CONTENTS Lilt of figuref viii List of tables ix Acknowledgements xi Introduction xii 1 The airport business 1 Improving financial performance 1 No/ all airports equally profitable 6 What is an airport? 7 Patterns of ownership 11 Measuring airport output 14 The world's major airports 21 2 Issues in airport management 25 Objectives of airports policy 25 Trend to airport privatization 26 Benefits and risks of privatization 28 Growing runway shortage 33 Financing airport expansion 40 European airports and 1993 42 3 Airport cost and revenue structures 45 Structure of airport costs 45 Economic characteristics of airport 48 Sources of airport revenue 53 Trends in revenue development 58 4 Aeronautical charges and pricing policies 62 Importance of aeronautical charges 62 Traditional structure of aeronautical charges 63 Traditional pricing policies 69 ICAO and IATA views on airport charges 71 Levels of airport charges 75 5 Alternative pricing strategies 78 Airports' legal constraints 78 Shortcomings of traditional charging structures80 Towards cost-related pricing 85 The application of cost-related pricing 86 Peak charging in practice 93 A rationing strategy 98 Grandfather rights or slot auctions 99 6 Developing a commercial strategy 112 Strategic options 112 Potential sources of commercial revenues 117 The right organizational structure 121 Rental policies and recharges to tenants 127 7 Maximizing concession revenue 131 Impact of traffic characteristics 132 Size and location of spaces available 136 Skill of concessionaires 143 The portfolio approach 146 Choice of concessionaires and contract terms 149 The competitors 155 The key to success 157 8 Monitoring airport performance and efficiency 158 The need for performance indicators 158 To monitor or to compare 160 Measuring airport outputs and inputs 162 Data comparability problems 164 Aggregate and disaggregate indicators 169 Measures of overall cost performance 170 Labour productivity 174 Productivity of capital employed 176 Revenue-generation performance 177 Performance of commercial activities 181 Profitability measures 184 Conclusions 186 9 Airports in the United States by Anne Graham Relationship with the airlines 188 Sources of capital investment 191 Airport revenues 197 Airport costs 200 Effects of airline deregulation 200 Future sources of finance 202 10 Airports in the developing world 207 Increasing emphasis on profitability 207 Need for better accounting practices 210 Improving aeronautical revenues 211 Maximizing commercial opportunites 213 Labour costs and manpower issues 216 References 219 Index 222