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MASTER	
  THESIS	
  
KAPANEN	
  KATJA	
  
TARGET	
  PHENOMENON	
  
	
  
IMPROVING	
  AIRPORT	
  PERFORMANCE	
  –	
  	
  
	
  MIKKELI	
  CITY	
  AIRPORT	
  
BACKGROUND	
  
•  Own	
  interest	
  –	
  work,	
  school	
  assignments	
  
•  Actual	
  topic	
  –	
  municipality	
  level:	
  a	
  part	
  of	
  
airport	
  development	
  project	
  for	
  the	
  City	
  of	
  
Mikkeli,	
  governmental	
  level:	
  air	
  transport	
  
strategy	
  by	
  the	
  working	
  group	
  appointed	
  by	
  
the	
  Ministry	
  of	
  Transport	
  and	
  
CommunicaRons	
  
•  Research	
  gap	
  –	
  theme	
  not	
  studied	
  
OBJECTIVES	
  AND	
  DELIMITATIONS	
  
The	
   main	
   objecRve	
   of	
   this	
   thesis	
   is	
   to	
   make	
  
proposal	
  for	
  Mikkeli	
  City	
  airport	
  for	
  developing	
  the	
  
airport	
   performance.	
   The	
   aim	
   is	
   to	
   present	
   an	
  
airport	
   	
  performance	
  comparison	
  between	
  Mikkeli	
  
City	
  airport	
  and	
  best	
  pracRse	
  example	
  –	
  Stockholm	
  
Skavsta	
   airport.	
   The	
   comparison	
   between	
   these	
  
airports	
  will	
  be	
  done	
  using	
  metrics	
  as	
  employment,	
  
produc9on	
   capacity	
   and	
   the	
   quan9ty	
   of	
  
passengers	
   for	
   offering	
   jusRficaRons	
   why	
   regional	
  
airport	
  is	
  worth	
  of	
  maintaining	
  and	
  worth	
  of	
  future	
  
development.	
  	
  
RESEARCH	
  QUESTION(S)	
  
Main	
  research	
  ques9on:	
  	
  
How	
  to	
  improve	
  the	
  performance	
  of	
  Mikkeli	
  City	
  airport?	
  	
  
	
  
Sub-­‐research	
  ques9ons:	
  
Why	
  to	
  improve	
  the	
  performance	
  of	
  Mikkeli	
  City	
  airport?	
  
What	
  is	
  airport	
  performance	
  and	
  how	
  it	
  is	
  measured?	
  
What	
  can	
  be	
  learned	
  from	
  Stockholm	
  Skavsta	
  airport	
  -­‐
case?	
  
	
  
	
  
THEORETICAL	
  FRAMEWORK	
  
TheoreRcal	
   framework	
   of	
   the	
   study	
   is	
   built	
   on	
   the	
   key	
  
performance	
   areas	
   and	
   key	
   performance	
   indicators	
   of	
  
airport	
  performance	
  studies.	
  Main	
  sources	
  of	
  informaRon	
  
have	
  been	
  used	
  studies	
  conducted	
  by	
  Mrs	
  Anne	
  Graham	
  
from	
   University	
   of	
   Westminster,	
   London	
   and	
   Mr	
   Hans-­‐
Arthur	
   Vogel	
   from	
   IUBH	
   InternaRonal	
   University	
   of	
  
Applied	
  Sciences,	
  Bad	
  Honnef	
  and	
  Bad	
  Reichenhall,	
  and	
  
also	
   University	
   of	
   Westminster,	
   London.	
   They	
   have	
  
studied	
  and	
  published	
  studies	
  about	
  airport	
  performance	
  
individually,	
  together,	
  and	
  with	
  other	
  researchers	
  within	
  
the	
  decade	
  of	
  2000	
  (Graham	
  2014;	
  Graham	
  2005;	
  Vogel	
  
2004;	
  Vogel,	
  H.	
  –A.,	
  Graham,	
  A.	
  2010).	
  	
  
 
RESEARCH	
  METHOD	
  
	
  This	
   study	
   is	
   qualita9ve	
   research	
   using	
   case	
   study	
  
approach	
   where	
   research	
   data	
   was	
   collected	
   using	
  
interviewing	
  and	
  analysing	
  of	
  secondary	
  data.	
  
Study	
  was	
  carried	
  out	
  using	
  the	
  benchmarking	
  technique	
  
for	
   finding	
   the	
   ways	
   of	
   improving	
   the	
   performance	
   of	
  
Mikkeli	
   City	
   airport.	
   Used	
   approach	
   of	
   performance	
  
indicators	
  is	
  Par9al	
  Factor	
  Produc9vity	
  (PFP)	
  measures,	
  
which	
   examine	
   the	
   relaRonship	
   between	
   inputs	
   as	
  	
  
employment	
  effect	
  and	
  producRon	
  capacity,	
  and	
  output:	
  
quanRty	
  of	
  passengers.	
  Hypothesis	
  of	
  the	
  study	
  was	
  that	
  
from	
   Stockholm	
   Skavsta	
   airport	
   could	
   be	
   learned	
  
pracRses,	
  which	
  can	
  be	
  used	
  to	
  improve	
  the	
  performance	
  
of	
  the	
  Mikkeli	
  City	
  airport.	
  	
