City of Austin Performance Report 2014-15

Airline Cost Per Enplaned Passenger

Measure Description
This is a key indicator for the airport industry. This measure is a function of airport costs and enplanement trends. There are two important components to airport costs: landing fees and terminal rent. Airline landing fees are based on the estimated landed weight of commercial carriers and are set to recover the City’s costs for the construction, operation, and maintenance of the airfield. Terminal rents are intended to recover the capital, operating, and maintenance costs associated with the airlines’ use of the terminal. Since airlines are charged on a cost recovery basis for certain expenses, this measure improves with lower airport operating costs as well as higher passenger traffic. This number is very important to airlines when considering new or expanded service in Austin; Austin- Bergstrom International Airport (ABIA) is considered a moderate cost airport. 
Calculation Method
This measure is calculated by dividing the total airport costs of passenger airline customers (revenue for the Aviation department) by the total enplaned, or departing, passengers. 
FY 2014-15 Results
The goal for this measure was established at $8.55. The goal was exceeded by a margin of 5.0%, with actual airline costs per enplaned passenger of $8.12.
Assessment of Results
The FY 2014-15 airline cost per enplaned passenger of $8.12 is an increase of 1.6% when compared to the same period for FY 2013-14. Total landing fees of $22.7 million earned through September 2015 were $1.7 million, or 8.2%, higher than the total landing fees earned through September 2014. At the end of the fiscal year landing fee charges are adjusted based on actual costs and landed weights throughout the year.
The total terminal rental and other fees of $26.9 million through September 2015 were $3.5 million, or 14.8%, higher than the total fees earned in FY 2013-14. The method of calculating terminal rental rates is known as the compensatory method. Under this approach terminal rental rates are calculated to recover only those costs allocated to occupied facilities. The costs associated with the remainder of the terminal (primarily concessions and public areas) must be recovered through other sources of revenue such as concessions and other fees. Excess net revenue is transferred annually to the Airport Capital Fund. Actual costs and revenue for the portions of the terminal used by the airlines are reviewed at the end of a fiscal year. Adjustments are made to reconcile any over/underpayments. 
Delta plane loading passengers.
Next Steps
The Aviation department is committed to controlling and maintaining moderate airline costs to attract future business for the growing Austin air traveler market. A shared use passenger processing system (SUPPS) was implemented in FY 2013-14 to increase efficiency and accommodate growth.
Contact Information
For more information contact David Arthur, Assistant Director of Finance, at (512) 530-6688.