport (Portland, OR) Raleigh-Durham International Airport (Morrisville, NC) Richmond International Airport (Richmond, VA) Salt Lake City International Airport (Salt Lake City, UT) San Diego International Airport (San Diego, CA) Santa Fe Municipal Airport (Santa Fe, NM) Sarasota Bradenton International Airport (Sarasota, FL) Seattle-Tacoma International Airport (SeaTac, WA) Spokane International Airport (Spokane, WA) Washington Dulles International Airport (Sterling, VA) Will Rogers World Airport (Oklahoma City, OK) William P. Hobby Airport (Houston, TX) Yellowstone Regional Airport (Cody, WY) Table 5. Airports in extended tarmac delay contingency plan sample. 2.4 The IROPS Business Case Analysis The existing body of literature on IROPS planning combined with airports’ individual contingency plans provides the basic tools required to respond to IROPS. They do not, however, provide the tools for optimizing the allocation of limited funds across a set of IROPS mitiga- tion initiatives. The goal of developing an IROPS business case methodology is to fill that need. Specifically, the goal consists of implementing and testing an approach to assess investments intended to minimize the impact of IROPS events on passengers and aircraft operators, as well as on the airport’s own infrastructure, staff, and neighboring communities. To provide useful information, business planning for IROPS must be able to handle multiple variables and high levels of uncertainty. The process must also be straightforward to use for

16 Being Prepared for IROPS: A Business-Planning and Decision-Making Approach airport management staff without formal training in business case analysis. Finally, it must main- tain a correct level of analysis to avoid the proverbial “paralysis by analysis.” A well-structured business-planning process will produce clear and insightful results that project sponsors can rely on to select the best value options to meet their strategic objectives. The business-planning approach should accomplish the following objectives: • Clearly capture and present alternatives, benefits, costs, and risks. • Be credible, defensible, and useful for effective decision-making with the goal of maximizing the use of scarce resources. • Comply with FAA and other federal agency requirements. • Support strategic goals and higher-level budget processes. • Reduce the time required from concept to implementation. • Minimize the cost of delivering safe and secure airport services to the aviation community and the public. • Manage the risks and uncertainty inherent in investment decisions. • Provide decision makers with a clear, standardized, and understandable rationale for funding requests for IROPS mitigation. • Reduce the risk of inefficient investment decisions resulting from subjective evaluations, political pressure, and other types of pressure. Description Type Acquire additional remote aircraft parking stands Capital Acquire alert system for aircraft diversions headed to airport Capital Acquire buses Capital Acquire communication software system Capital Acquire ground power units Capital Acquire passenger lifts Capital Acquire portable stairs Capital Acquire supplies for stranded passengers (e.g., cots, blankets, pillows, diapers, wipes, formula for babies, sanitary items, Meals Ready to Eat [MREs], etc.) Capital Acquire surface management software Capital Add additional terminal space that can be configured as sterile space for temporary customs/immigration processing Capital Construct additional gates Capital Contract with airlines to use airport personnel to provide ground-handling services O&M Develop IROPS/coordination plan O&M Establish communications center Capital Hire additional staff O&M Modify existing airline use agreements to allow airports to use exclusive use gates during IROPS events O&M Practice/simulate IROPS scenarios O&M Provide emergency electrical generators Capital Review plans to get airport staff from off-airport to work O&M Review plans to house and feed airport staff that are stranded at airport O&M Set aside contingency funds to pay for meals O&M Strengthen network with airports that are diversion generators O&M Train staff to assist with deplaning of passengers O&M Upgrade generator capability for terminal facilities Capital Table 6. IROPS mitigation initiatives.

