Airports and Economics

Conference themes: the economy; the credit markets; and the airport/airline model

White also tells airports that before they plan infrastructure expansion such as a new concourse, that they should first consider what the tenant airlines can afford. Then work together toward determining what’s appropriate to build, says White, and not first decide on a facility and then consider the costs to the airlines.

James Masoero, general manager of corporate real estate for Delta Air Lines, questions why the U.S. airport industry has accumulated some $27 billion in cash reserves, up from $21 billion in 2001, during a period when he says cost per enplanement has risen 49 percent. [For more on this topic, see “Inside the Industry,”]

Masoero offers up some specific rates and charges topics for consideration by airports:

  • competitively bid outside contracting for services and use the airport’s purchasing power as a tool;
  • review refinancing opportunities on current debt service;
  • review the airport’s cash reserves and assess if adequate/justifiable;
  • “value engineer” projects;
  • consider the potential to moth ball facilities that are currently being underutilized;
  • consider deferring any scheduled rate increases to tenants; and
  • implement landing fees for general aviation where feasible.

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