Cost-benefit analysis of investments in airport infrastructure: a practical approach

This paper presents a cost-benefit analysis approach devised to conduct project evaluation in conditions of limited analyst time, research budget and data availability. The emphasis is on discarding economically viable from unviable projects rather than on arriving at a precise estimate of project return. The paper starts by setting out the theoretical background for identifying and measuring project benefits. It then presents a practical approach to measure such benefits in projects involving the expansion of passenger capacity and, subsequently, those aimed at expanding aircraft capacity. Projects in the freight market and the estimation of airport costs are treated in turn. A practical application is included as an appendix. (C) 2004 Elsevier Ltd. All rights reserved.