The Performance Airport—U.S. Style

How should public airports measure success? Steer Davies Gleave is helping airport management and boards produce business plans and measure their performance against their goals and in comparison, to benchmarked airports of similar size and roles.

The overwhelming majority of U.S. airports are owned and operated by state and local governments. Unlike most other public agencies, airports operate on the economic principle of cost recovery, collecting fees paid by airport users for the use of runways and other infrastructure. The aeronautical revenues generated are augmented by “non aeronautical” revenues collected from passengers, including fees for the use of parking and terminal concessions.

Together these fees pay for the capital and operating costs of the airport. The result is that airports “use commercial means for public ends.” Elsewhere many leading global airports are private which means assessing their performance is more straightforward with metrics of profitability and investor returns.

For U.S. airports, it is the indirect benefits to the community, not the direct benefits to the airport operator, that management prioritizes. At Greenville-Spartanburg International Airport (GSP) in Greer, South Carolina, Steer Davies Gleave produces an annual performance report and presents it to the GSP Airport Commission. For the most recent calendar year, their goals included measures of safety and security, economic development, air service, financial sustainability, opportunity for local and disadvantaged businesses and customer service.

Each of these goals has between three and five measures that together constitute the airport’s performance plan. The CEO and Executive Team actively use these measures to ensure they are making progress against their goals. The performance plan also helps to inform initiatives in the following year budget process—where resources need to be invested or redeployed to ensure success.

Assessing the performance of private and public authorities—airports, rail and transit agencies and state departments of transportation—is invaluable not only to airport management, but for the constituencies these state and local governments represent.