A CASE STUDY ON
AIRPORT PRIVATISATION –CHALLENGES
POST GRADUATION DIPLOMA IN AVIATION LAW AND
AIR TRANSPORT MANAGEMENT
NALSAR UNIVERSITY OF LAW
The objective of the current work is about emerging challenges in the airport
management. The main purpose is to study about different a challenge that takes
place in the airport management and how to solve the problems that arise in the
airport. The focal point is to study about challenges way forward in the airport
Airport world is changing at a rapid pace; airports are facing capacity and
financial constraints, and privatizations of airports are being resorted to overcome
such constraints. There are some emerging organizational demands with the
change of ownership.
In the present project the study about main functional domains in the airport
and the challenges that arise in the airport management. Introduction to the some
of the new techniques to face the challenges in the correct approach and easy to
solve the problems without causing inconvenience to the passengers.
TABLE OF CONTENTS
Chapter Name Pg. NO
2. Emerging Challenges in Air-Side Operations……………………….6
3. Challenges In Airport Planning and Design…………………………10
4. Airport Financial and Revenue Management……………………….15
5. Challenges in Airport Land-Side and Terminal Operations……….19
6. Airport Safety and Security Management……………………………22
Aviation is the design, development, production, operation, and use of
aircraft. Aviation refers to the history of development of mechanical flight—from
the earliest attempts in kites and gliders to power heavier-than-air, supersonic and
1.2. Airport Management
Airport management is planning or managing of different operations that
take place in the airport. Airport has been traditionally viewed as a strategic entity
of a nation and therefore they have been traditionally operated to meet the just
needs from that perspective. The concept of ‘airport management’ as a discipline is
a new adoption borne out of the progressive traffic growth, both of passengers and
cargo during the past few years.
Airport Management is discharging multitude of responsibilities and tasks
associated with operating an airport on a day -to-day basis, airport management is
also responsible of providing a vision for the future of the airport. Airports are to
provide the traveling public with an airport system that is safe, secure, efficient and
1.3. Airport Functional Domains
International Civil Aviation Organization (ICAO) standards prescribe certain
minimum facilities before an airport is declared operational. They are different
operations takes place at an airport. Major functional domains of an airport are
landside, terminal complex and airside. Each of the functional domains has a
focus, a set of key functions and the primary service considerations are addressed
with an exclusive set of personnel, facilities, and other related resources. At the
same time, all domains must work together in a highly integrated and inter
dependent manner for an effective and efficient management of the airport system.
Figure: Different Operations at Airport
1.3.1. Air side Operations:
It is the airport operational or operating area where, aircraft, their desired
support vehicles and equipment are parked, and related operational activities take
place. It generally includes runways, taxiways, safety areas, ramps, aprons and
hangers. It also includes aircraft servicing, aircraft maintenance and aircraft storage
facilities. Operational support services include radio navigational aids and services,
air traffic control and services, apron control, rescue and fire fighting, energy
related equipment and airfield security controls.
1.3.2. Terminal complex Operations:
In general, it includes passenger check-in counters for the respective airlines,
baggage screening, mail and cargo services, concessionaires, security screening,
and boarding gates. Immigration and Customs are included at international
1.3.3. Land side Operations:
It includes surface transportation, terminal curbside facilities, link roads,
vehicle parking stands and related services.
EMERGING CHALLENGES IN AIR-SIDE OPERATIONS
Air-side is the airport operational or operating area where, aircraft, their
desired support vehicles and equipment are parked, and related operational
activities take place. It generally includes runways, taxiways, safety areas, ramps,
aprons and hangers. It also includes aircraft servicing, aircraft maintenance and
aircraft storage facilities.
2.1. Runways and Taxiways:
The layout of the runways and taxiways directly affects an airfield’s
capacity. Aircraft use runways to land and depart at an airport. The location and
orientation of the runways are not the main concern but the percent of time that a
particular runway or combination of runways is in use and the length, width,
weight bearing capacity, and instrument approach capability of each runway at the
2.2. Aircraft Mix:
Aircraft mix refers to the speed, size, and flight characteristics of aircraft
operating at the airport. Aircraft are generally classified according to three
important criteria in airport engineering:
• Geometric design characteristics.
