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Airport Economics – Aurecon believes the future is in the data

For Aurecon’s Medha Rahman, there is a way to effectively use available facts, figures and statistics to plan the economic business case for airports.

Aurecon's Aviation Associate Director Medha Rahman will be one of the speakers for the upcoming Passenger Terminal Conference and Expo in London

26 March 2019 – Airports are data rich, however, this wealth of information has for a long time been the biggest hurdle in the planning of aviation and commercial investments.

But for Aviation Associate Director, Medha Rahman, from leading global engineering and infrastructure advisory company Aurecon, there is a way to effectively use these facts, figures and statistics to plan the economic business case for airports.

No longer just a place of transit, airports, and airport terminals are hubs of global connectivity and community. They are multifaceted tourism, retail, and leisure developments that require new thinking to thrive.

Today, airports globally cater for more than three billion passengers annually, and the growth in traveller numbers at most airports continues to increase.

Recently working on Hobart Airport, Aurecon’s airport economics expertise was applied to help the owners strike a balance between aviation and commercial investments.

On Thursday 28th March, Mr Rahman will present the analytical decision-making framework used on Hobart Airport at the Passenger Terminal Conference and Expo in London. He will present to delegates the methodology Aurecon used to extrapolate the airport’s operational data to help shape their future investments.

Taking airports from traditional to new-age using data

Hobart Airport is the fastest-growing capital city airport in Australia. In a bid to keep up with the forecasted increase in passengers, new infrastructure development is required. However, these developments need to be sustainable, both operationally and financially, for the airport and its airline customers.

In assessing the need for new infrastructure projects, Aurecon helped Hobart Airport to identify its aeronautical asset base and develop a decision model to prioritise capital investment and planning within these parameters.

According to Mr Rahman, the aviation industry is evolving at a rapid pace with new digital technologies, reshaping customer interactions with aviation infrastructure, and expanding aviation partnerships.

Yet many airport owners are utilising traditional economic approaches and designing for the short term, sometimes missing out on the opportunity to effectively plan for the future.

“This is where the value of data comes in. It can be used to shape an airport’s commercial decision making and prioritisation strategy to deliver more value to the airport, its airline partners and its passengers,” Mr Rahman said.

He continues that on Hobart Airport, Aurecon took a deep dive into the airport’s operational data to build evidence-based assumptions to underpin commercial modelling and their business cases.

The changing nature of data use

Traditionally, price modelling for airport use is high level. Where a deep data dive takes us is the ability to justify an airport’s pricing structure, show the return on investment for suppliers and partners, and determine the value from investments.

Aurecon believes that designing for the longer term is important as airports are very much an essential component of infrastructure to most modern economies.

Airports are data rich, but most owners don’t know how to effectively use their data to support their long-term asset investment programmes and pricing agreements. At Aurecon, we like to look at things in a different way

“For Hobart Airport we were able to capture the vast expanse of data held by the airport, make sense of it, then extrapolate it in a way that provided the owners with value and insights,” Mr Rahman said.

“These insights became a structured methodology from which to plan the airport’s capital investments in alignment with its business strategy, growth forecasts and pricing models.

“We used granular data for each of those elements to suit the individual requirements of Hobart Airport.”

Beyond the data

Data is important, but what about the human element? Aurecon knows that it still takes the fusion of creative and technical minds to bring innovation to any project. Challenging traditional approaches to bring new ideas to life is that sweet spot where human interaction and technical data aligns. 

The true value of airport economics is moving away from traditional approaches, to models that process behavioural data rather than just transactional data.

With Hobart Airport it was the data that provided the foundation for asset investment and planning, but Aurecon used it in combination with the story of the airport infrastructure, its role as a powerhouse for the regional economy, and the predicted growth in passenger numbers.

“Evidence-based approaches can measure true investment value for owners. Instead of short term spending based on high-level financial modelling, the analytical decision-making frameworks can pinpoint the future for airport owners,” Mr Rahman said.

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