Modeling taxi drivers’ decisions for improving airport ground access: John F. Kennedy airport case

Taxi service is an important component of airport ground access, which affects the economic competitiveness of an airport and its potential positive impact on the surrounding region. Airports across the globe experience both taxi shortages and excesses due to various factors such as the airport’s proximity to the city center, timing and frequency of flights, and the fare structure. Since taxi drivers are independent entities whose decisions affect the taxi supply at airports, it is important to understand taxi drivers’ decision mechanisms in order to suggest policies and to maintain taxi demand and supply equilibrium at the airports. In this paper, New York City (NYC) taxi drivers’ decisions about airport pick-ups or cruising for customers at the end of each trip is modeled using logistic regression based on a large taxi GPS dataset. The presented approach helps to quantify the potential impacts of parameters and to rank their influence for policy recommendations. The results reveal that spatial variables (mainly related to proximity) have the highest impact on taxi drivers’ airport pickup decisions, followed by temporal, environmental and driver-shift related variables. Along with supplementary information from unstructured taxi driver interviews, the model results are used to suggest policies for the improvement of John F. Kennedy (JFK) airport’s ground access and passenger satisfaction, i.e. the implementation of taxi driver frequent airport server punch cards and a time-specific ride share program.     

On the relationship between airport pricing models

Airport pricing papers can be divided into two approaches. In the traditional approach the demand for airport services depends on airport charges and on congestion costs of both passengers and airlines; the airline market is not formally modeled. In the vertical-structure approach instead, airports provide an input for an airline oligopoly and it is the equilibrium of this downstream market which determines the airports’ demand. We prove, analytically, that the traditional approach to airport pricing is valid if air carriers have no market power, i.e. airlines are atomistic or they behave as price takers (perfect competition) and have constant marginal operational costs. When carriers have market power, this approach may result in a surplus measure that falls short of giving a true measure of social surplus. Furthermore, its use prescribes a traffic level that is, for given capacity, smaller than the socially optimal level. When carriers have market power and consequently both airports and airlines behave strategically, a vertical-structure approach appears a more reasonable approach to airport pricing issues.     

Demand uncertainty and airport capacity choice

This study analyzes the effects of demand uncertainty on airport capacity choices. It shows that demand uncertainty will not change optimal capacity choice if demand variation is low and capacity cost is high; otherwise the optimal airport capacity under demand uncertainty will be larger than the case when a deterministic mean demand is considered. These conclusions are robust with respect to the different market structures considered in this study and hold for both profit-maximizing and welfare-maximizing airports. The moderating effects of commercial revenue, capital cost, and airport operation cost on airport capacity choice are qualitatively the same in the cases of uncertain demand and deterministic demand.     

Stochastic capacity expansion models for airport facilities

It is important and also challenging to plan airport facilities to meet future traffic needs in a rapidly changing environment, which is characterized by various uncertainties. One key issue in airport facility development is that facility performance functions (delay levels as functions of capacity utilization rates) are nonlinear, which complicates the solution method design. Potential demand fluctuations in a deregulated aviation market add another dimension to the decision making process. To solve this problem, a deterministic total cost minimization model is proposed and then extended into stochastic programs, by including uncertainties in traffic forecasts. After the exploration of properties of the delay cost function, an Outer-Approximation (OA) technique which is superior to the existing discrete approximation is designed. After model enhancements, an efficient solution framework based on the OA technique is used to solve the model to its global optimality by interactively generating upper and lower bounds to the objective. Computational tests demonstrate the validity of developed models and efficiency of proposed algorithms. The total cost is reduced by 18.8% with the stochastic program in the numerical example.     

Airport and airlines competition: Incentives for vertical collusion

This paper develops a model of airport and airline competition in a three-stage game. We analyse incentives for vertical collusion between one airport and one airline that compete with another airport and another airline, by means of static and dynamic games. We find that incentives for collusion exist when airports and airlines have different market sizes and, under certain conditions, also when secondary airports and low cost airlines compete with main airports and full service airlines.     

How could the collaboration between airport and high speed rail affect the market?

