Guidebook for Developing General Aviation Airport Business Plans (2012)

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13 CHAPTER 2 AIRPORT BUSINESS PLAN 2.1 Introduction 2.2 What is an Airport Business Plan? 2.3 Elements of an Airport Business Plan 2.4 Wrap-Up 2.1 INTRODUCTION This chapter defines an airport business plan (and other primary planning and guiding documents), describes the interrelationships among the primary planning documents (i.e., strategic plan, business plan, and master plan), and introduces the elements of an airport business plan. 2.2 WHAT IS AN AIRPORT BUSINESS PLAN? An airport business plan is a document that uses a logical and disciplined structure to set out goals, objectives, and action plans that drive the day-to-day operation and management of an airport. In addition to the airport business plan, other documents can be used to operate and manage a general aviation airport. For purposes of discussion, these documents can be grouped into two categories—primary planning documents and primary guiding documents—as depicted in Figure 2-1. To ensure that the airport business plan serves its intended purpose, the planning team must fully understand the differences between primary planning documents and primary guiding documents. The airport manager was relieved that the budget had been approved, the operating subsidy had not been reduced, and expenses did not need to be cut further. Before starting on the airport business plan, the airport manager wanted to give more thought to the role of an airport business plan (compared to other planning and guiding documents) and the elements of an airport business plan.

14 Guidebook for Developing General Aviation Airport Business Plans Figure 2-1: Primary Planning Documents and Primary Guiding Documents The next two sections of this chapter discuss each of the primary planning documents and primary guiding documents. Once in place, an airport business plan can serve as a platform for developing additional planning documents such as a business and operational continuity plan (BOCP), a safety management system (SMS) plan, a wildlife hazard management plan (WHMP), and an airport system plan. PRIMARY PLANNING DOCUMENTS There are three primary planning documents for airports: (1) an airport strategic plan; (2) an airport business plan; and (3) an airport master plan or airport layout plan (ALP). Each document serves a distinct purpose while being related to the other documents. A description of each document follows. An airport strategic plan identifies the vision and the long-term strategic goals for the airport. Typically, an airport strategic plan has a time horizon of 10 to 20 years. An airport business plan uses a logical and disciplined structure to set out goals, objectives, and action plans that drive the day-to-day operation and management of the airport. In essence, an airport business plan transforms the vision and the long-term strategic goals for the airport into specific goals and actions within each functional area of the airport. Typically, an airport business plan has a time horizon of 1 year, although it may take longer to achieve certain goals and realize the vision for the airport. An airport master plan assesses the current capacity of the airport’s infrastructure, evaluates current and projected demand, identifies existing and anticipated deficiencies, and outlines the short-, medium-, and long- term development goals for the airport. Typically, an airport master plan has a time horizon of 20 years. There are interrelationships among these documents. For example, a vision statement, the findings of a SWOT analysis, and the long-term goals identified in the airport strategic plan may be useful for developing an airport business plan. An airport’s capital improvement program (CIP), which is typically developed as part of the master plan or ALP, is driven, in many ways, by the goals established in an airport strategic plan and/or airport business plan. Figure 2-2 depicts the interrelationships among the primary planning documents and identifies the common components of each document. Primary Planning Documents •Strategic Plan •Business Plan •Master Plan or Airport Layout Plan (ALP) Primary Guiding Documents •General Provisions and Definitions •Leasing/Rents and Fees Policy •Minimum Standards •Rules and Regulations •Development Guidelines •Applications, Permits, and Agreements

Airport Business Plan 15 Figure 2-2: Primary Planning Documents—Interrelationships While Figure 2-2 depicts the interrelationships among the primary planning documents, not every airport will have all three documents. If a strategic plan does not exist, a business plan can drive a master plan. If a business plan does not exist, a strategic plan can drive a master plan. In turn, a master plan affects the strategic and business plans. Whenever a planning document is being introduced or updated, all other planning documents should also be reviewed to ensure alignment among the plans. It is not necessary to have a strategic plan or a master plan to have a business plan. However, a vision statement, SWOT analysis, and long-term strategic goals (which are usually part of the strategic plan) are also important in creating a business plan. If these elements exist and are current, these elements can be integrated into the business plan. If these elements do not exist, or are outdated, the worksheets provided in Chapter 4 can be used to help create or update these elements. The survey of general aviation airports conducted for the development of this Guidebook revealed that the most common planning document is a master plan or ALP (94%), followed by a strategic plan (54%), and then by a business plan (25%). While the survey results indicated that one-quarter of the respondent airports have a business plan, the follow-up interviews revealed that the number could be much smaller, with very few general aviation airports actually having an “airport business plan” as defined in the survey questionnaire. •Vision statement •SWOT analysis •Internal assessment •External assessment •Strategic goals (and budget) Strategic Plan •Mission, vision, and values statements •Business goals, objectives, and action plans (within functional areas) •Airport and market •Organization •Operations •Marketing •Aviation products, services, and facilities •Financial •Budgets Business Plan •Inventory •Existing conditions •Forecasts •Demand/capacity analysis •Environmental •Concepts, alternatives, and CIP •Development (infrastructure) goals (and budget) Master Plan or ALP

