Dynamic Strategic Planning
4.1 Planning Concepts
The concept of planning needs explanation. It means different things in different contexts, to planning professionals and to airport planners in particular. Specific words and phrases, such as “plan,” “master planning,” and “strategic planning,” have acquired meanings that are not obvious. Persons who have not been intimately involved in these practices or are not aware of local differences may get confused. It is therefore useful to identify the mean-ing of the several words for plannmean-ing in the context of airport systems.
Plans
Professionals from different contexts do not share a common understanding about what the concept of planning implies. All agree that planning involves the preparation of a response to some possible future events and that a plan is a conceptual roadmap of what one could do. They disagree, however, between two contrasting perspectives:
• Is a plan a directive blueprint from top authorities that specifies what is to happen?
• Or, is a plan a collection of local suggestions of what airports might like to do, all of which are debatable or negotiable?
In many contexts, planning is a top-down, directive activity. Elite groups, typically gov-ernment officials, prepare plans for important sectors of the economy, such as airports.
They then transmit these plans to subordinates for development. This process prevails not only in autocratic but also in democratic countries. In Japan, for example, the responsible national ministry systematically identified and developed a sequence of major national pro-jects, such as the island airports of Hiroshima, Osaka/Kansai, and Nagoya/Chubu, and of regional airports for each prefecture.
In the United States and some other countries, planning is a bottom-up, visionary activ-ity. Local authorities prepare their own plans. This practice is common in countries that
have strong regional governments, such as the provinces in Canada, the Länder in Ger-many, and the states and cities of the United States. In the United States, for example, loc-al airports prepare lists of possible projects according to what they see as best for them, without consulting other airports and often in direct competition with them. Every 2 years the U.S. Federal Aviation Administration (FAA) collects these uncoordinated local plans and presents a revised National Plan of Integrated Airport Systems (NPIAS). This docu-ment is far from directive:
Because the NPIAS is an aggregation of airport capital projects identified through the local planning process, rather than a spending plan, no attempt is made to prioritize the projects the included development or evaluate whether the benefits of a specific development project would exceed its costs. [Italics added] (U.S. Secretary of Trans-portation, 2010)
Such bottom-up “plans” are in no sense guides as to what will happen, and certainly do not dictate any specific allocation of money. These wishful local plans are very different from directive national plans. Readers should keep this difference in mind whenever they read or listen to international colleagues.
Master Plans
Master plans have a very specific meaning in the context of airport planning. As stated by the International Civil Aviation Organization (ICAO):
An airport master plan presents the planner’s conception of the ultimate development of a specific airport. [Italics added] (ICAO, 1987, pp. 1–2)
This definition is widely accepted internationally. ICAO is part of the United Nations, and representatives of the member states developed and agreed to it.
A master plan focuses on an architectural/engineering development at a single airport.
Note that it involves three essential notions:
• Ultimate vision, that is, a current view of the possible long-term future, for example 20 years ahead
• Development, that is, the buildings, runways, and other physical facilities—not op-erational concepts or management issues
• Specific airports, not to a regional or national aviation system
The master plan is thus tightly constricted compared to national plans that governments have prepared and implemented in India, Japan, and elsewhere.
Traditional practice develops airport master plans in a linear process. The ICAO, the In-ternational Air Transport Association (IATA, an airline group), and the U.S. FAA provide the most commonly used guidelines (FAA, 2004 and 2005; IATA, 2004; ICAO, 1987).
They cover both master plans for individual airports, and “integrated airport system plan-ning.” These several guidelines are fundamentally the same, although they differ in detail.
The key elements of this process are the following:
• Inventorying existing conditions
• Forecasting future traffic
• Determining facility requirements
• Developing several alternatives for comparative analysis
• Selecting the most acceptable alternative as the master plan
This master planning process is fundamentally flawed. It assumes that planners should only consider a single forecast. This is both unrealistic and irresponsible:
• It is unrealistic in this era of innovation and competition. The future is full of sur-prises, as experienced airport professionals know well from experience. Sec. 4.3 makes this point in detail. Traffic can develop in many ways.
• It is irresponsible because, by focusing on the most likely or preferred forecast, it neglects risks. It does not provide appropriate insurance against them. It is as if a business based its planning on the most likely forecast that its facilities would not suffer a fire, and consequently neither provided fire suppression systems nor bought insurance.
Master plans rapidly become obsolete. Airport operators frequently have to junk the ul-timate, 20-year vision of the master plan after only a few years. Sometimes it is “dead on arrival” due to its inflexibility. Not too long ago, for example, the board of directors of one of the top airports in the United States voted to “accept” a master plan that had been 5 years in the making (they had to do this, so that they could legally pay the consultants). Then, as the next item of business, this same board voted a contract for a new planning process, because they already knew the approved master plan was out of date!
Despite the deficiencies of these documents, airport operators will continue to have to prepare master plans. This is because the national and international funding agencies ex-pect to see these kinds of plans. In the United States, for example, the general rule is that airports can only get funds from the federal government for projects that are in the NPIAS.
Furthermore, projects only get into the NPIAS if they are included in an approved master plan.
The challenge for airport planners is to improve the master planning process, so that it can deal realistically and responsibly with the future. In principle, this is not difficult, be-cause it is easy to modify the process from a technical point of view. In practice, old habits die hard, and it may take time for standard processes to evolve. Meanwhile, forward-think-ing airport operators should be able to implement better plannforward-think-ing procedures, such as dy-namic strategic planning.
Strategic Plans
In the field of management, strategic planning refers to a disciplined process for analyzing the current situation of a business activity, and identifying the vision of how that entity should position itself regarding its customers and competitors (e.g., Porter 1985; Hax and Majluf, 1996). This process has fallen out of favor (Mintzberg, 1994; Hax, 1997). In large part, this is because corporate strategic planning in practice evolved into large, expensive, and burdensome processes. These efforts were like master planning: they tried to predict various future states and design corporate responses to these predictions. As the forecasts so often turned out to be wrong, the resulting strategic plans became obsolete, just as the airport master plans do. According to a leading proponent of strategic planning in business,
“The criticism of strategic planning was well deserved. Strategic planning in most compan-ies has not contributed to strategic thinking” (Porter, 1987).
Yet airport managers and operators need to think strategically. They need to examine the range of future possibilities, position their organizations to respond flexibly to the events that occur, and in fact react appropriately as the future becomes clear.Sections 4.4and4.5 describe the suitable dynamic strategic planning in detail.
Good strategic thinking for an airport must consider the context of the airport/airline in-dustry. Events far beyond the airport boundaries affect the development and consequently the planning for airports. Decisions made in faraway airline boardrooms can drastically up-set airport developments. For example, US Airways’ decision to consolidate its operations in Philadelphia turned Pittsburgh’s airport into a “ghost town.” Traffic at this former hub dropped from 19.8 million annual passengers in 2001 to only 8.0 million in 2010. Sim-ilarly, when American Airlines bought TWA and closed its hub in St. Louis, traffic there dropped from 30.6 million annual passengers to 12.4 million in just 4 years. Likewise, the decisions by Emirates to expand aggressively, and of Dubai to provide enormous new air-port facilities, are causing shifts in traffic flows affecting major European hubs. Airair-ports must look beyond their boundaries when they do their planning. Airport planners need to take a systems view that looks at the larger airport/airline industry.