Thesis: Airport Operations KMIA

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Airport Operations: Analysis of Miami International Airport KMIA

The objective of this study is to conduct an analysis of Miami International Airport from a business and operational point-of-view. This work will analyze the operating and business environment of Miami International Airport as well as analyzing the major issues and challenges faced by the airport and finally state conclusions and make recommendations.

The Miami International Airport (MIA) is a large hub airport with 15.4 million enplanements in 2005 and is 62% American Airlines Hubs and International Gateway. There are 130 gates at the Miami International Airport and parking capacity includes a 152 short-term parking garage capacity and a 7,499 long-term capacity. Total operating revenues for 2005 is stated at $442.5 million or $28.64 per enplanement with 52.4$ of the revenues from passenger airlines with total commercial revenues stated at $139 million and concession revenues stated at $72 million while parking revenues are stated at $34 million. (Dooley, nd, paraphrased)

I. ANALYSIS OF THE OPERATING AND Business ENVIRONMENT

The Centre for Asia Pacific Aviation reported on the first day of June 2009 that Miami International Airport, which is "...one of the key gateways into Latin American and Europe from America's South, reported a traffic increase of 5.1% year-on-year for April 2009." (Centre for Asia Pacific Aviation, 2009) While traffic levels declined through 2008 and the first months of 2009 it is stated that the "return to positive traffic was a welcome sign for the airport." (Centre for Asia Pacific Aviation, 2009)

Figure 1

Miami International Airport Passenger Number Growth and Cargo Volume (May 2008 -- April 2009)

Source: Centre for Asia Pacific Aviation (2009)

Domestic traffic was reported to be weaker than international travel "with passenger volumes to U.S. destinations rising 3.3% in April, while international traffic was up 7.4%. Domestic and international passenger volume are roughly even, although the decline in passenger traffic during the recession has been more significant for domestic destinations." (Centre for Asia Pacific Aviation, 2009) Stated as reinforcing this trend is a shift of capacity "...from domestic from international markets by U.S. carriers, including American Airlines." (Centre for Asia Pacific Aviation, 2009)

Figure 2

Miami International Airport Domestic & International Passenger Traffic: Year to April 2009.

Source: Centre for Asia Pacific Aviation (2009)

Commercial aircraft movements fell 7.6% in April 2009 and total seating capacity is stated to have fallen approximately 0.8% which indicates that "carriers are operating fewer and larger aircraft at the airport and/or achieving higher passenger load factors." (Centre for Asia Pacific Aviation, 2009) However, the cargo segment's performance is described as "dismal...with volumes down 23.1% in April 2009." (Centre for Asia Pacific Aviation, 2009)

Reports state that IATA made the suggestion that "international air cargo has found a floor, stabilizing at around 20% and offering a glimmer of hope that there may be a recovery period around the corner." (Centre for Asia Pacific Aviation, 2009) Passenger traffic is stated to have declined approximately 1.2% over the first five months of 2009 with cargo declining 23.7% over the same period.

The top ten airlines which utilize Miami International Airport are the airlines shows in the following figure with accompanying capacity and frequency share.

Figure 3

Miami International Airport Capacity and Frequency Share: Top Ten Airlines

M

Source: Center for Asia Pacific Aviation (2009)

The top five international routes by capacity share to and from Miami are shown in the following figure.

Figure 4

Top Five International Routes by Capacity Share (% of total) to and from Miami

Source: Center for Asia Pacific Aviation (2009)

It is stated that the outlook for the rest of 2009 is somewhat dimmer than the results of April 2009 due to the factor of Swine Flu. Since Miami is a major entry point for traffic to and from Mexico it is likely that "airlines and service providers will have to wait longer for sustained passenger recover, while cargo remains depressed." (Center for Asia Pacific Aviation, 2009)

It is reported that the impact of the Miami International Airport and the impact on employment in the locality is approximately $13 billion with direct and indirect jobs in South Florida. Direct employment statistics for the direct employment of individuals by Miami International Airport are stated at 1,500 for the aviation department and in the category of 'other' 32,442 with a total of 33,942.

Figure 5

Economic Impact and Employment

Estimated impact

$13 Billion

Direct/Indirect jobs in South Florida

196,000

Direct Employment

Aviation Department

1,500

Other

32,442

Total

33,942

2001 Total Passengers

31.6 Million

Source: Department of Transportation Federal Aviation Administration Southern Region, Atlanta Georgia (2002)

The total passengers served by Miami International Airport are stated as of 31.6 billion. Miami International U.S. Airport rankings list the following rankings for MIA:

1st in U.S.

International Freight

3rd in U.S.

International Passengers

3rd in U.S.

Total Freight

3rd in U.S.

