Airline and Airport Management.pdf

B.TECH

R187A2142– AAM

By YUGENDER MALOTH

AERONAUTICAL ENGINEERING – MRCET (UGC – Autonomous)

AIRLINE AND AIRPORT MANAGEMENT

(R187A2142)

COURSE FILE

IV B. Tech II Semester

(2022-2023)

Prepared By

Mr. Yugender, Asso. Prof

Department of Aeronautical Engineering

MALLA REDDY COLLEGE OF ENGINEERING &

TECHNOLOGY

(Autonomous Institution – UGC, Govt. of India)

Affiliated to JNTU, Hyderabad, Approved by AICTE - Accredited by NBA & NAAC – ‘A’ Grade - ISO 9001:2015

Certified)

Maisammaguda, Dhulapally (Post Via. Kompally), Secunderabad – 500100, Telangana State, India.

IV-II B.TECH

R187A2142– AAM

By YUGENDER MALOTH

AERONAUTICAL ENGINEERING – MRCET (UGC – Autonomous)

MRCET VISION

o To become a model institution in the fields of Engineering, Technology and Management.

o To have a perfect synchronization of the ideologies of MRCET with challenging

demandsof International Pioneering Organizations.

MRCET MISSION

To establish a pedestal for the integral innovation, team spirit, originality and

competence in the students, expose them to face the global challenges and become

pioneers of Indian vision of modern society.

MRCET QUALITY POLICY

To pursue continual improvement of teaching learning process of Undergraduate

and Post Graduate programs in Engineering & Management vigorously.

o To provide state of art infrastructure and expertise to impart the quality education

R187A2142– AAM

IV-II B.TECH

By YUGENDER MALOTH

AERONAUTICAL ENGINEERING – MRCET (UGC – Autonomous)

PROGRAM OUTCOMES

(PO’s)

Engineering Graduates will be able to:

1. Engineering knowledge: Apply the knowledge of mathematics, science, engineering

fundamentals, and an engineering specialization to the solution of complex engineering

problems.

2. Problem analysis: Identify, formulate, review research literature, and analyze complex

engineering problems reaching substantiated conclusions using first principles of

mathematics, natural sciences, and engineering sciences.

3. Design / development of solutions: Design solutions for complex engineering problems and

design system components or processes that meet the specified needs with appropriate

consideration for the public health and safety, and the cultural, societal, and

environmental considerations.

4. Conduct investigations of complex problems: Use research-based knowledge and research

methods including design of experiments, analysis and interpretation of data, and synthesis

of the information to provide valid conclusions.

5. Modern tool usage: Create, select, and apply appropriate techniques, resources, and modern

engineering and IT tools including prediction and modeling to complex engineering

activities with an understanding of the limitations.

6. The engineer and society: Apply reasoning informed by the contextual knowledge to assess

societal, health, safety, legal and cultural issues and the consequent responsibilities

relevant to the professional engineering practice.

7. Environment and sustainability: Understand the impact of the professional engineering

solutions in societal and environmental contexts, and demonstrate the knowledge of, and

need for sustainable development.

8. Ethics: Apply ethical principles and commit to professional ethics and responsibilities

and norms of the engineering practice.

9. Individual and team work: Function effectively as an individual, and as a member or

leader in diverse teams, and in multidisciplinary settings.

10. Communication: Communicate effectively on complex engineering activities with the

engineering community and with society at large, such as, being able to comprehend and

write effective reports and design documentation, make effective presentations, and give

and receive clear instructions.

11. Project management and finance: Demonstrate knowledge and understanding of the

engineering and management principles and apply these to one’s own work, as a member

and leader in a team, to manage projects and in multi disciplinary environments.

12. Life- long learning: Recognize the need for, and have the preparation and ability to engage

in independent and life-long learning in the broadest context of technological change.

AERONAUTICAL ENGINEERING – MRCET (UGC – Autonomous)

R187A2142 – AAM

IV-II B.TECH

By YUGENDER MALOTH

DEPARTMENT OF AERONAUTICAL ENGINEERING

VISION

Department of Aeronautical Engineering aims to be indispensable source in

Aeronautical Engineering which has a zeal to provide the value driven platform for the

students to acquire knowledge and empower themselves to shoulder higher

responsibility in building a strong nation.

MISSION

The primary mission of the department is to promote engineering education and

research. To strive consistently to provide quality education, keeping in pace with time

and technology. Department passions to integrate the intellectual, spiritual, ethical and

social development of the students for shaping them into dynamic engineers.

QUALITY POLICY STATEMENT

Impart up-to-date knowledge to the students in Aeronautical area to make them quality

engineers. Make the students experience the applications on quality equipment and

tools. Provide systems, resources and training opportunities to achieve continuous

improvement. Maintain global standards in education, training and services.

AERONAUTICAL ENGINEERING – MRCET (UGC – Autonomous)

R187A2142 – AAM

IV-II B.TECH

By YUGENDER MALOTH

PROGRAM EDUCATIONAL OBJECTIVES – Aeronautical Engineering

1. PEO1 (PROFESSIONALISM & CITIZENSHIP): To create and sustain a community of learning

in which students acquire knowledge and learn to apply it professionally with due

consideration for ethical, ecological and economic issues.

2. PEO2 (TECHNICAL ACCOMPLISHMENTS): To provide knowledge based services to satisfy

the needs of society and the industry by providing hands on experience in various

technologies in core field.

3. PEO3 (INVENTION, INNOVATION AND CREATIVITY): To make the students to design,

experiment, analyze, and interpret in the core field with the help of other multi

disciplinary concepts wherever applicable.

4. PEO4 (PROFESSIONAL DEVELOPMENT): To educate the students to disseminate

research findings with good soft skills and become a successful entrepreneur.

5. PEO5 (HUMAN RESOURCE DEVELOPMENT): To graduate the students inbuilding

national capabilities in technology, education and research

PROGRAM SPECIFIC OUTCOMES – Aeronautical Engineering

1. To mould students to become a professional with all necessary skills, personality and

sound knowledge in basic and advance technological areas.

2. To promote understanding of concepts and develop ability in design manufacture and

maintenance of aircraft, aerospace vehicles and associated equipment and develop

application capability of the concepts sciences to engineering design and processes.

3. Understanding the current scenario in the field of aeronautics and acquire ability to apply

knowledge of engineering, science and mathematics to design and conduct experiments

in the field of Aeronautical Engineering.

4. To develop leadership skills in our students necessary to shape the social, intellectual,

business and technical worlds.

MALLA R

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R187A2142 – AAM

IV-II B.TECH

By YUGENDER MALOTH

IV Year B. Tech, ANE-II Sem

objective:

(R187A2142) AIRLINE AND AIRPORT MANAGEMENT

(PROFESSIONAL ELECTIVE – V)

To understand and acquire a sound understanding on basic management aspect of airport and

airlines system such as airports layout, air traffic control, landing procedure, scheduling, flight

planning and other economic and commercial activities.

UNIT I

AIRPORTS AND AIRPORT SYSTEMS

Introduction‐Airport Management on an international level‐ Rules that govern airport management‐

Organization and administration Airport ownership and organization , responsibilities of Airport

manager .Components of an airport‐The airfield‐Navigation aids(NAVAIDS)located on airfields‐Air

traffic Control and surveillance facilities located on the airfield.

UNIT II

AIRPORT OPERATIONS MANAGEMENT: Airspace and air traffic management, Airport operations

management under FAR Part 139, Airport terminals and ground access, Airport security and

Administration -Security at commercial service airports-Security at general aviation airports.

UNIT III

AIRPORT ADMINISTRATION AND FINANCIAL MANAGEMENT ,CAPACITY AND DELAY

concept of Airport planning and financial accounting‐Revenue strategies at commercial airports‐

Pricing of airport facilities and services, , The future of airport management.

Defining capacity‐Factors affecting capacity and delay‐estimating capacity‐Simulation

Models‐ Defining delay‐Estimating delay‐Analytical estimates of delay.

UNIT IV

INTRODUCTION TO AIRLINE PLANNING: Structure of Airline Industry (Domestic & International)‐

Growth and Regulation‐Deregulation‐Major and National Carriers‐Regional Carriers‐Economic

characteristics of the Airlines Airline Planning Process‐Airline Terminology and Measures: airline

demand, airline supply, average load factor, unit revenue, Airline Planning Decisions

UNIT‐V

FLEET PLANNING AND ROUTE EVALUATION: Factors in Fleet Planning‐Hub‐and‐Spoke System‐

Technical Aspects‐Fleet Rationalization‐Fleet Commonality‐Long Range Aircraft‐Noise Restrictions‐

Factors in Design and Development‐Fleet Planning Process; Route Evaluation in Hub Networks‐Route

profitability estimation issues‐Demand Driven Dispatch.

Text Books

1. Airport Planning and Management 6/E 0006 Edition by Young Seth, Mc GRAW Hills.

2. Airport Management by Ravindran P.C.K, Asian Law House.

3. Air Transportation: A Management Perspective (Fifth Edition) by Alexander T.Wells

and John G.Wensveen, Brooks Cole,2003

AERONAUTICAL ENGINEERING – MRCET (UGC – Autonomous)

R187A2142 – AAM

IV-II B.TECH

By YUGENDER MALOTH

1. Airport Systems: Planning, Design and Management by Rechard De Neufville Tata

Mc Graw Hills.

2. Airline Marketing and Management by Stephen Shaw, Ashgate Publishing, 2004

3. Airline Management, by Peter P BelobabaMIT Open Courseware Lecture Notes,

2006

Outcomes:

 Understand the functioning of the airline industry.



Focus on the underlying marketing, financial, operational and competitive factors that

influence airline viability..

 Investigate how the sensitivity of airline profitability impacts airline management decisions



Analyze the principles of airline economics, costs and pricing.

 The student and assess the individual characteristics of low-cost carriers and business only

airlines.

Code No: R17A2130

R17

MALLA REDDY COLLEGE OF ENGINEERING & TECHNOLOGY

(Autonomous Institution – UGC, Govt. of India)

IV B.Tech- II Semester Advance Supplementary Examinations, August 2021

Airport Management

(AE)

Roll No

Time: 3 hours Max. Marks: 70

Answer Any Five Questions

All Questions carries equal marks.

***

What is the importance of advisory circulars in airport management? List out the

ten advisory circulars in the 150 series.

[14M]

Explain about the following

i. Very-High frequency Omnidirectional range radio beacons.

[7M]

ii. GPS local area Augmentation systems

[7M]

List the technologies that are considered to apply biometrics to the airport security

environment and share your views on the future security systems at airports.

[14M]

i. What is the organizational structure of the transportation security

administration?

ii. What are the various security sensitive areas found at airports, as per the

Transportation security regulations?

[7M]

i. Write step-by-step procedure for snow removal.

[7M]

ii. what does the typical snow and ice control plan include?

[7M]

Establish a checklist designed for operators at airports for

i. Runways ii. Fuelling facilities

[7M]

i. What is Airport Improvement Program, what are its benefits?

ii. Discuss about the general obligation bonds & General airport revenue

bonds.

[7M]

Explain about the two accepted simulation models to estimate airport capacity.

[14M]

*****

Page 1 of 1

]

R15

Code No: R15A2130

MALLA REDDY COLLEGE OF ENGINEERING & TECHNOLOGY

(Autonomous Institution – UGC, Govt. of India)

IV B. Tech II Semester Regular Examinations, April/ May 2019

Airline and Airport Management

(AE)

Roll No

Time: 3 hours Max. Marks: 75

Note: This question paper contains two parts A and B

Part A is compulsory which carriers 25 marks and Answer all questions.

Part B Consists of 5 SECTIONS (One SECTION for each UNIT). Answer FIVE Questions

Choosing ONE Question from each SECTION and each Question carries 10 marks.

*********

PART-A (25 Marks)

1). a

What is the purpose of an organization chart?

[2M]

What specific rules and regulations are used to operate airports?

[3M]

What is the mobile lounge concept?

[2M]

How are runways identified on an airfield?

[3M]

What are the different types of budget strategies found at airports?

[2M]

What are the primary differences between the residual cost approach and

compensatory approach?

[3M]

What is airline demand and airline supply?

[2M]

Describe an airline fleet.

[3M]

Why is payload/range curve is most important in studying performance

characteristics?

[2M]

Write the difference between Top-down and Bottom-up Fleet Planning

[3M]

PART-B (50 MARKS)

SECTION-I

What are the different hub classifications described in the NPIAS?

[10M

What are the principal duties of a typical airport manager at a medium size

commercial airport?

[10M

SECTION-II

What types of taxiways exist on an airfield? Explain.

[10M

What are MPOs? What authority do MPO’s have over airport ground access?

[10M

SECTION-III

What is biometrics? What are some of the technologies that are considered to

apply biometrics to the airport security environment?

[10M

How does airport security differ between commercial service airports and general

aviation airports?

[10M

SECTION-IV

Explain the structure of airline industry at domestic and international level.

[10M

How do runway configurations affect capacity and delay?

[10M

Page 2 of 1

SECTION-V

Explain about the hub and spoke system in fleet planning.

[10M]

What are the objectives of Air Transportation Systems on airline fleet planning?

[10M]

AERONAUTICAL ENGINEERING – MRCET (UGC – Autonomous)

R187A2142– AAM

IV-II B.TECH

By YUGENDER MALOTH

Code No: R18A2142

MALLA REDDY COLLEGE OF ENGINEERING & TECHNOLOGY

(Autonomous Institution – UGC, Govt. of India)

IV B.Tech- II Semester Regular Examinations, May 2022

Airline and Airport Management

(AE)

Roll No

Time: 3 hours Max. Marks: 70

Note: This question paper Consists of 5 Sections. Answer FIVE Questions, Choosing ONE Question from

each SECTION and each Question carries 14 marks.

***

SECTION-I

Explain about different hub classifications described in NPIAS.

[14M]

What are the principal duties of a typical airport manager at a medium size commercial

airport?

[14M]

SECTION-II

Explain the airport operations management under FAR Part 139.

[14M]

Write short notes on the following:

(i) Airport terminals, and

(ii) Ground access

[7M]

SECTION-III

What are the revenue strategies at commercial airports? Explain briefly.

[14M]

How the capacity of an airport is defined? What are the various factors effecting it?

[14M]

SECTION-IV

Explain the structure of domestic and international airline industry.

[14M]

Write short notes on the following:

(i) Economic characteristics of the Airlines

(ii) Airline Planning Process

[7M]

SECTION-V

Briefly explain the factors to be considered in Fleet Planning.

[14M]

Explain in detail about the Hub and Spoke System.

[14M]

**********

R18

AERONAUTICAL ENGINEERING – MRCET (UGC – Autonomous)

R187A2142– AAM

IV-II B.TECH

By YUGENDER MALOTH

Code No: R17A2130

MALLA REDDY COLLEGE OF ENGINEERING & TECHNOLOGY

(Autonomous Institution – UGC, Govt. of India)

IV B.Tech- II Semester Supplementary Examinations, May 2022

Airport Management

(AE)

Roll No

Time: 3 hours Max. Marks: 70

Note: This question paper Consists of 5 Sections. Answer FIVE Questions, Choosing ONE Question from

each SECTION and each Question carries 14 marks.

***

SECTION-I

What are the rules of airline and Airport Management on an international level,

Discuss merits and demerits?

[14M]

What are the essential elements in Airport manager and public relations? And

discuss the ownership structures of airports.

[14M]

SECTION-II

Elaborate the development of airport terminals and its components of airport

terminal.

[14M]

Describe the transportation Security Administration and show the thrust areas of Security

at commercial service airports.

[14M]

SECTION-III

Discuss about Safety inspection programs and show the process of Bird and wildlife hazard

management.

[14M]

Differentiate Pavement Management and Aircraft rescue and firefighting (ARFF). Discuss

in detail?

[14M]

SECTION-IV

Explain how the Revenue strategies at commercial airports are along with pricing of

airport facilities and services. Discuss in detail.

[14M]

Discuss about the rise in airport financial burdens in Airport funding and Airport

financing with merits and demerits?

[14M]

SECTION-V

What are the factors affecting capacity and delay in airport management and also show

the process of estimating capacity.

[14M]

Discuss the steps about Approaches to reducing delay in administrative and demand

management with neat flow chart. Show the methods for Analytical estimates of delay.

[14M]

**********

R17

AERONAUTICAL ENGINEERING – MRCET (UGC – Autonomous)

R187A2142– AAM

IV-II B.TECH

By YUGENDER MALOTH

UNIT-1

AIRPORTS AND AIRPORT SYSTEMS

It is often said that managing an airport is like being mayor of a city. Similar to a city, an

airport is comprised of a huge variety of facilities, systems, users, workers, rules, and regulations.

Also, just as cities thrive on trade and commerce with other cities, airports are successful in part

by their ability to successfully be the location where passengers and cargo travel to and from

other airports. Furthermore, just as cities find their place as part of its county’s, state’s, and

country’s economy, airports, too, must operate successfully as part of the nation’s system of

airports.

The airport forms an essential part of the air transport system because it is the physical

site at which a modal Transfer is made from the air mode to the land mode or vice versa It is the

point of interaction of the three major components of the air transport system. The airport,

including its commercial & operational concessionaires, tenants and partners, plus. These

discussion purposes, the airways control system.

The airline

The user

The interaction among these three major components must be made to have successful rate and

planning and operation is also must. To operate well, each should reach some form of equilibrium

with the other two.

Function of the airport:

An airport is either an intermediate or terminal point for an aircraft on the air portion of

a trip. In simple functional terms the facility must be designed to enable an a/c to land & take off

In b/w their two operations, the aircraft may, if required, unload and load payload & crew & be

serviced Airport operations are divided into airside & land side functions. After approach and

landing an aircraft uses the runway, taxiway and apron prior to docking at a Packing position,

where its payload is processed through the terminal to the access system. The airport passenger

and freight terminals are themselves facilities that have three distinct functions.

Change of mode: To provide linkage b/w the air vehicle of the surface vehicle designed to

accommodate the operating characteristics of the vehicles on landside & airside respectively.

Processing: To provide the necessary facilities for ticketing, documentation and control of

passengers and freight.

Change of movement type: To convert continual shipments of freight by trucks of departing

passengers by car, bus, taxi & train to aircraft sized batches that generally depart according to a

preplanned schedule or to reverse this process for arriving aircraft. Airports of a significant size

must have an organization that can either supply or administer the following Faculties

AERONAUTICAL ENGINEERING – MRCET (UGC – Autonomous)

R187A2142– AAM

IV-II B.TECH

By YUGENDER MALOTH

Airports in the United States—An overview

The United States has by far the greatest number of airports in the world. More than half

the world’s airports and more than two-thirds of the world’s 400 busiest airports are located in

the United States. There are more than 19,000 civil landing areas in the United States, including

heliports, seaplane bases, and “fixed-wing” landing facilities. Most of these facilities are privately

owned, and for private use only. Such facilities include helipads operated at hospitals and office

buildings, private lakes for seaplane operations, and, most common, small private airstrips that

accommodate the local owners of small aircraft operations. Many of these facilities are nothing

more than a cleared area known as a “grass strip.”

There are approximately 5,400 airports that are open for use to the general public. Of

these, approximately 4,150 are equipped with at least one paved and lighted runway. Of the

5,400 public-use airports in the United States, approximately 4,200 are publicly owned, either by

the local municipality, county, state, or by an “authority” made up of municipal, county, and/or

state officials. The remaining 1,200 are privately owned, either by individuals, corporations, or

private airport management companies, see below. Fig.

Airports are often described by their levels of activity.

The activities,

1. services,

2. investment levels vary greatly among the nation’s airports.

3. The most common measures used to describe the level of activity at an airport are the

number of passengers served, the amount of cargo carried, and the number of operations

performed at the airport.

AERONAUTICAL ENGINEERING – MRCET (UGC – Autonomous)

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IV-II B.TECH

By YUGENDER MALOTH

Specifically, the term enplanements (or enplaned passengers) is used to describe the

number of passengers that board an aircraft at an airport. Annual enplanements are often used

to measure the amount of airport activity, and even evaluate the amount of funding to be

provided for improvement projects. The term deplanements (or deplaned passengers) is used

to describe the number of passengers that deplane an aircraft at an airport. The term total

passengers is used to describe the number of passengers that either board or deplane an aircraft

at an airport. At many airports, the number of total passengers is roughly double the number of

annual enplanements.

Cargo activity is typically used to measure the level of activity at airports that handle

freight and mail. Airports located near major seaports, railroad hubs, and large metropolitan

areas, as well as airports served by the nation’s cargo carriers (such as FedEx and UPS)

accommodate thousands of tons of cargo annually.

The number of aircraft operations is used as a measure of activity at all airports, but is

the primary measure of activity at general aviation airports. An aircraft operation is defined as a

takeoff or a landing. When an aircraft makes a landing and then immediately takes off again, it

is known as a “touch and go” and is counted as two operations. This activity is common at many

general aviation airports where there is a significant amount of flight training. When an aircraft

takes off and lands at an airport without landing at any other airport, the aircraft is said to be

performing local operations. An itinerant operation is a flight that takes off from one airport and

lands at another.

Another, albeit, indirect measure of airport activity is identified by the number of aircraft

“based” at the airport. A based aircraft is an aircraft that is registered as a “resident” of the

airport. The number of based aircraft is used to indirectly measure activity primarily at smaller

airports where private “general” aviation is dominant. At airports that primarily handle the air

carriers, relatively few aircraft are actually based. In general, airport management measure the

activity levels of their airports on the basis of all levels of passenger, cargo, operations, and based

aircraft activity; virtually all airports, especially the largest airports in the nation, accommodate

passengers and cargo, as well as air carrier and private aircraft operations.

Airport as an Operational system

1. Private airports and public use airports.

Airport planning is a systematic process used to establish guidelines for the efficient

development of airports that is consistent with local, state & national goals. Key object of airport

planning is to assure the effective use of airport resources in order to satisfy aviation demand in

a financially feasible manner.

1. National system planning.

AERONAUTICAL ENGINEERING – MRCET (UGC – Autonomous)

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By YUGENDER MALOTH

2. State airport system planning

3. Metropolitan airport system planning

4. Airport Master planning

Limitations of use:

FAA policies are applicable such as Usc, united state code, public law (PL), code of federal

regulations of official FAA policies.

Public & Private use airport

When we think of public airports, it is usually commercial service we think. How ever, Oregon’s

system of more than 100 public use airports includes a half dozen commercial service airports.

All public categories for purpose of oregano aviation plan.

Private air charter services, one advantage to use a private airport is the privacy factor.

Travelling

Details are kept confidentially including the destination, members of travelling paity & Potential

rerurn dates.

The national administrative structure of airports

All civil-use airports, large and small, in one way or another, utilize the United States’ Civil

Aviation System. The civil aviation system is an integral part of the United States’ transportation

infrastructure. This vital infrastructure is administered through the United States Department of

Transportation (DOT), led by the secretary of transportation.

AERONAUTICAL ENGINEERING – MRCET (UGC – Autonomous)

R187A2142– AAM

IV-II B.TECH

By YUGENDER MALOTH

U.S Department of Transportation organization chart.

