Guidebook for Developing General Aviation Airport Business Plans (2012)

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64 CHAPTER 6 AIRPORT AND MARKET 6.1 Introduction 6.2 Airport Overview 6.3 Community Overview 6.4 Industry Overview 6.5 Market Overview 6.6 Competition Overview 6.7 Market and Customer Segments 6.8 Market Drivers 6.9 Demand and Capacity 6.10 Wrap-Up 6.11 Worksheets 6.1 INTRODUCTION This chapter discusses the importance of having an intimate understanding of the airport, the community, the industry, and the market. This chapter also discusses the importance of examining the market from a macro (entire industry) to micro (local market) perspective; analyzing the number of FAA-registered aircraft and licensed pilots; reviewing the number of based aircraft, aircraft operations, and fuel volumes at the airport; evaluating the competition; exploring market and customer segments; understanding key market drivers; and assessing demand and capacity for airport infrastructure and aviation products, services, and facilities. Worksheets, provided at the end of this chapter and in Part 4 of the digital files, can be used to help compile the information and data needed to develop an overview of the airport, community, industry, market, and competition. If a current master plan exists, information and data can be extracted from the plan to help complete the overviews. Once completed, the overviews can be integrated into the airport business plan as desired. In addition, the presentation template (provided in Part 2 of the digital files) can be customized for the airport, the market, and the audience using the information and data from the overviews. Once customized, the presentation can be used to educate, make the case for an airport business plan, and obtain buy-in from policymakers. While the airport manager understood the industry, the market, and the airport “inside and out,” the Council did not. After all, the airport was just one piece of the pie. The airport manager walked over to the airport’s administrative assistant and said, “The members of the Council haven’t spent much time out here. I think it would be helpful if we could put together an overview of the industry, the market, and the airport. I could present the overview to the Council and share it with the planning team as well. This could help facilitate the business planning process.”

Airport and Market 65 6.2 AIRPORT OVERVIEW To help facilitate the business planning process, an airport overview should be developed. A worksheet is provided specifically for this purpose. In addition to identifying the airport’s key assets, amenities, and attributes, the airport overview should provide a brief history of the airport, identify the airport’s unique characteristics, examine some key airport statistics and trends, and discuss the current state of, and the future outlook for, the airport. A summary of current and future projects should be included as well. For purposes of this Guidebook, airport assets, amenities, and attributes are described as follows: • Assets include land, infrastructure, and improvements as well as vehicles, equipment, and tools. Collectively, these are referred to as capital assets. Airport infrastructure and improvements will be discussed in this chapter while airport vehicles, equipment, and tools will be discussed in Chapter 8. • Amenities include approaches; an air traffic control tower; Aircraft Rescue and Fire Fighting (ARFF); and aviation products, services, and facilities. Aviation products, services, and facilities will be discussed in Chapter 10. • Attributes include size, proximity to the community and business and industrial centers, and accessibility. Worksheet 6-1: Airport Overview The Airport Overview Worksheet is designed to help the planning team create a representative overview of the airport. This worksheet is provided at the end of this chapter and in Part 4 of the digital files. 6.3 COMMUNITY OVERVIEW To help facilitate the business planning process, a community overview should be developed. A worksheet is provided specifically for this purpose. In addition to identifying the community’s key assets, amenities, and attributes, the community overview should provide a historical perspective, identify unique characteristics of the community, examine some key statistics and trends, and discuss the current state of, and the future outlook for, the community. Some of the key demographic, economic, and socioeconomic statistics and trends that should be examined include population, household income, employment, unemployment, and labor force. Current and future projects, plans, and planning efforts should be identified. Airport-community alignment and related issues, challenges, or problems should also be discussed. Additional areas that could be included as part of the community overview are geographic location, weather, transportation alternatives, education and training, business, and industry. Worksheet 6-2: Community Overview The Community Overview Worksheet is designed to help the planning team create a representative overview of the community. This worksheet is provided at the end of this chapter and in Part 4 of the digital files. The information required to complete this worksheet may be obtained from chambers of commerce, economic development organizations, community constituents, educational institutions, planning and transportation agencies, and others. In addition, members of the planning team may be able to provide information or identify potential resources.

66 Guidebook for Developing General Aviation Airport Business Plans Before you build a better mousetrap, it helps to know if there are any mice out there. - Anonymous To help facilitate the business planning process, an overview of the industry should be developed. A worksheet is provided specifically for this purpose. An overview of the industry should provide some historical perspective, identify unique characteristics, and discuss the current state of, and the future outlook for, the industry on a national level. In addition, an analysis of key statistics and trends for the industry, including new aircraft shipments, registered aircraft, hours flown, licensed pilots, and fuel consumption should be conducted. The findings should be included in the industry overview. Industry forecasts and other related materials developed by the FAA, aircraft manufacturers, vendors, suppliers, and associations (e.g., American Association of Airport Executives [AAAE], Aircraft Owners and Pilots Association [AOPA], General Aviation Manufacturers Association [GAMA], National Association of State Aviation Officials [NASAO], National Air Transportation Association [NATA], National Business Aviation Association [NBAA], and others) should be considered as well. One good resource is GAMA’s General Aviation Statistical Databook & Industry Outlook, which provides an industry forecast for the upcoming year and other information and data about general aviation aircraft, flight activity, pilot population, safety record, and more. Government and industry programs that may affect general aviation, general aviation airports, and the general aviation services segment of the industry should be examined as well. The objective of this overview is to ascertain the state of, and the future outlook for, the general aviation segment of the industry on a national basis. Most important, the industry overview should identify any positive or negative effects on (1) the airport, including any potential opportunities and threats; (2) the business planning process; and ultimately, (3) the approach to, and the content of, the airport business plan. Worksheet 6-3: Industry Overview The Industry Overview Worksheet is designed to help the planning team create a representative overview of the industry. This worksheet is provided at the end of this chapter and in Part 4 of the digital files. 6.5 MARKET OVERVIEW To help facilitate the business planning process, an overview of the market should be developed. A worksheet is provided specifically for this purpose. An overview of the market on a regional, state, and local level should include an examination of key statistics and trends, including the number of FAA-registered aircraft and licensed pilots in the United States, the subject state, and the subject county. This examination should also consider the number of based aircraft, aircraft operations, and fuel volumes at the subject airport. 6.4 INDUSTRY OVERVIEW

