BIP Global Competitive Benchmarking for Airports

7/25/2019 BIP Global Competitive Benchmarking for Airports

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Global CompetitiveBenchmarking for AirportsA unique and beneficial approach


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2Global Competitive Benchmarking for Airports

Introduction

Airport managers are used to external benchmarking on general topics such as traffic, quality, or

high-level business performance. However, most benchmarking initiatives are too high level and

do not compare "apples to apples", leaving the airport with the question: So what?

The complex nature of the industry, constraints on data availability, and limited comparability

have been an issue with benchmarking so far. These approaches have been outside-in or limited

to certain functions of the airport, such as non-aviation performance. There has been no method-

ology out in the market providing a complete and comparable set of benchmarks on all airport-

specific business units.

Hence, A.T. Kearney designed the GCBthe Global Competitive Benchmarking for Airports.

It spans all airport activities, comparing your data with inside-out data of other airports, while

providing absolute data confidentiality. The GCB helps improve the airport across all businesses.

The level of aggregation can be modified from a holistic picture to very specific drill-downs oversix levels of detail.

The identification of improvement areas is realized by comparing financial data and key perfor-

mance drivers with operational best practices. The GCB insights can be used for a multitude of

objectives, such as restructuring, cost control, revenue improvement, mergers and acquisitions,

budgeting and performance steering.

The methodology of data standardization behind the GCBto overcome various accountingpractices and national differenceshas proven itself for more than ten years and has been

successfully adopted to the airport industry for more than four years. The GCB airport panel

covers more than international airport operators in and is growing steadily.


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UniqueGCB is different from all other

benchmarks because ...


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4Global Competitive Benchmarking for Airports 4

... it addresses revenues, cost and capex ...

Scope of GCB for Airports

The data collected covers all financial data of an airport giving a holistic

picture of the participants' competitiveness

GCB benchmark scope

Airport-related business

Performance gap quantification

OPEX

Process-related costs

Aviation

Non-aviation

Safety & security

Ground handling

IT

Support and overhead

Infrastructure

development

Aviation revenues

Central infra-

structure fees

Retail revenues

CAPEX on

Aviation

Non-aviation

Security

Complementary analyses

Revenues

Revenues

CAPEX

Investments

Performance and

long term

Remaining costs

Total airport profit and loss (on a one-airport basis)


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5Global Competitive Benchmarking for Airports 5

it creates real comparability ...

Three steps of GCB

GCB collects data in a standardized form and performs various

analyses to yield comparable results

Input

Standardized input

into user-friendly

allocation tools

Consistent due to a

large set of precise

definitions in the

GCB manual

Analysis

Harmonization to

adjust for country-

specific price levels

Normalization with

cost and revenue

drivers

Output

Process-related

Dashboard on all

airport activities

Detailed analyses for

each activityup to

six levels of drill-down


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it assures data quality and security.


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BeneficialGCB provides insights and

tangible results such as


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Infra-

structure

GCB Dashboard

The "Dashboard" provides an overview on the performance of the

operator consolidated on main activities Sanitized

Aviation

xxx xxx

Airside

operations

xxxx xxx

Airside

facilities

xxxx xxx

Terminal

operations

xxx x

Terminal

facilities

xxxx x

Baggage

systems

xxx x

Access andintercon-

nectivity

xxxx xxx

Traffic dataadminis-

tration

xxx xxx

GAT

x n.a.

Commer-

cials

xxxx xxxx

Aviation

overhead

xxxx xxx

Non-

aviation

xxx xxx

Retail and

gastro (Profit

Benchmark)

xxxxx xxxx

Property

(Profit

Benchmark)

xxxxx x

Car parking

(Profit

Benchmark)

xxxx xxxx

Advertising

(Profit

Benchmark)

xxxx xxx

Concessions

and licenses

xx x

Services

xxxx x

Utilities

xxxx x

Non-avia-

tion over-

head

xx x

Safety and

security

xxx xxx

Passenger

screening

xxxx xxx

Hold

baggage

screening

xxxx xxx

Personnel

screnning

xxx x

Cargo

screening

xxxx x

Airport

security

xxx x

Fire dept.

xxxx xxx

Emergency

mgmt.

xxx xxx

Safety and

security

overhead

x n.a.

Ground

handling

xxx xxx

Passenger

Service

xxxx xxx

Baggage

Services

xxxx xxx

Aircraft

Services

xxx x

Cargo

Handling

xxxx x

GH

Overhead

xxx x

IT

xxx xxx

Develop-

ment IT

application

xxx x

Maintain/

operate IT

app.

xxxx xxx

Enterprise

infrastr.

xxxx xxx

Internal

infrastr.

xxx x

IT overhead

xxx x

Planning

xxx xxx

Develop-

ment

xxxx xxxx

Project

financing

x n.a.

Supportand

overhead

xxx xxx

Purchasing

xxx xxx

Financeand

accounting

xxxx xxxx

Controlling

xxx xx

Officefacility

mgmt.

xxxx xxxx

Human

resources

xxxx xxx

Strategy

xx x

General

marketing

xxx xxx

Communi-

cations

xxx x

Environ-

ment

xxx xxx

S and O

Overhead

xxxx xx

Legal

xxx xx

Non-air-

port-related

Services

x n.a.

