AT 359 Module 3 Lecture Notes

Chapter 7: Airport Terminals & Ground

Access
Terminal Types
• Simple- everything consolidated into one
building
o Simple Unit Terminal- one building with common
ticking (one airline)
o Combined Unit Terminal- two+ airlines share a
terminal but have separate pax/bag processing
o Multiple Unit Terminal- each airline has its own
building

• Linear/ Curvlinear- extension of a simple

terminal with more gates
• Pier Finger- piers = concourses, fingers = gates
o evolved in 1950s when concourses were
needed
o Pax processed at simple terminal then routed down a pier where the aircraft are pared at
“finger” slots/ gates

• Pier Satellite/ Remote Satellite- all processing takes place in a single terminal and
multiple concourses lead to satellite structures, at the end of concourse aircraft are
parked in a cluster
o Satellites use automated passenger movement systems (APM) to get pax across long distances
o Remote satellites can use mobile lounges or transporter terminals
o Multiple concourses often lead to satellite structures
Centralized- all processing at one area; typically simple, linear, and curvilinear
Decentralized- some required processing in different terminals; typically pier finger, pier satellite, terminal
concourse, remote satellite, and mobile lounge

Airports changing over time

• Numerous concourses may lead to satellite structures
• As airports get bigger, they require APM (automated people mover)
• American with Disabilities Act (ADA) heavily affects designs of airports now

Deregulation 1978
• Higher pax volume
• Change from point to point to hub and spoke increased terminal requirements

Airport Air Service Development (ASD)

• Increase hub and spoke and direct routes
• Direct flights with smaller aircraft fluctuate
• ASD can be for PAX or Cargo
• New (as of the 70s) Landside-Airside Concept
• Pax & ground vehicle area separate from aircraft
handling area, rely on APMs
• Landside: concessions, atriums, and amenities
PIT LANDSIDE -AIRSIDE CONCEPT
 • Airside: fueling, loading, unloading for max efficiency
• Off-Airport Terminals discontinued after 9/11

Vertical Flow Distribution

• Different activities on different levels to increase efficiency

Terminal Design Considerations

• Gate Management
o Exclusive Use- airline retains sole use of gate
o Shared Use- gates shared, more efficient for airport
o Preferential Use- hybrid option, one carrier has preference,
but other can use if available
o Supported by Gantt charts and software such as TSI ASI2000
& PASSUR
o Good mgmt. is necessary to reduce delays, fines up to
$27500/ pax if delay is over 3 hours in domestic or 4 hours
on intl. flight

• Parking Considerations
o Commercial airports generally have predictable air traffic
o Exclusive use gates are managed by airline
o Apron & Gate System- For aircraft parking; depends on aircraft length, wingspan, and
orientation
o Parking Positions
▪ Nose-in (not angled) – typical for large planes. CDG MAIN TERMINAL -VERTICAL FLOW
Allows front door to be used for boarding.
Requires pushback.
▪ Angled nose-in – typical for small turboprops or regional jets
▪ Angled nose-out – farther from building (protects building from jet
blast) used by larger GA aircraft with low activity levels
▪ Parallel – easiest but requires most space, used by for small GA
aircraft and cargo aircraft (good for loading at both front and back)
▪ Remote parking – makes use of limited gate space and used for
overnight parking

• PAX & Baggage Handling

o Access interface – from ground access mode (e.g., car) to passenger
processing, includes circulation, parking, curbside loading and unloading
o Processing – processing for air trip
▪ Baggage check-in, baggage claim, seat assignment, security, federal
inspection services (FIS)
▪ Ticketing
• Exclusive use check in (old school, but still used) each airline
has its own counter
• Common use terminal equipment (CUTE) check in (depending
on time of day and need the airlines switch which counter
they use, tv screens change which airline logo is up)
• Common use self service kiosks (CUSS)
o Flight interface – passenger transfers from processing to/from aircraft
▪ Ancillary services- Restaurants, shopping and “non-essential” services
• Concessions- Key component in passenger satisfaction ratings
• 50 busiest airports - $5B in gross sales, $750M in net revenue to airport
operators
• $170 per sf of leased space for concession income
 • How does airport revenue compare to other retail space, is it higher or lower?
• Street Pricing- the airport can require in their contract with a business that the
price of a product in the airport must be the same as the price outside the
airport. Two sides of the coin because the airport makes a percentage of the
profit of products sold in their airport.
▪ Concourse provides for circulation
▪ Moving sidewalks and trains facilitate transfers
▪ Departure lounge is an assembly area
▪ Space for airline operations

