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Angela Gittens, View from the top, Issue 1, 2015

ACI World’s director general, Angela Gittens, discusses the trend toward public-private partnerships and the resultant need for key performance indicators and benchmarks.

Over the past 20 years, airports have evolved from being simply public-sector infrastructure providers into sophisticated, business-oriented service providers. 

This transformation has occurred mainly as a result of the realisation by governments around the world that airports are major engines of socio-economic growth for the territories they serve and that with the right management in place, airports can be run efficiently and in many instances be self-sufficient. 

An increasing number of countries are calling on the private sector for the development of aeronautical infrastructure, be it in the form of outright privatisations or public-private partnerships (PPPs). 

In order to attract this much needed investment, economic regulatory interventions should be minimal; moreover, the right economic regulatory incentives should be in place to ensure investment in airport infrastructure.

The direct and indirect costs associated with airport regulation can be considerable, particularly when regulation is applied to already competitive markets. 

The regulatory format applied should seek to minimise the costs to all parties while maximising the potential benefits. This can be achieved by the regulator standing back and allowing the market participants to determine an acceptable outcome for themselves. The regulator has the power to step in to avoid any abuses, but otherwise has an oversight role.

Markets can change rapidly and future requirements are unknown. Airport regulation should not be locked in to one approach but rather be flexible to changing market and economic conditions. Finally, the ultimate purpose of economic regulation is to protect the interests of the end user, the consumer – that is passengers and shippers.

For the owner, the challenge is to transparently determine that those interests are indeed being protected through the use of key performance indicators (KPIs) and benchmarks. This is not simple since airports are such specific, local entities, even while they serve the global marketplace. 

As we say, when you’ve seen one airport, you have seen one airport. Nonetheless, governments must know how asset holders perform. 

For its part, ACI continues to provide member airports with KPIs through an exhaustive statistical analysis of the data it collects. Given that airports are complex businesses which operate in unique and evolving physical, financial and regulatory environments, the use of international benchmarks provides quantifiable barometers of industry activity.

As we look toward to the seventh Annual ACI Airport Economics & Finance Conference & Exhibition – organised this year in co-operation with the World Bank – ACI World is working hard on this year’s edition of its Airport Economics Report. 

As always, the report covers indicators across many areas, ranging from financial performance and employee and fixed asset productivity to airport operations, as a means of giving airports the edge they need to compete in a highly complex and fast-changing industry.

By the same token, this issue of Airport World contains its own range of useful information, from an A to Z report on global airport operators and an article on changing airport business models written by LeighFisher’s Andy Carlisle to a round-up of the latest privatisation deals across the globe and much more. 

I hope you enjoy the business intelligence contained herein and I look forward to seeing you at the ACI Airport Economics and Finance Conference & Exhibition. 

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