Airport and Market 67 Market forecasts and other related materials developed by the FAA, aircraft manufacturers, vendors or suppliers, associations, and planning and transportation agencies (including state aviation agencies) should be considered as well. In particular, state aviation agencies can provide valuable information, including state aviation system plans and economic impact studies. For example, a Virginia Airport System Economic Impact Study (2011) indicated that the state’s 57 general aviation airports had an economic impact of approximately $728 million, approximately $213 million in payroll, and 5,154 jobs. Regional and local planning and transportation agencies can provide valuable information as well. REGISTERED AIRCRAFT AND LICENSED PILOTS Using information from sources that include the U.S. Census Bureau and the FAA, the number of registered aircraft and licensed pilots can be compared to the population to calculate marketshare. This, in turn, can be used to establish goals, develop objectives, and formulate action plans for the airport. Using the Denver Metropolitan Area as an example, Table 6-1 depicts an analysis of the number of registered aircraft in the area and Table 6-2 depicts an analysis of the number of licensed pilots in the area. Registered aircraft and licensed pilot data are available by state and county from the FAA. Table 6-1: Example: Number of Registered Aircraft Population Registered Aircraft 2010 2010 United States 308,745,538 364,746 1.2 State of Colorado 5,029,196 7,954 1.6 2.2% Denver County 600,158 807 1.3 19.5% Adams County 441,603 553 1.3 13.3% Arapahoe County 572,003 686 1.2 16.6% Douglas County 285,465 293 1.0 7.1% Jefferson County 534,543 489 0.9 11.8% Boulder County 294,567 752 2.6 18.1% Weld County 252,825 565 2.2 13.6% Total Region 2,981,164 4,145 1.4 52.1% Location Average per 1,000 persons Market Share SO U RC E: U. S . C ENS U S BU REA U A N D FAA Registered aircraft may not be located (or based at airports) in the state and/or county of record and a registered aircraft is not necessarily an active aircraft. Such data should be considered accordingly when making an assessment of the market.

68 Guidebook for Developing General Aviation Airport Business Plans Table 6-2: Example: Number of Licensed Pilots Population Licensed Pilots 2010 2010 United States 308,745,538 582,623 1.9 State of Colorado 5,029,196 17,750 3.5 3.0% City of Denver 600,158 1,394 2.3 13.6% Adams County 441,603 889 2.0 8.7% Arapahoe County 572,003 1,849 3.2 18.0% Douglas County 285,465 1,864 6.5 18.1% Jefferson County 534,543 1,928 3.6 18.8% Boulder County 294,567 1,509 5.1 14.7% Weld County 252,825 841 3.3 8.2% Total Region 2,981,164 10,274 3.4 57.9% Location Average per 1,000 persons Market Share SO U RC E: U. S . C ENS U S BU REA U A ND FAA A licensed pilot is not necessarily an active pilot. Such data should be considered accordingly when making an assessment of the market. BASED AIRCRAFT, AIRCRAFT OPERATIONS, AND FUEL VOLUMES The number of based aircraft, aircraft operations, and fuel volumes are key market indicators. When assessing these indicators, the number of based aircraft should be identified by type (i.e., single-engine, multi-engine, jet, helicopter, and total), the number of aircraft operations should be identified by type (i.e., local general aviation, itinerant general aviation, and total), and fuel volumes should be identified by type (i.e., jet fuel, avgas, mogas, and total). In addition, it can be useful to identify the number of based aircraft by category (i.e., piston, turboprop, and turbojet) as this helps further define the market. This information should be tracked by airport management or staff. If not, the tracking of this information should be identified as an objective of the airport business plan. On an annual basis, an Airport Master Record must be completed for any airport which is part of the National Airspace System (NAS). The number of based aircraft and aircraft operations are part of the Airport Master Record. If the airport has an air traffic control tower (ATCT), aircraft operations will be available from ATCT management, from the FAA Terminal Area Forecast (TAF), or through the FAA’s Air Traffic Activity Data System (ATADS) online database. If a fuel flowage fee is charged at an airport, the number of gallons of each type of fuel dispensed should be reported to the airport management. If not, the reporting of fuel volumes should be identified as an objective of the airport business plan. To identify key changes or trends in the market, a minimum of 5 years worth of data should be examined and the percentage change from year-to-year and compounded annual rates of change should be calculated. For example, in Tables 6-3 through 6-6, the number of based aircraft, aircraft operations, and fuel volumes at the Southern Illinois Airport are depicted for a 5-year period.

