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AIRPORT RESEARCH

The Problem of Uncertainty in


Airport Master Planning
Airport strategic planning (ASP) focuses on the development of plans for the medium-term and long-term
development of an airport. Strategic planning is defined as ‘the managerial activities that produce fun-
damental decisions and actions that shape and guide what the organization is, what it does, and why it
does it’ (Bryson 1995: pp. 4-5, as cited in Bryson 2004). Strategic planning can be done in many differ-
ent ways. In airports, the dominant approach is airport Master Planning (AMP), which results in a Master
Plan that ‘presents the planner’s conception of the ultimate development of a specific airport’ (ICAO,
1987, pp. 1-2). In the US, the FAA has set up strict guidelines for an AMP study (FAA, 2005 and earlier
versions). Internationally, IATA reference manuals as well as books about airport planning by leading
scholars heavily influence AMP practices (e.g. ICAO, 1987; de Neufville and Odoni, 2003; IATA, 2004).

By J.H. Kwakkel

Uncertainty in Master Planning which the airport will operate, if one wants often has seriously negative consequences
A crucial challenge in ASP is how to deal to plan effectively. In AMP, however, only for the long-term development of an airport,
with uncertainty about the future. It is nec- demand uncertainties are considered, which including an inability to implement the plan,
essary to take into account the future world, are assessed through forecasting. Often, severe capacity constraints due to unantici-
which the organization will operate in, in only a single demand forecast is created, and pated (noise) regulations, an inability to
order to make decisions that shape and a Master Plan is designed based on that sin- meet aviation demand, and unnecessary
guide what an organization is, what it does, gle forecast. investments in airside and landside facilities.
and why it does it. In case of ASP, uncertain-
ty is even more important, given the fact that Criticism of Master Planning Finding ways to deal with the many uncer-
decisions made today can shape and influ- AMP and demand forecasting as the tainties surrounding the future of the air
ence the airport performance for many years approach for the treatment of uncertainty in transport system is especially urgent in light
to come. For example, the decision to build ASP has come under increasing criticism of the fact that, in the coming years, the con-
a new runway at a specific location will (see for example, de Neufville, 1991a; text in which airports operate is expected to
likely influence the airport more than fifty Walker, 2000; Flyvbjerg et al., 2003). The become even more dynamic. Demand for
years from now. It is therefore necessary to demand forecasts are practically always air transport is expected to increase signifi-
have a thorough assessment of potential wrong, and Master Plans are often nearly cantly, but there is uncertainty regarding
developments that influence the future in impossible to implement. As such, AMP numerous aspects, such as the extent of the

Picture 1: Artists impression of Berlin’s new BBI Airport. Courtesy Berlin Brandenburg Airport

