Synthesis Topics

Airport Funding Models

The COVID-19 pandemic has exposed weaknesses in the financial foundations of airports and many aviation industry stakeholders. The proposed synthesis is to identify and evaluate current research on various airport funding models in order to describe potential future analytical projects.

Background (Describe the current situation or problem in the industry, and how your idea would address it.)

The sudden, rapid, and catastrophic impact on the aviation industry of the COVID-19 global pandemic has weakened our industry, as well as exposed weaknesses. As has been reported by airlines, airports, trade association, and other industry stakeholders, the devastating financial effect is beyond any previous experience, by many magnitudes. Many industry participants – airlines, terminal concessionaires, rental car companies, and other airport users – are considering strategies to avoid financial ruin and sustain their very existence. At this time, it is not inconceivable that any number of typical airport partners will be financially bankrupt and not in place for the likely recovery of air travel.

The impacts on the many participants in the travel industry affect airports. Airports are not immune. They do not produce revenue on their own. Rather, they rely on their many industry partners to generate – in complex revenue-sharing schemes – the monies needed to sustain the infrastructure that underlies the entire air travel system. The COVID-19 pandemic has exposed weaknesses in the underlying business model of the air travel system.

Objective (What is the desired product or result that will help the airport industry?)

This research proposal is two stages: first, a synthesis project that identifies the various business models of the air travel system (all participants: airports, airlines, and other entities providing services to airports, airlines, and the traveling public), as well as previous research and studies. The second phase – if indicated by the first synthesis project – would be evaluation of various financial models for airports and recommendations for modifications (if advisable) to any or all elements of the current business models for U.S. airports.

Voting

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Topic Collection
Idea No. 518