The DOT is divided into several administrations that oversee the various modes of national and

regional transportation in the United States. Such administrations include:

FHWA—The Federal Highway Administration FMCSA—

The Federal Motor Carrier Safety AdministrationFRA—

The Federal Railroad Administration

FRA—The Federal Transit Administration

MARAD—The Maritime Administration

NHTSA—The National Highway Traffic Safety Administration

USCG—The United States Coast Guard

The administration that oversees civil aviation is the Federal Aviation Administration (FAA). The

FAA’s primary mission is to oversee the safety of civil aviation. The FAA is responsible for the

rating and certification of pilots and for the certification of airports, particularly those serving

commercial air carriers. The FAA operates the nation’s air traffic control system, including most

air traffic control towers found at airports, and owns, installs, and maintains visual and electronic

navigational aids found on and around airports. In addition, the FAA

AERONAUTICAL ENGINEERING – MRCET (UGC – Autonomous)

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administers the majority of the rules that govern civil aviation and airport operations, as well as

plays a large role in the funding of airports for improvement and expansion. The FAA is led by an

administrator who is appointed by the secretary of transportation for a 5-year term. The FAA is

headquartered in Washington, D.C. Headquarter offices within the FAA include the offices of Air

Traffic Services (ATS), Office of Security and Hazardous Matericals (ASH), Commercial Space

Transportation (AST), Regulation and Certification (AVR), Research and Acquisitions (ARA), and

Airports (ARP). Within the Office of Airports lies the Office of Airport Safety and Standards (AAS)

and the Office of Planning and Programming (APP). It is in these offices where Federal Aviation

Regulations and policies specific to airports are administered. The FAA is also divided into nine

geographic regions, as illustrated in Fig.

Figure FAA regions.

Within each region are two or more Airport District Offices (ADOs). ADOs keep in contact

with airports within their respective regions to ensure compliance with federal regulations and

to assist airport management in safe and efficient airport operations as well as in airport

planning. Many civil-use airports, including those that are not directly administered by the FAA,

may be under the administrative control of their individual states, which in turn have their own

departments of transportation and associated offices and regions. Airport management at

individual airports should be familiar with all federal, state, and even local levels of

administration that govern their facilities.

Airport management on an international level

Internationally, the recommended standards for the operation and management of civil-

use airports are provided by the International Civil Aviation Organization (ICAO). ICAO,

headquartered in Montreal, Quebec, Canada, is a membership-based organization, comprised

AERONAUTICAL ENGINEERING – MRCET (UGC – Autonomous)

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of 188 contracting states that span the world. ICAO came into existence as a part of the 1944

Chicago Convention on International Civil Aviation for the purpose of providing a source of

communication and standardization among participating states with respect to civil aviation

operations. ICAO publishes a series of recommended policies and regulations to be applied by

individual states in the management of their airports and civil aviation systems.

The National Plan of Integrated Airport Systems

Since 1970, the Federal Aviation Administration has recognized a subset of the 5,400

public-use airports in the United States as being vital to serving the public needs for air

transportation, either directly or indirectly, and may be made eligible for federal funding to

maintain their facilities. The National Airport System Plan (NASP) was the first such plan, which

recognized approximately 3,200 such airports. In addition, the NASP categorized these airports

on the basis of each airport’s number of annual enplanements and the type of service provided.

The NASP categorized airports as being “commercial service airports” if the airport enplaned at

least 2,500 passengers annually on commercial air carriers or charter aircraft. Commercial service

airports were subcategorized as “air carrier” airports and “commuter” airports, depending on the

type of service dominant at a given airport. Airports that enplaned less than 2,500 passengers

annually were classified as “general aviation airports.” In 1983, the final year of the NASP, a total

of 780 commercial service airports (635 air carrier airports and 145 commuter airports) and 2,423

general aviation airports were recognized under the NASP.

With the passage of the Airport and Airway Act of 1982, the FAA was charged with

preparing a new version of the NASP, to be called the National Plan of Integrated Airport

Systems (NPIAS). The NPIAS revised the method of classifying airports, primarily to reflect the

extreme growth in annual enplanements that a relative few of the largest airports were

experiencing at the time. As of 2002, a total of 3,364 airports in the United States were included

in the NPIAS.

The categories of airports listed in the NPIAS are:

1. Primary commercial service airports

2. Commercial service airports

3. General aviation airports

4. Reliever airports

Commercial service airports

Commercial service airports are those airports that accommodate scheduled air carrier

service, provided by the world’s certificated air carriers. Virtually all of the 650 million passengers

that boarded commercial aircraft in 2001 began, transferred through, and ended their trips at

commercial service airports. Commercial service airports operate under very specific regulations

enforced by the Federal Aviation Administration, Transportation Security Administration, as well

as state and local governments. In addition, other federal and local administrations, such as the

Environmental Protection Agency, and local economic development organizations, indirectly

affect how commercial service airports operate. The goal of commercial service airports, of

course, is to provide for the safe and efficient movement of

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passengers and cargo between population centers through the nation’s aviation system. In 2002,

there were a total of 546 commercial service airports throughout the United States striving to

fulfill this mission.

Primary commercial service airports are categorized in the NPIAS as those public-use

airports enplaning at least 10,000 passengers annually in the United States. In 2002, there were

422 airports (less than 3 percent of the nation’s total airports) categorized as primary commercial

service airports. Within this exclusive group of airports, the range of airport size and activity level

is very wide, and the distribution of passenger enplanements is highly skewed. About half the

primary commercial service airports handle relatively little traffic; the vast majority of passengers

are enplaned through relatively few very large airports. This phenomenon is a direct result of the

airline routing strategy, known as the “hub and spoke. In fact, the top five airports in the United

States, in terms of annual enplanements, boarded nearly 25 percent of all the passengers in the

United States. The top two airports, Chicago O’Hare Field and the Hartsfield Atlanta International

Airport, enplaned nearly 70 million (over 10 percent) of the nation’s commercial air travelers in

2002.

Because of this wide range of size within the primary commercial service airport category,

the NPIAS subcategorizes these airports into “hub” classifications. It should be noted that the

term “hub” used by the FAA in the NPIAS is very different than the term used by the airline

industry. Whereas the airline industry uses the term “hub” as an airport where the majority of

an airline’s passengers will transfer between flights to reach their ultimate destinations, the FAA

defines hub strictly by the number of annual enplaned passengers to use the airport.

Furthermore, if there is more than one airport in a standard metropolitan statistical area

(SMSA), the total number of enplaned passengers of the airports within the SMSA is used to

determine the airport’s “hub” classification (Fig.).

Figure . Airports by level of activity. (Figure courtesy FAA)

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The hub classifications used by the FAA in the NPIAS are:

1. Large hubs

2. Medium hubs

3. Small hubs

4. Nonhubs

Large hubs are those airports that account for at least 1 percent of the total annual

passenger enplanements in the United States. In 2002, there were 31 large hub airports in the

NPIAS. These 31 large hub airports accounted for 70 percent of all passenger enplanements in

the United States.

Medium hubs are those airports that account for at least 0.25 percent but less than 1

percent of the total annual passenger enplanements. In 2002, there were 37 airports classified

as medium hubs.

Small hubs are defined as those airports accommodating greater than 0.05 percent but

less than 0.25 percent of annual U.S. enplanements. Seventy-four NPIAS airports were

categorized asmall hubs.

Nonhubs are those airports that enplane at least 10,000 annual enplanements but less

than 0.05 percent of the annual total U.S. enplanements. In 2002, 280 primary commercial

service airports fell into the nonhub category.

Airports that handle at least 2,500 but less than 10,000 annual enplanements are categorized as

nonprimary commercial service airports, or simply commercial service airports. In 2002,

there were 124 nonprimary commercial service airports included in the NPIAS.

General aviation airports

Those airports with fewer than 2,500 annual enplaned passengers and those used

exclusively by private business aircraft not providing commercial air carrier passenger service are

categorized as general aviation (GA) airports. Although there are over 13,000 airports that fit

this category, only a subset is included in the NPIAS. There is typically at least one general aviation

airport in the NPIAS for every county in the United States. In addition, any general aviation airport

that has at least 10 aircraft based at the airport and is located at least 20 miles away from the

next nearest NPIAS airport is usually included in the NPIAS. In 2002, a total of 2,558 general

aviation airports were included in the NPIAS. General aviation airports have facilities and activity

that rival their commercial service counterparts. These airports have multiple runways, at least

one long enough to accommodate corporate and larger-size jet aircraft, and have a full spectrum

of maintenance, fueling, and other service facilities. Many such general aviation airports even

have rental car, restaurant, and hotel services to accommodate their customers. An important

aspect of general aviation airports is that they serve many functions for a wide variety of airports.

Some GA airports provide isolated communities with valuable links to other population centers.

The principal function of general aviation airports, however, is to provide facilities for privately

owned aircraft to be used for business and personal activities. In most recent years, there has

been a significant increase in the amount of small business jet aircraft using general aviation

airports.

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A general aviation airport is generally categorized as being either a basic utility or general

utility facility. Basic utility airports are designed to accommodate most single-engine and small

twin-engine propeller-driven aircraft. These types of aircraft accommodate approximately 95

percent of the general aviation aircraft fleet. General utility airports can accommodate larger

aircraft, as well as the lighter, smaller aircraft handled by basic utility airports.

Reliever airports

Reliever airports comprise a special category of general aviation airports. Reliever

airports, generally located within a relatively short distance (less than 50 miles) of primary

commercial service airports, are specifically designated by the NPIAS as “general aviation-type

airports that provide relief to congested major airports.” To be classified as a reliever airport, the

airport must have at least 50 aircraft based at the airport or handle at least 25,000 itinerant

operations or 35,000 local operations annually, either currently or within the last 2 years. Reliever

airports are located within an SMSA with a population of at least 500,000 or where passenger

enplanements at the nearest commercial service airport exceed 250,000 annually. As the name

suggests, reliever airports are intended to encourage general aviation traffic to use the facility

rather than the busier commercial service airport, In many major metropolitan areas, reliever

airports account for a majority of airport operations. Of the general aviation airports recognized

in the NPIAS, 260 have been classified as reliever airports. These airports are home to over 38

percent of all general aviation aircraft.

The rules that govern airport management

Ensure the safe and efficient operation of public-use airports. All airports included in the

NPIAS are subject to a variety of Federal Aviation Regulations(FAR). FAR’s are found in Title 14

of the United States Code of Federal Regulations(CFR) (14 CFR—Aeronautics and Space). The 14

CFR series is made up of over 100 chapters, known as parts, each of which provide regulatory

mandates that govern various elements of the civil aviation system, including regulations for

pilots, general aviation and commercial flight operations, and, of course, airport operations and

management. Within airport management, regulations regarding airport operations,

environmental policies, financial policies, administrative policies, airport planning, and other

issues of direct concern to airports are covered. Although all Federal Aviation Regulations are

important to airport management, the following FARs are of specific importance to airport

management, operations, and planning, and will be referenced in detail in this text:

FAR Part 1 Definitions and Abbreviations

FAR Part 11 General Rulemaking Procedures

FAR Part 36 Noise Standards: Aircraft Type and Airworthiness Certification

FAR Part 71 Designation of Class A, Class B, Class C, Class D, and Class E Airspace Areas; Airways,

Routes, and Reporting Points

FAR Part 73 Special Use Airspace

FAR Part 77 Objects Affecting Navigable Airspace

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FAR Part 91 General Operating and Flight Rules

FAR Part 93 Special Air Traffic Rules and Airport Traffic Patterns

FAR Part 97 Standard Instrument Approach Procedures

FAR Part 121 Operating Requirements: Domestic, Flag, and Supplemental Air Carrier Operations

FAR Part 129 Operations: Foreign Air Carriers and Foreign Operators of U.S. Registered Aircraft

Engaged in Common Carriage

FAR Part 139 Certification and Operations: Land Airports Serving Certain Air Carriers

FAR Part 150 Airport Noise and Compatibility Planning

FAR Part 151 Federal Aid to Airports

FAR Part 152 Airport Aid Program

FAR Part 156 State Block Grant Pilot Program

FAR Part 157 Notice of Construction, Alteration, Activation, and Deactivation of Airports

FAR Part 158 Passenger Facility Charges

FAR Part 161 Notice and Approval of Airport Noise and Access Restrictions

FAR Part 169 Expenditure of Federal Funds for Nonmilitary Airports or Air Navigation Facilities

Thereon (for airports not operated under Federal Aviation Administration regulations)

In addition to the 14 CFR series, regulations regarding the security of airport and other

civil aviation operations are published under Title 49 of the Code of Federal Regulations (49 CFR—

Transportation) and are known as Transportation Security Regulations (TSRs). TSRs are enforced

by the Transportation Security Administration (TSA). TSRs of specific importance to airport

management include

49 CFR Part 1500 Applicability, Terms, and Abbreviations

49 CFR Part 1502 Organization, Functions, and Procedures

49 CFR Part 1503 Investigative and Enforcement Procedures

49 CFR Part 1510 Passenger Civil Aviation Security Service Fees

49 CFR Part 1511 Aviation Security Infrastructure Fee

49 CFR Part 1520 Protection of Security Information (replaced FAR Part 191)

49 CFR Part 1540 Civil Aviation Security: General Rules

49 CFR Part 1542 Airport Security (replaced FAR Part 107)

49 CFR Part 1544 Aircraft Operator Security: Air Carriers and Commercial Operators (replaced

FAR Part 108)

49 CFR Part 1546 Foreign Air Carrier Security (replaced parts of FAR Part 129)

49 CFR Part 1549 Indirect Air Carrier Security (replaced FAR Part 109)

49 CFR Part 1550 Aircraft Security Under General Operating and Flight Rules (replaced parts of

FAR Part 91)

To assist airport management and other aviation operations in understanding and

applying procedures dictated by federal regulations, the FAA makes available a series of advisory

circulars (ACs) associated with each regulation and policies. The advisory circulars specific to

airports are compiled into the 150 Series of Advisory Circulars. There are over 100 current and

historical advisory circulars in the 150 series available to airport management. Those advisory

circulars of particular general interest to airport management are referenced throughout this

text. Some of these include:

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AC 150/5000-5C Designated U.S. International Airports

AC 150/5020-1 Noise Control and Compatibility Planning for Airports

AC 150/5060-5 Airport Capacity and Delay

AC 150/5070-6A Airport Master Plans

AC 150/5190-5 Exclusive Rights and Minimum Standards for Commercial Aeronautical Activities

AC 150/5200-28B Notices to Airmen (NOTAMS) for Airport Operators

AC 150/5200-30A Airport Winter Safety and Operations

AC 150/5200-31A Airport Emergency Plan

AC 150/5300-13 Airport Design

AC 150/5325-4A Runway Length Requirements for Airport Design

AC 150/5340-1H Standards for Airport Markings

AC 150/5360-12C Airport Signing and Graphics

AC 150/5360-13 Planning and Design Guidelines for Airport Terminal Facilities

AC 150/5360-14 Access to Airports by Individuals with Disabilities

Airports are also subject to state and local civil regulations specific to the airport’s

metropolitan area. In addition, airport management itself may impose regulations and policies

governing the operation and administration of the airport. Each airport is encouraged to have a

published set of rules and regulations covering all the applicable federal, state, local, and

individual airport policies to be made available for all employees and airport users on an as-

needed basis.

Organization and administration

Introduction

Whether privately owned or part of a public system, there are fundamental characteristics of the

administrative and organizational structure of an airport. The number of people employed at a

given airport can range from as few as one, at the smallest of general aviation facilities, to as

many as 50,000 at the world’s largest airport authorities.

Those airports that employ fewer numbers of people expect these people to accept a

wider range of responsibilities. For example, an airport management employee at a small airport

might be responsible for maintaining the airfield, managing finances, and maintaining good

relations with the local public. At the larger airports, employees are typically given very specific

responsibilities for a particular segment of airport management.

Airport ownership and operation

Public airports in the United States are owned and operated under a variety of organizational and

jurisdictional arrangements. Usually, ownership and operation coincide: commercial airports

might be owned and operated by a city, county, or state; by the federal government; or by more

than one jurisdiction (a city and a county). In some cases, a commercial airport is owned by one

or more of these governmental entities but operated by a separate public body, such as an airport

authority specifically created for the purpose of managing the airport. Regardless of ownership,

legal responsibility for day-to-day operation and administration can

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be vested in any of five kinds of governmental or public entities: a municipal or county

government, a multipurpose port authority, an airport authority, a state government, or the

federal government.

A typical municipally operated airport is city owned and run as a department of the city, with

policy direction by the city council and, in some cases, by a separate airport commission or

advisory board. County-run airports are similarly organized. Under this type of public operation,

airport policy decisions are generally made in the broader context of city or county public

investment needs, budgetary constraints, and development goals.

Some commercial airports in the United States are run by multipurpose port authorities. Port

authorities are legally chartered institutions with the status of public corporations that operate

a variety of publicly owned facilities, such as harbors, airports, toll roads, and bridges. In managing

the properties under their jurisdiction, port authorities have extensive independence from the

state and local governments. Their financial independence rests largely on the power to issue

their own debt, in the form of revenue bonds, and on the breadth of their revenue bases, which

might include fees and charges from marine terminals and airports as well as proceeds (bridge or

tunnel tolls) from other port authority properties. In addition, some port authorities have the

power to tax within the port district, although it is rarely exercised.

Another type of arrangement is the single-purpose airport authority. Similar in structure and in

legal charter to port authorities, these single-purpose authorities also have considerable

independence from the state or local governments, which often retain ownership of the airport

or airports operated by the authority. Like multipurpose port authorities, airport authorities have

the power to issue their own debt for financing capital development, and in a few cases, the

power to tax. Compared to port authorities, however, they must rely on a much narrower base

of revenues to run a financially self-sustaining enterprise.

Since the early 1950s, there has been a gradual transition from city- and county-controlled

airports to the independent single or multipurpose authorities. The predominant form is still

municipally owned and operated, particularly the smaller commercial and GA airports; however,

there are reasons for this transition:

• Many airport market or service areas have outgrown the political jurisdiction whose

responsibility the airport entails. In some cases there is considerable, actual or potential, tax

liability to a rather limited area. In these cases the creation of an authority to “spread the

potential or actual tax support” for the airport might be recommended. By spreading the tax base

of support for the airport, more equitable treatment of the individual taxpayer can result and the

taxpayers supporting the airport in most cases more nearly match the actual users of the facility.

• Another advantage of authority control of an airport is that such an organization allows the

board to concentrate and specialize on airport matters.

• Aviation authorities can also provide efficiency of operation and economies of scale when

several political jurisdictions, each with separate airport responsibilities, choose to combine

these under one board. This has been done quite successfully in many areas of the country.

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Normally, the staff required by an airport authority will be quite small compared to the personnel

requirements of a city or county government. This factor generally results in better coordination

with the airport management team.

• Authorities can also provide on-scene decision makers, rates, and charges unclouded by off

airport costs, and with less political impact on the business of running the airport. State operated

airports are typically managed by the state’s department of transportation. Either general

obligation or revenue bonding might be used to raise investment capital, and state taxes on

aviation fuel might be applied to capital improvement projects.

Although several states run their own commercial airports, only a handful of large- and medium-

size commercial airports are operated in this way, primarily in Alaska, Connecticut, Hawaii,

Maryland, and Rhode Island. The federal government owns and operates the airport at Pomona

(Atlantic City), New Jersey, which is part of the FAA Technical Center. The FAA manages this

facility with capital development financed through congressional appropriations. Several airports

in the United States are managed by private companies generally operating under a fixed-fee

contract with a local government. By contrast, many U.S. airports are managed by the local

government, but contract out a significant number of airport functions to private contractors,

including janitorial, security, maintenance, and concession management. Neither of these

situations is particularly controversial, nor are the economics of these airports unusual.

Airport privatization

Privatization refers to shifting governmental functions and responsibilities, in whole or in part, to

the private sector. The most extensive privatizations involve the sale or lease of public assets.

Airport privatization, in particular, typically involves the lease of airport property and/or facilities

to a private company to build, operate, and/or manage commercial services offered at the

airport. No commercial airport property in the United States has been completely sold to a

private entity. Long-term operating leases are the standard privatization contract. Only in the

United Kingdom have outright sales of airport property been completed.

Although no U.S. commercial airport has been sold to a private entity, publicly owned airports

have extensive private sector involvement. Most services now performed at large commercial

airports, such as airline ticketing, baggage handling, cleaning, retail concessions, and ground

transportation, are provided by private firms. Some estimates indicate as many as 90 percent of

the people working at the nation’s largest airports are employed by private firms. The remaining

10 percent of the employees are local and state government personnel performing

administrative or public safety duties; federal employees, such as FAA air traffic controllers and

TSA security screeners; or other public employees, primarily military personnel. Airports have

been increasingly dependent on the private sector to provide services as a way to reduce costs

and improve the quality and the range of services offered.

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The airport organization chart

An organization chart shows the formal authority relationships between superiors and

subordinates at various levels, as well as the formal channels of communication within the

organization. It provides a framework within which the management functions can be carried

out. The chart aids employees to perceive more clearly their positions in the organization in

relation to others and how and where managers and workers fit into the overall organizational

structure.

Airport management organization charts range from the very simple to the very complex,

depending primarily on the size, ownership, and management structure of the airport.

The organization chart is a static model of an airport’s management structure; that is, it shows

how the airport is organized at a given point in time. This is a major limitation of the chart,

because airports operate in a dynamic environment and thus must continually adapt to changing

conditions. Some old positions might no longer be required, or new positions might have to be

created in order that new objectives can be reached; therefore, it is necessary that the chart be

revised and updated periodically to reflect these changing conditions. The duties, policies, and

theories that govern the job of airport management vary widely over time. In addition, many

such policies vary from airport to airport on the basis of individual airport operating

characteristics. As a result, it is difficult to say that any organization chart is typical or that the

chart of one airport at any particular time is the one still in effect even a few months later;

however, all airports do have certain common functional areas into which airport activities are

divided. Understandably, the larger the airport, the greater the specialization of tasks and the

greater the departmentalization.

Job descriptions

The following is a brief job description for each position shown in Fig.

Typical airport management organization chart.

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Airport director. The airport director is responsible for the overall day-today operation of the

airport. He or she reports directly to the airport authority, the airport board, or governmental

commission charged with the development and administration of the airport. This individual

directs, coordinates, and reviews through subordinate supervisors, all aircraft operations,

building and field maintenance, construction plans, community relations, and financial and

personnel matters at the airport. The airport director also:

• Supervises and coordinates with airline, general aviation, and military tenants use of airport

facilities.

• Reviews airport tenant activities for compliance with terms of leases and other agreements.

• Supervises enforcement of aircraft air and ground traffic and other applicable regulations.

• Confers with airlines, tenants, the FAA, and others regarding airport regulations, facilities, and

related matters.

• Participates in planning for increased aircraft and passenger volume and facilities expansion.

• Determines and recommends airport staffing requirements.

• Compiles and submits for review an annual airport budget.

• Coordinates airport activities with construction, maintenance, and other work done by

departmental staff, tenants, public utilities, and contractors.

• Promotes acceptance of airport-oriented activities in surrounding communities.

Assistant director—finance and administration The assistant director— finance and

administration is charged with the responsibility for overall matters concerning finance,

personnel, purchasing, facilities management, and office management. Specifically, this

individual’s duties include:

• Fiscal planning and budget administration.

• Accomplishment of basic finance functions such as accounts receivable and payable, auditing,

and payroll.

• Administration of the purchasing function.

• Administration and use of real property including negotiation of tenant leases and inventory

control.

• Personnel functions including compensation, employee relations, and training.

• Adequate telephone and mail service.

Public relations.

Personnel manager The personnel manager is responsible for administering the airport

personnel program. In such capacity, this individual’s duties include:

• Dealing with personnel problems involving position classification, compensation, recruitment,

placement, transfers, layoffs, promotions, leaves of absence, supervisor-subordinate

relationships, and working conditions.