  	
  
LIST	
  OF	
  REFERENCES	
  
ACI	
  EUROPE	
  2014;	
  2012;	
  ACI	
  INTERNATIONAL	
  2012;	
  ACRP	
  2011;	
  ASSOCIATION	
  OF	
  FINNISH	
  LOCAL	
  
AND	
   REGIONAL	
   AUTHORITIES	
   2010;	
   CARLGREN,	
   ERIC	
   2014;	
   CENTRE	
   FOR	
   ECONOMIC	
  
D E V E L O P M E N T , 	
   T R A N S P O R T 	
   A N D 	
   T H E 	
   E N V I R O N M E N T	
  
2013;	
  CITY	
  OF	
  MIKKELI	
  2014;	
  2013;	
  2012;	
  CITY	
  OF	
  NYKÖPING	
  2014;	
  CITY	
  OF	
  SEINÄJOKI	
  2013;	
  	
  
CROCKER,	
  DAVID	
  2005;	
  DELOVOI	
  PETERSBURG	
  2013;	
  ERIKSSON,	
  PÄIVI	
  &	
  KOVALAINEN,	
  ANNE	
  200
8;	
   EUROCONTROL	
   2014;	
   2013;	
   1999;	
   EUROPEAN	
   COMMISSION	
   2012;	
   FINAVIA	
  
2014;	
   2013;	
   2012;	
   FINNAIR	
   2014;	
   FRANCIS,	
   GRAHAM	
   &	
   HUMPHREYS,	
   IAN	
   &	
   FRY,	
   JACKIE	
  
2 0 0 2 ;	
   F R A N K E N ,	
   S V E N	
   2 0 1 3 ;	
   F R Y ,	
   J A C K I E	
   &	
   H U M P H R E Y S ,	
   I A N	
   &	
  
FRANCIS,	
   GRAHAM	
   2005;	
   GILLHAM,	
   BILL	
   2010;	
   GRAHAM,	
   ANNE	
   2014;	
   2005;	
   HELSINGIN	
  
S A N O M A T	
   2 0 1 4 ;	
   H U M P H R E Y S ,	
   I A N	
   &	
   F R A N C I S ,	
   G R A H A M	
   2 0 0 2 ;	
   I C A O	
  
2013;	
   2012;	
   2010;	
   KULOVUORI	
   DOT	
   GADE	
   2014;	
   KÄRNÄ,	
   MIKKO	
   2014;	
   LENTOPAIKAT	
  
2014;	
   LONGMAN	
   2001;	
   MC-­‐INFO	
   OY	
   2014;	
   MIKKELI	
   CITY	
   AIRPORT	
   2012;	
   MINISTRY	
   OF	
  
TRANSPORT	
   AND	
   COMMUNICATIONS	
   2014;	
   2013;	
   2012;	
   OECD	
   2011;	
   OUM,	
   TAE	
   HOON	
   &	
   YU,	
  
CHUNYAN	
   &	
   FU,	
   XIAOWEN	
   2003;	
   OXFORD	
   ECONOMICS	
   2011;	
   PAANANEN,	
   JUHA-­‐PEKKA	
  
2014;	
   PATTERSON,	
   JAMES	
   G.	
   1996;	
   RAIVIO,	
   JYRI	
   2013;	
   RAUHAMÄKI,	
   HARRI	
   &	
   MÄNTYNEN,	
  
JORMA	
  &	
  MÄKELÄ,	
  TOMMI	
  &	
  SINISALO,	
  ESSI	
  &	
  KALENOJA	
  HANNA	
  2006;	
  SILVENNOINEN,	
  SAKARI	
  
2014;	
  STATISTICS	
  FINLAND	
  2014;	
  2013;	
  2012;	
  STATISTICS	
  SWEDEN	
  2013;	
  STOCKHOLM	
  SKAVSTA	
  
AIRPORT	
   2014;	
   TAK	
   OY	
   2011;	
   TRAFI	
   2014;	
   2013;	
   2012;	
   VOGEL,	
   HANS-­‐ARTHUR	
  
2004;	
  VOGEL,	
  HANS-­‐ARTHUR	
  &	
  GRAHAM,	
  ANNE	
  2010;	
  WORLDS	
  AIRPORT	
  CODES	
  2014;	
  WORLDS	
  
TOURISM	
  ORGANISATION	
  AND	
  EUROPEAN	
  TRAVEL	
  COMMISSION	
  2009.	
  
TABLE	
  OF	
  CONTENTS	
  
GLOSSARY	
  OF	
  TERMS 	
  4	
  
	
  
1 	
  INTRODUCTION 	
  6	
  
1.1 	
  Background	
  of	
  the	
  study 	
  6	
  
1.2 	
  ObjecRve	
  and	
  delimitaRons 	
  9	
  
1.3 	
  Research	
  quesRons 	
  9	
  
1.4 	
  TheoreRcal	
  framework	
  10	
  
1.5 	
  Research	
  method	
  12	
  
1.6 	
  Structure	
  of	
  the	
  study 	
  15	
  
	
  
2 	
  AIRPORT	
  INDUSTRY 	
  17	
  
2.1 	
  Airport	
  operaRons 	
  17	
  
2.2 	
  Revenues	
  and	
  cost	
  structure	
  of	
  airport 	
  18	
  
2.3 	
  Airport	
  network	
  in	
  Finland 	
  20	
  
2.4 	
  Development	
  of	
  aviaRon	
  sector 	
  23	
  
	
  