• Disabilities
• Ground Access
• Vehicle Parking
• Apps & Real Time Security
• Airport Design
• Passenger Objectives
• Airline Objectives
• Airport Mgmt Objectives
• Community Objectives
•

Chapter 9: Airport Financial Management & Funding

Vocabulary:
Residual
Compensatory
Hybrid
Aeronautical Use Agreement
MII-
Bond
Accounting
Cost Center
Business Enterprise
Public Subsidy
Bonds and Bond Ratings (GO and
GARB)
Inflation and Interest rate
Public Private Partnership
Discretionary
Aeronautical
Non-aeronautical
Capital Expense
Depreciation
Operating and Maintenance Expense
AIP (what is a typ. fed and local share?)
Apportionment, Set-Aside and Discretionary
Grant Assurances
Aviation Trust Fund (and user fees)
User Fee
PFC and CFC
Signatory airline
Airport Liability
Financial statements provide accountability to government agencies and taxpayers

Airline Agreements
Compensatory approach - airlines pay rent (typically used by smaller airports)
JFK, LGA, LAX, SEA
• Airport assumes financial risk of operating airport
• Airport retains all profits (and can accumulate reserves)
• There are limits to use of airport “profits” – money can’t be spent off airport property (“revenue
diversion” is not allowed for AIP funded airports)
• Airport makes capital decisions
• Airports with many carriers and more origin/destination traffic more likely to be
compensatory
• Air carriers pay for space and use of terminals based on activity at airport. Fees
paid by airlines are like rent.
Residual approach- airlines are a financial partner
ATL, ORD, CVG, MSP, DFW – airlines under a residual contracts (usually the dominant airline) are the
signatory airlines of that airport
• Non-aeronautical revenue (e.g., parking) used to reduce aero costs
• Financial risk transferred to airlines (airlines have to cover any shortfall)
• Airlines play role in capital decisions
• Limit on airport profits
• May have sharing of non-aeronautical revenues and aeronautical revenues
• Non-aero fees typically used to reduce aero fees
• Typically longer term of agreement (original Chicago term was 50 years, now it may be 30 years or
life of a bond)

Different rates for signatory airlines and non-signatory airlines at airports that use Residual approach

• Signatory airlines have a current Aeronautical Use Agreement with airport and operate under
residual approach
• Signatory airlines have substantial commitment to airport and have made “significant
investment”
• Majority-in-Interest (MII) clause – allows signatory carrier significant control over airport budgeting
process and capital decisions
• Signatory airlines have a “Vote” when it comes to capital improvements at the airport, they
have a stronger role in planning, and in significant personnel decisions
The walkway at DEN exists because signatory airline wanted it in case the tram broke down

Aeronautical Use Agreement

Contract between airport operator and airlines
Defines allocation of risk, revenues and responsibilities
Purpose: grant operating rights for airlines and assure a
reliable revenue stream for airport
Can include: landing fee structure, ticket counter, baggage claim and
gate space
Rates for ramps funded by FAA AIP must consider local vs. FAA
contribution (airports cannot charge airlines for cost items FAA paid
for)

Compensatory approach
like airlines paying rent to use the airport
Airport takes financial risks and sets prices using one of two
methods
◦ Cost-of-service, aka cost-center approach: fees based on expenses for
each cost center
◦ Public subsidy approach: local government subsidies cover differences
between revenue and expenses (usually occurs at GA and smaller
airports)
Advantages of compensatory approach
◦ Incentives for good airport management
◦ Allows some discretionary use of revenues (airport can build up
reserves)
◦ Provides greater flexibility in managing airport
Compensatory Cost Centers
 Airfield
 Terminal
 Parking
 Cargo/hangar
 Commercial Property
 General Aviation
 General Administration
In each center, revenue supports O&M costs, debt service and
coverage and excess contributes to airport sponsor’s Net Cash
Flow
Users are charged fees to recover costs for each cost cent
SLIDE -19

