Airport Strategy – Invest in Assets that Reduce Costs

Most public agencies are dependent on revenues from taxes or fees, with constant pressure to deliver service for the minimum absolutely necessary.  While airports are usually self-supporting and funded with rents and fees, there is always pressure to economize.

A simple example is relocating concessions from before a security check point to after.  Because of Transportation Security Administration restrictions, concessions revenue at locations before security check points have fallen dramatically since 2002.  Most airports have now readjusted and reallocated concessions to post-security locations.

Armstrong Airport in New Orleans is seeking to reinvent itself with a much larger concept, to create a facility that reduces its costs by increasing revenues and limiting the burden on its rate payers, the commercial air carriers leasing terminal space.  By re-configuring concessions and right-sizing its new terminal, Armstrong seeks to reduce its operating costs while increasing sales, thus producing more revenue with a public asset and delivering the same or better service, i.e. more flights to more places, with the same cost.

Contributed by:

Ross Chapman
Principal
rfc@tmg-consulting.net or 504.569.9239

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 Disclaimer
The views, interpretations, or strategies expressed are those of the authors, and do not necessarily reflect the position of TMG Consulting. This site is meant for educational purposes only and does not constitute professional advice. TMG Consulting makes no representation as to accuracy, completeness, or suitability of any information on this site and will not be liable for damages arising from its display or use.

Superbowl 2013: New Orleans Welcomes Visitors with Improved and Modernized Airport

On January 15, 2013 New Orleans Mayor Mitch Landrieu hosted the official opening of Louis Armstrong New Orleans International Airport’s Terminal Interior and Exterior Improvements Airport Modernization Program.  This capital program, comprising more than $300 million of infrastructure improvements, was begun before the impact of Hurricane Katrina and successfully completed ahead of a make-or-break event for the city and the region: Super Bowl XLVII at the Mercedes-Benz Super Dome on February 2.

“An expected 42,000 visitors to the city will be greeted and hosted in world-class style with Armstrong’s newly renovated terminal and concourse spaces, windows and lighting, fully reconstructed restrooms throughout the terminal, together with new information displays, baggage claim and security checkpoint upgrades, a new walk-to-rent consolidated rental car facility, rental car service centers and six new gates in a renovated and expanded Concourse D. The Jerome S. Glazer Access Road has just been renovated for a smooth ride direct to Interstate 10.  After their visit, on the way home, there are new landmark local gift and dining venues such as the Saints store and Dooky Chase’s – more than $6 million of improved concessions offerings.  What the visitors won’t see is just as important: a new airfield fire station, rehabilitated airfield pavement and lighting controls, a $30 million state-of-the-art security system and emergency operations center and security fencing.

As significant as all of these improvements are for the visitors, they are lasting investments made for the long term benefit of the community here in South East Louisiana.  And they were all done without taxpayer dollars, with user fees and self-generated airport funds.

TMG Consulting has been assisting the New Orleans Aviation Board in realizing their plans for more than twenty years.  We have been able to advise Armstrong on planning, programing and funding their capital investments.  And we’ve been able to help build our hometown while doing it.  We’re proud of our efforts and those of our partners at Armstrong and throughout the local consultant community.  We’re continuing in our service and excited by the future.  As satisfying as the Airport Modernization Program is, we believe the best is yet to come…

Contributed by:

Ross F. Chapman

Principal

rfc@tmg-consulting.net  

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Disclaimer
The views, interpretations, or strategies expressed are those of the authors, and do not necessarily reflect the position of TMG Consulting. This site is meant for educational purposes only and does not constitute professional advice. TMG Consulting makes no representation as to accuracy, completeness, or suitability of any information on this site and will not be liable for damages arising from its display or use.