3 	
  AIRPORT	
  PERFORMANCE 	
  29	
  
3.1 	
  Performance	
  management	
  techniques	
  for	
  
	
  airports 	
  30	
  
3.2 	
  Performance	
  Indicators	
  for	
  Airports 	
  32	
  
	
  
4 	
  AIRPORT	
  PRESENTATION 	
  42	
  
4.1 	
  General	
  informaRon 	
  42	
  
4.2 	
  History	
  in	
  brief 	
  47	
  
	
  
5 	
  AIRPORT	
  PERFORMANCE	
  COMPARISON 	
  50	
  
5.1 	
  Airport	
  input 	
  51	
  
5.1.1 	
  Direct	
  and	
  indirect	
  employment 	
  51	
  
5.1.2 	
  ProducRon	
  capacity	
  of	
  the	
  airport	
  system
	
   	
  55	
  
5.2 	
  Airport	
  output 	
  58	
  
5.3 	
  Economic	
  benefits	
  for	
  the	
  City	
  of	
  Mikkeli	
  63	
  
	
  
6 	
  PROPOSAL	
  FOR	
  MIKKELI	
  CITY	
  AIRPORT 	
  66	
  
	
  
7 	
  CONCLUSIONS 	
  74	
  
	
  
LIST	
  OF	
  REFERENCES 	
  81	
  
	
  
LIST	
  OF	
  TABLES,	
  FIGURES	
  AND	
  PICTURES 	
  92	
  
	
  
COMPANY	
  PRESENTATION	
  
STOCKHOLM	
  SKAVSTA	
  AIRPORT	
  
Stockholm	
  Skavsta	
  airport	
  from	
  the	
  air.	
  	
  
Screen	
  shot	
  from	
  Google	
  maps	
  on	
  4th	
  of	
  	
  
March	
  2014.	
  
	
  
MIKKELI	
  CITY	
  AIRPORT	
  
Mikkeli	
  City	
  airport	
  from	
  the	
  air.	
  
Picture	
  by	
  Sakari	
  Silvennoinen.	
  	
  
LOCATION	
  
Picture	
  about	
  the	
  loca@ons	
  of	
  Stockholm	
  Skavsta	
  airport	
  and	
  Mikkeli	
  City	
  airport.	
  	
  
Screen	
  shot	
  from	
  Google	
  maps	
  on	
  4th	
  of	
  March	
  2014.	
  	
  
COMPANY	
  PRESENTATION	
  
GENERAL	
  	
  
INFORMATION	
  
MIKKELI	
  CITY	
  AIRPORT	
   STOCKHOLM	
  SKAVSTA	
  
ICAO-­‐CODE	
   EFMI	
  	
   ESKN	
  	
  
IATA-­‐CODE	
   MIK	
  	
   NYO	
  	
  
LOCATION	
   230	
  km	
  northeast	
  of	
  Helsinki	
  	
  
4	
  km	
  west	
  of	
  Mikkeli	
  
100	
  km	
  southwest	
  of	
  Stockholm	
  	
  
7	
  km	
  northwest	
  of	
  Nyköping	
  	
  
CATCHMENT	
  AREA	
  	
   150	
  km	
  radius	
  covers	
  over	
  500.000	
  
people,	
  which	
  is	
  9,2%	
  of	
  the	
  populaRon	
  	
  
100	
  km	
  radius	
  covers	
  2.4	
  million	
  people,	
  
27%	
  of	
  the	
  populaRon	
  
STARTED	
  OPERATIONS	
   1930`s	
  ,	
  during	
  the	
  II	
  WW	
  in	
  military	
  use,	
  
today	
  Army	
  Command	
  Finland	
  
1930`s,	
  	
  
opened	
  for	
  civil	
  aviaRon	
  1984	
  
RUNWAYS	
   Runway	
  1	
  –	
  5584	
  p	
  	
  (1700m)	
   Runway	
  1	
  –	
  9442	
  p	
  (2800m)	
  
Runway	
  2	
  –	
  6690	
  p	
  (2000m)	
  
OPERATING	
  HOURS	
   Mon	
  0600–1000	
  EET	
  (GMT	
  +	
  02.00)	
  	
  
Tue–Thu	
  0600–1000	
  EET	
  	
  
and	
  1600–1800	
  EET	
  
Fri	
  1400–1600	
  EET	
  
Otherwise	
  only	
  by	
  agreement	
  	
  
0600–2200	
  GMT	
  
2200–0600	
  GMT	
  only	
  by	
  agreement	
  	
  
OWNERSHIP	
   100%	
  CITY	
  OF	
  MIKKELI	
   90,1%	
  ADC	
  &	
  HAS	
  Airports	
  
Worldwide,	
  9,9%	
  NYKÖPING	
  
AMOUNT	
  OF	
  PASSENGERS	
  2013	
   2	
  916,	
  	
  
99%domesRc,	
  1%	
  internaRonal	
  
2	
  165	
  040,	
  	
  
0,015%	
  domesRc,	
  99,985%	
  inernaRonal	
  
	
  	
  	
  
