Time to Sweat the Assets?
The analysis of two airportcases of restricted capacity
in different continents

26

Discussion Paper 2017 • 26
Miguel Mujica Mota andGeert Boosten
Aviation Academy of Amsterdam
University of Applied Sciences,
The Netherlands

Catya Zuniga
Aeronautic University of Querétaro,
Querétaro, México

Time to Sweat the Assets?
The analysis of two airport cases of restricted capacity
in different continents

Discussion Paper No. 2017-26

Prepared for the Roundtable on
Capacity Building through Efficient Use of Existing Airport Infrastructure
9-10 March 2017, Querétaro

Miguel Mujica Mota
Geert Boosten
Aviation Academy of Amsterdam University of Applied Sciences, The Netherlands
Catya Zuniga
Aeronautic University of Querétaro, Querétaro, México
September 2017

The International Transport ForumThe International Transport Forum is an intergovernmental organisation with 59 member countries. It acts as athink tank for transport policy and organises the Annual Summit of transport ministers. ITF is the only global bodythat covers all transport modes. The ITF is politically autonomous and administratively integrated with the OECD.
The ITF works for transport policies that improve peoples’ lives. Our mission is to foster a deeper
understanding of the role of transport in economic growth, environmental sustainability and social inclusion and toraise the public profile of transport policy.
The ITF organises global dialogue for better transport. We act as a platform for discussion and pre-negotiationof policy issues across all transport modes. We analyse trends, share knowledge and promote exchange amongtransport decision-makers and civil society. The ITF’s Annual Summit is the world’s largest gathering of transportministers and the leading global platform for dialogue on transport policy.
The Members of the Forum are: Albania, Armenia, Argentina, Australia, Austria, Azerbaijan, Belarus,
Belgium, Bosnia and Herzegovina, Bulgaria, Canada, Chile, China (People’s Republic of), Croatia, Czech
Republic, Denmark, Estonia, Finland, France, Former Yugoslav Republic of Macedonia, Georgia, Germany,
Greece, Hungary, Iceland, India, Ireland, Israel, Italy, Japan, Kazakhstan, Korea, Latvia, Liechtenstein, Lithuania,
Luxembourg, Malta, Mexico, Republic of Moldova, Montenegro, Morocco, the Netherlands, New Zealand,
Norway, Poland, Portugal, Romania, Russian Federation, Serbia, Slovak Republic, Slovenia, Spain, Sweden,
Switzerland, Turkey, Ukraine, the United Arab Emirates, the United Kingdom and the United States.

International Transport Forum
2 rue André Pascal
F-75775 Paris Cedex 16
contact@itf-oecd.org
www.itf-oecd.org

ITF Discussion Papers
ITF Discussion Papers make economic research, commissioned or carried out in-house at ITF, available toresearchers and practitioners. They describe preliminary results or research in progress by the author(s) and are
published to stimulate discussion on a broad range of issues on which the ITF works. Any findings, interpretations
and conclusions expressed herein are those of the authors and do not necessarily reflect the views of theInternational Transport Forum or the OECD. Neither the OECD, ITF nor the authors guarantee the accuracy of any
data or other information contained in this publication and accept no responsibility whatsoever for any consequenceof their use. This document and any map included herein are without prejudice to the status of or sovereignty overany territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or
area. Comments on Discussion Papers are welcome.

Mujica Mota, Boosten and Zuniga – Time to Sweat the Assests?

Abstract

Air traffic numbers have been steadily increasing and are projected to so in the future. Most traffic
growth pertains to a small fraction of the total available airport capacity worldwide; particularly themain airport hubs present these trends. As a consequence, they are becoming increasinglycongested, which results in the increase of delays and reduction of reliability. For these reasons it isimportant to look for ways in which the existing assets can take up more traffic. These solutions
should go beyond long-term considerations to build more infrastructures. In the current paper we
discuss of different ways of increasing capacity. First we define capacity and then we discusstechniques for identifying bottlenecks and room for improvement. We exemplify them by providing
two examples of airports in different continents, Schiphol Airport and Mexico City Airport.

ITF Discussion Paper 2017-26 — © OECD/ITF 20173

Mujica Mota, Boosten and Zuniga – Time to Sweat the Assests?

Table of contents
Introduction ...................................................................................................................................... 6
Defining and measuring airport capacity ....................................................................................... 6
Estimation of operational capacity.................................................................................................. 7
Amsterdam Schiphol Airport .......................................................................................................... 9
Airport infrastructure ...................................................................................................................... 9
Environment constraints ................................................................................................................. 9
Physical boundaries ...................................................................................................................... 13
Airline and airport business models .............................................................................................. 14
Relationship region-airport ........................................................................................................... 16
Rules and regulations in Schiphol ................................................................................................ 18
Societal considerations ................................................................................................................. 18
Summary on capacity situation of Schiphol Airport..................................................................... 18
Mexico City Airport ....................................................................................................................... 20
Airport infrastructure .................................................................................................................... 20
Environment constraints ............................................................................................................... 21
Physical boundaries ...................................................................................................................... 21
Airline business models ................................................................................................................ 22
Relationship region-airport ........................................................................................................... 24
Relationship airport-airline ........................................................................................................... 24
Governmental regulations ............................................................................................................. 24
Societal behaviour......................................................................................................................... 25
Technical constraints .................................................................................................................... 25
Identifying potential for growth by a simulation-based analysis .................................................. 25
Estimating peak hour capacity ...................................................................................................... 26
Runway analysis ........................................................................................................................... 26
Terminal gates analysis ................................................................................................................. 26
Taxiway network analysis ............................................................................................................ 27
The impact of bigger aircraft ........................................................................................................ 28
Conclusions on the situation of Mexico City analysis .................................................................. 29
Comparison of Schiphol and International Airport of Mexico City .......................................... 29
References ....................................................................................................................................... 30
Notes ................................................................................................................................................ 33
FiguresFigure 1. Schiphol Airport ........................................................................................................................................ 10
Figure 2. Development of aircraft noise emissions................................................................................................... 11
Figure 3. Airport system of Schiphol Airport (2015 values) .................................................................................... 12
Figure 4. Noise contours around Schiphol Airport ................................................................................................... 13

4

ITF Discussion Paper 2017-26 — © OECD/ITF 2017

Mujica Mota, Boosten and Zuniga – Time to Sweat the Assests?

Figure 5. The AirportCity growth cycle ................................................................................................................... 15
Figure 6. The triple helix as growth model for Schiphol Airport ............................................................................. 17
Figure 7. AICM airport model layout ....................................................................................................................... 21
Figure 8. Low-cost carrier behaviour in Mexico ...................................................................................................... 24
Figure 9. Effect of the introduction of the A380 in the RWY utilisation.................................................................. 28

TablesTable 1.
Table 2.
Table 3.
Table 4.
Table 5.
Table 6.

Factors that define capacity of an airport .................................................................................................... 8
Top 10 domestic routes in México ............................................................................................................ 22
Top 10 international routes in Mexico ...................................................................................................... 23
Measurements for runway ......................................................................................................................... 26
Measurements of gate buildings usage for the 30 simulations .................................................................. 27
Measurements of taxiway usage ................................................................................................................ 27

ITF Discussion Paper 2017-26 — © OECD/ITF 20175

Mujica Mota, Boosten and Zuniga – Time to Sweat the Assests?

Introduction

During the past decade, the world economy grew at an average annual rate of 3.6%, measured interms of Gross Domestic Product (GDP). In the same period, the aviation sector worldwide has beensteadily increasing and it has also been forecasted to do so in the future. The total scheduled airline
traffic grew at an average annual rate of 5%, and it has been forecasted a 4.2% and 6% steady growth in
the next twenty years for advanced and emerging markets, respectively. The airline industry has achieved
7% compound annual revenue growth, which is more than double that of global economic growth.
Specially, in 2014, airlines double industry net profit by USD 20 billion over 2013. In passenger terms,
the growth levels imply an additional 150-160 million passengers globally over the 2013 levels (Airbus,
2015; Boeing, 2015).
Most traffic is concentrated at the biggest global airports. Over 80% of the commercial air traffic isconcentrated on the top 100 airports worldwide, most of which face severe capacity constraints now orwill face capacity constraints in the near future. The main issue with the steady growth is that airports are
becoming increasingly congested, which in turn is a problem because capacity constraints have adverse
impacts on welfare. Passengers and businesses are affected by flight delays, cancellations, and missed
connections. In general terms, congestion causes delays and reduces reliability. Therefore, in a capacity
constrained airport, it is important to look for ways in which the existing assets can take up more traffic.
These ways should go beyond long-term considerations to build more infrastructure.
The present paper looks at different factors that affect capacity. It starts by addressing the definitionof capacity by several authors, and it presents the multifactorial nature of the definition of capacity. To
illustrate this nature, the definition is followed by the analysis of Schiphol Airport capacity constraints
and Mexico City airport as a preamble to highlight the benefits of simulation-based analysis of Mexico
City to shed light on their capacity constraints and what theoretical potential there is to increase its
capacity.

