The uncertainty about the future yearly Pax is quite high. With this as the backcloth for airport planning the stochastic nature of Pax forecasts has to be taken into account when investment decisions are to be made.
Enterprise risk management (ERM) only has value to those who know that the future is uncertain. Businesses have three key needs: First, they need to have a product or service that people will buy. They need revenues. Second, they need […]
Concessions are an important source of revenue for all airports. An airport simulation model should therefore be able to give a good forecast of revenue from different types of concessions.
The basic determinant of an airport’s economics is the passenger forecast. It is the basis for estimation of aircraft movements, investment in terminal buildings, traffic charges, tax free sales etc.
In real life both for investment decisions and in valuation of companies there are managerial flexibility in the sense that at future points of time there is flexibility in choosing among alternatives.