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From page 59... ... 4 1 Chapter 4 Airport Entrepreneurial Activity – Part I 4.1 A Revenue Strategy of Ingenuity and Necessity 4.2 Scope of the Strategy 4.3 Techniques to Implement the Strategy 4.4 Techniques by Funconal Area 4.5 Implementaon Issues 4.6 Wrap up 4.7 Addional References Chapters 4 and 5 highlight entrepreneurial acvies that provide opportunies for an airport sponsor to achieve addional revenue. This chapter focuses on airport provided services to airlines, tenants, and passengers at market rates and achievement of economies of scale through shared use of services, facilies, systems, and equipment. Read the entire page →
From page 60... ... INNOVATIVE REVENUE STRATEGIES – AN AIRPORT GUIDE 4 2 management decided to offer ground services to charters by cross ulizing airport personnel. Thus began a logical build out of airport provided, above the wing and below the wing services to commercial and charter airlines. Read the entire page →
From page 61... ... CHAPTER 4 – AIRPORT ENTREPRENEURIAL ACTIVITY – PART I 4 3 Figure 4 1: Elements of the Strategy Source: KRAMER aerotek inc., 2014 The airport entrepreneurial strategies place a high value on operang efficiencies and the provision of services directly by airport staff or service contracts. The business arrangement would recover the direct expenses and the fully allocated indirect expenses plus a modest profit of 10% to 15%. Read the entire page →
From page 62... ... INNOVATIVE REVENUE STRATEGIES – AN AIRPORT GUIDE 4 4 Table 4 1: Services/Facilies with Potenal for Revenue Improvement, Cost Recovery & Operaonal Efficiency Revenue Improvement, Cost Recovery, Operaonal Efficiency Potenal Limited Potenal Airport Provided Services Airport Tenants Badging Building Services to Airlines & Concessionaires Logiscs Services & Warehousing for Concessionaires Trash Removal & Recycling Ulies Reimbursement Air Passengers Lounges/Clubrooms Meeng Rooms Ground Handling (Commercial, Charter, GA) Above the Wing Below the Wing Deicing Glycol Recovery and Recycling Fueling Vehicles Shared Services Baggage Delivery Services Curbside or Remote Baggage Drop off and Check in Janitorial Joint Markeng and Adversing Maintenance on Baggage Systems/PBB Wi Fi Wheelchair Services Shared Facilies, Systems, & Equipment Communicaons Systems and Cell Phone Towers Consolidated Air Cargo Facility Consolidated Fuel Farm Dynamic Signage and Way finding Ground Services Equipment and Maintenance Facility Paging Shared Gates Ramp Control Source: KRAMER aerotek inc., 2014 Read the entire page →
From page 63... ... CHAPTER 4 – AIRPORT ENTREPRENEURIAL ACTIVITY – PART I 4 5 4.3 TECHNIQUES TO IMPLEMENT THE STRATEGY Each airport provided service or shared use opportunity described in Table 4.1 is associated with different departments or func onal areas of the airport. The relevant departments or func onal areas are: Aircra & Passenger Services – AS Business Development – BD Cargo – CA Energy Management & Alterna ves – EN Environmental – EV Planning, Design, & Administra on – PL Terminal Opera ons – TO Table 4 2 reorganizes implementa on techniques by func onal area and indicates what types of airports might consider use of the techniques. Read the entire page →
From page 64... ... INNOVATIVE REVENUE STRATEGIES – AN AIRPORT GUIDE 4 6 Table 4 2 (Connued) Read the entire page →
From page 65... ... CHAPTER 4 – AIRPORT ENTREPRENEURIAL ACTIVITY – PART I 4 7 Ground handling involves two components: below the wing, which involves servicing the aircra, and above the wing, which primarily involves passenger services. Table 4 3 shows examples of above the wing and below the wing services. Read the entire page →
