https://www.americancityandcounty.com/wp-content/themes/acc_child/assets/images/logo/footer-logo.png
  • Home
  • Co-op Solutions
  • Commentaries
  • News
  • In-Depth
  • Multimedia
    • Back
    • Podcast
  • Resources
    • Back
    • Resources
    • Webinars
    • White Papers
    • Events
    • How to Contribute
    • Municipal Cost Index – Archive
    • Equipment Watch Page
    • American City & County Awards
  • Magazine
    • Back
    • Digital Editions
    • Reprints & Reuse
    • Advertise
  • About Us
    • Back
    • About Us
    • Contact Us
    • Privacy Statement
    • Terms of Service
American City and County
  • NEWSLETTER
  • Home
  • Co-op Solutions
  • Commentaries
  • News
  • In-Depth
  • Multimedia
    • Back
    • Podcasts
  • Resources
    • Back
    • Webinars
    • White Papers
    • Events
    • How to Contribute
    • American City & County Awards
    • Municipal Cost Index
    • Equipment Watch Page
  • Magazine
    • Back
    • Digital Editions
    • Reprints & Reuse
    • Subscribe to GovPro
    • Manage GovPro Subscription
    • Advertise
  • About Us
    • Back
    • About Us
    • Contact Us
    • Cookie Policy
    • Privacy Stament
    • Terms of Service
  • newsletter
  • Administration
  • Economy & Finance
  • Procurement
  • Public Safety
  • Public Works & Utilities
  • Smart Cities & Technology
acc.com


Airport makes reservations with private firm

Airport makes reservations with private firm

The Indianapolis International Airport needed help. with no market incentives to function efficiently, the airport simply accessed fees by calculating
  • Written by Goldsmith, Stephen
  • 1st April 1996

The Indianapolis International Airport needed help. with no market incentives to function efficiently, the airport simply accessed fees by calculating its annual budget, subtracting revenue received from parking, concessions and other services and charging the difference to the airlines.

If expenses went up or revenue went down, the difference was merely passed along to the airlines, and this increase was eventually passed along to their passengers.

The airport needed to boost its economy in order to survive, and privatization seemed like the right solution. So in 1994, the airport authority board of directors took the dramatic step of seeking competitive proposals from private companies to manage the system.

With private management efforts, more than 60 government services would be forced to compete with the private marketplace within the airport so the city requested a contract calling for astreet pricing,, provision, figuring that the pressure of competition squeezes more economy and service improvement even the best functioning government agencies.

The city awarded the management contract to the British Airport Authority, USA division (BAA USA), which owns and operates London’s Heathrow Airport and six other airports in the United Kingdom.

The company guaranteed $32 million in savings to the city over the 10-year term of the contract, agreeing not to be paid until the first $3.2 million of savings is realized.

To achieve those revenues, the company plans on increasing productivity by applying current technology trends, such as cashierless public-parking; bringing in experts from the United Kingdom experienced in handling problems of larger airports to act as consultants to the smaller airports in streamlining operations; including recognizable restaurants such as T.G.I. Fridays and McDonald’s with prices competitive to those outside the airport [email protected] developing retail shops (11 new retail stores will open at the airport within the next year); and adding property management by providing cargo facility space and aircraft storage space.

The city estimates that the airport cost-per-enplaned passenger, the standard industry measure of efficiency, will drop from $7.78 to $5.19, a 26 percent reduction, by the year 2005, partly because of increase in revenue from the terminal business. “Where you have lower airport costs, you’ll have lower fares,” says Michael Boyd, president of Aviation Systems Research, Golden, Colo.

The resulting lower airline fee will benefit the airline industry as well. If revenue from airport parking, concessions and retail facilities increases, the margin of airline fee expenses charged by the management company can be lowered, thus attracting more airlines to the airport.

Privatization creates competition and forces creativity. The city of Indianapolis benefits from private management as the airport continues to grow.By having an outside firm manage our airport, the city is setting a trend in the airline industry,” says Betty Johnson, a member of the airport authority board.

This article was written by Indianapolis Mayor Stephen Goldsmith.