Airport and Market 69 Table 6-3: Example: Based Aircraft (By Type) Year Single- engine Multi- engine Jet Helicopter Total Annual Change 2007 80 6 1 2 89 N/A 2008 82 8 1 2 93 4.5% 2009 85 8 1 2 96 3.2% 2010 78 8 1 2 89 -7.3% 2011 83 9 1 2 95 6.7% Total Change 3.8% 50.0% 0.0% 0.0% 6.7% Annual Change 0.9% 10.7% 0.0% 0.0% 1.6% SO U RC E: SO U T H ERN IL L I NO I S R EG IO NA L AI RPO RT Table 6-4: Example: Based Aircraft (By Category) Year Piston Turboprop Turbojet Total Annual Change 2007 88 0 1 89 N/A 2008 91 1 1 93 4.5% 2009 94 1 1 96 3.2% 2010 87 1 1 89 -7.3% 2011 92 2 1 95 6.7% Total Change 4.5% N/A 0.0% 6.7% Average Change 1.1% N/A 0.0% 1.6% SO U RC E: SO U T H ERN IL L I NO I S R EG IO NA L AI RPO RT The number of aircraft based at the subject airport can be compared to the number of aircraft based at airports in the market to calculate market share. Table 6-5: Example: Aircraft Operations Year GA Local GA Itinerant Total Annual Change 2007 55,664 31,394 87,058 N/A 2008 61,335 30,142 91,477 5.1% 2009 49,650 27,236 76,886 -16.0% 2010 52,635 25,591 78,226 1.7% 2011 46,626 23,449 70,075 -10.4% Total Change -16.2% -25.3% -19.5% Average Change -4.3% -7.0% -5.3% SO U RC E: SO U T H ERN IL L I NO I S R EG IO NA L AI RPO RT If aircraft operations are being estimated, as is typically the case at airports without an ATCT, such data may have limited usefulness and should be considered accordingly when making an assessment of the market.

70 Guidebook for Developing General Aviation Airport Business Plans In order to plan your future wisely, it is necessary that you understand and appreciate your past. – Jo Coudert Table 6-6: Example: Fuel Volumes Year Avgas Jet Total Annual Change 2007 142,101 73,212 215,313 N/A 2008 151,102 61,601 212,703 -1.2% 2009 123,754 66,054 189,808 -10.8% 2010 116,929 73,228 190,157 0.2% 2011 119,786 72,491 190,157 0.0% Total Change -15.7% -1.0% -11.7% Average Change -4.2% -0.2% -3.1% SO U RC E: SO U T H ERN IL L I NO I S A I RPO RT Understanding key changes and trends in the industry, within the market, and at the airport is essential to the business planning process. By gaining a thorough understanding of the market, the planning team will be better positioned to anticipate changes, develop forecasts, project performance, and formulate realistic and attainable goals, objectives, and action plans for the airport. Worksheet 6-4: Market Overview The Market Overview Worksheet is designed to help the planning team create a representative overview of the market. This worksheet is provided at the end of this chapter and in Part 4 of the digital files. 6.6 COMPETITION OVERVIEW To help facilitate the business planning process, an overview of the competition should be developed. A worksheet is provided specifically for this purpose. An overview of the competition should include identification of airports in the area competing for based and transient customers; the assets, amenities, attributes, and activity levels (e.g., aircraft operations, based aircraft, and fuel volumes) at competitive airports; and the strengths and weaknesses of those airports and organizations. Understanding how an airport compares to other airports in the area and ascertaining an airport’s competitive position within the market is crucial for formulating goals, objectives, and action plans for realizing the mission and vision for the airport and building on strengths, addressing weaknesses, capitalizing on opportunities, and managing threats.

Airport and Market 71 Worksheet 6-5: Competition Overview The Competition Overview Worksheet is designed to help compare the airport with competitive airports in the area and, upon completion, to ascertain the airport’s competitive position within the market. This worksheet is provided at the end of this chapter and in Part 4 of the digital files. The information required to complete this worksheet can be obtained directly from the owners or operators of competitive airports (e.g., from websites, public records, and conversations with airport management, staff, and others). Information can also be obtained from various other sources (e.g., airnav.com, AC-U-KWIK, Fixed Base Operator [FBO] and Specialized Aviation Service Operator [SASO] websites, and others). In addition, members of the planning team may be able to obtain information or identify potential resources. 6.7 MARKET AND CUSTOMER SEGMENTS PERSONAL FLYING In many respects, aircraft owners and operators who have committed time and financial resources to this segment of the industry have done so because of a sheer love of aviation. The "romance factor,” which has enthralled young and old alike, is a very important element in understanding the relationship between people and flying machines. The aircraft used for personal flying are typically based at general aviation airports, both public and private. For the most part, the aircraft used for personal flying are single-engine and light multi-engine piston-powered aircraft, although some larger aircraft, including turbine-powered aircraft, are also used for this purpose. According to GAMA, there were 150,000 active aircraft being used for personal flying in the United States in 2009. This segment of the market is typically price oriented, seeking the best price for the service. BUSINESS FLYING The business segment of the market is viewed as being integral to the long-term growth and development of the general aviation industry. As of 2009, this segment comprised more than 32,000 active aircraft, including approximately 5,800 turboprop and jet aircraft, in the United States. It is estimated that business flights make up about 21% of the 23 million hours flown by general aviation each year (GAMA, 2010). One of general aviation’s most important roles in the economy of the United States is enhancing the profitability and the competitive strength of United States companies and industries. Companies taking advantage of general aviation routinely outperform businesses relying solely on the airlines for air travel. Studies have shown that, on average, Standard & Poor’s 500 firms that use general aviation aircraft to transport management teams, employees, business partners, and customers earned approximately 88% more total return to shareholders than those that do not use general aviation aircraft (NexaAdvisors). This analysis revealed a correlation between firms utilizing general aviation aircraft and return on equity. It did not conclude that the use of general aviation aircraft increased financial performance.

