Strategic Planning and Performance Management Working Group

The purpose of this working group is to promote the implementation of best practices in strategic planning, continuous forecasting/budgeting, performance measurement, enterprise risk management, and benchmarking principles and techniques at airports; and to standardize, improve, and implement related industry surveys.

Working Group Projects

Cost per Enplanement: The Strategic Planning and Performance Management working group has put together a task force to develop and define a “full CPE” metric to allow for more accurate comparison of CPE across airports and determine steps for gathering data to calculate that metric on a routine basis.

The taskforce presented the preliminary proposal at the CFO Summit. Most large and medium hub airports agreed that using operating and delay cost as a complement to the traditional CPE provides a valuable tool to better  evaluate airport operating costs on a holistic basis as well as for justifying capital projects to expand capacity. However, this metric would have limited applicability to small airports and some medium hub airports. The taskforce presented the refined proposal at the Working Group meeting at the 2013 ACI-NA Annual Conference in San Jose, CA.

UPDATE - Sept. 2013: During the Finance Committee Meeting at the 2013 ACI-NA Annual Conference & Exhibition in San Jose, Jeff Shulthess (Ricondo & Associates Inc.) presented a proposed methodolgy for 'All-in Airport Cost Per Enplanement'. You can view his presentation here.

Hurdle rate task force: The working group has also put together a task force to further discuss airport hurdle rate policy. 

ACI-NA Airport Financial Benchmarking Survey: The annual Airport Financial Benchmarking Survey is a service and benefit for participating ACI-NA members. This survey has proven to be a great management tool that has benefited all participating ACI-NA airport members since 2005. Our goal is to assist ACI-NA and its members to measure operational and financial performance across all airports. You may also utilize the survey to automatically produce the FAA Form 127 Report, or use FAA Form 127 data to automatically fill out some survey questions.

Other than high level summary data, ACI-NA does not make the Benchmarking Survey results publicly available. Only participating airports receive full access to all data for your internal benchmarking purposes.

More information, including the latest survey form, can be found here:
http://www.aci-na.org/finance-benchmarking

Airport Best Practice Forum Webinar Series: Strategic Planning and Performance Management Working Group launched an Airport Best Practices Forum, the mission of which is to offer a prime opportunity to create a discussion venue to identify and characterize common airport practices and ultimately, develop a best practices knowledge database. The forum’s success will ultimately depend on “relevant content, practical application and participant commitment.”

Recordings of all the webinars listed below are available to our members from our Resource Center.

Past webinars:

  • Finance Benchmarking webinar (October 2013): This webinar was moderated by Andy Rountree, Vice President for Finance and CFO, Metropolitan Washington Airports Authority. Andy also serves as a member of the Finance Committee Steering Group. Since 2005, the ACI-NA Benchmarking Survey has attracted airports from both US and Canada, and in 2013 participation grew to 96 airports (90% of large hub airports and 82% of medium hub airports). We greatly value the participation of all hub sizes ranging from large hub to non-hub airports. This survey is ACI-NA's largest annual data gathering effort and is deemed essential by most member airports. This webinar featured the summary results of the 2013 Annual Financial Benchmarking Survey and presentations from three speakers:
  • Walt Matwijec, Assistant Vice-President of Continuous Improvement, Metropolitan Nashville Airport Authority
  • Greg Cohen, Manager, Financial Strategy, Metropolitan Washington Airports Authority
  • Rafael Echevarne, Director of Economics and Program Development, ACI World
  • Total Cost of Ownership & Life Cycle webinar (July 2013): This webinar was moderated by David Boenitz, Director of Ground Transportation, San Diego County Regional Airport Authority. It featured two speakers, each with a presentation: 
  • Ellen Crews (Senior Consultant, Jacobs Asset Management and Assessment Services) who presented "Revitalizing an Airport - Understanding the Cost of Ownership" .
  • Patrick Neville (Vice President, Airport Planning and Technical Services, Greater Toronto Airport Authority), presenting "Life Cycle Maintenance & the Total Cost of Ownership - Real Life Case Studies".

‚ÄčTotal Cost of Ownership and Life Cycle Management are topics of great importance within Asset Management.  Asset Management can be defined as "the set of coordinated activities that an organization uses to realize values from assets in the delivery of its outcomes and objectives.  Realization of value requires the achievement of a balance of costs, risks and benefits, often over different time periods."  Total Cost of Ownership (TCO) (the financial term) includes total cost of acquisition and operating costs.  TCO, when incorporated in any financial benefit analysis, provides a cost basis for determining the total economic value of an investment.  Life Cycle Management (LCM) is a business "cradle to grave" approach to managing an asset's entire lifecycle from its design and conception, through development and implementation, to service, and disposal.