MIKKELI	
  PASSENGER	
  STATISTICS	
  
0	
  
2	
  000	
  
4	
  000	
  
6	
  000	
  
8	
  000	
  
10	
  000	
  
12	
  000	
  
14	
  000	
  
16	
  000	
  
1993	
   1995	
   1997	
   1999	
   2001	
   2003	
   2005	
   2007	
   2009	
   2011	
   2013	
  
Amount	
  of	
  passengers	
  
Between	
  years	
  1993–2013	
  
Passenger	
  sta9s9cs	
  of	
  Mikkeli	
  City	
  airport	
  
SKAVSTA	
  PASSENGER	
  STATISTICS	
  
0	
  
500000	
  
1000000	
  
1500000	
  
2000000	
  
2500000	
  
3000000	
  
1997	
   1999	
   2001	
   2003	
   2005	
   2007	
   2009	
   2011	
   2013	
  
Amount	
  of	
  passengers	
  
Between	
  years	
  1997–2013	
  
Passenger	
  sta9s9cs	
  of	
  Stockholm	
  Skavsta	
  
SKAVSTA	
  DESTINATIONS	
  
(hrp://www.skavsta.se/en/content/4/97/route-­‐map.html)	
  
Airport	
  opera9ons	
   Mikkeli	
  City	
  Airport	
  
	
  	
  
Stockholm	
  Skavsta	
  
	
  
Airport	
  management	
   0,5	
   3	
  directors,	
  6	
  managers	
  
Admin/Finance/Property	
   0,5	
   12	
  
Air	
  traffic	
  control	
   1	
  
LFV	
  (air	
  navigaRon	
  services	
  of	
  
Sweden)	
  is	
  the	
  supplier	
  
Security	
   1	
   Outsourced	
  to	
  Securitas	
  
Technical	
  support	
   1	
   15	
  
Handling	
   1	
   76	
  (incl.	
  Rescue)	
  
Passenger	
  services	
   0,5	
   App.	
  1	
  300	
  
	
  EMPLOYMENT	
  EFFECT	
  
Airport	
  system	
   Mikkeli	
  City	
  airport	
   Stockholm	
  Skavsta	
  
Runways	
   1	
  –1700	
  m	
  (2300	
  m)	
  
1	
  –	
  2800	
  m	
  
1	
  –	
  2000	
  m	
  
Terminal	
   1	
   1	
  
Gate	
   1	
   6	
  
Hourly	
  capacity	
   1	
  plane	
  –	
  2	
  movements	
  within	
  1,5	
  hours	
  
4–12	
  planes/8–24	
  movements	
  per	
  hour	
  
depending	
  on	
  direcRon	
  of	
  wind	
  and	
  share	
  
of	
  starts/landings	
  
Opening	
  hours	
  
Mon	
  0600–1000	
  EET	
  (GMT	
  +	
  02.00)	
  	
  
Tue–Thu	
  0600–1000	
  EET	
  	
  
and	
  1600–1800	
  EET	
  
Fri	
  1400–1600	
  EET	
  
Otherwise	
  only	
  by	
  agreement	
  
0600–2200	
  GMT	
  daily	
  
2200–0600	
  GMT	
  	
  
only	
  by	
  agreement	
  
Daily	
  capacity	
  
Mon	
  –	
  2	
  planes/4	
  mov.	
  
Tue–Thu	
  –	
  3	
  planes/day/6	
  movements	
  
Fri	
  –	
  1	
  plane/2	
  mov.	
  
With	
  opening	
  hours	
  of	
  Stockholm	
  Skavsta	
  
10	
  planes/20	
  movements	
  day	
  
From	
  64	
  planes/128	
  movements	
  up	
  to	
  
192	
  planes/384	
  movements	
  per	
  day	
  
depending	
  on	
  direcRon	
  of	
  wind	
  and	
  share	
  
of	
  starts/landings	
  (6	
  simultaneous	
  flights	
  
–	
  two	
  simultaneous	
  arrivals)	
  
Annually	
  
624	
  planes	
  –	
  1	
  248	
  movements	
  	
  
(with	
  current	
  hours)	
  
3	
  640	
  planes	
  –	
  7	
  280	
  movements	
  	
  
(with	
  Skavsta	
  hours)	
  
From	
  23	
  296	
  planes/46	
  592	
  movements	
  
up	
  to	
  69	
  888	
  planes/139	
  776	
  movements	
  	
  
limited	
  to	
  37	
  500	
  planes/75	
  000	
  
movements	
  according	
  to	
  environmental	
  
permit	
  
	
  PRODUCTION	
  CAPACITY	
  
Airport	
  opening	
  hours	
  
	
  
Runway	
  1700	
  meters	
  
	
  
	
  
Runway	
  2300	
  meters	
  
	
  
Current	
  opening	
  hours	
  
Mon	
  0600–1000	
  EET	
  	
  
(GMT	
  +	
  02.00)	
  	
  
Tue–Thu	
  0600–1000	
  EET	
  
and	
  1600–1800	
  EET	
  
Fri	
  1400–1600	
  EET	
  
Otherwise	
  only	
  by	
  
agreement	
  
	
  
Planes	
  with	
  100	
  passengers:	
  
2	
  400	
  /weekly	
  
124	
  800	
  /annually	
  	
  
	
  
Planes	
  with	
  150	
  passengers:	
  
3	
  600	
  /weekly	
  
187	
  200	
  /annually	
  
	
  
	
  
Planes	
  with	
  250	
  passengers:	
  
