Communications Plan Essay
The Federal Aviation Administration (FAA) and TSA awarded a $37m grant for expansion projects at Denver International Airport. These funds are being used for the master plan projects. Approximately $11.6m will go towards rehabilitating runway 8/26, and over $1.7m will be used to improve the taxiway system surrounding Jeppesen Terminal. About $8.7m will be used to upgrade runway 16L/34R. About $15m from the TSA grant will be spent on improving the airport’s baggage screening system. Stakeholder Analysis
To examine the role of the airport stakeholders a precise definition of stakeholders and their goals for the airport is necessary. The purpose of this section is to identify the airport’s goals from the point of view of each stakeholder group.
For passengers, the airport provides a transition point between the ground and air transportation modes, or a connection point between two flights. Different sub-types of passengers have been identified (Neufville & Odoni 2003):
1) Arriving passengers
2) Originating passengers
3) Transfer passengers
4) International and domestic passengers
5) Charter and low-fare airline passengers
6) Shuttle/commuter passengers
These passenger types are not mutually exclusive; rather, an individual passenger may be a member of more than one subtype of passenger categories. Arriving and originating passengers are commonly referred to as origin and destination (O&D) passengers. Independent of the passenger classifications according to the above attributes, the passengers may be viewed in two different capacities in the context of this analysis. First, passengers can be viewed as participants in the economic system, either as business travelers or as tourist/leisure travelers, purchasing services from airport service providers and interacting in different ways with local businesses and the local community. Second, passengers can be viewed as individual travelers that have expectations about receiving quality services, and passing through the airport system in a convenient manner. These two perspectives have different implications on the goals for the airports and will be treated separately in the following subsections.
a) Passengers as Economic Participants
Passengers may participate in the economic system in one of several ways: 1) As origin leisure/personal travelers: These are passengers from the local community that use the airport as their departure point for leisure or other personal travel. 2) As origin business travelers: These are travelers representing local businesses, using the airport as their departure point. 3) As destination leisure/personal travelers: These are visitors to the region, for tourism or other personal purposes. 4) As destination business travelers: These are business travelers coming to visit local businesses. If the airport’s traffic is heavily geared toward O&D traffic, then demand at the airport is more heavily dictated by the local economy.
In contrast, significant connecting (transfer) passenger levels are less sensitive to the performance of the local economy, but those traffic volumes may represent vulnerability for the airport since they are to a greater degree dictated by a carrier’s viability and route decisions. Passengers contribute toward the financing of airport capital improvement projects through Passenger Facility Charges (PFCs) of up to $4.50 per passenger. PFCs are paid directly by passengers through airline tickets and proceeds must be used for capital improvements at the airport that collected them (Wells & Young 2003). The goals for passengers as economic participants relates to the cost of travel: Providing access to low airfares is a key objective for the airport in the view of air passengers.
b) Passenger as Travelers
When considering the passengers as travelers as a stakeholder group, the focus is on the passenger as an individual. The goal of the airport from the individual passenger viewpoint is, moving passengers quickly and conveniently to where they need to go. This view considers the airport as a transit point from one mode of transportation to another, or as a connection point between two different flights. Ensuring on-time performance was raised as the most important aspect to achieving this objective. 2) Business, Commerce, Tourism, Arts, Sports, and Education Organizations The organizations that in various ways are customers of the airport have been summarized as “business, commerce, tourism, arts, sports, and education organizations”. Some organizations are direct users of the airport by importing or exporting services (i.e. business travelers) and goods (raw materials or finished goods). Other organizations are indirect customers of the airport as a result of their customers (e.g. tourists) traveling through the airport. The term “organizations” is used to encompass both for-profit and not-for-profit organizations.
Organizations whose clients arrive through the airport
Organizations that are direct users of the airport
Importers of services and goods
Exporters of services and goods
The airport serves as an engine of business activity for the organizations in the region. The airport drives and supports economic activity in several different ways, including both through business activities directly at the airport and through business activities throughout the regional economy (Button & Stough 2000). Underlying goals for maximizing this economic activity include maximizing passenger volumes and traffic at the airport as well as maximizing the number of destinations served and the frequency of those services (Matt Erskine, Greater Washington Board of Trade 2009). As a result of the different types of use of the airport described in the previous paragraph, the priority of one goal over another varies between organizations.