Business Planning for IROPS 17 • Provide documentation of the economic evaluation of investment options, using quantifiable metrics. • Support funding requests that help achieve strategic goals. A well-designed business-planning approach should produce end products that are concise, useful, credible, and insightful, so that airport sponsors have the right information to make decisions. This analysis supports the role of business planning throughout a program’s lifecycle to guide decisions on how to best use scarce resources to meet the airport’s objectives. Use of the approach should result in effective investment decisions that are in compliance with FAA regulations and applicable advisory circulars. Figure 1 illustrates the systematic process traditionally used to develop business-planning products for a broad range of aviation infrastructure and airfield investments. The process begins with identifying objectives. This step helps identify alternative reasonable, feasible, and effective solutions that meet the objectives. The process then identifies, quantifies, and estimates costs and benefits; ranks and evaluates initiatives through benefit-cost ratios and other investment metrics; and performs sensitivity and risk analysis. 2.5 Limitations of Traditional Business Case Analysis Business case analysis for air transportation investments is an established science. The tradi- tional business-planning approach is the benefit-cost analysis. For several reasons, however, the benefit-cost analysis may not be the most effective method for business planning for IROPS mitigation initiatives. These reasons include the following: • Conducting a benefit-cost analysis for an IROPS mitigation initiative is labor intensive. It would require a quantitative assessment of the frequency of the IROPS event(s) under consideration, as well as a study of the impact of the event with and without the mitigation in place. Completing such assessments may be difficult because IROPS events are associated with an unusually high level of uncertainty. • Not all benefits of investments intended to mitigate IROPS events can be expressed in stan- dard fashion (i.e., monetary amounts) using current FAA guidance on investment analysis for airports. Although it is common for benefit-cost analyses to include both quantitative and qualitative benefits, the former can be entered into the computation of a benefit-cost ratio, which is easy to interpret by decision makers. Establish Objecve(s) Idenfy Alternaves Determine Methodology Establish Ground Rules and Assumpons Idenfy Benefits Esmate Benefits Analyze Benefits and Costs Compare and Rank Alternaves Conduct Risk and Sensivity Analysis Produce Conclusions and Recommendaons Document Process and Results Figure 1. Traditional business case analysis.

18 Being Prepared for IROPS: A Business-Planning and Decision-Making Approach • Existing FAA guidance on benefit-cost analyses for airport projects focuses on measuring the economic benefits of capacity enhancement projects. Consequently, much of the guidance may not apply to the evaluation of IROPS-related projects. • Airport activity metrics used for benefit-cost analyses focus on accepted airport planning prac- tices that draw on averages, which may not capture the volatility in activity during IROPS events. For these reasons, this guidebook employs a decision analysis approach based on the AHP meth- odology. This approach can be used to rapidly evaluate initiatives across a wide range of criteria. Described in detail in Chapter 3, this framework supports decision-making even when not all aspects can be monetized (i.e., evaluated as dollar values). In lieu of monetary benefits, measures of effectiveness are used which can be quantified by incorporating expert evaluations by the airport management team to determine relative effectiveness. The framework also takes into account that, for airport operators, dealing with unexpected events is to some extent “just another day” at the airport. The approach is designed to capitalize on the experience of the airport management staff and incorporate decision-maker preferences. It combines these subjective evaluations with objective metrics such as lifecycle cost, to prioritize choices among a set of alternatives. Notice that no formal training or education in the AHP technique is required to use the business-planning approach or the Microsoft Excel-based decision support tool presented in this guidebook. The process is described in detail, but this information is intended primarily for readers who are interested in obtaining a deeper understanding of the business-planning approach and the results generated by IRIS. The material presented on the methodology should be viewed as optional and is not required to make use of accompanying software. IRIS was developed under the assumption that it would be adopted at a broad range of airports. Even though traditional business-planning methodologies cannot always be applied effectively to IROPS business-planning problems, the steps illustrated in Figure 1 still have applicability to this project. Metrics and methods that are part of current industry practices and part of the FAA’s guidance on investment analysis can be used when relevant. For example, an airport can base its evaluation of effectiveness on monetized savings in aircraft operator costs and passenger value of time. Such estimates can be developed using FAA guidance on the economic value of aircraft operator and passenger benefits (FAA 2013b). Conversely, multi-day disruptions to the itineraries of passengers, crew, and aircraft cannot be monetized using existing standards and, therefore, require an alternative valuation, such as the one used in the methodology presented here. To provide additional background information on business case analysis, Appendix A includes a primer on the topic. The primer focuses on the benefit-cost analysis. It explains the framework used to formally map out benefits and costs and discusses the key principles of both benefit and cost estimating. This primer should be of value to the reader who wants a deeper understanding of traditional business case analysis. It helps highlight the similarities and dif- ferences between the benefit-cost analysis and the decision-making approach presented in this guidebook. It also contains useful “how to” information about the elements of traditional busi- ness case analysis that are retained in the approach presented in this guidebook, notably cost estimating. ACRP Synthesis 13: Effective Practices for Preparing Airport Improvement Program Benefit-Cost Analysis (Landau and Weisbrod 2009) provides additional reference material for the reader wishing to explore the benefit-cost analysis in more depth. 2.6 Cost Estimating Cost estimating is one aspect of traditional business case analysis methodologies that carries over into the business-planning approach described in this guidebook. The resulting cost estimates are used differently here than in a benefit-cost analysis, but lifecycle cost is one of the required inputs for the analysis.