6	
  000	
  /weekly	
  
312	
  000	
  /annually	
  
	
  	
  
Planes	
  with	
  300	
  passengers:	
  	
  
7	
  200	
  /weekly	
  
374	
  400	
  /annually	
  
According	
  to	
  	
  
Skavsta	
  opening	
  hours	
  
0600–2200	
  GMT	
  
daily	
  
2200–0600	
  GMT	
  	
  
only	
  by	
  agreement	
  
	
  
Planes	
  with	
  100	
  passengers:	
  
14	
  000	
  /weekly	
  
728	
  000	
  /annually	
  
	
  	
  
Planes	
  with	
  150	
  passengers:	
  
21	
  000	
  /weekly	
  
1	
  092	
  000	
  /annually	
  
	
  
Planes	
  with	
  250	
  passengers:	
  
35	
  000	
  /weekly	
  
1	
  820	
  000	
  /annually	
  
	
  	
  
Planes	
  with	
  300	
  passengers:	
  	
  
42	
  000	
  /weekly	
  
2	
  184	
  000/annually	
  
	
  QUANTITY	
  OF	
  PASSENGERS	
  
ANSWERS	
  TO	
  RESEARCH	
  QUESTIONS	
  
How	
  to	
  improve	
  the	
  performance	
  of	
  Mikkeli	
  City	
  airport?	
  
Lengthen	
  the	
  runway	
  and	
  opening	
  hours	
  and	
  gaining	
  new	
  
customers	
  to	
  the	
  airport.	
  	
  
Why	
  to	
  improve	
  the	
  performance	
  of	
  Mikkeli	
  City	
  airport?	
  	
  
Money:	
  employment	
  effect	
  from	
  €28	
  930	
  up	
  to	
  €211	
  700	
  and	
  
tourism	
  income	
  from	
  €291	
  000	
  up	
  to	
  €25	
  million.	
  
What	
  is	
  airport	
  performance	
  and	
  how	
  it	
  is	
  measured?	
  	
  
No	
  widely	
  accepted	
  industry	
  prac@ces	
  for	
  measuring	
  and	
  
comparing	
  airport	
  performance,	
  all	
  the	
  interest	
  groups	
  	
  
around	
  the	
  airport	
  have	
  their	
  own	
  indicators.	
  
What	
  can	
  be	
  learned	
  from	
  Stockholm	
  Skavsta	
  airport	
  -­‐case?	
  
Segmenta@on,	
  des@na@ons	
  and	
  ownership.	
  
PROPOSAL	
  FOR	
  MIKKELI	
  CITY	
  AIRPORT	
  
1.  SegmentaRon:	
  	
  
to	
  become	
  leading	
  tourism	
  airport	
  in	
  Finland	
  
2.  DesRnaRons:	
  	
  
offering	
  wide	
  range	
  of	
  tourism	
  desRnaRons	
  
3.  Ownership:	
  privaRzing	
  the	
  airport.	
  	
  
AT	
  THE	
  END	
  
Our	
   research	
   is	
   reliable	
   when	
   conducRng	
   the	
   study	
   using	
  
benchmarking	
   with	
   an	
   approach	
   of	
   parRal	
   factor	
   producRvity	
   (PFP)	
  
when	
   analysing	
   our	
   data	
   and	
   finding	
   the	
   answer	
   to	
   our	
   research	
  
quesRons.	
   ParRal	
   factor	
   producRvity	
   showed	
   well	
   the	
   relaRonship	
  
between	
  inputs	
  as	
  employment	
  and	
  producRon	
  capacity	
  and	
  output	
  of	
  
quanRty	
  of	
  passengers.	
  Collected	
  data	
  is	
  valid	
   corresponding	
  to	
  the	
  
requirements	
  for	
  minimum	
  amount	
  of	
  data	
  according	
  to	
  Graham	
  and	
  
Vogel	
  (2014;	
  2004)	
  for	
  comparing	
  airport	
  performance	
  using	
  input	
  and	
  
output	
   indicators.	
   Our	
   study	
   has	
   validity,	
   where	
   used	
   data,	
   method	
  
and	
   results,	
   jusRfies	
   the	
   proposals	
   for	
   the	
   City	
   of	
   Mikkeli	
   for	
  
developing	
   the	
   Mikkeli	
   City	
   airport	
   performance.	
   Study	
   method	
  
measures	
   the	
   phenomenon,	
   using	
   employment	
   effect,	
   producRon	
  
capacity	
   and	
   quanRty	
   of	
   passengers,	
   and	
   is	
   reliable	
   and	
   it	
   can	
   be	
  
replicated.	
   Study	
   results	
   and	
   arguments	
   made	
   according	
   to	
   the	
  
analysis	
  of	
  the	
  collected	
  data	
  are	
  also	
  reliable	
  and	
  can	
  be	
  replicated.	
  
 
	
  
THANK	
  YOU!	
  
PHOTO	
  BY	
  RAIMO	
  SUOMELA	
  ON	
  09.03.2010	
  AT	
  LPP.	
  