3) Air Carriers
Air carriers provide the air transportation service from the airports. Air carriers include both passenger and cargo carriers and are classified into three subcategories (Environmental Protection Agency 2000): 1) Large certified carriers: These carriers have a certificate to carry 61 passengers or more, payload equal to or greater than 18,000 pounds, or conduct international operations. 2) Small certified carriers: These carriers fly aircraft that carry less than 61 passengers, carry less than 18,000 pounds, and do not conduct international operations. 3) Commuter carriers: These are air taxis with a published schedule of at least five weekly round trips between at least two airports. Air carriers select airports based on the passenger demand for service to/from the airports (i.e. revenue generation potential) and based on the cost of operating at the airport. The airlines have the objective of achieving high yields, (Doganis 2002).
Airports serve the role of providing access to high yield markets. Attractive airports ensure low cost of air carrier operations at the airport. This includes both minimizing direct fees charged to air carriers through the maximization of non-aeronautical revenues (Dallas Dawson, Tampa International Airport 2009) and minimizing costs incurred by air carriers through delay on the ground (Peter Stettler, Ricondo and Associates 2009). An airport may serve either as a hub for a carrier, with a high portion of that carrier’s flights operating to/from the airport, or as a non-hub airport with a lower portion of flights for a given carrier (Belobaba et al. 2009). In either situation, the airport should act as an efficient hub/connection point, contributing to ensuring air carriers’ on time performance (Pat Oldfield, United Airlines 2009). In addition, it is the expectation of air carriers that airports ensure safety of operations on the airport surface (Kurt Krummenacker, Moody’s 2009).
4) General Aviation Users
General aviation encompasses many types of aviation outside the air carrier definition, including (Wells & Young 2003).
1) Air taxi operators (except those air taxi operators listed in section IV.A.3)
2) Corporate-executive transportation
3) Flight instruction
4) Aircraft rental
5) Aerial application
6) Aerial observation
Several of the goals listed for air carriers also apply to general aviation in terms of on-time performance, low costs, and safety. However, a representative of a business aviation organization defined the primary goal of airports as serving as access point to the national air transportation system by providing good availability and high capabilities in terms of instrumentation and services (Jeff Gilley, National Business Aviation Association 2009). 5) Airport Organization
The airport organizational structure varies (Neufville & Odoni 2003) and can be comprised of an individual airport such as Dallas Fort Worth Airport (DFW) (DFW Airport 2009) or as a group of airports managed by the same organization, such as the Metropolitan Washington Airports Authority (MWAA) (Metropolitan Washington Airports Authority 2009). The airport organization is overseen by a board appointed by local governments. In larger airports or systems of airports, a common feature is that the organization includes a separation of operating units which carry out on-going management of airport operations, and they are separate from staff units which have responsibility for (among several other areas) infrastructure development (Neufville & Odoni 2003). The airport itself pays for some capital infrastructure projects.
Airport operating revenues come from sources such as landing fees, terminal leases and proceeds from concessions sales. This revenue is used to pay for the airport’s operating expense, but any surplus can be used to contribute toward capital improvements. A set of goals for the airport organization can be derived from studying airports’ strategic plans and objectives and from interviewing airport management experts. The primary objective (sometimes referred to as the “mission”) of the airport is to provide access to high quality air services to its region. Other goals, such as ensuring strong financial performance and high operational efficiency, are considered as “means to an end” in that they enable the airport to achieve this overarching goal (DFW Airport 2008; Hillsborough County Aviation Authority 2006). A summary view of the airport’s goals is presented using the structure of Denver International Airport’s strategic plan (Denver International Airport 2009):
1) Excel in airport management: This goal includes:
a) Achieve high security and safety (City of Cleveland, Department of Port Control 2007; Denver International Airport 2009; Hillsborough County Aviation Authority 2006) b) Grow revenue and manage costs (City of Cleveland, Department of Port Control 2007; Denver International Airport 2009; DFW Airport 2008; Hillsborough County Aviation Authority 2006) c) Drive economic growth (Denver International Airport 2009) d) Grow passenger numbers (City of Cleveland, Department of Port Control 2007; Denver International Airport 2009) e) Provide access to a high number of destinations and a high frequency of service (Denver International Airport 2009).
This goal relates immediately to the primary objective of the airport described above. Airport management must also achieve a balance where sufficient infrastructure capacity exists for handling traffic while capacity is at the same time not over-built (Paul McKnight, Jacobs Consultancy 2009; Frank Berardino, GRA Inc 2009). Additionally, a key objective for airports is to maximize non-aeronautical revenues since that provides diversified revenues and allows for keeping usage charges to air carriers low, thereby potentially attracting more traffic (Chellie Cameron, MWAA 2009; Peter Stettler, Ricondo and Associates 2009; Seth Lehman and Emma Walker, Fitch Ratings 2009).
