Title: Aviation World: ch=8 Airport Financial Management
Headings: Aviation World
Aviation World
ch=8 Airport Financial Management
AIRPORT FINANCIAL MANAGEMENT
1-AIRPORT EXPENSES
(a) Operation and Maintenance Costs
(b) Capital Improvement Expenses
2-AIRPORT FINANCIAL ACCOUNTING
3-Operating Expenses
Operating expenses can be divided into four major groupings
1-AIRFIELD AREA EXPENSES
2-TERMINAL EXPENSES
3-HANGARS, CARGO FACILITIES, OTHER BUILDINGS, & GROUNDS EXPENSES
4-GENERAL & ADMINISTRATIVE EXPENSES
LIABILITY INSURANCE
Liability in such instances can stem from
A/P when it is not in usable condition
4-OPERATING REVENUES
A/P operating revenues can be divided into five major groupings
1-AIRFIELD AREA
2-TERMINAL AERA CONCESSIONS
3-AIRLINE LEASED AREAS
4-OTHER LEASED AREAS
5-OTHER OPERATING REVENUE
5-Planning and Administering an Operating Budget
Both short-term and long-term decisions require planning
BUDGET APPROPRIATION
1-Lump Sum Appropriation
2-Appropriation by Activity
3-Line-Item Budget
6-ADMINISTERING AN OPERATING BUDGET
REVENUE STRATEGIES AT COMMERCIAL AIRPORTS
AIRPORT FUNDING
1-GRANT PROGRAM
2-STATE GRANT PROGRAMS
AIRPORT FINANCING
PRIVATE INVESTMENT
PRIVATE INVESTMENT
1-Build, Operate, and Transfer (BOT) Contracts
2-Lease, build, and operate (LBO) agreements
3-Full Privatization

Content: AIRPORT EXPENSES
AIRPORT FINANCIAL ACCOUNTING
Operating Expenses
OPERATING REVENUES
Planning and Administering an Operating Budget
BUDGET APPROPRIATION
PRIVATE INVESTMENT
1-AIRPORT EXPENSES
A/P expenses fall into two types
(a) Operation and Maintenance Costs
Operation and Maintenance costs consist of those expenses that occur on a regular basis and are required to maintain the current ops at the A/P. Such expenses typically include wages and salary of A/P employees, costs of utilities such as power, water, and telecommunications, and a broad range of regularly needed supplies. (b) Capital Improvement Expenses
Capital Improvement Expenses are very large, periodic expenses which contribute to A/P infrastructure improvement or expansion. Capital improvement expenses include the costs of major construction projects such as airfield and terminal expansion, the acquisition of major utilities such as air rescue and fire fighting vehicles, and the purchase of land for future expansion
2-AIRPORT FINANCIAL ACCOUNTING
Revenues from operations of the Airport are used to cover the airport O&M expenses
Financial accounting is employed to manage the balance of operating revenues and expenses. A/P accounting involves the accumulation, communication, and interpretation of economic data relating to the financial position of an A/P and the results of its ops for decision-making purposes. A/P accounting differs from accounting procedures found in business firms because A/P differ considerably in terms of goals, size, and operational characteristics. As such, it is difficult to derive a unified accounting system that can be used by all A/Ps. System tailored to the needs of a large commercial A/P might be impractical for a small GA A/P or vice versa as A/Ps have different definitions of what elements constitute operating and non-operating revenues and expenses and sources of funds for A/P development. 3-Operating Expenses
Operating expenses can be divided into four major groupings
AIRFIELD AREA
TERMINAL
HANGARS/CARGO/OTHER BUILDINGS & GROUNDS
GENERAL AND ADMINISTRATIVE EXPENSES
1-AIRFIELD AREA EXPENSES
O&M expenses associated with the airfield area include: R/Ws, T/Ws, apron areas, A/C parking areas, & A/F light sys maint
Service on airport equipment
Maintenance on fire equipment and airport service roads
Utilities (electricity) for the airfield. 2-TERMINAL EXPENSES
O&M expenses associated with the terminal include: