The High Cost of Upfront Savings: Rethinking Long-Term Value in Airport Infrastructure

Taking a long-term asset-management approach provides the opportunity to evaluate costs through a lifecycle maintenance plan that considers the comprehensive cost of operating, maintaining, repairing and replacing an asset over time.

Key Highlights

  • Judge value engineering by lifetime cost, not upfront savings: Ask what can be saved today and what that decision could cost to maintain, replace or retrofit tomorrow, and what operational disruption that work could create.
  • Ensure accountability follows risk: Understand who bears the cost and risk of maintenance, premature failure and replacement, and structure accountability accordingly.
  • Design with those who will operate and use the facility: Incorporate real-world operational requirements during planning and design to avoid costly modifications later.
  • Establish a plan to fund future replacements today: Determine how major lifecycle needs will be paid for before they become unplanned capital demands.
  • Decide now what the asset should be in 30 years: Establish expectations for facility condition, remaining useful life, deferred maintenance and future capital needs, while considering how the asset can adapt to evolving operational and technological requirements. 

Airport leaders are accustomed to making difficult choices about where and how to invest limited capital. Aging infrastructure, increasing operational demands and competing priorities leave no room for error. Getting the most out of every dollar requires looking beyond initial expense to understand what an asset will truly cost over its full lifecycle.  

Taking a long-term asset-management approach provides the opportunity to evaluate costs through a lifecycle maintenance plan that considers the comprehensive cost of operating, maintaining, repairing and replacing an asset over time. A decision that saves money during construction can cost far more later through increased maintenance requirements and accelerated replacement needs and result in a substandard customer experience. 

Effective long-term asset management considers these trade-offs from the outset, well before a facility enters operation. The objective is not simply to maintain an asset, but to maximize its performance, reliability and useful life while managing total costs and risks over decades. 

Looking beyond maintenance 

Maintenance keeps a system functioning today. Effective management asks a harder question: How will today’s decision affect reliability, operating costs, replacement needs and value five, 10 or 20 years from now? The answer is shaped in every asset lifecycle stage, from planning and design through construction, warranty optimization, preventive maintenance, major repairs and replacements. 

For airport owners, understanding where long-term responsibility resides and how future repair and replacement needs will be funded is just as important as evaluating the initial cost. Delivery methods can influence how that responsibility is allocated among the airport and its partners, but the fundamental consideration remains the same: who ultimately bears the cost and risk of maintenance, premature failure and replacement? Aligning that responsibility with long-term performance helps create accountability for decisions made throughout the asset lifecycle.  

The implications extend well beyond the facilities department. Reliable assets keep operations running and passengers moving. Disciplined repair and replacement planning makes budgets more predictable, reduces unplanned capital demands and decreases the risk of unexpected failures.  

The same lifecycle perspective can also change what represents "value" during design and procurement. 

Aligning today’s decisions with tomorrow’s costs 

Some of the costliest lifecycle decisions appear relatively minor during design. 

Consider mechanical systems. Properly sized piping, soft starts and variable frequency drives can reduce strain on pumps, motors and system components and help extend equipment life. Removing them to lower construction costs may produce immediate savings, but those savings disappear if piping or equipment requires premature replacement. 

Material specifications offer another example. At Reno-Tahoe International Airport’s new ground transportation center and consolidated rental car facility, concrete specifications account for conditions the facility will face throughout its operating life, including moisture saturation and road salt carried in on vehicles during winter. Relatively modest design decisions like these can create a more durable long-term product. 

Weather exposure tells a similar story. At one facility, protective covers for outdoor HVAC units were removed to reduce costs. Moisture exposure contributed to deterioration, putting equipment on track for replacement around year 10 rather than the anticipated 15. Adding protection later may extend the life of replacement equipment, but it cannot recover the service life lost to the original cost-saving decision.  

The same principle applies to designing around the people who will use a facility. Early input from tenants and operators, such as rental car companies in a consolidated rental car facility (ConRAC), helps ensure infrastructure supports real-world operational requirements and stays flexible as needs evolve. That avoids costly modifications or premature system replacement. Column spacing in a ConRAC is one example.  

Rental car operators need flexibility to adjust how vehicles are stacked and staged as demand shifts between ready and return areas. Without this flexibility, a new facility may struggle to keep pace with changing market conditions and could require significant future investment. 

Value engineering, applied well, improves value without sacrificing performance. Viewed through a lifecycle lens, the question changes from "Can this cost be removed?" to "What will removing this cost today mean over the life of the asset?" 

This is where delivery structure and incentive alignment matter. When the organizations responsible for long-term operations, maintenance and lifecycle costs, along with the facility’s users, help shape design and construction decisions, initial savings can be weighed against downstream consequences. Initial cost still matters but should be considered alongside operational needs, maintenance frequency, replacement cycles, operational disruption and total lifecycle cost.  

The long-term accountability of asset handback 

Another important consideration is defining the condition the asset should be in decades from now. For long-term operating, lease or concession agreements, that means establishing clear expectations for the condition in which the asset is ultimately returned to the airport. 

Contractual handback requirements, set at the outset, create a legal mechanism for holding the responsible party accountable for asset condition over the long term. Importantly, “operational” and “in good condition” are not necessarily synonymous. A facility can still function while carrying substantial deferred maintenance or while approaching a major cycle of equipment replacements. 

Asset management indicators can set objective expectations around handback. Facility condition, remaining useful life, equipment availability, deferred maintenance and forecasted capital requirements give a more complete picture of the asset the airport is receiving. 

Many airports have received an asset back from a tenant or operator that required significant rehabilitation to place it back into service or lease it again. The goal should be handback of an operational asset that has been responsibly maintained, was designed to adapt to evolving operational and technological requirements and does not immediately require significant airport investment to address accumulated needs. 

Measuring value over decades 

No single maintenance approach fits every airport infrastructure project. Assets, funding environments and institutional priorities differ and so should the solutions. 

The underlying question, however, does not change: Are today’s decisions creating the greatest value over the life of the infrastructure? 

Answering that question requires looking beyond purchase price. When evaluating an infrastructure investment, airport leaders should ask: 

  • What do the people who will operate and use the facility need from it? 
  • How will repair and replacement be funded? 
  • Who bears the consequences of premature failure? 
  • What disruption will replacement create? 
  • How can the facility adapt as needs evolve? 
  • What condition should the asset be in decades from now? 

For infrastructure expected to serve an airport and its users for generations, a long-term asset management approach offers a disciplined way to connect today’s decisions to the airport’s broader objectives. The true measure of a successful infrastructure investment is not how it performs at the ribbon-cutting, but how well it continues to serve the airport decades later.

About the Author

Scott Anderson

Scott Anderson

Managing Director of Conrac Solutions Operators

Scott Anderson oversees Conrac Solutions’ nationwide facility operations. With more than a decade of experience in airport infrastructure and operational strategy, his primary areas of expertise include facility activation, long-term asset preservation and sustainable resiliency solutions. 

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