Defining and measuring airport capacity

Capacity is the main term that comes in mind when congestion problems arise. People can perceive
congestion symptoms in different areas of the airport system, in the length of queues inside the terminalbuilding, waiting times for security, amount of people inside the terminal buildings. In addition, queuingin the airside indicates congestion and the ultimate indicator of congestion levels is the daily delay
suffered by airlines. Congestion affects all the different stakeholders in different ways. It degrades theGround Handlers level of services1 agreed with the different airlines. The airport operator in turn pays
attention to the perception of quality by the passengers and airlines. The airlines pay a lot of attention tothese levels for setting new routes or even a hub in the different airports. For the region (businesses,

6

ITF Discussion Paper 2017-26 — © OECD/ITF 2017

Mujica Mota, Boosten and Zuniga – Time to Sweat the Assests?

passengers, cargo shippers) capacity constraints may result in less connectivity 2 to other parts of theworld. For these reasons, and from discussions with different stakeholders, we perceived that capacity isa term that has different meanings and many factors affect it depending from which angle it considered.
Capacity has been analysed and defined by different authors, however no objective definition can befound because of the multidimensional nature of the concept as the following review illustrates.
Reichmuth, Berster and Gelhause (2011) mention that airport capacity is related to a facilitie’s capability
to handle people, freight and vehicles. Other authors define capacity by the number of movements perhour (Barhart et al., 2012) while Upham et al. (2003), and Graham and Guyer (1999) define capacity as afunction of operational and environmental constraints. Recently, academic research on airport operations
tends to focus on the relationship between flight schedules, airport capacity and how to mitigate delays(Jacquillat and Odoni, 2015). Other important considerations are land use at and around the airport(Janic, 2016) and the role and contribution of stakeholders for defining the environmental capacity anddemand for air traffic (Upham et al., 2004). According to Janic (2008), capacity and development of
airports can also be seen as the interaction between four main factors: 1) operational, sizing and design ofairside and landside infrastructure, 2) economics, 3) environmental restrictions and regulations and 4)
social perception towards airport infrastructures. Some others, like D'Alfonso and Nastasi (2014), study
capacity through investigating the relationship between airports and airlines, and their respective
business models. The FAA (2015) provides a list of factors that affect capacity constraints: noise,emission reduction, airport slots, separation intervals for landing and departures, meteorologicalconditions, aerodrome design, runway configuration, arrival/departure ratio, air traffic flow type, aircraft
characteristics, and demand-related issues (like fleet mix, runway occupancy time and average ground
speed on final approach). We can conclude that airport capacity is not a static factor that defines theamount of aircraft or passengers/cargo handled but that dynamic factors like flight schedules, aircraft
types and weather conditions also play an important role in defining airport capacity.
Estimation of operational capacity

The various airport capacity indicators demonstrate that an overall definition of airport capacity is
missing. For this paper, airport capacity is proposed as a multifunction of airline and airport businessmodel, airport infrastructure, regulations, and capacity caps imposed by the government forenvironmental or society-related reasons. To define airport capacity as a multifactor function leaves open
the exact relationships between the factors but stresses that all factors are relevant to assess airport
capacity. Therefore the definition of capacity should take into account some factors as the following
formula illustrates:
𝐴𝑖𝑟𝑝𝑜𝑟𝑡 𝑐𝑎𝑝𝑎𝑐𝑖𝑡𝑦 = 𝑓(𝐹𝑎𝑐𝑡𝑜𝑟 1, 𝐹𝑎𝑐𝑡𝑜𝑟 2, 𝐹𝑎𝑐𝑡𝑜𝑟 3. . 𝐹𝑎𝑐𝑡𝑜𝑟 𝑛)

Table 1 is used for shedding more light on the idea of the multidimensionality in the definition of
capacity. The table presents the different factors that affect capacity, how they are measured and also
potential actions that might be taken for relaxing the restrictions.
The definition of capacity which the authors propose is “dynamic” in the sense that it should take
into account that constraining factors can differ per airport, per season, and even per time of the day. A
dynamic capacity definition acknowledges that both, operational and strategic phases may result in adifferent constraining factor and thus capacity limitations. Understanding airport capacity and what
drives the capacity usage at airports will provide an insight in the set of instruments available to optimise
the use of capacity. In other words, every existing airport will have a different (unique) set of
constraining factors and possible solutions to increase the capacity. The following two examples stressthe proposed definition, highlight the importance of these factors, and illustrate how different actions canbe taken for relaxing restrictions and unleashing capacity.

ITF Discussion Paper 2017-26 — © OECD/ITF 20177

Mujica Mota, Boosten and Zuniga – Time to Sweat the Assests?

Table 1. Factors that define capacity of an airport

8

Limiting
factorDescription

Capacity-increasing strategies

Technical
constraints

This parameter has been measured by the maximum
ATMs per hour in a runway in a combined arrival anddeparture fashion. Regarding terminal and landside, they
are measured by the maximum amount of passengers perhour; the standard measure is the peak hour concept.

Paradigms like SESAR and NextGen aim toremove some technical boundaries by more
efficient trajectories. In addition, techniques likesimulation and optimisation allow getting to thelimits of operational capacity of infrastructuresand systems. Nevertheless there is still thepractice to expand facilities whenever possible
however it is a long-term solution that might takemany years.

Environmen
tal
constraints

This parameter refers to imposed limitations due to noiseand emissions that directly affect the wellbeing of thecommunities surrounding the airport. These constraints
can put limits on the allowed number of operations
measured in ATMs/season.

For this factor the change in technology and/or
operational procedures can provide morecapacity in the systems.

Physicalboundaries

The geographical and type of boundaries of the airport
limit the operation since the noise emission is anundesirable side effect of the airport operation. In
addition, the influence of inhabitants surrounding the
airport might hinder the operation of the airport in thevicinity by putting a cap on the allowed ATM
movements.

This factor can be influenced by negotiations
with the communities or by the acquisition ofland in the vicinity of the airport. Land-use
planning is crucial to preserve area for airport
expansion,

Airlinebusinessmodels

The airline business model affects the capacity more andmore. Some carriers operate under the hub-and-spoke
model while other under a point-point one. These models
directly affect the peak hour operational capacity,
particularly in big international hubs stretching capacity
to its very limits. Airlines often compete with highfrequencies between destinations, thus increasing thenumber of movements. In addition, connectivity also has
downsides for this model: the delays in one airport might
be exported and sometimes amplified in another due tothe connectivity, influencing the real capacity.

One of the ways to influence this factor has been
by setting economic incentives or pricing
models. Furthermore, by expanding information
systems from one airport to multiple airports(gate-to-gate concept) and the use of larger
aircraft to reduce frequencies.

AirportbusinessmodelsSome airports invest in real state or inside facilities that
reduce capacity. Some airports decide to make deals to
use their available space for alternative business thatprovide revenue instead of using it to expand capacity,
this is a particular case of terminal buildings on thelandside and real estate close to the airside.

The airport needs to clearly define its businessmodel. This decision might affect expansion
investments. Government regulations can ensurethat airports invest in aeronautical infrastructure
on time.

Relationshipairportairline

The relationship between these two entities might create
more or less competition which is turn increase or reduce
capacity. These relationships might benefit particular
airlines letting less space for competition in slots where
capacity can be used.

Some authors propose to reduce the relationshipin order to prevent monopolistic behaviour ofairlines.

Relationshipregionairport

Beyond the physical limits there are other stakeholders
whose interests should be considered so that they do notblock or establish capacity limitations. This is theparticular case of communities in the vicinity of the
airport.

In order to relax capacity boundaries,
negotiations should take place between airportand stake holders. Furthermore more complex
relationships between airports and the region canarise in response to the limitations of capacity
such as the multi-airport system concept.

Governmentalregulations

The government, either pushed by society or by otherentities, can limit the capacity growth by using curfews
or artificial caps which might change during seasons andeven during the day.

For these regulations only the change intechnology might allow the increase in capacity.

ITF Discussion Paper 2017-26 — © OECD/ITF 2017

Mujica Mota, Boosten and Zuniga – Time to Sweat the Assests?

Table 1. Factors that define capacity of an airport (cont.)
Limiting
factorDescription

Capacity-increasing strategies

Societalbehaviour

Disruptive technology can also affect the capacity infacilities, in which the impact might vary depending on
the technical development of societies. That is the case ofmobile phones: they reduce the uncertainty forpassengers, which is translated into less demand forspace inside terminal buildings. In the future this might
imply less processing time from arrival to departure, thus
leading in an increase of capacity at different levels. The
behaviour of people together with the evolution of more
efficient aircraft might cause passengers to choose formore point-point flights avoiding the use of big hubs.

Studies should be performed for evaluating towhat extent capacity in different areas is
impacted. These may result in new operating
models for airports.

