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Airport Infrastructure Business Cases

The document outlines the importance of developing robust business cases for airport infrastructure investments, emphasizing the need for clear cost-benefit analyses and collaboration with airlines. It highlights best practices, objectives, and core elements necessary for successful project implementation while ensuring that investments are affordable and deliver returns for both airports and airlines. Additionally, it stresses the importance of stakeholder consultation, risk management, and financial assessments throughout the project lifecycle.

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Trevor T Paraziva
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31 views2 pages

Airport Infrastructure Business Cases

The document outlines the importance of developing robust business cases for airport infrastructure investments, emphasizing the need for clear cost-benefit analyses and collaboration with airlines. It highlights best practices, objectives, and core elements necessary for successful project implementation while ensuring that investments are affordable and deliver returns for both airports and airlines. Additionally, it stresses the importance of stakeholder consultation, risk management, and financial assessments throughout the project lifecycle.

Uploaded by

Trevor T Paraziva
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Airport Infrastructure Business

Cases
Introduction  The benefits of best practice airport
infrastructure business cases include:
Airport capital investments should only proceed ­ Projects investments that optimize the use
where a clear business case exists, supported by a of capital expenditure with airlines buy-in.
positive cost benefit analysis and the explicit ­ Operating cost reductions and efficiencies,
agreement of airlines. improvements in capacity and resilience,
and passenger experience enhancements.
The main purpose of airport infrastructure business
­ A quality check with airline subject matter
cases is to clearly describe why the project is
experts that investments deliver the
required, the benefits for airlines and passengers,
intended functional and commercial
and other alternatives that may exist.
outcomes.
A direct cost relatedness exists between airport ­ Assurances that existing assets are being
infrastructure investments and airport charges that used as efficiently as possible before
airlines pay for. Airport investments therefore need investment is made.
to be affordable, fit for purpose and deliver a return
on investment for airlines, as well as airports. Business Case Planning and
In addition to developing sound business cases, Implementation
airports also need to ensure that infrastructure
benefits will be maximized by conducting The level of detail available in the business case will
meaningful and effective consultation with the depend on a project’s level of maturity at a point in
airline community. See “IATA Airport Infrastructure time, for instance:
Investment-Best Practice Consultation” for further  Near term projects with well-developed
details. objectives, costs and benefits defined through
Airports and airlines should collaborate and work in design and development stages.
partnership while recognizing that the success of  Medium term investments being progressed
airlines maximizes economic benefits for all parties. planned for the following the next 18 months to
5 years.
Objectives  Longer term investments beyond 5 years that
can include major projects over multiple years
Best practice business cases should achieve the
or master plan phasing elements where less
following objectives:
detail and cost/benefit certainty will exist.
 Demonstrate the return on investment for
airline stakeholders through a detailed cost- Business Case feasibility should include an
benefit analysis. assessment of a “do nothing” scenario and consider
 Identify material benefits and outcomes from process and technology improvements to use
the start of a project and through the design, existing infrastructure more efficiently.
development, and delivery stages to benefits
As part of user consultation airport stakeholder
realization.
events are recommended for each major project
 Ensure that airlines business objectives and
stage to ensure the business case remains viable for
inputs are captured from an early stage in the
airports and airlines.
project process.
 Ensures the support of the airline community Resolution of major outstanding issues or risks is
before the project proceeds through major required prior to progressing to the next stage of
decision points. feasibility for any project including airport
investments.

1 Airport Infrastructure Business Cases


When a project is in the implementation stage  Identify all stakeholders and parties affected by
following the endorsement of the business case and the project
conclusion of the design phase, a clearly defined  Inter-dependencies with other projects should
change control process is recommended should be identified and their impacts understood
any unforeseen, material changes to the project be  Project delivery, key milestones
required. The impact of any changes to the Benefits:
business case benefits should be assessed,  The impact and outcome of each specific
understood and either jointly rejected or approved benefit should be identified with a clear
by airports and airlines. description, and indication of how the benefit
will be measured with a baseline and target.
Consideration should also be given to identify
 Identifying categories/sub-categories can help
natural break points in projects to maintain flexibility,
to align benefits with airline and airport
should market conditions change or unforeseen
strategic objectives.
issues materialize, resulting in business case
Risks:
benefits and outcomes being compromised.
 Identify the top risks and impacts including the
Independent checks to provide an ongoing type of risks and probability of each one
appraisal of all major decisions, focusing on the materializing.
efficient use of capital and project outcomes are  A risk register and mitigation strategy is
also recommended for high value projects. required for each business case.
 The impact on airline operations should be
An assessment to validate whether business case
recognized as a risk where relevant.
benefits have been delivered is important when
Financials:
assets enter operational use.
 A positive financial return on investment.
Any excess capital costs incurred during the  Investments should result in efficiencies, lower
implementation and delivery phase of the project operating costs per passenger and deliver best
should not be added to the airport’s asset base and value.
not recovered through airport charges.  Airport user charges impact recognizing a
direct cost-relatedness with infrastructure.
Business Case Core Elements  A financial appraisal that includes capital and
Core elements include (but are not limited to): operating expenditures, revenue and spend
profiles, depreciation and financial
Scope: assumptions.
 Key assumptions Schedule:
 Identify the issue, opportunity or main drivers  A schedule of critical dates and construction
for the project as the basis for the business phasing aiming to minimise airline and
case e.g. safety and compliance, asset operational disruption.
replacement reliability and resilience, capacity,
passenger experience or technology
 Objectives to specify what is going to be
Supporting Documents
achieved through the project This paper provides a framework for other papers
 Solutions providing an overview of the assets and related to airport infrastructure development:
and infrastructure required to deliver the  IATA Airport Infrastructure Investment – User
objectives
Consultation
 Asset life and whole life costings
 Total capex requirement and opex impacts

2 Airport Infrastructure Business Cases

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