Airportweb
The home of Airport Corporation of America
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Airportweb The home of Airport Corporation of America
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AIRPORT FINANCIAL PLANNING ACA offers all of the financial planning services needed to meet the operational and capital project development challenges of today's airports. These services encompass financial reviews and automated financial modeling, rate and fee analysis, financial feasibility and implementation services which specifically include:
Examples of ACA's Financial Planning Services are discussed below. It should be noted that in many instances, ACA's services are extended by the client airport to include implementation of its financial recommendations. Van Nuys Airport Los Angeles World Airports, "LAWA," owns and operates Van Nuys Airport, the busiest General Aviation Reliever Airport in the United States. In 1994, LAWA selected ACA to conduct financial and economic analyses of the ground rental rates and fuel flowage fees in effect at the Airport. The specific purpose of this study was to determine whether Van Nuys Airport’s aviation ground rental rate, fuel flowage fee and its commercial/industrial ground rental rate were fair and reasonable in relation to the business activities and opportunities available at the Airport and in relation to other comparable airports considering the Airport’s ability to maintain financial self sufficiency. The analyses and recommendations of this study were to be used in connection with the renegotiations of airport rates and charges which occur regularly at five year intervals. The study considered the state of the aviation economy, the Airport’s financial performance and leasing policy, tenant financial performance and comparable airport rates and charges. Recommendations included a multi-tier leasing and rental structure and policy, sanctioned by the FAA, designed to provide needed financial relief to private aviation users without impact to the Airport’s financial performance. City of San Diego (Brown and Montgomery Fields) In 1992, ACA was engaged by the City of San Diego to conduct financial and economic analyses of the rates and charges in effect at its two municipal airports, Brown and Montgomery Fields. The extent of this consulting effort related to a cost / benefit analysis of fixed versus percentage rates at each airport. It included an analysis of the local economic climate as it related to the rates and charges in effect at both airports, and compared to similar airports, each airports current and projected financial performance, recommendations regarding future aviation leasing policy, rates and charges structure, an analysis of all aviation leases and a strategy to implement recommended policy, rates and charges into existing and new agreements. ACA’s recommendations, which are being implemented by the City of San Diego, included the phasing out of percentage rates at each airport and interim (three year) leases at Brown Field pending preparation of redevelopment plans and financing proposals. City of Phoenix Aviation Department ACA was selected by the City of Phoenix Aviation Department in 1995 to review and assess the General Aviation Rates in effect at Sky Harbor, Goodyear and Deer Valley airports, and to recommend and implement a new rate structure for each of the three airports. The project was complex because there were other than aeronautical issues involved. In addition, the rate structure for each airport was different as were the services and amenities provided and each airport’s cost centers. In the course of its analysis, ACA held two public meetings at each airport, offered one on one tenant meetings, conducted a tenant survey, reviewed comparable airports and third party facilities. The three airports have over 1,250 based General Aviation aircraft. ACA’s preliminary recommendations were completed in the Spring of 1996. Project implementation was temporarily deferred to allow for some master planning and strategic analysis. In the Fall of 1996, the City directed ACA to proceed with fine tuning its recommendations and implementing them. The project was completed and implemented in April 1997 with the City Councils’ approval of ACA’s recommendations. While implementation of the recommendations produces a $750,000 annual increase in GA revenues to the City, only two letters of complaint were filed from over 1,250 tenants. Bradley International Airport Airport Corporation of America is presently working with the State of Connecticut to prepare the financial feasibility analysis required for a $135 million expansion of Terminal Building facilities at Bradley International Airport. ACA's initial involvement in the Project was designed to assess the Airport's financing capacity from all sources including Airport revenue and PFC-backed bonds. This led to initial scaling of the project and selection of a $135 million preliminary design alternative that the State could afford. ACA is presently heavily involved in the financing plan and feasibility study that will form the basis for, and accompany, the official statements associated with the project's bond financing. ACA's role specifically includes documentation of the Airport's current financial practices, including existing bond indenture coverage and other requirements for the issuance of additional bonds, analysis and recommendations on airline rates and charges, concession and other rates and charges, all operating and non-operating revenue and expenditure projections, other capital cost and financing projections, ongoing financing capacity analyses, development