Amsterdam Schiphol Airport

Airport infrastructure

Schiphol is a large airport with five main runways and one terminal split into three halls. In terms ofoperations it has a good performance in comparison to other airports in Europe as suggested the overallpunctuality of 81.15%, measured as 15-minute tolerance in 2015 (OAG, 2016). The airport has 110 air
traffic movements (ATM) peak hour capacity3 with an average of 76 ATM at off-peak time. Its
operations are limited during the evening and at night (Netherlands, 2016). In 2017 the maximum
number of movements is restricted to 500 000 ATMs which is a reduction of 10 000 ATMs compared to2015.
Schiphol is part of the European network and has declared a high operational capacity; the traffic
growth will make it increasingly difficult to keep its performance in practice as declared due to theconstraining factors that complicate the operations and limit the airport capacity development.
Environment constraints

At Schiphol there have been capacity limitations due to the amount of generated noise by theaircraft since the 1960s. As from 1967 (Deventer, 2010) Schiphol can be perceived as noise-constrained,
but the extent to which noise limitations constrained the airport has changed over time. The constraints
forced the definition of a noise contour around the airport, limiting the amount of particularly noisy
aircraft. The maximum noise perceived by the houses and by 2050 sensors within the contour also affects
the preferred runway usage. In the year 2003 the runway known as Polderbaan (see Figure 1) wasconstructed in response to community complaints in addition to the imposed annual limit of ATMs in the
airport. Furthermore, the noise limits also influenced the establishment of an informal airport systemwith other Dutch airports to guarantee the continuous growth of traffic in case Schiphol meets the
maximum number of ATM.The agreement among the stakeholders includes that the 50% of potential
capacity gains due to the use of new (quieter) technology within the current noise limits will not be used
and returned to the communities thus reducing the noise while at the same time allowing the increase of
more ATMs per year. Figure 2 illustrates that new aircraft produce less noise. So if the fleet composition

ITF Discussion Paper 2017-26 — © OECD/ITF 20179

Mujica Mota, Boosten and Zuniga – Time to Sweat the Assests?

at Schiphol Airport will consist of more latest-technology aircraft the total annual noise produced bythese aircraft will be less than today. The noise reduction will be split in half; only 50% will be used to
grow the maximum of ATMs at the airport. The other 50% will in fact reduce the annual amount of noiseproduced.

'Aalsmeerbaan'

Figure 1. Schiphol Airport

Source: Google maps.

10

ITF Discussion Paper 2017-26 — © OECD/ITF 2017

Mujica Mota, Boosten and Zuniga – Time to Sweat the Assests?

Figure 2. Development of aircraft noise emissions

Source: Bundesverband der Deutschen Luftverkehrswirtschaft (2015).

Hence, today the noise around the airport is contained by (Deventer, 2010):


limitation of 500 000 ATMs per annum

rules for air space usage (minimum flight levels, strict standard arrival and departure routes)

rules for runway system availability and runway usage at various moments of the day (day,evening, night)

rules about noise-preferential runway usage

minimising the number of noise hindered houses, serious hindered persons and persons with
disturbed sleep patterns.

If Schiphol exceeds its ATM limit, part of the traffic has to be moved to other airports in the
Netherlands. The advisory board for Schiphol airport suggested that priority must be put to those airlinesthat play an important role in the development of the hub function of the airport due to its small
catchment area. For this reason, LCCs and charter traffic would be the ones that more easily can divert
their operations to other airports in the vicinity if Schiphol, namely Rotterdam, Eindhoven and in the
future Lelystad. Figure 3 provides an overview of the airport system designed to handle the overflow.

ITF Discussion Paper 2017-26 — © OECD/ITF 201711

Mujica Mota, Boosten and Zuniga – Time to Sweat the Assests?

Box 1. Slot limitations at Schiphol
In 2017 Schiphol Airport expects to hit the 500 000 ATM ceiling. The limited number of slots raises questions
on how to allocate the scarce capacity. Should this be given to the hub carrier or divided amongst all parties
demanding capacity at Schiphol Airport? By February 2017 still 12 000 slots are not yet allocated; these arerequested from parties that have not received a slot at all and parties that want to improve their slot time. A party
like holiday charter TUI (the third biggest operator at Schiphol) claims to have received less slots than it shouldhave based on historic rights. How capacity is defined at Schiphol is not clear; last year airlines and airport had afierce discussion on this topic. (Cohen, 2017a)

Figure 3. Airport system of Schiphol Airport (2015 values)

10%

100
%

90%

Lelystad
Expected Capacity (ATM):- Max:
45.000- Current: 0

Amsterdam
Capacity (ATM):- Max:
500.000- Current: 450.679

Rotterdam
Capacity (ATM):- Current: 21.605
33%
67%

Eindhoven
Capacity (ATM):- Max:
43.000- Current: 28.900

Remaining
Capacity
Used Capacity

Source: Mujica Mota et al. (2017).

Limitations due to noise cause not only a maximum number of ATM per year but they also add
complexity on the airport operations, especially for air space usage in the terminal ATC area. In practice
ATC has to decide what runway should be used by arriving and departing flights based on time of the
day and available noise quota left from the annual noise budget per runway.
Additionally, the strict arrival and departure paths offer further challenges for ATC controllers andpilots. At night times the Polderbaan (see Figure 1) is the preferred runway due to its remote location

12

ITF Discussion Paper 2017-26 — © OECD/ITF 2017

Mujica Mota, Boosten and Zuniga – Time to Sweat the Assests?

away from the houses. This procedure requires an additional 15-20 minutes taxi-time (relative to otherrunways at Schiphol) due to the distance between the runway and the terminal building. Overall, due tothe established relationship, airlines and airport are confronted with a situation in a complex airfield inwhich the runways configuration must be changed during the day making the management of traffic areal challenge. This in turn affects the potential capacity of Schiphol.
Assuming a constant noise budget, being the maximum amount of noise to be produced at any
location on the contour per annum, the amount of ATM is by definition a function of available
technology and operational procedures. Therefore, the quieter the aircraft used at Schiphol, the moreaccurate use of arrival and departure paths, the more efficient scheduling for flights between day,evening and night, the more ATMs can fit within the given contour.
Another consequence of the noise contours, preferential runway usage and the introduction of the
Polderbaan for evening and night flights is that Schiphol dominates/controls the land-use of a vast landarea around the airport as shown in Figure 4.
Figure 4. Noise contours around Schiphol Airport

Source: Schiphol Group (2015).

Next to noise contours, the neighbouring communities and cities are also confronted with safetyzones and land-use for land transportation to and from the airport. Due to its runways layout, Schiphol
Airport has a large land area (2787 ha) compared to, for instance, Heathrow Airport (1227 ha) (Janic,
2016).
Physical boundaries

Available land on- and off-airport offers limitations for airport development. Given the land scarcity
in Schiphol surroundings there is a big pressure from area neighbouring communities to redevelop landfor housing and business areas. The current land occupation for noise and safety contours and corridors
for land traffic connections to the airport block this development. It results in a so-called Schiphol
Paradox: the more successful the airport development and its contribution to the regional economy is themore constrained the airport growth by neighbouring communities will be, which are directly
beneficiaries of housing an economic development result from the airport development (Boosten, 2008).

ITF Discussion Paper 2017-26 — © OECD/ITF 201713

Mujica Mota, Boosten and Zuniga – Time to Sweat the Assests?

The airport has a large impact on the development and land use planning of the region. Most
communities and cities surrounding the airport face serious limitations to expand, nature and precious
habitat are effected by aviation, quality of living of large areas are impacted by noise, pollutants, safetyzones and land-based traffic corridors which are often very congested due to local and airport designatedtraffic.
Environmental constraints in combination with land use put severe pressure on the maximum annual
capacity of Schiphol Airport. Given the fact that the technical capacity is still not reached, there is an
on-going debate if the boundaries of the airport are too strict. In 2020, the Schiphol advisory board will
review the situation in order to decide if newer technology would be applied and some capacity can berelieved to Schiphol and also to the community in the form of a reduced noise cap. The solution for
short- and medium-term growth was found in establishing a multi-airport system where the regional
airports are used as reliever airports for Schiphol.
Box 2. The concept of the multi-airport system
The multi-airport system is defined as an informal system with no hard regulation to allocate air traffic tovarious airports. The government uses soft incentives like prices to convince airlines to move from Schiphol
Airport to other airports in the system. The lack a hard criteria now puts pressure on the sector and the government
because no party is willing to move and the non-hub airlines fear hard measures by the government to force them tomove. The government on the other hand struggles to find the right set of measures. Up to now spill-over to otherairports is a capacity measure that has not worked. (Cohen, 2017b)
Airline and airport business models

The business models of an airport and airlines impact how much physical capacity is available andhow it is used. The business model of an airport has changed nowadays. Modern airport enterprises havediversified by enriching service package offering (Jarach, 2005). The core benefits of an airport are thepassengers and goods transferred, the generic product that includes the airline and airport services, theexpected product including multi-modal services to and from the airport and the wide product including
logistical, commercial, consulting, real estate services among others (Jarag, 2005). So the revenue is not
coming only form the core business handling aircraft and passengers or cargo in terms of airport fees,
today it also comes from non-aeronautical businesses inside the airport (retail and food and beverage),car parking, real estate management, and business locations inside the airport among others. We can see
good examples of these new business models in the biggest hubs in Europe and abroad, people canperform diverse activities inside the airport which include shopping (BCN, CPN), to visiting museums
and casinos (Schiphol), and even surfing in summer (MNC). At Schiphol the airport business model has
a high interaction with developments in the region (Figure 5). The airport connectivity supports thebusiness development in the region and this in turn will increase the demand for connectivity and traffic.
The Schiphol business model is based on exploiting a so-called airport city concept. In this model
an airport invests in both aeronautical and non-aeronautical activities and the overall airport return isbased on the revenue flows from both activities. Within the airport company this will result in constantdebate on where to invest the scarce capital. Delaying investments in operational capacity (the concept ofsweating assets) is beneficial in the short term for the airport financial results, especially if there are good
options to invest in (very) profitable non-aeronautical activities. On the other hand, expanding
non-aeronautical activities at the airport does have an adverse impact on the landside capacity of the
airport. It attracts more activities and traffic to the airport that has to be accommodated next to thededicated air traffic (passengers, cargo and staff).