72 Guidebook for Developing General Aviation Airport Business Plans Although approximately 3% of general aviation aircraft are registered to Standard & Poor’s 500 firms, most business aircraft are operated by smaller companies. In the Business Aviation Factbook (2011), NBAA indicates that 59% of companies operating business aircraft employ fewer than 500 employees and 70% have fewer than 100 employees. The business segment of the market is typically service oriented, seeking the best service for the price. COMMERCIAL FLYING Commercial aviation is a significant economic engine in that it represents companies that use general aviation aircraft for a wide variety of commercial purposes, including flight instruction, air taxi (non-scheduled, on demand), medical transportation (air ambulance), sightseeing, aerial observation (e.g., pipeline/power-line patrol/inspection), aerial application (e.g., agriculture, photography, and fire fighting), cargo, and much more. This segment comprises more than 38,000 active aircraft. It is estimated that general aviation aircraft used for commercial purposes make up about 43% of the 23 million hours flow by general aviation each year (GAMA, 2010). The commercial segment of the market is typically value oriented, seeking the best combination of service and price. GOVERNMENT FLYING Government agencies use general aviation aircraft for various reasons, including transportation of government officials, law enforcement, and emergency services. This segment of the market is typically value oriented, seeking the best combination of service and price. Within each of the four primary operating segments of the market, there are two customer segments—based and transient. • Based customers use an airport as a base of operations. In addition to parking or storing aircraft, based customers may occupy office, shop, and storage space at the airport. • Transient customers use an airport on an itinerant basis. 6.8 MARKET DRIVERS Some of the market drivers for based and transient aircraft owners and operators in the personal and business segments of the general aviation market can include, but are not necessarily limited to, the following: • Proximity to home, work, or the final destination—One of the primary attributes considered by general aviation aircraft owners and operators when selecting a base airport is proximity to home or work—from a distance and more importantly, from a time standpoint. One of the primary considerations for transient aircraft owners and operators is the airport’s proximity to the final destination. • Runway length—Although some general aviation aircraft can be operated safely from 1,000-foot runways, as a general rule, the personal flying customer segment typically desires a 3,000-foot paved runway and prefers a longer runway. Further, with the development of larger and faster general aviation aircraft, the business segment generally desires a 5,000-foot runway and prefers a longer runway. As a result, a 5,000-foot runway has become the minimum design criteria for airports seeking to attract the full range of general aviation aircraft owners and operators. With regard to the high end of the business segment of the market, which includes ultra-long range intercontinental or global jets, and at higher altitude airports, a minimum 7,000-foot runway is desired and a longer runway is preferred.

Airport and Market 73 perspective. Business customers prefer a precision approach with a non-precision approach as a minimum. Also, a precision approach is typically preferred when terrain or obstacles are a factor. • ATCT—Personal customers do not generally require an ATCT. In fact, at some airports, the owners of personal aircraft consider an ATCT a negative attribute. An ATCT is typically desired and radar coverage is preferred by business customers to facilitate instrument departures and arrivals and to provide an additional level of safety. • Aviation products and services— o Fuel: Both the personal and business segments of the market want the required aviation fuels to be available. The personal segment is generally price oriented while the business segment is typically service oriented. The convenience of a self-serve fueling system can be a positive attribute, particularly for the personal segment of the market. o Line services: Basic aircraft ground handling services are generally required by the personal segment and full ground handling services are typically desired by the business segment, which also expects higher level and quality services. o Maintenance: At a minimum, airframe and powerplant maintenance services are desired and avionics services are preferred by both the personal and business customer segments of the market. These services provide a higher level of convenience by alleviating the need to travel or seek such services at a different airport. o Ground transportation: Generally, transient aircraft customers want reliable ground transportation services, including courtesy vans, rental cars, limousine services, and crew cars. • Aviation facilities—The availability of quality aircraft parking and storage (hangars) is an important factor in attracting customers from all segments of the general aviation market. Access to ancillary facilities, including general aviation terminal buildings with passenger and crew amenities (e.g., lounges, conference rooms, quiet rooms, work areas, Internet access, weather briefing and flight planning capabilities, and restrooms with showers), is important as well. A restaurant providing aircraft catering is typically preferred by the business segment of the market. • Noise restrictions and issues—Airports with noise restrictions that limit access to the airport for certain aircraft types or during certain hours or highly noise-sensitive areas close to the airport can be a deterrent to all segments of the market. The market drivers for the commercial and government segments of the market are generally the same as the business segment of the market; however, there are some notable differences. For instance, air taxi or charter aircraft typically require longer runways and the destination airport must have real-time weather reporting capabilities. The government segment of the market may prefer precision approaches and an ATCT. This segment of the market may also have special requirements relating to the availability of fuel, line services, maintenance, and hangars during extended hours of operation. • Approaches—Although personal aviation customers do not typically require precision approaches, non- precision approaches are desired. A precision approach is generally preferred from a flight training