This paper discusses the possibility of collaboration between airport and high speed rail (HSR) to improve the airport’s gateway function. We apply the model which consists of three players, carriers, passengers, and the airport. In order to estimate the impact of the collaboration, we carry out some numerical computations with the model under the twin hub three zones network. Our results show that the collaboration between HSR and the smaller demand airport can reduce the congestion at the bigger demand airport, which suggests the collaboration can be preferable for carriers and passengers; it would improve the social welfare.     

A literature review of flexible development of airport terminals

The Master Plan has long been the traditional go-to approach to airport development. It was originally conceived for a scenario of stable growth. In recent decades, however, the airport industry has undergone substantial structural changes, with the traditional Master Plan progressively revealing limitations with regard to airports coping with the market’s unpredictability. There have since been increased calls for flexibility in the approach as an alternative or as a complement to the traditional Master Plan. A flexible development plan helps to accommodate changes within terminals. This paper presents a review of the current literature on airport terminal flexibility, covering a total of 19 reference works. The works were analysed in terms of the concepts, definitions and deployment frameworks, or similar. The review reveals that research in airport terminal flexibility is still in its early stages. A consensual definition has yet to be defined and no robust framework for deploying flexibility has been defined. We propose a new definition of flexible development. Furthermore, flexibility has been studied essentially in the context of expansion. However, in certain regions where land availability is scarce, other forms of airport development may be more important. We conclude the paper with suggestions for future research areas.     

Intercontinental-airport regulation

This paper analyzes strategic interaction between intercontinental airport regulators, each of which levies airport charges paid by airlines and chooses its airport capacity under conditions of congestion. Congestion from intercontinental flights is common across intercontinental airports since departure and arrival airports are linked one to one, while purely domestic traffic also uses each airport. The paper focuses on two questions. First, if both continents can strategically set separate airport charges for domestic and intercontinental flights, how will the outcome differ from the first-best solution? Second, how is strategic airport behavior affected by the extent of market power of the airlines serving the intercontinental market? We see that strategic airport pricing and capacity choices by regulators lead to a welfare loss: the regulators both behave as monopolists in the market for intercontinental flights, charging a mark-up and decreasing capacity. This welfare loss even overshadows possible negative effects from imperfect competition within the intercontinental airline market. We further discuss how the presence of multiple regulators on one continent or a simple pricing rule might constrain the welfare loss created by strategic airport regulation.     

The economics of airport noise: How to manage markets for noise licenses

This paper discusses various issues in the implementation of a local market for aircraft noise licenses to solve the noise externalities harming the residents located near airports. The design of such markets is affected by aircraft heterogeneity, wind contingencies, peak times, runways capacity constraints, hub strategies, and airport planning is discussed.     

Predictability impacts of airport surface automation

Past evaluations of airport surface operations automation technologies have focused on capacity utilization, delay mitigation and fuel efficiency impacts. Predictability, while recognized as an important operational performance goal, has received little attention. One reason could be that applicable predictability metrics have not been developed in the context of airport surface operations management. This research fills the gap by proposing metrics for predictability performance evaluation. Using results from a SARDA human-in-the-loop simulation conducted at NASA Ames’ Future Flight Central, we present a comprehensive assessment of the predictability impacts of airport surface automation. A wide range of the impacts is considered, which includes variability in taxi-out time, predictability of take-off time and take-off sequence, entropy of the airfield state, and perceived predictability from users.     

A parameterized consideration set model for airport choice: an application to the San Francisco Bay Area

Airport choice is an important air travel-related decision in multiple airport regions. This paper proposes the use of a probabilistic choice set multinomial logit (PCMNL) model for airport choice that generalizes the multinomial logit model used in all earlier airport choice studies. The paper discusses the properties of the PCMNL model, and applies it to examine airport choice of business travelers residing in the San Francisco Bay Area. Substantive policy implications of the results are discussed. Overall, the results indicate that it is important to analyze the choice (consideration) set formation of travelers. Failure to recognize consideration effects of air travelers can lead to biased model parameters, misleading evaluation of the effects of policy action, and a diminished data fit.     

Level of service design concept for airport passenger terminals—a European view

Drawing from the experiences of highway and pedestrian planning, the author suggests a method of improving the method of designing airport terminals. The improved technique would use the concept of level of service to indicate the interaction of time with space provision.     