14

ITF Discussion Paper 2017-26 — © OECD/ITF 2017

Mujica Mota, Boosten and Zuniga – Time to Sweat the Assests?

Figure 5. The AirportCity growth cycle

Source: Schiphol presentation

Due to the required time for expanding facilities, it can only be done stepwise and In this case theairport takes the economic risk on the investment. The structure and business model of the airport will inturn provide answers on the question of if the airport is capable to invest in capacity expansion
programmes (either new infrastructure or optimisation of existing). Schiphol Airport is a state-owned
company that has direct access to the financial markets; before the financial crisis in 2008 the airport had
a AAA-status and in 2016 the airport has an A1-status.4 Until now Schiphol has been able to invest in
new capacity timely and was able to get a positive return on its investments. The new status of Schiphol
implies that more risk is put into the investments therefore they have to be evaluated carefully in order toavoid potential economic downturns. This in turn may cause that investments in airport capacity
expansion will be delayed or limited therefore new capacity will be available at a later stage.
Airline business models in turn have an impact on how and to what extent the capacity is used. At
Schiphol Airport, the home carrier KLM and its alliance partners count for approximately 70% of thetraffic and most of the transfer traffic. KLM and partners operate a hub concept at Schiphol, resulting inhigh operational peak demand and need for evening, night and early morning flights. Just like many
carriers, KLM’s business model is based on frequency competition using smaller aircraft by generatinghigh frequencies of service to the same destination. This principle demands much more peak capacity
than the situation of an airline maximising the number of passengers or cargo per movement (D'Alfonsoand Nastasi, 2014). At Heathrow, due to severe capacity constraints British Airways makes a different
choice by using larger aircraft with less frequent flights than Schiphol (D'Alfonso and Nastasi, 2014)
making a more efficient use of the work load units per movement5.

ITF Discussion Paper 2017-26 — © OECD/ITF 201715

Mujica Mota, Boosten and Zuniga – Time to Sweat the Assests?

The second group of big users at Schiphol are low-cost carriers (LLCs). The LCCs typically operate
A320 or B737 family-type of aircraft at a high frequency to several destinations as well. Because of these
operational models, airlines (no matter if it is FSC or LCC) prefer certain times of the day to fly puttinghigh pressure on these slots while other times in the day the facilities are underutilised.
As a hub, Schiphol Airport competes with the other major hubs in Europe. The airport thus has
incentives to be able to provide high peak-capacity as well as reliable, short minimum connection times(MCT). These features allow the hub carrier to offer high connectivity with short transfer times at the
airport. The overall capacity and efficiency of the hub can be defined by its maximum peak hour capacity(measured in ATMs) which has bearing on the number of available connections offered by the hub andby its ability to transfer passengers and baggage between flights within the requested MCT. The terminal
design and automated baggage handling system are supportive to this capacity demand. Furthermore, at
Schiphol both the “one-roof-terminal-concept” and the massive investments in automated baggage
handling systems are developed to support the peak hour transfer capacity demand. All these features
make the airport very attractive for supporting the business models of the different carriers that want tooperate in it.
In addition, traffic flows are shifting worldwide; for instance, the airports in the Middle East
nowadays connect Asia, Australia and the Americas. For Schiphol Airport, these trends could have amajor impact in the demand for and the type of airport facilities needed. Scenarios are possible that theexisting capacity and business models will be completely restructured. Due to these situations,continuing to optimise the current capacity and operations might not be possible.
Box 3. The impact of long-haul low-cost business model
A recent report indicates that the introduction of long-haul low-cost (LHLC) operations at Schiphol might
introduce passenger self-transfer. The passenger itself books two connecting flights at his own risk and ensures theconnection of the baggage. Airports like London Stansted and Milano nowadays start facilitating this type oftransfer. But it will require new infrastructure at the airport and will result in facility changes at the reclaim areas
and transfer lounges among others. (KiM, 2017)
Relationship region-airport

The main objective of the hub airport in Amsterdam is to support the regional and the national
economy by delivering connectivity to all important regions in the world. It acts as an economic engine
for the region. Therefore, for the development of the airport, a careful balance is required between thenational/regional (economic) interests and the business development of the airport and airline. For somedecades, a relationship between the airport, government and the main carrier (the triple helix) acted as the
major driver for airport development in the short, medium and long term (see Figure 6). Through thisrelationship, the airline and airport had congruent strategies towards the development of the region andthe country.
The airport generates many jobs locally, supports economic activities in the region and offers
inhabitants high levels of air connectivity. These high levels of connectivity, on the other hand, aresupported by transfer passengers who could have, at least in theory, the option to use other airports toreach their final destination. Furthermore, in the light of capacity constraints at Schiphol, therecommendation of the advisory board for Schiphol is to redistribute the non-hub-related traffic to otherairports in the Netherlands. If airlines, particularly LCCs, have to move to a different airport, this mightbring as a consequence that some local travellers in the vicinity of Schiphol will have to use anotherairport to get to their destinations. Furthermore, in the extreme case Schiphol will be left as a hub airport

16

ITF Discussion Paper 2017-26 — © OECD/ITF 2017

Mujica Mota, Boosten and Zuniga – Time to Sweat the Assests?

for airlines that match this business model. Additionally, noise and congestion can be displaced to otherareas of the country.
The Dutch economy is an open economy with a high-connectivity demand to support the country’s
exports where transportation and logistics are important economic sectors. KLM’s strategy is focused on
becoming a worldwide operating carrier as a partner of a large alliance; the airport strived to become a“mainport”’ for the Dutch economy and an important hub for the national airline. This relationship where
the national and regional interests are put on top of the priorities raise a debate about what the right limit
for the airport should be. This limit should aim at finding the right balance between its position in the
Dutch economy as a node in the global economic network and the quality of life in the Amsterdam
region.
Figure 6. The triple helix as growth model for Schiphol Airport

Source: AAS presentations.

Interviews with former executives showed that the triple helix was detrimental to the success ofboth the airline and airport by comparing Schiphol’s growth model in the 90’s to Frankfurt Airport
Fraport and Copenhagen Airport (Veer and Bertnsen, 2016).
The business/development models of the Dutch Government, KLM and Schiphol Airport are key
parameters for the airport capacity as a whole. Within the framework of the environmental capacity,
parties cooperated to create the maximum capacity of a successful hub. With this objective in mind,
airside, terminal and landside capacities are balanced based on the aviation demand and the further
commercial development of the airport city concept. It is important to note that at Schiphol the airport
capacity is not only a function of aeronautical activities at the airport; capacity for non-aeronauticalactivities is required to finance the investments in infrastructure, to attract business to the airport and tosecure connectivity to all regions worldwide.

ITF Discussion Paper 2017-26 — © OECD/ITF 201717

Mujica Mota, Boosten and Zuniga – Time to Sweat the Assests?

Rules and regulations in Schiphol

Regulation of airport capacity can have significant influence on the operational capacity of the
airport. For instance, a night curfew will have a big impact on the airline flight schedules and operations.
It could result in change of peak patterns if airlines try to optimise its aircraft utilisation or even relocate
aircraft to different airports to avoid flights that cannot depart or arrive on time before the curfew. Suchchanges may also affect the efficiency and on-time performance of the terminal operations.
Changes in security regulation affect the throughput of both passengers and baggage. Recently
Schiphol Airport had to invest heavily in upgrading security due to the aftermath of the terrorist attacks
in Brussels and Istanbul. In addition, a new round of measures and investments pertaining to landsidesecurity are foreseen. Moreover Schiphol serves significant traffic to and from the UK thus Brexit may
imply that the terminal will be redesigned to account for a higher share of non-EU traffic passing throughthe airport. Altogether these events and changes in security will affect the capacity of the airport andpossibly change the balance between airside and terminal/landside capacity. This can result in longer
handling times within the terminal which will increase the minimum connecting time between flights andthus reduce the peak hour connectivity. For this reason Schiphol is also working on new high throughput
security units based on biometrics.
Societal considerations

For the airport, the questions of scale and scalability arise. There is a concern that further growth of
air traffic and the resulting additional airport facilities, which is technically possible, may not bebeneficial to airport operations. It can take up to two hours or more to walk from the landside to the gate,suggesting that there might be a limit to the capacity of an airport site. So in these situations the
expansion of facilities for increasing capacity might discourage the use of Schiphol to some passengers.
Regarding social and technological developments, apart from having a direct impact on aircraft
operations, they also influence human behaviour inside the airport. Its impact it is not totally clear yet.
On the one hand we can already see that travellers use smart technology to make their own well informed
decisions and the time they spend in the airport might be affected by the use of novel technology. On theother hand, technological developments pertaining to communications also change the way in which
individuals and businesses decide whether to travel or communicate from home or workplace before
travelling. The use of easier ways of communicating may indeed intensify air travel through fostering
connections that haven’t been previously possible.
Summary on capacity situation of Schiphol Airport