• Air Traffic Control operational characteristics (approach speed criteria).
• Wake vortex generation characteristics. Groups are light, medium and heavy.
2.3. Meteorological Conditions and Approach Procedures:
Meteorological conditions are another significant factor affecting airfield
capacity. Airport capacity is usually highest in clear weather, when flight visibility
is at its best. As weather conditions get worse and visibility is diminished, airfield
capacity is reduced and the spacing of aircraft must increase to provide allowable
boundaries of safety. By increasing the distance between aircraft the number of
aircraft this can operate at the airport during any given period shrinks.
This consequently reduces overall airfield capacity. There are three
categories of weather conditions:
Visual Flight Rule (VFR) conditions includes minimum for distance
visibility, ceilings (for takeoffs and landings), and cloud clearances. Under
VFR conditions, pilots can see so far and are permitted to approach, land, or
take off without relying on their instruments to fly safely but by visual
Instrument Flight Rule (IFR) conditions are weather conditions that do not
meet the minimum visibility requirements for VFR. In such conditions pilots
must rely on instruments for navigation and guidance to the runway and will
rely entirely on air traffic control rules and procedures for safe separation
Poor Visibility Conditions (PVC) exist when the cloud ceiling and/or
visibility is below minimum requirements prescribed by the instrument
approach procedures for the airport. In this case, the airport is closed to
2.4. AIR SPACE:
Airspace means the portion of the atmosphere controlled by a country above its
territory, including its territorial waters or, more generally, any specific three-
dimensional portion of the atmosphere.
Controlled airspace exists where it is deemed necessary that air traffic
control has some form of positive executive control over aircraft flying in
Uncontrolled airspace is airspace in which air traffic control does not exert
any executive authority, although it may act in an advisory manner.
Figure: Geographical Position of Airspace Arcs (Rings)
2.5. AIR SPACE MANGEMENT:
In order to ensure that the limited usable airspace is effectively and
efficiently utilized by civil aircraft for their safe, orderly and economic operations,
it is essential that an efficient airspace management is available on a global basis.
Airspace, therefore, have been defined in terms of lateral and vertical limits, and
the different types services that are required to be provided are also identified.
Rules and regulations governing the operation of flights within, across and into
such airspace are framed and published.
Air Traffic Services (ATS) generally include Air Traffic Control (ATC)
Services (air space management), Air Navigation Services (ANS) including
Aeronautical Telecommunication Services, Meteorology and Aeronautical
Information Services (AIS). The Air Traffic Services could be a function of the
Airport Management (Airport Authority/Department of Civil Aviation) or it could
be an independent function provided by a designated agency or authority, while
airport authority takes care of the management of airports.
All the above mention systems should work together for the management of
airspace to avoid congestion at the airport and can minimize the time for the whole
process. For the systems used in ATS should have second support systems to avoid
undesirable circumstances. Likely, the new development in the field of Air
navigation is ADS-B (Automatic Dependent Surveillance-Broadcast) which greatly
enhance situational awareness of the traffic, which in turn will increase the
airspace capacity while greatly enhance flight safety.
2.6 Air Traffic Control:
Air traffic control (ATC) is a service provided by ground-based controllers
who direct aircraft on the ground and in the air. The primary purpose of ATC
systems worldwide is to separate aircraft to prevent collisions, to organize and
expedite the flow of traffic, and to provide information and other support for pilots
Preventing collisions is referred to as separation, which is a term used to
prevent aircraft from coming too close to each other by use of lateral, vertical and
longitudinal separation minima; many aircraft now have collision avoidance
systems installed to act as a backup to ATC observation and instructions. In
addition to its primary function, the ATC can provide additional services such as
providing information to pilots, weather and navigation information and NOTAMs
(Notices to Airmen)
CHALLENGES IN AIRPORT PLANNING AND DESIGN
3.1. Airport planning:
Airport Management while discharging multitude of responsibilities and
tasks associated with operating an airport on a day -to-day basis, airport
management is also responsible of providing a vision for the future of the airport.