• Serving as equal rights and equal opportunity officer for the airport.

• Handling worker’s compensation cases.

• Evaluating the organization pattern, reviewing and recommending proposed departmental

organizational changes, and preparing position descriptions.

• Conferring with employees and their supervisors on personnel problems.

• Preparing personnel documents and maintaining personnel records.

• Interviewing or supervising the interviewing of applicants for airport positions.

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Chief accountant The chief accountant is responsible for financial planning, budgeting,

accounting, payroll, and auditing. The principal duties include:

• Coordinating, consolidating, and presentation of financial plans.

• Administering basic accounts such as general accounts, cost accounting, and accounts

receivable and payable.

• Administering budget; reviewing and analyzing actual performance at budget review sessions.

• Supervising all receipts and disbursements.

• Administering payroll.

• Conducting periodic internal audit of all airport functions.

Facilities chief The facilities chief establishes criteria and procedures for the administration of all

airport property. In this capacity, he or she is responsible for inventory control of all equipment

and facilities. Principal duties and responsibilities of this individual include:

• Identification and control of all property and equipment including periodic audits.

• Evaluating and making recommendations concerning the most efficient use of airport real

property utilization.

• Soliciting tenants and concessionaires.

• Developing policy and rate structure applicable to use of property by tenants and

concessionaires.

Coordinating with purchasing and legal staff concerning tenant and

concessionaire leases.

Chief purchasing agent The chief purchasing agent directs the procurement of materials and

services to support the airport; he or she prepares, negotiates, interprets, and administers

contracts with vendors. This individual’s principal duties include:

• Coordinating requirements for materials and services to be purchased.

• Purchasing all materials and services.

• Establishing bidding policies and procedures.

• Working closely with the facilities’ chief and legal staff regarding contracts associated with

purchasing equipment.

Manager of public relations The manager of public relations is the chief liaison officer between

the airport and the surrounding community. In this capacity, he or she is responsible for all public

relations activities including the development of advertising and publicity concerning the airport.

This individual is also responsible for handling all noise and other environmental matters.

Principal duties include:

• Consulting with and advising airport management regarding public relations policies and

practices.

• Coordinating all publicity releases to the various media.

• Supervising all airport guides and information booths.

• Coordinating VIP visits to the airport.

• Receiving and analyzing all public complaints regarding such things as noise and other

environmental concerns.

• Preparing answers to complaints and advising management as appropriate.

• Sponsoring activities and special events to generate goodwill and public acceptance.

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Assistant director—planning and engineering The assistant director— planning and

engineering provides technical assistance to all airport organizations, and ensures the

engineering integrity of construction, alteration, and installation programs. This individual also

establishes industrial safety standards. Principal duties and responsibilities include:

• Developing standards and specifications for construction, alteration, and installation

programs; monitors such programs to ensure compliance therewith.

• Reviewing all construction plans to determine technical integrity and conformance to

aesthetic design standards.

• Developing and publishing standards and procedures for industrial safety.

• Participating in the negotiation of construction contracts.

Assistant director—operations The assistant director—operations is responsible for all airside

and landside operations including security, and crash, fire, and rescue operations. Principal duties

include:

• Directing the operations and security programs for the airport.

• Coordinating and supervising security activities with field maintenance personnel, police and

fire departments, federal agencies, and airport tenants.

• Recommending and assisting in promulgating operational rules and procedures.

• Supervising investigations of violations of airport regulations.

• Preparing annual operations budget.

• Directing monitoring of noise levels and coordinating noise level studies.

• Participating in special programs relating to or affecting airport operations, such as studies of

height limits around airport property and studies of noise control.

Chief—airside operations The chief—airside operations is responsible for all airfield

operations. In this capacity, principal duties include:

• Enforcing operating and security rules, regulations, and procedures concerning landing,

taxiing, parking, servicing loading and unloading of aircraft, operation of vehicular traffic on the

airfield, airline activities, and emergency situations.

• Inspecting conditions of airfield lighting, runways, taxiways, and ramp areas.

• Correcting hazardous conditions.

• Coordinating airfield activities with maintenance and security personnel.

• Assisting in all airfield emergency calls and disasters by notifying control tower to close

runways, directing maintenance personnel, directing security officers in crowd control, and

overseeing other safety considerations and activities necessary to resume normal airport

operations.

• Investigating and reporting on complaints and disrupted airport operations, including

unscheduled plane arrivals, aircraft accidents, rule and procedure violations, airline activities, and

other operations of the airport.

• Assigning gate and parking spaces to all aircraft.

• Coordinating special arrangements for arrivals and departures of important persons.

• Completing all report forms pertaining to operations activities on assigned

shifts.

• Assisting in directing noise level studies with other departmental personnel.

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Chief—landside operations The chief—landside operations is responsible for all landside

operations. In this capacity, principal duties include:

• Enforcing operating and security rules, regulations, and procedures concerning buildings,

access roads, and parking facilities.

• Exercising authority to halt hazardous or unauthorized activities by tenants, employees, or the

public in violation of safety regulations and procedures.

• Answering inquiries and explaining terminal use procedures and safety regulations to tenants.

• Coordinating terminal building and other facility activities with maintenance and security

personnel.

• Coordinating all parking facility activities with tenants and transit companies.

• Preparing personal injury and property damage reports and general incident reports.

• Completing all report forms pertaining to operations activities on assigned shifts. Security chief

The security chief enforces interior security, traffic, and safety rules and regulations and

participates in law enforcement activities at the airport. This individual also works closely with

federal security officials assigned to the airport. Principal duties include:

• Enforcing ordinances and regulations pertaining to parking, traffic control, safety, and

property protection.

• Patrolling facilities to prevent trespass and unauthorized or hazardous use.

• Preventing public entry into dangerous or restricted areas.

• Issuing citations and warnings for violations of specific provisions of airport rules and

regulations.

• Securing gates and locks and watching buildings and facilities for indications of fire, dangerous

conditions, unauthorized entry, and vandalism.

• Responding to emergencies and taking immediate action to control crowds, direct traffic,

assist the injured, and turn in alarms.

• Responding to calls for police service; participating in arrests; apprehending, or assisting

members of the police department in apprehending, law violators.

• Providing information to the public regarding locations and operations of the airport.

• Assigning uniformed and armed personnel to patrol and stand watch, on a 24-hour basis, to

protect and safeguard all persons in the airport and property on the airport.

Aircraft rescue/fire fighting chief The aircraft rescue/fire fighting chief develops procedures and

implements accident, fire, and disaster plans. Principal duties include:

• Conducting a training (continuing) program for all aircraft rescue, fire fighting personnel.

• Developing and implementing all aircraft rescue and fire fighting programs.

• Staffing and operating all aircraft rescue and fire fighting equipment on the airport.

• Inspecting and testing all types of fixed fire prevention and extinguishing equipment on the

airport.

• Inspecting all facilities for fire and/or safety hazards. Assistant director—maintenance The

assistant director—maintenance is responsible for planning, coordinating, directing, and

reviewing the maintenance of buildings, facilities, vehicles, and utilities. Principal duties include:

• Developing, directing, and coordinating policies, programs, procedures, standards, and

schedules for buildings, utilities, vehicle maintenance, and field facilities.

• Coordinating work done by tenants and contractors.

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• Inspecting maintenance work for compliance with plans, specifications, and applicable laws.

• Making recommendations as to adequacy, sufficiency, and condition of buildings, facilities, and

vehicles.

• Overseeing maintenance contracts. Buildings and facilities chief The buildings and facilities

chief is responsible for ensuring that buildings are adequately maintained with a minimum of

cost. Types of maintenance required are primarily electrical, mechanical, plumbing, painting,

carpentry, masonry, and cement work. Principal duties include:

• Developing an approved maintenance schedule for all building maintenance requirements.

• Assigning qualified personnel to perform maintenance. Inspecting work for adequacy and

compliance with requirements.

• Developing special maintenance methods where necessary.

Grounds chief The grounds chief is responsible for ensuring that the grounds are maintained in

good repair and that the landscape is adequately maintained. Principal duties include:

• Developing approved schedules for maintaining all airport surface areas including paving,

landscaping, and drainage systems.

• Assigning qualified personnel to accomplish ground maintenance.

• Inspecting work for adequacy and compliance with maintenance standards.

Vehicle chief The vehicle chief is responsible for the maintenance of all vehicles utilized by the

airport. Vehicle maintenance includes tune-up, minor maintenance, washing and polishing, tires

and batteries, lubrication, and fueling. Principal duties include:

• Developing an approved vehicle maintenance schedule.

• Coordinating schedule with users of airport vehicles.

• Assigning qualified personnel to perform maintenance.

• Inspecting all work to determine compliance with established maintenance standards.

• Coordinating with purchasing to obtain vendor services as required.

• Maintaining vehicle usage and maintenance records.

• Coordinating with purchasing in developing a vehicle disposal and replacement program.

Although the aforementioned positions represent a typical managerial structure at a commercial

airport, there are numerous employees with a wide variety of job skills reporting to them. Some

of the typical job titles found at major airports include the following:

Accountant Buyer

Administrative assistant Carpenter

Air-conditioning mechanic Cement finisher

Airport guide Civil engineer

Airport noise abatement officer Construction inspector

Architect Contract analyst

Auditor Custodian

Auto mechanic Drafter

Bus driver Electrician

Elevator mechanic Plumber

Equipment mechanic Public relations representative

Equipment operator Secretary

Facility planner Security officer

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Financial analyst Sheet metal mechanic

Firefighter Software engineer

Groundskeeper Student intern

Heavy-duty equipment operator Supervisor of operations

Industrial engineer Tilesetter

Maintenance and construction Toolroom keeper

laborer

Maintenance foreman Traffic painter and sign poster

Operations assistant Tree surgeon

Painter Truck operator

Personnel representative Welder

Plasterer Window cleaner

Airport management as a career

There are many career paths within the field of airport management as evidenced by the wide

variety of job descriptions under the previous section. Even the job of airport manager varies

greatly. At one extreme is the manager of a large metropolitan airport, an appointee or civil

service employee of the city government or airport authority, who heads a large staff of assistants

and specialists through which he or she manages a highly complex organization. At the other

extreme is the owner-manager of a small private field near a rural community. The latter might

combine activities as airport manager with work in some other business.

Between these two extremes is the manager of a municipally owned or privately owned airport

where there are a limited number of scheduled airline flights each day. Based at the airport are

several fixed-base operators (FBOs) and a number of aircraft owned by individuals and

corporations. The typical manager of a medium-size airport deals with all segments of the

aviation community including the airlines, general aviation, and federal and state agencies.

In the early days of aviation, an individual could become an airport manager if he or she was a

pilot and had several years of experience in some segment of the industry. Although the

individual had to be able to manage the operation for the owner, his or her experience was likely

to be in some area of flying rather than in business management.

Today an airport manager must be primarily a skilled and experienced executive with a broad

background in all facets of aviation and management in general. It is no longer necessary that the

manager be a pilot. Almost every airport manager’s job situation is unique in some major respects

because of the wide variety of size of airport and type of ownership and operation. There are also

wide variations in government procedures in different communities. This sometimes causes the

responsibilities, salaries, and authority of airport managers to be completely different from one

city to the next. Even the job title varies. Director of aviation, airport superintendent, executive

director, airport director, general manager, and other titles are often used instead of airport

manager.

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Duties of an airport manager

An airport manager is often part landlord and part business executive. As a landlord, the safe

condition and operation of the airport is the manager’s greatest responsibility. The maintenance

of the airport buildings and land is also important. As a business executive, the manager is in

charge of public relations; financial planning; profitable and efficient day-to-day operation; and

coordination of airline, concession, and airport facilities to best serve the tenants and flying

public. The airport manager’s primary duty is the safe and efficient operation of the airport and

all its facilities regardless of its size. However, at least in the larger commercial airports, the

manager does not have direct control over most flying activities. He or she must deal with all

groups and individuals who use the airport facilities. These include representatives of the airlines

that schedule flights, maintain and service their aircraft, and process passengers; all segments of

the general aviation community, including FBOs and individual and corporate owners and

operators of aircraft; and the government-employed staffs of the air traffic control facilities,

customs, and so forth.

All of these groups can be regarded as tenants of the airport, carrying on their independent

activities. Besides dealing with the companies and individuals directly concerned with flying, the

manager is in contact with concessionaires who operate restaurants, shops, and parking facilities,

and with the traveling public.

The size of the airport and the services it offers its tenants and the public play an important part

in determining the airport manager’s specific duties. Some of these duties were enumerated

earlier in this chapter under job descriptions. A manager must formulate fiscal policy, secure new

business, recommend and enforce field rules and regulations, make provisions for handling

spectators and passengers, oversee construction projects, see that the airport is adequately

policed and that airplane and automobile traffic is regulated. The manager interprets the

functions and activities of the airport to the city or other local government and to the public; he

or she is a public relations expert as well as a business manager. This public relations function is

extremely important and will be taken up at the end of this chapter in a separate section. Not all

of these duties are required of all managers of airports. Many airports are too small to have FAA-

staffed control towers; others have no scheduled airline flights. In these airports the job is

simpler, but the manager must usually do all of the work personally. In large airports, the

manager has many assistants and supervises the work The job of airport manager is obviously

not completed between 9 and 5. The hours are often irregular and most managers have some

weekend and holiday work. They will often have to work at night. In emergency situations they

will usually work additional hours. Difficult weather conditions, labor problems, personnel

irregularities, and flight schedule changes are only some of the things that will affect job hours.

Even when not actually working, most airport managers are on call.

Education and training

The major requirement for the job of airport manager is business and administrative ability; this

means the ability to make decisions, to coordinate details, to direct the work of others, and to

work smoothly with many kinds of people. Perhaps the best college program to follow is one that

leads to a degree in aviation management. College courses in engineering; management;

accounting; finance and economics; business and aviation law; and airline, general aviation, and

airport management are good preparation for a career in airport management. Many schools

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that are members of the University Aviation Association (UAA) offer programs and courses that

can be applied to the problems of managing an airport.

A number of the primary airports in the United States have 1- or 2-year internship programs that

train college graduates for various aspects of airport management. Other individuals have started

at a small GA airport where they become involved in all aspects of airport management—from

maintenance and repair to attending city commission meetings. Some college graduates have

taken jobs with aviation or airport consulting firms and after several years have moved into

airport management. Many others have acquired experience in some other area of aviation

before entering the field.

The airport manager and public relations

Unquestionably, one of the most important and challenging aspects of an airport manager’s job

is that of public relations. Public relations is the management function that attempts to create

goodwill for an organization and its products, services, or ideals with groups of people who can

affect its present and future welfare. The most advanced type of public relations not only

attempts to create goodwill for the organization as it exists, but also helps formulate policies, if

needed, that of themselves result in a favorable reaction.

Aviation and airports have such great impact on our lives, and on the life of our nation, that it is

difficult to find a person who has no knowledge or opinion of airports. Despite the tremendous

growth in all segments of aviation over the past 25 years, and the resulting challenges, problems,

and opportunities, aviation has not been exempted from the controversies that inevitably are

part of any endeavor affecting or touching the lives of a large number of people. This controversy

is the reason why every opinion, whether positive or negative, will be a strong one. The net result

is that every airport has an image—either good or bad.

The great problems of airports are always related to the original and elemental images resulting

from the collective opinions of the public. These images are really the balancing or compensating

factors that correspond with the problems the public encounters with airports. These images are

deposits representing the accumulated experience of jet noise, hours of struggle to reach the

airport on clogged highways under construction, the frustration of trying to find a closein parking

place, the lines to obtain tickets, the time waiting for luggage, and other inconveniences.

Regardless of the size of an airport, there are several basic principles underlying the public

relations process:

• Every airport and every company and interest on the airport has public relations, whether or

not it does anything about them.

• Public goodwill is the greatest asset that can be enjoyed by any airport, and public opinion is

the most powerful force. Public opinion that is informed and supplied with facts and fair

interpretation might be sympathetic. Public opinion that is misinformed or uninformed will

probably be hostile and damaging to an airport.

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• The basic ingredient of good relations for any airport is integrity. Without it, there can be no

successful public relations.

• Airport policies and programs that are not in the public interest have no chance of final success.

• Airport public relations can never be some kind of program that is used only to respond to a

negative situation. Good public relations have to be earned through continuing effort.

• Airport public relations go far beyond press relations and publicity. Public relations must

interpret the airport interests to the public, and should be a two-way flow with input and

interpretation of public opinion to airport management and community leadership. Public

relations must use many means of reaching the various segments of the public interested in

airport operations, and must try to instill the public relations spirit into all facets of the airport’s

operation.

The airport and its public

Basically, every airport has four “publics” with which it deals, and despite the wide variance in

size and scope of activities of airports, these publics are basically the same for all airports:

• The external business public. These are the past, present, and future airport customers for all

the services offered on an airport. It includes all segments of the business, government,

educational, and general flying public.

• The external general public. These are the local citizens and taxpayers, many of whom have

never been to the airport but who vote on airport issues or who represent citizen groups with

particular concerns.

The internal business public. These are the businesses and enterprises whose interests are tied

directly to the airport—the airlines, FBOs, other members of the general aviation community,

government officials, and other aviation and travel-oriented local businesses and trade

organizations, and the employees of all of these enterprises.

• The internal employee public. This group includes everyone who works for the airport and its

parent organization. These are the most important airport publics. These are the sources of vital

information that management must have in order to know what and how it is doing, and they are

the ones who must be informed and persuaded if any airport objective is to be achieved.

Public relations objectives

The primary objectives of an airport’s public relations activities are as follows:

• Establishing the airport in the minds of the external public as a facility that is dedicated to

serving the public interest: Many airports work closely with the local chamber of commerce in

developing a brochure or pamphlet citing various accomplishments and activities at the airport

that would be of interest to the local business community and the community in general.

• Communicating with the external public with the goal of establishing and building goodwill:

The airport manager and other members of his or her staff often serve as guest speakers at

various civic and social organizations. They also become active members of local or civic

organizations in order to informally promote the airport and determine the pulse of the

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community. Public announcements of new developments at the airport are made through all

media. This is a continuing part of the communications process.

• Answering general and environmental complaints on an individual basis: It is important that

the airport develop a good rapport with its neighbors and concerned citizen groups. Working

closely with the airlines and other internal business publics, airport management attempts to

work out such problems as noise by changing traffic patterns and adjusting hours of flight

operation. Tours of the airport are given to various community groups in order for them to get

a better understanding of operations. Civic-oriented activities are also conducted at the airport

to improve relations with airport neighbors and address their concerns. Citizen participation in

airport planning and public hearings is another means by which airport management is

continually apprised of community feelings about airport-related activities.

Establishing good working relationships with internal business publics whose interests are similar

to those of airport management.

• Promoting programs designed to enhance and improve employee morale. Like any other

facility that serves the total community, an airport requires total community understanding. A

well-executed public relations program can make the community aware of the airport and its

benefits and create an atmosphere of acceptance. Attitudes are not changed overnight, so the

public relations effort must be a continuous campaign to build understanding and develop

attitudes of acceptance.

historical and legislative perspective

The formative period of aviation and airports: 1903–1938

The birth of civil aviation: 1903–1913

December 17, 1903, the day Orville and Wilbur Wright succeeded in achieving flight with a fixed-

wing, heavier-than-air vehicle at Kitty Hawk, North Carolina, has gone down in history as being

the “birth of aviation.” Their first airplane flight occurred on a large field, with sufficient room for

the aircraft to take off and land. There were no paved runways, gates, fuel facilities, lights, or air

traffic control. There was no terminal building and there was no automobile- parking garage.

There were no rules and regulations governing the flight. That field in Kitty Hawk was, however,

the first airport.

In the 10 years following the Wright brothers’ first flight, the aviation world evolved in a very

slow and hesitant manner, with most of the advances focusing on improving aircraft technology,

and much of the efforts trying to promote the technology. Little, if any, consideration was

focused on creating facilities for aircraft to take off and land. As a result, by 1912, there were only

20 recognized landing facilities in the country, all of which were privately owned and operated.

World War I: 1914–1918

The outbreak of World War I in 1914 opened up initial opportunities for fixedwing aircraft to

serve in a military capacity. The effort to use aviation as a military force in World War I resulted

in the production of thousands of aircraft (most of which were produced and served in France,

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Germany, and England), and hundreds of military pilots, to first fly reconnaissance and later

fighting missions. As a result, the U.S. military built 67 airports for the war effort. These

predominantly grass fields provided facilities to base, fuel, and maintain aircraft, as well as

provide sufficient room for takeoff and landing—but required little other infrastructure. After the

war, 25 of these military airfields remained operational, and the rest were decommissioned.

Early airmail service: 1919–1925

After the end of World War I in 1918, many of the aircraft and airmen that had served in the

military turned their talents towards civil uses. One of the first civil applications of aviation was

that of providing air transportation for the U.S. mail. The first regular airmail route in the United

States was established on May 15, 1918, between New York City and Washington, D.C. The

service was conducted jointly by the United States War Department and the Post Office

Department. The War Department operated and maintained the aircraft and provided trained

airmen, and the Post Office Department attended to the sorting of the mail and its transportation

to and from the airfield, and the loading and discharge of the aircraft at the airfields. This joint

arrangement lasted until August 12, 1918, when the Post Office Department took exclusive

responsibility for the development of the mail service on a larger scale

The Air Commerce Act: 1926–1938

The potential for growth of the airmail industry in particular, and in aviation activity in general,

resulted in the need to have aviation managed, controlled, and regulated as a comprehensive

system so that its potential for widespread growth would be met. On May 20, 1926, President

Calvin Coolidge signed the Air Commerce Act of 1926 into law. The object of the Air Commerce

Act was to promote the development and stability of commercial aviation in order to attract

adequate capital into the business and to provide the fledgling industry with the assistance and

legal basis necessary for its growth. The act made it the duty of the secretary of commerce to

encourage air commerce by establishing civil airways and other navigational facilities to aid aerial

navigation and air commerce. Under the act, the Department of Commerce was charged with

encouraging local and municipal development of airfields, for the purpose of economic growth,

and to contribute to the infrastructure that would allow the growth of airmail service, as well as

to provide safe landing facilities for the newly formed U.S. Army Air Service.

The Civil Aeronautics Act: 1938–1939

On June 23, 1938, the Civil Aeronautics Act of 1938 was approved by President Franklin Delano

Roosevelt. This act substituted a single federal statute for the several general statutes that had

up to this time provided for the regulation of civil aviation. The act placed all regulation of aviation

and air transportation into one authority. The act created an administrative agency consisting of

three partly autonomous bodies. The five-man Civil Aeronautics Authority was principally

concerned with the economic regulation of the new passenger air carrier industry. The Air Safety

Board was an independent body for the investigation of accidents. The administrator of civil

aviation was concerned with construction, operation, and maintenance of the airway system as

a whole. The transfer of responsibilities, personnel, property, and unexpended balances of

appropriations of the Bureau of Air Commerce to the Civil Aeronautics

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Authority, effected in August 1938, under the provisions of the act, brought to a close a 12-year

period during which the development and regulation of civil aviation was under the jurisdiction

of the Department of Commerce.

