Case Studies on Transport Policy xxx (xxxx) xxx–xxx

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Case Studies on Transport Policy

journal homepage: www.elsevier.com/locate/cstp

A new methodological framework for evaluating flexible options at airport

passenger terminals
⁎
Liliana Magalhãesa, , Vasco Reisb, Rosário Macárioc
a
Instituto Superior Técnico, University of Lisbon, DECivil, CESUR, Sala 4.24, Avenida Rovisco Pais, 1049-001 Lisboa, Portugal
b
Instituto Superior Técnico, University of Lisbon, DECivil, Sala 3.21, Avenida Rovisco Pais, 1049-001 Lisboa, Portugal
c
Instituto Superior Técnico, University of Lisbon, DECivil, Sala 4.17, Avenida Rovisco Pais, 1049-001 Lisboa, Portugal

A R T I C LE I N FO A B S T R A C T

Keywords: Flexibility has been proposed as a suitable alternative or a complement to the traditional airport development
Airport flexibility approach based on Master Plans. Flexibility increases airports’ resilience to unexpected or unforeseen events
Flexible airport terminals such as economic recessions, regulatory restrictions or technological developments, to name a few. Although the
Evaluating flexibility benefits of flexibility have been discussed, the debate has thus far been conducted at the conceptual level.
Airport development
Furthermore, research which refers to ways of measuring the benefits of flexibility is almost inexistent.
Passenger terminals
This manuscript proposes a novel framework to support the incorporation of elements of flexibility in the
Air transport
airport development plan. The framework was primarily developed for cases of extension – i.e., when expansion
is not an option. It is organised in three phases: 1) definition of the decision inputs, scenarios and flexible
options, 2) ex-ante operational evaluation and, 3) ex-ante economic evaluation. The framework is meant to
guide airport managers assessing the plausibility of alternatives in keeping or improving the efficiency of air-
port’s processes.
An application of the framework is presented. The case study is the Terminal 2 of the Lisbon International
Airport. The objective of the use of this case study is twofold: 1) to exemplify the applicability of the framework,
and; 2) validate the framework together with the interviews that we conducted with airport practitioners. The
results evidence that flexibility can increase the efficiency by reducing the waiting times, which will increase the
passengers’ dwelling time. The costs are compensated by the increase in the non-aeronautical revenues.

1. Introduction airport industry is increasingly dominated by less regulation, un-

In the aftermath of the 1944 Chicago Convention, a controlled en-
vironment emerged that was characterised by extensive regulation of
the aviation industry. In the course of the following decades, air
transport benefited from a stable context, accompanied with a steady
growth in demand.
The first airport development plans, commonly known as Master
Plans, were formulated in this context. Typically, a Master Plan defines
the development stages of an airport over a period of 30 years (IATA,
2004). It defines the elements of an airport (e.g., terminal, runways) to
be built or implemented over time. In a context of stability and con-
tinuous growth, such exercise was relatively straightforward. ICAO
formulated, in 1967, the first guidelines (ICAO, 2002). Over the years,
other recommendations and guidelines have been advanced by IATA
and FAA (FAA, 2007; IATA, 2004).
First starting in the U.S. in late 1970s, a liberalisation wave has been
sweeping the globe ever since (Rhoades, 2008). The new context of
predictable demand, growing financial constraints, new social trends
and successive technological leaps (Burghouwt, 2007). Airports are
becoming commercially-oriented firms that compete for a variety of
customers with multiple services (Graham, 2010; Morrell, 2010). A new
scenario has progressively emerged, characterised by inherent un-
predictability and increasing volatility. Taking into consideration that
airports are infrastructures with long-life cycles spanning multiple
decades, airport managers face unparalleled challenges which require a
new paradigm of airport planning. Additionally, the very conception of
an airport development plan often takes years, meaning that the initial
conditions may no longer apply at the end of the process.
Master Plans, as originally formulated, present known limitations
when it comes to preparing the airport to adapt to short or medium-
term changes in demand and other conditions (Neufville and Odoni,
2003; Magalhães et al., 2013). They rely on medium to long-term
forecasts which often miss the mark.
A different approach based on the principles of flexibility has been

⁎
Corresponding author.
E-mail addresses: liliana.magalhaes@tecnico.ulisboa.pt (L. Magalhães), vascoreis@tecnico.ulisboa.pt (V. Reis), rosariomacario@tecnico.ulisboa.pt (R. Macário).

https://doi.org/10.1016/j.cstp.2018.03.003
Received 2 March 2017; Received in revised form 29 December 2017; Accepted 6 March 2018
2213-624X/ © 2018 World Conference on Transport Research Society. Published by Elsevier Ltd. All rights reserved.