On a larger scale, individual states and the nation as a whole are handed the
responsibility of strategically planning for a coordinated system of Airports to best
meet the future needs of the traveling public.
Airport Planning could be defined as the employment of an organized
strategy for the future management of airport operations, facilities designs, airfield
configurations, financial allocations and revenues, environmental impacts, and
The airport operator is principally responsible for planning and development
of airport improvements, but as in the case of daily operating decisions, that
responsibility is shared with many other parties.
3.2. Types of Airport Planning:
Various types of planning may be performed at various levels and three such
planning includes System Planning, Master Planning and Project Planning.
3.3. Strategic Planning:
Strategic planning is a long term plan or forward thinking or developing plan
for an airport. It encompasses all other planning activities into a coordinated effort
to maximize the future potential of the airport to the community. They are different
types of planning systems in the strategic planning. They are,
National Airport Planning
State Airport Planning
Regional Airport Planning
3.3.1. National Airport Planning:
Airport Planning at the national-level is the responsibility of the national
government-Min of Civil Aviation, whose interests are to provide guidance and
leadership for the development of the vast network of public/PPP airports and to
establish a framework of reference for investment of funds. These interests are set
forth in the National Airspace System Plan (NASP), a document required under the
Airport and Airway Development Act of 1970.
3.3.2. State Airport Planning:
Airport planning at the state level involves issues that are somewhat
different from those of local or regional agencies. State governments are typically
concerned with developing an airport system that will provide adequate service to
all parts of the state, both rural and metropolitan. Development of airports is often
seen as an essential tool for economic development or overcoming isolation of
rural areas. Virtually all state plans estimate costs of recommended improvements
and identify funding sources.
3.3.3. Regional Airport Planning:
Regional airport planning takes as its basic unit of analysis the airport hub,
roughly coincident with the boundaries of a region, and may comprise more than
one metropolitan area. Concern is the air transportation for the region as a whole,
both large and small. Regional planning seeks to overcome the rivalries and the
jurisdictional overlaps of the various local agencies involved in airport
development and operation. The aim is to produce an airport system that is
optimum with respect to region wide benefits and costs through the allocation of
traffic among the airports in a region.
3.4. Airport Master Planning:
At the local level, the centerpiece of airport planning is the master plan—a
document that charts the proposed evolution of the airport to meet future needs.
The magnitude and sophistication of the master planning effort depends on the size
of the airport. At major airports, planning may be in the hands of a large
department capable of producing its own forecasts and supporting technical
At such airports, master planning is a formal and complex process that has
evolved to coordinate large construction projects (or perhaps several such projects
simultaneously) that may be carried out over a period of 5 years or more. At
smaller airports, master planning may be the responsibility of a few staff members
with other responsibilities that depend on outside consultants for expertise and
support. At very small airports, where capital improvements are minimal or are
made infrequently, the master plan may be a very simple document, perhaps
prepared locally but usually with the help of consultants.
While there is considerable variation in the content of the master plan and
how it is used, its basic products are a description of the desired future
configuration of the airport, a description of the steps needed to achieve it, and a
financial plan to fund development. The master planning process consists of four
basic phases: 1) airport requirements analysis, 2) site selection, 3) airport layout,
and 4) financial planning.
The process of relating future demand to existing facilities and estimating
the nature and size of needed improvements is complex. This process is simplified
by the use of standard relationships between general measures, such as annual
enplanements, and specific measures, such as peak-hour passenger demand.
The site selection is most important in the construction of a new airport.
