International Journal of Transport Management 1 (2002) 7985

www.elsevier.com/locate/traman

Performance measurement: a review of airports

Ian Humphreys
a

a,*

, Graham Francis

b,1

Transport Studies Group, Department of Civil and Building Engineering, Loughborough University, Loughborough LE11 3TU, UK
b
Performance Management Research Unit, Open University Business School, Walton Hall, Milton Keynes MK7 6AA,
UK and Department of Accounting, Waikato Management School, Waikato University, New Zealand

Abstract
This paper considers the past, present and future of airport performance measurement. The authors examine the changing nature
of the performance measurement of airports. Airport performance measures are important for day to day business and operational
management, regulatory bodies, Government and other stakeholders such as passengers and airlines. Measurement systems have
been forced to develop in response to changing organisational contexts. With pressures for change coming from changing ownership
patterns, an increased commercial focus, regulation, rapid passenger growth, increased concern for the natural environment and
technical innovation, the experiences shared and lessons to be learnt highlighted in this paper will be of interest to both academics
and practitioners.

2002 Elsevier Science Ltd. All rights reserved.

1. Introduction
Complex and dynamic organisations such as international airports provide a challenge in establishing
an appropriate performance measurement system. The
many interacting parts of airports; passengers, airlines,
handling agents and surface transport service providers,
in addition to the interests of the regional and national
economy, complicate the development of performance
measurement systems. Performance measurement is a
critical management activity, both at the operational
level of the individual airport and at the wider system
level. This is particularly relevant given the impending
review of airport charges and regulation of UK designated airports by the Civil Aviation Authority and the
Oce of Fair Trading and international moves towards
greater commercialisation.
This paper considers the past, present and future of
airport performance measurement through reection on
a series of related projects by the authors. These projects
have been in the areas of; airport privatisation (see for
example Humphreys, 1999; Humphreys and Francis,

*
Corresponding author. Tel.: +44-1509-223422; fax: +44-1509223981.
E-mail addresses: i.m.humphreys@lboro.ac.uk (I. Humphreys),
g.a.j.francis@open.ac.uk (G. Francis).
1
Tel.: +44-1908-655888; fax: +44-1908-655898.

2000; Humphreys et al., 2001); performance measurement in regulated industries (see for example Francis
and Minchington, 1999; Francis and Humphreys, 2001)
and benchmarking in air transport (see for example
Francis et al., 1999). Evidence of the practical implications from the viewpoint of airport professionals has
been gathered from a number of major European airports on the strict condition that they remain anonymous. The information was gathered through a series of
face to face informal interviews during 2000.
There are several reasons why airport managers and
governments measure airport performance: to measure
eciency from a nancial and an operational perspective (Doganis, 1992), to evaluate alternative investment strategies, to monitor airport activity from a safety
perspective and to monitor environmental impact.
Management require information to enable them to
identify areas that are performing well and those where
appropriate corrective action needs to take place. Governments typically require information to regulate
airport activity. The airports customers will also be interested in assessing its performance. It is important to
recognise that airlines are the key customers of airports
and that the airlines act as an intermediary between the
airport and passengers or freight shippers. Thus the
dierent stakeholders will have varying performance information requirements. The sort of performance measures used will be contingent upon the stakeholders
needs and the availability of information to them.

1471-4051/02/$ - see front matter
2002 Elsevier Science Ltd. All rights reserved.
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I. Humphreys, G. Francis / Transport Management 1 (2002) 7985

Examples of dierent purposes to which performance

data may be used include:
Governmentfor economic and environmental regulation
Airlineso they can compare costs/performance
across airports
Airports managersto run their own business
Passengersto assess how well they are served as
consumers
Owners/shareholdersto assess business performance and the return on their investment
Forecasts that world air trac would continue to
grow at around 5% per annum and that the cost of airport development to accommodate this growth would
total $500 billion by 2020 (ACI, 2001), have led governments to consider ways of relieving themselves of the
potential nancial burden of airport ownership.
Internationally more than 60 countries, in South
America, Australasia, Africa, Northern Europe and the
US, have introduced private interests into the operation and ownership of airports. This paper will assess
the implications of changing ownership patterns for
performance measurement systems. The paper is divided
into three sections, starting with the historical context of
performance measurement at airports, secondly tracing
current developments and then nally considering possible innovations for the future.

