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Introduction to, Need for, and Organization of the Guidebook P a r t 1
1-1 This report for Airport Cooperative Research Program (ACRP) Project 07-07: âEvaluating Terminal Renewal Versus Replacement Optionsâ (published as ACRP Report 68: Guidebook for Evaluating Terminal Renewal Versus Replacement Options, hereafter referred to as the Guidebook) directs the user through a step-by-step process for conducting a business-driven evaluation of competing options to renew or replace airport terminal facilities. The process is repeatable and scalable to airports of different sizes. The Guidebook is intended to assist its users in identify- ing the need for terminal redevelopment and selecting among competing options for renewing versus replacing existing terminal facilities. The Guidebook provides information, tools, and techniques that can be used by airport professionals, policy makers, and industry professionals to develop and understand the processes needed to make fully informed decisions and to clearly state assumptions and conclusions required for facilitating stakeholder, government agency, and public project and funding approvals. This Guidebook is based on the knowledge, expertise, opinions, and recommendations of air- port executives and airport industry professionals. It is also based on information the researchers acquired through literature reviews, interviews, and analyses. The Guidebook sets forth and relies upon proven techniques and tools currently being used by airport operators, as well as practices used in other industries with significant facility asset management requirements. C h a p t e r 1 Introduction
2-1 Passage of the Airline Deregulation Act of 1978 began a period of rapid growth and expan- sion for U.S. airlines that lasted through the 1990s; however, since 2000, the effects of expansion, competition, increasing fuel prices, and global economic downturns have placed severe finan- cial constraints on these airlines. The airlines have responded by reducing capacity nationwide and, in some cases, consolidating. Even as airport operators were adjusting to airline service reductions, the September 11, 2001, terrorist attacks caused unprecedented federal oversight and administration of air transportation security that dramatically transformed the way airport terminals function. As a result, aging terminal facilitiesâsome already nearing the end of their service livesâare more rapidly approaching functional obsolescence. As airlines reduce costs in an attempt to return to long-term profitability, airport operator initiatives to renew or replace aging terminal facilities frequently encounter resistance from the airlines. Purely demand-driven terminal replacement projects have become rare; instead, airport operators are just as often required to find ways to reuse terminal areas that have been âgiven backâ by the airlines. Airports with underutilized space are facing scrutiny from the airlines to justify the replacement of aging facilities as being more cost effective than facility renewal. Airport operators are challenged to develop alternatives to evaluating strictly cost-driven approaches for renewing or replacing terminal facilities. While it may be easier to reach consen- sus using strictly cost-driven approaches to decision-making, such approaches may not provide airport operators the ability to implement long-range strategies that would improve the com- petitiveness of their airports. The purpose of this research project is to formulate guidelines for conducting a business- driven evaluation of competing options to renew or replace terminal facilities that is repeatable and scalable to airports of varying sizes. C h a p t e r 2 Purpose of and Need for the Guidebook
3-1 This Guidebook initially presents a general discussion of terminal building life-cycles, moti- vations for, and factors that affect, terminal redevelopment at U.S. airports as well as the roles and responsibilities of persons and organizations undertaking major terminal redevelopment programs. Understanding the context in which terminal redevelopment takes place is critical to formulating an evaluation process that will provide decision makers with business-driven analyses and recommendations to align a terminal capital program with the airport operatorâs strategic goals for the airport. Appendix A provides the definitions of key terms used within the context of the Guidebook. The Guidebook describes a preferred, sequential four-step process wherein objectives and needs are established, options are developed, evaluations are conducted, and recommendations are documented. Specifically, the four steps are as follows: ⢠Step 1: Determine Need For Terminal Redevelopment ⢠Step 2: Refine Terminal Redevelopment Objectives and Generate Options ⢠Step 3: Evaluate Options ⢠Step 4: Document Results From the Analyses The evaluation of options for terminal renewal versus terminal replacement is, in reality, only one phase of a larger process for planning terminal redevelopment. Therefore, the Guidebook references available literature that will assist the user in developing prerequisite information to prepare for the actual evaluation of competing options, which primarily occurs under Step 3. In the Guidebook, a case study example terminal redevelopment case referred to as City Airport is used to facilitate user understanding of techniques to evaluate competing options. The City Air- port example is intended to enhance user recognition of the general processes, techniques, and specific tools used in the evaluation. More importantly, the City Airport example will facilitate user understanding of the sources of data needed to conduct an evaluation, synthesize separate analyses that may be undertaken by different groups involved in the evaluation, and interpret the analyses in terms of an airportâs Strategic Plan or Master Plan. Appendix B provides additional quantitative information related to the City Airport example application. Airport terminals are complex facilities that exhibit vastly different characteristics in terms of size, air service, business arrangements, governance, and physical condition, among other char- acteristics. Consequently, tools described in this Guidebook should not be considered formulaic. Users of the Guidebook will necessarily have to adapt the templates provided in Appendix C to reflect the unique operating and business environment of a particular airport. Even so, users will find the evaluation methodology described in the Guidebook to be fully adaptable and easy to integrate into their existing processes for developing unique terminal-related capital programs. For additional information related to the concepts discussed in the Guidebook, a literature review is provided in Appendix D. C h a p t e r 3 Organization of the Guidebook