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Improving airport performance_Case Mikkeli City airport_Kapanen Katja 2014

  • 2. TARGET  PHENOMENON     IMPROVING  AIRPORT  PERFORMANCE  –      MIKKELI  CITY  AIRPORT  
  • 3. BACKGROUND   •  Own  interest  –  work,  school  assignments   •  Actual  topic  –  municipality  level:  a  part  of   airport  development  project  for  the  City  of   Mikkeli,  governmental  level:  air  transport   strategy  by  the  working  group  appointed  by   the  Ministry  of  Transport  and   CommunicaRons   •  Research  gap  –  theme  not  studied  
  • 4. OBJECTIVES  AND  DELIMITATIONS   The   main   objecRve   of   this   thesis   is   to   make   proposal  for  Mikkeli  City  airport  for  developing  the   airport   performance.   The   aim   is   to   present   an   airport    performance  comparison  between  Mikkeli   City  airport  and  best  pracRse  example  –  Stockholm   Skavsta   airport.   The   comparison   between   these   airports  will  be  done  using  metrics  as  employment,   produc9on   capacity   and   the   quan9ty   of   passengers   for   offering   jusRficaRons   why   regional   airport  is  worth  of  maintaining  and  worth  of  future   development.    
  • 5. RESEARCH  QUESTION(S)   Main  research  ques9on:     How  to  improve  the  performance  of  Mikkeli  City  airport?       Sub-­‐research  ques9ons:   Why  to  improve  the  performance  of  Mikkeli  City  airport?   What  is  airport  performance  and  how  it  is  measured?   What  can  be  learned  from  Stockholm  Skavsta  airport  -­‐ case?      
  • 6. THEORETICAL  FRAMEWORK   TheoreRcal   framework   of   the   study   is   built   on   the   key   performance   areas   and   key   performance   indicators   of   airport  performance  studies.  Main  sources  of  informaRon   have  been  used  studies  conducted  by  Mrs  Anne  Graham   from   University   of   Westminster,   London   and   Mr   Hans-­‐ Arthur   Vogel   from   IUBH   InternaRonal   University   of   Applied  Sciences,  Bad  Honnef  and  Bad  Reichenhall,  and   also   University   of   Westminster,   London.   They   have   studied  and  published  studies  about  airport  performance   individually,  together,  and  with  other  researchers  within   the  decade  of  2000  (Graham  2014;  Graham  2005;  Vogel   2004;  Vogel,  H.  –A.,  Graham,  A.  2010).    
  • 7.   RESEARCH  METHOD    This   study   is   qualita9ve   research   using   case   study   approach   where   research   data   was   collected   using   interviewing  and  analysing  of  secondary  data.   Study  was  carried  out  using  the  benchmarking  technique   for   finding   the   ways   of   improving   the   performance   of   Mikkeli   City   airport.   Used   approach   of   performance   indicators  is  Par9al  Factor  Produc9vity  (PFP)  measures,   which   examine   the   relaRonship   between   inputs   as     employment  effect  and  producRon  capacity,  and  output:   quanRty  of  passengers.  Hypothesis  of  the  study  was  that   from   Stockholm   Skavsta   airport   could   be   learned   pracRses,  which  can  be  used  to  improve  the  performance   of  the  Mikkeli  City  airport.      
  • 8. LIST  OF  REFERENCES   ACI  EUROPE  2014;  2012;  ACI  INTERNATIONAL  2012;  ACRP  2011;  ASSOCIATION  OF  FINNISH  LOCAL   AND   REGIONAL   AUTHORITIES   2010;   CARLGREN,   ERIC   2014;   CENTRE   FOR   ECONOMIC   D E V E L O P M E N T ,   T R A N S P O R T   A N D   T H E   E N V I R O N M E N T   2013;  CITY  OF  MIKKELI  2014;  2013;  2012;  CITY  OF  NYKÖPING  2014;  CITY  OF  SEINÄJOKI  2013;     CROCKER,  DAVID  2005;  DELOVOI  PETERSBURG  2013;  ERIKSSON,  PÄIVI  &  KOVALAINEN,  ANNE  200 8;   EUROCONTROL   2014;   2013;   1999;   EUROPEAN   COMMISSION   2012;   FINAVIA   2014;   2013;   2012;   FINNAIR   2014;   FRANCIS,   GRAHAM   &   HUMPHREYS,   IAN   &   FRY,   JACKIE   2 0 0 2 ;   F R A N K E N ,   S V E N   2 0 1 3 ;   F R Y ,   J A C K I E   &   H U M P H R E Y S ,   I A N   &   FRANCIS,   GRAHAM   2005;   GILLHAM,   BILL   2010;   GRAHAM,   ANNE   2014;   2005;   HELSINGIN   S A N O M A T   2 0 1 4 ;   H U M P H R E Y S ,   I A N   &   F R A N C I S ,   G R A H A M   2 0 0 2 ;   I C A O   2013;   2012;   2010;   KULOVUORI   DOT   GADE   2014;   KÄRNÄ,   MIKKO   2014;   LENTOPAIKAT   2014;   LONGMAN   2001;   MC-­‐INFO   OY   2014;   MIKKELI   CITY   AIRPORT   2012;   MINISTRY   OF   TRANSPORT   AND   COMMUNICATIONS   2014;   2013;   2012;   OECD   2011;   OUM,   TAE   HOON   &   YU,   CHUNYAN   &   FU,   XIAOWEN   2003;   OXFORD   ECONOMICS   2011;   PAANANEN,   JUHA-­‐PEKKA   2014;   PATTERSON,   JAMES   G.   1996;   RAIVIO,   JYRI   2013;   RAUHAMÄKI,   HARRI   &   MÄNTYNEN,   JORMA  &  MÄKELÄ,  TOMMI  &  SINISALO,  ESSI  &  KALENOJA  HANNA  2006;  SILVENNOINEN,  SAKARI   2014;  STATISTICS  FINLAND  2014;  2013;  2012;  STATISTICS  SWEDEN  2013;  STOCKHOLM  SKAVSTA   AIRPORT   2014;   TAK   OY   2011;   TRAFI   2014;   2013;   2012;   VOGEL,   HANS-­‐ARTHUR   2004;  VOGEL,  HANS-­‐ARTHUR  &  GRAHAM,  ANNE  2010;  WORLDS  AIRPORT  CODES  2014;  WORLDS   TOURISM  ORGANISATION  AND  EUROPEAN  TRAVEL  COMMISSION  2009.  