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increase, on which routes, by which carriers, long-term plans for airport development’ > Make an aviation forecast;
what the noise contours will be, what the (FAA, 2005)’, which is almost identical to > Determine facility requirements;
regulatory regimes will be, etc. The United the ICAO definition. > Develop and evaluate several alternatives;
States, which was the first country to liber- > Develop the best alternative into a detailed
alize its air transport market, is already fac- The goal of a Master Plan is to provide a Master Plan.
ing these issues. Hub operations can move blueprint that will determine future airport
from one airport to another, and airports are developments (Dempsey et al., 1997; Forecasting
increasingly called upon to comply with the Burghouwt and Huys, 2003). As such, it The aviation forecast is the main premise for
wishes of airlines (Dempsey et al., 1997; de describes the strategy of an airport operator a new Master Plan. By comparing the fore-
Neufville and Odoni, 2003). The European for the coming years, without specifying cast with the existing conditions, an assess-
Union started to liberalize its internal market operational concepts or management issues. ment can be made whether there is a need
in the mid 1990s, and this resulted in dra- A typical Master Plan, according to the for new or expanded facilities. As such, avi-
matic changes in air traffic demand. In addi- FAA, should contain (i) a technical report ation forecasting is the main way in which
tion, airports and airlines are being priva- containing the analyses conducted during uncertainties about the future context, in
tized, which introduces new stakeholders the development of the Master Plan; (ii) a which an airport operates, are handled. A
(e.g. within the financial market) and new summary report that brings together facts, forecast is a statement, usually in probabilis-
requirements for airport performance. These conclusions and recommendations relevant tic terms, about the future state or properties
developments lead to uncertainties about the to a wider public; (iii) an airport layout plan of a system based on a known past and pres-
future performance of the airport (e.g. drawing set which contains a graphical rep- ent. The basic concept of forecasting is sim-
capacity, delays, noise and financial per- resentation of the proposed developments in ple: past trends, based on time series or the-
formance), uncertainties about the robust- the Master Plan; and (iv) a website and pub- ories about underlying mechanisms, are
ness of the policies airport decision-makers lic information kit for providing information identified and extrapolated forward. In
want to implement, and uncertainties about the Master Plan to the public (FAA, mathematical terms, a relationship between
regarding the implementability of these 2005). The time horizon covered in a Master independent variables (X1, X2, …, Xn) and
policies. Together, these uncertainties ham- Plan can vary, depending on the situation of the dependent variable (Y) is developed:
per ASP and make the traditional AMP the airport for which a Master Plan is devel-
approach even less appropriate. oped. A short-term Master Plan has a time Y = f(X1, X2, …, Xn)
The Challenge of uncertainty in ASP horizon of roughly five years, a mid-term that correlates well with past performance.
A general definition of uncertainty is ‘any Master Plan has a time horizon of six to ten This formula is then extrapolated to obtain a
departure from the unachievable ideal of years, and a long-term Master Plan has a forecast for the year of interest. According to
complete determinism’ (Walker et al., time horizon of 20 years (FAA, 2005). the FAA, forecasts should be realistic, based
2003). Uncertainty is not simply a lack of on the latest available data, reflect the cur-
knowledge, since an increase in knowledge AMP follows a strict linear process. The rent conditions at the airport, supported by
might lead to an increase of knowledge most commonly used guidelines (e.g. FAA, information in the study, and provide an
about things we do not know and thus 2005; ICAO, 1987; IATA, 2004) are funda- adequate justification for the airport plan-
increase uncertainty ( ). The traditional way mentally the same, although they differ in ning and development (FAA, 2001).
to deal with uncertainty in airport planning detail (de Neufville and Odoni, 2003). The
is through AMP. Based upon a limited num- key steps in an AMP process are: How are forecasts made? The first step in
ber of forecasts of future traffic demand, a > Analyze existing conditions; making forecasts is to identify the depend-
static plan is designed that can accommo-
date the forecasted traffic demand in an ade-
quate way. It is assumed that the airport
authorities are able to independently imple-
ment the plan without any opposition from
other stakeholders (Dempsey et al., 1997;
Burghouwt and Huys, 2003).

Master Planning
Airport Master Planning (AMP) is the
process of developing a Master Plan.
According to ICAO, the United Nations
body for civil aviation, ‘an airport Master
Plan presents the planner’s conception of the
ultimate development of a specific airport’
(ICAO, 1987, pp. 1-2). This definition is
also used by the International Air Transport
Association (IATA) (IATA, 2004).
According to the FAA, the United States
regulator of aviation, ‘an airport Master Plan
is a comprehensive study of the airport and
typically describes short-, medium-, and Picture 2:Berlin Tempelhof will be closed-down in favour for the new BBI Airport