74 Guidebook for Developing General Aviation Airport Business Plans Figure 6-1 summarizes the key market drivers for the personal and business segments of the market. Figure 6-1: Key Market Drivers Overall, the range, level, and quality of airport infrastructure and aviation products, services, and facilities are some of the key factors that drive the decision of based and transient aircraft operators to select one airport over another. Understanding the needs, desires, and expectations of customers is one of the most fundamental aspects of the business planning process. Such an understanding is essential to establishing goals, developing objectives, and formulating action plans that realize the mission and vision for the airport. For this reason, throughout the business planning process, it is important to keep the customer’s perspective “top of mind.” 6.9 DEMAND AND CAPACITY During the airport business planning process, the demand in the market for aviation products, services, and facilities needs to be examined and compared to the capacity at the airport to identify any deficiencies. Once accomplished, goals, objectives, and action plans need to be formulated to address any deficiencies noted. During the airport master planning process, the demand for airport infrastructure is forecast and compared to the capacity at the airport to identify deficiencies. In the airport master plan, strategies are conveyed for addressing such deficiencies. In this section, demand and capacity will be discussed from the standpoint of aviation products, services, and facilities and airport infrastructure. Personal •Close proximity •3,000-foot runway (with longer preferred) •Fuel (with self-serve available) •Line services (basic) •Maintenance (basic) •Ground transportation (basic) •Tiedown (with hangar available) Business •Close proximity •5,000-foot runway (with longer preferred) •Precision approach(es) •ATCT (with radar coverage preferred) •Fuel •Line services (full) •Maintenance (full - with avionics and instruments preferred) •Ground transportation (full) •Hangar (preferred) •Catering (full)

Airport and Market 75 AVIATION PRODUCTS, SERVICES, AND FACILIT IES Three worksheets (Aviation Products Assessment Worksheet, Aviation Services Assessment Worksheet, and Aviation Facilities Assessment Worksheet) are provided at the end of this chapter and in Part 4 of the digital files to help identify deficiencies in aviation products, services, and facilities at the airport. Although aviation products and facilities are tangible, it may be challenging to assess aviation services, particularly in terms of the range, level, and quality of aviation services being provided at an airport. These worksheets can be used to identify deficiencies by comparing demand in the market to capacity at the airport. Any product, service, or facility deficiencies identified through the assessment process need to be prioritized and addressed in the airport business plan. More specifically, goals, objectives, and action plans need to be formulated to address the deficiencies. Throughout this process, consideration needs to be given to (1) the assets, amenities, and attributes of the airport and the community; (2) the market and customer segments being served by the airport; and (3) the FBOs and SASOs located at the airport. For example, if an assessment indicates that market demand for T-hangar space exceeds, or will soon exceed, the existing capacity at the airport, a goal needs to be established or an objective needs to be developed and an action plan needs to be formulated to address this deficiency. How will the deficiency be addressed and by whom? Will the airport sponsor work with existing businesses at the airport to ascertain the level of interest in leasing land for development and operation of new T-hangars? If airport businesses are not interested in the opportunity or multiple airport businesses are interested, will the airport sponsor issue a Request For Qualifications (RFQ) or Request For Proposals (RFP) seeking responses from interested parties to lease land and develop and operate new T-hangars? If an acceptable response is not received during the RFQ/RFP process, is the airport sponsor willing to develop T-hangars and enter into a contract with an airport business or other interested party to manage the T- hangars? If not, is the airport sponsor willing to develop and operate the T-hangars directly? As demonstrated in this example, once the assessment identifies a deficiency, it can be addressed in various ways. This example identified some private enterprise, public-private partnership, and public agency solutions. Through the business planning process, the various approaches for addressing a deficiency need to be identified and evaluated. Once a decision is made, goals, objectives, and action plans need to be formulated. In addition, the parameters for doing business at an airport are typically set forth in policy documents commonly referred to as primary guiding documents. Such documents could include leasing/rents and fees policy, minimum standards, rules and regulations, and development guidelines. Airport management needs to ensure the airport’s primary guiding documents are relevant to the activities taking place at the airport, are reasonable and appropriate for the market and the airport, are physically attainable, and are uniformly and consistently applied and enforced. This is particularly important if the airport sponsor is going to rely on private enterprise to address any deficiencies identified through the assessment process. Worksheet 6-6: Aviation Products Assessment Worksheet 6-7: Aviation Services Assessment Worksheet 6-8: Aviation Facilities Assessment

76 Guidebook for Developing General Aviation Airport Business Plans INFRASTRUCTURE An airport master plan outlines the short-, medium-, and long-term infrastructure development goals for the airport. As defined by the FAA, an airport master plan supports modernization of existing airports and the creation of new airports, regardless of size, complexity, or role. Using graphics, tables, diagrams, reports, and various studies, an airport master plan provides a framework for decision making related to airport development (Advisory Circular 150/5070-6B). The following airport master plan elements (outlined in Advisory Circular 150/5070-6B) can be useful when developing an airport business plan: • Public Involvement Program—encourages information sharing and collaboration among stakeholders. • Public Information Kit—provides essential information about the airport, the air transportation and emergency services provided to the community, and the economic impact of the airport, including direct and indirect impacts and the type and number of jobs. • Existing Conditions—identifies key factors affecting the airport as it currently exists. o Inventory—identifies the existing infrastructure at the airport. o Socioeconomic data—assesses the community and the market and provides specific input for economic forecasts. o Financial resources—includes a discussion of the airport’s operating revenues and expenses and sources and uses of funds. • Aviation Forecasts—projects future activity which provides the basis for ascertaining the need for new or expanded infrastructure. The following items are generally assumed to have a potential effect on demand: o Economic characteristics of a community. o Demographic characteristics of an area’s population. o Geographic distances between populations and centers of commerce within the airport service area. o Business activity, changes in the aviation industry, and local aviation actions. o Political developments, including domestic issues and international relations, changes in the regulatory environment, and shifting attitudes toward the environmental effects of aviation. • Facility Requirements—the aviation industry is dynamic and changes in the industry may have a significant effect on the size, quantity, and type of infrastructure needed to meet demand. o Support facilities—typically includes ARFF, airport administration and operations buildings, airport maintenance and storage facilities, airport deicing areas, and other airport buildings and facilities. o General aviation requirements—typically includes vehicle and aircraft access and parking; may include aircraft storage facilities, general aviation terminal buildings, aircraft maintenance facilities, fuel storage facilities, and other buildings and facilities. • Financial Feasibility Analysis—demonstrates the airport sponsor's ability to fund the infrastructure projects identified in the CIP. This analysis considers funding sources for the CIP, projects revenues and expenses for each year of the CIP, and may identify methods to increase airport revenues from both an aeronautical and non-aeronautical perspective. Worksheet 6-9: Airport Infrastructure An Airport Infrastructure Worksheet is provided at the end of this chapter and in Part 4 of the digital files to help identify deficiencies in airport infrastructure. If a current master plan exists, information and data can be extracted from the master plan to help complete this worksheet.