  • 9. TABLE  OF  CONTENTS   GLOSSARY  OF  TERMS  4     1  INTRODUCTION  6   1.1  Background  of  the  study  6   1.2  ObjecRve  and  delimitaRons  9   1.3  Research  quesRons  9   1.4  TheoreRcal  framework  10   1.5  Research  method  12   1.6  Structure  of  the  study  15     2  AIRPORT  INDUSTRY  17   2.1  Airport  operaRons  17   2.2  Revenues  and  cost  structure  of  airport  18   2.3  Airport  network  in  Finland  20   2.4  Development  of  aviaRon  sector  23     3  AIRPORT  PERFORMANCE  29   3.1  Performance  management  techniques  for    airports  30   3.2  Performance  Indicators  for  Airports  32     4  AIRPORT  PRESENTATION  42   4.1  General  informaRon  42   4.2  History  in  brief  47     5  AIRPORT  PERFORMANCE  COMPARISON  50   5.1  Airport  input  51   5.1.1  Direct  and  indirect  employment  51   5.1.2  ProducRon  capacity  of  the  airport  system    55   5.2  Airport  output  58   5.3  Economic  benefits  for  the  City  of  Mikkeli  63     6  PROPOSAL  FOR  MIKKELI  CITY  AIRPORT  66     7  CONCLUSIONS  74     LIST  OF  REFERENCES  81     LIST  OF  TABLES,  FIGURES  AND  PICTURES  92    
  • 10. COMPANY  PRESENTATION   STOCKHOLM  SKAVSTA  AIRPORT   Stockholm  Skavsta  airport  from  the  air.     Screen  shot  from  Google  maps  on  4th  of     March  2014.     MIKKELI  CITY  AIRPORT   Mikkeli  City  airport  from  the  air.   Picture  by  Sakari  Silvennoinen.    
  • 11. LOCATION   Picture  about  the  loca@ons  of  Stockholm  Skavsta  airport  and  Mikkeli  City  airport.     Screen  shot  from  Google  maps  on  4th  of  March  2014.    
  • 12. COMPANY  PRESENTATION   GENERAL     INFORMATION   MIKKELI  CITY  AIRPORT   STOCKHOLM  SKAVSTA   ICAO-­‐CODE   EFMI     ESKN     IATA-­‐CODE   MIK     NYO     LOCATION   230  km  northeast  of  Helsinki     4  km  west  of  Mikkeli   100  km  southwest  of  Stockholm     7  km  northwest  of  Nyköping     CATCHMENT  AREA     150  km  radius  covers  over  500.000   people,  which  is  9,2%  of  the  populaRon     100  km  radius  covers  2.4  million  people,   27%  of  the  populaRon   STARTED  OPERATIONS   1930`s  ,  during  the  II  WW  in  military  use,   today  Army  Command  Finland   1930`s,     opened  for  civil  aviaRon  1984   RUNWAYS   Runway  1  –  5584  p    (1700m)   Runway  1  –  9442  p  (2800m)   Runway  2  –  6690  p  (2000m)   OPERATING  HOURS   Mon  0600–1000  EET  (GMT  +  02.00)     Tue–Thu  0600–1000  EET     and  1600–1800  EET   Fri  1400–1600  EET   Otherwise  only  by  agreement     0600–2200  GMT   2200–0600  GMT  only  by  agreement     OWNERSHIP   100%  CITY  OF  MIKKELI   90,1%  ADC  &  HAS  Airports   Worldwide,  9,9%  NYKÖPING   AMOUNT  OF  PASSENGERS  2013   2  916,     99%domesRc,  1%  internaRonal   2  165  040,     0,015%  domesRc,  99,985%  inernaRonal        
  • 13. MIKKELI  PASSENGER  STATISTICS   0   2  000   4  000   6  000   8  000   10  000   12  000   14  000   16  000   1993   1995   1997   1999   2001   2003   2005   2007   2009   2011   2013   Amount  of  passengers   Between  years  1993–2013   Passenger  sta9s9cs  of  Mikkeli  City  airport  
  • 14. SKAVSTA  PASSENGER  STATISTICS   0   500000   1000000   1500000   2000000   2500000   3000000   1997   1999   2001   2003   2005   2007   2009   2011   2013   Amount  of  passengers   Between  years  1997–2013   Passenger  sta9s9cs  of  Stockholm  Skavsta  
  • 16. Airport  opera9ons   Mikkeli  City  Airport       Stockholm  Skavsta     Airport  management   0,5   3  directors,  6  managers   Admin/Finance/Property   0,5   12   Air  traffic  control   1   LFV  (air  navigaRon  services  of   Sweden)  is  the  supplier   Security   1   Outsourced  to  Securitas   Technical  support   1   15   Handling   1   76  (incl.  Rescue)   Passenger  services   0,5   App.  1  300    EMPLOYMENT  EFFECT  