Business Planning for IROPS 19 When the mitigation strategy involves the procurement of commercial-off-the-shelf (COTS) products, a cost estimate is relatively easy to obtain. The cost can be determined simply, using the purchase price or a quote provided by one or more potential vendors. For anything other than a straightforward COTS procurement, however, cost estimating becomes much more complex. This happens in part because airport equipment acquisition and construction usually require significant planning, design, and engineering activities. Frequently, site surveys, soil testing, and permitting are required. Construction is usually preceded by site preparation activities, which can be extensive. Implementation can also add activation, documentation, and training costs. Prime contractors and airport personnel are involved. Similarly, O&M activities can include a range of maintenance, modifications, and tech refresh activities. Each cost element can be complex enough to require substantial analysis. In many cases, cost data will be available as an outcome of the airport’s regular capital plan- ning process. Estimates of construction and acquisition costs developed for the Airport Capital Improvement Plan (ACIP) are typically provided by the airport’s engineer (in-house or through a consultant appointment). Such cost estimates are fully usable for IROPS business planning. The estimated costs may have to be converted into lifecycle costs, which typically requires adding O&M expenses and any upgrades planned during the lifecycle. In the absence of existing cost estimates, the airport may need to develop cost estimates. The primer on business case analysis presented in Appendix A contains an introduction to cost estimating. More in-depth information, including best practices, can be found in exist- ing reference material, notably the U.S. Government Accountability Office’s Cost Estimating and Assessment Guide (U.S. GAO 2009). Airport-specific guidance on cost estimating is also available through the FAA’s guidance on benefit-cost analyses for airport projects (FAA 1999). Additional guidance on airport project cost estimating will be available from ACRP Project 1-19, “Airport Capital Improvements: Developing a Cost-Estimating Model and Database,” which is expected to be completed in 2014. 2.7 Overview of the Business Case Methodology for IROPS Business Planning As discussed in Section 2.5, traditional business case analysis that estimates the costs of an initiative and compares them to monetized benefits is not always well-suited to IROPS challenges. Instead, this guidebook uses an integrated approach that merges decision analysis with traditional benefit-cost methodologies. This approach establishes a proxy for monetized benefits by estimating a benefit function of likelihood and impact of the associated IROPS event as well as the effectiveness of the mitigation initiative. AHP is used to evaluate and quantify effectiveness, and the resulting benefit calculation is then compared against cost data. The process used in this guidebook provides a comprehensive evaluation of the likelihood, impact, effectiveness, and costs of proposed IROPS mitigation initiatives. Moreover, the selected approach is suitable for incorporation in the IRIS decision support tool distributed with this guidebook for use in Microsoft Excel. The IRIS decision support tool cannot capture all issues that affect an investment decision and does not attempt to replace the judgment of the airport management team regarding what strategy to pursue; however, the tool provides an analysis of potential benefits to airport stakeholders, including a broad spectrum of the financial, tactical, and strategic considerations related to the possible mitigation initiatives. The tool also provides documentation that can support the recommended investment decision. IRIS allows the airport management team to specify a set of IROPS events and potential impacts to be included in the business-planning process. IRIS provides decision support for evaluating the initiatives under consideration to mitigate the negative impacts of those IROPS

20 Being Prepared for IROPS: A Business-Planning and Decision-Making Approach events. The user identifies the potential alternatives under consideration by creating an investment portfolio of mitigation initiatives. The initiatives should match the IROPS events and the impacts they are designed to address. The user then provides additional input to allow for the evaluation of the likelihood, impact, effectiveness, and costs associated with the investment portfolio. IRIS processes this input to generate an overall score for each IROPS mitigation initiative in the portfolio. Those scores are used to rank order the portfolio and can be used as guidance on which options would be most effective to fund. Effectiveness is measured using AHP, an established, structured decision analysis technique. AHP merges the stakeholders’ objectives with their evaluation of the problem to provide insight on complex planning problems. The process involves breaking the problem into manageable parts and arranging them in a logical hierarchy. By making simple comparisons between the sub-elements of the hierarchy, potential outcomes can be prioritized. The utility of this tech- nique lies in its ability to synthesize human judgment with quantitative metrics in an organized way to prioritize choices across multi-dimensional, complex problems. Consequently, the benefit of IRIS is that it takes a large number of decision parameters into account. The tool capitalizes on the experience, expertise, and skills of the airport management team, and synthesizes the available information into a defensible ranking of IROPS mitigation options. These options are supported with numerical scores that can then be used in the capital planning process. The scores also are useful as support material when presenting funding recommendations to decision makers. A demonstration project was implemented to test IRIS in the field across a targeted but representative group of airports. A formal assessment of the demonstration project was used to refine the model and prepare the documentation of the research results. The final version of IRIS includes a number of improvements that incorporate the feedback provided by these air- port users. Details of the final business-planning approach are presented in Chapter 3. Chapter 4 discusses implementation of the business-planning approach (i.e., the conversion of the selected methodology into the IRIS decision support tool).