This webinar focused on the concepts, applications and lessons learned.  Many organization's decision processes focus primarily on the investment or acquisition costs and often pay minimal attention to the overall asset life cycle costs including commissioning and disposal.  This webinar provided an introduction to these important considerations.

  • Sustainability webinar (January 28, 2013): This webinar was moderated by Elizabeth Leavitt, Director, Aviation Planning and Environmental Programs, Seattle-Tacoma International Airport and featured five speakers, each with a presentation:
  • Jim Crites, Executive Vice President of Operations, Dallas-Ft. Worth International Airport - “Sustainability: An Overview and What Airports and Industry have Learned Through Implementation”
  • Bruce Robertson, Capital Planning Manager, San Francisco International Airport - “Sustainability and the Capital Planning Process"
  • Marc St. Jean, Associate Director, Business Performance, Aviation Service, Greater Toronto Airports Authority - “Sustainability Toronto Pearson: Past, Present, Future”
  • Brenda Enos, Assistant Director Capital Programs & Environmental Management, Massachusetts Port Authority - “Boston Logan Terminal B Garage Rehabilitation: A Project Case Study on Lighting and Renewable Energy Options”
  • Robert Freeman, Airport Environmental Manager, Los Angeles World Airports - “Green Building Requirements” 

There are many ways to define sustainability – but it is generally understood to incorporate three elements: environmental, economic and social considerations. The Airports Council International-North America takes this approach one step further by defining airport sustainability as “A holistic approach to managing an airport so as to ensure the integrity of the Economic viability, Operational efficiency, Natural Resource Conservation and Social responsibility (EONS) of the airport”. Taking into consideration all four components is essential for airports to make a business case for sustainability.

Understanding the economic impacts of sustainability is especially important as airports face constrained budgets and competing priorities. Airport operators across the North American region and around the world that have embraced sustainability and are implementing programs at their facilities have found that sustainability makes good business sense. The significant benefits of sustainability include reduced capital asset life cycle costs, reduced operating costs, better customer service and satisfaction, and enhanced relationships with neighbors.

  • Pension and OPEB webinar (November 2012): During the Accounting/Financing Working Group meeting held in Calgary on Sep.9, 2012, financial reporting issues on pension and OPEB were the focus of the discussion. To allow more members to benefit from the discussion, the Working Group decided to hold a webinar. This webinar featured two presentations. Firstly, Blake R. Rodgers, Practice Fellow of the Government Accounting Standards Board provided a GASB update on accounting pronouncements on pension accounting, upcoming projects on OPEB accounting and other current accounting issues. The 2nd presentation was made by Jim Gill, CFO of the Pittsburgh International Airport on the findings of the ACI-NA Pension and OPEB Survey.
  • Capital Program Management Webinar (September 2012)The webinar featured two presentations, made by three speakers. The 1st presentation  was made by Judy M. Ross, Deputy Aviation Director, City of Phoenix Aviation Department. She provided an overview of the organizational and structural changes that were implemented at the City of Phoenix Aviation Department to achieve a clear, long term vision for their capital program.  Her presentation focused on the capital planning process that has achieved a collaborative, strategic, and accountable capital program. The 2nd presentation was made jointly by Donald Arthur and Sharon Sarmiento. Both are Principals with the Unison Consulting, Inc. They gave an overview of best practices for evaluating airport capital investment decisions.
  • Webinar on Enterprise Risk Management (June 12, 2012): The webinar was moderated by Jeff Hollingsworth, Risk manager for Port of Seattle, and presented by Janel Reeve, General Manager of Risk Management for Greater Toronto Airport Authority and Walt Matwijec, Assistant Vice President of Continuous Improvements for Nashville Airport Authority; the speakers shared their stories of ERM assessment process and planned next steps at their airport.
     
  • Webinar on Revenue Enhancement Strategies (April 25, 2012): The webinar had two presenters, Sebastian Tonkin, Co-Founder / CEO of Cloud Nine Media, and Jeremiah Wise, Treasurer of Indianapolis Airport Authority. Sebastian looked at passenger Wi-Fi sponsorship and revenue opportunities available for airports. Jeremiah provided examples on how airports are utilizing airport land for commercial development and generating significant new revenue.
     
