Privatization, restructuring and its effects on performance: a

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Capacity Measurements in Airport Sector
Drawbacks of Conventional Methods and
Benchmarking Airports Using Declared Capacity
Tolga Ülkü
Presented in 2008 GAP Workshop, FHW
Berlin October 10, 2008
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Outline

• Introduction
• Literature Review on Airport Benchmarking
• Critics of Conventional Methods (inputs and
  outputs)
• Declared Runway Capacity
• Data and Methodology
• Empirical Analysis
• Runway Utilization By Yearly Capacity
• Runway Utilization By Peak Hour Capacity
• Runway Utilization Country Comparison
• Runway Utilization By Level of Coordination
• Conclusion

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Introduction

• Need for benchmarking on airports
• Focus on Capacity Benchmarking
• Within Capacity
• Terminal Side
• Airside(RWY and Apron)
• Commonly Used Methods
• TFP
• DEA
• SFA

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Literature

• Main Literature on Conventional Methods
• Using the DEA
• Gillen and Lall (1997)
• Consider terminal and airside seperately
• Sarkis (2000,2004)
• Finance and labor included
• Pels et. al. (2001)
• Bazargan and Vasigh (2003)

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Literature

• Common Inputs Used in these Analyses
• airport area,
• number of runways,
• runway area,
• number of gates,
• number of check-in counters,
• operating costs,
• number of employees,

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Literature

• Common Outputs Used in these Analyses
• passengers,
• cargo,
• ATM,

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Critics

• Of the Input-Output Combination
• Runway vs. Terminal
  activities
• Employee structures differ, both quantitative and
  qualitative
• Different fleet mixes in different airports

• Attractivity
• Marketing

• Core activity
• Pure engineering

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Critics

• Of the Chosen Inputs
• Number of Runways
• - Main problems by benchmarking stem from
• Runway System
• Distance between two Runways
• Parallel vs. Crossing
• Length and Width
• Taxiways
• Apron Capacity
• Number of Parking Positions (on terminal or
  remote)
• Terminal Capacity
• Fleet Mix

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One Example
- Some Facts Frankfurt Airport
The new landing runway will be some 2,800 meters
long. The centerline separation from the existing
North runway will be approx. 1,400 meters. This
will allow for simultaneous landing operations on
these two runways, which are not possible on the
existing parallel runways because they are not
far enough apart. www.fraport.de
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Declared Runway Capacity

• There is no consensus on how to define the runway
  capacity.
• Some examples
• The number of movements which can be handled in
  one hour.
• The maximum number of aircraft that can be
  handled by a facility during a specified time
  period under conditions of continuous demand
  regardless of delay magnitude to aircraft, is
  called ultimate capacity (Hockaday and Kanafani,
  1974)
• Maximum throughput capacity (MTC) or saturation
  capacity indicates the average number of
  movements that can be performed on the runway
  system in 1h in the presence of continuous
  demand, while adhering to all the separation
  requirements imposed by the ATM system. (De
  Neufville Odoni, 2003)
• A measure of the maximum number of aircraft
  operations, which can be accommodated at the
  airport or airport component in an hour (US
  Federal Aviation Administration, Advisory
  Circular, AC 150/5060-5, 1983).
• The ability of a component of the airfield to
  accommodate aircraft. It is expressed in
  operations (arrivals and departures) per unit of
  time, typically in operations per hour (Ashford
  and Wright, 1992).

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Data and Methodology

• RUNWAY CAPACITY
• Definitions are somehow confusing. However,
• ?rather than using Number of Runways ?Declared
  capacity
• Focus on Runway efficiency. Terminal efficency is
  not included at all, and left for further
  research.
• Data Source
• Airport Capacity/Demand Profiles (2003) by ACI,
  ATAG and IATA
• 64 European Airports
• Variables Used
• Declared Peak Hour Runway Capacity
• Number of Aircraft Movements (yearly and peak
  hour)
• Hours of Operation

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Data and Methodology

• Basic Methodology
• Finding the daily capacity by observing the hours
  of operations and making additional assumptions
• 2. Finding the yearly capacity (multiplying by
  365)
• Comparing the yearly capacity with the actual
  number of movements to find the utilization
• For 4 different cases
• Near Saturated most of the day (only 4 airports)
• 24h operation with no restriction
• 24h operation, but night restrictions
• No operation at night

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Data and Methodology
Case 1. Frankfurt/Main, London Gatwick, London
Heathrow and Stockholm, Near Saturation Daily
Capacity Peak Hour Declared Capacity
Hours without Restrictions
Peak Hour Declared Capacity/3 Hours with
Restrictions   Case 2. The airport operates 24
hours without restrictions Daily Capacity
Peak Hour Declared Capacity 10
Peak Hour Declared Capacity/2 8
Peak Hour Declared Capacity/4
6   Case 3. The airport operates 24 hours with
restrictions Daily Capacity Peak Hour
Declared Capacity 10 Peak
Hour Declared Capacity/2 Rest without
restrictions Peak Hour
Declared Capacity/6 Rest with
restrictions   Case 4. The airport operates for a
determined part of the day Daily Capacity
Peak Hour Declared Capacity 10
Peak Hour Declared Capacity/2 Rest
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Empirical Results- 1
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Empirical Results- 1

• Big airports are mostly on the top of the table.
• Economies of Scale!
• Some airports are almost fully efficient.
• ?Unlike in DEA, absolute numbers, but not
  relative comparison
• SOME CRITICS
• Definition of Declared Runway Capacity is not
  unique,
• Some airports do not take the same considerations
  into account,
• Seasonality
• How about looking at Peak Hour Declared and
  Actual Capacity???

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Empirical Results- 2
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Empirical Results- 2

• Many airports utilize (much) more than their
  declared capacity on the peak hours
• In some cases, there is an extreme difference,
• e.g. Nuremberg Declared 30 Actual 65
• Maximum Declared Capacity understates the actual
  one!
• One possible explanation
• Some airports work for just a period, by
  employing more labor, by foregoing the level of
  quality(e.g. more waiting times etc.)
• To understand the reason behind that,
• An in-depth analysis of each airport is
  necessary!
• How about looking at the countries and compare
  them???
• ???

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Empirical Results- 3
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Empirical Results- 3

• Countries with a small number of airports in the
  sample can be ignored.
• However it is interesting that Turkey(IST) leads,
  followed by Belgium(BRU)
• Among other countries with more airports in the
  sample
• ? Germany is doing the best, followed by the UK
  and France.
• ? Spain and Italy are under the average.
• ? Greece is characterised by a very poor
  performance

Is the Airport Coordination Germany working very
well?
Effects of Seasonality?
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Empirical Results- 4

• European airports are divided into three
  categories in terms of slot coordination
• Level 1 Non-coordinated airports (8)
• Level 2 Schedules facilitated airports (13)
• Level 3 Fully coordinated airports (39)
• -- Numbers in the parentheses show the number of
  airports in the sample with this level of
  coordination

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Empirical Results- 4

Fully coordinated airports have a higher average
score than others
Do the slot coordinated airports perform their
runway operations better than the others?
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Self Critic and Conclusion

• Terminal side is totally ignored. How complete
  is the analysis only by observing the runways?
• A similar data for terminal capacity is
  available.
• Next step is to do a similar analysis for
  terminal?
• Does it make sense to calculate the yearly
  capacity in this way?
• Do the airports declare unique, comparable data
  on runway?
• There are different consideration taken into
  account
• Noise Consideration (12)
• ATC Consideration (29)
• Runway Consideration (29)
• Apron Consideration (15)
• Terminal Consideration (13)

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