The Role Of Private Organizations In Airports: Factors Influencing Airport Performance (Essay).

1. Identify and discuss the main reasons for a government to privatise their airports.

2. Discuss how a change in in airport ownership can influence an airport’s performance.

3. Identify and discuss the major factors influencing an airport’s costs and revenue (both aeronautical and non-aeronautical).

4. Define benchmarking in the context of the airport industry and discuss its importance for measuring an airports economic performance and efficiency.

Main reasons for a government to privatize their airports

1.

Private organization plays an important role in airport industries and in this modern generation private organizations improved performance and efficiency as compared to government airports. The main aim of this report is to describe the role of private organizations in the field of airport industries and also provide main key factors to change government airports into private airports (Breheny, & McQuaid, 2018). Airplane fatal privatization has rotated into a design in the preceding 30 years such as economic change and improvement in the air transport industry. The main reason for a government to private their airports is that the private sector improves their facilities to advance a client business strategy (Cruz, & Sarmento, 2017). There are many reasons for a government to privatize their airports which are explaining in this paper.

 Private sectors provide many benefits to customers as compare to government sectors. There are many advantages of private airports such as it can reduce the burden of finances from governments, feast the risk linked to processes, develop new technologies, improve efficiency, and productivity (Ng, & Loosemore, 2007). For example, if the airport run under a government organization than the commercialization of facilities would be very tough but the private organization can detect the accounting problem; therefore, cost of airports can be examined and resolved. In private airports, low public investment is required and it has a market-oriented viewpoint for their industry strategies, and plans (Andrew, & Hendriks, 2017). There are main three economics improvements detected in private airports such as increments in functional efficiency of airplanes, improve profit business process, and increase the ability to make good investment judgments. The main advantage of private management is that it decreases government economic and people security in the organization. Airport privatization prototypes can be classified into five groups such as trade sell, concession, share flotation, finance privatization, and management contract. According to data, in the last few years 14 airports out of 20, has increased their efficiency and amongst them, only 6 airports faced financial issues (Neto, Casagrande, Lancieri, & Moraes, 2016).

2.

The main advantage of a private organization is that it improved the overall performance of the airline and it is estimated that private organization increased 50% of efficiency in 2017. The main aim of this report is to describe how private organizations improve the overall performance of airport industries. This paragraph is explaining how private organizations improve the performance of airports. According to the organization model, and management system the ownership of private airports influences the performance of airports because various owners possess diverse encouragements, and follow characteristic goals. This paper evaluates the key factors of a private organization in the field of airlines industries. 

Change in airport ownership can influence an airport’s performance

 In government proprietorship, a firm is measured by civil domestics who expand a target work that is a weighted regular of communal welfare and his/her own strategy. But in private organization, the firm is the track to expand profit or values of shareholders (Lai, Potter, Beynon, & Beresford, 2015). According to De Alessi, private firms would provide better services, and improve efficiency or airplane as compare to government ownership. Therefore private ownerships improve the performance of airports by improving their profitability by expanding the business into commercial and provide many services to customers (Carlucci, Cirà, & Coccorese, 2018). According to data from the last few years, private ownership is very efficient as compared to government ownership. Private ownership improves efficiency or performance of airports by developing advanced technologies in airplane and platform such as automatic door system, artificial intelligence, robotics, virtual reality and internet of things (Liu, 2016). According to research, private ownerships improve the performance of airports by increasing financial efficiency and developing modern technologies. There are some methods through which efficiency of airports can be increased such as TFP, data analysis, ratio analysis, and regression analysis. In which TFP is a most common process which is used by private ownership to determine the exact productivity of all efforts in the construction method (lo 2018).

3.

There are many key factors which increase the price and income of airport which are explaining in this paper. The price and revenue structure of the airport is divided into two issues such as operating, and non-operating. This paper is explaining major factors that influencing an airport cost and revenue. There are two main issues that affect the price and income of airfields such as flight, and non-aeronautical (Oum, Yu, & Fu, 2003).

