Re-calibration of Airport Business Models

BMF - Business Model Frameset

183:879382629 (Max Schintlmeister) — Mon, 27 Jun 2022 14:19:52 GMT

BMF - an abbreviation that puts your airport back on the fast lane

Only three letters but powerful as the whola alphabet together.

The Business Model Frameset means "Not every area for itself, but all together."

Three basic models are developed individually for each airport, their dependencies analyzed and integrated into the consideration of the airport as an overall concept.

The BMF and the people involved are then the basis for all further development steps.

Three Reason to hire Airport Excellence

183:879382629 (Max Schintlmeister) — Thu, 23 Jun 2022 14:30:06 GMT

What makes Airport Excellence unique?

What we can offer... Three reasons why you will benefit from our expertise:

Full picture
Ability to identify the drivers that matter
Ability to identify the real game changers

Due to my experience from airport privatization and concession projects I start with limited information to get the first results quickly – fine tuning comes afterworth.
In this way you get a very economic result and then you decide how to proceed.
Our promise – if you don’t like our work from the first phase you don’t need to pay anything.

Our unique setup allows us to provide quick results.

Due to all these changes a step back to view the complete business model helps mainly when looking at the shortages airports experience: land, people, financial funding.

Key insight from the Passenger Terminal Conference 22

183:879382629 (Max Schintlmeister) — Fri, 17 Jun 2022 13:04:09 GMT

There are about 10 main challenges for airports which are treated in 10 different areas of expertise but there is only one business model per airport.

To get the right prioritisation of resources we help airports to select the right options and to adapt them to achieve the individual targets.

Our three step approach :

Assess the challenges and their impact on the business model of your airport
Map the components of the business model regarding drivers and relations to each other
Combine and align to benefit from cross-fertilisation and synergy effects (this needs: enabled people, optimising business units, re-design of the business model).

Airport Excellence supports the re-calibration of your airport’s business model with our experience:

Elaboration of tailor-made, flexible models that combine traffic, capacity, commercial, operational, and financial aspects.
Establishing a business mindset meaning that every decision maker understands the relations between revenues and costs, opportunities and threats, business units and market segments.
Facilitating the re-calibration process by including all relevant internal and external people, providing analysis, including best-practise examples. There will be workshops, “homework” and study tours.

Three Power Tools

183:879382629 (Max Schintlmeister) — Fri, 03 Jun 2022 18:03:09 GMT

The Airport Excellence Support: Three Power Tools for sustainable business models

We provide the tools that airport people can jointly develop the airport’s next generation business model.

Further down, each tool is described in detail.

Modelling the framework - “Measuring is Knowing”

links historical data like financial results, traffic data, economic data and infrastructure information to identify all relations that are necessary to assess the future performance of the business under different economic and market conditions. Having a clear map of the current situation is also the prerequisite to analyse various development options.

With our experience in the elaboration of financial models, business-plans and business assessment we convert your historical data into a flexible business-plan model that delivers immediate results.

Training the people - “Knowing is performance”

Understanding every aspect of an airport, what are the success factors and resources of the different business units, what are the trade-offs, what drives the market and how do we set up a business case, what determines the value of a company and who are the stakeholders and what do they expect? How are airports operated all over the world and how does the airport perform compared to others? The better the employees understand the airport’s business model in a global context the better they will contribute to the airports business performance.

Our Managing Director, Max Schintlmeister, has a broad and long experience as a trainer and lecturer. He has set-up the seminar "Airport as Business Models” for the Munich Airport Academy and also has trained executives all over the world. He also lectures at the Cranfield University and the University of Westminster.

Facilitation - “Releasing the potential”

bringing in the people into the process. Making all their experience and know how available to the business modelling and development process and creating an environment that makes the joint development of options possible. The business model framework accompanies the process providing valuable assessment and analysis work. Besides the model and the management of the workshops we provide additional information (benchmarks, best practice, case studies) and organise study tours.

Framework Structure

183:879382629 (Max Schintlmeister) — Mon, 30 May 2022 15:58:46 GMT

How to release the full potential of an airport’s location

Architects have changed their planning long ago in order to create stronger buildings. They shifted from "column-structures" to the "frame-structure". Airports should do the same to be more resilient to today's challenges. Below, I explain the differences of both structures and of course I would be happy to help introduce the Framework Structure at airports.

The Business Model Threats

Wed, 25 May 2022 14:10:57 GMT

F our factors that put the business model of airports under pressures

There are basically four factors that put the business model of airports under pressure:

Balancing for highest performance

183:879382629 (Max Schintlmeister) — Wed, 04 May 2022 16:20:24 GMT

Find the right balance between potentials and resources

One of my USPs is my abality to evaluate flexibly and thoroughly the impact of performance indicators... For an airport it is crucial to identify its performance drivers. So together with the airport people I can find the right balance between Potentials and Resources so that the performance can go up to its peak (again).