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ent variables (the Y’s) to forecast. the same time improve the quality of living traffic demand actually experienced. The
Depending on the relevant issues and poten- in the area surrounding the airport. unexpected high rate of growth of air traffic
tial problems of a particular airport, the vari- Improving the quality of living should be demand was due to (i) an unanticipated
ables to estimate through forecasting gener- measured in terms of noise, emissions, and rapid growth of the hub network of KLM,
ally include aircraft operations, passengers, third-party risk compared to the 1990 situa- leading to an increase in transfer passengers;
air carrier enplanements, passenger tion. Until 2003, only noise would be con- (ii) an alliance between KLM and
enplanements, air carrier and commuter sidered. Emissions and third-party risk Northwest Airlines, which fed passengers
operations, tons of cargo, and aircraft oper- would become relevant after that. The plan- from both airlines through Schiphol; and
ations by type of aircraft. The next step is to ning period was 20 years, from 1995 till (iii) The European Union’s liberalization
gather and analyze the data on the related 2015. Forecasts were created based on three process of the air transport industry, which
independent variables (the X’s), which are scenarios in order to come to a decision. It increased competition among air carriers,
assumed to be necessary to forecast the vari- became clear during the development of the lowering air fares, and paving the way for
ables of interest. Relevant data sources PKB that in only one of the three scenarios low-cost carriers.
include previous forecasts for the airport, both objectives could be achieved. The final
historical aviation data, forecasts of other PKB was based exclusively on the aviation The inadequacy of aviation forecasting
airports in the region, forecasts for air travel forecasts derived from this scenario. The What is clear from the foregoing illustration
in the region, and socio-economic data. key decisions of the PKB were (Dutch is that AMP does not succeed in reaching its
These data should be analyzed to see Parliament, 1998-1999): goals. Plans are quickly obsolete and are not
whether they are appropriate to be used and robust with regard to the future. In other
not ‘contaminated’ by unique events, such > Schiphol would be allowed to grow into a words, uncertainty (e.g. aviation demand,
as a major sport event that created a tempo- small hub airport, with KLM as its hub car- regulatory context, technological break-
rary major boost in air traffic. The final step rier that should serve roughly 40 to 45 mil- throughs, and stakeholder behavior) is a key
is to select a forecast method, such as regres- lion passengers in 2015; source of problems in ASP.
sion and trend analysis or share analysis, and > A fifth runway would be built;
apply it in order to obtain an aviation fore- > Until 2003, which was the expected year One reason that AMP does not achieve its
cast of Y for some future year. the fifth runway would open, the noise situ- goals is that the only uncertainties that are
ation should not get worse than the situation considered are demand uncertainties, which
Forecasting is based on the idea of identify- in 1990, which implies a maximum of are addressed through forecasting.
ing trends and underlying mechanisms, around 15,000 houses in the high noise con- However, forecasting has come under
based on the past and the present, and tour (the so called “stand still” principle); increasing scrutiny. Criticism can be split
extrapolating them forward. However, it > After 2003, the maximum number of into two categories: forecasting failure due
might be that the phenomenon you want to houses in the high noise contour would be to bias, and forecasting failure due to uncer-
forecast has recently gone through changes, lowered to 10,000 houses; tainty. Forecasters’ bias contributes to fore-
or is expected to undergo changes (e.g. trend > An insulation program for houses would cast failure in several ways.
breaks). In such situations, it is unwise to be implemented within the high noise con- > Forecasters have a tendency to misjudge
simply extrapolate based on past trends and tour; the relevance of (recent) data (Porter et al.,
known underlying mechanisms. In such sit- > A study into the development of Lelystad 1991);
uations, forecasters sometimes use trend airport to relieve Schiphol; > Forecasters often have a poor database
break scenarios to produce forecasts that > A high-speed rail link from the that has internal biases caused by the data
deviate from past trends (de Neufville and Netherlands to Belgium and France, and collection system (Flyvbjerg et al., 2003);
Odoni, 2003). from the Netherlands to Germany, would be > Forecasters often integrate political wish-
developed that would pass Schiphol, in es into their forecasts (Flyvbjerg et al.,
The inadequacy of airport Master order to reduce the number of short-haul 2003);
Planning flights from Schiphol. > Forecasters use data from their home
AMP, as the main way to treat uncertainty, countries (instead of the local areas) for cal-
has proven to be ineffective. There are many As it turned out, the limits of the noise reg- ibrating their models (Flyvbjerg et al.,
examples of Master Plans that turned out to ulations were reached in 1999, leading to a 2003);
fail in practice (e,g, Nelkin, 1974; Nelkin, temporary shutdown of the airport, and the > Forecasts by project promoters may be
1975; Szyliowics and Goetz, 1995; Demsey passenger limit was reached in 2005. The even more biased, since the promoter has an
et al., 1997; de Neufville and Odoni 2003; two-year costly process that aimed at devel- interest in presenting the project in as favor-
Cidell, 2004). One example will be dis- oping a plan adequate for 20 years turned able a light as possible (Flyvbjerg et al.,
cussed here. out to have a lifetime of less than ten years. 2003).
How did this happen? The model used to
An illustration: Amsterdam Airport Schiphol create the demand forecast was based upon Forecasting failure due to uncertainty man-
In 1995, after a two year process, which is a relationship between GDP and traffic ifests itself in several ways. As pointed out
known as the so-called physical planning demand that represented past experience by Flyvbjerg et al. (2003), discontinuous
key decision Schiphol (PKB Schiphol), a quite well. However, due to a number of behavior of the phenomena we try to fore-
number of major decisions regarding the trend breaks that happened after the fore- cast, unexpected changes in exogenous fac-
future of Schiphol Airport were made. The casts had been made; this relationship no tors, unexpected political activities, and
main objective was to facilitate the process longer produced good predications, result- missing realization of complementary poli-
of Schiphol becoming a mainport, while at ing in forecasts significantly lower than the cies are important reasons for forecasting