In last few years non-operating factors have an effect on the presentation of airfields, for example:  in 2006, Singapore airports manufactured almost $1,456 million undiscounted taxes in which almost 50% were consequent due to operational reasons. Operating factors divided into two categories such as direct and indirect costs. Direct cost depends upon airline operations, and indirect costs impended upon airline operations (Humphreys, & Francis, 2016). There are two main factors that influence the cost and revenue of airports such as flight, and non-aeronautical. An aircraft factor consists of jetty fees, parking fees, handling fees, and passenger fees. Non-aeronautical factor consists of concessions, rents, recharges, consultancy, and direct sales. The concession is defined as a payment that the airport charges the manager of any organization to conduct various activities at the airport. There are many factors that influence cost and revenue of airports such as technologies development, competition, and market integration, the price of oil, flight distance, and timing of purchase, passenger appetite, and fees (Bezerra, & Gomes, 2016). To reduce the cost of operation in airports, a process can be used that is the analytic hierarchy process. There are many applications of AHP in various fields such as social, economic, technologies, and political. According to results, there are main four factors analyzed in airports such as the structure of routes, types of airplanes, cost of labor, and quality management.

Major factors influencing an airport cost and revenue

4.

Benchmarking play a significant role in many organizations and industries and this process also provide a platform to evaluate problem occur in any organization. The main aim of this report is to describe the fundamental concept of benchmarking and the role of benchmarking in the field of airport industries. Benchmarking has a most common tool which is used in many industries and it is also very helpful in detecting any problems and improves performance. Benchmarking plays an important role in airports industries and improves the productivity and efficiency of airports. This paper is explaining the role of benchmarking in airport industries (Yoshida, & Fujimoto, 2008).  

 A good benchmarking is defined as an effective cost, efficient tool for time to obtain the number of innovative ideas from which one idea can be used and it also provides many benefits to a company. There are many applications of benchmarking such as benchmark airport charges, airport productivity benchmark and improve the performance of airports. Benchmarking needs a process which can be used to improve the performance and efficiency of airports (Fragoudaki, Giokas, & Glyptou, 2016). There are many steps involve in the benchmarking process to improve the efficiency of airports such as establishing a goal, data collection, analysis, and adaptation. Benchmarking plays an important role to improve the performance of airports industries and it is also used to detect core areas such as facilities, cargo throughput, security and safety, financial, and economic implications, and business development. Benchmarking is a tool which is used to analyze the performance of airports and improves the efficiency of the airport's industry. In benchmarking, a process is used that is simple indicators which produce a ranking of performance. Benchmarking is also used to explore more modeling methodologies which can help to improve the performance of airports.

Conclusion

There are many advantages of private organizations such as improve efficiency, productivity, performance and reduce time and cost. Therefore many airports are considered in private management and they improve their efficiency and reduce financial problems rather than government management. This paper explained the role of private organizations in airports. This paper explained the role of the private organization in the field of airport industries. The private organization should improve overall efficiency by developing many advanced technologies and e-services.

Cost of airline increases when an organization adopts the latest and modern technologies to increase their productivity and they also increase many facilities for customers. This shows that the above 2 factors are very important to decrease the cost of aircraft and the rest of the two factors are not important. This paper explained many key factors that influence cost and revenue of airports such as technologies development, competition, and market integration, the price of oil, flight distance, and timing of purchase, passenger appetite, and fees. However, managers should focus on their resources, and improve the performance of airlines using modern technologies, and identify factors that influence the cost and revenues of airports. This paper explained key factors which are influencing an airport cost and revenue. 

The role of benchmarking in the field of airport industries

Benchmarking is defined as a process which is used to describe and identify different types of problem in any organization and also provide a platform to improve the overall performance of any business. Generally, this process is used for improving efficiency and performance of any organization and industry. There are many advantages to this process which studies in this report and also explained the role of benchmarking in airports industries. This paper explained benchmarking process and role of benchmarking in the field of the airport. The private organization should improve the performance of airport industries by adopting modern technologies, services, by proving promotional offer to customers and clients and increasing information and systems services.   

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