When considering the expansion of an existing airport, there is usually less choice
about where to locate new facilities. Requirements for safety areas and clear zones
around existing runways and taxiways, for example, mean that much apparently
vacant land at airports cannot be used for other purposes. In the airport layout, the
locations of planned new facilities are mapped on the airport site. In this phase, the
planner also looks at how the airport will fit into the surrounding community. The
fourth and final phase, financial planning, is an economic evaluation of the entire
plan of development. It looks at the activity forecasts of the first phase from the
point of view of revenues and expenditures, analyzing the airport’s balance sheet
over the planning period to ensure that the airport sponsor can afford to proceed.
3.5. General Problems in Airport System Planning:
Airport planning, as practiced today, is a formalized discipline that combines
forecasting, engineering, and economics. Because it is performed largely by
government agencies, it is also a political process, where value judgments and
institutional relationships play as much a part as technical expertise. On the whole,
airport planners have been reasonably successful in anticipating future needs and in
devising effective solutions. Still, mistakes have been made—sometimes because
Of poor judgment or lack of foresight and sometimes because of certain
characteristics of the planning process itself. In effect, the process and the methods
employed predispose planners toward solutions that may be “correct” for a single
Airport but perhaps not for the community, region, or airport system as a whole.
As a result, airport plans may take on a rigidity that is inappropriate in light of
changing conditions or a narrowness of focus that does not make best use of
resources. Some of the general problems are mentioned below in airport planning.
Demand as an Independent Variable
Plans as Advocacy Documents
Lack of Integration Among Plans
Coordination and Review
AIRPORT FINANCIAL AND REVENUE MANAGEMENT
Financial Performance is a product of successful investments in new
opportunities and exploiting the existing activities. Financial planning therefore,
gives you control of the business activity. Plans followed by an evaluation of the
results through a measurement process with feed backs ensure effective financial
At most commercial airports, the financial and operational relationship
between the airport operator and the airlines is defined in legally binding
agreements that specify how the risks and responsibilities of running the airport are
to be shared. These contracts, commonly termed “airport use agreements” establish
the terms and conditions governing the airlines’ use of the airport. They also
specify the methods for calculating rates airlines must pay for use of airport
facilities and services; and they identify the airlines’ rights and privileges,
sometimes including the right to approve or disapprove any major proposed airport
Capital development projects.
Analysis of Financial Performance
Working Capital Management
Budgeting and Control
4.1. Approaches to Financial Management:
Although financial management practices differ greatly among commercial
airports, the air- port-airline relationship at major airports typically takes one of
two very different forms, with important implications for airport pricing and
The residual-cost approach, under which the airlines collectively assume
significant financial risk by agreeing to pay any costs of running the airport
that are not allocated to other users or covered by nonairline sources of
The compensatory approach, under which the airport operator assumes the
major financial risk of running the airport and charges the airlines fees and
rental rates set so as to recover the actual costs of the facilities and services
that they use.
4.1.1. Comparison of Residual-Cost and Compensatory Approaches:
These two major approaches to financial management of major commercial
airports have significantly different implications for pricing and investment
practices. In particular, they help determine:
An airport’s potential for accumulating retained earnings usable for capital
The nature and extent of the airlines’ role in making airport capital
investment decisions, which may be formally defined in majority in- interest
clauses included in airport use agreements with the airlines; and
The length of term of the use agreement between the airlines and the airport
4.2. Planning and Administering- Operating Budget:
Planning and operating budget is an integral part of airport financial
management. Every airport needs to make short-term decisions about the allocation
and scheduling of its resources over many competing uses; it has to make long-
term decisions about rates of expansion of capital improvements and funding
sources. Planning also helps:
Encourages coordinated thinking as no one department can act
independently, as it affects the airport as a whole,
Helps develop standards for future performance,
Assists management in controlling the actions of subordinates. Planning
helps to achieve a goal or standard,
Helps to reveal potential problems and remedial measures can be initiated
well in time, Promotes smooth running of airport operations. New
equipment can be ordered in advance of its anticipated usage, the overall
efficiency of the airport can be increased.