Tags:

Related


  • ASCE releases 2021 Report Card for America’s Infrastructure
    The American Society of Civil Engineers (ASCE) today released its 2021 Report Card for America’s Infrastructure, looking at the state of the country’s infrastructure across 17 categories. The Report Card is compiled every four years by America’s civil engineers to provide a comprehensive assessment of the nation’s major infrastructure categories, using a simple A to […]
  • 2020 Crown Communities winner: Phases 2 and 3 of Minot, N.D.'s Mouse River Enhanced Flood Protection Plan
    Phases 2 and 3 of Minot, N.D.’s Mouse River Enhanced Flood Protection Plan involved numerous federal, state and local entities, several setbacks, years to complete and $40 million. But the result was a multi-faceted flooding defense that Minot was able to make its own. Historic flooding of the Mouse River in June 2011 created the […]
  • Senate American Rescue Plan includes more than $60 million in direct aid for counties
    The U.S. Senate’s version of the 2021 American Rescue Plan maintains the $350 billion in state and local aid that was in the House bill, including $60.1 billion in direct aid to counties. The U.S. Senate begin debating its version March 4. The House of Representatives passed its version of the $1.9 trillion bill Feb. […]
  • Why Tucson is building its own 4G network
    The city of Tucson, Ariz., is weeks away from finishing the first phase of its 4G LTE network buildout. The city will initially use the network to connect around 1,000 kids in poor households to the Internet but eventually hopes to use the network for a variety of services ranging from smart city IoT operations […]

Leave a comment Cancel reply

-or-

Log in with your American City and County account

Alternatively, post a comment by completing the form below:

Your email address will not be published. Required fields are marked *

Related Content

  • 2020 Crown Communities Winner: South Bay Cities Council of Governments' South Bay Fiber Network
  • 2020 Crown Communities winner: Gainesville, Fla. closes Dignity Village and houses its homeless population
  • 2020 Crown Communities winner: Harris County, Texas, Precinct 2's ACCESS2HEALTH SmartPod
  • How technology can ensure equitable access to the COVID-19 vaccine

White papers


Discover How Public Sector Officials are Monitoring and Managing Overtime in This New White Paper

22nd February 2021

How to Assemble a Successful Government Grant Proposal

5th February 2021

The Rise of Procurement’s Next Normal

5th February 2021
view all

Events


PODCAST


Young Leaders Episode 4 – Cyril Jefferson – City Councilman, High Point, North Carolina

13th October 2020

Young Leaders Episode 3 – Shannon Hardin – City Council President, Columbus, Ohio

27th July 2020

Young Leaders Episode 2 – Christian Williams – Development Services Planner, Goodyear, Ariz.

1st July 2020
view all

Twitter


AmerCityCounty

Why Tucson is building its own 4G network dlvr.it/RvDxK0

8th March 2021
AmerCityCounty

Key Steps Governments Can Take to Guard Against Malware Attack dlvr.it/RvCr2x

8th March 2021
AmerCityCounty

2020 Crown Communities winner: El Paso County, Texas’ pretrial justice modernization dlvr.it/Rv4GKL

6th March 2021
AmerCityCounty

A city’s innovative downtown master plan sees future in local, inclusive placemaking dlvr.it/Rv3SfM

5th March 2021
AmerCityCounty

2020 Crown Communities winner: Gainesville, Fla. closes Dignity Village and houses its homeless population dlvr.it/Rv1GS2

5th March 2021
AmerCityCounty

2020 Crown Communities Winner: South Bay Cities Council of Governments’ South Bay Fiber Network dlvr.it/Rv10b7

5th March 2021
AmerCityCounty

Senate American Rescue Plan includes more than $60 million in direct aid for counties dlvr.it/RtzvBK

4th March 2021
AmerCityCounty

ASCE releases 2021 Report Card for America’s Infrastructure dlvr.it/Rtvck5

3rd March 2021

Newsletters

Sign up for American City & County’s newsletters to receive regular news and information updates about local governments.

Resale Insights Dashboard

The Resale Insights Dashboard provides model-level data for the entire used equipment market to help you save time and money.

Municipal Cost Index

Updated monthly since 1978, our exclusive Municipal Cost Index shows the effects of inflation on the cost of providing municipal services

Media Kit and Advertising

Want to reach our digital audience? Learn more here.

DISCOVER MORE FROM INFORMA TECH

  • IWCE’s Urgent Communications
  • IWCE Expo

WORKING WITH US

  • About Us
  • Contact Us

FOLLOW American City and County ON SOCIAL

  • Privacy
  • CCPA: “Do Not Sell My Data”
  • Cookies Policy
  • Terms
Copyright © 2021 Informa PLC. Informa PLC is registered in England and Wales with company number 8860726 whose registered and Head office is 5 Howick Place, London, SW1P 1WG.
This website uses cookies, including third party ones, to allow for analysis of how people use our website in order to improve your experience and our services. By continuing to use our website, you agree to the use of such cookies. Click here for more information on our Cookie Policy and Privacy Policy.
X