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AIRPORT

BENCHMARKING-GLOBAL
PERSPECTIVE

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Introduction
 An economic benchmark is a standard by which
business performance is measured.
 The report measures and compares the performance of
several pivotal aspects of airport operations.
Ø Productivity
Ø employee productivity,
Ø capital productivity
Ø Revenue generating efficiencies of the respective
airports

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IDENTIFICATION OF PROBLEM
 Indian airports besides having adequate
resources are not able to make proper
utilization of such resources.
Objectives
 To study and compare the performance of several
important aspects of airport operations.
 To examine the relationships between various
performance measures and airport characteristics to
provide better understanding of the observed differences
in airport performance.
 To identify best practices for possible incorporation into
the organization’s procedures to increase efficiency,
quality and customer satisfaction.

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Contd...
 Identify effects of
Ø Ownership and Institutional forms
Ø Extent of focus on non-aviation (commercial) activities
Ø Extent of outsourcing
on productivity, unit cost, financial performance, and Airport
User Charges
o To provide Indian airports with meaningful global
comparison of airports.

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Scope
 Nine airports each have been selected from three
different geographical regions these are Asia
Pacific, Europe, and North America.
 For individual analysis the airports with consistent
data on number of runways have been selected
taking into consideration number of gates as well
as terminal size to reveal efficiency.
 In some cases data are only available for a group
of airports instead of an individual airport.

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PARAMETERS
Economic variables

 LABOUR PRODUCTIVITY
2) Passenger per employee
3) Aircraft movement per employee
4) Workload unit per employee
5) Aggregate output per employee

© SOFT COST INPUT PRODUCTIVITY


8) Passenger per unit of soft cost inputs
9) Aggregate output per unit of soft cost input
 FINANCIAL RESULTS
2) Total revenue per passenger
3) Revenue per employee
4) Revenue per movement
Capacity variables

 TERMINAL PRODUCTIVITY MEASURES


2) Passenger per gate
3) Passenger per square meter terminal area

© RUNWAY PRODUCTIVITY
6) Aircraft movement per runway
ECONOMIC PARAMETERS :
LABOUR PRODUCTIVITY

•Reveals that its employees are more efficient as they are imparted with
regular training to handle passengers. Another reason for this is more
automated systems being practiced inside the airport terminals
•La Guardia’s terminals are operated directly by airlines which reduces
the need for more number of employees.
•Efficient employees
•Technically advanced processes
•Aircraft movements for this airport are 5 times in
comparison to Oslo and Brisbane and also has efficient staff
to manage it.
•Flat governance and management structure.
•Less international traffic hence demands for less employees
to handle domestic passengers as they require to be served
with less number of facilities.
•Technologically advanced as compared to other airports for
performing it operations.
•Being part of Europe it gets updated to new technologies
every now and then.
•Winner of the award for punctuality three times by
association of European airlines (AEA).
SOFT COST INPUT

•Airport provides wide range of passenger and aircraft


handling services by its own.
•Enjoys economies of scale and feels no need to outsource
these activities.
•3 new airlines and 23 new non stop destinations have been added
which exploit the added capacity with the new terminal.
•Increased route network by low cost carriers and traditional network
have realized the potentials of the airport.
•Business and tourist travel has grown in recent past.
FINANCIAL RESULTS:

•Most of the Terminal Activities are performed directly by


the Airlines and Major operations are concessioned.
•More share of non aeronautical revenue.
•Passenger has to pay on his/her ticket for international service or
domestic service as the case may be.
•Best airport worldwide makes the airport earn by facilitating larger
number of passengers.
•Minimum landing charges is Rs 150000 even when discount is offered
during off peak period.
•The airport has more frequent flights with smaller aircrafts which
provides advantage by charging the minimum landing fees.
•Total operating revenue is very high with high operating margin i.e.
67%
TERMINAL PRODUCTIVITY
MEASURES

•Practices swing area concept so makes best utilization of its gates.


•Most of the airlines make use of aerobridges which makes sure that
passengers of particular flight pass through the airline by which they
are going to travel and avoids confusion.
•The airport handles less number of total passengers and also only 3%
of international traffic which uses terminal for more time.
•It has huge space available as compared to passengers it handles, this
ensures passengers to feel comfortable inside the terminal building.
RUNWAY PRODUCTIVITY

•LHR is the third largest airport worldwide the airport and is able to handle
maximum aircrafts per runway because of the parallel runways facilitate
simultaneous operations.
•Being the busiest airport in passenger traffic handling it is well equipped with
technologies in the airside to speed up the operations..
•It has rapid exit taxiways makes possible maximum utilization of the runways.
 LaGuardia International Airport ranks
CONCLUSION
highest in 4 parameters which makes
the airport an overall benchmark for
practicing strategies worldwide.
RECOMMENDATIONS
 Airports contract with third party
terminal operators as maximum number
of employees are required in terminal to
handle passenger operations.
 Outsourced to airlines which is
operating from that terminal as this
would resist an airline to deteriorate the
services and it would provide services
more efficiently for the reason to
improve the operations for its own
airline passengers being served.
 Runways built are able to operate
simultaneously as this would make sure
that available staff is utilized properly at
given point of time.
 Multitasking manpower.
 Indian airports need to take make or
buy decision carefully.
 Provide passengers with varied services
of better quality.
 Increase retail space as it involves
negligible cost on the part of the airport
operator but provides greater revenue.
 Airport operator can charge premium
charges if the regulatory authority
allows.
 Develop competition among airlines to
use the airport.
 Practice swing area concept.
 Rapid exit taxiways to speed up the
operations per hour to meet growing
demand in future.
OVERALL SUGGESTIONS
 Market India, by building a powerful and
unique position for the reliable, safe,
value-for-money, tourist-friendly brand.
 Initiate by playing on volumes to reap
the benefits of economies of scale.
 Development of real estate, services,
cargo operations, lounges, basics, F&B
outlets.
Bibliography
 Air Transport Research Report (ATRS)-2007
 Part I Summary report
 Part II Full Results and Analysis
 Part III Airport Profiles, Methodologies and Data description
 www.indiastat.com
 Research methodology methods & techniques-C.R. Kothari
 www.atrsworld.org- Airport Benchmarking Report by Prof. Tae
H. Oum
 Airport Benchmarking To Maximize Efficiency 6 July 2006 by
Airport Council International

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Thank You