Airports generally operate under one of three different forms of budgeting
appropriations, lump sum appropriation, and appropriation by activity, and line-
4.3. Finance Control and Accounting
Finance Control and Accounting are separable in concepts, but are
interrelated, since management cannot exercise financial control effectively
without having at its disposal the data provided by a sound financial accounting
system. It is therefore essential that any procedure being established to provide
financial control be accompanied by a through examination of the accounting
system to ensure that the latter can adequately provide the financial data necessary
for this purpose.
4.4 Revenue Management:
1n general, revenue diversification enhances the financial stability of an
airport. In addition, the specific mix of revenues may influence year-to year
financial performance. Some of the major sources of airport revenue (notably
landing fees and terminal concessions) are affected by changes in the volume of air
passenger traffic, while others (e.g., airline terminal rentals and ground leases) are
essentially immune to fluctuations in air traffic.
The distribution of operating revenues differs widely according to factors
such as passenger enplanements, the nature of the market served, and the specific
objectives and features of the airport’s approach to pricing and financial
management. Airport size generally has a strong influence on the distribution of
revenues. Factors other than airport size also affect distribution of operating
revenues. At commercial airports, for example, parking facilities generally provide
the largest single source of nonairline revenues in the terminal area.
Airports that have a high proportion of connecting traffic may, however,
derive a smaller percentage of their operating income from parking revenues than
do so called “origin and destination” airports. Other factors that may affect parking
revenues include availability of space for parking, the volume of air passenger
traffic, the airport pricing policy, availability and cost of alternatives to driving to
The approach to financial management, because it governs the pricing of
facilities and services provided to airlines, significantly affects the distribution of
operating revenues. Since so many other factors play an important role in
determining revenue distribution, however, the mix of operating revenues at an
airport cannot be predicted on the basis of whether the airport employs a residual-
cost or a compensatory approach. The mix of revenues varies widely among
CHALLENGES IN AIRPORT LAND-SIDE AND TERMINAL
5.1. Land-Side Operations:
It includes surface transportation, terminal curbside facilities, link roads,
vehicle parking stands and related services. The passenger is just as concerned to
reduce time on the ground as in the air part of the trip, and just as annoyed by any
delay, whether in the air, the terminal or on the way to and from the airport. The
total time of transportation ‘from door to door’ is decisive for the passenger. The
attractiveness of an airport markedly decreases if the time of access by surface
transport exceeds a certain maximum time. A gradual increase in the share of the
available high occupancy modes of transportation normally occurs as the airport
grows, and this change should be encouraged on the grounds of environmental
impact and balanced capacity.
5.2. Terminal Operations:
The terminal is often the first point of contact with the country for the
arriving passenger. It is a shop window of the country and makes the first and, on
departure, also the last impression on the passenger. From the architectural point of
view terminals have always been and they still are a show piece representing the
best of a particular country. It is, however, necessary to give priority to the
functionality of the building by a suitable layout of the terminal and the way it is
operated if the passenger is to go away or enter with a good impression. Some of
the functional challenges in the terminal management
There are five main functions to be performed in the terminal:
Conversion between modes of transport
sorting, including breaking down loads from originators and consolidating
storage, and facilitating government inspection
movement of goods from landside to airside and vice-versa, or from aircraft
Documentation: submission, completion, transmission.
5.3. Passenger information system:
These systems guide a passenger from the landside areas right up to the
boarding gate, while passing through various processing points. In-fact, the
directional signs appear much before the airport/terminal buildings such as the road
signs to airport and generally such signs include an aircraft symbol. Nearer to the
terminal, the signs will guide the passenger to the appropriate part of the terminal.
Inside the terminal it will start with the flight information boards –
mechanical/electronic, and may also include visual display units (VDU). Both
International Air Transport Association (IATA) and Airport Council International
(ACI) have certain guidelines for the circulation distance between gate positions,
particularly in case of multiple gate positions.
5.4. Cargo Operations:
Air Cargo is extremely heterogeneous in character. They are generally
categorized according to the manner in which it is to be handled in the terminal.