Please cite this article as: Magalhães, L., Case Studies on Transport Policy (2018), https://doi.org/10.1016/j.cstp.2018.03.003
L. Magalhães et al.
Fig. 1. The interaction between external factors, airport operations and flexibility.
advocated (Burghouwt, 2007; Neufville, 2008; Butters, 2010;
Magalhães et al., 2017). In this approach, the limitations to accurately
forecast the future are acknowledged. Multiple plausible future sce-
narios, and respective development options are taken into account that
typically provide better results than the alternative “do nothing”. By
doing this, airports become change-resilient, that is, able to adapt to
variations in demand and other conditions (Magalhães et al., 2015).
Flexibility can be applied in three different moments of an airport
development with different objectives (Magalhães et al., 2017), namely:
• Extension, when flexible options are used to increase capacity whilst
keeping the same footprint;
• Expansion, when flexibility is used to generate a high capacity in-
crease by building new facilities, and;
• Reduction, when flexible options are used to reduce capacity and
costs.
Extension may be either used to postpone the need of an expansion,
or during an expansion to accommodate the transition period (i.e.,
when civil construction works are under way).
Literature on airport flexibility is growing, yet both a consensual
definition and a framework deployment are still lacking. The few pro-
posed frameworks are essentially conceptual (Magalhães et al., 2017,
2015) and do not provide guidance on how to assess the benefits that
come with the introduction of flexibility. However, from an airport
manager’s perspective, understanding the costs and benefits involved in
flexibility is of utmost importance. The difficulty in isolating and cal-
culating the impact of flexibility has been acknowledged (Chen and
Chung, 1996; Nilchiani, 2005), since the added value of flexibility only
surfaces in situations of contextual change.
The manuscript presents a new methodological framework for
evaluating flexible options in the context of airport capacity extension.
The framework helps airport managers to choose the most adequate
flexible option. Aiming at validating the framework, we conducted a
series of interviews to empirically validate our methodological frame-
work. Moreover, aiming at evidencing the applicability, we also com-
plement the validation of the methodological framework with an ap-
plication to the case study of the passengers’ processes at Terminal 2 of
the Lisbon International Airport (Portugal). We developed a simulation
model to test our methodological framework as real-world testing was
not possible.
This manuscript is organised into six sections. Following the in-
troduction, the Section 2 presents a brief review on airport flexibility
and examples of flexible options used at airports worldwide. The Sec-
tion 3 presents the research method used to build the methodological
framework. The Section 4 presents the methodological framework de-
veloped for the evaluation of flexible options. The Section 5 presents an
application to the case study of Terminal 2 at the Lisbon International
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Airport for validation and evidence of application purposes. Lastly, the
Section 4 presents the conclusions.
2. Depicting flexibility
2.1. Theoretical discussion1
The need for flexible design in airport terminals is a recent re-
cognition (Neufville and Belin, 2002; Edwards, 2005; Neufville, 2008)
and the research into flexible airport development is still very much in
its early stages. As Magalhães et al. (2017) state, there is a scarcity of
publications on the topic of airport flexibility. Only few authors have
studied the concept of airport flexibility and, so far, no universal defi-
nition has been accepted. Moreover, there is no consensus among au-
thors. The review of the literature presented at Magalhães et al. (2017)
revealed the existence of at least five different terms used to describe
the concept of airport flexibility.
For the purpose of this study, flexibility is herein seen as a property
that increases the reliance upon the airport processes. A process is made
up of a set of tasks, which take place in a given time and space, con-
suming resources (e.g., staff). Tasks can be shared by different processes
(e.g., baggage drop-off at check-in). In the face of variation of demand
or other unexpected event, those tasks will underperform which in turn
will negatively affect the performance of the processes. Once embedded
within the processes, flexibility enables the tasks to continue with good
performance results, and therefore, contributing to the overall perfor-
mance of the processes.
Fig. 1 represents our view of the interaction between flexibility,
external factors and airport operations (processes). This figure re-