sults were collated on a national basis and made available to the public by the Chartered Institute of Public
Finance and Accountancy.
Outputs related to freight throughput, and the resources used to generate that output, are very dierent
from those used to generate the equivalent outputs in
passenger terms. Dierences include; the ground handling equipment used, the hours of operation, the average age of aircraft and associated environmental
impacts. These dierent outputs and inputs need measuring in their own right. There was little point in
amalgamating the two areas other than to give an
overall nancial result. Ultimately under the public
utility view of airports that prevailed the WLU was
accepted but was of little use to airport management.
Operational performance was measured against
internationally specied design and level of service
standards. Many authors have specied the dierent
standards (for example Ashford, 1988; Muller and Gosling, 1991). Design standards were expressed in terms
of the space oered to a user at each part of the airport
facility, i.e. square metres at each facility per passenger
per hour (Ashford et al., 1995). This technique, borrowed and adapted from highway design, gave an
aggregate view of passenger service levels within the
airport terminal. Current developments in airport performance measurement are now considered.

3. The present: commercial pressures

2. The past: public service measures
Until the mid-1980s airports were regarded as public
service facilities, publicly owned, operated and subsidised for the benet of the Nation or Region. Often
airports were developed as objects of prestige by local
and national government irrespective of their commercial viability (Humphreys, 1999). Performance measurement developed initially within this context. Performance
indicators were primarily used to assist in making publicly owned airports accountable to their government
owners. The focus was placed on measuring the performance of airports and their roles within the wider air
transport system.
Measures that developed were based around the work
load unit (WLU), dened as one passenger processed or
100 kg of freight handled (Doganis, 1978). This measure
was adopted by the airlines around 20 years ago to
provide a single measure of output for passenger and
freight business (for example see CIPFA, 1980). Typical
measures used included: total cost per WLU; operating
cost per WLU; depreciation cost per WLU; labour cost
per WLU; WLU per employee; WLU per unit asset
value; total revenue per WLU and aeronautical revenue
per WLU. In the UK, annual airport performance re-

The interview data revealed that the move towards

privatisation and the new commercial emphasis at European airports has led to new performance measures
being introduced to reect the changing management
goals. New measures fall into three categories: nancial
measures to monitor commercial performance, measures
to meet the requirements of government regulators and
environmental measures.
Commercial pressure from ownership forms that demand a degree of nancial accountability have led many
airports to become more focussed on measuring operational and business performance within the airport
company. Operational performance measures that relate
passenger level of service to international standards are
still widely used. The major weakness with this type of
measure is that they are too crude. As Gosling (1999)
highlights, there is a tension in data collection between
what is easy to measure and what is useful to measure
but potentially more dicult. The level of service delivered is contingent upon various passenger characteristics and a certain design may deliver totally dierent
levels of service for passengers depending on the purpose
and nature of their journey. The business passengers
view of a particular level of service will be vastly different to the view of a passenger travelling on a package