They are Planned Cargo (air mode is considered to be most appropriate), Regular
(they have very limited commercial life like fresh flowers, newspapers etc.),
Emergency (speed is most important- life saving drugs etc.), High Value (those
requiring special security precautions such as diamond, gemstones etc), Dangerous
(chemicals and radioactive materials like combustible liquids, compressed gases,
explosives etc), Restricted Articles (explosives and such items that can be
transported only under very strict security conditions) and Live Stock
(arrangements exist for animals to receive food and water and suitable environment
and may even involve full-time staff).
5.5. BAGGAGE HANDLING:
This is another key activity of the airport operations. More often than not,
this aspect serves as a good benchmark for the quality service of an airport. If the
processing and delivery of baggage on arrival is not carried out smoothly, it can
have an adverse and cumulative impact on other elements of airport operation.
Delayed, damaged or lost baggage is in- fact, a very substantial cost item for
airline, besides loss of image.
AIRPORT SAFETY AND SECURITY MANAGEMENT
The aim of aviation security shall be to safeguard international civil aviation
operations against acts of unlawful interference. Safety of passengers, crew,
ground personnel and the general public shall be the primary objective of each
Contracting State in all matters related to safeguarding against acts of unlawful
interference with international civil aviation. Each Contracting State shall establish
an organization, develop plans and implement procedures, which together provide
a standardized level of security for the operation of international flights in normal
operating conditions and which are capable of rapid expansion to meet any
increased security threat.
To ensure the safety of the airport, passengers, revenues, crew etc. some of the
safety measures should be taken like,
Measures relating to passengers and their cabin baggage
Measures relating to checked baggage, cargo and other goods
Measures relating to access control
Measures relating to airport design
Safety Auditing of ground operations
6.1. Measures Relating To Passengers and Their Cabin Baggage:
The adequate measures are taken to control transfer and transit passengers
and their cabin baggage to prevent unauthorized articles from being taken on board
aircraft engaged in international civil aviation operations. No possibility of mixing
or contact between passengers subjected to security control and other persons not
subjected to such control after the security screening points at airports serving
international civil aviation have been passed.
6.1.2. Measures Relating To Checked Baggage, Cargo and Other Goods:
They should establish measures to ensure that operators when providing
service from that State do not transport the baggage of passengers who are not on
board the aircraft unless the baggage separated from passengers is subjected to
other security control measures. The consignments checked-in as baggage by
couriers for carriage on passenger flights are subjected to specific security controls
in addition to those provided.
6.1.3. Measures Relating To Access Control:
Airport should have procedures and identification systems to prevent
unauthorized access by persons or vehicles to: a) the air side of an airport serving
international civil aviation; and b) other areas important to the security of the
airport. They should ensure adequate supervision over the movement of persons to
and from the aircraft and to prevent unauthorized access to aircraft.
6.1.4. Safety Auditing:
Audits are the one of the principle methods for fulfilling the safety and
quality they are core activities of the safety management system. Audits may be
performed by external audit authority, such as state regulatory authority, or they
may be carried out internally.
DEVELOP AUDIT PLAN CARRY ON THE AUDIT
DETERMINE THE DETERMINE
CORRECTIVE ACTIONS SUBMIT REPORT FOLLOW UP
Figure: The Safety Audit Process
The challenges arising in the airport management is studied in the current
project. The report explained about the three different functional domains of the
airport and the emerging challenges in the management of this domains and also
explains about the financial management of the airport and planning and the design
of the airport. New techniques are suggested to solve the problems of the airport in
easy way and deal with it correctly.
Recommendations and future work include the following:
1. Further work needs to be done on the efficient planning and design of the
2. The financial management of the airport should make the budget keeping all
constrains in the view.
3. The passenger safety will be top priority without causing inconvenience to them
and solve the problems.
4. The main functional domains should work efficiently by using the new
technologies for the better performance of the airport.
1. Airport Management: World Class and Beyond- Dr.PCK Ravindran
2. Airport Systems: Planning, Design, and Management- Richard De Neufville
3. ICAO Annexes
4. Airport Design And Operation- Antonin Kazada, Robert E. Caves