AIP Funds
For planning, development, airport capacity improvement, and noise compatibility funds (Part 150)
Funded by users fees & taxes that go into Aviation Trust Fund
• Domestic ticket and domestic flight segment tax
• International: departure and arrival tax
• Air cargo/mail tax
• Aviation fuel tax for commercial and GA aircraft
Facilities & Equipment (F&E) – nav aids and control towers , FAA pays for 100%
Most AIP funds do not go to the busiest airports
• 35 busiest airports serve 75% of all passengers but less than 20% of AIP funds ($600M out of $3.5B)
• Largest airports spent $6.3B on capital improvements, AIP was less than 10% of this
AIP funds are distributed to airports through three main programs
• Apportionment (aka entitlement)- (largest share): primary (based on enplanements), cargo and
GA
• Set-aside- (e.g., by state and for reliever airports or other specific needs such as noise and
Military Airport Program)
• Discretionary- highest priority to safety, security, recon, capacity and stds
SLIDE23-32
Airport Funding Sources -Capital Expenses
Bonds
• Secured loan
• Provide funds to build a public project
• Rate of return and duration is specified for each bond
• May be backed by a variety of sources, which affects the interest rate and the kind of bond (airport
revenue bond vs. municipal bond)
• First Airport bond in US: $2.5M sold in 1945. Dade County Port Authority purchased Miami International
Airport from Pan American World Airways (reflects growth in aviation industry after WWII)
• General obligation bonds (GO) – backed by national, regional or local governments
o Tax exempt, typically low interest
• General airport revenue bonds (GARB)
o Rates vary depending on credit rating of airport
o Most common method in US: paid back using airport revenue
o May be secured by “residual agreements” in which air carriers agree cover any shortfall
• International airports in developing countries
o World Bank may provide low cost loans
• Private financing may be used for some kinds of projects
o Build, operate, transfer (BOT) – may be used for new terminals
o Special facility revenue bonds (SFRB) – may be used for projects that are solely responsibility of
airline

Airport Bond Ratings

Rated by one of four
major companies:
• Moody’s
• Standard and
Poor’s
• Fitch ICBA
• Kroll
Bond underwriters (e.g., Goldman Sachs, Merrill Lynch) play an
important role in airport financing
Bond underwriters
• Purchase securities from the airport at a discount
• Resell bonds to investors
• Profits are the difference between the initial purchase price and the resale price (margin is called the
underwriting spread)

Factors Affecting Airport Bond Ratings

• Market strength – geographic location, regional demographics
• Air traffic characteristics – trends and forecasts
• Physical infrastructure – utilization of facilities
• Management and operations – cost recovery method, contractual terms with airlines, concessions
contracts
• Financing – existing debt burden, PFC, airlines, cash reserves
• General context – political climate and opposition, environmental issues
Historically large hub airports have had better credit ratings than airlines
SLIDE 37-
Chapter 11: Airport Planning
Master Plans- documents plans for next 20 years
- Must be revised when there are significant changes to airport or environment
- ALP must be current, shows current and future airport
- Projects funded by the FAA must be in the ALP
- Different plans have a different planning horizon
Typical Master Plan Elements
1. Inventory; includes narrative and Airport Layout Plan (ALP)
2. Activity Forecasts
3. Facility Needs Based on Demand / Capacity Analysis (and gap analysis
1. Airfield, Airspace, Terminal area, Ground access
4. Design Alternatives, Evaluation, and Selection
5. Financial Planning
6. Environmental Planning
7. Implementation Plan
Master Plan Objectives
- Graphical presentation of development of airport and adjacent land uses
- Establish schedule of priorities and timeline with phasing for improvements
- Present data used to develop master plan
- Describe concepts and alternatives considered in establishment of proposed plan
- Provide concise report that can be understood by community, authorities and affected public
agencies

Design alternatives
- Alternatives reflect forecasted demand
o Plans for airfield and local space
o Plans for terminal and ground access
o Plans for existing facilities and space- airport may be considered on a new undeveloped or
“greenspace”
- Runway design and orientation
o Identify Airport Reference Code
…