2) Provide high levels of customer service: This goal includes ensuring a good experience for both passengers and other customers (City of Cleveland, Department of Port Control 2007; Denver International Airport 2009; DFW Airport 2008; Hillsborough County Aviation Authority 2006). 3) Develop environmentally sustainable practices and minimize noise: This goal includes minimizing emissions, energy consumption, etc., within the airport (Denver International Airport 2009; City of Cleveland, Department of Port Control 2007). Some airports, such as Sea-Tac, are also beginning to expand their focus by considering greenhouse gas emissions not only from the airport-controlled operations but also from airlines and other tenants as well as the public (Port of Seattle, Sea-Tac Airport 2007). Related to this is the goal of minimizing airport-related noise (Neufville & Odonin2003).
4) Develop high-performing employee teams: This goal relates to developing effective and skilled employees (City of Cleveland, Department of Port Control 2007; Denver International Airport 2009) and maximizing employee engagement (DFW Airport 2008). 5) Enhance competitive advantage: This goal includes providing competitive user rates and protecting the airport’s physical infrastructure (Denver International Airport 2009; City of Cleveland, Department of Port Control 2007).
Some of these goals may be in competition with each other. For instance, the goal of maximizing non-aeronautical revenue can conflict with the goal of developing environmentally sustainability and providing a good experience for passengers: The latter two goals would be aided by promoting and developing access to public transportation access modes to the airport such as bus or rail. However, the goal of maximizing non-aeronautical revenue is better served by maximizing revenue-generation in the form of parking revenue from private vehicles. In such instances, airport management must balance the competing priorities in order to accomplish the goals of the airport. 6) Investors and Bond-Holders
The majority of airport debt is of the general airport revenue bond (GARB) type. GARB means that the bond is backed by revenues generated from airport operations and not backed by any government funding source. The credit ratings agencies Moody’s, Standard and Poor’s, and Fitch Ratings participate in this system by assigning grades of investment quality to the airports’ bonds. The ratings agencies’ ratings affect the interest rates and terms of the bonds (Wells & Young 2003). A large number of factors impact the bond ratings, including:
1) Historical and projected population growth
2) Historical and projected employment expansion and mix
3) Passenger growth
4) Airport utilization trends
5) Portion of origin and destination (O&D) traffic
6) The importance of the facility to the overall US system of airports
7) Whether the airport is in a favorable geographic location (e.g. is it a natural hub location?)
8) Airfield capacity and attractiveness of facilities
9) Debt burden and carrying costs
10) Financial strength of carriers with a lot of connecting traffic, and their level of commitment to the airport
11) The role of the airport in the dominant carrier’s network
12) The level of legal flexibility for the airport to change the rates it charges air carriers
Airport concessionaires operate passenger services in terminal buildings and may include food and beverage services, retail services, and hotels. Concessions operators pay the airport organization a fixed annual fee and/or a percentage of gross revenues (Wells & Young 2003). Considering the concessions operators’ objective of maximizing profits, the goals of the airport for these operators are deduced to be maximizing passenger volumes and minimizing the fees paid to the airport organization.
8) Service Providers
The service providers are private operators that offer services to air carriers and general aviation users. Independent operators may supply these services (e.g. fixed-base operators, FBOs), but some of the services may also be provided by the airport operator, the airline itself, or by another airline. Services provided include (Neufville & Odoni 2003):
1) Supply of aviation fuel and oil
2) Baggage handling and sorting
3) Loading and unloading of aircraft
4) Interior cleaning of aircraft
5) Toilet and water service
6) Passenger transport to/from remote stands
7) Catering transport
8) Routine inspection and maintenance of aircraft at the stands 9) Aircraft starting, marshalling, and parking
10) Aircraft de-icing
11) Passenger handling (e.g. ticketing and check-in)
12) Cargo and mail handling
13) Information services
14) Preparation of handling and load-control documents
15) Supervisory or administrative duties
Similar to concessionaires, independent service providers pay a fee to the airport organization which is typically a percentage of gross revenues (Neufville & Odoni 2003). In a parallel to concessionaires, service provider goals for the airport would include maximizing traffic volumes and minimizing the fees paid to the airport organization.
The employee category includes both direct employees of the airports organization as well as employees of companies operating at the airport, such as concessions operators. Some employees are organized into unions, such as the Service Employees International Union (SEIU USW West 2009) and Unite Here (Unite Here 2009). The objective of the airport from the perspective of those unions is to provide secure jobs, wages, and benefits (Unite Here 2009).
