Incorporating Shock Events into Aviation Demand Forecasting and Airport Planning (2024)
Chapter: 19 Conclusions
CHAPTER 19
Conclusions
The research in this study found that shock events are often overlooked and their possibility is often ignored when considering future airport development. This is certainly not something unique to airports and relates more to the human condition. Often, we lack the information or imagination to consider such events and are biased toward what is knowable and comfortable. This can apply to nearly all fields of human endeavor—politics, economics, science, technology, and society in general. While insurance (and other forms of risk-transfer or risk-sharing) can be used to mitigate some shock events, this is generally based on known and understood risks and may not cover unknown unknowns or black swan shock events. An airport cannot obtain practical insurance that will cover the loss of a major carrier or declining traffic due to the loss of local industry.
Nevertheless, our research has found methods and strategies that can be deployed to address shock events in airport forecasting and planning. In general, it is not practical or realistic to actually predict or foresee shock events. However, just the exercise of identifying and exploring potential shock events can provide substantial benefits. Here, the role of forecasting is not about what will happen but rather about what could happen when shock events occur. From this, decision-makers can consider options to prepare for and respond to shock events, even when the exact nature of the shock event is not known.
Drawing on the research undertaken during the project, this guide sets out a systematic methodology to aid airports in understanding and addressing shock events. The methodology aims to contribute to a more resilient airport business model by assisting the airport to be better able to have a robust response to shock events and to aid in the development of a ready-to-deploy portfolio of strategies that the airport can make use of should a shock event occur (or is expected to occur). While not all shock events can be identified or foreseen, the intent is that an airport would be better positioned for these eventualities. The approach emphasizes the need to consider the less familiar and less comfortable possibilities when identifying shock events and the importance of organization-wide engagement and ongoing vigilance. Fundamentally, the methodology in this guide poses the question, What would happen if a shock event occurred, and what can be done to mitigate the impact from these events? Furthermore, it is not a one-size-fits-all approach for all airports and all projects.
While this guide discusses some of the more advanced methods that can be deployed to address this question, consideration is also given to simplified approaches that could be used by small airports or airports with limited time or resources. Clearly, the more resources that can be dedicated to this methodology, the more comprehensive and detailed the findings will be, but even a simple approach will provide value and is better than ignoring the issue entirely. A key lesson from the research is the need to explicitly address the potential for shock events and develop preparedness, which requires engagement throughout the organization.