The capacity of Schiphol Airport cannot be defined by one single parameter; to define the capacity
is a complex matter of very different non-independent parameters which via iterations can influence eachother. For the moment the most influential factor is the triple helix relationship between Dutch
governments, airline and airport which imposes an artificial ATMs/year cap due to the problems noisecause to the population in the vicinity of the airport. In addition, other important constraints and factorsthat affect the potential growth of Schiphol Airport are:


18

Technical constraints: The technical peak hour capacity is measured in the maximum hourly
ATMs and handling capacity of terminal and landside in millions of passenger/annum
combined with the level of service standard if no other limitations would occur. This peak hourcapacity is based on the available infrastructure and use of air space. The combination of
runway capacity with airspace capacity will determine the operative limit of the airside while
the size of facilities and technology in place will determine the amount of passengers that can

ITF Discussion Paper 2017-26 — © OECD/ITF 2017

Mujica Mota, Boosten and Zuniga – Time to Sweat the Assests?

be handled per hour. For the time being, the technical capacity for Schiphol is not the mostlimiting factor.
Environmental constraints: The environmental capacity being the annual limitation of theATMs to reduce the annoyances caused by the airport to the environment and population. As
mentioned before the most limiting factor is the amount of noise produced per annum per point
on a noise contour. The environmental capacity can be further limited by other conditions likeemissions or safety. Currently noise restrictions limit the number of ATM per annum to
500 000 and this limit is in 2017 the constraining factor for slot allocation.

Airport and airline business models: They define how airport capacity will be used. The hub
development at Schiphol Airport is very important for the region, therefore the routing oftraffic to reliever airports or the modification of strategies from high frequency to improvementof WLU per ATM play an important role for defining the capacity of the airport. There are
difficulties to execute these options because of the lacking of instruments to distribute thetraffic between the airports.

Infrastructure: The relationship between airport and airline play an important role for defining
when expansions will take place and who runs the risk. For the moment Schiphol runs the risk
for these investments and this could result in a policy of sweating assets and delay aeronauticalinvestments as long as possible. Consequently, it might affect the operational capacity of the
airport and/or delay the investments in airport facilities. Currently Schiphol is investing in a
new pier with eight gates for absorbing the demand (A-pier).



Relationship (the triple helix): The relationship between Dutch governments, airline and airport
was a unique and important key for the successful development of the hub and airport capacity
in the region. Once Schiphol reaches its annual capacity limits, new ways for interaction withsurrounding communities and tools to balance the impact of airport growth in the region should
be developed. In other words solutions for further expansion could be found outside the airport
perimeters.

Technological developments: New socio-technological trends can influence the traffic and/or
hub developments as well as the behaviour of passengers and cargo at the airport. Airport usage
and utilisation can change dramatically due to these developments with a major impact on
capacity requirement. For Schiphol Airport we already can see some trends emerging like newtransport flows worldwide, smart personal technology being used to optimise the operational
processes and commercial activities. In future dwelling times of passengers and cargo at
Schiphol can be reduced with a large impact on the business model while the use of
telecommunications tool will foster the use of airlines.



Government regulation: New rules and regulations can have a major impact on the peak hourcapacity or capacity at specific times of the day. Schiphol security and border control will
impact the capacity for transfer passengers within the MCT and therefore the efficiency of the
hub and the capacity needed for ATM and handling times.

Congestion and delay in the network: For an airport operating at maximum capacity in mostpartsof the day, it will take long time to recover from delays or other disturbances. The impact
might be strengthened due to the main traffic flows between hubs and also the delays might be
distributed amongst the hubs in Europe. Schiphol is part of the European network and has
declared a high operational capacity; the traffic growth will make it increasingly difficult to

ITF Discussion Paper 2017-26 — © OECD/ITF 201719

Mujica Mota, Boosten and Zuniga – Time to Sweat the Assests?

keep its performance in practice as declared. We should add a recovery standard (or resiliencemeasure for brittleness) to the airport capacity indicators for getting an indication of its
vulnerability to disturbances and the time needed to recover.

Mexico City Airport

In 2015, Mexico transported more than 73 million passengers and about 655 500 tonnes of cargo.
There were 63% domestic passengers and 37% international passengers. Mexico City International
Airport moved 38.43 million passengers, more than a third of the total traffic of the country (SCT, 2015),
which makes it the major airport in Mexico and one of the most important airports in Latin America. In
the cargo sector, it moved almost 33 500 tonnes from which 27 600 tonnes where from international
destinations and 5 700 domestic ones. This makes it the main airport for international and domestic cargo
controlling the 65% and 38% of the total, respectively. The domestic general aviation sector accounted
for the 8.5% of the total movements. In addition, the demand will continue to grow in the coming years(around +5% in aircraft movement and +12.2% in number of passengers) and 41 million passengers havebeen forecasted by 2020.
Airport infrastructure

AICM runway system consists of two runways with dimensions of 3 963m x45m and 3 985mx45m,
respectively. Runways operate in a segregated mode which means that one is used for arrivals and theother one for departures. According to Herrera (2012), the arrivals are performed on the runway 05R/23L
and departures on runway 05L/23R. The current airport facilities have a total surface area of 790 ha. It
includes 96 parking positions, 33 direct boarding gates in Terminal 1 (T1) and 23 in Terminal 2 (T2), anda total of 74 operative gates. AICM accounts for two passenger terminals, T1 with 548 000m2, and T2
with 242 000 m2 which are interconnected by a 3-km monorail and road access. T1 is used for bothnational and international flights, whereas T2 is used mainly operated by Aeromexico and its allies. The
airport can be accessed by subway, bus, taxi and private transport. It also connects directly with morethan 5 000 car parking spaces split between the international and the domestic area. Figure 7 depicts anaerial view of the airport.

20

ITF Discussion Paper 2017-26 — © OECD/ITF 2017

Mujica Mota, Boosten and Zuniga – Time to Sweat the Assests?

Figure 7. AICM airport model layout

TWY B

TWY B

RWY 05L-23R

RWY 05R-23L

Environment constraints

As in the case of Schiphol, AICM is also contained by factors such as noise emissions that force
particular air space usage rules; those in combination with its altitude (2230 AMSL) make the operationa challenge for ATC. Furthermore, rules for runway system availability and usage are also influenced byweather conditions, when the wind is from northeast; landing operations are usually directly over theurban area. Therefore, there is an important problem regarding noise pollution. This issue has been
partially mitigated by the introduction of new aircraft models with advanced technology which reduces
noise emissions and fuel consumption. Normally, at AICM, aircraft use the take-off/climb noise
abatement procedures provided by the aircraft flight manual in coordination with ATC.
Physical boundaries

The airport is located on the east side of Mexico City but in the core of metropolitan area: it islocated in a 25-million inhabitant metropolis situated 5 km east downtown and surrounded by a hugeurban area. Nowadays, the airport does not have a clear possibility of expansion in terms of available
land on and off airport. The geographic characteristics of the airport also affect its capacity; it is locatedat an elevation of 2230 AMSL, which complicates landing and departure operations. In addition, it issurrounded by volcanoes and mountains in a convection zone. Its runways run southwest-northeast,
which constrains the approaching and departure routes. In addition, the soil conditions of the airport withhigh water content pose extraordinary challenges mainly in runways and terminals. These environmental
constraints in combination with operations put severe pressure on the maximum operative capacity of the
airport.

ITF Discussion Paper 2017-26 — © OECD/ITF 201721

Mujica Mota, Boosten and Zuniga – Time to Sweat the Assests?

Airline business models

The airport is used by 26 commercial airlines and 17 cargo carriers. Aeromexico, the biggest
Mexican airline, has its operation hub in the airport, and as the airline belongs to the Sky-Team alliance,
the airport has also become a Sky-Team hub. AICM serves as the major hub airport in the Mexican
system; it has the highest connectivity origin-destination routes within Mexico. It has been accounted for
750 regular routes, 402 international and 348 domestic routes. Table 2 and 3 introduce the top 10
domestic and international routes respectively.
Within the domestic routes, 47 concentrate the 80.2% of the total passengers; while the 80% of theinternational tourism uses 94 routes (SCT, 2015). In the international sector, most of the passengers
come from United States; this could be linked to two main factors, the first one is the alliances between
airlines and the currently used hub and spoke model of airports; and the second being the big amount of
Mexican population living in the US. Aeromexico transported in 2014 the biggest amount of passengers
to United States with a total of 2.8 million, followed by Volaris with almost 1.7 million. To Europe, Asia
and Canada, Aeromexico was the only airline which transported passengers, a total of 384 000, 120 000
and 83 000 passengers were accounted, respectively. To Central America and the Caribbean,
Aeromexico, Aeromexico-Connect and Interjet transported 196 000, 235 000 and 270 000 passengers,
respectively. To South America, there were transported by Aeromexico and Interjet 88100 and 76 000
passengers, respectively (SCT, 2015).
Table 2. Top 10 domestic routes in México
OriginDestination

Transported
passengers(thousands)

1

MexicoCancun2Monterrey

Mexico3

MexicoGuadalajara

4

Tijuana

Mexico5

MexicoMerida6

Tijuana

Guadalajara

2013
3
295
2
460
2
278
1
241
1
050
941

7
8

Villahermosa
TuxtlaGutierrez
Monterrey
PuertoVallarta

MexicoMexico

700
684

2014
3
524
2
736
2
379
1
266
1
131
1
025
776
728

CancunMexico

673
527

712
606

9
10

Growing(%)

Origindestination vs.
total %

2013/2014
7.0

2013
10.8

2014
10.7

11.2

8.1

8.3

4.4

7.5

7.2

2.0

4.1

3.8

7.8

3.4

3.4

9.0

3.1

3.1

11.0
6.5

2.3
2.2

2.4
2.2

5.9
14.9

2.2
1.7

2.2
1.8

Source: SCT (2015).

