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    The document is an introduction to airport management presentation that was given in Barcelona, Spain in 2019. It discusses airport business models and how airports generate revenue, moving from just providing transportation to also including retail shopping and dining options. It introduces key concepts for airport finance like net present value (NPV), internal rate of return (IRR), and payback periods. It includes an exercise calculating the NPV of a proposed new airport in Brazil over 10 years under different cost scenarios and discount rates.

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    The document is an introduction to airport management presentation that was given in Barcelona, Spain in 2019. It discusses airport business models and how airports generate revenue, moving from just providing transportation to also including retail shopping and dining options. It introduces key concepts for airport finance like net present value (NPV), internal rate of return (IRR), and payback periods. It includes an exercise calculating the NPV of a proposed new airport in Brazil over 10 years under different cost scenarios and discount rates.

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    12 views18 pages

    Session 3 - Airport Management

    Uploaded by

    wepeso3094
    The document is an introduction to airport management presentation that was given in Barcelona, Spain in 2019. It discusses airport business models and how airports generate revenue, moving from just providing transportation to also including retail shopping and dining options. It introduces key concepts for airport finance like net present value (NPV), internal rate of return (IRR), and payback periods. It includes an exercise calculating the NPV of a proposed new airport in Brazil over 10 years under different cost scenarios and discount rates.

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    of 18

    Session 3: Introduction to Airport

    management

    Empresa

    Hector Fornes

    Barcelona, 2019
    AIRPORT BUSINESS MODEL

    Empresa. EETAC. UPC 2


    Fast facts
    Airport economics

    Empresa. EETAC. UPC 3


    Airport business model

    Los ingresos se ajustan a la siguiente


    estructura:
    ▪ Ingresos aeronáuticos
    ▪ Ingresos no aeronáuticos
    Empresa. EETAC. UPC 4
    From bus stations…

    Empresa. EETAC. UPC 5


    … to shopping malls

    https://liveandletsfly.boardingarea.com/2019/07/2 https://www.retailgazette.co.uk/blog/2019/07/are-
    3/airport-retail-growth/ travel-terminals-increasingly-becoming-shopping-
    destinations/
    Empresa. EETAC. UPC 6
    Duty free

    Empresa. EETAC. UPC 7


    Video “How do airports make money”
    https://www.youtube.com/watch?v=wdU1WTBJMl0

    Empresa. EETAC. UPC 8


    INTRODUCTION TO NPV & IRR

    Empresa. EETAC. UPC 9


    NPV, IRR, Payback period
    NPV (Net present value) → Esp. VAN (Valor actual neto)

    IRR (Internal rate of return) → esp. (TIR)


    tasa de descuento que hace que el NPV sea 0
    Payback period → tiempo que se tarda en recuperar la inversión

    Empresa. EETAC. UPC 10


    Impacto de la tasa de descuento y la TIR
    Calculo del NPV y TIR con distintas tasas de descuento

    Empresa. EETAC. UPC 11


    Impacto de la tasa de descuento y la TIR
    Calculo del NPV y TIR con distintas tasas de descuento

    Empresa. EETAC. UPC 12


    EXERCISE

    Empresa. EETAC. UPC 13


    NPV Airport exercise
    Due to political reasons, a new airport in Brasil needs to be built. Construction is expected to
    be in 2020. The forecasted demand for the new airport can be found in the excel file. The
    discount rate is 5%. The cost and revenue structure is as follows:

    Costs
    - Initial investment: 250 M€
    - Annual maintenance costs
    • 2021 – 2026: 3% of initial investment
    • 2027 – 2030: 5% of initial investment
    Revenues
    - Aeronautical: 12€ per passenger
    - Non-aeronautical: 6€ per passenger

    Q1. Determine if the project should go on (i.e. What is the NPV after a period of 10 years?)

    Considering a cost overrun of 10% of the initial investment:


    Q2. Plot the NPV for different rates of discount.
    Q3. Calculate the IRR.

    Empresa. EETAC. UPC 14


    AIRPORT ASSIGNMENT REMINDER

    Empresa. EETAC. UPC 15


    THOMAS COOK

    Empresa. EETAC. UPC 16


    Thomas Cook

    Empresa. EETAC. UPC 17


    Thomas Cook
    What happened?
    Which markets are affected?
    What was Thomas Cook’s model?
    What happens now?
    - Pax
    - Aircraft
    - Airline
    - Slots
    - Hotels

    Empresa. EETAC. UPC 18

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