A critical examination of an airport noise mitigation scheme and an aircraft noise charge: the case of capacity expansion and externalities at Sydney (Kingsford Smith) airport

In the wake of the Australian airline liberalization in 1990 and its forecasted impact on air traffic, capacity has been expanded at Sydney (Kingsford Smith) airport (Sydney KSA) – Australia's busiest commercial airport – with the construction of the third runway in 1994. Coinciding with the approval for this capacity expansion, the Commonwealth Government amended the Federal Airports Corporation (FAC) Act to direct the FAC to carry out activities which protect the environment from the effects of aircraft operations, with the cost to be borne by the airline industry according to the ‘Polluter Pays Principle'. Noise management plans were part of the conditions for developmental approval for a third runway. To this end, since 1995, Sydney KSA imposes a noise levy designed to generate sufficient revenues to fund a noise mitigation scheme. Although the issues of aircraft noise, in particular its impact on property values and land use planning around the airport, have been extensively addressed in the literature, no one has empirically examined the implications of new environmental policies in conjunction with airline liberalization and change in airport infrastructure. Principles and policy analyses are discussed in this paper. By focusing on the specifics of Sydney KSA, broader policy issues likely to be relevant for other major airports around the world are discussed.     

A choice model of airline passengers’ spending behaviour in the airport terminal

This study examines the influence of passengers’ travel-related factors, their intention to shop and the impact of socio-economic factors on their consumption behaviours while at the airport terminal. Three categories of consumption model – shopping, dining and airport entertainment – are developed to analyse different consumption behaviours. The results show that free time is the main factor that influences passengers to choose entertainment while waiting at the terminal, and the use of airline lounges has a negative influence on the extent of engagement in all three types of passenger consumption behaviour, especially dining. Furthermore, passengers’ dining expenditure has a positive effect on the extent of engagement in entertainment, but a negative influence on the extent of engagement in airport shopping. Passengers’ preferences of airport shopping area after they have cleared security is positively associated with the extent of engagement in both shopping and entertainment but negatively associated with the extent of engagement in dining activities.     

Preference-based evolutionary algorithm for airport surface operations

In addition to time efficiency, minimisation of fuel consumption and related emissions has started to be considered by research on optimisation of airport surface operations as more airports face severe congestion and tightening environmental regulations. Objectives are related to economic cost which can be used as preferences to search for a region of cost efficient and Pareto optimal solutions. A multi-objective evolutionary optimisation framework with preferences is proposed in this paper to solve a complex optimisation problem integrating runway scheduling and airport ground movement problem. The evolutionary search algorithm uses modified crowding distance in the replacement procedure to take into account cost of delay and fuel price. Furthermore, uncertainty inherent in prices is reflected by expressing preferences as an interval. Preference information is used to control the extent of region of interest, which has a beneficial effect on algorithm performance. As a result, the search algorithm can achieve faster convergence and potentially better solutions. A filtering procedure is further proposed to select an evenly distributed subset of Pareto optimal solutions in order to reduce its size and help the decision maker. The computational results with data from major international hub airports show the efficiency of the proposed approach.     

How to mix per-flight and per-passenger based airport charges

This paper investigates the questions of why carriers advocate for higher per-passenger airport charges and lower per-flight charges, and whether and when this proposal is welfare-enhancing. Specifically, the paper compares the optimal mix of per-flight and per-passenger based airport charges from both a monopoly carriers’ and the social viewpoints conditional on airport cost recovery. It focuses on the trade-off between price and frequency (i.e., schedule delays) when time valuations are uniform, or differ, between business and leisure passengers. We identify an easy test for the evaluation of the mix of per-passenger and per-flight based airport charges by policy makers, which is simply to check whether the carrier’s preferred per-flight charge is zero. Our analysis suggests that there is no need for immediate regulatory corrections of the current trend towards the strong use of per-passenger based airport charges.     