I. Humphreys, G. Francis / Transport Management 1 (2002) 7985

holiday. Park (1999) began to address this when he developed a perception response model for level of service
that contained a simple two-way segmentation between
long haul and short haul passengers.
Major airports have developed performance measures beyond the WLU that reect the operational needs
under the new commercial context for airports. Ultimately, the processing of the passenger has very dierent
demands and rewards for an airport, particularly in this
ever more commercial age of airport retailing. Freight
does not spend money in the airport shops! Dierent
passenger market types have dierent characteristics
regarding their propensity to spend money and their
spending preferences. One small UK regional airport
reported to us to have tripled its retail space and initially
had poor spending levels because the shops were seen as
too high priced in relation to the quality oered. New
management changed the retail oer to cater for the
charter holidaymaker, a market segment that accounted
for around 70% of that airports business. 2 As a result of
this, revenue per square foot increased dramatically.
Market segmentation of passengers by spending behaviour is essential if the retail provision is to be eectively targeted and revenues from retail maximised.
Indicators such as commercial income per square
metre of oorspace, concession income per passenger,
non-aeronautical income per passenger, income per
employee and property income per passenger have
emerged. Interestingly Table 2 shows that non-aeronautical income per passenger was deemed to be the
most useful of the nancial measures, in line with the
trend towards airport management adopting a more
commercial focus.
The nancial orientation of airports is clearly shown
by the increased presence of commercially based indicators (see Tables 1 and 2 below). These measures reect
the diversication of the business under new commercial
and privatised ownership structures and the subsequent
management drive to satisfy shareholders. Whilst traditional WLU measures are present there is now also the
inclusion of commercial concession and duty free income measures. As well as revenues, attention is paid to
costs (again not exclusively in terms of WLU) and the
impact of the organisations capital structure.
The relatively low use of total revenue per WLU
(Table 2), and its rating as having a low usefulness to
managers relative to other nancial measures, could
reect the lack of relevance to management of a nancial measure that combines two outputs (passengers and
freight) that have very dierent inputs (Humphreys and

Whilst at this airport 70% of passengers were charter it should be

noted that this is not the case for other airports. For example
Heathrow charter passengers only accounted for 122,000 of 62.3
million passengers in 1999/2000 (source CAA, 2000).

81

Table 1
FLAP groupa nancial performance measures (source: authors)
Revenue

Cost

Trac income per passenger

Trac income per WLU
Trac income per turnover %
Commercial income per passenger
Concession income per passenger
Duty and Tax free income per
international departing passenger
Other concession income per
passenger
Property income per passenger
Property income per work load unit

Sta cost/employee
Passenger/employee
WLU per employee
Sta cost per passenger
Sta cost per WLU
Other direct costs per
passenger
Other direct costs per WLU

Unadjusted reported accounts

Prots/equity %
Debt/equity %

The FLAP group made up of representatives of Frankfurt, London, Amsterdam, and Paris airports.

Francis, 2000). WLU are perhaps more relevant as

performance measures for use by airlines rather than
airports who gain relatively little revenue from bellyhold freight activities compared to passengers.
A survey of the worlds 200 busiest passenger airports
(Francis et al., 2001) provides an insight into the prevalence and perceived usefulness of performance measures. Extracts from this survey are shown in Table 2.
Airports have begun to benchmark their quality of
service with each other. The world airports body, Airports Council International (ACI) has begun to facilitate such comparisons and has produced a survey of
service standards and measurements used at 120 of its
member airports (ACI, 2000). However the tendency on
occasion is to measure what was easy to measure as
opposed to what was useful. For example baggage delivery time was one of the most used measures, yet respondents found this to be of relatively little use (mean
of 1.5 on a scale of 15, see Table 2). Perhaps this is a
process that managers feel depends on other factors
such as handling agent employed, level of congestion,
ramp handling eciency. It would be interesting to
follow up exactly why this measure is considered as not
useful. Quality of signage was not used by a surprisingly
large proportion of airports, possibly as a consequence
of the diculty in assessing such qualitative information.
Other measures used are deemed to be useful to the
airports that use them. An interesting point is the use of
check in waiting time as a measure by airports because
this typically depends on the airline and how many sta
they allocate to this task and how many check-in desks
they rent from the airport. It is possible that this is
measured by airport management to monitor airline
behaviour and the implications of this for the level
of service delivered to passengers in the terminal and
the impacts on passenger ow and space requirements
at dierent parts of the terminal. Given expansion

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I. Humphreys, G. Francis / Transport Management 1 (2002) 7985

Table 2
Performance measures used by respondents
Performance measure

Used (%)

Not used (%)

Do not know (%)

Usefulness of measurea
Mean

Income per passenger

Expenditure per passenger
Concession revenue per m2
Non-aeronautical income per passenger
Revenue to expenditure ratio
Capital expenditure per passenger
Baggage delivery time
Check in waiting time
Quality of signage/ease of nding way
Availability of trolleys