  • Webinar on Airport Productivity Initiatives (February 13, 2012): The Strategic Planning and Performance Management Working Group of the ACI-NA Finance Committee hosted the fifth Best Practice Forum series webinar on Feb.13 focusing on “Airport Productivity Initiatives”. Attendance was high with over 50 airport representatives on the call, listening to speakers from Denver and Nashville International Airports.

Patrick Heck, Denver’s chief financial officer, explained the development of Denver’s 10-year financial strategy and the goals to achieve: fiscal stability and continued growth, competitive costs to carriers, optimization of resources, and more informed decision making.

He identified five key drivers of Denver’s financial performance and focused on one of the five drivers – operation and maintenance with a goal of achieving a balance between modernizing and expanding facilities without impacting customer service. Examples of Denver’s efforts to control costs included renegotiating a shuttle bus contract by making supply variable by day of week to match demand to save unnecessary hiring, while maintaining peak operations so as not to affect customer service. Through this initiative, 100 hours/month worth $2 million in savings were achieved annually. Heck also stated that the largest cost for Denver was personnel cost making up 25 percent of total expenditure. By converting contractors to airport employees, Denver achieved an annual savings more than $1 million.

 Walt Matwijec, Assistant Vice-President of Continuous Improvement at Nashville, discussed performance excellence and Lean Six Sigma initiatives, which are the two of the eight ways identified to improve the airport authority. The “lean” strategy focused on eliminating all non-value-adding activities and waste from an organization’s processes, essentially anything for which a final customer would not want to pay.

Matwijec demonstrated the business tools available and how appropriate use at the right level can yield greater economic output. The presentation culminated in a demonstration of customer demand variation of a parking lot. By measuring as many customer activities as possible, multiple analyses were able to be performed, revealing otherwise unseen demand trends and fluctuations. These efforts allow further planning to target demand more accurately, as well as full creation of value streams in the business model.   

  • Webinar on Strategic Planning (April 12, 2011): The first webinar featured a brief overview of ACRP Report #20 “Strategic Planning in the Airport Industry” provided by Pete Ricondo of Ricondo & Associates. The report provides practical guidance on the strategic planning process for airport board members, directors, department leaders, and other employees; aviation industry associations; a variety of airport stakeholders, consultants, and other airport planning professionals; and aviation regulatory agencies. A workbook of tools and sequential steps of the strategic planning process is provided along with the report.
     
  • Webinar on Strategic Development (June 22, 2011): The Strategic Planning and Performance Management Working Group of the ACI-NA Finance Committee held the second of series of Best Practices Forum webinars on “Strategic Planning” on June 22. It was very well attended with over 30 airport and associate members. The second webinar featured three airports: San Diego, Toronto and Dallas/Fort Worth. 
     
  • Webinar on Strategic Deployment (September 8, 2011): The working group held a third Best Practices Forum webinar on Strategic Deployment. Guest speakers included Toronto and Dallas-Ft. Worth. Each presentation touched on communication, implementation and measurement of airport developed strategies.
     
  • Webinar on ACI-NA Benchmarking Survey (November 10, 2011): The Strategic Planning and Performance Management Working Group is responsible for the Annual ACI-NA Benchmarking Survey. This survey has proven to be an invaluable tool for airports in evaluating their operational and financial performance. This year 96 airports including 26 large hubs (out of 29 industry total), 28 medium hubs (out of 36 industry total), 29 small hubs, 6 non hubs and 7 Canadian airports participated (a new record). The webinar attracted over 100 participants from airports and associates. DFW airport went through examples of the application of benchmarking survey data and discussed data challenges so as to improve the quality of future survey data.

Form 127 Update (June 20, 2011): Over the last three years, ACI-NA has worked with FAA and ATA to modify the Form 127 to provide improved categories and definitions for a more accurate picture of airport finances. FAA has incorporated our suggestions into the CATS database and the new form was launched on June 23rd. Please find a letter from Greg detailing how ACI achieves success working with FAA on airport financial reporting.

All US airport directors should have already received a letter from FAA requesting that airports make all necessary corrections to the FY2009 data and update the FY2010 report. The letter explains all the changes that have been made. Airports are given 30 days to complete this process. Click here to access a sample letter.

FAA has also updated the Advisory Circular providing guidance for airport sponsors on using the revised form. You may access the updated Advisory Circular.