Airport and Market 77 Capacity •Infrastructure •Products, Services, and Facilities Airport Aviation Businesses •FBOs and SASOs Demand •Personal •Business •Commercial •Government Based Aircraft Transient Aircraft Figure 6-2 depicts the key elements of the demand-capacity equation and the key relationships among the elements. Figure 6-2: Demand-Capacity Equation NON-AERONAUTICAL USE Some airport land or infrastructure may be unusable for aeronautical purposes. In such situations, the assessment of demand and capacity analysis should be expanded to include the non-aeronautical use of airport property as such use could generate additional revenue and help the airport become (or continue to be) financially self- sustaining. The FAA’s policy on establishing rent for aeronautical use differs from the policy on setting rent for non- aeronautical use. The FAA encourages airport sponsors to establish fair market rent for aeronautical use, but does “not consider the self-sustaining obligation to require the sponsor to charge fair market value rates for aeronautical users.” In contrast, “rates charged for non-aeronautical use (e.g., concessions) of the airport must be based on fair market value.” (FAA Order 5190.6B) In other cases, airport property may be underutilized or may not be expected to be used for quite some time. In such situations, airport managers and policymakers should proceed with caution before allowing the non- aeronautical use of airport property. Generally, the FAA must approve the non-aeronautical use of airport property designated for aeronautical purposes. Airport sponsors are encouraged to seek guidance from the FAA’s Airport District Office before allowing the non-aeronautical use of airport property designated for aeronautical purposes.

78 Guidebook for Developing General Aviation Airport Business Plans THROUGH-THE-FENCE ACTIVITIES One of the most significant challenges associated with through-the-fence activities is creating economic parity between on-airport and off-airport (or through-the-fence) operators. Although some circumstances may be conducive to granting through-the-fence rights or access to an airport (e.g., special-use aeronautical operations such as air cargo companies like UPS or aircraft manufacturing companies like Gulfstream Aerospace), this type of arrangement is discouraged by the FAA because of concerns about safety, security, and airport economics. As a matter of policy, airport managers and policymakers may refuse to grant through-the-fence rights to any party for any reason. Consistent with best practices, any and all other options should be fully and completely exhausted before considering this possibility. Airport sponsors desirous of prohibiting through-the-fence operations can do so by developing and adopting a policy or directive to this effect. In 2012, ACRP’s Oversight Committee elected to pursue a research project, that will culminate in the preparation of a guidebook for managing through-the-fence operations (ACRP Project 10-12). 6.10 WRAP-UP In summary, having an intimate understanding of the airport, the community, the industry, and the market is foundational for developing and implementing an airport business plan. Understanding the competition, customers, and demand and capacity is also essential to the business planning process. This chapter addressed each of these areas and should be consulted as needed to develop objectives. 6.11 WORKSHEETS • Worksheet 6-1: Airport Overview • Worksheet 6-2: Community Overview • Worksheet 6-3: Industry Overview • Worksheet 6-4: Market Overview • Worksheet 6-5: Competition Overview • Worksheet 6-6: Aviation Products Assessment • Worksheet 6-7: Aviation Services Assessment • Worksheet 6-8: Aviation Facilities Assessment • Worksheet 6-9: Airport Infrastructure The non-aeronautical use of airport property is discussed further in Chapter 11: Financial. Additionally, this topic is discussed in ACRP Synthesis 19: Airport Revenue Diversification.

Airport and Market 79 WORKSHEET 6-1: AIRPORT OVERVIEW CHAPTER 6: AIRPORT AND MARKET This worksheet is designed to help the planning team identify the airport’s key assets, amenities, and attributes. It includes a place to provide a brief history of the airport, identify the airport’s unique characteristics, convey additional airport statistics and trends, and discuss the current state of (and the future outlook for) the airport. Additional information, data, and documentation can be attached to this worksheet as needed. Airport Considerations Item Information Airport name (and identifier) City and state Distance/direction from CBD* Owner Operator (if different) Governing body Part of a system Manager/director Size (acres) Elevation (MSL) Number of runways Longest runway Weight bearing capacity Other runway(s) Precision approaches Non-precision approaches Air traffic control tower Airport type Airport role Population served Economic impact Part 139 ARFF FBOs (number and names) SASOs (number and names) ** Non-commercial tenants Government tenants Military tenants * Central business district ** Individual and corporate flight departments

80 Guidebook for Developing General Aviation Airport Business Plans Item Information Historical perspective Unique characteristics Key statistics/trends Current state Future outlook

Airport and Market 81 FBO Considerations Item Information Historical perspective Unique characteristics Key statistics/trends Current state Future outlook