During the first year and half of its existence, a number of organizational difficulties arose within

the Civil Aeronautics Authority. As a result, President Roosevelt, acting within the authority

granted to him in the Reorganization Act of 1939, reorganized the Civil Aeronautics Authority by

creating two separate entities. The five-man authority initially known as the Civil Aeronautics

Authority remained an independent operation and became known as the Civil Aeronautics Board

(CAB). The Air Safety Board was abolished and its functions given to the CAB. The administrator

of the old Civil Aviation Authority became the head of an office within the Department of

Commerce known as the Civil Aeronautics Administration (CAA). The duties of the original five-

man authority were unchanged, except that certain responsibilities, such as accident

investigation, previously handled by the Air Safety Board, were added. The administrator, in

addition to retaining the function of supervising construction, maintenance, and operation of the

airways, was required to undertake the administration and enforcement of safety regulations,

and the administration of the laws with regard to aircraft operation. Subsequently, the

administrator became directly responsible to the secretary of commerce. The term CAA, which

originally identified the Civil Aeronautics Authority, became the common moniker of the Civil

Aeronautics Administration.

Airport modernization: The early jet age The Airways Modernization Act of 1957

Recognizing that the demands on the federal government in the years ahead would be

substantial, the director of the Bureau of the Budget requested a review of aviation facilities

problems in 1955, William B. Harding was appointed as a consultant to the director. Harding, in

turn, solicited the help of a number of prominent individuals in aviation to form his committee.

In late December 1955, Harding submitted his report. Reporting that the need to improve air

traffic management had already reached critical proportions, the group recommended that an

individual of national reputation, responsible directly to the president, be appointed to provide

full-time, high-level leadership in developing a program for solving the complex technical and

organizational problems facing the government and the aviation industry.

The Federal Aviation Act of 1958

On May 20, 1958, a military jet trainer and a civilian transport plane collided over Brunswick,

Maryland, killing 12, the third major air disaster within a period of 31_2 months. This tragedy

spurred governmental action to establish a comprehensive Federal Aviation Agency. Instead of

taking a predicted 2 or 3 years to create a single aviation agency, Congress immediately took

action to enact legislation. As a result, the Federal Aviation Act of 1958 was signed by the

president on August 23, 1958. Treating comprehensively the federal government’s role in

fostering and regulating civil aeronautics and air commerce, the new statute repealed the Air

Commerce Act of 1926, the Civil Aeronautics Act of 1938, the Airways Modernization Act of 1957,

and those portions of the various presidential reorganization plans dealing with civil aviation.

The law provided for the retention of the Civil Aeronautics Board as an independent office

including all its functions except the safety rule-making powers, which were transferred to the

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new Federal Aviation Agency. The Federal Aviation Agency was created with an administrator

responsible to the president.

The agency incorporated the function of the Civil Aeronautics Administration and the Airways

Modernization Board. Section 103 of the act concisely stated the administrator’s major powers

and responsibilities:

1. The regulation of air commerce in such manner as to best promote its

development and safety and fulfill the requirements of national defense.

2. The promotion, encouragement, and development of civil aeronautics.

3. The control of the use of the navigable airspace of the United States and

the regulation of both civil and military operations in such airspace in

the interest of the safety and efficiency of both.

4. The consolidation of research and development with respect to air navigation

facilities, as well as the installation and operation thereof.

5. The development and operation of a common system of air traffic control

and navigation for both military and civil aircraft.

The Department of Transportation: 1967

For many years it was argued that there had been unrestrained growth and considerable

duplication of federal activities regarding transportation. In 1966, President Lyndon Johnson

chose to deliver a special transportation message to Congress. He focused in on the need for

coordination of the national transportation system, reorganization of transportation planning

activities, and active promotion of safety. In his address, President Johnson contended that the

U.S. transportation system lacked true coordination and that this resulted in system

inefficiencies. He advocated the creation of a federal department of transportation to promote

coordination of existing federal programs and to act as a focal point for future research and

development efforts in transportation.

Congressional hearings were held on several bills involving most of President Johnson’s

recommendations. Although some opposition was expressed to specific proposals, there was

general support for creation of the Department of Transportation (DOT). The legislation creating

the DOT was approved on October 15, 1966. DOT commenced operations on April 1, 1967, and

Alan S. Boyd was appointed the first secretary of transportation.

The agencies and functions transferred to the DOT that related to air transportation included the

Federal Aviation Agency in its entirety and the safety functions of the Civil Aeronautics Board,

including the responsibility for investigating and determining the probable cause of aircraft

accidents and safety functions involving review on appeal of the suspension, modification, or

denial of certificates or licenses. The Federal Aviation Agency was placed under the DOT and

renamed the Federal Aviation Administration (FAA). The administrator of the FAA was still

appointed by the president but from then on reported directly

to the secretary of transportation.

The act also created within the new department a five-member National Transportation Safety

Board (NTSB). The act charged the NTSB with (1) determining the cause or probable cause of

transportation accidents and reporting the fact, conditions, and circumstances relating to such

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accidents; and (2) reviewing on appeal the suspension, amendment, modification, revocation,

or denial of any certificate or license issued by the secretary or by an administrator.

Airport legislation after airline deregulation

The Deregulation Acts of 1976 and 1978

The passage of the Air Cargo Deregulation Act of 1976 and, more important, the Airline

Deregulation Act of 1978, signaled an end to the 40-year history of economic regulation of the

airline industry. Deregulation of airlines was part of a general trend gaining momentum in the

1970s to reduce government regulation of private industry. By this time, many observers in

Congress and elsewhere had begun to doubt that federal regulation was encouraging orderly

competition and had come to suspect that the regulatory process was imposing unnecessary

costs and creating distortions in the marketplace. Even before Congress passed the deregulation

acts, the CAB itself had conducted a number of experimental reductions of certain types of

regulation in order to encourage competition. With the 1978 act, the market was opened to new

entrants, and carriers gained much greater freedom to enter or leave markets, to change routes,

and to compete on the basis of price. The 1978 act also called for the “sunset” of the CAB by the

end of 1984, with transfer of its few remaining essential functions to the DOT and other

departments.

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UNIT II

AIRPORT OPERATIONS MANAGEMENT

The components of the airport

An airport is a complex transportation facility, designed to serve aircraft, passengers, cargo, and

surface vehicles. Each of these users is served by different components of an airport. The

components of an airport are typically placed into two categories

The Airside

The landside

The airside of an airport is planned and managed to accommodate the movement of

aircraft around the airport as well as to and from the air. The airside components of an airport

are further categorized as being part of the local airspace or the airfield. The airport’s airfield

component includes all the facilities located on the physical property of the airport to facilitate

aircraft operations. The airspace surrounding an airport is simply the area, off the ground,

surrounding the airport, where aircraft maneuver, after takeoff, prior to landing, or even merely

to pass through on the way to another airport.

The landside components of an airport are planned and managed to accommodate the

movement of ground-based vehicles, passengers, and cargo. These components are further

categorized to reflect the specific users being served. The airport terminal component is primarily

designed to facilitate the movement of passengers and luggage from the landside to aircraft on

the airside. The airport’s ground access component accommodates the movement of ground-

based vehicles to and from the surrounding metropolitan area, as well as between the various

buildings found on the airport property.

No matter what the size or category of an airport, each of the above components is

necessary to properly move people from one metropolitan area to another using air

transportation. The components of an airport are planned in a manner that allows for the proper

“flow” from one component to another. An example of a typical “flow” between components is

illustrated in Fig. In Figure further identifies some of the facilities located on the airfield and

ground access components of the airport.

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Fig. The components of an airport

The complexity of the Airport operation:

Until the deregulation & privatization of the air transport industry in the late 1970s &

1980s, it had been seen in many countries almost as a public service industry that required

support from the Public purpose.

Airports such as Shannon in republic & Amsterdam in Netherlands, were among the first

to develop income from commercial activities. By 1970s commercial revenues had become very

inplerns of total income. The larger airports became complex business with functions that

extended well beyond the airfield or “traffic” side of operations. It is also clear that in most

countries, airports maintain economic viability by developing a broadly based revere capability

As the relative and alxobute sizes of the non traffic element of the airports revenue increase,

much more attention must be paid to developing commercial expertise, some of the largest

airports have developed considerable in-house expertise in maximizing commercial revenues.

The non aeronautical activities found at airports are (ICA0) 2006;

Aviation fuel suppliers

Food & beverage sales (i.e restaurants, bars cafeterias etc)

Duty paid shopping

Banks / Foreign exchange

Airline catering services

Taxi services

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Car rentals

Advertising

Airport /City transport services (i.e buses, limousines etc.

Duty free shopping (eg alcohol, tobacco, perfume, watches, optical)

Petrol/automobile service stations

Hair dressing/barber shop

Internet services

Casinos/gaming machines

Cinema

Vending machines for other than food

Freight consolidators

Art concerts

Music concerts

Souvenir shops

The degree to which airports go to a non aeronautical activity is likely to depend on the

destination of the revenges generated from such activities. These go directly to the airport and

add to the airports profitability. There are number of situations that can act as disincentive to the

airport company. Where income from non aeronautical sources goes directly to the national

treasury. Where the government gives the dut-free franchise to the government- owned airline.

Where the U. S airport is operated on a residual cost basis, and income from non aero

Airport terminals and ground access

The airport terminal area, comprised of passenger and cargo terminal buildings, aircraft parking,

loading, unloading, and service areas such as passenger service facilities, automobile parking, and

public transit stations, is a vital component to the airport system. The primary goal of an airport

is to provide passengers and cargo access to air transportation, and thus the terminal area

achieves the goal of the airport by providing the vital link between the airside of the airport and

the landside. The terminal area provides the facilities, procedures, and processes to efficiently

move crew, passengers, and cargo onto, and off of, commercial and general aviation aircraft.

The term terminal is in fact somewhat of a misnomer. Terminal implies ending. Although aircraft

itineraries begin and end at an airport’s terminal area, the itineraries of passengers and baggage

do not.

The historical development of airport terminals

Just as there were no runways or other airfield facilities during the very earliest days of aviation,

there certainly were no terminals, at least the way they are recognized today. The first facilities

that could be remotely considered airport terminal areas evolved in the early 1920s with the

introduction of airmail service. Airmail operations required small depots in order to load and

unload mail, fuel aircraft, and perform any required maintenance. Little in the way of formal

passenger or cargo processing was required, and hence, airport terminal facilities were little

more than single-room structures with the most basic of infrastructure.

Unit terminal concepts

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These first terminals were the earliest centralized facilities, centralized meaning that all

passenger processing facilities at the airport are housed in one building. These first centralized

facilities became known as the earliest simpleunit terminals, because they contained all required

passenger processing facilities for a given air carrier in a single-unit building. In addition to

passenger processing facilities, the airport’s administrative offices, and even air traffic control

facilities, were located within the unit terminal building As air service became more popular,

particularly in the 1940s and 1950s, airport terminals expanded to accommodate increasing

volumes of aircraft, passengers, and cargo. As multiple airlines began to serve single

communities, airport terminals expanded in two ways. In smaller communities, two or more

airlines would share a common building, slightly larger than a simple unit terminal, but have

separate passenger and baggage processing facilities. This configuration became known as the

combined unit terminal. In larger metropolitan areas, separate buildings were constructed for

each airline, each building behaving as its own unit terminal. This terminal area configuration

became known as the multiple-unit terminal concept (Fig. 6-3). Even though the multiple-unit

terminal area consisted of separate facilities for each airline, it is still considered an individual

centralized facility because all passenger and cargo processing required for any given passenger

or piece of cargo to board any given flight still exists in one facility.

Linear terminal concepts

As airports expanded to meet the growing needs of the public, as well as the growing wingspans

of aircraft, simple-unit terminals expanded outward in a rectangular or linear manner, with the

goal of maintaining short distances between the vehicle curb and aircraft parking that existed

with unit terminals. Within linear terminals, ticket counters serving individual airlines were

introduced and loading bridges were deployed at aircraft gates to allow passengers to board

aircraft without having to be outside on the apron, thereby improving convenience and safety

for passengers. In some instances airports were extended in a curvilinear fashion, allowing even

more aircraft to park “nose-in” to the terminal building while maintaining short walking distances

from the airport entrance to the aircraft gate (Fig. 6-5). In many respects, the linear and

curvilinear terminal concepts are mere extensions of the simple unit terminal concept More

sophisticated linear terminals particularly those that serve high volumes of passengers, often

feature twolevel structures where enplaning passengers are processed on one level and

deplaning passengers on the other level. Passenger walking distances from the “curb to the gate”

are typically short, on the order of 100 feet. The linear configuration also lends itself to the

development of automobile parking that is close to the terminal building, and provides extended

curb frontage for loading and unloading of ground transportation vehicles. One of the main

disadvantages of linear terminals becomes evident as the length of the terminal building

increases. Walking distances between facilities, particularly distantly separated gates, become

excessive for the passenger whose itinerary requires a change in aircraft at the airport.

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Terminal design concepts. (Source: FAA)

Off-airport terminals

In the 1980s the airside-landside concept formed the basis for a series of experimental concepts

known as off-airport terminals. With the notion that certain passenger processes, such as

ticketing and baggage check-in, and certainly automobile parking, did not need to be within any

proximity of aircraft, such processes weren’t necessarily required to be performed on airport

property. As a result, facilities located miles away from the airport itself were introduced whereby

passengers could park their personal vehicles, check themselves and their baggage in for their

flights, and then take a shuttle bus to the airport. With the use of these off airport terminals,

passengers would avoid the often significantly more crowded passenger processing facilities at

the main terminal. Also the passenger would not be required to find parking at the often more

crowded and expensive parking facilities at the main terminal.

Present-day airport terminals

With over 650 million passengers traveling annually, each with different agendas, itineraries,

needs, and desires, airport terminals have become complex systems in their own rights,

incorporating both necessary passenger and baggage processing services as well as a full

spectrum of customer service, retail shopping, food and beverage, and other facilities to make

the passengers’ transition between the airside and landside components of the airport system as

pleasant as possible. It is clear that no single airport terminal configuration is best for all airports.

The airfield, schedules of airlines, types of aircraft, volumes of passengers, and local

considerations, such as local architecture, aesthetics, and civic pride, dictate different choices

from airport to airport and from one time to another. The airport terminal planner has the

dubious task of anticipating conditions up to 10 years in the future in an environment that seems

to change by the day. To ensure that present-day airport terminal plans will be effective

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in the future, the airport planner must rely on the fundamental requirements of airport terminals

and behaviors of passengers, and also must plan with the idea of flexibility in mind, such as

considering facilities that can be expanded modularly or can provide the opportunity for relatively

low-cost, simple modifications that future circumstances might demand. For airport

management, airport terminal areas, when properly planned and managed, have provided

significant sources of revenue from airline leases to retail concessions.

Components of the airport terminal

The airport terminal area is in the unique position of accommodating the needs of both aircraft

and the passengers that board them. As such, the component systems of the airport terminal

area may be thought of as falling into two primary categories: the apron and gate system, which

is planned and managed according to the characteristics of aircraft, and the passenger and

baggage handling systems, which are planned and managed to accommodate the needs of

passengers and their baggage in their transition to or from the aircraft.

The apron and gate system

The apron and gates are the locations at which aircraft park to allow the loading and unloading

of passengers and cargo, as well as for aircraft servicing and preflight preparation prior to

entering the airfield and airspace.

Aircraft gate management

One of the most important and sometimes most challenging aspects of planning and managing

the apron concerns the number of aircraft parking areas, or gates, that are required for efficient

operations. The number of commercial aircraft gates required at an airport, for example, over

any given operating day is dependent on a series of factors, including: the number and type of

aircraft scheduled to use a gate, each aircraft’s scheduled turnaround time (also known as gate

occupancy time), and the type of gate usage agreement that each air carrier has with the airport.

Airport ground access

Access to the airport from the surrounding community is an integral part of the overall passenger

and baggage processing system. The access/egress link of an airport’s passenger handling system

includes all of the ground transportation facilities, vehicles, and other modal transfer facilities

required to move the passenger to and from the airport. Included in the access/egress link are

highways, intercity and metropolitan rail service, autos, taxicabs, buses, shuttles, limousines, and

transfer stations, including off- and on-airport parking sites and rail stations.

Airport access is usually divided into two major segments:

• Access from the CBD (central business district) and suburban areas via highway and rapid

transit systems to the airport boundary

• Access from the airport boundary to parking areas and passenger unloading curbs at the

terminal building

Access modes

Unless the ultimate destination of any travel itinerary is the airport itself, every trip on a

commercial aircraft and nearly every trip on a general aviation aircraft includes an additional

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mode of transportation. A mode of transportation is defined as a type of vehicle used to travel

from one point to another.

The Transportation Research Board defines the most common modes of airport access as:

• Private vehicles: Vehicles used to transport airline passengers or visitors

(e.g., family members, employees, friends, or clients), without payment

of a fare by the passenger, which are privately owned and privately operated.

• Rental cars: Vehicles used to transport airline passengers or visitors, which are leased by the

passenger or visitor from an agency doing business at or near the airport and rented for the

duration of the passenger’s or visitor’s trip. Vehicles rented under a long-term lease (i.e., greater

than 3 months) are considered private vehicles, not rental cars.

• Courtesy vehicles: Door-to-door, shared-ride transportation provided for customers of hotels,

motels, rental car agencies, parking lots (both those privately operated and airport operated),

and other services. Typically, no fare is charged because the transportation service is considered

part of (or incidental to) the primary service being provided. Service is provided using a variety

of vehicles, including full-size buses,

minibuses, vans, and station wagons.

Factors influencing demand for ground access

Demand for ground access, that is, the volume of people that wish to have access between the

airport and their respective origins and destinations at commercial service airports, is primarily

generated by the number of enplaning and deplaning passengers using the airport. These

volumes are generated in part by the provision of air service by the air carriers that serve the

airport. Characteristics of this air service include destinations served, the type of aircraft used,

and the daily departure and arrival schedules of the air carriers.

In addition to passengers themselves, airports are accessed by those people seeing off or meeting

passengers at the airport. These people are known as meeters/greeters. The demand for airport

access by meeters/greeters is dependent on similar characteristics as that of passengers

themselves.

A significant proportion of trips made to and from airports are generated by the workforce in

place at each airport, including airport, airline, and government employees, as well as employees

of the many private companies that do business at the airport, including concessionaires,

contractors, and suppliers. These trips are less dependent on available flight service. They are

more associatedwith the travels that occur during any business day, including morning and

evening commutes and trips associated with business delivery. In addition, as many functions in

the airport operate as much as 24 hours per day, there are a number of trips to the airport that

occur outside normal business hours.

Airport security

Introduction

One of the most significant issues facing airports in the early twenty-first century is that of

airport security. Most users of commercial service airports are subjected to security

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infrastructure, policies, and procedures within the airport terminal area. Airport security is not

limited to the terminal area, however. Airport security concerns all areas and all users of the

airport.

Airport security procedures are designed to deter, prevent, and respond to criminal acts that may

affect the safety and security of the traveling public. Criminal activity includes the hijacking of

aircraft, known as air piracy, damaging or destroying aircraft with explosives, and other acts of

terrorism, defined as the systematic use of terror or unpredictable violence against governments,

publics, or individuals to attain a political objective. Criminal activity also includes acts of assault,

theft, and vandalism against passengers and their property, aircraft, and all airport facilities.

The Transportation Security Administration

As a result of the events of September 11, 2001, and the subsequent signing of the Aviation and

Transportation Security Act (ATSA), the practice of airport security began to undergo radical

changes, beginning with the creation of the Transportation Security Administration. With the

signing of the ATSA, the Transportation Security Administration (TSA) was incorporated into the

organizational structure of the U.S. Department of Transportation, to be operated in close

coordination with all other transportation administrations, including the FAA, and headed by an

undersecretary of transportation security. On December 10, 2001, Secretary of Transportation

Norman Mineta announced the appointment of then Chief of the Bureau of Alcohol, Tobacco,

and Firearms, and former Secret Service agent, John Magaw, as the TSA’s first undersecretary of

transportation.

In May 2002, Undersecretary Magaw resigned his post, amid feelings by airport operators that

the TSA was not sympathetic to the transportation-related needs of airport management that

was necessary to create an efficient security system. Admiral James Loy, former administrator

of the United States Coast Guard, was appointed temporary undersecretary of the TSA.

In March of 2003, the TSA, along with the Coast Guard, Customs Service, and Immigration and

Naturalization Service, was formally moved into the newly formed United States Department of

Homeland Security, led by Secretary Tom Ridge. At the same time, James Loy was appointed the

first administrator of the TSA.

As of March 31, 2003, the TSA employed a workforce of over 55,200 passenger and baggage

screeners (to be reduced to 54,600 by September 30, 2003) at 429 commercial service airports in

the United States, supervised by a team of 155 federal security directors (FSD) each assigned to

one or more airports, along with an administrative staff of over 600 regional and national

managers. The administrative structure of the TSA is organized according to the organizational

chart depicted in Fig .

The mission of the TSA is to protect all of the nation’s transportation systems to ensure freedom

of movement for people and commerce. Since its inception in 2001, the TSA has concentrated

the vast majority of its efforts on securing the transportation of passengers on commercial air

carriers traveling through the nation’s airports through the implementation of passenger and

baggage screening requirements set forth in the ATSA.

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Security at commercial service airports

The events of September 11, 2001, the associated legislative action of the ATSA, and the

formation of the TSA have all contributed to the changing rules, regulations, policies, and

procedures associated with airport security. In addition, state and local governments, along with

organizations representing members of the aviation industry, from the Air Line Pilots Association,

to the American Association of Airport Executives, to the Aircraft Owners and Pilots

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Association, have made major contributions to the potential future security for the users of the

nation’s commercial service and general aviation airports.

At commercial service airports, areas of airport security are commonly categorized as passenger

screening, baggage screening, employee identification, and controlled access and perimeter

security.

Passenger screening

The processing of passengers and baggage for the purpose of ensuring the security of the civil

aviation system has undergone a virtual overhaul following the terrorist attacks on the United

States on September 11, 2001. As of 2003, passenger and baggage security screening is managed

and operated by the Transportation Security Administration (TSA). Even though the TSA has

ultimate authority of the facilities and procedures that comprise the security screening processes,

airport managers and planners should be keenly aware of the security screening process, because

the process has presented the most significant impacts on airport terminal planning and

operations in recent years. As of 2003, policies surrounding passenger and baggage security

screening remained in a high state of flux. Despite this, certain fundamentals of the passenger

and baggage screening process remain.

Passenger screening facilities include an automated screening process, conducted by a

magnetometer that attempts to screen for weapons potentially carried on by a passenger that

are metallic in content. As a passenger walks through a magnetometer, the presence of metal on

the passenger is detected. If a sufficient amount of metal is detected, based on the sensitivity

setting on the magnetometer, an alarm is triggered. Passengers who trigger the magnetometer

are then subject to a manual search by a TSA screener. Manual searches range from a further

check of metal on the passenger’s person with the use of a handheld wand, to a manual pat

down, to the inspection of the passenger’s shoes explosive detection equipment prior to being

loaded onto air carrier aircraft (known as the 100 percent EDS rule). As of 2003, the primary piece

of equipment used to perform checked-baggage screening, the explosive detection system

(EDS), uses computed tomography technology, similar to the technology found in medical CT scan

machines, to detect and identify metal and trace explosives that may be hidden in baggage

Checked-baggage screening

Facilities to conduct screening of checked baggage for explosives have been placed at airports

to adhere to the requirement implemented by the TSA on January 1, 2003, to have every piece

of checked baggage screened by certified

Employee identification

TSA regulations require any person who wishes to access any portion of an airport’s security

identification display area (SIDA) must display appropriate identification. This identification,

known typically as a SIDA badge, is usually in the form of a laminated credit card–sized

identification badge with a photograph and name of the badge holder. Persons typically

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requiring a SIDA badge include airport employees, air carrier employees, concessionaires,

contractors, and government employees such as air traffic controllers and airport security staff.