22

ITF Discussion Paper 2017-26 — © OECD/ITF 2017

Mujica Mota, Boosten and Zuniga – Time to Sweat the Assests?

Table 3. Top 10 international routes in Mexico
Origin1

Mexico

2

New
York
Los
AngelesNew
York
CancunMiami
MexicoDallas
HoustonMexico

3
4
5
6
7
8
9
10

Destination

Transported
passengers(thousands)

Growing(%)

Origin-destination
vs. total %

2013
783

2014
813

2013/2014
3.8

2013
2.7

2014
2.5

731

803

9.8

2.5

2.5

Guadalajara

746

781

4.7

2.5

2.4

Mexico

710

760

7.2

2.4

2.4

Atlanta
MexicoHoustonCancunCancunBogota

661
718
620
630
561
469

704
694
693
678
585
572

6.6
-3.4
11.7
7.7
4.3
21.9

2.2
2.4
2.1
2.1
1.9
1.6

2.2
2.2
2.1
2.1
1.8
1.8

Los
Angeles
CancunSource: SCT (2015).

However, due to the restriction in capacity, it has become difficult for airlines to get slots to operate
at AICM. According to OCDE (2014), the AICM´s slot allocation process is one of the major hurdles forairline competition, the claim by the government is that airport is fully used and thus competition by new
entrants is restricted. In 2013, the Ministry of Communications and Transportation (SCT) issued a new
Saturation Declaratory for the Airport (DOF, 2013). According to Mexican authorities, the maximum
capacity is limited to 61 operations per hour (with hard restriction of 40 landings per hour) under optimal
conditions. However, during adverse weather conditions the limit will drop to 30 or even 20 landings perhour.
The consequence of AICM being constrained is that traffic at regional airports bound for AICM
suffers delays (ground delays) due to ATC problems at AICM. The result is increasing delays in thedomestic aviation system and underutilisation of aircraft by the airlines. Therefore, the need has been
expressed to design and implement an efficient slot allocation model based on competition, in order tobenefit consumers and stakeholders by increasing new competitors and its participation in all the airport
system.
According to data from SCT (2015), the biggest domestic airlines in terms of transported passengers
are Aeromexico, Volaris, Interjet and Aeromexico-connect. In Mexico, the low-cost carriers (LCCs)
business model arrived in 2005 with 5.5% of the market share and fast growth allowed them to get up to
the 60% of the domestic market by 2013. This sector is operated by three main companies(Interjet,Volaris and Vivaaerobus). Unlike these companies, there has been limited development ofLCCs, while the potential in the market is clearly there (see Figure 8).

ITF Discussion Paper 2017-26 — © OECD/ITF 201723

Mujica Mota, Boosten and Zuniga – Time to Sweat the Assests?

Figure 8. Low-cost carrier behaviour in Mexico

Source: SCT (2015).

Relationship region-airport

Similarly with Schiphol, innovative alternatives have been explored in order to provide efficient andreliable services for the metropolitan region. One of them involved implementing new demand
management schemes which involves the development of a multi-airport system. To do so, the catchment
area of the metropolitan region was analysed taking into consideration the social, geographic, economic,
and political reality of the different zones. As a result, Mexico City airport is the main airport and the
airports of Queretaro (QET), Toluca (TLC), Puebla (PBC), and Cuernavaca (CVJ) airport are also
considered within the multi-airport system.
Relationship airport-airline

AICM as many airports in the world, operates its terminals with operative and commercial rules.
Terminal 1 is used by many carriers for domestic and international flights, and it is used to handle
different types of aircraft ranging from A320s to A380s in a dedicated gate. Terminal 2, which is thenewest terminal, is mainly operated by Aeromexico, and its twenty allies from sky team provide accessto 1 062 destinations in 177 countries. As a result, with new destinations and new routes offered,
Aeromexico operates more than 600 daily flights and its destinations network features more than 80
cities: 45 in Mexico and 41 in America, Europe and Asia (Aeromexico, 2015). Among the benefits of thealliance, the member airlines can benefit from knowledge and best practice sharing, particularly when it
comes to safety, customer service and operational efficiencies.
Governmental regulations

In 1997, Mexican government opened the inversion to the airport systems. As a result, five airportgroups manage 35 out of the 60 airports. Grupo Aeroportuarios Ciudad de México operates the AICM,
while, Grupo Aeroportuario Centro Norte holds thirteen airports and Grupo Aeroportuarios del Pacífico
twelve. Aeropuertos del Sureste accounts for nine airports while the rest remain operated by thegovernment under ASA Corporativo. The conformation of these groups, together with liberalisation andderegulation, has been employed in order to facilitate access to competitors and increase capacity.

24

ITF Discussion Paper 2017-26 — © OECD/ITF 2017

Mujica Mota, Boosten and Zuniga – Time to Sweat the Assests?

Societal behaviour

An official public announcement in 2001 declared the needed for the construction of a six-runway
airport on communal lands a few kilometres east of the AICM. The project was meant to become an
achievement to the Mexican Air Transport system; the airport was projected as the new gateway to Latin
America. However, the decision failed to acknowledge local and regional impacts, particularly in termsof the required expropriation of 15 000 acres belonging to communities living in the surroundings. It wasnecessary to relocate thousands of families who have lived and work for decades in the area. Communal
farmers refused to abandon their lands. In reaction, the government offered farmers a modest
compensation (around USD 0.70/m2) for the land (Galland, 2011). This became a strong social
movement against expropriation which produced constant protest marches and a series of unfortunate
and violent events and confrontations. After this situation, and followed by unsuccessful negotiations, thefederal government decided to cancel the project. Decision makers and managers failed to predict this
scenario was perhaps due to the complex behaviour between socio-economic, biophysical, political andcultural contexts.
Technical constraints

As it has been mentioned, the airport suffers mainly by technical constraints. These are mainly due
to the separation between runways (approximately 300 m) which does not allow for independent
operations. Instead both runways are operated following the ATC rules for parallel dependent operations
in which most of the time one runway is used for arrival while the other for departures.
In order to exemplify that for some factors different tools or mechanisms can be applied forincreasing or understanding capacity problems; the following section illustrates a simulation-based
analysis that allows identifying the main blockers of the system and the impact of the change intechnology by using bigger aircraft as the A380 in such a constrained system.
Identifying potential for growth by a simulation-based analysis

A simulation model was developed in order to analyse the performance of the airside of the airport,
aiming at identifying the bottlenecks during the operation of a high-demand day. The model simulates
the movements over a 24-hour period; based on a publicly available flight schedule of the airport (OAG,2015).The flight schedule of a representative day has been used as the main input for the model which
was validated using information from Flight Stats and Flight Radar (Flight Radar, 2017).
The simulation model incorporates the uncertainty of the operation of the problem such as variationin turnaround times and taxi times, among others. The level of detail enables the integration of technicaland operative restrictions imposed by the airport authority and ICAO. The most relevant characteristics
are the wake vortex6 and taxiway separation, taxiway routing for landing and take-off, and the routes
followed by the aircraft in the taxiway network. Aircraft speed and type have also been modelled in eachof the taxi in/out route together with the stand location and quantity.
The elements that compose the complete model are: the two runways, taxi network and parking
stands for the two terminals (T1 and T2). The model focuses only in the airside operation of the airport
excluding terminal activities and the flow of vehicles. Figure 7 depicts the layout of the AICM model
developed for the study.

ITF Discussion Paper 2017-26 — © OECD/ITF 201725

Mujica Mota, Boosten and Zuniga – Time to Sweat the Assests?

Estimating peak hour capacity

Scenarios were constructed in order to get insight into the capacity of AICM. The simulation model
was then used to measure the proposed key performance indicators (KPIs) for the airport:
runway utilisation in peak hourrunway utilisation during the dayTerminal 1 utilisation in peak hourTerminal 1 utilisation during the dayTerminal 2 utilisation in peak hourTerminal 2 utilisation during the daytaxiway elements utilisation in peak hourtaxiway elements utilisation during the day.

Runway analysis

The analysis of the model confirmed that runway capacity is the most limiting factor of the system.
The modelling exercise estimated that the runway utilisation during a typical day is close to 70%. On theother hand, for the peak hour utilisation, the runway is operating at full capacity (98%). Table 1
illustrates the results obtained after 30 replications of the model. It can be noticed that these figuressuggest that there is still potential to use off-peak capacity.
Table 4. Measurements for runway
Parameter
Runway usage(Peak hour 3-4
pm)
Runway usage(Operative day
24hrs)

Averageutilisation
98%

Minimum
utilisation
97.9%

Maximum
utilisation
98.9%

66.41%

62.40%

70.2%

Terminal gates analysis

The situation of the terminal gates results are of particular interest for the study. The reason for thisis that there are hard restrictions regarding the allocation of airlines in both terminals due to theairline-airport relationship that allocates T2 for the use of Aeromexico while T1 is used for a mixture ofairlines both domestic and international. This allocation might in turn affect the efficient management of
the terminals. Table 5 illustrates the utilisation of the gates in both terminals during the day and during
the peak hour.