  • 17. Airport  system   Mikkeli  City  airport   Stockholm  Skavsta   Runways   1  –1700  m  (2300  m)   1  –  2800  m   1  –  2000  m   Terminal   1   1   Gate   1   6   Hourly  capacity   1  plane  –  2  movements  within  1,5  hours   4–12  planes/8–24  movements  per  hour   depending  on  direcRon  of  wind  and  share   of  starts/landings   Opening  hours   Mon  0600–1000  EET  (GMT  +  02.00)     Tue–Thu  0600–1000  EET     and  1600–1800  EET   Fri  1400–1600  EET   Otherwise  only  by  agreement   0600–2200  GMT  daily   2200–0600  GMT     only  by  agreement   Daily  capacity   Mon  –  2  planes/4  mov.   Tue–Thu  –  3  planes/day/6  movements   Fri  –  1  plane/2  mov.   With  opening  hours  of  Stockholm  Skavsta   10  planes/20  movements  day   From  64  planes/128  movements  up  to   192  planes/384  movements  per  day   depending  on  direcRon  of  wind  and  share   of  starts/landings  (6  simultaneous  flights   –  two  simultaneous  arrivals)   Annually   624  planes  –  1  248  movements     (with  current  hours)   3  640  planes  –  7  280  movements     (with  Skavsta  hours)   From  23  296  planes/46  592  movements   up  to  69  888  planes/139  776  movements     limited  to  37  500  planes/75  000   movements  according  to  environmental   permit    PRODUCTION  CAPACITY  
  • 18. Airport  opening  hours     Runway  1700  meters       Runway  2300  meters     Current  opening  hours   Mon  0600–1000  EET     (GMT  +  02.00)     Tue–Thu  0600–1000  EET   and  1600–1800  EET   Fri  1400–1600  EET   Otherwise  only  by   agreement     Planes  with  100  passengers:   2  400  /weekly   124  800  /annually       Planes  with  150  passengers:   3  600  /weekly   187  200  /annually       Planes  with  250  passengers:   6  000  /weekly   312  000  /annually       Planes  with  300  passengers:     7  200  /weekly   374  400  /annually   According  to     Skavsta  opening  hours   0600–2200  GMT   daily   2200–0600  GMT     only  by  agreement     Planes  with  100  passengers:   14  000  /weekly   728  000  /annually       Planes  with  150  passengers:   21  000  /weekly   1  092  000  /annually     Planes  with  250  passengers:   35  000  /weekly   1  820  000  /annually       Planes  with  300  passengers:     42  000  /weekly   2  184  000/annually    QUANTITY  OF  PASSENGERS  
  • 19. ANSWERS  TO  RESEARCH  QUESTIONS   How  to  improve  the  performance  of  Mikkeli  City  airport?   Lengthen  the  runway  and  opening  hours  and  gaining  new   customers  to  the  airport.     Why  to  improve  the  performance  of  Mikkeli  City  airport?     Money:  employment  effect  from  €28  930  up  to  €211  700  and   tourism  income  from  €291  000  up  to  €25  million.   What  is  airport  performance  and  how  it  is  measured?     No  widely  accepted  industry  prac@ces  for  measuring  and   comparing  airport  performance,  all  the  interest  groups     around  the  airport  have  their  own  indicators.   What  can  be  learned  from  Stockholm  Skavsta  airport  -­‐case?   Segmenta@on,  des@na@ons  and  ownership.  
  • 20. PROPOSAL  FOR  MIKKELI  CITY  AIRPORT   1.  SegmentaRon:     to  become  leading  tourism  airport  in  Finland   2.  DesRnaRons:     offering  wide  range  of  tourism  desRnaRons   3.  Ownership:  privaRzing  the  airport.    
  • 21. AT  THE  END   Our   research   is   reliable   when   conducRng   the   study   using   benchmarking   with   an   approach   of   parRal   factor   producRvity   (PFP)   when   analysing   our   data   and   finding   the   answer   to   our   research   quesRons.   ParRal   factor   producRvity   showed   well   the   relaRonship   between  inputs  as  employment  and  producRon  capacity  and  output  of   quanRty  of  passengers.  Collected  data  is  valid   corresponding  to  the   requirements  for  minimum  amount  of  data  according  to  Graham  and   Vogel  (2014;  2004)  for  comparing  airport  performance  using  input  and   output   indicators.   Our   study   has   validity,   where   used   data,   method   and   results,   jusRfies   the   proposals   for   the   City   of   Mikkeli   for   developing   the   Mikkeli   City   airport   performance.   Study   method   measures   the   phenomenon,   using   employment   effect,   producRon   capacity   and   quanRty   of   passengers,   and   is   reliable   and   it   can   be   replicated.   Study   results   and   arguments   made   according   to   the   analysis  of  the  collected  data  are  also  reliable  and  can  be  replicated.  
  • 22.     THANK  YOU!   PHOTO  BY  RAIMO  SUOMELA  ON  09.03.2010  AT  LPP.