85
85
78
77
73
32
78
69
62
55

13
13
22
19
21
61
22
31
36
39

2
2
0
4
6
7
0
0
2
6

4.2
3.9
4.1
4.3
3.9
3.2
1.5
4.4
4.5
4.3

0.8
1.1
1.0
0.8
1.1
1.5
0.6
0.7
0.8
0.8

Source: Extracts from Francis et al. (2001).

a
Scale: 1 not useful to 5 very useful, S standard deviation.

pressures airport managers may need to monitor airline

behaviour in order to manage the terminal eciently
now and to assess future capacity requirements realistically.
Regulation of airport activity by Government and
the performance measures that accompany it can have
dysfunctional eects. The case of BAA plc would tend to
indicate that the regulation introduced as part of the
UKs privatisation policy and the impacts of this on the
environment are in conict. London Heathrow handled
nearly 65 million passengers in 2000 and is the busiest
international airport in the world (ACI, 2001). Regulation to protect users has placed a price cap on the level
of aeronautical charges and as a consequence Heathrow
is one of the cheapest airports for the airlines to use.
Increasing the aeronautical charges is likely to have a
limited eect on suppressing trac at the London airports because they only represent 57% costs, except in
the case of the no frills carriers and charter services
when airport charges can play a more signicant part
(Doganis, 2001). However, given the favourable trac
volumes and passenger yield at Heathrow, if aeronautical charges were increased the money could be used to
mitigate some of the social and environmental impacts
of air transport. This might make proposed airport
expansion more acceptable to the local community.
The price capping of London airports shows how the
regulator can restrict the prots from traditional core
(regulated) airport operations through a pricing mechanism (RPI-X). These operations are often very dierent
from the traditional business of a company but may be
being pursued in the interests of private shareholders
and could be building on their core competencies. For
example BAA view retail as a core competency and, at
Heathrow, have purposefully diversied their eorts into
increased airport retail activity. The commercial pressure for increased retail activity within BAAs terminals
may conict with the UK policy to maximise the use of
existing airport capacity (HMSO, 1985). The need for an
additional terminal may be less pressing if the 448,000

square feet of retail space in the current four terminals was converted to passenger processing usage. These
considerations are currently part of a wider UK airports
policy consultation in response to the Department of
Environment Transport and the Regions document, The
Future of Aviation (DETR, 2000).
The BAA have also diversied into property development, have purchased and managed a chain of hotels
and have entered a joint venture to develop and manage
seven out of town shopping centres as part of their
strategy to maximise their return to shareholders by
focusing on unregulated activities.
The UK example provides an indication of the possible consequences of airport privatisation. The post
privatisation focus for airports includes: share performance, in addition to the traditional operational measures, commercial activities such as concessions and
retail; diversication of business into activities such
as property management and adaptation of business
strategy to compensate for the role of the regulator
(Humphreys, 1999). If properly regulated there may be
little reason why airports should not be privately owned.
Given that governments no longer wish to nance airport expansion, the most eective way forward is a form
of privatisation or commercialisation. It is important
however that governments and regulators do not allow
airport mangers to lose sight of their public service and
environmental responsibilities and develop performance
measures to ensure this.

4. The future: ensuring accountability to stakeholders

The future of performance measurement at airports
is likely to be driven by the forces of commercial business focus; increased responsiveness to targets set by
regulators and increased sensitivity to environmental
standards that protect communities around airports.
Passengers make a variety of dierent demands on the
capacity oered by an airport, which in turn generate a