Prior to obtaining an identification badge, persons must complete an application and undergo a

fingerprint-based criminal history records check. Any of the following criminal histories within a

10-year period prior to the date of application will result in the disqualification for obtaining an

SIDA badge:

1. Forgery of certificates, false marking of aircraft, and other aircraft registration violation

2. Interference with air navigation

3. Improper transportation of a hazardous material

4. Aircraft piracy

5. Interference with flight crew members or flight attendants

6. Commission of certain crimes aboard aircraft in flight

7. Carrying a weapon or explosive aboard aircraft

8. Conveying false information and threats

9. Aircraft piracy outside the special aircraft jurisdiction of the United States

10. Lighting violations involving transporting controlled substances

11. Unlawful entry into an aircraft or airport area that serves air carriers or foreign air carriers

contrary to established security requirements

12. Destruction of an aircraft or aircraft facility

13. Murder

14. Assault with intent to murder

15. Espionage

16. Sedition

17. Kidnapping or hostage taking

18. Treason

19. Rape or aggravated sexual abuse

20. Unlawful possession, use, sale, distribution, or manufacture of an explosive

or weapon

21. Extortion

22. Armed or felony unarmed robbery

23. Distribution of, or intent to distribute, a controlled substance

24. Felony arson

25. Felony involving a threat

26. Felony involving:

i. Willful destruction of property

ii. Importation or manufacture of a controlled substance

iii. Burglary

iv. Theft

v. Dishonesty, fraud, or misrepresentation

vi. Possession or distribution of stolen property

vii. Aggravated assault

viii. Bribery

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ix. Illegal possession of a controlled substance punishable by a maximum term of imprisonment

of more than 1 year.

27. Violence at international airports

28. Conspiracy or attempt to commit any of the criminal acts listed above

Controlled access

A variety of measures are used around airports to prevent, or more appropriately, control the

movement of persons and vehicles to and from security-sensitive areas of the airport property.

At most commercial service airports, controlled access through doors that provide access to the

AOA, secure areas, sterile areas, and other areas within the SIDA, as well as many employee-only

restricted areas, is enforced by the use of control systems. These systems range from simple key

locks to smart-access technologies, such as keypad entry systems requiring proper pass code.

In many cases, pass codes are calibrated with a person’s SIDA badge, requiring both a

presentation of the person’s badge and proper pass code entry to gain access.One weakness

associated with door entry to security-sensitive areas, regardless of their access control

measures, is the ability to allow unauthorized persons to enter through the door after an

authorized person has opened the door. This situation is known as piggybacking, and is almost

always a violation of security policies.

In some instances, revolving turnstiles with a one-rotation limit per access,rather than typical

door systems, have been used to restrict the number of persons achieving access through these

areas.

Biometrics

Advanced identification verification technologies, including those that employ biometrics, are

continuously being developed to enhance access control at airports. Biometrics refers to

technologies that measure and analyze human body characteristics such as fingerprints, eye

retinas and irises, voice patterns, facial patterns, and hand measurements, especially for

identification authentication purposes.

Biometric devices typically consist of a reader or scanning device, software that converts the

scanned information into digital form, and a database that stores the biometric data for

comparison.

For the most part, biometric technologies have initially been found to be most applicable when

controlling the access of those with SIDA badges at the airport. Controlling the access of

thegeneral public using biometrics proves more difficult, because previously recorded data are

required to authenticate the identification of the person. If anything, however,

biometricsprovides another technology to prevent unauthorized access to security-sensitive

areas

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Perimeter security

An important part of an airport’s security plan is its strategy for protecting the areas that serve

as the border between secured and unsecured areas of the airport, known as the airport

perimeter. Four of the most common methods for securing the airport’s perimeter are perimeter

fencing, controlled access gates, area lighting, and patrolling of the secured area. Perimeter

fencing is one of the most common methods of creating a barrier in otherwise easily accessible

areas of an airport’s secured area boundary. Fencing can vary in design, height, and type,

depending on local security needs. Generally, however, the following standards, a recommended

by FAA Advisory Circular 107-1, Aviation Security, Airports, are followed.

Security at general aviation airports

the Federal Aviation Administration focused virtually all of its aviation security programs toward

the commercial aviation sector of the industry. As such, the vast majority of regulations created

for airport security are those for airports that serve the flying public using certificated carriers or

regularly scheduled aircraft with more than 60 passenger seats. The FAA’s justification for this

strategy was that nearly 100 percent of all passenger air travel takes place at commercial airports

using the airlines or other large aircraft. However, general aviation airports have a number of

characteristics that make them prone to potential security risks. In many cases, aircraft owners,

pilots, and passengers have access to the airfield with relatively little outside supervision. What

supervision is preferred is done so by the users of the airport themselves, including aircraft

owners, fixed-base operators, and airport employees. Most other security measures in place at

general aviation airports, such as fencing or controlled access gates, are designed more for

deterrence rather than security measures.

The biggest threat for general aviation facilities, however, is the fact that the load-carrying

capability of aircraft of general aviation airports, even if limited, enables the delivery of

explosives, compensating for their relative lack of kinetic energy or fuel. Another potential risk

is that general aviation aircraft could be used to strike ground-based targets. Given the ubiquity

of general aviation aircraft and airports, such aircraft are never far from major urban centers,

critical infrastructures, and other targets. Another important issue is the fact that most localities

do not have the staff to assign someone to patrol the airport; therefore, patrolling is usually done

on an infrequent basis which can range anywhere from once every few hours to weeks. An

equally serious factor that reduces the security at general aviation airports is the fact that of much

of the equipment (i.e., fencing, gates, etc.) surrounding the airport is antiquated or

undermaintained for supporting unauthorized access. In fact, the main purpose of gates and

fencing at a number of general aviation airports is to keep out animals and/or deter people from

accidentally walking/driving onto the airport.

Similar to commercial service airports, common security attributes that general

aviation airports may be equipped with are:

• Personnel and vehicle identification procedures

• Perimeter fencing

• Controlled access gates

• Security lighting

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• Locks and key control

• Patrolling

The future of airport security

Since the first criminal threats to civil aviation, reactive policies to prevent further occurrences of

current threats have been implemented. This reactive paradigm has resulted in two

consequences: (1) the reduction in the number of attacks from a current type of threat and (2)

the creation of new threats against civil aviation that the system has not been prepared to

mitigate. This has been evidenced by the historical development of different threats, from

nonviolent hijackings, to violent hijackings using firearms, the placing of unattended explosives

on aircraft, suicide hijackings, attempted suicide bombings, and most recently, attempts to down

aircraft using shoulder-fired missiles near airports where aircraft are at relatively low altitudes

and speeds.

As a result, thoughts regarding the future of airport security suggest a shift of policy, from a

reactive approach to screening for the placement of weapons or explosives on aircraft, to a

proactive approach to protecting against violent or other criminal acts by persons in and

around the entire airport environment. This proactive approach requires technological and

human expertise to screen persons for suspicious activity, rather than simply screening them

for unauthorized possessions. Two such programs in development that address this include the

Computer Assisted Passenger Pre-Screening System (CAPPS II) and the Trusted Traveler

Program.

CAPPS II

The Computer Assisted Passenger Pre-Screening System, known as CAPPS II, is an enhancement

of a profiling system employed by the FAA that selected passengers for additional screening

based on their air carrier itinerary and citizenship. CAPPS II, designed to be a nondiscriminatory

selection system uses passenger information to verify identity and then determine risk, which is

presented in a score and its corresponding color: red, yellow, or green. The system is designed to

start with four pieces of passenger information, voluntarily given when passengers purchase

airline tickets: name, address, phone number, and date of birth. CAPPS II then combs criminal

activity and other databases to build a risk assessment score based on verified passenger

information.

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UNIT III

AIRPORT ADMINISTRATION AND FINANCIAL MANAGEMENT ,CAPACITY AND DELAY

Airport financial managementAirport financial accounting

The nature of airport expenses depends upon a number of factors including the airport’s

geographic location, organizational setup, and financial structure. Airports in warmer climates,

for example, do not experience the sizable snow removal and other cold weather–related

expenses that airports in colder climates must face. Some municipalities, counties, or local

authorities absorb the costs of certain staff functions, such as accounting, legal, planning, and

public relations. Certain operating functions such as emergency service, policing, and traffic

control might also be provided by local fire departments and local law enforcement agencies at

some airports. In addition, the ever-changing demand characteristics of passengers, service

characteristics of air carriers and other aircraft operators, as well as aircraft, navigation,

communication, and information technologies affect the need to invest in projects involving

airport capital improvements.

A good accounting system is needed for a number of reasons: Financial statements are needed

to inform governmental authorities and the local community regarding details of the airport’s

operations.

• A good accounting system can assist airport management in allocating resources, reducing

costs, and improving control.

• Negotiating charges for use of airport facilities can be facilitated.

• Financial statements can influence the decisions of voters and legislators.

Planning and administering an operating budget Planning an operating budget is an integral part

of airport financial management. Every airport must make short-term decisions about the

allocation and scheduling of its limited resources over many competing uses; it must make long-

term decisions about rates of expansion of capital improvements and funding sources. Both

short-term and long-term decisions require planning. Planning is important because it:

• Encourages coordinated thinking. No one department can act independently. A policy decision

in a particular department affects the airport as a whole.

• Helps develop standards for future performance. Without plans, the airport’s measure of

financial performance can be based only on historical standards. Although past operating

statements help to set these standards for the future, they should not necessarily serve as

standards themselves.

• Assists management in controlling the actions of subordinates. By planning, employees are

provided a goal or standard to achieve.

• Might help reveal potential problems for which remedial measures can be taken earlier.

• Promotes smoother-running operations. For example, new equipment can be ordered in

advance of its anticipated usage. With smooth, uninterrupted operations, the overall efficiency

of the airport can be increased.

Pricing of airport facilities and services

Major commercial airports are diversified enterprises that provide a wide range of facilities and

services for which fees, rents, or other user charges are assessed. The facilities and services

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provided to users generate the revenues necessary to operate the airport and to support the

financing of capital development. Smaller commercial airports and GA airports typically offer a

much narrower range of facilities and services, for which only minimal fees and charges often are

assessed. Revenue bases shrink as airports decrease in size, and many of the smallest airports do

not generate sufficient revenue to cover their operating costs, much less capital investment.

Among GA airports, those that lease land or facilities for industrial use generally have a better

chance of covering their costs of operation than do those providing only aviation- related services

and facilities.

Airport financing

Since the mid-1990s the largest source of funding for capital improvements at airports has been

through bond financing. In the years 1999–2001, for example, a total of $12 billion was funded

for capital improvements at the nation’s commercial service airports, $6.9 billion of which (59

percent) was issued through airport bonds.

The role of bond financing in overall investment varies greatly according to an airport’s size and

type of air traffic served. In terms of total dollar volume of bond sales, large and medium airports

are by far the most prominent in the bond market. Of the total amount of municipal debt sold

for airport purposes during the last two decades, 90 percent was for large and medium airports,

in contrast to only 9 percent for small commercial airports. GA airports accounted for a little

more than 1 percent of total airport bond sales.

The economic, political,and social role of airports

The economic role of airports

It is well understood that a viable and efficient transportation system is a fundamental and

necessary component to the economy of any region. Transportation, by definition, provides the

ability for people and goods to move between communities. This movement leads to trade and

commerce between markets, which, in turn, leads to jobs, earnings, and overall economic benefit

for a community’s residents.

Transportation role

Even though there are a variety of transportation modes, such as automobiles, trucks, ships, and

railroads, perhaps no other mode has as significant an impact on intercity trade and commerce

than aviation. Travel in the aviation system allows for intercontinental travel of large volumes of

passengers and cargo in relatively short periods of time. Access to markets around the world has

resulted in the largest of communities reaping extraordinary economic benefit. Airports are the

gateways to the nation’s aviation system, providing access to air transportation for the

surrounding community. Commercial air carriers provide access to air transportation between

many major metropolitan areas of the country. Thousands of smaller cities, towns, and villages

have access to aviation by way of airports serving general aviation.

Political roles

A major commercial airport is a huge public enterprise. Some are literally cities in their own right,

with a great variety of facilities and services. Although the administration of these facilities is

generally the responsibility of a public entity, such as a department of city government or aviation

authority, airports also have a private character. Commercial airports must be operated in

cooperation with the air carriers that provide air transportation service

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and all airports must work with tenants, such as concessionaires, FBOs, and other firms doing

business on airport property. This combination of public management and private enterprise

creates a unique political role for airport management.

Airport planning

Airport planning may be defined as the employment of an organized strategy for the future

management of airport operations, facilities designs, airfield configurations, financial allocations

and revenues, environmental impacts, and organizational structures. There are various types of

airport planning studies, including:

Facilities planning

Financial planning

Economic planning

Environmental planning

Organizational planning

Strategic planning

Defining the planning horizon

The planning of airport operations, or any activities for that matter, is defined in part by

the length of time into the future management considers in its planning. The length of time into

the future that is considered is termed the planning horizon. Different planning efforts require

different planning horizons. For example, the organizational planning of staffing levels per shift

for airport operations may require a 3-month planning horizon, but certainly not a 20-year

planning horizon. On the other hand, facilities planning of an airfield which may include runway

construction, requires at least a 5-year planning horizon, and certainly not a planning horizon of

less than 1 year.

Airport system planning

Airport system planning is a planning effort that considers a collection of airports, either

on a local, state, regional, or national level, expected to compliment each other as part of a

coordinated air transportation system. Through airport system planning, the objectives of

individual airports are set in accordance with the needs of the community by, for example, setting

the mission of each airport to serve certain segments of the demand for aviation, such as

targeting one airport in a region to handle international commercial air travelers and another

airport to handle primarily smaller general aviation aircraft operations.

The airport master plan

At the local level, the centerpiece of airport planning is the airport master plan, a

document that charts the proposed evolution of the airport to meet future needs. The

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magnitude and sophistication of the master planning effort depends on the size of the airport.

At the largest commercial service airports, master planning is a formal and complex process that

has evolved to coordinate large construction projects (or perhaps several such projects

simultaneously) that can be carried out over a period of up to 20 years. At smaller airports, master

planning might be the responsibility of a few staff members with other responsibilities, who

depend on outside consultants for expertise and support. At very small airports, where capital

improvements are minimal or are made infrequently, the master plan might be a very simple

document, perhaps prepared locally but usually with the help of consultants.

An airport master plan presents the planner’s conception of the ultimate development of

a specific airport. It effectively presents the research and logic from which the plan was evolved

and artfully displays the plan in a graphic and written report. Master plans are applied to the

modernization and expansion of existing airports and to the construction of new airports,

regardless of their size or functional role. The typical airport master plan has a planning horizon

of 20 years. The Federal Aviation Administration notes that for a master plan to be considered

valid it must be updated every 20 years or when changes in the airport or surrounding

environment occur, or when moderate and major construction may require federal funding.

Objectives of the airport master plan

To provide an effective graphic presentation of the ultimate development of the airport

and of anticipated land uses adjacent to the airport

To establish a schedule of priorities and phasing for the various improvements proposed

in the plan

To present the pertinent backup information and data that were essential to the

development of the master plan

To describe the various concepts and alternatives that were considered in the

establishment of the proposed plan

To provide a concise and descriptive report so that the impact and logic of its

recommendations can be clearly understood by the community the airport serves and by

those authorities and public agencies that are charged with the approval, promotion, and

funding of the improvements proposed in the airport master plan

Elements of the master plan

An airport master plan typically consists of the following elements: inventory, activity forecasts,

demand/capacity analysis, facilities requirements, design alternatives, and financial plans. These

elements provide a recipe for the airport in its effort to meet the demands of its users and the

surrounding community over the airport’s master plan. In addition, some master plans include

environmental and economic assessments of plans associated with the future plans for the airport.

The airport layout plan

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Even though a narrative description of the airport environment is a necessary part of an

airport master plan inventory, a graphical representation is also required. This graphical

representation is known as the airport layout plan, or ALP.

The airport layout plan is a graphic presentation to scale of existing and proposed airport

facilities and land uses, their locations, and the pertinent clearance and dimensional information

required to show conformance with applicable standards. It shows the airport location, clear

zones, approach areas, and other environmental features that might influence airport usage and

expansion capabilities

The airport layout plan also identifies facilities that are no longer needed and describes

a plan for their removal or phase out. Some areas might be leased, sold, or otherwise used for

commercial and industrial purposes. The plan is always updated with any changes in property

lines; airfield configuration involving runways, taxiways, and aircraft parking apron size and

location; buildings; auto parking; cargo areas; navigational aids; obstructions; and entrance

roads. The airport layout plan drawing includes the following items: the airport layout, location

map, vicinity map, basic data table, and wind information.

The airport layout is the main portion of the drawing. It depicts the existing and ultimate

airport development and land uses drawn to scale and includes as a minimum the following

information

Prominent airport facilities such as runways, taxiways, aprons, blast pads, extended

runway safety areas, buildings, NAVAIDs, parking areas, roads, lighting, runway marking,

pipelines, fences, major drainage facilities, segmented circle, wind indicators, and

beacons.

Prominent natural and man-made features such as trees, streams, ponds, rock outcrops,

ditches, railroads, power lines, and towers.

Outline of revenue-producing non-aviation-related property, surplus or otherwise, with

current status and use specified.

Areas reserved for existing and future aviation development and services such as for

general aviation fixed-base operations, heliports, cargo facilities, airport maintenance,

and so forth.

Areas reserved for non aviation development, such as industrial areas, motels, and so

forth

Existing topographic contours

Fueling facilities and tiedown areas

Facilities that are to be phased out

Airport boundaries and areas owned or controlled by the sponsor, including avigation

easements

Airport reference point with latitude and longitude given on the basis of the U.S.

Geological Survey grid system

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Elevation of runway ends, high and low points, and runway intersections

True azimuth of runways (measured from true north)

North point—true and magnetic

Pertinent dimensional data—runway and taxiway widths and runway lengths, taxiway-

runway-apron clearances, apron dimensions, building clearance lines, clear zones, and

parallel runway separation

The location map shown in the lower-left-hand side of the airport layout plan drawing is

drawn to scale and depicts the airport, cities, railroads, major highways, and roads within 25 to

50 miles of the airport. The vicinity map shown in the upper-left-hand side of the airport layout

plan drawing shows the relationship of the airport to the city or cities, nearby airports, roads,

railroads, and built-up areas

Fig. Example of ALP layout of airfield and facilities.

The basic data table contains the following information on existing and ultimate conditions

where applicable:

Airport elevation (highest point of the landing areas)

Runway identifications

Percent effective runway gradient for each existing and proposed runway

Instrument landing system (ILS) runway when designated, dominant runway otherwise,

existing and proposed

Normal or mean maximum daily temperature of the hottest month

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Pavement strength of each runway in gross weight and type of main gear (single, dual,

and dual tandem) as appropriate

Plan for obstruction removal, relocation of facilities, and so forth

In addition, a wind rose (described in detail later in this chapter) is always included in the

airport layout plan drawing with the runway orientation superimposed. Crosswind coverage and

the source and period of data are also given. Wind information is given in terms of all- weather

conditions, supplemented by IFR weather conditions where IFR operations are expected.

Airport layout plans also include to scale diagrams of all FAR Part 77 surfaces, noise

impacted areas, and detailed-to scale drawings of major facilities at the airport, including

terminal buildings, aircraft and automobile parking facilities, ground access roads, and public

transit infrastructure, such as rail systems

Forecasting

Airport master plans are developed on the basis of forecasts. From forecasts, the

relationships between demand and the capacity of an airport’s various facilities can be

established and airport requirements can be determined. Short-, intermediate-, and long-range

(approximately 5-, 10-, and 20-year) forecasts are made to enable the planner to establish a

schedule of development for improvements proposed in the master plan.

Two types of forecasting methods are available to assist planners in the decision- making

process: qualitative and quantitative.

Qualitative forecasting methods

Qualitative forecasting methods rely primarily on the judgment of forecasters based on

their expertise and experience with the airport and surrounding environment. Judgmental

predictions of future airport activity tend not to be based on historical data, but by the foresight

that certain experts have, based on their knowledge of the current and potential future

environment. Qualitative forecasts may almost be thought of as “educated guesses,” opinions,

or “hunches” of future activity, although they tend to be just as accurate as quantitative methods.

Despite this, qualitative forecasts tend to require the support of some quantitative analysis to

justify the forecasts to the public. Four of the more popular qualitative methods include: Jury of

Executive Opinion, Sales Force Composite, consumer market survey, and the Delphi method.

Quantitative methods

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Quantitative forecasting methods are those that use numerical data and mathematical

models to derive numerical forecasts. In contrast to qualitative methods, quantitative methods

are strictly objective. Because only numerical data are used, quantitative methods do not directly

consider any judgment on the part of the forecaster. Quantitative methods are either used as

stand-alone forecasting methods, or used to support forecasts made under qualitative methods.

Quantitative methods include time-series or trend analysis models, which forecast future

values strictly on the basis of historical data collected over time, and causal models, which

attempt to make accurate predictions of the future on the basis of how one area of historical

data affects another.

A causal model is constructed by finding variables that explain, statistically, the changes

in the variable to be forecasted. The availability of data on the variables, or more specifically their

specific values, is largely determined by the time and resources the planner has available. For

example, the number of aircraft operations forecast to occur at a general aviation airport may be

statistically correlated to the strength of the economy, perhaps measured by the average income

of residents in the area surrounding the airport.

Another reasonably sophisticated statistical method of forecasting is time-series or trend

analysis, the oldest and in many cases still the most widely used method of forecasting air

transportation demand. Time-series models are based on a measure of time (months, quarters,

years, etc.) as the independent or explanatory variable. This method is used quite frequently

where both time and data are limited, such as in forecasting a single variable, for example, cargo

tonnage, where historical data are obtained for that particular variable.

Regression analysis

The most widely used mathematical method for performing both time-series and causal

quantitative forecasts is regression analysis. Regression analysis applies specific mathematical

formulas to estimate forecast equations. These equations may then be used to forecast future

activity by applying the equations to independent variables that may occur in the future.

Regression equations come in many forms. The most common regression equation is one that

represents a straight line. The method used to estimate the equation of a straight line that best

represents either historical trends or causal relationships is known as ordinary least-squares (OLS)

linear regression analysis. Although based in sophisticated theories of statistics and calculus, OLS

linear regression analysis tools are readily available on most personal computer spreadsheet

software such as Microsoft Excel, Corel Quattro Pro, or IBM’s mLotus 1-2-3. Other common

statistical software tools available for personal computers include SPSS, SAS, and a variety

programming languages that may be used to create custom regression models. All that is

required of the forecaster is to collect appropriate data, enter the data into a software

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program, and apply the regression tool. Although applying data to today’s regression tools is

quite simple, proper interpretation and use of regression results require at least a fundamental

knowledge of regression modeling from a theoretical perspective. It is suggested that anyone

who will actively participate in performing or interpreting quantitative forecast results, such as

those found from regression analysis, seek additional knowledge in statistical modeling.

Fig. Example of time-series forecast using OLS linear regression.

