Innovative Revenue Strategies – An Airport Guide (2015) / Chapter Skim
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From page 23... ...
2 1 Chapter 2 Overview of Revenue Strategies 2.1 Agility in Changing Times 2.2 What Is Innova ve for Airports? 2.3 Strategies Selected 2.4 Strategy Evalua ons 2.5 Key Func onal Areas Involved with Strategies 2.6 Wrap up 2.7 Addi onal References Chapter 2 presents the factors that went into selec on of the strategies, an overview of the strategies themselves, and a discussion of how implementa on of the strategies relates to different func onal areas of the airport.
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From page 24... ...
INNOVATIVE REVENUE STRATEGIES – AN AIRPORT GUIDE 2-2 Figure 2-1: Key Aributes of a Diversified Airport Enterprise Source: KRAMER aerotek inc., 2014 2.2 WHAT IS INNOVATIVE FOR AIRPORTS? Innovaon involves finding new ways to deliver a service or produce an outcome through adopon of new technology and systems, improvements to processes, or changes in organizaonal structure [Schumpeter]
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From page 25... ...
CHAPTER 2 – OVERVIEW OF REVENUE STRATEGIES 2-3 2.3 STRATEGIES SELECTED The innovave strategies described in this Airport Guide result directly or indirectly in cost savings or net revenue increases to the airport sponsor. There are three basic ways to increase net revenues to the airport sponsor: 1.
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From page 27... ...
CHAPTER 2 – OVERVIEW OF REVENUE STRATEGIES 2 5 Goal Increase Net Revenues to the Airport Sponsor Strategy 1 Technique 1.1 Technique 1.2 2.4 STRATEGY EVALUATIONS Each strategy is evaluated and described in subsequent chapters according to a common framework, as follows: Scope of the Strategy o General descripon o Objecves o Applicability to different types of airports (all, commercial, general aviaon, cargo) o Prevalence (used regularly, used rarely, not tried at airports, used for other modes)
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From page 28... ...
INNOVATIVE REVENUE STRATEGIES – AN AIRPORT GUIDE 2 6 Table 2 1: Examples of Revenue Techniques by Key Func onal Area Key Func onal Areas Examples of Revenue Genera on Techniques Aircra and Passenger Services Airport provides ground handling service, deicing, catering, aircra parking, passenger processing (ckeng, check in, baggage, gate services) , shared clubrooms Business Development Airport develops and improves traveler and tenant services, joint markeng and adversing campaigns, foreign trade zones, and pursues commercial or industrial development adjacent to the airport Cargo Airport parcipates in development of shared cargo warehouses, dedicated equipment, logiscs centers, and value capture techniques for just in me manufacturing and logiscs centers off the airport Concessions Airport engages directly in concept innovaon, mobile applicaons to support concessions, conversion of non revenue space to food & beverage, retail, and services, seasonal and niche markets, internet commerce Energy Management & Alterna ves Airport operates ulies for tenants and parcipates in renewable energy and alternave fuel projects Environmental Airport offers opportunies for waste management and recycling, and agriculture for land stabilizaon Finance & Property Management Airport works with other public and private enes to iniate and obtain alternave sources of funding and financing for capital projects, operaons, and maintenance Airport strives to maximize use of airport property and may parcipate as developer, manager, partner, or joint venture in new ventures Ground Transporta on Airport pursues management alternaves, smart technology, alternave fee structures, beer curbside management for revenues, operaon of intermodal transfers Informa on Technology Airport pursues strategies for Wi Fi, shared backbone services, digital displays, customer segmentaon Legal and Contracts Legal department is involved with innovave lease and concession agreements, third party contracts, revenue sharing, profit sharing, equity parcipaon, privilege fees, royales, intellectual property rights, exclusive product selling rights Parking Airport introduces targeted product mix, concierge services, online reservaons, privilege fees, cost recovery for employee parking Planning, Design, & Administra ve Process Procurement and administraon improves plans and specificaons for concessions, customer service offerings, document preparaon, solicitaon, offer & award, revenue development incubators Service Quality Airport pursues a pracce of exceponal customer service, quality assurance, and performance measurement (happy customers spend more money)
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CHAPTER 2 – OVERVIEW OF REVENUE STRATEGIES 2 7 Table 2 2: Key Func onal Areas Involved with Strategies Func onal Areas Code Customer Focus Shared Services & Facili es Revenue Par cipa on Off Airport Value Capture Improvements to Exis ng Businesses Aircra & Passenger Services AS Business Development BD Cargo CA Concessions CN Energy Management & Alterna ves EN Environmental EV Finance & Property Management FN Ground Transporta on GT Informa on Technology IT Legal & Contracts LC Parking PK Planning, Design, & Administra ve Process PL Service Quality SQ Terminal Opera ons TO Sources: Funconal areas adapted from ACRP Report 19A: Resource Guide to Airport Performance Indicators; chart prepared by KRAMER aerotek inc. 2.6 WRAP UP Chapter 2 presented an overview of revenue strategies that could be used by airports to increase net revenues to the airport sponsor and outlined the framework for evaluang each strategy.
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From page 30... ...
INNOVATIVE REVENUE STRATEGIES – AN AIRPORT GUIDE 2 8 ACRP Report 77: Guidebook for Developing General Aviaon Airport Business Plans (Avia on Management Consul ng Group) , Transporta on Research Board of the Na onal Academies, Washington, DC., 2009, hp://onlinepubs.trb.org/onlinepubs/acrp/acrp_rpt_077.pdf Davidson, N
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