I. Humphreys, G. Francis / Transport Management 1 (2002) 7985

varied range of dierent revenues. The dierences need

to be accounted for and measures of performance calculated with respect to the dierent trac segments.
Once this has been achieved then meaningful cross-airport comparisons of performance may be possible. It is
inappropriate to consider outputs alone; the wider outcomes should also be considered. Smith (1993) has discussed the diculties associated with attempting to
measure outcomes, as opposed to outputs.
Airports have traditionally been compared to their
peers (Graham, 2001) but have now started to recognise
the potential for benchmarking against other airports to
improve their competitive position through the identication and adoption of best practices (Centre for Airport Studies, 1998). A comprehensive comparison of
airport service performance indicators from the perspective of international passengers is published by The
International Air Transport Association (IATA) and
includes data from 57 of the worlds major airports
(IATA, 2000).
These ratings oer a starting point from which airport management can start to ask questions about performance levels. The extent to which airports analyse
the processes that generate the rating gures and learn
from best practice is likely to advance as a consequence
of the drive towards a more commercial business focus.
An example of an innovative benchmarking approach
was BAA examining the processes used by Wembley
Stadium to handle large volumes of people and cars and
applying some of the lessons to its airport operation.
Highly quantitative methodologies such as data envelopment analysis (DEA) and total factor productivity
(TFP) have been applied to airports in order to measure
inputs in relation to outputs. Parker (1997) applied
DEA to airports by measuring the technical eciency
(operation on the best practice frontier) of BAA. Parker
showed the variability of airport performance within the
BAA group and measured the relative eciency of different decision-making units within each airport and the
changes in relative eciency over time. TFP was used
prior to the privatisation of Australian airports to assess
performance. Graham (1999) noted that data comparability problems limited the application of TFP between airports with dierent owners.
Two major European airports reported to us that
noise restrictions to the operational day caused stacking
of aircraft that may arrive prior to the lifting of the
curfew due to meteorological conditions en route. Although the stacking process relieves noise for communities under the airport ight paths there is a negative
environmental impact of this activity in relation to increased levels of emissions from queuing aircraft. It is
more dicult to measure the consequences of emissions,
but a conict exists in that one measure to protect the
community from noise appears to be degrading the
natural environment from the perspective of increased

83

emissions. Performance measures need monitoring in

order to identify and correct for such dysfunctional effects. Participation from the local community in the
environmental performance measurement process may
oer a mechanism to guard against such eects.
It is important to recognise that stacking of aircraft
and the consequent implications for the environment is
related to the available number of runway slots and
dierent levels of achieved runway productivity. This
varies across Europe, for example Gatwick has an air
transport movement (ATM) rate per hour of 47,
whereas the old Athens airport, also a single runway
airport only achieved 30 movements per hour (Caves,
1999). For parallel runway pairs, Heathrow achieves 81
ATMs per hour compared to Frankfurt, 70, Copenhagen, 76 and Brussels 60 (Caves, 1999). Variations in
productivity are dependent on the level of acceptable
delay at each and determined by the airport co-ordination group that includes the airport, airlines and air
trac service providers at each airport. Many factors
such as trac mix, runway separation, taxiway congurations, local air trac control radar capability and
environmental restrictions contribute to the variations
in airport performance. Although Heathrow has the
highest maximum movement rate, this could be increased further if it was allowed to operate its runways
in mixed mode (landings and takeos from the same
runway). Due to environmental restrictions related to
community response to aircraft noise runways are operated in the less ecient segregated mode (where only
landings or takeos occur on one runway) and the
runway for landing and for takeo swap around at 3 pm
each day (Caves, 1999). This is an example of how operation to mitigate aircraft noise could be doing so at the
expense of environmental pollution.
A new set of performance measures has emerged in
the last decade driven by the increased environmental
sensitivity of local communities to the environmental
externalities of airports. Airports have had to meet environmental performance measures in order for governments to grant them permission to expand. Perhaps
the best example of this to date was Manchester Airport
in the UK, where a suite of 34 environmental performance measures was developed in partnership with
the local community and planning authority as a prerequisite to permission for a new runway. Measures
included: average water quality (concentration mg/l),
number of contamination events, waste recycling (tonnes), energy consumption (kW h/m2 ), share of journeys
that use public transport, noise measured by percentage
of scheduled operations by chapter 2 aircraft, area affected by aircraft noise (area within 60 LA eq noise
contour  km2 ), noise track deviations (%), number of
breaches of noise limits and number of community
complaints about airport activity. Certain targets need
to be met for the airport to be able to continue to