Forecasts of aviation demand

Forecasts of aviation demand form the basis for facilities planning. There is a need to

know the types of civil airport users, certificated air carriers, commuters, general aviation, and

military services where applicable; the types and volume of operational activity, aircraft

operations, passengers and cargo, based aircraft, and so forth; and the aircraft fleet mix, jet and

large-capacity prop transport aircraft, smaller commercial, corporate, business, and pleasure

aircraft, future vertical/short takeoff and landing (V/STOL) aircraft, and so forth.

Civil airport users

The FAA defines the various types of civil airport users as follows. Air carriers These airline

aircraft operators holding Certificates of Public Convenience and Necessity issued by the former

Civil Aeronautics Board and based on authorization from the Department of Transportation to

perform passenger and cargo services. This general air carrier grouping includes the major,

national, large, and medium regional air carriers. Commuters are non certificated small regionals

that perform scheduled service to smaller cities and serve as feeders

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to the major hub airports. They generally operate aircraft of less than 12,500 pounds maximum

gross takeoff weight.

General aviation: General aviation is the segment of civil aviation that encompasses all

facets of aviation except air carriers and commuters. General aviation includes air taxi operators,

corporate-executive transportation, flight instruction, aircraft rental, aerial application, aerial

observation, business, pleasure, and other special users.

Military This category encompasses the operators of all military (Air Force, Army, Navy, U.S.

Coast Guard, Air National Guard, and military reserve organizations) aircraft using civil airports.

Operational activity: Six major types of operational activity forecasts are considered necessary

to determine future facility requirements.

Enplaning passengers: This activity includes the total number of passengers (air carrier,

commuter, and general aviation) departing on aircraft at the airport. Originating, stopover, and

transfer passengers are identified separately.

Enplaning air cargo: Enplaning air cargo includes the total tonnage of priority, nonpriority, and

foreign mail, express shipments, and freight (property other than baggage accompanying

passengers) departing on aircraft at an airport, including originations, stopover, and transfer

cargo. Where applicable, domestic and international are identified separately.

Aircraft operations: Aircraft operations include the total number of landings (arrivals) at and

takeoffs (departures) from an airport. Two types of operations— local and itinerant—are

separately identified: local operations, performed by aircraft that operate in the local traffic

pattern or within sight of the tower and are known to be departing for or arriving from flight in

local practice and flight test areas located within a 20-mile radius of the airport and/or control

tower and execute simulated instrument approaches or low passes at the airport; and itinerant

operations, all aircraft arrivals and departures other than local operations described above.

Where applicable, domestic and international itinerant operations should be identified

separately. Except for local training flights at some airports, air carrier aircraft movements are

itinerant operations. The basic premise underlying the methodology for forecasting air carrier

operations by an airport is that a relationship exists between the number of enplaned passengers

and cargo shipments and the level of service provided. It is assumed that the number of aircraft

seats for transiting and enplaning passengers and the number of flights by type of aircraft have

been a function of the traffic demand and traffic characteristics of the communit as well as the

route structure and operating policies and practices of the individual

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carriers. It is also assumed that these same factors will continue to determine the level of

operations in the future.

Based aircraft: Based aircraft is the total number of active general aviation aircraft that use or

might be expected to use an airport as “home base.” General aviation–based aircraft are

separately identified as single-engine, multiengine, piston, or turbine, or vertical/short takeoff

and landing (V/STOL) aircraft.

Busy-hour operations: Busy-hour operations is the total number of aircraft operations expected

to occur at an airport at its busiest hour, computed by averaging the two adjacent busiest hours

of a typically high-activity day. One definition of a typically high-activity day would be the average

day of the busiest month of the year. The operations are identified by major user category, as

applicable.

Aircraft fleet mix: Fleet mix is defined as the percentage of aircraft, by type or category,that

operate or are based at the airport. Aircraft fleet mix is typically summarized as seating capacity

groups for air carrier aircraft and operational characteristics groups for all four of the major

airport user categories. By performing a comprehensive forecast of the above measures of

airport activity, using both quantitative and qualitative methods, the airport planner has the

ability to incorporate into the master plan airport facilities that will accommodate forecast

activity.

Facilities requirements

After an inventory of current facilities has been compiled and future aviation activity has

been forecast, the next step in the airport master planning process is the assessment of facility

requirements. The study of the demand/capacity relationship involves an estimation of the need

to expand facilities and the cost of these improvements. This type of analysis is done in

consultation with the airlines and the general aviation community. The analysis is applied to

aircraft operations versus airfield improvements, passenger enplanements versus terminal

building improvements, cargo tonnage versus cargo facility development, airport access traffic

versus access roads and rapid transit facilities, and other improvements as might be appropriate.

Airspace in the vicinity of the master plan airport is also analyzed.

Demand/capacity analysis is normally applied to short-, intermediate-, and long-range

developments (approximately 5, 10, and 20 years). The analysis is only an approximation of

facility requirements, their costs, and savings that will result from reduced delays to airport users

as well as anticipated revenues that might be obtained from proposed improvements;

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thus, demand/capacity analysis will yield preliminary estimates of the number and configuration

of runways, areas of apron, number of vehicle parking spaces, and capacities of airport access

facilities. Preliminary estimates of economic feasibility may also be obtained. These

approximations will provide a basis for developing the details of the airport master plan and for

determining the feasibility of improvements considered in the plan.

Aircraft operational requirements

The forecasts of aviation activity will indicate the kinds of aircraft anticipated to use the

master plan airport. The frequency of use, passenger/cargo load factors, and lengths of outbound

nonstop flights will also be indicated. From this demand data, the planner can ascertain the

required physical dimensions of the aircraft operational areas. Although a capacity analysis

provides requirements in terms of numbers of runways/taxiways and so forth, the analysis of

aircraft operational requirements allows the determination of runway/taxiway/apron

dimensions, strengths, and lateral clearances between airport areas. Of course, both of these

analyses are interrelated and are accomplished simultaneously in order to determine system

requirements.

Capacity analysis

An analysis of the existing air traffic capacity of the area the master plan airport is to serve

will help determine how much additional capacity will be required at the master plan airport.

Four distinct elements require investigation, namely, airfield and airspace capacity, terminal area

capacity, and ground access capacity.

Airfield capacity is the practical maximum rate of aircraft movements on the

runway/taxiway system. Levels of demand that exceed capacity will result in a given level of delay

on the airfield (see Chap. 12 for a detailed analysis of airfield capacity). The proximity of airports

to one another, the relationship of runway alignments, and the nature of operations [IFR or visual

flight rules (VFR)] are the principal inter airport considerations that will affect airspace capacity

of the master plan airport. For example, it is not uncommon in a large metropolitan area to have

major or secondary airports spaced so closely that they share one discrete parcel of airspace. In

such cases there may be a reduction in the IFR capacity for the airports involved because of the

intermixing of traffic within the common parcel of airspace. When this occurs, aircraft, regardless

of destination, must be sequenced with the proper separation standards. This reduces the IFR

capacity for a specific airport.

Terminal area capacity is the ability of the terminal area to accept the passengers, cargo,

and aircraft that the airfield generates. Individual elements within terminal areas must be

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evaluated to determine overall terminal capacity. Terminal elements included in the analysis are

airline gate positions, airline apron areas, cargo apron areas, general aviation apron areas, airline

passenger terminals, general aviation terminals, cargo buildings, automobile parking, and

aircraft maintenance facilities. The establishment of capacity requirements for the master plan

airport will determine the capacity required for airport ground access. A preliminary examination

of existing and planned highway and mass transit systems allows a judgment as to the availability

of ground access capacity. In determining the volume of people, it is necessary for the planner to

establish the percentage relationship between passengers, visitors, and airport employees. This

can vary from one urban area to another and from one site to another.

Facility requirements are developed from information obtained in demand/capacity

analysis and from FAA advisory circulars and regulations that provide criteria for design of airport

components. Demand/capacity analysis yields the approximate number and configuration of

runways, number of gates, square footage of terminal buildings, cargo facilities, number of public

and employee parking spaces, types of airport access roads, and the overall land area required

for the airport. From the mix of aircraft and the number of aircraft operations, general

requirements for length, strength, and number of runways; spacing of taxiways; layout and

spacing of gates; and apron area requirements can be determined.

Design alternatives

When planning for an airport’s future, airport planners develop a series of design

alternatives to accommodate forecast levels of demand. These design alternatives are then

brought to airport management, the local government, the surrounding community, and often

the Federal Aviation Administration to reach a consensus on the recommended design

alternative.

The design alternatives for airports may include:

The selection of an airport on a new yet undeveloped site

The plans for design and operation of the airfield and local airspace

The plans for design and operation of the terminal and ground access

Systems

Site selection

One of the design alternatives for the future of an airport may be to design a new airport

on an open, or greenfield, site. If this is the case, the first and perhaps most important step in this

process is that of proper site selection. The major factors that require careful analysis in the final

evaluation of airport sites include runway orientation and wind analysis,

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airspace analysis, surrounding obstructions, availability for expansion, availability of utilities,

meteorological conditions, noise impacts, and cost comparisons of alternative sites.

Runway orientation and wind analysis

Planning an airfield with respect to runway orientation is a nontrivial task. Runway

orientation planning consists of three tasks:

1. Identifying the Airport Reference Code (ARC) on the basis of an airport’s critical aircraft.

2. Analyze historical wind data for the airfield.

3. Apply the Airport Reference Code and historical wind data using a wind rose to find the

appropriate orientation of the primary runway and any necessary crosswind runways.

Analyzing historical wind data for the airfield

At airports, wind is typically measured by its velocity (in knots), and direction (in degrees

from north). Wind direction and velocity data have historically been recorded on an hourly basis

at airports and other areas of interest by the National Oceanic and Atmospheric Administration.

Historical wind data are compiled, categorized, and illustrated by means of a graphical

tool called a wind rose. A wind rose graphically represents wind speed, and direction by a series

of concentric rings, which represent wind speed, and spokes, which represent direction. The

center of the wind rose represents calm winds. Rings further out from the center of the wind rose

represent winds of increasingly stronger velocity. The spokes represent direction from North. The

percentage of time that the wind blows between certain directions and between certain speeds

is placed in the cells created from the rings and spokes of the wind rose.

A wind rose is designed to provide the airport planner and manager a visual guide to the

appropriate direction of the primary runway and any necessary crosswind runways. By overlaying

a proposed runway direction over the wind rose, an airport planner can visually identify the

direction of the prevailing winds and assess the approximate percentage of time that the runway

orientation will provide less-than-maximum tolerable crosswinds. This is performed by adding up

the percentages found within the “runway template.” The “width” of the runway template is

associated with the maximum crosswind component associated with the Airport Reference Code

for the airport.

Airspace analysis

In major metropolitan areas, it is not uncommon for two or more airports to share

common airspace. This factor might restrict the capability of any one airport to accept IFR traffic

under adverse weather conditions. Airports too close to each other can degrade their

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respective capabilities and create a serious traffic control problem. It is important to analyze the

requirements and future needs of existing airports before considering construction sites for a new

airport.

Surrounding obstructions

Obstructions in the vicinity of the airport sites, whether natural, existing, or proposed

man-made structures, must meet the criteria set forth in Federal Aviation Regulations .The FAA

requires that clear zones at the ends of runways be provided by the airport operator. Runway

clear zones are areas comprising the innermost portions of the runway approach areas. The FAA

requires that the airport owner have “an adequate property interest” in the clear zone area

in order that the requirements of FAR Part 77 can be met and the area protected from future

encroachments. Adequate property interest might be in the form of ownership or a long- term

lease or other demonstration of legal ability to prevent future obstructions in the runway clear

zone.

Availability for expansion

Available land for expansion of the airport is a major factor in site selection; however, it

is not always necessary to purchase the entire tract at the start because adjacent land needed

for future expansion could be protected by lease or option to buy. The Airport and Airway

Development Act of 1970 first established funding for communities to acquire land for future

airport development.

Noise

Noise is the most predominant objection raised by opponents to new airports and

airport expansion projects. Numerous efforts are being made by industry and government to

seek new and better ways to reduce aircraft sound levels. Many of the older jet aircraft are now

being retrofitted with noise kits that are designed to reduce noise. Engine manufacturers are

exploring new engineering concepts and designs that will reduce this source of noise to an

absolute minimum. Pilots of airliners are required to maintain certain power settings and to fly

prescribed routes that reduce noise levels in the vicinity of takeoff and landing areas. Noise

certification standards have been established by the FAA for new aircraft.

Terminal area plans

The primary objective of the terminal area plans is to achieve an acceptable balance

between passenger convenience, operating efficiency, facility investment, and aesthetics. The

physical and psychological comfort characteristics of the terminal area should afford the

passenger orderly and convenient progress from automobile or public transportation through

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the terminal to the aircraft and back again. A detailed description of airport terminal geometries,

along with the facilities that are found in airport terminals, is provided in Chap. 6 of this text. One

of the most important factors affecting the air traveler is walking distance. It begins when the

passenger leaves the ground transportation vehicle and continues on to the ticket counter and

to the point at which he or she boards the aircraft. Consequently, terminals are planned to

minimize the walking distance by developing convenient auto parking facilities, convenient

movements of passengers through the terminal complex, and conveyances that will permit fast

and efficient handling of baggage. The planner normally establishes objectives for average

walking distances from terminal points to parked aircraft. Conveyances for passengers such as

moving walks and baggage handling systems are also considered.

Airport access plans

The airport access plans are an integral part of the master planning process. These plans

indicate proposed routing of airport access to the central business district and to points of

connection with existing or planned ground transportation arteries. All modes of access are

considered, including highways, rapid transit, and access by vertical and short takeoff and landing

(V/STOL) aircraft. The estimated capacity requirement for the various modes considered is

determined from forecasts of passengers, cargo, and aircraft operations. The airport access plans

normally are general in nature because detailed plans of access outside the boundaries of the

airport will be developed by highway departments, transit authorities, and comprehensive

planning bodies

Financial plans

The financial plan is an economic evaluation of the entire plan of development. It looks at

the master plan activity forecasts from the point of view of revenues and expenditures, analyzing

the airport’s balance sheet over the planning period to ensure that the airport sponsor can afford

to proceed. A corollary activity in this phase is the consideration of funding sources and financing

methods for the proposed development.

Economic evaluation

Although the primary objective of the airport master plan is to develop a design concept

for the entire airport, it is essential to test the economic feasibility of the plan from the

standpoints of airport operation and individual facilities and services. Economic feasibility will

depend on whether the users of the airport improvements programmed under the plan can

produce the revenues (as might be supplemented by federal, state, or local subsidies) required

to cover annual cost for administration, operation, and maintenance. This must be determined

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for each stage of development scheduled in the master plan. This consideration includes the cost

of capital to be employed in financing the improvement, the annual operating costs of facilities,

and prospective annual revenues.

This preliminary cost estimate for each of the proposed improvements provides the basic

capital investment information needed for evaluating the feasibility of the various facilities.

Estimated construction costs are adjusted to include allowance for architect and engineering fees

for preparation of detailed plans and specifications, overhead for construction administration,

allowance for contingencies, and allowance for interest expenses during construction. Estimated

costs of land acquisitions as well as the costs of easements required to protect approach and

departure areas are included. If the master plan provides for the expansion of an existing airport,

the cost of the existing capital investment might be required to be added to the new capital costs.

The airport layout plan also indicates the stage development of the proposed facilities. The

drawings are normally written with appropriate legends to indicate staging shown on the plan,

either on single or separate sheets. Charts that show the schedule of development for various

items of the master plan are developed for inclusion in the master plan report.

Land use planning

The airport land use plan shows on-airport land uses as developed by the airport sponsor

under the master plan effort and off-airport land uses as developed by surrounding communities.

The work of airport, city, regional, and state planners must be carefully coordinated. The

configuration of airfield runways, taxiways, and approach zones established in an airport layout

plan provides the basis for development of the land use plan for areas on and adjacent to the

airport. The land use plan for the airport and its environment in turn is an integral part of an area

wide comprehensive planning program. The location, size, and configuration of the airport need

to be coordinated with patterns of residential and other major land uses in the area, as well as

with other transportation facilities and public services. Within the comprehensive planning

framework, airport planning, policies, and programs must be coordinated with the objectives,

policies, and programs for the area that the master plan airport is to serve.

Land uses on the airport

The amount of acreage within the airport’s boundaries will have a major impact on the

types of land uses to be found on the airport. For airports with limited acreage, most land uses

will be aviation oriented. Large airports with a great deal of land in excess of what is needed for

aeronautical purposes might be utilized for other uses. For example, many airports lease land to

industrial users, particularly those who employ business aircraft or whose personnel travel

extensively by air carrier or charter. In many cases, taxiway access is provided directly to the

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company’s facility. In some instances, railroad tracks serving the company’s area, company

parking lots, or low-level warehousing can be located directly under runway approaches (but free

of clear zones). Companies that might produce electronic disturbances that would interfere with

aircraft navigation or communications equipment or cause visibility problems because of smoke

are not compatible airport tenants.

Some commercial activities are suitable for location within the airport’s boundaries.

Recreational uses such as golf courses and picnicking areas are quite suitable for airport land and

might in effect serve as good buffer areas. Certain agricultural uses are appropriate for airport

lands, but grain fields that attract birds are avoided. Although lakes, reservoirs, rivers, and

streams might be appropriate for inclusion within the airport’s boundaries, especially from the

standpoints of noise or flood control, care is normally taken to avoid those water bodies that

have in the past attracted large numbers of waterfowl. Dumps and landfills that might attract

birds are also avoided.

Land uses around the airport

The responsibility for developing land around the airport so as to maximize the

compatibility between airport activity and surrounding activities, and minimize the impact of

noise and other environmental problems, lies with the local governmental bodies. The more

political entities that are involved, the more complicated the coordination process becomes. In

the past, the most common approach to controlling land uses around the airport was zoning.

Airports and their surrounding areas become involved in two types of zoning. The first type of

zoning is height and hazard zoning, which protects the airport and its approaches from

obstructions to aviation while restricting certain elements of community growth.

The second type of zoning is land use zoning. This type of zoning has several shortcomings.

First, it is not retroactive and does not affect preexisting uses that might conflict with airport

operations. Second, jurisdictions with zoning powers (usually cities, towns, or counties) might not

take effective zoning action. This is partly because the airport might affect several jurisdictions

and coordination of zoning is difficult. Or the airport might be located in a rural area where the

county lacks zoning powers and the sponsoring city might not be able to zone outside its political

boundaries. Another problem is that the interest of the community is not always consistent with

the needs and interests of the aviation industry. The locality might want more tax base,

population growth, and rising land values, all of which are not often consistent with the need to

preserve the land around the airport for other than residential uses.

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Another approach to land use planning around the airport is subdivision regulations.

Provisions can be written into the regulations prohibiting residential construction in intense

noise-exposure areas. These areas can be determined by acoustical studies prior to development.

Insulation requirements can be made a part of the local building codes, without which the

building permits cannot be issued.

Finally, another alternative in controlling land use around the airport is the relocation of

residences and other incompatible uses. Often urban renewal funds are available for this

purpose.

Environmental planning

For any proposed airport planning project, a review of how such expansion would affect

the surrounding environment must be performed. This requirement was first established in the

Airport and Airway Development Act of 1970 and the Environmental Policy Act of 1969. The

National Environmental Policy Act of 1969 requires the preparation of detailed environmental

statements for all major federal airport development actions significantly affecting the quality

of the environment. The Airport and Airway Development Act of 1970 directed that no airport

development project may be approved by the Secretary of Transportation unless he or she is

satisfied that fair consideration has been given to the communities in or near which the project

may be located.

For every proposed project, an Environmental Impact Review (EIR) is performed. The

results of the review may find that there will be no significant impact to the surrounding

environment as a result of the project. If this finding is realized then a Finding of No Significant

Impact (FONSI) statement is issued. If the EIR reveals that there is the potential for significant

environmental impact as a result of the project, then a more comprehensive Environmental

Impact Statement (EIS) must be developed. The EIS states specifically the areas of the

environment that will be impacted and the degree of impact on the environment, and, most

important, requires a plan on the part of the airport to mitigate those impacts.

Studies of the impact of construction and operation of the airport or airport expansion

upon accepted standards of air and water quality, ambient noise levels, ecological processes, and

natural environmental values are conducted to determine how the airport requirements can best

be accomplished. An airport is an obvious stimulus to society from the standpoints of economic

growth and the services it offers to the public; however, this generation of productivity and

employment might be negated by noise and air pollution and ecological compromises if

compatibility between an airport and its environs is not achieved; thus, the airport master plan

must directly contend with these problems identified in the studies of

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environmental qualities so that the engineering of airport facilities will minimize or overcome

those operations that contribute to environmental pollution.

In line with the above guidelines and policy, an airport master plan (including site

selection) must be evaluated factually in terms of any proposed development that is likely to:

Noticeably affect the ambient noise level for a significant number of people

Displace significant numbers of people

Have a significant aesthetic or visual effect

Divide or disrupt an established community or divide existing uses (e.g., cutting off

residential areas from recreation or shopping areas)

Have any effect on areas of unique interest or scenic beauty

Destroy or detract from important recreational areas

Substantially alter the pattern of behavior for a species

Interfere with important wildlife breeding, nesting, or feeding grounds

Significantly increase air or water pollution

Adversely affect the water table of an area

The airport master plan is commonly thought of as a “living document” whose contents adapt

to constant changes in community needs. A robust master plan is one that helps airport planners

and management maintain and develop an airport that meets the needs of the community,

surrounding environment, and the nation’s aviation and transportation system overall.

Airport Capacity and Delay

The efficient movement of aircraft and passengers between airports is highly dependent on two

key characteristics of an airport’s operations: the demand for service by aircraft operators and

passengers and the capacity at the airport, both in airspace and local environment. A major

concern of airport planning and management is the adequacy of an airport’s airfield, specifically

in relation to the layout of the airport’s runways, to handle the anticipated demand of aircraft

operations. If air traffic demand exceeds airport or airspace capacity, delays will occur, causing

expense to air carriers, inconvenience to passengers, and increased workload for the FAA air

traffic control system as well as airport employees and administrators. At most airports in the

United States, particularly those commercial service and general aviation airports serving

smaller communities, the demand for servicedoes not consistently exceed capacity. The Federal

Aviation Administration estimates that airports with single runways have the capacity to serve

approximately 200,000 operations annually, a demand level typically generated by

metropolitan areas with approximately 350,000 inhabitants. Other airports, particularly those

primary commercial service airports serving large metropolitan areas with populations

exceeding 5,000,000 inhabitants, experience consistent periods of time where demand exceeds

capacity, despite the fact that two or more such airports serve the area. Examples of these

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metropolitan areas include Chicago, Los Angeles, South Florida, the San Francisco Bay Area,

Washington, D.C., and New York City.

Defining capacity

Capacity, in general, is defined as the practical maximum number of operations that a system can

serve within a given period of time. Capacity is, in fact a rate, similar to velocity. An automobile

for example, might travel at a rate of 50 miles per hour, meaning that over an hour, traveling at

this rate, the automobile will travel 50 miles. Traveling this rate for 30 minutes, the automobile

will travel 25 miles, and so forth. Airport capacity is measured in aircraft operations per hour. A

single runway at an airport, might have an operating capacity of 60 operations per hour, meaning,

over the course of an hour, the airport will be able to serve approximately 60 aircraft takeoffs

and landings; in 30 minutes, the airport can serve 30 such operations, and so forth.