Assessing the impact of tactical airport surface operations on airline schedule block time setting

With the growth of air traffic, airport surfaces are congested and air traffic operations are disrupted by the formation of bottlenecks on the surface. Hence, improving the efficiency and predictability of airport surface operations is not only a key goal of NASA’s initiatives in Integrated Arrival/Departure/Surface (IADS) operations, but also has been recognized as a critical aspect of the FAA NextGEN implementation plan. While a number of tactical initiatives have been shown to be effective in improving airport surface operations from a service provider’s perspective, their impacts on airlines’ scheduled block time (SBT) setting, which has been found to have direct impact on airlines’ on-time performance and operating cost, have received little attention. In this paper, we assess this impact using an econometric model of airline SBT combined with a before/after analysis of the implementation of surface congestion management (SCM) at John F. Kennedy International Airport (JFK) in 2010. Since airlines do not consider gate delay in setting SBT, we find that reduction in taxi-out time variability resulting from SCM leads to more predictable taxi-out times and thus decreases in SBT. The JFK SCM implementation is used as a case study to validate model prediction performance. The observed SBT decrease between 2009 and 2011 at JFK is 4.8 min and our model predicts a 4.2 min decrease. In addition, Charlotte Douglas International Airport (CLT) is used as an example to demonstrate how different surface operations improvements scenarios can be evaluated in terms of SBT reduction.     

The impact of airport noise as part of a Strategic Environmental Assessment,case study: The Tivat (Montenegro) Airport expansion plan

Strategic Environmental Assessment (SEA) is one of the most important instruments for making relevant decisions on the basis of which spatial planning is aligned with the tenets and principles of sustainable spatial development. Its primary application is in spatial (strategic) and urban planning, as well as in the planning and design of sectoral policies in the areas of energy, water management, waste management, transport, etc. The implementation of SEA allows developers to establish the benefits and implications of the proposed spatial changes, taking into account the capacity of the space to sustain the planned development, and to determine the degree of acceptability of the proposed spatial changes. This paper presents a specific method of assessing the impact of airport noise as part of a particular SEA. The particularity of this method is that it integrates the objectives, indicators and criteria for assessing the impact of airport noise on the population using the method of multi-criteria evaluation, applied in the preparation of the SEA for the Urban development plan regarding the expansion of Tivat Airport, Montenegro. The changes in noise intensity within the planning horizon to 2030 were predicted taking into account the following factors: physical, geographic and demographic characteristics of the space, the projected increase in the number and nature of the flights operated within the planning period, as well as the types of aircraft. On the basis of these data noise dispersion modelling was carried out using the IMMI model, and the results obtained were used in a multi-criteria evaluation as part of the SEA. The results of the research do not indicate any significant increase in noise intensity within the planning period to 2030 and they represent a good basis for making relevant decisions regarding the future development of Tivat Airport.     

Determinants of airport retail revenue: a review of literature

ABSTRACT

As the airport retail industry continues to grow due to increasing travel demands, airport operators are increasingly developing their retail revenue potential to ensure financial viability. This study aims to provide a review of airport retail literature and identify the salient factors associated with passenger shopping behaviour. The paper presents a review of contemporary airport retail literature, covering a total of 50 studies from 1998 to 2018. The review identified 26 factors, which could broadly be grouped into five categories: airport/operator related; passengers' demographic related; passengers’ travel related; passengers’ psychological related and passengers’ resources related. In addition to providing a summary of the statistically significant factors across studies, the review identifies and discusses potential approaches for future research. These include the importance of considering both “to spend or not” decision and how much to spend and how most empirical studies focussed on the former; the gap in empirical analysis on the impact of airport terminal design layout on retail performance; and the gap in application of general consumer shopping behavioural models to airport retail problems. The paper concludes with the suggestion that we can build on the existing studies to develop a hybrid approach to solve several of the identified gaps simultaneously.     

Airport capacity choice under airport-airline vertical arrangements

This study investigates the effects of airport-airline vertical arrangements on airport capacity choices under demand uncertainty. A multi-stage game is analysed, in which competing airlines contribute to capacity investments and share airport revenues. Our analytical results suggest that for a profit-maximising airport, such a vertical arrangement leads to higher capacity but may not increase its profit, whereas for a welfare-maximising airport, such an arrangement has no effect on capacity or welfare. Capital cost savings brought by airport-airline cooperation, if any, always lead to higher capacity, and to higher profit for a profit-maximising airport and higher welfare for a welfare-maximising airport. Numerical simulations reveal that win-win outcomes may be achieved for an airport and its airlines without government intervention.