presents the understanding of flexibility followed in this study, and can
be divided into three main blocks:
• External factors are the drivers of change forcing airport managers to
adjust processes to keep and improve airport efficiency levels;
• Airport operations are represented through processes (e.g., pas-
senger), where flexibility is applied. Each process is an organised
chain of tasks (e.g., boarding). Each one consumes time and re-
sources. Tasks may be shared by different processes (e.g., check-in).
The utilisation of processes is justified as they define the perfor-
mance and are a key component on the cost structure of the airport.
Flexibility influences the required resources to do a task;
• Airport productivity is measured through several indicators and is the
ultimate purpose of airport manager. The two main parameters
considered to analyse flexibility are throughput and, financial and
1
We published a literature review about the concept of airport flexibility in Magalhães
et al. (2017). Herein, we present the key conclusions and facts.
L. Magalhães et al.
Table 1
Real-world examples of flexible options and their planning levels.
Flexible option Planning level Real-world example
Moveable walls Tactical Edmonton International
Mombasa International
Niagara Falls International
Toronto Pearson International
Vancouver International
Swing gates Operational Mombasa International
Niagara Falls International
Pease International
Toronto Pearson International
Modular terminals Strategical Amsterdam Schiphol
Bangkok Suvarnabhumi
Dublin International
Niagara Falls International
Southampton International
Non-load bearing walls Strategical Pease International
Land saving Strategical Amsterdam Schiphol
Athens International
Dublin International
Mombasa International
economic performance. Flexibility influences the processes and, ul-
timately, the performance and cost structure of the airport.
Flexibility can be applied at different levels: components, building
design, space design and master plan (Butters, 2010). These levels can
be connected with the typical planning levels: strategic, tactical and
operational. The connection was established by Magalhães et al. (2013)
where flexible options are divided among these three levels. Some le-
vels of flexibility are shared by two planning levels, depending on the
type of flexible options.
In a flexible development situation, capacity is coordinated with
demand. This means that flexibility exploits airport’s latent capacity
and reduces its idleness. There will be a moment at which the infra-
structure will no longer be able to cope with demand and that will be
when an expansion could be required. As such, flexible extension of an
airport allows to exhaust its capacity, postponing the need for expan-
sion.
For the purposes of this research, we adopted the definition of air-
port flexibility originally proposed by Magalhães et al. (2017) as being
the ability to change an infrastructure in time to respond to its capacity
needs obtaining maximum value for money from the investment. This
definition is supported on five fundamental variables: implementation
time, removability, value for money, productivity and costs. Flexible
airport design should be able to respond in time to capacity needs.
These needs are generated by several external factors or events (e.g.,
economic constraints, technological developments) explained in detail
elsewhere (Magalhães et al., 2013). Since the external factors may
change or fade out, flexible option should be removable too. Flexibility
must also provide maximum value for money, i.e., return on the in-
vestment made to respond to capacity needs. Since flexibility influences
productivity, one must be able to analyse the benefits of productivity
both in operational performance and financial terms. Lastly, the cost
factor is also included in the definition as flexibility should ensure that
the adaptations implemented provide maximum value for money and
therefore, an assessment of its costs must be taken into account.
One of the major gaps identified by the authors in the literature
related with airport flexibility is the absence of a tool to quantify the
benefits of flexibility (Chen and Chung, 1996; Nilchiani, 2005; Shuchi
and Drogemuller, 2012). The debate has thus far been conducted at the
conceptual level. Flexibility has been identified as an asset which offers
several benefits. However, although the benefits of flexibility are dis-
cussed, only one assessment tool has been developed. The notable ex-
ception was the work of de Neufville (2008), which uses the concept of
Net Present Value to evaluate the benefits of flexibility for airports in
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Case Studies on Transport Policy xxx (xxxx) xxx–xxx
long-term investments. Isolating the impact of flexibility in a scenario of