There are actually two commonly used definitions to describe airport capacity: throughput

capacity and practical capacity. Throughput capacity is defined as the ultimate rate at which

aircraft operations may be handled without regard to any small delays that might occur as a result

of imperfections in operations or small random events that might occur. Throughput capacity,

for example, does not take into account the small probability that an aircraft will take longer than

necessary to take off, or a runway must close for a very short period of time because of the

presence of small debris. Throughput capacity is truly the theoretical definition \ of capacity and

is the basis for airport capacity planning.

Practical capacity is understood as the number of operations that may be accommodated over

time with no more than a nominal amount of delay, usually expressed in terms of maximum

acceptable average delay. Such minimal delays may be a result of two aircraft scheduled to

operate at the same time, despite the fact that only one runway is available for use, or because

an aircraft must wait a short time to allow ground vehicles to cross. The FAA defines two

measures of practical capacity to evaluate the efficiency of airport operations. Practical hourly

capacity (PHOCAP) and Practical annual capacity (PANCAP) are defined by the FAA as the

number of operations that may be handled at an airport that results in not more than 4 minutes

average delay during the busiest, known as the peak, 2-hour operating period, hourly and

annually, respectively.

Factors affecting capacity and delay

The capacity of an airfield is not constant. Capacity varies considerably based on a number of

considerations, including the utilization of runways, the type of aircraft operating, known as the

fleet mix, the percentage of takeoff and landing operations being performed, ambient climatic

conditions, and FAA regulations which prescribe the use of runways based on these

considerations. When a specific number is given for airfield capacity at an airport, it is usually

an average number based either on some assumed range of conditions or on one specific set of

conditions.

An understanding of the variability of capacity, rather than its average value, however, is crucial

to the effective management of an airfield. Much of the strategy for successful management of

an airfield involves devising ways to compensate for a number of factors that, individually or in

combination, act to reduce capacity or induce delays.

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The physical characteristics and layout of runways, taxiways, and aprons, for example, are basic

determinants of the ability to accommodate various types of aircraft and the rate at which they

can be handled. Also important is the type of equipment, particularly the presence of instrument

landing systems, installed on the airfield as a whole or on a particular segment.

Estimating capacity

The art of estimating the capacity of an airfield is a challenging one. Significant investments are

made on the part of airport management, the FAA, and air carriers to estimate as accurately as

possible the capacity of an airfield under varying conditions and operating characteristics.

However, if the basic fundamentals of aircraft operations are understood, initial estimates of

runway capacity may be established with little effort. The FAA categorizes the wide variety of

aircraft types by their maximum certified takeoff weights (MTOW). Aircraft with MTOW less than

41,000 pounds are considered category A/B or small aircraft, aircraft with MTOW between 41,000

and 255,000 pounds are considered category C or large aircraft, and aircraft with MTOW greater

than 255,000 pounds are considered category D or heavy aircraft (see Table 12- 1). For the

purposes of estimating runway capacity, an airport’s fleet mix is defined by the percentage of

small, large, and heavy aircraft that perform takeoff and/or landing operations over a given

period of time on the runway.

Defining delay

Delay is defined as the duration between the desired time that an operation occurs and the actual

time the operation occurs. When aircraft depart and arrive “on time,” according to their

respective schedules, for example, the aircraft is said to have experienced no delay. If, however,

an aircraft actually departs an hour after its scheduled departure time, that aircraft is said to have

suffered 1 mhour of delay. This delay may have been the result of any number of factors. A

mechanical repair may have been required, luggage may have been slow in being loaded,

weather may have required the aircraft wait until conditions improve, or perhaps the aircraft was

one in a large number of aircraft that were scheduled to depart during a high-demand period

time of day when the capacity of the airfield was insufficient to accommodate such high demand.

Estimating delay

As with estimating capacity, various methods exist to estimate delay from fundamental analytical

models, FAA tables and graphs, and computer simulation models. Similar to capacity estimation,

analytical models allow an airport planner to estimate delays using fundamental estimations for

aircraft demand and airport capacity. FAA tables provide cursory estimations of delay for more

complex operating conditions, whereas computer simulation models provide detailed

estimations of delay under a full variety of operating conditions, from the very simple to the

highly complex.

Approaches to reducing delay

Many commercial service airports, particularly those in large metropolitan areas, have

experienced significant operating delays on their airfields, and also in their terminals, and on

ground access systems around the airports, as well as between the airport and the associated

area. The strategies that may be employed to reduce delays fall into two categories: increasing

system capacity and managing system demand. Increasing capacity includes the addition of new

infrastructure, such as additional runways, terminal facilities, and ground access roads.

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Increasing capacity also includes provision of technologies and policies to make existing

infrastructures operate more efficiently. For example, it reduces the amount of processing time

required at any given facility to allow more operations over a given period of time. Managing

demand focuses more on changing the behavior of system users that in turn will lead to better

use of existing system capacity.

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UNIT-4

INTRODUCTION TO AIRLINE PLANNING

An industry can be defined as a number of firms that produce similar goods and services and

therefore are in competition with one another. In this sense, the airline industry is a segment or

part of the broader air transportation industry. Several hundred U.S. companies engage in the

carriage of persons or goods by air. For example, American Airlines earns revenues in excess of

$20 billion a year, while the smallest may operate a single plane only several months a year.

Broadly defined, the airline industry consists of a vast network of routes that connect cities

throughout the country, and indeed, the world. Over this network, a large number of airlines

carry passengers and cargo on scheduled service

STRUCTURE OF THE AIRLINE INDUSTRY

Growth and Regulation

To clarify the structure of the industry at the outset, it is useful to define the industry.

When the Civil Aeronautics Act was passed in 1938, only a handful of air carriers operated regular

schedules over prescribed routes, and when they received government certification, they

became known as certificated route, scheduled air carriers, a term that is used to this day. The

act empowered the Civil Aeronautics Board (CAB) to structure the interstate airline industry

through regulation of passenger fares, air mail rates, route entry and exit, mergers and

acquisitions, and intercarrier agreements. The CAB immediately “grandfathered” the routes of 23

existing airlines, which later became known as trunk carriers (a term borrowed from the trunk

railroads of the day). By definition, trunk carriers were airlines certified to operate on medium-

and long-haul interstate routes. These carriers came under Section 401 of the board’s regulations

and thus were sometimes referred to as 401 carriers. To be exempt from 401 certification, a

carrier could not exceed a takeoff weight of 12,500 pounds (roughly the weight of a DC-3), which

effectively limited aircra_ to 19 passengers. Typically, two or three carriers provided service in a

given market, although in some instances routes were covered by only one carrier. The CABset

standard fare levels to ensure cross-subsidization between profitable and unprofitable

routes. Carriers were required to charge equal fares for equal

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distances. Cost increases were passed along to customers, and the CAB allowed the airlines to

earn a reasonable rate of return.1 Originally, there were two general classes of common-carrier

air transportation: (1) the trunk airlines, which provided scheduled service on fixed routes, and

(2) small nontransport carriers, principally operating from a fixed base, which furnished service

on request, without schedules. For the nonscheduled carriers, transportation services were

incidental to the principal business activities of sale and service of aircra_ and flight instruction.

After World War II, a number of enterprising aviation entrepreneurs purchased war surplus DC-

3s (C-47s) and DC-4s (C-54s) and began to transport people and cargo forcompensation or hire

with no fixed routes or schedules, much in the manner of tramp steamers. These operations,

usually cu_hroat in the worst sense of the term, became known as nonscheduled, or

“nonsked,”air carriers to the public and as “large irregular air carriers” to the CAB, which was

powerless to regulate them until the Civil Aeronautics Act was amended by Congress. The act

was amended a_er World War II to create supplemental air carriers and supplemental air

transportation2 so that such operations also required certificates of public convenience and

necessity. Originally designed to supplement the capacity provided by the trunk carriers, by the

1960s the supplemental air carriers had truly become competitive carriers, and by the 1970s the

name supplemental had lost all meaning. Some carriers provided scheduled passenger and cargo

services, whereas others concentrated on cargo only.

In the postwar period, there were also many feeder routes to be granted. The trunk lines claimed

that they had grandfather rights (original certifi-cation) to provide such service feeding into the

trunk routes, but their pleas were to no avail; the CAB chose instead to certificate a whole new

level of service. The CAB assured the trunks that the feeders would be carefully watched and

notpermi_ed to provide service between the major metropolitan areas. The CAB awarded each

local-service carrier a regionally centered route system that fed the trunks with additional

passengers. These localservice carriers, which provided intrastate service to small communities,

were exempt from CAB economic regulation, and many were eligible for government subsidies

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to cover operating losses. The charter services charged lower fares, did not operate published

schedules, and were also exempt from CAB regulations.

Deregulation

In response to the criticism, the CAB reversed its policies, beginning with the approval of new

route applications. In 1977, it consented to American Airlines ’ request for “super saver

”discounts some 45 percent below existing coach fares. When American Airlines’ traffic grew

as much as 60 percent in response, the solution to overcapacity seemed at hand. Other carriers

quickly filed and received CAB approval for similar discounts. De facto deregulation was under

way. In 1978, now with the active encouragement of new CAB Chairman Alfred Kahn, Congress

passed the Airline Deregulation Act. The act mandated that the CAB phase out its route pproval

authority over three years and its regulation of fares over five years, and that it pass its

remainingfunctions to the Department of Transportation. The CAB ceased operation at the end

of 1984.

MAJOR AND NATIONAL CARRIERS

That deregulation was a landmark event in the history of the U.S. airline industry is illustrated

by the fact that 5 of the top 12 airlines of 1978, as measured by revenue passenger miles (RPMs),

no longer exist (see Table 5-1). Eastern (no. 4) and Braniff (no. 8) went bankrupt; Western (no. 7)

was absorbed by Delta; National (no. 10) was absorbed by Pan Am; Pan Am (no. 6) broke itself up

for parts, with most going to Delta and United; the remnant of Pan Am then dissolved in

bankruptcy. Deregulation fueled a trend toward concentration of business with a new cluster of

“ mega-carriers,” with a number of small and midsize airlines being absorbed in the process. By

the end of 2004, the top five carriers accounted for 74 percent of the business (see Table 5-2). In

contrast, in 1978, under CAB control, the top five airlines accounted for 68 percent of the RPMs

of the top 12. The immediate consequence of deregulation was that the established carriers faced

competition on many fronts. First, they competed vigorously among themselves, motivated in

part by the belief that market share

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would determine the ultimate survivors in aerostructure industry. This meant new routes and

lower prices, which led to more available seat miles but lower load factors, as capacity

outstripped new passenger traffic, and to lower passenger revenue yields because of the reduced

fares. The competition within the established industry was intensified by three innovations

pioneered by the major carriers in the early 1980s that collectively represent a radical change

from the regulated era. Although each of the measures offered initial competitive advantage to

the first movers, in the aggregate these innovations appear to have contributed to the very high

volatility of industry revenues. First,airlines established “hub- and-spoke” route structures,

designed to funnel traffic from outlying regions for further transit, at very high load factors, to

major destinations. But hubs are very expensive to establish and maintain because of the high

infrastructure costs; the high fixed costs hinder easy adjustment of route structures in response

to changing papers of demand, and the overall route structure produces more connections on

long-distance routes, which is disfavored by full- fare business travelers. The hub-and-spoke

structure also le_ the airlines vulnerable in the1990s to low-fare carriers that fly point to point

between destination city-pairs. Among other factors, the point-to-point carriers gain the

advantage of higher aircraft utilization than do the hub-and- spoke carriers, which have to provide

time in their schedules of long-distance routes for the arrival of feeder flights. Second, the airlines

adopted frequent-flier programs designed to enhance brand loyalty among business travelers

and to exploit the differences between regional and national (or international) airlines in terms

of more desirable destinations. The frequent-flier programs proved to be expensive to

administer, and the potential liability of accruing free travel credits was an unwelcome overhang

on an airline s financial statement. Moreover, the frequent- flier programs came to play a

somewhat perverse role in the design of route structures, in which destinations were added or

retained to avoid the potential loss of frequent fliers.

Third, the airlines developed sophisticated reservations systems that they used for at least two

purposes: (1) to skew in their favor the display of scheduling information on the screens that

were used in travel agents’ offices and (2) to establish yield management programs. The airlines

are an example of an industry sector subject to exogenous shocks that have undermined many

of its previous ways of doing business. Not only did deregulation expose the airlines to powerful

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competitive forces that undermined profitability, but it also eliminated the implicit protection

under government regulation against collapse and bankruptcy. As a result, the industry is

makinga transition to a new structure (see Figure). At the top of the pyramid shown in Figure 5-

1,and foremost among the carriers that make up the airline industry, are the major and national

carriers.The 54 carriers that were included in these two categories at the beginning of 2004 hold

certificates of public convenience and necessity and operate scheduled and nonscheduled or

charter services over medium- and long-range national and international routes serving large

population centers. Airlines are now classified as major air carriers if their annual gross revenues

are over $1 billion.

FIGURE The structure of the airline industry—2004. (*74 certificated)

REGIONAL CARRIERS

Regional air carriers are classified as large, medium, or small, depending on their annual gross

revenue and whether they hold a certificate of public convenience and necessity from the DOT.

Large regionals are certificated carriers with annual gross revenues between $10 million and

$99.9 million. Medium regionals are certificated carriers with annual gross revenue less than

$10million. The small regionals, commonly referred to as commuters, are noncertificated

carriers.

Early Growth

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Out of several thousand air taxi operators in January 1964, only 12 offered scheduled services, all

to non certificated points. By the end of 1968, there were over 200 scheduled air taxi operators.

This explosive early growth in what became the regional/commuter airline industry resulted in

part from the economic opportunity created by the service gap le_ by the withdrawing local-

service carriers. Another important factor was the availability of new aircra_that were small

enough to be exempt from CAB economic regulation yet large enough to carry profitable loads in

scheduled short-haul operations.

Regulatory and economic changes in the 1960s improved the climate for the growth of scheduled

air taxis. In 1964, the FAA promulgated Federal Aviation Regulation (FAR) Part 135, which defined

the operational and safety rules of the industry. In 1965, the CAB amended its regulations to

allow these carriers to transport mail and to provide service between certificated points, open

as replacements for trunk or local-service airlines. In 1964, American Airlines

contracted with Apache Airlines to replace it in serving Douglas, Arizona; this was the first “air

taxi replacement agreement.” In 1968, Allegheny Airlines (now US Airways) greatly expanded this

concept by contracting its unprofitable routes to 12 independent commuters operating under

the name “Allegheny Commuter”; this network continues today. The CAB officially recognized

the commuter industry in 1969, defining a commuter air carrier as an air taxi operator that either

performs at least five round-trips per week between two or more points and publishes flight

schedules that specify the times, days of the week, and origins and destinations of such flights,

or transports mail by air under contract with the U.S. Postal Service. By August 1978, 26 commuter

airlines were providing replacement service for certificated carriers at 59 points, mostly without

direct financial assistance.

During the 1970s, passenger enplanements on commuter carriers grew at an annual rate of

slightly over 13 percent, compared with a 7 percent growth rate for the combined trunk and local-

service airlines and a 3 percent annual growth rate in real gross national product.

As part of airline deregulation in 1979, the trunk and local-service carriers began their second

stage of withdrawal from smaller communities. The commuters saw yet another opportunity to

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serve the traveling public and eagerly moved to provide service. Under congressional mandate,

communities that stood to lose service as part of deregulation were placed under the EssentialAir

Service (EAS) program. As of early 2006, more than 114 communities were served by the program

in the continental United States, Alaska, Hawaii, and Puerto Rico.

Role of the Regional Air Carrier

Today, the regional/commuter airline segment is an integral part of the nation s air

transportationsystem. Regional carriers provide regularly scheduled passenger or cargo service

on aircra_ predominantly seating fewer than 60 passengers or holding cargo with an 18,000-

pound or less payload. Regionals fly pursuant to schedules published in widely used airline

schedule guides.

A typical regional flight operates over a trip distance of 100 to 400 miles and at lower altitudes

than flights of the long-haul carriers. Regionals operate well-timed frequent flights from outlying

communities to the associated hub airports to interline,or connect, passengers and cargo with

other scheduled flights. Seventy percent of all regional passengers make such connections.

Although the growth period of regionals has been relatively short and not without problems,

continuing efforts by the industry principals are playing a significant role in helping to forge an

integrated and complete air transportation system. Today, 9 out of every 10 airports in the

UnitedStates receiving scheduled air transportation are served by a regional air carrier. By year-

end 2005, regionals provided frequent and timely air service to 664 airports, with 664 of these

communities depending exclusively on regional airlines for scheduled air transportation. By

contrast, the major airlines served approximately 32 percent of the total.

Economic Characteristics of the Airlines

Economists usually describe the certificated airline industry as closely approximating an

oligopolistic market structure. An oligopoly (from the Greek oli, meaning “few”) is an industry

composed of a few firms producing either similar or differentiated products. A few” can be 5 or

10 or 100 firms. A large percentage of our nation’s output of goods and services is produced by

oligopolistic industries: steel, automobiles, oil, and aluminum, to mention a few. Oligopolistic

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industries typically are characterized by high barriers to entry. These usually take the form of

substantial capital requirements, the need for the technical and technological know-how, control

of patent rights, and so forth.

In addition to few sellers, a similar product, and high obstacles to entry, oligopolistic industries

tend to share several other characteristics.

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1. Substantial economies of scale. By economy of scale, economists mean decreases in a firm’s

long-term average costs as the size of its operations increases. Firms in oligopolistic industries

typically require large-scale production to obtain low unit costs. Large-scale production is

afforded by intensive labor and management specialization of job responsibilities, utilization of

the most efficient technology available, and effective use of by-products. If total market demand

for the product or service is sufficient to support only a few large firms of optimum size,

competition generally ensures that only a few such firms will survive.

2. Growth through merger. Many of the oligopolies that exist today have resulted from mergers

of competing firms—in mergers that may date back to the late 19

or early 20th century. In

1901, for example, the U.S. Steel Corporation was formed from a merger of 11 independent

steelproducers. Or think of the number of U.S. automobile manufacturers back in the 1930s,

1940s, and 1950s. Well-known companies like LaSalle, Hudson, Packard, and Studebaker have

long since gone. The purpose of most mergers is to gain a substantial increase in market share,

greater economies of scale, more buying power in the purchase of resources, and various other

advantages that smaller firms do not possess to the same extent.

3. Mutual dependence. When there are only a few firms in a market, it ma_ers very much to each

firm what its rivals do. Economists call this situation mutual dependence. The small number of

sellers in an oligopolistic industry makes it necessary for each seller to consider the reactions of

competitors when se_ing prices. In this sense, the behavior of oligopolists in the marketplace

may be somewhat similar to the behavior of players in such games of skill as chess, checkers, or

bridge. In these games, the participants try to win by formulating strategies that anticipate the

possible counterreactions of their opponents.

4. Price rigidity and nonprice competition. In an oligopolistic industry, firms find it more

comfortable to maintain constant prices and to engage in various forms of nonprice competition,

such as advertising and customer service, to hold, if not increase, their market shares. Price

reductions, when they occur, are sporadic and usually come about only under severe pressures

resulting from weakened demand or excessive capacity.

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Airline Demand RPM = Revenue Passenger Mile

• One paying passenger transported 1

mileYield = Revenue per RPM

• Average fare paid by passengers, per mile flown

• Airline Supply ASM = Available Seat Mile

• One aircraft seat flown 1 mile Unit Cost = Operating Expense per ASM (“CASM”)

• Average operating cost per unit of output

• Average Load Factor = RPM / ASM • Unit Revenue = Revenue/ASM (“RASM”)

Example: Airline Measures

• A 200-seat aircraft flies 1000 miles, with 140 passengers: RPM = 140 passengers X 1000 miles

= 140,000 ASM = 200 seats X 1000 miles = 200,000

• Assume total revenue = $16,000; total operating expense = $15,000: Yield = $16,000 / 140,000

RPM = $0.114 per RPM Unit Cost = $15,000 / 200,000 ASM = $0.075 per ASM Unit Revenue =

$16,000 / 200,000 ASM = $0.080 per ASM

• Average Load Factor = RPM / ASM ALF = 140,000 / 200,000 = 70.0%

• For single flight, also defined as passengers / seats

Airline Supply Terminology

• Flight Leg (or “flight sector” or “flight segment”) – Non-stop operation of an aircraft between

A and B, with associated departure and arrival times

• Flight

– One or more flight legs operated consecutively by a single aircraft (usually) and

labeledwith a single flight number (usually)

– NW945 is a two-leg flight BOS-MSP-SEA operated with a B757

• Route

– Consecutive links in a network served by single flight numbers

– NW operates 2 flights per day on one-stop route BOS-MSP-SEA

• Passenger Paths or Itineraries

– Combination of flight legs chosen by passengers in an O-D market to complete a

journey (e.g., BOS-SEA via connection at DTW)

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FLEET PLANNING

• Long-term strategic decision for an airline:

–Affects financial position, operating costs, and especially the ability to serve specific routes.

• Huge capital investment with lasting impacts:

–US $40-60 million for narrow-body aircraft

–$200+ million for wide-body long-range 747-400

–Depreciation impacts last 10-15 years

–Some aircraft have been operated economically for 30+ years

Fleet Planning Decisions

• Fleet planning is an optimal staging problem: – Number and type of aircraft required – Timing

of deliveries and retirement of existing fleet – Tremendous uncertainty about future conditions

• Aircraft evaluation criteria for airlines include: – Technical and performance characteristics –

Economics of operations and revenue generation – Marketing and environmental issues –

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Political and international trade concerns

ROUTE PLANNING

• Given a fleet, selection of routes to be flown

• Economic considerations dominate : – Forecasts of potential demand and revenues – Airline’s

market share of total forecast demand – Opportunity cost of using aircraft on this route –

Network implications for costs, revenues and “profit”

• Practical considerations just as important: – Aircraft with adequate range and proper capacity

– Performance and operating cost characteristics – Operational constraints and aircraft/crew

rotation issues – Regulations, bilaterals, and limited airport slots

“Route Profitability Models”

• OR models designed to perform such route evaluations, used by some airlines: – Demand,

cost and revenue forecasts for specific route, perhaps for multiple years into the future – Select

routes to maximize profits, given set of candidate routes and estimated demands – Subject to

fleet and capacity constraints – Assessments should be based on total network impacts

• Built on highly simplified assumptions: – Profit estimates entirely dependent on accuracy of

demand estimates and market share models – Ability to integrate competitive effects is limited

SCHEDULE DEVELOPMENT

• Involves several interrelated decisions, which to date have not been fully integrated:

Frequency Planning: Number of departures to be offered on each route, non-stop versus multi-

stop

Timetable Development: Flight departure and arrival times, including connections at airline

hubs

Fleet Assignment: Aircraft type for each flight, based on demand and operating cost estimates

Aircraft Rotation Planning: Links consecutive flights to ensure balanced aircraft flows on the

network.

OR Models in Airline Scheduling

• Airline scheduling problems have received most operations research (OR) attention

• Use of schedule optimization models has led to impressive profit gains in:

– Aircraft rotations; fleet assignment – Crew rotations; maintenance scheduling •

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Currentfocus is on “solving” larger problems:

– Timetable optimization is still not feasible--too many dimensions and constraints MITICAT MIT ICAT 4

PRICING DECISIONS

• “Differential pricing” by airlines is universal:

– Classes of service (First, Business, Coach)

– Different “fare products” within the coach cabin, with different restrictions, at different prices

– Virtually every airline in the world offers multiple price points (even low-fare carriers with

“simplified” fare structures)

• Economic trade-off in pricing decisions: – Stimulation of new demand; increased market

sharefor airline

– Diversion of existing demand to lower fares; reduced revenues

– Recent pricing difficulties of network airlines due in part to greater diversion of revenues

thanstimulation of demand

Pricing Models

• Pricing theory has not kept pace with airline competitive pricing practices

– Difficult to estimate price elasticity, willingness to pay, potential for stimulation and diversion

– No practical tools for airlines to determine “optimal” prices

• Some airlines are now implementing “Pricing Decision Support Systems”

– Primarily monitoring of price changes

– Little competitive modeling of pricing impacts

• Dominant practice is to match low fares to fill planes and retain market share.

