RATIONAL AIRPORT RATE MAKING

The pricing policy that is being developed for Portland International Airport is examined as well as the methodology for determining the rates and the present factors that have permitted this effort. The objective is to identify different areas of the airport and their associated costs, both capital and operating. From that, rates can ideally be established and each area would be placed on a break-even basis. Four work areas were identified: their terminal complex, the airfield, the airside development area, and the groundside development area. The base of the data system for operations is derived from a series of monthly computer gains or loss statements referred to as management reports. These reports give a monthly summary of revenues and expenses. The reports further divide the airport into 52 geographic locations and 11 functional locations. The bond ordinance and the agreement with the air carriers provide the mechanics for generating the capital funds necessary for future airport development. Having identified annual operating and capital costs, and recognized the revneues anticipated from each and except the landing fees and terminal rents, the next step required is to add enough revenues into the terminal complex and airfield to bring total revenues up to the sum of operating and capital expenses. These added revenues will give the break-even rental rate and landing fee. The whole exercise is meant to establish a "rational: methodology for ratemaking policy whereby fees are not subject to negotiation but are the direct result of the budget process. It also allows all tenants to be treated on the same basis while the airport generates the required revenues. The emphasis is on cooperative rather than adversary relations, and allows all parties to concentrate on things that are more important than rate negotiations.

  • Corporate Authors:

    American Association of Airport Executives

    2029 K Street, NW
    Washington, DC  United States  20006
  • Authors:
    • Sartin, J
  • Publication Date: 1977-10

Media Info

  • Pagination: p. 21-24
  • Serial:

Subject/Index Terms

Filing Info

  • Accession Number: 00176614
  • Record Type: Publication
  • Source Agency: Airport Management Journal
  • Files: TRIS
  • Created Date: May 31 1978 12:00AM