Airport Planning: Economic and Financial Feasibility

Economic and Financial Feasibility

The economic and financial feasibility of alternative plans for a new airport or expansion of an existing site must be clearly demonstrated by the planner. Even if the selected alternative is shown to be economically feasible, then also it is necessary to show that the plan will generate sufficient revenues to cover annual costs of capital investment, administration, operations, and maintenance. This must be determined for each stage or phase of development detailed in the airport master plan.

An evaluation of economic feasibility requires an analysis of benefits and costs. A comparison of benefits and costs of potential capital investment programs indicates the desirability of a project from an economic point of view. The economic criterion used in evaluating an aviation investment is the total cost of facilities, including quantifiable social costs, compared with the value of the increased effectiveness measured in terms of total benefits. The costs include capital investment, administration, operation, maintenance, and any other costs that can be quantified. The benefits include a reduction in aircraft and passenger delays, improved operating efficiency, and other benefits. The costs and benefits are usually determined on an annual basis.