The National Academies Press

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From page 9... ... 9 GRFs offer significant benefits and can provide a new framework for managing sustainability actions at airports. Using a GRF structure to support sustainability offers an airport a clear process to prioritize and develop projects based on their cost-effectiveness. Read the entire page →
From page 10... ... 10 Revolving Funds for Sustainability Projects at Airports early in the exploration process can increase the likelihood that obstacles will be uncovered, and more support will be provided when the assessment turns into a GRF proposal. Once stakeholders have been updated, it is important to understand the standard accounting practices used at the airport for resource efficiency projects. Read the entire page →
From page 11... ... Phase 1: Planning -- Initiating an Airport GRF 11 Much work has already been done in this area and using existing materials can cut months from the fund development process. There are two key areas in which research is crucial. Read the entire page →
From page 12... ... 12 Revolving Funds for Sustainability Projects at Airports than 500 are commercial service airports, over 250 are reliever airports, and nearly 2,600 are categorized as general aviation (GA) airports. Read the entire page →
From page 13... ... Phase 1: Planning -- Initiating an Airport GRF 13 The lack of revenue sharing agreements at reliever and GA airports may enable GRFs to grow at relatively fast rates compared with GRFs at commercial service airports; however, the scale of operations may limit the size of annual savings at GA airports and thus reduce their revenue benefits. A GRF is not the right solution, if the total dollars saved are lower than the airport cost to establish and maintain a revolving fund. Read the entire page →
From page 14... ... 14 Revolving Funds for Sustainability Projects at Airports Airport and Port Authority Advisory Boards and Commissions -- GRF Applicability Airport and port authority advisory boards typically consist of representatives with considerable knowledge or expertise relating to the aviation industry. Airport authorities represent 30% of all U.S. Read the entire page →
From page 15... ... Phase 1: Planning -- Initiating an Airport GRF 15 Detailed agreements, leases, or other contracts determine the extent to which private entities are delegated airport control. Generally, a "private operator's authority over key decisions is often constrained by the long-term lease agreement with the airport owner and the continued application of commitments to the federal government" (Reimer and Putnam 2009) Read the entire page →
From page 16... ... 16 Revolving Funds for Sustainability Projects at Airports Stakeholder Impacts. Under a residual agreement, the air carriers that enter into a contract assume significant financial risk by agreeing to keep the airport financially self-sustaining by covering airport losses after factoring in all nonaeronautical revenues (Young and Wells 2004) Read the entire page →
From page 17... ... Phase 1: Planning -- Initiating an Airport GRF 17 operators may choose to share nonaeronautical revenues, but it is not required. Additionally, air carrier leasehold space charges are set based on the operational cost of the aeronautical facilities used (FAA Airport Compliance Manual 2009) Read the entire page →
From page 18... ... 18 Revolving Funds for Sustainability Projects at Airports GRF Applicability. GRF savings would likely need to be shared to some degree with air carriers under a hybrid agreement lease structure because of the inclusion of residual agreement elements. Read the entire page →
From page 19... ... Phase 1: Planning -- Initiating an Airport GRF 19 Standard Approach. Under the standard approach, the airport operator directly leases and manages concessions space. Read the entire page →
From page 20... ... 20 Revolving Funds for Sustainability Projects at Airports finance. The goal of this initial round of discussions is to identify logistical, political, and financial barriers to a GRF; develop a strategy for overcoming these barriers; lay the groundwork for building future support; and refine the proposed fund's structure to capture opportunities at each individual airport. Read the entire page →
From page 21... ... Phase 1: Planning -- Initiating an Airport GRF 21 A savings reclamation model is often easier to implement because it can indirectly leverage federal, state, and internal capital budget funds that might not be eligible for use as an endowment. 3.2.2 GRF Operation Models Once capitalized, there are various approaches for operating a GRF, ranging from relatively simple to complex. Read the entire page →
From page 22... ... 22 Revolving Funds for Sustainability Projects at Airports only in airport (non-shared) facilities where the airport itself (not a lessee) Read the entire page →
From page 23... ... Phase 1: Planning -- Initiating an Airport GRF 23 amount or based on actual accrued savings. Once the GRF has been repaid, the transfers are discontinued and the process repeats. Read the entire page →
From page 24... ... 24 Revolving Funds for Sustainability Projects at Airports awareness of the GRF among external airport parties and sourcing potential project ideas from external parties, often through an application submission and review process. The management team then evaluates and approves project applications. Read the entire page →
From page 25... ... Phase 1: Planning -- Initiating an Airport GRF 25 Rate-Base Recovery GRF Operation A rate-base recovery GRF model is a specialized form of an external GRF operations model that uses the existing airport lease rate-setting process as the mechanism for repayment. A ratebase recovery model functions in a similar manner to the external model in all respects except, instead of using a separate lending agreement and processing external repayments, the lease outlines the provisions for accessing GRF funding and for the subsequent rate adjustments to cover recapitalization of the fund. Read the entire page →
From page 26... ... 26 Revolving Funds for Sustainability Projects at Airports the operational models outlined. (See the FAQ in Appendix A for additional information on revenue use limitations within the GRF context) Read the entire page →
From page 27... ... Phase 1: Planning -- Initiating an Airport GRF 27 Forecasting can be done using custom-made spreadsheets or specialized GRF tracking tools, which can also be used for tracking once the fund is launched (see Appendix D for more information) Read the entire page →
From page 28... ... 28 Revolving Funds for Sustainability Projects at Airports facilities. In some cases, an airport's ability to recover the capital investment costs funded by the GRF may be limited or may not match the time horizon needed to replenish the GRF. Read the entire page →
From page 29... ... Phase 1: Planning -- Initiating an Airport GRF 29 Airlines May Be Reluctant Initially Because the majority of airline agreements require operational cost savings to be shared, securing airline buy-in is crucial for GRFs to work at airports. Clear communications with the airline contract and legal departments can help them recognize the strategic benefits that can be accomplished through a GRF. Read the entire page →
From page 30... ... 30 Revolving Funds for Sustainability Projects at Airports airlines for their carbon reduction partnerships if the carriers choose to support emissions reductions achieved through GRFs. Read the entire page →

From page 9...

... 9 GRFs offer significant benefits and can provide a new framework for managing sustainability actions at airports. Using a GRF structure to support sustainability offers an airport a clear process to prioritize and develop projects based on their cost-effectiveness.