Guide to Evaluating Airport Governance Structures (2022) / Chapter Skim
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Pages 70-84
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From page 70... ...
70 As the literature review highlighted, there are often several points of view involved when evaluating the efficacy of an airport's governance structure. The way a community, elected official, or local leader evaluates the effectiveness of an airport, and by extension its governance structure, is often viewed through a focus on a specific metric or outcome.
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From page 71... ...
Evaluation Criteria for Governance Transitions 71 Market accountability manifests in several ways at airports. While the direct exercise of stakeholder accountability is limited in the United States due to the limited private ownership of public-use airports, it is present in decisions made by airport tenants, including airlines, concessionaires, and other airport users.
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From page 72... ...
72 Guide to Evaluating Airport Governance Structures employees and their managers and between airport executives and elected officials or boards of directors. Also, processes, procedures, reporting requirements, and forms ensure standardized treatment of all citizens, vendors, employees, and customers.
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From page 73... ...
Evaluation Criteria for Governance Transitions 73 Commercial Service Airport KPI: 2019 Cost per Enplaned Passenger In conversations with airport managers for the case studies and in the research team's daily work, one of the most commonly mentioned metrics is the average CPE. CPE assesses the cost to airlines of operating at a particular airport.
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From page 74... ...
74 Guide to Evaluating Airport Governance Structures Source: FAA Part 127 (n=30)
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From page 75... ...
Evaluation Criteria for Governance Transitions 75 Commercial Service Airport KPI: 2019 Nonaeronautical Revenue Many airports across the United States look to build resiliency in their financial and operational portfolios by developing revenue streams from ancillary sources. Nonaeronautical development and associated revenue from land leases, terminal concessionaire agreements, retail, rental cars, parking, and hotels have become increasingly important to airport managers as they look for ways to reduce their aeronautical revenue to make themselves more competitive to commercial passenger and cargo airlines.
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From page 76... ...
76 Guide to Evaluating Airport Governance Structures State-operated large hubs had the lowest average nonaeronautical development in 2019 at just over $86.5 million. It is important to consider that because there are only 30 large hubs, the average for any one governance arrangement can be skewed significantly by an outlier in either direction (extremely low or high nonaeronautical development relative to other airports)
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From page 77... ...
Evaluation Criteria for Governance Transitions 77 Source: FAA Part 127 (n=72)
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From page 78... ...
78 Guide to Evaluating Airport Governance Structures Source: FAA CY 2019 enplanement statistics (n=367)
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From page 79... ...
Evaluation Criteria for Governance Transitions 79 Figure 7-14 shows small hubs operated by an airport authority had the highest YoY change in enplanements at 8.06%, followed by port authorities at 7.82% and county-operated airports at 6.24%. Small hubs operated by a state had the smallest YoY growth at 2.39%.
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From page 80... ...
80 Guide to Evaluating Airport Governance Structures Figure 7-16 shows the 2019 average total operations for GA airports by governance structure. Port authorities had the highest average total operations in 2019 at over 49,000, followed by airport authorities with over 27,000 operations and county-operated airports with over 25,000 operations.
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From page 81... ...
Evaluation Criteria for Governance Transitions 81 • City- or county-operated to port authority • Port authority to airport authority • Airport authority to city- or county-operated A checklist has been developed for each transition type to ensure the reader has a widespread understanding of what to think about when considering a transition. This list is not exhaustive; it was developed based on the findings from the case studies.
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From page 82... ...
82 Guide to Evaluating Airport Governance Structures City- or county-operated to port authority: Potential accountability trade-offs when considering a transition from city- or county-operated governance to a port authority are: • Increased shareholder and consumer accountability • Decreased citizen, elected official, labor, and bureaucratic accountability Table 7-5 highlights the key considerations involved in a transition from city- or county-operated governance to a port authority. Port authority to airport authority: Potential accountability trade-offs when considering a transition from a port authority to an airport authority include: • Increased professional accountability • Decreased labor and bureaucratic accountability Table 7-6 highlights the key considerations involved in a transition from a port authority to an airport authority.
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From page 83... ...
Evaluation Criteria for Governance Transitions 83 Category Key Considerations Airport Leadership Form a governing board that takes broad interests of airport, port, and region into consideration Determine level of decision-making power to give to airport director and other key positions Instate oversight measures to ensure appropriate checks and balances for airport management and board Other_________________________________________ Contractual Secure fire and police services Revisit airport lease agreements, contracts, and arrangements to ensure appropriate best practices and fair rates Resolve outstanding debt service and explore options for bonding through new organization or previous governing entity Other_________________________________________ Documentation Develop governance documents for new organization Develop policies and procedures for new organization Other_________________________________________ Human Resources/ Staffing Transfer former public-sector employees (possibly unionized) to new organization Determine new positions needed or positions to be eliminated to meet goals Other_________________________________________ IT/Systems Migrate and develop new financial/accounting system Migrate and develop new procurement system Migrate and develop new personnel system Other_________________________________________ Table 7-5.
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From page 84... ...
84 Guide to Evaluating Airport Governance Structures Category Key Considerations Airport Leadership/ Oversight Form a governing board that takes broad interests of airport and community into consideration Other_________________________________________ Contractual Secure fire and police services (potentially bringing new employees into the bargaining unit) Revisit airport lease agreements, contracts, and arrangements to ensure they meet city or county legal requirements Resolve outstanding debt service and potential transfer to city/county Other_________________________________________ Documentation Develop governance documents that comply with city/county documents Develop policies and procedures that comply with city/county policies and procedures Other_________________________________________ Human Resources/ Staffing Transfer employees to city/county and potential unionized environment Determine if overlapping positions to be eliminated Other_________________________________________ IT/Systems Migrate into existing city/county financial system Migrate into existing city/county procurement system Migrate into existing city/county personnel system Other_________________________________________ Table 7-7.
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