Airport Reference Codes

ALP: Airport Layout Plan
Activity Forecasts and Facility Needs
Design Alternatives, Alternatives Analysis and Environmental Planning
Public Involvement
Examples

Ethics
Variety of Ethics Sources: Professional organizations, federal law, state law, local ordinances
AAAE abridged code of ethics:
1. Safe, efficient, and economic operation
2. Highest ideals of honor and integrity
3. Refrain from partisan political activities
4. Resist encroachment on professional responsibility
5. Neither seek nor accept any favor or gift
6. Provide facts and advice on policy
7. Officials are responsible for airport policies
8. Keep the community informed on airport affairs
9. Personnel matters on the basis of merit
10. Continually improve
11. Compliance with the rules of criminal and civil law
12. Maintain confidentiality in accreditation
Common ethics violations:
- Financial Disclosure
- Gifts
- Honoraria
- Doing Business With Employer
- Conflict of Interest
- Misuse of Public Position
- Using Employer Property
- Confidentiality
- Integrity
Financial disclosure
Public officials and employees are required to file financial disclosure forms annually. Forms the airport authority
uses from the Pennsylvania State Ethics Commission:
- Occupation
- Real estate interests
- Creditors
- Sources of income
- Gifts received and office
- Directorship or employment in a business
- Any financial interest in a for-profit business.
Misuse of Public Position- “The Chairmans Flight” NYNJ Port Authority chairman approved United building permit
request at airport in exchange for flights to South Carolina where he had a vacation home
Ethics Violations: include legal issues such as fraud and Failure to comply with FAA Grant Assurances
FAA grant assurance: Airports must follow numerous requirements and meet contractual obligations when they
accept FAA funds
- Grant assurances are often related to airport funds
- Grant assurances originated after WWII when the federal government “gave” airports to local
municipalities; cities and local agencies accepted obligations when they accepted the airports
- One grant assurance relates to Revenue Diversion
o This requires that all money earned at the airport must stay at the airport
o FAA does not want the airport to use funds earned at the airport to support activities at City Hall

Presentation Notes
Hurricane Milton’s Effect on Florida Airports
• Melbourne Orlando Airport- tore a hole in the roof half the size of a basketball court
• Tampa- damaged the 9th floor of a short-term parking garage, their FBO had heavy damages
• Sarasota- Entire roof of concourse B destroyed (where all TSA & concessions are), hangers destroyed

FAA Invests $970 M in Airport Infrastructure Across the US

• The bipartisan infrastructure act allocated $1.3 T over the next 5 years to rebuild and modernize US
infrastructure
• Modernization, Sustainability, and Accessibility at 125 US Airports

TSA Ruling on Real IS Requirements at Airport Checkpoints

• TSA will allow mobile driver’s licenses effective Nov 25
• There are currently 11 states that TSA accepts mDL from
• Real ID will be enforced May 2025 (the stars)
• They hope the FAA can make this permanent and nationwide because it currently stands a waiver

London Luton Airport to Net Zero

• In 2020 they set out to be net 0 by 2040
• Third major airport in UK to achieve level4 of the carbon accreditation
• Were named 2024 European airport of the year
• New buses that run on hydrotreated vegetable oil

Haiti’s Main Airport Shuts Down Due to Gang Violence

• Port-Au-Prince is the capital city and the airport was originally a USMC base
• Violence broke out due to unrest from the newly elected prime minister
• The airport also closed from violence in July 2021 after the president was assassinated
• A spirit airplane was shot while landing and a flight attendant was injured
• All airline service has been temporarily suspended and no US planes are ground currently
• Jetblue had left 30 mins before the spirit flight landed but found bullet holes in the plane once they
landed in the US

AL Maktoum International Airport

• Also known as Dubai World Center
• Began passenger service in 2013
• Projected to be the bussiest airport in the world
• Currently have 1 pax terminal and 1 runway, plans to build 5 new terminals and 5 new parallel runways
in the next decade
• First phase completed in 2033

Harry Reid (LAS) Renovations

• Flyover bridge to allow traffic between terminals under the bridge

Hong Kong Expands Airport Blueprint for Airport City

•

Questions