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failure. Ascher (1978) sees faulty core proven insufficient for handling the uncer- Cambridge, Cambridge University Press.
assumptions as a prime reason for forecast- tainties airports face, since they assume that IATA, International Air Transport Association
ing failure. It refers to the fact that since the the future is known to a degree that is suffi- 2004. Airport Development Reference Manual.
phenomenon we are trying to forecast is not cient for making appropriate decisions. Montreal, Canada.
ICAO, Interational Civil Aviation Organization
completely understood, forecasters have to Hence, finding new ways to deal with the
1987. Airport Planning Manual, Part 1, Master
make assumptions about the data they need, different uncertainties surrounding the Planning, Montreal Canada.
the formula to be used, etc. (Porter et al. future is a key issue in air transport research. Nelkin D. 1974. Jetport: the Boston Airport
1991). The use of historical data as a means Controversy, New Jersey, Transaction Books.
of testing the adequacy of a given formula References Nelkin D. 1975. “The Political Impact of
does not solve this problem, for there are an Ascher W. 1978. Forecasting: an Appraisal for Technical Expertise”, Social Studies of Science,
infinite number of formulas possible that Policy-makers and Planners, Baltimore: Johns Vol. 5, No. 1., pp. 35-54.
can match the given historical data. Related Hopkins University Press. de Neufville, R. and Odoni, A. 2003. Airport
to this is the fact that, in order to forecast a Bryson J.M. 2004. “What to do When Systems: Planning, Design, and Management. .
Stakeholders Matter: Stakeholder Identification New York: McGraw-Hill Professional.
dependent variable Y based on a formula Y
and Analysis Techniques”, Public Management Porter A.L., Roper A.T., Mason T.W., Rossini
= f(X1, X2, …, Xn), we need forecasts for Review, Vol. 6, No. 1, pp. 21-53. F.A., Banks J. 1991, Forecasting and
the future values of the n independent vari- Burghouwt G., Huys M., 2003. “Deregulation Management of Technology, John Wiley &
ables. Instead of forecasting a single vari- and the Consequences for Airport Planning in Sons, New York.
able, we end up forecasting n variables. Europe”, DISP, 154, pp. 37-44. Szyliowicz J.S., Goetz A. R. 1995, “Getting
Even if we were able to address the prob- Cidell J.L. 2004. Scales of Airport Expansion: Realistic about Megaproject Planning: The Case
lems identified under the label of forecaster Globalization, Regionalization, and Local Land of the New Denver International Airport”, Policy
bias, this category of forecasting failure, due Use, July, 2004. Sciences, Vol. 28, No. 4, pp. 347-367.
to uncertainty, implies that forecasting Dempsey P.S., Goetz A.R., Szyliowicz J.S., Walker W.E., Harremoës P. Rotmans J., Sluis J.P.
1997. Denver International Airport: Lessons van der, Asselt M.B.A. van, Janssen P., Krayer
always can go wrong. By looking at the past
Learned. McGraw-Hill, New York. von Kraus M.P. 2003. “Defining Uncertainty: A
and assuming that past behavior will contin- Dutch Parliament, Tweede Kamer 1998-1999. Conceptual Basis for Uncertainty Management
ue in the future, we overlook a large part of Groeicijfers Schiphol; Rapport. 26265 nr. 2. in Model-Based Decision Support”, Integrated
the uncertainty that, when it manifests itself, obtained from Assessment, Vol. 4, No. 1, pp. 5-17.
will lead to trend breaks. http://www.rekenkamer.nl/9282000/d/tk26265_ Walker, W.E. 2000. ‘Policy Analysis: A
2.pdf on July 30 2007. Systematic Approach to Supporting
Closing Remarks Federal Aviation Administration (FAA). 2001. Policymaking in the Public Sector’, Journal of
In conclusion, until now, a static reactive Forecasting Aviation Activity by Airport. . Multicriteria Decision Analysis, Vol. 9, Issue 1-3,
approach, in the form of Master Planning, to Washington D.C.: U.S. Department of pp. 11-27.
Transportation.
Airport Strategic Planning has dominated
Federal Aviation Administration (FAA). 2005. About the Author
the airport planning and design process. In Advisory Circular 150/5070-6B, Airport Master J.H. Kwakkel is PhD researcher at the Faculty of
traditional AMP, the uncertainties are often Plans. Washington D.C.: U.S. Department of Technology, Policy and Management of the
ignored, oversimplified, handled probabilis- Transportation. Delft University of Technology.
tically, or handled through the use of fore- Flyvbjerg B., Bruzelius N., Rothengatter W. 2003. j.h.kwakkel@tudelft.nl
casts and scenarios. These methods have Megaproject and Risk: an Anatomy of Ambition,

Picture 3: Computer animation of BBI’s new terminal. Courtesy Berlin Brandenburg Airport.

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