82 Guidebook for Developing General Aviation Airport Business Plans WORKSHEET 6-2: COMMUNITY OVERVIEW CHAPTER 6: AIRPORT AND MARKET This worksheet is designed to help the planning team identify the key assets, amenities, and attributes of the community. It includes a place to provide a brief history of the community, identify unique characteristics of the community, and discuss the current state of (and the future outlook for) the community. Additional information, data, and documentation can be attached to this worksheet as needed. Item Information Geographic location Weather/climate Transportation infrastructure Highway Railroad Air (air carrier service) Air (general aviation service) Port access Demographic information Population Median age (years) Housing characteristics Housing units Median value (dollars) Economic characteristics Labor force Median household income Per capita income Families below poverty level Educational characteristics High school graduation Bachelor’s degree or higher Business Industry

Airport and Market 83 Item Information Historical perspective Unique characteristics Current state Future outlook

84 Guidebook for Developing General Aviation Airport Business Plans WORKSHEET 6-3: INDUSTRY OVERVIEW CHAPTER 6: AIRPORT AND MARKET An overview of the industry should provide some historical perspective, identify unique characteristics, and discuss the current state of, and the future outlook for, the industry on a national level. In addition, an analysis of key statistics and trends for the industry, including new aircraft shipments, registered aircraft, hours flown, licensed pilots, and fuel consumption should be conducted. The findings should be included in the industry overview. Item Information Historical perspective Unique characteristics Current state

Airport and Market 85 Future outlook Key industry statistics/trends General aviation aircraft shipments Increased/Decreased X.X% per year (from X to Y) Number of registered general aviation aircraft Increased/Decreased X.X% per year (from X to Y) General aviation hours flown Increased/Decreased X.X% per year (from X to Y) Number of licensed pilots Increased/Decreased X.X% per year (from X to Y) Fuel consumption Increased/Decreased X.X% per year (from X to Y)

86 Guidebook for Developing General Aviation Airport Business Plans WORKSHEET 6-4: MARKET OVERVIEW CHAPTER 6: AIRPORT AND MARKET An overview of the market (on a regional, state, and local level) should include an examination of key statistics and trends, including the number of FAA-registered aircraft and licensed pilots (in the United States, the subject state, and the subject county) and the number of based aircraft, aircraft operations, and fuel volumes at the subject airport. Number of Registered Aircraft Population Registered Aircraft 2010 2010 United States #DIV/0! State #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! Total Region 0 0 #DIV/0! #DIV/0! Location Average per 1,000 persons Market Share Number of Licensed Pilots Population Licensed Pilots 2010 2010 United States #DIV/0! State #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! Total Region 0 0 #DIV/0! #DIV/0! Location Average per 1,000 persons Market Share

Airport and Market 87 Based Aircraft (By Type) Year Single- engine Multi- engine Jet Helicopter Total Annual Change 0 N/A 0 #DIV/0! 0 #DIV/0! 0 #DIV/0! 0 #DIV/0! Total Change #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! Annual Change #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! Based Aircraft (By Category) Year Piston Turboprop Turbojet Total Annual Change 0 N/A 0 #DIV/0! 0 #DIV/0! 0 #DIV/0! 0 #DIV/0! Total Change #DIV/0! #DIV/0! #DIV/0! #DIV/0! Average Change #DIV/0! #DIV/0! #DIV/0! #DIV/0! Aircraft Operations Year GA Local GA Itinerant Total Annual Change 0 N/A 0 #DIV/0! 0 #DIV/0! 0 #DIV/0! 0 #DIV/0! Total Change #DIV/0! #DIV/0! #DIV/0! Average Change #DIV/0! #DIV/0! #DIV/0! Fuel Volumes Year Avgas Jet Fuel Total Annual Change 0 N/A 0 #DIV/0! 0 #DIV/0! 0 #DIV/0! 0 #DIV/0! Total Change #DIV/0! #DIV/0! #DIV/0! Average Change #DIV/0! #DIV/0! #DIV/0!

88 Guidebook for Developing General Aviation Airport Business Plans WORKSHEET 6-5: COMPETITION OVERVIEW CHAPTER 6: AIRPORT AND MARKET This worksheet can be used to identify the airports in the area that compete with the subject airport for based and transient customers; the assets, amenities, attributes, and activities at those airports; and the strengths and weaknesses of those airports. Information from the airport profile (from “airport name and identifier” through “ARFF”—identified in italics) should be incorporated into this worksheet under the column titled “Subject Airport.” Subject Airport Airport 1 Airport 2 Airport 3 Airport name (and identifier) City and state Distance/direction from CBD* Owner Operator Governing body Part of a system Manager/director Size (acreage) Elevation (MSL) Number of runways Longest runway Weight bearing capacity Other runway(s) Precision approaches Non-precision approaches Air traffic control tower Airport type Airport role Population served Part 139 ARFF ** FBOs (number and names) Owned/operated by SASOs (number and names) Maintenance, repair, overhaul Avionics/instruments Modification/refurbishment Flight/ground instruction Aircraft rental Aircraft charter Aircraft management Aircraft sales/leasing

Airport and Market 89 Subject Airport Airport 1 Airport 2 Airport 3 Market segment(s) served*** Non-commercial tenants Government tenants Military tenants Non-aeronautical tenants T-hangar(s) Owned/operated by Number Occupancy Other hangar(s) Owned/operated by Number Occupancy Jet fuel price (per gallon) Owned/operated by Full service Self-serve Avgas price (per gallon) Owned/operated by Full service Self-serve Based aircraft Single-engine Multi-engine Jet Helicopter Other Total Aircraft operations General aviation—local General aviation—itinerant Total Fuel volumes General aviation—jet fuel General aviation—avgas Total Other fuel volumes (specify) * CBD = Central Business District ** FBO providing fueling, line (ground), passenger/crew, and location-based services *** Personal (P), Business (B), Commercial (C), Government (G) Airport 1: ______________________ Airport 2: ______________________ Airport 3: _______________________

