Effective Practices for Preparing Airport Improvement Program Benefit-Cost Analysis

Abstract

Airport Improvement Program (AIP) authorizing legislation requires that airports applying for funding of capacity-enhancing projects needing more that $5 million in discretionary funds conduct a benefit-cost analysis (BCA). Airports filing BCAs must identify aviation, economic, and non-tangible benefits and detriments accruing as a result of these projects. Achieving a BCA ratio of one or greater is often a difficult hurdle for many capacity-enhancing projects whose benefits are difficult to quantify. The Federal Aviation Administration (FAA) guidance on quantifying benefits for FAA-funded projects is nearly ten years old and not well-developed in documenting streamlined and consistent processes that have been used successfully to estimate difficult to quantify benefits for projects. The objective of this synthesis is to describe successful assessment techniques that can be used by airports in performing BCAs for hard to quantify benefits from projects needing more than $5 million in AIP discretionary funding. The synthesis includes a literature review, review of BCAs submitted to the FAA for AIP funding, and evaluation and summary of successful practices.