10) Federal Government
The federal government participates in the airport system in three different roles: As a bill-payer, as an operator, and as a regulator. Each of these roles will be addressed in this section. In terms of the government’s role as a bill payer for the system, the Airports Improvement Program (AIP) is administered by the FAA and its funding comes from the Airport and Airway Trust Fund, which in turn is funded by user fees and fuel taxes. AIP funds can be applied toward projects that support aircraft operations including runways, taxiways, aprons, noise abatement, land purchase, and safety, emergency or snow removal equipment. In order to be eligible for AIP funding, airports must be part of the National Plan of Integrated Airport Systems (NPIAS), which imposes requirements on the airport for legal and financial compliance (Wells & Young 2003). The NPIAS has two goals: To ensure that airports are able to accommodate the growth in travel and to keep airports up to standards for the aircraft that use them (FAA 2008).
The government’s role as airport operators includes three different agencies: 1) FAA: The FAA is the operator of ramp, ground, local, and departure/arrival air traffic control services (United States Code of Federal Regulations 2010). 2) Transportation Security Administration (TSA): The TSA provides passenger and baggage security screening services. The TSA states that it is the goal for its baggage screening operations to screen for explosives and other dangerous items while maximizing efficiency (Transportation Security Administration 2009). This can be translated to state that it is the goal for the airport to ensure secure transportation of people and goods while minimizing the impact of security measures on legitimate travelers and goods.
3) Customs and Border Protection (CBP): The CBP is responsible for operating passport control and customs inspections at international airports. The CBP states that it is its mission to protect “our nation’s borders from terrorism, human and drug smuggling, illegal migration, and agricultural pests while simultaneously facilitating the flow of legitimate travel and trade” (Customs and Border Protection 2009). Just as for the TSA, this can be translated to state that it is the goal for the airport to ensure secure transportation of people and goods while minimizing the impact of security measures on legitimate travelers and goods. Lastly, the federal government is a regulator of the airports system. Airports that are included in the NPIAS are subject to a number of federal regulations that are enforced by the FAA and the Transportation Security Administration. The regulations apply to both the airport infrastructure as well as to service providers within the airport systems. The purpose of these rules is to ensure the safe and efficient operations of public-use airports (Wells & Young 2003).
11) Local Government
US airports are with few exceptions not private, profitmaking enterprises. Instead, airports are typically owned and operated by public entities such as cities, counties, or local airport authorities (Neufville & Odoni 2003). For instance, Washington’s Dulles and National airports are owned and operated by the Metropolitan Washington Airport’s Authority (MWAA). The MWAA is officially a body independent of the local government but its board is appointed by the Governor of Virginia, the Mayor of the District of Columbia, the Governor of Maryland and the President of the United States). Similarly, Newark, LaGuardia, JFK, Stewart International, and Teterboro airports in metropolitan New York City are owned by the Port Authority of New York and New Jersey (The Port Authority of New York and New Jersey 2009). Dallas-Fort Worth Airport is jointly owned by the City of Dallas and the City of Forth Worth (DFW Airport 2009).
The government owners in the form of city and local governments are represented by an airport board which is responsible for the strategic direction of the airport and for appointing airport management (Wells & Young 2003). The local government is supported in an advisory role by federally funded Metropolitan Planning Organizations (MPOs) who are charged with assisting in planning for aviation and other transportation infrastructure for the local region (Association of Metropolitan Planning Organizations 2010). State and local government also contribute as bill-payers for capital improvement projects (Airports Council International – North America 2009). The objectives of the airport from the point of view of the local government is representative of those of the local community it represents and involves both maximizing its positive effects while minimizing its negative effects. One form of positive impact of the airport is in the shape of economic effects.
There is significant literature on the economic impact of airports. However, many studies are sponsored by the airports authorities themselves, making them more political than analytical. Although there may be no definitive measure of the economic impact of airports, a structure for the types of impacts of airports to their regional communities has proposed (Button & Stough 2000): 1) Short-term impact from construction, expansion, and renovation of airports 2) Sustained impact in the form of jobs at the airport (direct impact) and off-airport jobs that result from the “multiplier effect” of the income generated by employees at the airport 3) Stimulus of the local economy as a result of firms and individuals having air transportation services at their disposal 4) Spurring other economic development by crossing thresholds for economies of scale, scope, and density. The authors note that this last form of impact is very difficult to quantify.
The objective of this strategic communications plan is to serve as a road map for how communications will be done between members of the project team as well as the stakeholders.. This plan comprises objectives, strategies and tactics for how team correspondence will be performed between each facet of the project team..
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