Cook, A.J.

Cristobal, S.

Graham, A.

Gurtner, G.

English

WestminsterResearch

Airport economic value – informing business modelsDenis Huet, Gérald GurtnerAndrew Cook, Anne Graham, Samuel Cristobal, Bruno Desart1.Goals and backgroundObjectives▰ Contribute to SESAR Operational Focus Area 05.01.01 (Airport Operations Management)▰ Assess the economic value of extra capacity at an airport▰ Better understand interdependencies of various KPIs▰ Assess existence and behaviour of an airport economic optimum, in a similar way to the early 2000s when estimating the economic en-route capacity optimum▰ Build a simple model but highly data-driven3En-route capacity economic optimum4Basic idea: capacity is costly, but delays too. Economic optimum requires a minimum of delays.Airport Economic value (1/2)5Objective: Is it possible to compute an airport economic value as well as its optimum depending of various parameters?▰ Gather various types of airport-related data:▰ Operational.▰ Economic & Financial.▰ Quality of service (satisfaction).▰ …▰ Develop a simple generic model based on real data.▰ Analyse behaviour of this model as well as its optimum.Airport Economic value (2/2)62.Data analysisData sources8▰ Large variety of data sources▰ Alignment is difficult!▰ Clustering produced to categorise airport based on data only▰ Found 3 clusters (modularity-based method)▰ Based on variables inferred from a principal component analysisClustering93.Model development▰ Single airport modelling (calibrated on a big hub in Europe)▰ Equilibrium between supply (airport capacity) and demand (traffic from airlines)▰ Includes relationship between capacity and delay▰ Includes loss of revenues for airline due to delays▰ Includes traffic variation based on airline revenues▰ Includes operational cost of airport, direct and indirect revenuesModel overview11Model flow12▰ Airport chooses capacity based on cost and revenues▰ Capacity sets level of delay▰ Delay impacts airline revenue▰ Airline revenue changes probability of operating flights▰ Probability of operating flight changes airport revenueTraffic vs. delay13▰ Exponential fit▰ Linear fit works well tooCost vs. delay14▰ Sourced from Uni. of Westminster standard reference values▰ For the airport calibrated, mix of type of aircraft and airlines taken into accountProblem: cost of average is not average cost of delay because: ▰ Cost is not linear with delay,▰ In particular, airlines do not make money from negative delays (anticipated flights with respect to their schedule)Distribution of delays15▰ Lots of negative delays▰ Some very high positive delaysCost of uncertainty16▰ Cost of ‘uncertainty’ can be bigger than cost of average delayEquilibrium17▰ Delay depends on traffic;▰ traffic depends on probability of operating the flight;▰ probability depends on the cost of delay; ▰ cost of delay depends on delay.▰ ➔Implicit equation.4.ResultsAirport incomeMarginal cost of capacityis hard to calibrate➔ used as a variable.Optimal capacity20▰ Optimal point in capacity▰ Point depends on several factors, including marginal operational costAirport comparison21▰ Airports have different profitable marginal costs▰ Profitable marginal cost depends on the size of the airportPax per flight22▰ Increasing the number of pax per flight helps additional capacity units to be more profitable.Passenger effects23▰ Up to a point, pax spend more when they spend more time at airport ('golden hour')▰ Pax are less satisfied when waiting more▰ ➔More optimal points Conclusions▰ Study compiles lot of different sources of data.▰ Only scratched the surface!▰ Can be focused on specific airports in the future▰ Model based on:▰ Delay vs traffic▰ Cost vs delay▰ Traffic vs revenues▰ Full cost of delay, including uncertainty, is taken into account▰ Single optimal capacity point in general▰ Depends on marginal costs of capacity▰ Can be used to benchmark airports▰ Pax-related effects could be enhanced, e.g. access and dwell time models24Thanks!Questions?25g.gurtner@westminster.ac.ukdenis.huet@eurocontrol.int

Airport economic value – informing business models

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Airport economic value – informing business models

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