Airport Management Expert Discusses Impact of Runway Closure on Airport Revenue

This case involves a regional airport in the Northeast that ordered a new runway to be constructed by a large specialty construction firm. The runway, which was constructed out of concrete, had only been in use for two years before the runway surface began to degrade significantly. In order to repair the runway, the airport was forced to close down the runway for an extended period of time. During this time, the airport was forced to reduce the volume of daily flights, which caused it to suffer a loss of revenue. The airport claimed that the construction firm used defective concrete in the construction of the runway, directly contributing to the loss of revenue experienced by the airport during the repair.

Question(s) For Expert Witness

1. Please describe your experience managing runway closures.

2. What effect does a closure have on the airport's revenue?

Expert Witness Response E-058111

I can speak to the impacts on the airline operation and very broadly, on the way that airports normally handle such issues. If an airport's runway close, it does not mean that it loses a direct percentage of its revenue. Airports generate income from landing charges to airlines, which can be calculated by the airport acceptance rate and the maximum landing weight. An airport could adjust in two ways. It could combine flights so the same number of people and the landing weight remain the same. Alternatively, airlines can cut its least profitable flights and thin their schedules to mitigate costs. That is less profitable for the airport, which loses its landing charge. To calculate estimated damages, it is necessary to look at airline schedules in the airport before and after the runway's closure and to identify what aircraft were landing.