The Business Model Development Process

183:879382629 (Max Schintlmeister) — Thu, 27 Jan 2022 17:31:41 GMT

Four steps for an ecologic and economic business model

First : translating the business in comparable figures, putting revenues, costs and investments in context and denominate the results including the involved risks in money terms is a great basis since the major opportunities and challenges can be identified and quantified. During the business development process the financial framework is an indispensable tool to quickly evaluate every idea, to assess every option and to analyse every scenario.

Second : before starting with the actual development process we do not only need the numbers but also the readiness of the people. For that reason we run a three day ” Airport Business Training ” where the participants learn about revenues and costs of airports, how the different factors (aviation, commercial, operations, infrastructure) are related to each other and how other airports work. Finally a business-plan will be jointly developed.

Third: based on the assessment performed with the use of the business framework and the known inter-dependencies the current model can be optimised by balancing revenues and costs and also include accepted risk levels. A second focus is put on the alignment of the individual targets of the business units with the overall company result.

Fourth: getting green, mobility, real estate development and other possible changes are opportunities for the future development of the airport business. The Re-Design of the business model deals with this opportunities and selects the options that are the most promising for the airport.

Customer Experience at Piestany Airport

183:879382629 (Max Schintlmeister) — Wed, 22 Sep 2021 17:06:11 GMT

Positive customer experience at Piestany Airport

In September 2021, I presented the path to a sustainable business model for Piestany Airport and finally got the chance to visit the airport. Only one gate but for me as a parent of two young children the playing zone was really impressive.

Real Estate Activities - Potential and Limits (paper)

183:879382629 (Max Schintlmeister) — Sun, 16 May 2021 13:06:32 GMT

At the 2021 ACI Commercial Forum, Max presented his latest conclusions after having analyzed thorougly a variety of revenue generators at different airports.

The title of his presentation (and the corresponding paper) summarizes his latest findings in a few words:

"Integration of real estate activities

into the airport business model:

potentials and limits"

The paper can be downloaded here.

In case the link doesn´t work, please send us a note and we will be happy to e-mail you this paper.

click here for our email address

Max during his session chair

My experience as a facilitator

Tue, 27 Apr 2021 12:33:16 GMT

I love my job... Some ideas of how I provide benefit to an airport by being a CEO’s sparring partner or a facilitator for the different department heads.

Balancing different targets of the various departments of airports in order to achieve the maximum result for the company. However, it is interesting how airports separate the responsibility for revenues and costs among different units. It is logical, since an airport has to fulfill many tasks and needs to be safe and reliable but someone in the middle has not only to calculate margins per business unit but also per market segment, peaks, and so on and to provide information about sensitivities and trade-offs.

The New Business Model Framework

Tue, 16 Mar 2021 13:33:15 GMT

I proudly present: My new Business Model Framework for Regional Airports

Finished! Today I present my framework for the development of sustainable regional airport business models.

I look forward to receiving your comments!

Most regional airports understand themselves as infrastructure operators who try to get as many traffic as possible. A certain offer of retail and F&B outlets shall increase the revenues per passenger. The real estate business is more a rental business with the objective to provide space to entities that are somehow related to the airport business.

The new business model considers both the aviation and the real estate business as equal business units that exploit the potential that is driven by the airport‘s catchment area. It is the main goal to manage the airport‘s resources as efficiently as possible to achieve the maximum profitability or the maximum benefits for the stakeholders (this has to be defined).

Furthermore an airport that follows the new business approach will take every action possible to increase the value of its catchment area by e.g. improve the accessibility of the airport, or by developing the catchment as a destination together with other stakeholders. The airport will try to use every square meter of land in order to generate revenues or to improve its eco-footprint by e.g. installing solar panels.

Compensate Revenue Gaps

Wed, 20 Jan 2021 12:13:34 GMT

How to compensate the revenue gap of airports?

Even when the traffic gets back to the pre-crisis level, airport s will miss substantial budgets caused by the loss in revenues in the years 2020 and 2021. Therefore CAPEX planning needs to be done carefully and I suggest to apply the " Pareto Principle ": 20 % of the costs to achieve 80 % of the target.

The trade-off between quality and expected disruptions needs to be put into the focus. Just a small reduction in quality may lead to substantial savings. Of course the airport has to assess the impact of higher risk levels on the revenue side.

I am sure that there will be significant cost savings by: postponing projects, adjusting the requirements, temporarily replacing CAPEX by operational measures, accepting a higher risk level by introducing a sophisticated mitigation approach.