From page 66... ... INNOVATIVE REVENUE STRATEGIES – AN AIRPORT GUIDE 4 8 engages Envoy (formerly American Eagle) , a non union subsidiary, to provide airport services. Read the entire page →
From page 67... ... CHAPTER 4 – AIRPORT ENTREPRENEURIAL ACTIVITY – PART I 4 9 AS 3 DEICING At smaller commercial airports or general aviaon (GA) airports with significant winter operaons, a consolidated deicing operaon can make sense. Read the entire page →
From page 68... ... INNOVATIVE REVENUE STRATEGIES – AN AIRPORT GUIDE 4 10 AS 5 FUEL SALES AND FUELING VEHICLES Some smaller commercial and GA airports can provide fuel storage to airlines and FBOs. When the airport sponsor is the FBO, its own personnel and equipment fuel the aircra. Read the entire page →
From page 69... ... CHAPTER 4 – AIRPORT ENTREPRENEURIAL ACTIVITY – PART I 4 11 A consolidated air cargo processing facility and service improves the efficiency of operaons, reduces requirements for airline staffing, and at smaller airports, separates air cargo from passenger areas. A consolidated air cargo facility could reduce the airlines' cargo facility costs and reduce excess capacity in exclusive facilies. Read the entire page →
From page 70... ... INNOVATIVE REVENUE STRATEGIES – AN AIRPORT GUIDE 4 12 The following types of recyclable waste are prevalent in airport terminals and flight kitchens, and aboard aircra: Plasc boles Plasc or foam cups Glass boles Aluminum cans Other metal cans Cardboard Mixed paper Asepc containers Edible food Food scraps Electronic equipment Growing numbers of airports and airlines are recycling. Airlines that do not have their own recycling program either use an airport recycling program or backhaul recyclable items to an airport where they can dispose of the items. Read the entire page →
From page 71... ... CHAPTER 4 – AIRPORT ENTREPRENEURIAL ACTIVITY – PART I 4 13 space to cell phone companies for towers. Cell phone towers are an excellent addional revenue source that makes use of an area in the terminal that might otherwise go vacant. Read the entire page →
From page 72... ... INNOVATIVE REVENUE STRATEGIES – AN AIRPORT GUIDE 4 14 the service. Delivery can include services to hotels and to the homes of passengers. Read the entire page →
From page 73... ... CHAPTER 4 – AIRPORT ENTREPRENEURIAL ACTIVITY – PART I 4 15 In November 2013, San Diego Internaonal Airport opened an $8.7 million receiving and distribuon center (RDC) Read the entire page →
From page 74... ... INNOVATIVE REVENUE STRATEGIES – AN AIRPORT GUIDE 4 16 typically build the lounges and operate them as concessions. The airport sponsor receives ground rent and a percentage of gross revenues. Read the entire page →
From page 75... ... CHAPTER 4 – AIRPORT ENTREPRENEURIAL ACTIVITY – PART I 4 17 Shared gates are a promising way to increase net revenue to the airport sponsor. With preferenal use gates, the leasing airline receives the gate use fees paid by the non leasing airlines as reimbursement for the rents and fees it pays for its preferenal rights. Read the entire page →
From page 76... ... INNOVATIVE REVENUE STRATEGIES – AN AIRPORT GUIDE 4 18 Decrease the airport's cost of doing business Decrease the airline's cost of doing business Increase opportunies for airlines to add or expand service Gain a compeve advantage over compeng airports Deliver new revenues Implementaon of the strategy is not without challenges. This secon highlights some of the issues that may arise. Read the entire page →
From page 77... ... CHAPTER 4 – AIRPORT ENTREPRENEURIAL ACTIVITY – PART I 4 19 4.5.3 Perception of Airport Role Although some airports have evolved into complex sets of enterprises, in some locaons the public perceives an airport as a ulity rather than a revenue generang enty. A percepon of the airport compeng with the private sector is common. Read the entire page →
