CHAPTER 18

Illustrative Application of Methodology at a Small Airport

This chapter provides an example of how the methodology can be employed on a small scale with an illustration of a GA airport. While it follows the structure of the methodology, some of the steps have been simplified or combined.

Setting and Situation

This illustrative example imagines a GA airport that has no commercial service. It is an uncontrolled airport with a single runway and a small apron. The airport’s users are GA aircraft including private aircraft and flight training at a local flying club but also include commercial activity such as medivac, aerial surveying, and occasional forest-fire suppression (not based at this airport). The airport’s revenue sources are primarily from the sale of avgas fuel (70%) and land leases (30%). The airport does not have its own forecast, but an FAA TAF is available.

Application of the Methodology

Step A: Identification of Shock Event

For this illustrative case, only a single shock event is examined, as shown in Table 12. On a small scale, it may be sufficient to examine only a single shock event that would disrupt the airport’s existing projection of traffic—either up or down—to explore the ramifications throughout the airport’s business.

Steps B and C: Scenario Forecast and Scenario Implementations

Based on these high-level descriptions, the airport can now consider how these impacts would directly affect the airport’s operations, finances, and planning. Quantification of impacts should be estimated whenever possible, even if it is speculative to demonstrate potential magnitudes to assess mitigation strategies.

• Expected impact on aircraft operations. Assume that piston-engine aircraft operations at the airport will decline by 50% once the ban is in place (47.5% decline in total operations). This may be due to some aircraft owners or operators deciding not to retrofit engines for alternative fuel sources or that conversion will take more than 2 years to complete. Turbine-powered aircraft operations are not affected, but those aircraft types make up a small proportion of total annual operations.
• Expected recovery of aircraft operations. Expect that within 5 years after the ban, only half of the initially lost operations will be recovered and that the airport permanently has a lower level of forecast operations than expected before the shock.

Table 12. Illustrative case on single shock event.

• Expected impact on airport revenues. Before the shock, 70% of airport revenues were from fuel sales, which were only 100LL. Unless the airport makes changes to its fuel offerings, it could lose the entirety of those fuel sale revenues resulting in a 70% drop in operating revenues if no other actions are taken. If fueling is no longer considered to be a business of the airport, there may be costs associated with decommissioning the existing fueling system.

The primary outcome of this simplified exercise should be to begin to establish how an airport’s activity levels and finances could be impacted by a shock. How would the airport deal with a drastic downturn in revenues (as in this illustrative scenario) or a major increase in operations in some other shock scenario? Examination of historical revenue and operations trends may allow operators to draw insights from past events or past shocks to help quantify potential impacts of the shock event under study.

Steps D and E: Options for Robustness and Monitoring

To mitigate the potential negative impacts of this shock event, the following is a series of robustness strategies that could be employed.

• Study the potential for sale of different types of avgas other than 100LL. Is the current fueling system capable of storing and dispensing different varieties of avgas? Could additional pumps and tanks be installed to allow for the sale of multiple types of avgas? Are there suppliers in the region for alternative aviation fuels? Could the fueling system be contracted out to a third-party operator under concession to reduce risks?
• Diversify airport revenue sources. The current airport derives the majority of its revenues from fuel sales, and thus, any impact to fuel sales, positive or negative, would dramatically impact revenues. Diversification of revenues, such as increasing land leases for aeronautical or nonaeronautical sources, could reduce the airport’s risk exposure to changes in fuel revenues.
• Plan alternatives for alternative fuel supply. Could the airport consider developing plans for the provision of alternative fuels like SAF or recharging battery-electric aircraft as new revenue sources to capture emerging aircraft technology developments?
• Engage industry and stakeholders. Devise or outline plans for how the airport would work with industry groups and stakeholders should the shock take place. Identify who key stakeholders are (e.g., local airport tenants, Aircraft Owners and Pilots Association, and government agencies) and consider how the airport would manage the shock should it occur. Stakeholder planning could also include actions to mitigate the potential shock event, such as lobbying or activism within industry or other associations.
• Monitor current regulatory process. Monitoring of potential changes to regulation through industry groups is important to assess how likely such a change may be or if other related shocks could emerge that may have similar or related effects.