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I. Humphreys, G. Francis / Transport Management 1 (2002) 7985

operate and expand. This has set a precedent for European airports and developments such as the proposed
Heathrow Terminal 5 or any expansion of Frankfurt
will have to meet and maintain similar, or possibly more
stringent standards.
A way of expanding the FLAP group measures
(Table 1) could be to incorporate further measures reecting various stakeholders interests. Environmental
measures such as those at Manchester Airport, already
discussed could be adopted. Other measures that could
further reect wider stakeholder interests that could
include security (perceived risk of incident by dierent
stakeholder groups and safety, measured by accidents
per number of operations and by deaths per number of
operations). Italian airports Milan Malpensa and Rome
Fiumicino both have to issue operational and environmental performance measures by law for accountability
to their stakeholders.
To extend the performance measurement of activities,
service satisfaction measures could be applied to the
dierent airport users (passengers, visitors, tenants,
Government agencies, freight shippers). Canadian airports have pioneered an approach whereby the 14 major
elements of their airports were each measured against
various performance criteria and rated on a scale of 15
(for example Baggage claim was rated for categories
such as: adequate signage, travel information, cleanliness, feel safe and secure, delays, crowding and number
of baggage carts) (Braaksma and Bell, 2000).
A particular problem faced by airports is that of
competing and conicting performance measures. For
example the drive to raise commercial income levels may
conict with environmental goals by generating more
surface access trips from non-passengers wishing to access retail facilities. In Europe airports raise around
12.8% of their income from car parking revenue (ACI,
1999), yet at European airports there is increased pressure to reduce the number of passengers using car
for the airport access trip. Several airport managers interviewed spoke about the conict between creating
shareholder value and meeting environmental targets.
One possible way of trying to address competing performance measures is to use multiple measures as advocated by Eccles (1991) potentially in the form of a
balanced scorecard as advocated by Kaplan and Norton
(1992, 1996). Fitzgerald et al. (1991) suggested service
organisations diered in nature to other organisations
and thus should have dierent performance measurement systems. However it is important to consider
whether it is appropriate to prioritise dierent measures.
Can a balanced scorecard be developed to take into
account the conict between commercial goals, operational goals and environmental goals? The output is, in
theory, supposed to be balanced, but in practice airport
managers may focus on measures that are most important to them.

A number of airport managers interviewed expressed

the need for continued vigilance and awareness to
maintain operational safety standards. Establishing organisational priorities in terms of commercial pressures
and shareholder value, verses issues surrounding safety
and the environment is an important issue within the
corporate governance of airports.
5. Conclusions
Performance measurement at airports has evolved in
a dynamic environment. Pressures for innovation have
come from the introduction of new forms of ownership,
regulation related to ownership context, rapid growth in
trac and technical innovation. Thus it is unsurprising
that many measures require improvement to improve
their usefulness to governments, regulators and airport
managers. In the traditional suite of performance measures, the emphasis has been what is simple to measure.
These measures must now be developed in order to deliver the quality of information required by those concerned with the airport industry.
Changing ownership patterns have created a greater
emphasis on commercialisation and has led to the
introduction of more nancial (shareholder) oriented
mea-sures that are seen as being consistent with maximising shareholder wealth. This may result in shifting
managerial attention to what were traditionally seen as
non-core activities. Privatisation and the inherent commercialisation will increasingly impact on airport operations potentially at the expense of other stakeholders.
The authors believe that it is vital that regulators have
sucient information in order to monitor and maintain
environmental and safety standards, particularly in the
context of increased commercial pressure. However their
ability to undertake such responsibilities may largely be
determined by the degree of authority they are granted
and the nature and form of the performance measures
that they have at their disposal. The continued review of
indicators and their application is desirable given the
dynamic context in which they are to be used. Airports
are important contributors to the economies of the
countries they serve. The degree of eectiveness and
the national implications of airports will depend on the
nature and the use of performance indicators by the full
range of stakeholders.
Acknowledgements
The authors would like to acknowledge the nancial
support from the Performance Management Research
Unit, Open University Business School. We would like
to thank the following for their assistance: Dr Jackie Fry
and Dr Jacky Holloway at Open University Business
School, Dr Robert Caves, Transport Studies Group,

I. Humphreys, G. Francis / Transport Management 1 (2002) 7985

Loughborough University. We would also like to thank

the Anonymous reviewers for their constructive comments and EGCH.
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