ABSTRACT
Airport management and planning is not an easy task. Airport authorities must invest substantial capital sums in large and immovable assets that have no alternative use, to satisfy a demand over which they have little control except very indirectly. It is the airlines and not the airports who decide where and how the demand for air travel or air freight will be met. Airports merely provide a facility for bringing together airlines and their potential customers. Thus, matching the provision of airport capacity with the demand while achieving and maintaining airport profitability and an adequate level of customer satisfaction is a difficult task. It is made particularly difficult because investments to expand airport capacity are lumpy, increasing effective capacity by much more than is needed in the short term, and because they must be planned long in advance. The planning cycle from the initial conception and decision to build a new large terminal to its actual opening may be between five and ten years. Moreover, that terminal may well have sufficient capacity to meet projected demand for at least another ten years. Thus airports are planning fifteen to twenty years ahead. This clearly requires above all the use of accurate and sophisticated forecasting techniques. But airport managers also need to have a clear understanding of their cost and revenue structures both to ensure that they achieve profits or at least reduce their losses and in order to monitor the financial impact of any new investments.