16 Guidebook for Developing General Aviation Airport Business Plans PRIMARY GUIDING DOCUMENTS Several documents—commonly referred to as primary guiding documents—play a key role when it comes to doing business at a general aviation airport. Primary guiding documents are a compendium of policies, standards, guidelines, rules, and regulations governing the operation and management of an airport. In combination, primary guiding documents are designed to (1) contribute to the long-term financial health of an airport; (2) facilitate the orderly development of an airport; (3) ensure the provision of quality aviation products, services, and facilities at an airport; (4) protect the health, safety, interest, and general welfare of the public; and (5) reduce the potential for conflicts with customers. Although not part of an airport business plan, primary guiding documents can be integral to the successful implementation of an airport business plan. Typically, primary guiding documents consist of the following: • General Provisions and Definitions. These set forth the provisions common to all of the primary guiding documents and defines key terms. • Leasing/Rents and Fees Policy. These set forth the parameters for leasing airport land and improvements and outline the process for establishing and adjusting rents and fees. • Minimum Standards. These set forth the minimum requirements for an entity to engage in commercial aeronautical activities at an airport. • Rules and Regulations. These set forth the rules and regulations for the safe, orderly, and efficient use of the airport. • Development Guidelines. These set forth the parameters governing the design, development, construction, or modification of improvements at the airport. • Applications, Permits, and Agreements. These include (1) applications for leasing airport land or improvements and engaging in commercial aeronautical activities at an airport; (2) permits for engaging in commercial aeronautical activities at an airport; and (3) agreements for leasing, occupying, or using airport land or improvements for commercial and non-commercial purposes. Primary planning documents are planning tools used by airport managers and policymakers to help achieve goals and realize the mission and vision for the airport. In comparison, primary guiding documents are policies, which are typically binding on the airport sponsor, customers, and stakeholders, that are used to govern the operation and management of the airport. 2.3 ELEMENTS OF AN AIRPORT BUSINESS PLAN As depicted in Figure 2-3, an airport business plan consists of principal and ancillary elements. Each element is introduced in this section. PRINCIPAL ELEMENTS The seven principal elements of an airport business plan are as follows: mission statement, vision statement, values statement, goals, objectives, action plans, and budgets. Each of the principal elements is discussed in detail in Chapter 4 with the exception of budgets, which is discussed in detail in Chapter 11.

Airport Business Plan 17 ANCILLARY ELEMENTS In addition, an airport business plan will typically include three ancillary elements: an executive summary, introduction, and appendix. Each of the ancillary elements is discussed in detail in Chapter 4. Figure 2-3: Elements of an Airport Business Plan •summarizes the airport business plan Executive Summary •sets the stage for the airport business plan Introduction •conveys the reason for an airport's existence or purpose Mission Statement •articulates the aspirations for an airport; it is a picture of success Vision Statement •describes the beliefs held throughout an organization Values Statement •states a desired result, outcome, or level of attainment that needs to be reached to realize the mission and vision for the airport Goals •identifies a significant step toward achieving a goal or a means to an end Objectives •answers the key questions of who is going to do what, when, where, why, and how in order to accomplish a specific objective Action Plans •forecasts the financial position or performance of the airport Budgets •provides additional or supplemental information, data, and documentation Appendix

18 Guidebook for Developing General Aviation Airport Business Plans 2.4 WRAP-UP This chapter defined an airport business plan (and other primary planning and guiding documents), described the interrelationship among the primary planning documents (i.e., strategic plan, business plan, and master plan), and introduced the elements of an airport business plan. Having completed this chapter, the planning team should be ready to begin the airport business planning process outlined in the next chapter of this Guidebook.