januaryfebruary2021 - 38

AIRPORT GURU
AUTHOR Curt Castagna

AIRPORT DEVELOPMENT 101:

Will an Investment be Profitable?
" IF you build it, they will come. " Made famous by the classic 1989
film Field of Dreams, this popular business mantra implies that
if you make the investment to build something, people will be
drawn to use it. However, such advice can prove disastrous in
real-life business situations, including development projects at
our nation's general aviation airports.
To protect an airport's long-term
economic health, public and private
investors must resist the urge to develop
new hangar, terminal and building space
simply because the property is available.
Rather, the feasibility and financial
viability of future development projects
must be determined by construction
market research examining both customer
demand and return on investment.
For example, a feasibility study is a
type of market research which analyzes
the potential success of a new business
location or expansion to a new market.
Commercial lenders often require a
feasibility study to acquire financing
for a project in order to eliminate risk
of the investment. This analysis takes
into account economic, technical,
demographic and legal factors, as well as
the competition.
As a starting point, the feasibility
study should include a demographic and
trend analysis, which helps to understand
the potential size and profiles of clients

ABOUT THE AUTHOR
CURT CASTAGNA

Curt Castagna, president and CEO of
Aeroplex/Aerolease Group, is a member
of the Los Angeles County Airport
Commission, president of the Van Nuys
and Long Beach Airport Associations,
and board chair of the National Air
Transportation Association. A certified
private and instrument-rated pilot,
he has instructed courses in aviation
administration at Cal State Los Angeles
for over two decades.

and customers in a particular market area.
A second core component is an overview
of key competitors in the market -
reviewing strengths, weaknesses, service
offerings, differentiators and other factors
that would impact the success or failure
of a new market entrant.
Finally, a third important component
of the feasibility analysis is a market study
that determines interest in the location,
appeal, demand and other objectives that
may impact the viability of the proposed
concept. Taking the time to conduct
this research prior to investing in a new
airport development can help secure
investments, uncover gaps in the market,
identify potential obstacles and determine
if the project is worth pursuing.
General aviation airports also face
the challenge of designing projects that
maximize economic potential, while
balancing the needs of community
stakeholders. This often results in
diverse aeronautical and non-aeronautical
land uses, ranging from executive jet
terminals and propeller aircraft parks to
educational institutions and technology
and innovation centers.
According to the Federal Aviation
Administration (FAA), airport planning
is a systematic process used to establish
guidelines for the efficient development
of airports that is consistent with local,
state and national goals. A key objective
is to assure the effective use of airport
resources in order to satisfy aviation
demand in a financially feasible manner.
For an individual airport, the airport

38 \ AIRPORTBUSINESS / JANUARY/FEBRUARY 2021

master plan represents its blueprint for
long-term development. The goals of
an airport master plan include:
* To provide a graphic representation of
existing airport features, future airport
development and anticipated land use
* To establish a realistic schedule for
implementation of the proposed
development
* To identify a realistic financial plan to
support the development
* To validate the plan technically and
procedurally through investigation of
concepts and alternatives on technical,
economic and environmental grounds
* To prepare and present a plan to the
public that adequately addresses all
relevant issues and satisfies local, state
and federal regulations
* To establish a framework for a
continuous planning process
Typically, an airport master plan
should be updated every five to seven
years. However, many airports are guided
by master plans that were published 10
to 15 years ago - limiting their ability
to respond to changing economic and
market conditions. These master plans
must be regularly updated to allow
januaryfebruary2021

Table of Contents for the Digital Edition of januaryfebruary2021
