Wilfred S. Manuela Jr., Asian Institute of Management, Makati City, Philippines Mark Friesen, QUINTA Consulting, Frankfurt, Germany

Wilfred S. Manuela Jr., Asian Institute of Management, Makati City, Philippines Mark Friesen, QUINTA Consulting, Frankfurt, Germany

Car parking facilities are a major source of commercial revenues at airports. Most studies on commercial airport revenues consider revenue sources other than car parking. Our paper analyzes the factors that determine the provision of car parking facilities at the ten largest European airports, based on passenger data, for the period 2011 2015.

Our research will identify the factors that determine airport car parking revenues and the number of airport car parking spaces. Our research helps airport authorities as well as airport managers and operators optimize their car parking-related infrastructure to improve nonaviation revenues and profits, resulting in a more financially viable and profitable airport operations.

Commercial revenues account for some 50% of airport revenues with retail revenues being the most significant, although there is considerable variation by region and individual airports (Graham, 2009). The main drivers of airport commercial revenues per passenger include the number of transit passengers, the ratio of commercial to total airport revenues, income, the share of domestic and leisure travelers to total passengers, and the number of flights (Fuerst, Gross, and Klose, 2011). The leisure time that passengers have at their disposal inside the airport tends to increase airport commercial revenues (Castillo- Manzano, 2010).

Airport customers use airport parking facilities infrequently but those who do park for long durations (Airport Cooperative Research Program Report, 2014). While airport customers pay higher parking fees, the cost of parking normally represents a small percentage of the total door-to-door travel cost (e.g., airfares, rental car charges, lodging, and other costs) and customers place high value on time and convenience (particularly those traveling on business purposes) and some have no option other than driving to, and parking at, the airport (Airport Cooperative Research Program Report, 2014).

We collected and estimated airport-related data from databases, airport websites, and other online sources for the period 2011 2015 London Heathrow Airport, 75.0 million passengers (2015) Paris Charles de Gaulle Airport, 65.8 million passengers (2015) Istanbul Atatürk Airport, 61.8 million passengers (2015) Frankfurt Airport, 60.9 million passengers (2015) Amsterdam Airport Schiphol, 58.2 million passengers (2015) Adolfo Suárez Madrid Barajas Airport, 46.8 million passengers (2015) Munich Airport, 40.9 million passengers (2015) London-Gatwick Airport, 40.3 million passengers (2015) Leonardo da Vinci Fiumicino Airport, 40.2 million passengers (2015) Barcelona El Prat Airport, 39.7 million passengers (2015)

The econometric model consists of two equations due to the endogeneity of the car parking spaces variable in the car parking revenues equation We estimated the system of equations simultaneously using ordinary least squares Due to missing data for some airports in a number of years, the estimation results are still preliminary

REVENUES (xy) = β 0 + β 1 PASSENGERS (xy) + β 2 SPACES (xy) + β 3 RATE (xy) + β 4 BUS (xy) + β 5 RAIL (xy) + β 6 TAXI (xy) + β 7 DISTANCE (xy) + β 8 GDP (xy) + β 9 BUS LINES (xy) + Where for each airport x and year y, REVENUES = car parking revenues in million PASSENGER = airline passengers in million SPACES = number of car parking spaces RATE = maximum car parking rate or tariff per day in BUS = bus fare to or from the city center in RAIL = train fare to or from the city center in TAXI = taxi fare to or from the city center in DISTANCE = distance from city center in kilometers GDP = gross domestic product annual growth rate (country of airport) BUS LINES = number of bus lines to or from the airport = error term

SPACES (xy) = β 0 + β 1 POPULATION (xy) + β 2 OPTIONS (xy) + β 3 DISTANCE (xy) + β 4 RAIL TRAVEL (xy) + β 5 TAXI TRAVEL (xy) + β 6 BUS TRAVEL (xy) + Where for each airport x and year y, POPULATION = catchment population in million OPTIONS = number of alternative car parking facilities near the airport RAIL TRAVEL = travel time to or from the city center by train in minutes TAXI TRAVEL = travel time to or from the city center by taxi in minutes BUS TRAVEL = travel time to or from the city center by bus in minutes The other variables are as defined in the REVENUES equation