Ways for increasing revenue

Wed, 13 Jan 2021 12:20:24 GMT

There are many ways for increasing revenue

Some weeks ago I shared a chart with you showing the average operational and capital expenditures per year per departing passenger of smaller regional airports. This time I have introduced the average fee airlines would pay to the airport and we see that an airport handling 1 Million passengers per year can only cover the operational expenditures and the annual investments if it handles mainly legacy carriers.

Most airports have no chance to finance their capital and administration costs. However, there are examples of airports with about 1 million passengers that make profits: either because they are able to generate higher aviation revenues per passengers (e.g. Innsbruck) or because they follow a strict cost management approach. Some other airports have high revenues from the real estate business or the General Aviation segment. Every airport can learn from the others:

Invest in the catchment area to make it more attractive (accessibility, creating an incoming market)
CAPEX programme according to market needs
Operational Hours and staff (how many fire fighters are necessary)
Re-Position ning the airport as the mobility or connectivity hub of the region.

Now I am looking for more data and examples - who wants to share?

Doomed to grow?

Thu, 07 Jan 2021 12:36:18 GMT

Volatility of traffic development requires diversification

The EBITDA per Pax has been declining at most airports over the last ten years. A comparison of 2 hubs (MUC-Munich, VIE-Vienna, HAM-Hamburg, CGN-Cologne-Bonn) and 2 major "O&D" airports in Germany/Austria shows that Vienna took a different path with a strong focus on the development of the Airport City and the contribution of the profitable airports in Malta and Kosice.

Diversification seems to be the right approach when the volatility of traffic development increases (dramatically in the case of aviation).

Profitability comparison

Wed, 16 Dec 2020 12:40:29 GMT

Profitability comparison – Austria vs Germany

Interesting! German Regional airports need much more passengers than Austrian airports to be profitable.

There are some reasons for that because Austrian legislation is more flexible with regards to the utilization of staff but on the other hand Austrian airports have to pay for the security leading to much higher airport fees that should actually reduce traffic and profitability. The business model of Austrian airports seems to work (at least until the breakout of COVID). I took the available annual accounts and adjusted them to show the data without any public support (as far as this was obvious). I took the map from the website of the German Airports Association (ADV), I hope this is o.k.?

The body content of your post goes here. To edit this text, click on it and delete this default text and start typing your own or paste your own from a different source.

Critical cost factors

Wed, 11 Nov 2020 12:46:00 GMT

A brief analysis of critical cost factors

Beside the right number of operational staff, the size of a passenger terminal is also a critical cost factor of an airport. Providing the right amount of space for the passengers is therefore the real „Balance Challenge“ - the longer the waiting time the more space per passenger is needed.

How much space exactly? Well, this depends on the passenger structure. An efficient passenger terminal provides the right amount of space at the right place at the right time in order to maximise both commercial revenues and operational efficiency. In order to calculate the flow, we need to consolidate various data sources like traffic stats, access control, DSC data and whatever is available.

Knowing more about the show up profiles of passengers helps to actively manage the flows and hence leads to a better utilisation of the facilities and higher commercial revenues.

Another question will be whether more space will be needed due to the Corona virus. This however cannot easily be covered by simply adding space.

Success factors

183:879382629 (Max Schintlmeister) — Tue, 03 Nov 2020 12:49:19 GMT

What are the factors that make regional airports successful?

Here are some questions that should be kept in mind when we talk about success factors for regional airports:

- The unique catchment (population, incoming tourism, economy) but also the proximity to larger airports is an important factor. However, this does not explain everything. Some airports have comparable catchment areas but still a huge difference with regards to passenger numbers.

- Is the tourism in the region also relevant for air travel?

- What are the main trading partners of the region?

- What are the alternative modes of transport ?

- And of course, what are the competitive advantages of one airport compared to the airports in the neighborhood?

I am working on a map that shows all airports ( I started with the region I know quite well), the distance/travel time (at the moment only by car) to other airports, the number of passengers. Then I started to analyze the unique catchment area (population and incoming international tourism).

The longer I look at the picture the more thoughts/ideas are generated. Please not that I have used 2018/2019 data because I truly believe that we will come back to this level.

Avoid Insolvency

183:879382629 (Max Schintlmeister) — Wed, 21 Oct 2020 11:55:33 GMT

How airports can avoid insolvency

1. Not only re-schedule but also re-design the CAPEX schedule:

Trade-Off between quality, lifetime, level of accepted disr uptions, operational alternatives, costs and potential returns.

2. Reconsider the operational scope:

Trade-Off between revenues and costs - do clients value (and hence pay for) the quality your airports provide?
Operating hours and necessary staff

3. Identify land that is really necessary for operational needs and assess the value of land that could be monetised.