PPRuNe Forums - View Single Post - How do Airports Charge for use of Their Facilities
Old 26th Jun 2007, 11:12
  #19 (permalink)  
Woofrey
 
Join Date: Nov 2002
Location: South East UK
Age: 69
Posts: 62
Likes: 0
Received 0 Likes on 0 Posts
Jemy, it seems that your gripe is more to do with being charged for car parking than anything else, however as you have expressed an interest in how BAA charge for their facilities, you first need to understand the regulatory environment that they operate within ( for the South East airports anyway ), which as you have read about Economics, I trust you do.
But if you haven't, it operates something like this :
1. BAA are allowed a rate of return on their asset base.
2. One of the considerations in determining the asset base is traffic volumes and capacity required, hence capital spend forecasts to accomodate pax growth and facilities required.
3. You can now work out the allowed return, e.g. if the allowed return is 5%, and the asset base is £1 bn, then the allowed return is £50m.
4. In computing how the £50m is acheived, they calculate how much it costs to run the airport, ( say £200m ) and then the likely income from activities other than traffic charges, ( say £150m ) to leave the balance to come from airport charges, in this case £100m.
5. You then divide the airport charges income by the number of passengers to get the yield per pax. ( The yield is then acheived through a combination of landing fees, parking fees and departing passenger charges ).
That of course is a very simplistic summary, and there is a whole industry involved in regulating and reviewing all of this, involving the CAA, BAA and airlines themselves, looking at everything from forecast pax numbers, facilities required, rates of return and financial forecasts.
You will see however, that if you wish to have free car parking, the income from non aeronautical sources will drop, in which case traffic charges will rise in order to balance the allowed return. This is how the retail income subsidises the airport charges.
I'm not advocating the rights and wrongs of this regulatory model, just setting out how it currently operates. You will find loads more on this, and the current review, in the CAA site on Economic Regulation.
I trust this is helpful.
Woofrey is offline