In the REVENUES equation, the number of passengers passing through the airport, number of car parking spaces, car parking rate or tariff, and the GDP growth rate should have a positive relationship with car parking revenues. Car parking revenues should decrease with an increase in bus fare, rail fare, and taxi fare because fare increases suggest an increase in the cost of fuel, which makes driving to the airport more expensive. The impact of the number of bus lines on car parking revenues is negative since transport network connectivity discourages people from using their cars to move around. The impact of distance of the airport from the city proper on car parking revenues is also negative since travel cost is higher and travel time is longer.

In the SPACES equation, the catchment population and longer travel times by bus, rail, and taxi should have a positive impact on the number of car parking spaces. Alternative parking facilities should impact airport car parking spaces negatively. The distance of the airport from the city center should impact the number of car parking spaces negatively due to the higher cost of driving as the distance increases. Airport distance may have a positive impact on car parking spaces as the number of passengers in the car increases because the cost per person of driving to the airport and parking the car decreases as family size increases. The same argument can be made for people with more luggage.

Dependent variable: Airport car parking revenues Coefficient Std. Error t-statistic Constant 5850.888 525.115 11.142 *** PASSENGERS -65.618 9.793-6.700 *** SPACES 0.038 0.007 5.397 *** RATE 59.740 5.515 10.833 *** BUS FARE -106.978 44.616-2.398 ** RAIL FARE 105.600 14.643 7.212 *** TAXI FARE -6.523 3.187-2.047 ** DISTANCE -89.293 15.897-5.617 *** GDP 1074.280 3570.717 0.301 BUS LINES -102.910 16.686-6.167 *** Adjusted R 2 = 0.8658 No. of observations = 50 *** significant at the 1% level ** significant at the 5% level

Dependent variable: Number of airport car parking spaces Coefficient Std. Error t-statistic Constant 4498.334 5510.217 0.816 POPULATION 958.044 161.445 5.934 *** OPTIONS 730.327 207.294 3.523 *** DISTANCE -356.565 270.824 1.280 RAIL TRAVEL 51.173 108.881 0.470 TAXI TRAVEL -130.320 132.788-0.981 BUS TRAVEL 66.524 174.949 0.380 Adjusted R 2 = 0.6193 No. of observations = 50 *** significant at the 1% level

The number of car parking spaces, car parking rate or tariff, and the GDP growth rate behave as expected, that is, higher values for these variables tend to increase car parking revenues. Bus and taxi fares, airport distance from the city center, and the number of bus lines serving the airport behave as expected, that is, higher values for these variables tend to decrease car parking revenues. Higher rail fares tend to increase car parking revenues while more passengers passing through the airport tend to decrease car parking revenues. These results appear to be counterintuitive.

Only the catchment population and parking options are statistically significant in the second equation. Catchment population behaves as expected, that is, higher values for this variable tend to increase the number of car parking spaces. The number of parking options tend to increase the number of airport car parking spaces, which appears to be counterintuitive, although the reverse sign may indicate that passengers prefer airport parking due to its proximity to the departure and arrival gates.

We identified and analyzed factors that impact car parking revenues and the number of car parking spaces at 10 large European airports for the period 2011 2015. The results indicate that the number of car parking spaces, car parking tariff, higher rail fares, and the GDP growth rate tend to impact car parking revenues positively. The results also indicate that a bigger catchment population tends to increase the need for car parking at airports. Overall the results suggest car parking revenues may be improved by optimizing the number of car parking spaces available and car parking tariffs and that a reliable rail service between the airport and the city center does not necessarily impact car parking revenues negatively.