Please study the attached files and write a report in bullet point from the point of view of CFO as in how perfromace and KPI can be improved and things can be made better.
Icarus News - Airports Set For Turbulence
Over the past year, airport operators have faced the kind of turbulence that would have had even seasoned travellers reaching for their sick bags. Airports, particularly those close to major population centres, came under fire from passenger groups and politicians for the long queues and delays caused by heightened security measures introduced after a series of terrorist alerts and incidents at European travel termini in 2018. Airport retailers are also believed to be unhappy at the effect on shop revenues.
The well-publicized problems of pilot shortages leading to cancellations to flights across the autumn and winter schedule at Ryanair, following the collapse of low cost airline Monarch in late 2017, have added to the uncertainty in the industry at a time when Brexit and fear of terrorism is already dampening demand for air travel.
Nevertheless the Icarus Group remain optimistic. "We are confident that our excellent new management teams, and the investments they are making in the airport infrastructure, will be reflected in improved customer satisfaction and, ultimately, in better business performance over the next four years."
The Board of the Icarus Group will be monitoring your airport's performance by reference to the following targets, with the overall objective of maximising shareholder value. Your share price will be published at the end of each decision year. At that point you will be able to compare your share price and other key performance indicators with those of the other airports in the Icarus Group.
Key Performance Targets
- 20% growth in flights over the next 5 years
-10% improvement in the passenger satisfaction index over 5 years
-10% improvement in employee motivation index
- 15% improvement in yield per passenger over 5 years
-The best brand reputation in the UK airport sector
-Profitability (ROCE) of 10%.
Planning Model
Your airport has a powerful planning model, which enables you to build your business plans andassess their financial viability. As FD you are responsible for managing this planning model and for ensuring that the financial implications of your team's preferred strategy and operating decisions are fully understood.
You should also encourage your team to explore alternative strategies, using the "Scenarios" feature of the planning model, and to and to test their assumptions and forecast before completing each decision year.
Decisions
Your executive colleagues will be responsible for making decisions in their own areas. As FD, you will need to ensure that the financial implications are fully understood, and for helping your CEO to resolve any conflicts.
For example, your Commercial Director may want to increase the amount of terminal space that is used for shops, while the Chief Engineer may want more lounge space to ease the flow of passengers.
You will be particularly involved in setting the airport runway, passenger and freight feeswhich make up 75% of your airport income
Theairlines may be very sensitive to excessive increases in these charges.
Runway charges are paid by the airlines according to the maximum
Takeoff weight of the aircraft (MTOW).
You decide by how much to increase or decrease the price per tonne each year. Your airport offers two levels of service, full service during peak times and a lower cost service during offpeak hours.
Full service is used mainly by the traditional scheduled airlines, and includes use of dedicated gates and airbridges, full baggage handling service, aircraft cleaning, pushback, water and toilet services. Budget airlines tend to opt for the off peak service, which typically involves parking on the airfield, with passenger steps, a passenger bus service to and from the gates, and the airline handling its own cleaning.
The airlines pay a passenger fee on each passenger departure. These fees cover the costs of processing each passenger through the airport and include a security charge per head. Again there are two tariffs, Full Service and Off Peak, and a discount is applied for domestic passengers.
For freight flights, the airlines pay runway charges per tonne of MTOW (maximumtakeoff weight) at the same rates as passenger flights. There isalso a ground handling charge per tonne of freight handled. You decide by what % to increase or decrease this charge each year.
You can also increase your investment in freight handling facilities.
Attachment:- parta-b.zip