From page 78... ... INNOVATIVE REVENUE STRATEGIES – AN AIRPORT GUIDE 4 20 Some airports will have a greater ability to pursue entrepreneurial opportunies than other airports. Airports sponsored by cies or counes are generally more risk averse and may be slower to embrace evoluon of the airport as an enterprise of mulple businesses. Read the entire page →
From page 79... ... Table 4 4: Techniques to Implement the Airport Services/Shared Use Strategy Code Innovave Techniques and Improvements Airport Area Impact Applicability Revenue or Cost Recovery Potenal Airport Sponsor Financial Risk Airport Cost to Implement Aircra & Passenger Services – AS AS 1 Above the Wing Terminal and Gates Small Commercial Low/Moderate Low/Moderate Low/Moderate AS 2 Below the Wing Ramp Small Commercial/GA Low/Moderate Low/Moderate Low/Moderate AS 3 Deicing Deicing Pads Small Commercial/GA Low/Moderate Low/Moderate Low/Moderate AS 4 Glycol Recovery and Recycling Deicing Pads Large Commercial Moderate Low Low/Moderate AS 5 Fuel Sales and Fueling Vehicles Ramp Small Commercial/GA Low/Moderate Low/Moderate Low/Moderate AS 6 Consolidated Fuel Farm Fuel Farm Small Commercial/GA Low/Moderate Low/Moderate Low/Moderate AS 7 Ground Services Equipment and Maintenance Facility Ramp/Maintenance Small Commercial/GA Low/Moderate Low/Moderate Low/Moderate Business Development – BD BD 5 Communicaon Systems and Cell Phone Towers Building Roof Areas Medium/Large Commercial Low Low Low BD 6 Joint Markeng and Adversing Concessions Medium/Large Commercial Low/Indirect Low Low Cargo – CA CA 1 Consolidated Air Cargo Facility Cargo Area All Commercial Low/Moderate Moderate Moderate/High Energy Management – EN EN 1 Ulies Reimbursement/Separately Metered Ulies Airport Tenants All Commercial Cost Recovery Low Low/Moderate Environmental – EV EV 1 Trash Removal and Recycling Terminal/Aircraft Cabins/Flight Kitchens All Airports Cost Recovery/Low Revenue Low Low/Moderate (connued on next page) Read the entire page →
From page 80... ... Table 4 4 (Connued) Read the entire page →
From page 81... ... CHAPTER 4 – AIRPORT ENTREPRENEURIAL ACTIVITY – PART I 4 23 4.7 ADDITIONAL REFERENCES Baskas, H., "Remote Baggage Services Cost Extra, But Come With Extras," On the Road with Harriet Baskas (blog) , USA Today,May 6, 2005. Read the entire page →
From page 82... ... INNOVATIVE REVENUE STRATEGIES – AN AIRPORT GUIDE 4 24 Landry, J., and S Ingolia, ACRP Synthesis 29: Ramp Safety Prac ces, Transportaon Research Board of the Naonal Academies, Washington, DC, 2011, hp://onlinepubs.trb.org /onlinepubs/acrp/acrp_syn_029.pdf LeighFisher, and Exstare Federal Services Group, LLC, ACRP Report 54: Resource Manual for Airport In Terminal Concessions, Transportaon Research Board of the Naonal Academies, Washington, DC, 2011, hp://onlinepubs.trb.org/onlinepubs/acrp/acrp_rpt_054.pdf Port of Oakland, "Environmental Efforts Take Flight at Oakland Internaonal Airport," 2009 Rhodes, D., and G Read the entire page →

From page 59...

... 4 1 Chapter 4 Airport Entrepreneurial Activity – Part I 4.1 A Revenue Strategy of Ingenuity and Necessity 4.2 Scope of the Strategy 4.3 Techniques to Implement the Strategy 4.4 Techniques by Funconal Area 4.5 Implementaon Issues 4.6 Wrap up 4.7 Addional References Chapters 4 and 5 highlight entrepreneurial acvies that provide opportunies for an airport sponsor to achieve addional revenue. This chapter focuses on airport provided services to airlines, tenants, and passengers at market rates and achievement of economies of scale through shared use of services, facilies, systems, and equipment.