90 Guidebook for Developing General Aviation Airport Business Plans WORKSHEET 6-6: AVIATION PRODUCTS ASSESSMENT CHAPTER 6: AIRPORT AND MARKET The availability of fuel is a critical factor in attracting and retaining based and transient customers from all segments of the market. This worksheet can be used to identify the demand for the aviation products (including fuel, lubricants, parts, sales and leasing, and pilot supplies) and the capacity of the airport’s operators. If desired, an assessment can be made regarding the quality of the products being provided, as follows: Quality: E = Excellent; G = Good; A = Average; F = Fair; or P = Poor Airport Considerations Demand (Yes/No) Capacity Operator 1 (Yes/No) Capacity Operator 2 (Yes/No) Capacity Operator 3 (Yes/No) Quality (Rating) General Aviation Fueling Jet fuel Full service Self-serve Avgas Full service Self-serve Mogas Full service Self-serve Aviation lubricants Aircraft parts Aircraft sales/leasing Pilot supplies The convenience of a self-serve fueling system can be a positive feature for the personal segment of the market. FBO Considerations Demand (Yes/No) Capacity Operator 1 (Yes/No) Capacity Operator 2 (Yes/No) Capacity Operator 3 (Yes/No) Quality (Rating) Air Carrier Fueling Jet fuel Avgas Military Fueling Jet fuel Avgas Operator 1: _____________________ Operator 2: _____________________ Operator 3: _____________________

Airport and Market 91 WORKSHEET 6-7: AVIATION SERVICES ASSESSMENT CHAPTER 6: AIRPORT AND MARKET The availability of quality services is an important factor in attracting and retaining customers from all segments of the market. This worksheet can be used to identify the demand for services and the capacity of existing operators at the airport. If desired, an assessment can be made regarding the quality of the services being provided, as follows: Quality: E = Excellent; G = Good; A = Average; F = Fair; or P = Poor Demand (Yes/No) Capacity Operator 1 (Yes/No) Capacity Operator 2 (Yes/No) Capacity Operator 3 (Yes/No) Quality (Rating) Line (Aircraft Ground) Services Towing AC ground power DC ground power Lavatory Preheat Deicing Oxygen Nitrogen Compressed air Cleaning/detailing Disabled aircraft removal Passenger/Crew Services Concierge Coffee, tea, ice Snacks/vending Business center Rental cars/crew car Courtesy transportation Technical Services (Aircraft Maintenance, Repair, and Overhaul) Piston fixed wing Turboprop fixed wing Turbofan fixed wing Avionics /Instruments Modification Refurbishment Flight Services Flight/ground instruction Aircraft rental Aircraft charter Aircraft management Operator 1: _____________________ Operator 2: _____________________ Operator 3: _____________________

92 Guidebook for Developing General Aviation Airport Business Plans WORKSHEET 6-8: AVIATION FACILITIES ASSESSMENT CHAPTER 6: AIRPORT AND MARKET The availability of quality aircraft parking and storage (hangar) space is an important factor in attracting and retaining customers from all segments of the market. Access to ancillary facilities, including general aviation terminal buildings which typically provide various passenger and crew amenities, can be important as well. This worksheet can be used to identify the demand for facilities and the capacity of existing operators at the airport. If desired, an assessment can be made regarding the quality of the facilities being provided, as follows: Quality: E = Excellent; G = Good; A = Average; F = Fair; or P = Poor Demand (Yes/No) Capacity Operator 1 (Yes/No) Capacity Operator 2 (Yes/No) Capacity Operator 3 (Yes/No) Quality (Rating) General aviation terminal building Passenger lounge Conference room Work areas/stations Crew lounge Crew snooze/quiet room(s) Crew restrooms/showers Crew flight planning room Internet access Office space Shop space Hangar(s) Shadeport(s) T-hangar(s) Executive/box hangar(s) Community hangar(s) Corporate hangar(s) Maintenance hangar(s) Aircraft parking (ramp) Vehicle parking Fuel storage facility Jet fuel Avgas Mogas Diesel Operator 1: _____________________ Operator 2: _____________________ Operator 3: _____________________

Airport and Market 93 WORKSHEET 6-9: AIRPORT INFRASTRUCTURE CHAPTER 6: AIRPORT AND MARKET This worksheet can be utilized to identify the airport’s existing infrastructure and associated demand. Additionally, if desired, an assessment can be made regarding the quality of the airport’s existing infrastructure, as follows: Quality: E = Excellent; G = Good; A = Average; F = Fair; or P = Poor Details Demand (Yes/No) Quality (Rating) Runway 1 Length/Width Weight bearing capacity Runway 2 Length/Width Weight bearing capacity Runway 3 Length/Width Weight bearing capacity Taxiways Airport striping Airport lighting Airport signage Aircraft parking (ramp) Air traffic control tower Precision approach(es) Non-precision approach(es) ARFF facility* ARFF service* GSE facility** Airside roadways (perimeter) Administration building/office Properties office Operations office Maintenance building/office/yard Storage building/yard Customs building/office Vehicle parking Landside roadways *ARFF = Aircraft Rescue and Fire Fighting **GSE = Ground Support Equipment