Benchmarking For Success
An interview with Louis E. Miller,
Executive Director Tampa International Airport

Improving business performance and strategic planning is a key goal of airports, and benchmarking is an important way to measure progress toward that goal. Louis E. Miller, executive director of Tampa International Airport (TIA), shares his thoughts on the subject. TIA was awarded the Global Airport Efficiency Excellence Award from the Air Transport Research Society in 2005.

What were the business drivers that initiated your focus on benchmarking and performance measurement techniques?

In 1997, it became apparent that for us to continue to excel and improve our business, we would have to manage by fact and improve on how we measured our success. The initial nine business drivers are still the core drivers in our business today and include our need and desire to:

• Effectively manage the facility and capacity demands of an expanding base of airport users and maintain a technologically advanced aviation system.
• Grow the business and increase revenues to fund growth.
• Expand air service to additional domestic and international cities.
• Listen to our customers and deliver convenient, safe, and enjoyable airport services to all customers.
• Improve cost effectiveness through process and systems improvement.
• Balance mandatory compliance programs with customer expectations.
• Provide employees with a productive organizational structure and a functional and enjoyable work environment.
• Develop and maintain an effective community involvement and public relations program.
• Maintain a sound and stable financial position, minimizing issuance of long-term debt.

The focus on benchmarking and performance management techniques was set at the top by the Executive Director in 1997. Our Deputy Executive Director was charged with leading departmental directors to begin establishing and tracking performance measures. Senior departmental directors were charged with establishing specific measures and developing goals to improve performance. The Finance Department established revenue centers, cost centers, and financial statistics to facilitate improved measurement. And a performance measurement section was created to ensure data collection, compilation, and reporting to executive management.

What are the core measurements for an airport?

At Tampa, we have established many measurements to improve our effectiveness and measure our successes. I would consider the core items to be:

• Total operating revenue per enplaned passenger.
• The operating revenue/operating expense ratio.
• Major revenue components such as food and beverage, parking, and car rentals per enplaned passenger.
• The mix between airline revenue and non-airline revenue.
• The number of cities served and seats available.
• Total airline costs and airline cost per enplaned passenger.
• Operating and maintenance expenses per enplaned passenger.
• Capital project cost mix—measurement of hard and soft costs.
• Passenger satisfaction surveys.
• Security screening wait times.
• Noise complaints and deviations from noise compatibility program.
• Number of safety and security incidents.
• Economic impact to the surrounding communities.
• Long-term debt per enplaned passenger.
• Debt service coverage.
• Bond ratings.

Benchmarking can be a complicated and time-consuming process—how do you get it right?

Benchmarking does require a significant time commitment, but without good measurement indicators, you cannot truly measure your success or determine where you need to improve. During early 2003, Tampa initiated a benchmarking program called Airports Initiative in Measurement (AIM) to allow a small group of airports to submit data for comparative purposes. Thirteen airports participated the first year; this number grew to 16 participants in the second year. The third AIM project was conducted by Airport Council International—North America (ACI) as an additional service to its members, and 46 airports participated. ACI intends to expand this effort to all members desiring to participate in the future.

The original AIM process included selecting key measures and establishing clear definitions for measures to ensure data comparability. To further ensure consistency, it was agreed to use information from the airport’s audited financial statements where possible. Tampa compiled the submitted data into charts for 54 measures and followed up with the participants regarding specific statistics that appeared well outside of normal ranges.

The survey construction also included a factor of comparison section to assist participants in understanding differences between airports. Some of the questions included the type of airline agreement, form of governance, ownership of baggage systems, operation of general aviation airports, and whether or not a hotel is on site. By reviewing these elements, members can gain insight regarding who actually should be considered a peer for comparison.

It appears it is more difficult to benchmark airports than other industries. Is this the case?

Airports do present challenges when trying to benchmark, however, these challenges should not be an excuse to avoid the process. Other industries possess inherent conditions which create benchmarking challenges that must be addressed by understanding those conditions. While an understanding of the details is important, a core set of key measurements can serve to limit the number of details that must be considered. Each airport should decide upon a few key measures that are critical to their assessment and work to make the detail provided by peers as meaningful as possible.

How are you using benchmarking to improve your passenger service at Tampa International?

Both internal and external benchmarking tools are used to assess passenger service. Internal data is used on a comparative basis over several years to understand growth trends. These trends are analyzed to forecast future needs and in planning to accommodate future travelers. External data is collected to assess passenger perceptions regarding the services offered by Tampa relative to other airports in the aviation system.

Three foremost elements drive passenger service: money, passenger counts in a given market, and the adopted strategic vision the airport employs to establish how those passengers will be served. Tampa’s strategic vision is to exceed our customer’s expectations by making our aviation system one of the most efficient, safe, secure, convenient, and cost-competitive air transportation centers in the world.

Tampa is a very efficient airport. During July 2005, Tampa received the Air Transport Research Society award recognizing Tampa as the most efficient airport out of the 166 worldwide airports reviewed. Efficiency can also be measured on how cost-competitive our rates and charges are to the air carriers. Tampa consistently is well below the United States average cost per enplaned passenger. The cost per enplaned passenger for airlines serving Tampa was $3.93 for our fiscal year ending September 30, 2005. This compares with the national average of over $8.00.

How have you “institutionalized” benchmarking into your overall performance system at Tampa International?

In addition to the AIM benchmarking program, the airport has adopted a policy requiring departments to establish goals and measurement criteria prior to the start of each new fiscal year. Goals are developed to accomplish one of the company’s eight strategic objectives. Departments report on these goals quarterly and upon goal completion compare the performance of the activity against before and after measurement criteria. Successful completion of goals can result in an organizational wide employee incentive award. The employee incentive award was created to reward employees equally for improving customer satisfaction and financial results.

As several U.S. airports move to benchmarking, how do you see the overall performance of the U.S. airports compared to European airports?

International and U.S. airport comparisons present even greater benchmarking challenges. These include currency conversions, forms of governance, services provided by the airport to the air carriers, security, as well as the differences in laws between countries.

With regard to efficiency, the Air Transport Research Society reviewed and rated both North American and European airports. Mean averages for various categories were higher for North American airports. In the case of unit variable cost and airport cost competitiveness, the mean average for North American airports was 0.637, as compared to the European airports’ 0.474. Gross variable factor productivity was 0.656 for North America airports, compared to 0.540 for European airports.