Total Cargo (Freight and mail)

11th in U.S.

Total Number of Operations

12th in U.S.

Total Passengers (Department of Transportation Federal Aviation

Administration Southern Region, Atlanta Georgia, 2002)

World airport rankings are stated for Miami International Airport as follows:

6th in World

International Freight

5th in World

Total Freight

5th in World

Total Cargo (Freight and mail)

19th in World

Total Passengers

19th in World

International Passengers (Department of Transportation Federal

Aviation Administration Southern Region, Atlanta Georgia)

A report prepared by the Department of Transportation Federal Aviation Administration Southern Region, Atlanta Georgia or specifically the "Record of Decision for Proposed New Parallel Runway and Associated Work" states: that the Summer 2002 Florida Economic Bulletin published by Enterprise Florida pointed to growth in the health, financial, real estate, professional and construction services industries.

Miami-Dade's diversified service-oriented economy relies on trade in services, such as business, legal and medical services. Analysis of the local industry includes that as listed in the following figure.

Figure 6

MIA - Local Industry Analysis

Industry Code Description

33122

Total Estabs

33126

Total Estabs

33134

Total Estabs

33166

Total Estabs

33172

Total Estabs

TOTAL

1988

AGRICULTURAL SERVICES, FORESTRY, AND FISHING

0

0.0%

3

0.2%

10

0.3%

11

0.3%

1

MINING

0

0.0%

0

0.0%

2

0.1%

0

0.0%

1

CONSTRUCTION

15

1.7%

88

4.4%

70

2.3%

4.7%

60

MANUFACTURING

44

5.1%

48

2.4%

48

1.6%

6.4%

41

TRANSPORTATION AND PUBLIC UTILITIES

21.8%

13.6%

4.2%

16.8%

WHOLESALE TRADE

46.0%

26.8%

7.4%

38.9%

RETAIL TRADE

70

8.1%

12.2%

12.3%

8.1%

FINANCE, INSURANCE, AND REAL ESTATE

16

1.9%

9.4%

16.2%

5.1%

SERVICES

14.1%

29.8%

54.3%

18.0%

UNCLASSIFIED ESTABLISHMENTS

11

1.3%

24

1.2%

38

1.3%

70

1.7%

21

Source: (Department of Transportation Federal Aviation Administration Southern Region, Atlanta Georgia, 2002)

There have been "significant increases in destination-Miami passenger traffic based on projected passenger-base growth originating from Latin America." (Department of Transportation Federal Aviation Administration Southern Region, Atlanta Georgia, 2002) In fact, Miami International Airport's expansion plans are stated to be "predicated to a large degree on forecasts of increasing passenger traffic. " (Department of Transportation Federal Aviation Administration Southern Region, Atlanta Georgia, 2002)

In a separate report it is stated that "...ambitious expansion plans" have been announced by American Airlines which will results in Miami serving as hub to both Latin America and the Caribbean." (The Metropolitan Center, 2003) The airline passenger market is stated to be particularly competitive in the Miami area since 'tourist destinations such as Miami Beach, key Biscayne, Coconut Grove and Downtown Miami are all desirable destinations which offer more in the way of "amenities and fewer distractions than airport area locations. There is stated to be a "niche market served by airport area hotels particularly in Miami." (The Metropolitan Center, 2003)

Airport security has been increased which has made check-in times longer. It is stated that "evening and late arrivals also lure travelers who desire ready convenience upon arrival." (The Metropolitan Center, 2003) The improvements that were made to LeJeune Road with the MIC construction displaced a "substantial number of hotels in the airport area..." ranging from "physically dilapidated properties to recently constructed three-star properties." (The Metropolitan Center, 2003)

The franchise restaurants are stated to be "consistent with the standard and homogenized mix of national chain airport hotels...that appeal to business travelers who desire certainty and standard fare." (The Metropolitan Center, 2003) Findings stated after conduction of a survey among area hotels are as follows:

(1) More than half the hotels surveyed noted that upwards of 80% of their guests are business travelers;

(2) Half the hotels surveyed responded that the typical length of stay was 1-2 nights;

(3) Over half the hotels surveyed cited occupancy rates at 80% or higher. The remainder were between 70-78% occupancy; and (4) The average room night stay starts at $108.00 with a median of $110.00. (The Metropolitan Center, 2003)

The following chart shows the commercial revenue categories for Miami International Airport as stated in the work of Dooley (nd).

Figure 7

Miami International Airport Revenue Categories

Source: Dooley (nd)

II. ANALYSIS OF THE MAJOR ISSUES & CHALLENGES FACED BY THE AIRPORT

Safety Issues

There are issues and challenges which the Miami International Airport… [END OF PREVIEW]

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