Managing uncertainty in airport parking facility development

Parking facilities represent a fundamental element in the airport’s operative process and at the same time they are among the greater source of revenues for airport operators. Commercial revenues are approximately the 50% of the airport total revenues (Ashford et al., 1995; Humphreys and Francis, 2002) and the revenues due to parking facilities range between the 18% and the 30% of the total (ACI International and Graham, 2008). The 2007 yearly report of the British Aviation Authority (BAA 2007) highlights that, in the year of analysis, the revenues from parking facility, in the UK, in average have reached the 33% of the total commercial revenues, with a growth of around the 5,5% respect the previous year. Similar data have been registered in the Paris airports in the 2006 where the revenues attributable to parking facilities represented the 21% of the total non aeronautic revenues, with a growth rate of the 5,1% respect the previous year (Aèroports de Paris, 2006). Different studies have proved that private vehicle is the predominant transport mode used by passengers for accessing airports. In detail, an analysis conducted in North America has shown that the average percentage of passengers using private cars for traveling to an airport is between the 67% and the 87% (Pels at al., 2002). The European situation does not differ much from the North American one, a study carried out by the airport of Athens have quantified as the 50% the quota of passengers which travel to the airport using private vehicles (Psaraki et al., 2002). A report on the accessibility of German Airports (Wilken et al., 2005) has shown that the 56% of passengers reach airports with private vehicles, among them only the 18% uses the private car, while the 34% is taken to the airport and the last 4% reaches the airport with rental cars. These data confirm the importance of planning airport parking infrastructures, both for accommodating the growing demand both for the importance of the revenues deriving from airport parking spaces in the economy of an airport. Moreover, the construction of airport parking spaces require the expenditure of significant economic resources: in fact on the one hand, the potential revenues stemming from these infrastructures tends to attract private companies along with airport companies which have to guarantee a minimum number of parking, but on the other it is characterised by an high level of risk. The profitability of an investment in airport parking facilities is strongly influenced by the air transport demand, which is difficult to forecast and affected by different exogenous variables, among them the socio economic conditions of the area where the airport is located and the global economic conditions. This paper is aimed at providing at methodology for evaluating the risk associated to the financial efficiency of airport parking space investments by examining the different sources of uncertainty and simulating the incidence of each of them.