REVENUE MANAGEMENT

• “Inventory control” for airlines:

– Given a scheduled flight, capacity and prices, how many bookings to accept by fare type

– Objective is to maximize revenue

-- fill each seat with highest possible revenue

• Computerized RM systems used by airlines to increase revenues by 4-6%:

– Generate forecasts by flight date and fare class

– Optimize seat allocations to different fare classes

– Overbooking models to minimize costs of denied boardings and “spoilage”

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Integrated Airline Planning Models

•As described, current practice is to perform scheduling, pricing and RM sequentially.

•Integrated models would jointlyoptimize schedules, capacity, prices, and seat inventories:

–Better feedback from pricing and RM systems can affect optimal choice of schedule and aircraft

–Better choice of schedule and capacity can reduce need for excessive discounting and “fare

wars”

The Ultimate Challenge

•Joint optimization and planning is a big challenge, both theoretically and practically:

–Few airlines have “corporate databases”with consistent and detailed demand/cost data

–Research is still required to identify models that can capture dynamics and competitive

behaviors –Organizational coordination within airlines and willingness to accept large-scale

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decision tool –Might never be possible to integrate all subtleties of airline planning decisions

intoa useful tool

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UNIT-5

FLEET PLANNING AND ROUTE EVALUATION

One of the most difficult decisions airline managements must make is whether to buy new or

used aircraft and what type. Alternatively, they must consider whether it makes be_er

financialsense to modernize older aircraft already in their fleet or to acquire aircraft from the

outside.

Many additional factors, including the costs associated with engineering and maintenance, must

be weighed. The factors are constantly changing, and their relative importance at each airline

depends on the carrier’s individual situation

FACTORS IN FLEET PLANNING

Purchasers of new aircra_ can generally get by for 7 to 10 years without having to ake any major

structural repairs. Furthermore, maintenance costs as a percentage of total costs have been

teadily decreasing since the 1960s. However, percentages do not necessarily present a true

picture. If one set of costs, such as for maintenance, rises less steeply than others, its percentage

f the total may drop although the cost in absolute dollars may be rising. In this context, a set of

figures from American Airlines is worth noting. Over the 20-year life of a 707, American found

that maintenance costs rose 10 percent but that improvements in reliability more than

compensated for the rise. This was in terms of current dollars. When translated into constant

dollars, which take inflation into account, the situation was even be_er: maintenance costs

actually dropped.

It would be quite simple if maintenance were the only, or the most important, ctorto consider

in fleet decisions. But besides maintenance costs, many other factors must be balanced against

one another: the price of fuel; the availability and price of used aircraft; resale value; the price of

newaircraft; terms of purchase; cash flow; debt/equity ratio; the availability of money from

lenders; the receptivity of Wall Street to the issuance of stocks, bonds, and debentures; interest

rates; route structure; competitive situation; strategy; and labor costs. All are even more

important than before in today’s deregulated environment.

The Hub-and-Spoke System

In the quest to achieve the lowest possible unit cost, U.S. airlines have come to stress huband-

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spoke route systems where practical. This, too, has had a profound influence on new aircra_

requirements. Li_ capacity has tended to be greater in smaller aircra_ with shorter full- payload

ranges, such as American’s MD-80s, United’s fleet of 737s of various models, and US

Airways’ERJs and CRJs.Hub-and-spoke networks have influenced airlines in other ways. Although

the air carrier community has long recognized economies of scale (as reflected in the preference

for a large number of identical aircraft_), it has also come to appreciate that, with deregulation,

economies of scope are perhaps as important as economies of scale. This has led carriersto serve

not only more city-pair markets but more varied markets than ever before.

This, in turn, has caused the largest airlines to require a wider variety of aircraft than ever

before.Indeed, the range of attributes embodied in such aircraft appears to be broad eningas

economies of scope are pursued, partially through airline consolidation. Hubs have also

influenced carriers’decisions with regard to larger aircraft, such as the Boeing 767 and Airbus

A330. As the hubsbecome increasingly congested and slot limitations more constraining, there

is a natural tendency to schedule larger aircraft rather than smaller ones through the hub,

especially during periods ofpeak activity. This, too, has led to a proliferation of certain types

of aircraft in the fleets of the larger carriers relianton hub-and-spoke networks. Here, also, there

has been a happy conjunction of events: changes in the so-called two-engine rule have

increasingly enabled airlines to operate larger twin-engine aircraft inter continentally and

internationally as well as on shorter hauls.

Fleet Rationalization

Consolidation of the industry during the 1980s as a result of mergers has led to a proliferation

of specific aircraft types operated by any particular carrier. No doubt, much of this proliferation

will be reduced as fleet rationalization becomes both practical and possible. Although fleet

rationalization may well be a first order of business for consolidated airlines, such carriers still

need to acquire new aircraft not only to address new markets but also to enable them to enjoy

thebenefits of maximum practical fleet commonality in the long run. What will influence the

acquisition process involving new aircraft is the economic organization of the airline industry as

consolidation proceeds. The issue is the behavior of the airline industry under conditions of

oligopoly.

Fleet Commonality

One of the main reasons for aircraft purchases in large numbers is fleet commonality. The Boeing

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757 and 767 have common type-rating requirements, a distinct advantage to thecarriers

operating both types, as well as a strong inducement for airlines that are operating either

model.

The new generation of the 737 family provides various models with identical cockpits and seating

from 100 to 180 passengers, which offers airlines using such models greater flexibility for

planning new routes. Commonality is also apparent in the Airbus series. The A320/321 and the

A330/340 share many of the same component arts and flight deck instrumentation. Engine

choice is offered on almost all new transports having 200 or more seats, an important factor in

decisions to buy a particular type. Usually, the selection is based on power plant commonality

with other aircraft in the operator’s fleet. Sometimes, it is a politically motivated decision,

especially when the air carrier involved is government owned or heavily subsidized.

Long-Range Aircraft

The Boeing 777, launched in 1990, is aimed at markets between the 767 and 747. It competes

directly with the A330/340 series and the MD-11. The 777 is the first commercial airliner with the

option of folding wings, allowing it to fit its otherwise long wings (for required

range) in most existing airport gates. However, as of early 2006, no aircraft operator had ordered

a 777 with this option due to high costs ($2 million per aircraft. In 2008, Boeing will launch the

787 Dreamliner, a mid-sized twin-engine wide body aircraft that will carry between 250 and 300

passengers. This aircraft will compete against Airbus’ 350, a 250- to 300-passenger long-range

aircraft that will be available in 2010.

Because of the hub-and-spoke system’ s drawbacks, airlines are currently rethinking route

structures and are considering new aircraft that can economically bypass hubs and provide point-

to-point service. This would certainly win friends among the traveling public. Point-to- point

service has always been popular, but the concept has even more appeal for travelers today

because of their increasing frustration with air traffic delays and mounting congestion at major

hub terminals. Bombardier ’ s Canadair CRJ series and Embraer ’ s EMB-135 and EMB-145 regional

jets are aiming at this market niche. Since the events of September 11, 2001, many airlines have

refocused on point-to-point services to cut costs. In most cases, the regional jet is used because

of efficient operational costs and reduced load-factor requirements

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compared to other aircraft .

Noise Restrictions

Most early orders for new-generation aircraft were conceived as direct replacements of older

planes—usually with models of roughly the same size. But as it became obvious that air travel

was increasing beyond early projections, the carriers started looking for larger aircraft with more

seats to obviate the need to add more flights. This led to orders for models such as the Boeing

757 to replace the 727s and the McDonnell-Douglas MD- 80 to supplant the DC-9s. More than

2,000 new jet transports were on order for delivery during the 1990s, indicating that the days for

aging airliners in the fleet were undoubtedly numbered. Higher maintenance costs, higher noise

levels, and higher fuel consumption make them candidates for replacement by newer-

generationmodels. What will happen to these planes that have served the public so well for so

many years? Some old 727s have, in fact, found a new home with Federal Express; hushkits

have beendeveloped so that they can meet the new noise rules. However, FedEx can absorb

only so many;other aging units may be headed for South America or Africa, where noise is

not yet a major issue. Additionally, Valsan offered a re-engining program especially for the 727.

But the retrofit’ s high cost might discourage most prospects, who would still be le_ with an

older airplane. UPSand Rolls-Royce planned to re-engine 727 freight haulers to meet Stage 3

noise standards.

Table 13-1 lists the number of aircraft that ATA member airlines had on order as of December

31, 2002. As of early 2006, no updated data was available from ATA.

DESIGN AND DEVELOPMENT—THE MANUFACTURER’S

VIEWPOINT

The Boeing Approach

The design and development stages for a new jetliner can take from five to six years. In the case

of the Boeing 757 and 767 models, the concept of a more fuel-efficient aircraft was born in the

mid-1970s with the skyrocketing price of fuel. When the 757 was being planned, engineers for

Boeing, working with the airlines, were hoping for a 10 percent reduction in operating costs

compared to the 727 jetliner that the new aircraft was designed to replace. In fact, Boeing had

very modest ambitions for the 757. The original plan was essentially to modify the 727 to operate

with two highly efficient engines instead of the three less efficient engines used on the 727. But

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as the months passed, Boeing’ s engineers kept making changes, and they finally decided to build

the airplane more along the lines of the 767. About 60 percent of the parts in the 757 are

interchangeable with parts in the 767; only 6 percent of the parts in the 757 are the same as

those used in the 727. It should be noted, production of the 757 ended in October 2004 after

1,050 had been built.

The use of electronic monitoring devices and navigational aids allows the 757 to be flown by

twopilots, as opposed to three for the 727, another improvement in operating costs. In the 757

cockpit, many of the common mechanical gauges and control systems are replaced by video

screens and computers. The flight control systems are so advanced that, beginning shortly a_er

takeoff, the plane can fly and even land by itself.

Designing and developing an appropriate family of aircraft to meet a majority of the airlines’

needs has become even more difficult since deregulation. With new competition from other

established carriers and from the newcomers, most of the large carriers are still in the process

of rationalizing their current and future route structures in an a_empt to determine where they

want to be in 5 or 10 years. The major carriers have been dropping low-density routes and

concentrating on their high-density, long-haul routes with more standardized fleets, the

motivation being to improve efficiency (load factors and utilization). This specialization among

the different levels of carriers presents a problem for the manufacturer that tries to develop an

aircraft whose users’ needs vary considerably. The custom of prederegulation days, when each

carrier had various models of aircraft from different manufacturers, seems to be over.

Another important step in the process of designing and developing a new aircraft is taking an

objective look at the company’s product in comparison with its competition. It is important

to select those characteristics for comparison that are of particular concern to the potential

airline customer. Figure 13-1 shows a few of the characteristics of competing commercial aircraft

of concern to a particular manufacturer. Here, we see comparative data on block speed, payload,

unit operating cost, and return on investment. With comparative data such as these, the

manufacturer can make judgments as to the relative importance in the eyes of the customer of,

say, differences in speed and range and return on invested capital.

Other Factors in Design and Development

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Another important factor in the design and development stage is the ability of individualcarriers to

finance the proposed new aircraft. There is a direct relationship between aircraft orders and airline

profitability. Although airline profitability is a key element in the design and development

of any new aircraft, forecasting earnings and orders for some future period is a difficult task.

Furthermore, forecasting the breakdown of orders by manufacturer and by type of aircraft for

each manufacturer becomes an even more difficult task. Yet this important step must be taken

before plans can be made to invest millions of dollars in the design and development of a new

aircraft Finally, manufacturers must be concerned with the proliferation of government

regulations regarding the design and development of a new aircraft through the certification

stage. These regulations cover everything from safety to noise and emission standards.

Consequently, manufacturers work closely with government regulatory agencies, including the

FAA, throughout all of the production stages.

THE FLEET-PLANNING PROCESS

From an individual airline’s standpoint, the aircraft selection process is an ongoing function

coordinated by a generalist group, such as corporate planning, with major help from technical,

or specialist, administrations such as finance and property, marketing, line maintenance,

engineering and maintenance, and flight operations. The existing fleet of an operator also is

a significant factor in an operator ’ s fleet-planning decisions. Substantial savings in terms of

training, spares inventories, and operations can be achieved by operating a common fleet of

aircraft.

Information Needed

Basically, corporate planning is interested in information on four different areas in the fleet-

planning process: the carrier ’ s current resources, corporate objectives, projected industry

environments, and marketing strategy.

Current Resources. The carrier’s current resources include its present fleet inventory by type of

aircraft, use, and month. Also included are financial and technical data on aircraft on order.

Financial data include acquisition costs (purchase or lease), startup costs (primarily maintenance

and flight training), and unit operating costs. Technical data on aircraft currently on order

includepayload-range figures, cruise performance information, runway requirements, noise

levels, parts and service availability, and flight characteristics. Labor resources are also included

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undercurrent resources. Maintenance capability in terms of type and availability of

personnel to be trained on the new equipment must be considered, and lead times must be established.

Similarly, flight crews must be prepared in advance of delivery dates of aircraft currently on order. In short,

the corporate planning unit must completely analyze the carrier’s current resources—what it has

now, what it has on order—as a starting point in the aircraft selection process.

Corporate Objectives. Top management’s objectives for the company, or corporate objectives,

include forecasted profitability (operating revenues and expenses, operating income, net

earnings, earnings per common share, and return on investment), systemwide load factors,

acceptable levels of cash on hand, market share on prime routes, debt/equity ratio, and general

guidelines regarding new-aircra_ acquisition. Other objectives include labor productivity

improvement targets and cost-saving goals. Corporate objectives are broad and emphasize what

is to be achieved, but not necessarily how it is to be done.

Projected Industry Environments. Projected industry environments include the outlook for the

national economy, the outlook for the industry, and the carrier’s performance within the

industry. First and foremost, corporate planning is concerned with the national economic

outlook: the gross national product, national income, personal income, disposable income, and

level of consumer income in the next 1-year, 5-year, and 10-year periods. Next to be considered

is the air transport industry forecast within the overall economy, including such items as revenue

passengers and cargo tonnage, RPMs, ASMs, cargo tonmiles, revenue block hours, and so forth.

This is followed by a forecast of the carrier’s traffic statistics within the industry. In addition, the

carrier makes certain assumptions regarding passenger traffic mix (business versus pleasure),

cargo directionality, and price elasticity of demand in selected long- and short-haul markets.

Marketing Strategy. This is a key piece of information, requiring considerable interplay among

corporate planning and other administrations, primarily marketing. Giventhe company’s current

resources and corporate objectives and the projected industry environments, how is the carrier

to implement its plan, or marketing strategy? Significant items to be considered

include how much service to provide between key city-pairs, how much emphasis to place on long-haul

or short- haul markets or both, which weak markets to penetrate now or later or to eliminate, and in which

markets to trade off profit for market share or vice versa. A critical area of consideration is fareand rate

structure levels in various markets for both passenger and cargo service.

The Fleet-Planning Model

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Computer models have been developed to translate this information into a fleet planning

modelthat is used in determining future aircraft acquisition requirements, aircraft assignment

requirements, financial requirements, and operating conditions over various planning periods (2

and 3 years ahead for order versus option decisions, 4 and 5 years ahead to ensure that

thepurchases made in years 2 and 3 were consistent with long-term developments, and possibly

7 to10 years ahead to ensure consistency and to gain insight into financial and facility needs in

thelong term). This fleet planning model is commonly referred to as the unconstrained

operating plan, because it ignores system constraints in order to ensure a full range of

opportunities to be considered. Computer-generated fleet-planning models provide corporate

planning with the basic output—the number and type of aircraft to be acquired, the times of

acquisition, and the timing of trade-in or phase out of existing fleet. But they also allow

management to assess the impact of altering the information fed in, primarily corporate

objectives, industry environment, and marketing strategy.

Aircraft Evaluation

The aircra_ evaluation process can be broken down into five areas: consideration of design

characteristics, physical performance, maintenance needs, acquisition costs, and operating

economics.

Design Characteristics. Design characteristics include such factors as the aircraft’s dimensions,

weight profile (including maximum zero-fuel weight and operator’s empty weight), fuel

capacity,type of power plants, systems (electrical, hydraulic, and environmental), seating

configuration, containers and pallets, bulk volume, and total volume. It is difficult to compare

these various characteristics for competing aircra_, and the problem is compounded by the many

options available on each aircra_. For example, Boeing’s high-cruise-speed 747-300 with the

upper-deckextension has many seating arrangements. In the upper deck, on the economy

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side, with seats at 34-inch pitch,69 passengers can be carried. At the same pitch, so can 81, 85,

or 91. At 32-inch pitch, the maximum number of economy passengers is 96. Either 42, 52, or 63

business-class passengers can be carried at 36-inch pitch. On the first-class side, 38 passengers

at 40- or 42-inch pitch or 26 first-class sleepers at 62-inch pitch can be carried. Varied lower-deck

forward arrangements include 18 first-class sleepers at 62-inch pitch plus 63 business passengers,

or 41 first-class sleepers at 57-inch pitch. There also are arrangements for 40 first-class sleepers

at 60-inch pitch or 36 first-class sleepers at the same pitch.

Route Planning and Evaluation

Given a fleet plan, the process of route planning and evaluation involves the selection of routes

to be flown Economic considerations dominate route evaluation: – Forecasts of potential

passenger andcargo demand (as well as expected revenues) for planned route are critical to

evaluations –Origin-destination market demand is primary source of demand and revenues for

a given route, but far from the only source – In large airline hub networks, traffic flow support

to the new route from connecting flights can make it profitable – Airline’s market share of total

forecast demand for the new route depends on existence of current and expected future

competition – The fundamental economic criterion for a planned route is potential for

incremental profitability in the short run, given the opportunity cost of taking aircraft from

another route Route Evaluation Issues

• Practical considerations can be just as important: – Technical capability to serve a new route

depends on availability of aircraft with adequate range and proper capacity – Performance and

operating cost characteristics of available aircraft in the airline’s fleet determine economic

profitability – If the route involves a new destination, additional costs of airport facilities, staff

re-location, and sales offices must be considered – Regulations, bilaterals, and limited airport

slots can impose constraints on new route operations, to the point of unprofitability

• Strategic considerations can overlook lack of route profit: – Longer term competitive and

market presence benefits of entering a new route even if it is expected to be unprofitable in short

run.

Route Planning Models

• Route planning requires a detailed evaluation approach: – Demand, cost and revenue

forecasts required for specific route, perhaps for multiple years into the future – Assumed market

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share of total demand based on models of passenger choice of different airline and

schedule options – Depends to a large extent on presence and expected response of competitors

to route entry

• “Route Profitability Models” – Computer models designed to perform such route evaluations,

but ability to integrate competitive effects is limited – Profit estimates entirely dependent on

assumptions used.

Review: Basic Airline Hub Economics • Routing flights and passengers through a hub is more

profitable for the airline if: COST SAVINGS from operating fewer flights with larger aircraft and

more passengers per flight IS GREATER THAN REVENUE LOSS from passengers who reject

connecting service and choose a non-stop flight instead, if it exists • Passenger preference for

multiple connecting departures vs. 1 or 2 non-stops per day: – Large multiple hub network

operated by Delta, for example, provides over a dozen daily connections Boston-San Diego

Hub Impacts on Route Planning

• New routes to smaller spoke cities become much easier to justify in an established hub

network: – An airline needs only 1 or 2 passengers per flight to each of 30+ connecting

destinations to make a 100-seat aircraft “profitable” – However, such incremental analysis leads

to a tendency to overlook potential displacement of other traffic on connecting legs – Same

“incremental” logic makes it more difficult to stop service to a potentially unprofitable

destination, which provides connecting traffic support to other flights

• Difficult to justify a new non-stop service to by-pass the hub, as it might steal traffic from hub

flights: – However, large number of departures in a connecting market can allow airline to build

market share and perhaps introduce a nonstop flight supported by many connecting

opportunities

Recent Trends: Hub Strengthening

• Despite forecasts of more non-stop flights, a trend toward bigger and stronger hubs has re-

emerged: – Largest US and European airlines have cut virtually all flights that do not originate or

terminate at their hubs – Several smaller, weaker US hubs have been shut down

• Factors that continue to reinforce hub growth: – Liberalized bilateral agreements have allowed

airlines to fly even low-density international routes from their hubs (e.g., CVG-MUC) – Small

regional jets are being used to increase frequency of service to small spoke cities, not to

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over-fly the hub with non-stop service – Airline alliances focus on linkages between major hub

networks

• With recent economic downturn, importance of hub operations will likely continue

Measuring Route “Profitability”

• Airline costs are driven by fleet and flight schedule – Fleet drives fixed costs (capital costs) and

variable cost rates (fuel burn rates, maintenance rates) – Flight schedule drives utilization and

thus variable costs – Costs are incurred on a flight basis and on a network basis

• Airline revenues are driven by O-D markets – Prices are set by competitive considerations or

by regulation – Revenues are earned on a passenger itinerary basis

• Scheduling decisions are often made at the route and flight departure level – Airline

managers must decide which flight legs to remove so that other flight legs can be added

Approaches to Flight Profit Measurement

• Ideally, add/change/remove a flight leg and then measure the profitability given that the rest

of the network can be re-optimized – Captures interactive or network effects of both costs and

revenues – Not easy as it requires a good model of the entire operation

• Another approach – allocate all costs and revenues on a flight leg basis and then treat each leg

as being independent of the rest of the network – Allocation schemes are always subjective

– Does not capture network effects, very important in most cases – But, much easier to

conceptualize.

Flight-Level Profitability

• Incremental Revenues

• Incremental Costs

• Measures of Profitability

• Network Contributions and Costs

Incremental Revenues (SYR-OMA)

• Two sources of incremental passenger revenues – Passengers boarding in SYR and deplaning in

OMA (Local Revenue) – Passengers boarding in SYR and connecting in OMA to LAX or SFO

(Connecting Revenue)

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• Connecting O-D revenues allocated to each flight leg – Proration methodology needed to split

O&D fare into component parts (e.g. mileage, ratio of full fares) – Or, assign total connecting O-

D fare to flightleg being analyzed

• Implicit assumption is that all revenues from a flight segment will be lost if the segment is

cancelled – Reality is that airline might recapture some of this revenue

Incremental Costs

• Variable Operating Costs

• Aircraft Ownership Costs – Equivalent leasing costs based on duration of flight segment

• Overhead and Non-Operating Costs – Equivalent share of other fixed costs based on duration

of flight segment

• Fully allocated flight costs equals the variable operating costs plus the aircraft ownership

costs plus the allocated overhead and non-operating costs.

Network Contributions and Costs

• Contributions to Rest of Network – Additional revenue on other segments due to presence of

SYR-OMA segment

• Costs to Rest of Network – Cost of processing SYR connecting passengers at OMA –

Incremental cost of having more passengers on the connecting segments out of OMA –

Opportunity Costs of selling seats beyond OMA, which could have been occupied by passengers

from other O-D markets (known as “network displacement costs”).