26

ITF Discussion Paper 2017-26 — © OECD/ITF 2017

Mujica Mota, Boosten and Zuniga – Time to Sweat the Assests?

Table 5. Measurements of gate buildings usage for the 30 simulations
Parameter
Terminal 1 Gate usage (3-4 pm)
Terminal 1 Gate usage (24hrs)
Terminal 2 Gate usage (3-4 pm)
Terminal 2 Gate usage (24hrs)

Average use
74%
51%
72.9%
44%

Minimum use
68%
50%
64.1%
43.08%

Maximum use
88%
100%
85%
100%

In Table 5, the terms average, minimum and max refer to the values obtained during the simulation
runs, in other words after running several times the scenarios, due to the uncertainty of the operation, we
will have average values and in some moments a minimum use and maximum one. It is noteworthy thatthe 100% is not achieved during the peak hour. This situation makes more evident that due to the runway
as the limiting element of the system, during the peak hour, the utilisation of both terminals does notreach their operational potential. As it can also be noted, the utilisation of Terminal 2 is lower than
Terminal 1; this might be the consequence of Aeromexico operating mainly in Terminal 2.
Simulation modelling also reveals that the gates at the terminal buildings are able to handle more
traffic; however focus should be put into the time slots where the entrant carriers would like to operate.
The negotiation between carriers and airport authorities is key if the airport wants to keep a good level ofservice for the carriers and passengers. An example of this situation could be the allocations of flights inthe morning slots as now some LCC carriers from the USA are doing (e.g. Southwest and Jet Blue).
Taxiway network analysis

For the analysis of the simulation model, we could identify two taxiway (TWY) segments that
present some problems. On the north from the runways, the TWY B (see Figure7) which is parallel to thenorthern runway presents congestion problems during the day. In addition, TWY A, which connects
Terminal 2 with the northern runway, also shows congestion problems.
Table 6. Measurements of taxiway usage

TWY B queue (3-4 pm)
TWY B queue lengths
TWY A (3-4 pm)
TWY A queue lengths

Maximum Average
4
5.5
7
3.8

Minimum
3
4
5
2

Maximum
6
8
11
5

We identified potential causes of this situation:

The heavy aircraft type coming from Terminal 1 that need to use the southern runway for takeoff (since it is the longest runway), need to cross the northern one with the consequence ofblocking the runway for longer than the expected runway occupancy time, which should be theoptimal situation for operational purposes.



Since all the gates of T1 use TWY B for positioning themselves at the head of the northern
runway any incident within this taxiway might cause problems and delays in the TWYB.
Furthermore, due to this configuration, the TWY works like a funnel where all the aircraft
coming from T1 need to line up in order to take their position at any runway.

ITF Discussion Paper 2017-26 — © OECD/ITF 201727

Mujica Mota, Boosten and Zuniga – Time to Sweat the Assests?

In the case of TWY A, the one that connects T2 with the northern runway, we identified a similar
situation as in T1; however the aircraft coming from Terminal 2 can use TWY “A-1” for taking positionat the southern runway.
The impact of bigger aircraft

Some carriers have declared their intentions of operating flights to Mexico City Airport using thebiggest aircraft models: Airbus A380 or Boeing 747-8. For this reason, it is important to get insight about
the impact that this new aircraft technology would have in the system. Therefore we used the model ofthe airport for analysing the impact of AirFrance’s A380 which operates three times per week to/from
Paris.
The results showed that the elements of the system were able to absorb the traffic without
significant change in comparison with the scenario without the A380. The only element that wassensitive to the introduction of the A380 was the runway utilisation, whose utilisation rate was shifted as
Figure 9 illustrates.

Runway PERCENT USAGE : 0= No_A380 , 1= A380

Figure 9. Effect of the introduction of the A380 in the RWY utilisation

AVG ATM/HRIn Figure 9, one can see the dots with a “0” and a “1” label. The “0” represents the values of the
runway utilisation in the scenario without the A380, while the “1” represents the scenario with the A380
present in the traffic. The figure shows how the scenario of the A380 produces an average utilisation of
the runway higher than the one without it. It is shifted up as a result of the introduction of the A380 in theoperation of the day. The remaining parameters like Terminal 1, Terminal 2 gate utilisation, or the levelsof congestions were not affected. We performed statistical tests and the only parameter that wassignificantly affected was the runway utilisation. This analysis suggests that while in average the runway
utilisation during the day is affected, if the operation of big aircraft is located in a less busy time thefacilities would absorb the operation without a problem.

28

ITF Discussion Paper 2017-26 — © OECD/ITF 2017

Mujica Mota, Boosten and Zuniga – Time to Sweat the Assests?

Conclusions on the situation of Mexico City analysis

The airport of Mexico City is a facility which will continue operating until the new airport is ready.
Until that day comes, tools and actions are required for increasing the current capacity as much as
possible. We presented simulation-based analysis as one tool for supporting the sweating-the-assets
decision making.
Different factors play an important role for the limitation of capacity in this airport. Unlike
Schiphol, technical restrictions are the main blocker for growth and we presented one tool that can beused for releasing this airport’s remaining potential of growth.
By using simulation-based analysis we identified runways as the main constraint for increasing thecapacity; however under clever allocation of traffic we are still able to use the airport for absorbing new
entrants as the analysis of the model suggests. These tools can also be used for analysing the impact ofactions like different procedures for taxi in/out together with flexible gate usage or the approaches for Air
Traffic Control (ATC) such as the ones proposed in SESAR and NextGen.

Comparison of Schiphol and International Airport of Mexico City

Both airports play an important role in connecting the region to the world and both airports haveproblems to meet the growing demand for connectivity in their regions. Here the comparison stops.
Schiphol Airport growth potential is limited by environmental limitations in terms of noise and emissions
while the International Airport of Mexico City is limited by the technical capacity of the runway and air
traffic control. Both cases demonstrate that defining the maximum capacity of an airport cannot be doneby just assessing one variable (i.e. runway capacity) but that for each airport a different mix of variables
needs to be studied.
The various causes for both airports will result in different sets of analysis and parameters to
optimise the existing capacity at the airport. In the case of Schiphol Airport, the pressure today is on the
allocation of slots amongst the airlines who want to operate at the airport and to incentivise non-hub
airlines to move to reliever airports in the system. Optimising capacity at the airport requires the use of
the most modern fleet and collaboration with the stakeholders in the vicinity of the airport for improving
the system of hinder control.
In the case of the International Airport of Mexico City, the technical capacity of the available
infrastructure must be analysed for a better understanding of the potential of the airport and the impact of
new aircraft or traffic in the system. For this challenge, simulation tools can be used effectively for
analysing the performance and risk related to new decisions and configurations of facilities and traffic
within the system. The optimisation of airport capacity in this case has to be done by improving theoperational procedures at the airport, by introducing flexibility in the use of facilities and by innovating
ATC-procedures and/or technology.
To summarise, the cases of Schiphol Airport and the International Airport of Mexico City
demonstrates that airport capacity is a function of many dependent and independent variables. These
include hard limitations like infrastructure, technology such as aircraft or ATC-equipment, and soft
limitations like business models, operating procedures, flight schedules and regulations like maximum

ITF Discussion Paper 2017-26 — © OECD/ITF 201729

Mujica Mota, Boosten and Zuniga – Time to Sweat the Assests?

allowed noise hinder. Consequently the limitations of airport capacity by definition will differ for eachexisting airport, so will the set of measures that are required for optimising the existing capacity.

References

ACI (2015), ACI Annual World Airport Traffic Report: Aircraft Movements, Airports Council
International, www.aci.aero
AICM (2015), History of the Airport, Mexico City International Airport. www.aicm.com.mx
Airbus (2015), Global Market Forecast 2015-2034. Flying on Demand Deutsche Bank Toulouse, 22January 2015.
Aeromexico (2015), Aeormexico, www.aeromexico.com
Barnhart, C., D. Fearing, A. Odoni and V. Vaze (2012), “Demand and capacity management in airtransportation”. EURO Journal on Transportation and Logistics, Vol. 1/1, pp. 135-155.
DOI:10.1007/s13676-012-0006-9
Boeing (2015), Current market outlook 2015-2034. Boeing Commercial Airplanes. www.boeing.com
Boosten, G., (2008), “The importance of Schiphol Mainport for the northern part of the Randstad region:
The Schiphol Paradox”. In de Jong D., B. Kaashoek and W.-J. Zondag (eds.), Bleu Skies or Storm
Clouds: Science Guide.
Bundesverband der Deutschen Luftverkehrswirtschaft (2015) Aircraft
https://www.bdl.aero/download/2013/aircraftnoisereport2015.pdf