Regulatory

manage-

ment

xx x

Analyzed

activity

Total

position

Total

gap

Color rating

of total gap

Relative. gap


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... with relative comparison of revenue and cost

In Europe per traffic unit

Airport Fin year Dashboard color and gap Gap absolute Revenue position Driver: total traffic units

XYZ xx.x % xx,xxx,xxx EUR xxx,xxx,xxx EUR x,xxx,xxx

Airport-related revenue per traffic unit

Total airport performance Sanitized

XYZ P Avg

x.xx

x.xx

Total traffic units

in mn

Total annual

movements

Max monthly

PAX capacity

utilization in %

Traffic units permovement

Max monthly

movement cap.

utilization in %

Share of LCC

PAXin %

xx

xx

xxx,xxx

xxx,xxx

xx

xx

x%

xx%

xx%

xx%

xx%

xx%

Deviation from average (in % per segment)

Qualitative good deviation

Qualitative worse deviation

n XYZ

Panel average

Revenues

LCC: low-cost carrier

PAX: passengers


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In Europe per sqm

Airport Fin year Dashboard color and gap Gap absolute Profit position Driver: total traffic units

XYZ xx.x % xx,xxx,xxx EUR xx,xxx,xxx EUR x,xxx,xxx

Results exampleprofit analysis (without goods sold)

Non-aviationretail Sanitized

Revenues

x.xx x.xx

Cost Profit P Avg

Profit External services Personnel costs Revenues

Share of interna-

tional PAXin %

Share of inter-

continental PAX

in %

Share of LCC

PAXin %

Share of

business PAX

in %

Revenue per

PAXin EUR

x.xx

x.xx xx%

xxx%

xx%

x%

xx%

x%

xx%

xx%

X,xx%

X,xx%

... activity-specific break downs to profit level




n XYZ

Panel average

LCC: low-cost carrier

PAX: passengers


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Total cost per screened passenger

Sanitized

Allow for a balance of cost and quality

In Europe per passenger

Airport Fin year Dashboard color and gap Gap absolute Cost position Driver: total traffic units

XYZ xx.x % xx,xxx,xxx EUR xx,xxx,xxx EUR x,xxx,xxx

XYZ P Avg

x.xx

x.xx

Other Power External services Personnel costs

Passenger

screening sites

Existing

passenger

screening lines

Screened PAX

per average open

line in mn PAX

Waiting time sec-

urity screening

(av.) in minutes

Min. employeesper line

requirement

FTEper one mn

screened PAX

x.x

x.x

xx

xx

x.x

x.x

x.xx

x.xx

x.x

x.x

xx.x

xx.x




n XYZ

Panel average

FTE: flight technical errors

PAX: passengers


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Up to detailed analyses ...


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The GCB four-step root cause analysis

After identifying a gap in retail stores, the terminal center

management was restructured Client example: non-aviation

lead to operational best practice

Post-GCB valuation and root cause

Performance gap in the

Non-aviation section

Analysis of the

Retail-dashboard

Harmonized profits per

square meter fine at the

landside and off-terminal

Drill down:

airside retail costs

Benchmarks

competitive at

sales, marketing,

billing and overheadCause is not a

cost gap

To identify a profit

gap split down of

sub-activities

Good relative

performance withgastro

Bad performance

with shops, especially

branded fashion

Branded shops

further investigated:

Process-related

costRevenue split

Varying cost drivers by

# shops, # sqm,

# contract partners

GCB results and analysis

Detailed analysis

of single stores

profitability

Analysis of customer

flows and dailythroughput

Analysis of the terminals

gastro versus shop mix

Analysis of aviation

and non-aviation

collaboration

Evaluation of the overall

center management

Close of selected

shops recommended

and selection of

new concessionaires

Stronger alignmentof concession

partners concerning

aviation flows

Concentration of

offer availability

and resources

at peak hours

Optimized center

management

Phase Phase Phase Phase


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Watch the GCB video online

Authors

Robert A. Ziegler, partner, Berlin

[email protected]

Ren Steinhaus,consultant, Berlin

[email protected]

http://youtu.be/qiuFJwp-L


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A.T. Kearney is a global team of forward-thinking, collaborative partners that deliversimmediate, meaningful results and long-term transformative advantage to clients.

Since , we have been trusted advisors on CEO-agenda issues to the worlds

leading organizations across all major industries and sectors. A.T. Kearneys offices

are located in major business centers in countries.

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represents our pledge to live the values he instilled in our irm and uphold his commitment to ensuring

essential rightness in all that we do.

Atlanta

Calgary

ChicagoDallas

Detroit

Houston

Mexico CityNew York

San Francisco

So Paulo

TorontoWashington, D.C.

Bangkok

Beijing

Hong Kong

Jakarta

Kuala Lumpur

Melbourne

Mumbai

New Delhi

Seoul

Shanghai

Singapore

Sydney

Tokyo

Amsterdam

Berlin

Brussels

Bucharest

Budapest

Copenhagen

Dsseldorf

Frankfurt

Helsinki

Istanbul

Kiev

Lisbon

Ljubljana

London

Madrid

Milan

Moscow

Munich

Oslo

Paris

Prague

Rome

Stockholm

Stuttgart

Vienna

Warsaw

Zurich

Abu Dhabi

Dubai

Johannesburg

Manama

Riyadh

For more information, permission toreprint or translate this work, and all

other correspondence, please email:

[email protected].

A.T. Kearney Korea LLC is a separateand independent legal entity operating

under the A.T. Kearney name in Korea.

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reserved.

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