and use of the Airport's financial model, drafting and editing of related financial feasibility report text, airline negotiations and PFC Application preparation. The project has progressed through submission of a draft feasibility report and completion of the financial model. The Bradley International Airport Financial Model reflects the recommendation that the compensatory rate setting methodology reflected in existing air carrier agreements continue. Accordingly, the Model's components and structure include the input of operating budgets, debt service schedules and approved capital amortization, expenditure allocation percentages to the airlines, airport and airline activity statistics in order to calculate airline rates and charges and associated revenue projections. It also includes concession revenue projections driven from the enplaned passenger forecast and other factors, land and building rental and other revenue forecasts. The Airport's capital plan is reflected in the financial model as well. It includes Passenger Facility Charge and Airport Improvement Program projections also driven from the enplaned passenger forecasts, capital project lists, implementation schedules and funding source designations in the projection of Airport net capital outlays. All of these projections, which run for a 30-year forecast period, culminate in projected airline rates and charges and a pro forma financial statement reflecting net income for debt service, future proposed debt service, coverage ratio tests and cash flow projections through the various Airport funds established through bond indenture provisions. Juneau International Airport ACA has been Juneau International Airport's financial advisor since September,1995. ACA was initially engaged by the City and Borough of Juneau, Alaska to conduct a financial, leasing and management systems review of Juneau International Airport. The scope of the financial review included documentation and analysis of the airport’s financial performance, all rates and charges, revenues and expenses and the development of a financial model for the Airport. The objective of the financial review is to fund the operation and development of the Airport in a fair and equitable manner considering revenue and expense allocations among such tenant groups as airlines, air taxis, air cargo, general aviation, concessions and non-aviation tenants. This is to be accomplished through implementation of a revised system of rates and charges and a PFC, all of which are analyzed through the use of the financial model. The leasing review includes an audit of all leasing terms, conditions and policies, drafting new master leases, renegotiating airline, air taxi and other leases, drafting and negotiating new concession agreements, issuing RFPs for all concessions and establishing Airport minimum standards. The management systems review includes an airport - wide assessment of computer hardware and software needs among management staff in the performance of their duties, establishment of an automated property and lease management system, an automated statistical management system and general consultations on the effective use of software and hardware in improving airport management performance and communications. This project began in 1995 and has successfully progressed through its primary stages. Airport financial performance, revenue and expense allocations and development of the financial model have been completed, rates and charges recommendations have been made, concession RFPs and agreements have been drafted and the management information systems needs assessment has been completed. The Airport's PFC Application has been approved, PFC reporting and recordkeeping processes have been put in place, negotiation and implementation of a new system of rates and charges for all airport tenants is an ongoing process determined and assessed through use of the financial model. The Juneau financial model represents a hybrid approach in which existing rates are measured for fairness and reasonableness based on the revenue and expense allocations, and resulting surpluses and deficits, associated with all airport user groups. Proposed rates are then assessed for their impact upon these surpluses and deficits and the Airport's financial performance as a whole. Rates and charges are implemented based on negotiation and Airport Board policy. Bismarck Municipal Airport ACA has been the City of Bismarck’s financial advisor and management consultant for Bismarck Municipal Airport since 1990. ACA was engaged to conduct a three phase review of the Airport's revenue and cost structure. The City was experiencing difficulty in generating the revenue necessary to operate its airport and develop it in accordance with its Master Plan while remaining financially self sufficient, and competitive in its pricing and service level. This project consists of the following:
This project has successfully progressed through the initial development and ongoing implementation of financial recommendations. This includes negotiation and renegotiation of new airline lease agreements with the major airlines and commuters; negotiation and renegotiation of new rental car, parking and advertising concession agreements; ongoing negotiation of new lease agreements for General Aviation tenants and completion of two PFC Applications. As a result of these efforts, Bismarck’s operating revenues increased by more than 40%, its financial performance has significantly improved and it has remained financially self sufficient enabling it to implement its master and capital plans.
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