A Risk Assessment Framework for Airport Development Projects

Abstract

This paper develops a risk assessment framework for airport development projects. It discusses the major types of inherent development risk, including political risk, environmental risk, financial risk, airline risk, forecast risk, and regulatory or operational risk, and it offers suggestions for risk mitigation strategies. Furthermore, it identifies and analyzes relative risk determinants, which affect the magnitude and type of risk that development projects will likely face. These include the presence of a dominant airline, the airport’s rate structure, the airport’s ownership and operating structure, local demand, and geopolitical events. These factors and their interconnected relationships are illustrated through case studies of relevant airport development projects.