noisereport2015,

Cohen R., (2017a), “Nu de schaarste toeneemt, krijgen we meer vragen over onze keuzes”. Financieel
Dagblad, 13 February 2017, https://fd.nl/ondernemen/1187780/nu-de-schaarste-op-schipholtoeneemt-krijgen-we-meer-vragen-over-onze-keuzes
Cohen, R., (2017b), “Opstellen verkeersverdelingsregel luchtvaart stelt ministerie voor hoofdbrekens”.
Financieel Dagblad, 15 February 2017, https://fd.nl/ondernemen/1187335/opstellenverkeersverdelingsregels-luchtvaart-stelt-ministerie-voor-hoofdbrekens
D'Alfonso, T. and A. Nastasi (2014), “Airport–Airline Interaction: Some food for thought”. Transport
Reviews, Vol. 34/6, pp. 730-748. DOI:10.1080/01441647.2014.971470
DeNeufville, R. and A. Odoni (2013), Airport Systems: Planning, Design and Management. McGrawHill Education LLC.
Deventer, F. (2010), Geluidbeleid Schiphol, verleden, heden en toekomst. Een geschiedenis invogelvlucht. Paper presented at the NSG De toekomst van geluidshinderbestrijding, Utrecht,
https://nsg.nl/file/91/NSG_verslag_hr_100420.pdf
DOF (2014), “Declaratory: Saturation at the Mexico City International Airport”. Official Newspaper of
the Federation (DOF), Mexico.
Eindhoven Airport (2015), Major improvement to external area and accessibility [Press release].
https://d21buns5ku92am.cloudfront.net/33708/pdf/campaigns/123476-20160302142936-majorimprovements-to-external-area-and-a.pdf
30

ITF Discussion Paper 2017-26 — © OECD/ITF 2017

Mujica Mota, Boosten and Zuniga – Time to Sweat the Assests?

Eurocotrol (2015), Wake Vortex, www.eurocontrol.int/articles/wake-vortex
FAA(2015), FACT3: Airport Capacity Needs in the National Airspace System.
https://www.faa.gov/airports/planning_capacity/media/FACT3-Airport-Capacity-Needs-in-theNAS.pdf

Ferjan, K. (2014), Airline Cost Management Group (ACMG). Airline Cost Conference, Geneva.
FlightRadar24 (2017), http://flightradar24.com
Galland, D. and C. Lassen (2011), Aeromobility and Social Consequences: The Case of Mexico City
International Airport. http://planninglatinamerica.wordpress.com
Graham, B. and C. Guyer (1999), “Environmental sustainability, airport capacity and European airtransport liberalization: irreconcilable goals?” Journal of Transport Geography, Vol. 7/3, pp. 165180. DOI: 10.1016/S0966-6923(99)00005-8
Group Schiphol (2016). Schiphol Annual Report 2015.
Herrera, A. (2012), “Simulation Model of Aeronautical Operations at Congested Airports: The case of
the Mexico City International Airport”, Mexican Institute of Transport, No. 365, Queretaro,
Mexico.
I&M

and
MIN
(2016),
SchipholActionwww.government.nl/...schiphol/IenM+actieagenda+Schiphol

Programme.

The

Hague.

Inalhan, G. and C. Pasaoglu (2014), Macro Modelling of the European Air Traffic Network: A data
analytic perspective. Paper presented at the Resilience ATC Madrid.
International Air Transport Association (IATA) (2014), Annual Review 2014. Technical report 69th
Annual General Meeting Cape Town.
ITF (2016), Airport Demand Forecasting for Long-Term Planning, ITF Round Tables, OECD
Publishing, Paris. DOI: http://dx.doi.org/10.1787/9789282108024-en
Jacquillat, A. and A. Odoni (2015), “Endogenous control of service rates in stochastic and dynamic
queuing models of airport congestion”. Transportation Research Part E: Logistics andTransportation Review, Vol. 73, pp. 133-151. DOI:10.1016/j.tre.2014.10.014
Janic, M. (2008), “The Future Development of Airports: A Multidimensional Examination”.
Transportation
PlanningandTechnology,
Vol.
31/1,
pp.
113-134.
DOI:10.1080/03081060701835803
Janic, M. (2016), “Analyzing, modeling, and assessing the performances of land use by airports”.
International Journal of Sustainable Transportation, Vol. 10/8, pp. 683-702.
DOI:10.1080/15568318.2015.1104566
Jarag, D. (2005), Airport Marketing. Strategies to Cope with the New Millenium Environment. Ashgate
Publishing Limited, Hampshire.
KiM (2017), The Potential of the long-haul low-cost business model and its impact on the Netherlands.
Netherlands Institute for Transport Policy Analysis, Ministry of Infrastructure and theEnvironment.
https://www.kimnet.nl/actueel/nieuws/2017/02/09/the-potential-of-the-long-haullow-cost-business-model-and-its-impact-on-the-netherlands
Mendoza, E., C.A. Zuñiga and J.L. Martínez (2014), “Aeropuerto Internacional De La Ciudad De
México “Benito Juárez”: Revisión Histórica De Un Problema Recurrente De Saturación”. Revista
de Investigación e Innovación en Ingeniería, Vol. 2/3, pp. 6-17, Narváez Rincón / Universidad
Simón Bolívar, ISSN: 2344-8652.

ITF Discussion Paper 2017-26 — © OECD/ITF 201731

Mujica Mota, Boosten and Zuniga – Time to Sweat the Assests?

Moes, W., R. Veld and G. Teisman (2009), Duurzame ontwikkeling en Schiphol: naar een creatieve
confrontatie. Een onderzoek naar de duurzame ontwikkeling van het governance -veld rond
Schiphol. (RNMO reeks adviezen nr A14 [2009]). RMNO, The Hague.
Mujica Mota, M., G. Bosten, N. De Bock, E. Jimenez, P. de Sousa, (2017), “Simulation-based
turnaround evaluation for Lelystad Airport”. Journal of Air Transport Management, Vol. 64/A,
pp. 21-32.
Mujica Mota, M. and G. Boosten (2014), “Extended definition of capacity in Airport Systems”. In Proc.
of NGI Next Generation Infrastructures, Vienna.
Netherlands, Stichting Airport Coordination, (2016), Capacity declaration Amsterdam Airport Schiphol;summer 2016. http://merrick.marketing-desktop.nl/files/editor/assets/Airport Coordination
Netherlands/docs/DECCAP_AMS_S2016.pdf
OAG

Producer(2016),
On-time
performance
resultsforairlines
andairports.
https://cdn2.hubspot.net/hubfs/490937/Free_Reports/Punctuality_League_2015/PunctualityLeague
Report2015.pdf

OAG (2015), OAG Database for MMMX, www.oag.com
Reichmuth, J., P. Berster and M.C. Gelhausen (2011), “Airport Capacity Constraints: Future avenues for
growth of global traffic”. CEAS Aeronautical Journal, Vol. 2/1-4, pp. 21-34.
DOI:10.1007/s13272-011-0034-4
SESAR JU (2017), Workpackages Summary, http://www.sesarju.eu/discover-sesar/workpackagessummary
Upham, P., D. Raper, C. Thomas, M. McLellan, M. Lever and A. Lieuwen (2004), “Environmental
capacity and European air transport: stakeholder opinion and implications for modelling”. Journalof Air Transport Management, Vol. 10/3, pp. 199-205. DOI:10.1016/j.jairtraman.2003.10.016
Upham, P., C. Thomas, D. Gillingwater and D. Raper (2003), “Environmental Capacity and Airport
Operations: Current issues and future prospects”. Journal of Air Transport Management, Vol. 9/3,
pp. 145-151. DOI:10.1016/s0969-6997(02)00078-9
Veer, Floris van der and T. Bertnsen (2016), Air Service Development at AMS, CPH and FRA. Bach.
Thesis, Amsterdam University of Applied Sciences.

32

ITF Discussion Paper 2017-26 — © OECD/ITF 2017

Mujica Mota, Boosten and Zuniga – Time to Sweat the Assests?

Notes

1

In aviation level of service is defined by IATA/ACI as: “The concept of Level of Service (LoS) is an aggregatedguidance framework for the planning of new terminal facilities as well as for monitoring the operational
serviceperformanceofexisting
facilities”.
See:
https://www.iata.org/services/consulting/Documents/Level-of-Service-Assessment-Handout.pdf(assessed 18 February 2017).

2

Connectivity (the aggregate of unique destinations and frequency) can be seen as an indicator how well a region isconnected to other regions in the world.

3

The peak hour capacity is an indicator of the maximum number of aircraft and thus passengers, baggage and cargothat can be handled in one hour of operations. The take-offs and landings related to this number ofaircraft are the maximum of ATM. If the runways are the limiting factor the ATM’s define the peak hourcapacity.

4

Source Schiphol Group: https://www.schiphol.nl/en/schiphol-group/page/credit-rating/ (accessed 07 January2017).

5

A work load unit (WLU) is a standard for a passenger or an amount of cargo.

6

Wake vortex turbulence is defined as turbulence which is generated by the passage of an aircraft in flight. It will
be generated from the point when the nose landing gear of an aircraft leaves the ground on takeoff andwill cease to be generated when the nose landing gear touches the ground during landing (Eurocontrol,2015).

ITF Discussion Paper 2017-26 — © OECD/ITF 201733

International Transport Forum
2 rue André Pascal
F-75775 Paris Cedex 16
contact@itf-oecd.org
www.itf-oecd.org