contextual change is no easy matter (Chen and Chung, 1996; Nilchiani,
2005). Nevertheless, it seems important to assess the benefits of flex-
ibility from a productivity gain’s point of view.
2.2. Flexibility in practice: some examples
Notwithstanding the scarce literature on flexible airport design ex-
amples, it is somehow possible to find some references. Table 1 gathers
the flexible options presented in the literature. The table also presents
the planning level of each option, based on the classification proposed
by Magalhães et al. (2013).
The Airport Cooperative Research Program (ACRP) from the
Transportation Research Board presents the largest collection of real-
world applications of flexible airport planning (Kincaid et al., 2012).
Toronto Pearson International Airport is equipped with moveable walls
which allow to change the capacity of the space for international and
domestic flights. Moreover, it also has swing gates which provide the
possibility of using the same gate for international and domestic flights.
The airport also has an open space terminal. In this case, it is an area
currently being used for retail operations which, in fact, is a buffer to
increase the capacity for security control in the future.
Moveable walls are also used at Vancouver International Airport
(Neufville, 2008; Kincaid et al., 2012; Shuchi et al., 2012). The terminal
is a simple large open hall divided by interior glass panels which are
moveable. This flexible option can also be found at Edmonton Inter-
national Airport.
Roulston (2010) presents the case of Niagara Falls International
Airport as a good example of flexible design. The terminal was designed
in such a way that it is possible to reconfigure its parts. It has moveable
walls and the building is prepared to expand in different phases without
compromising the current design or operations – modular terminals.
Southampton International Airport is presented by Shuchi et al.
(2012) as a good example of a modular and cost-effective terminal. The
expansion of the terminal does not imply disruptions to current op-
erations. The authors also mention Bangkok Suvarnabhumi Airport as a
good example of the application of modular technique that offers a
quick expansion.
Dublin International Airport is also referred as a good example of
flexible design (Butters, 2010). It was built based on a series of com-
ponents that can be easily expanded independently or combined.
Flexibility is herein assured through land saving and modular expan-
sion.
In the case of Mombasa International Airport, the initial develop-
ment plan consisted of two passengers’ terminals, one for domestic and
the other for international traffic. Nevertheless, there was the risk of an
international traffic shift which would leave one of the buildings un-
derutilised (Kincaid et al., 2012). Therefore, the strategy was to build a
single passenger terminal with mixed-use areas for domestic and in-
ternational flights, using moveable walls and swing gates.
Pease International Airport is also mentioned as an airport with
three flexible options. Firstly, the airport has domestic/international
swing gates. Secondly, it is using an unutilised aircraft parking as a car
park. Thirdly, the terminal can be easily expanded or converted due to
its non-load bearing walls (Kincaid et al., 2012), which are non-struc-
tural walls that can be removed.
Athens International Airport is a good example of land saving for
future expansions. During an interview with Stratos Papadimitriou,2 it
was explained that only half of the initial project was built. The initial
project includes another terminal and runway symmetric to those al-
ready built. However, as the current demand does not justify such in-
vestment, airport managers are using the empty land to collect energy
generated by solar panels. This is an example of how a flexible option
2
Chairman of the Board of Directors of the Airport. Interview on January 13th, 2012.
L. Magalhães et al. Case Studies on Transport Policy xxx (xxxx) xxx–xxx

can be explored until needed.

Amsterdam Schiphol International Airport is pointed out by Shuchi
et al. (2012) as an example of a successful continuous growth in terms
of terminal and piers. As Maurits Schaafsma3 said during our interview,
Schiphol has been successfully expanded to respond to the continuous
increasing demand.

3. Research method

The research method supporting the development of the framework

was based on the principles of the grounded theory methodology (Birks
and Mills, 2012). In the first step of our investigation, a literature re-
view was carried out. The literature review evidenced the benefits of
incorporating elements of flexibility in the context of airport develop-
ment, notably in cases of airport expansion. Also, no instrument or
technique for deploying flexibility was found in the reviewed literature.
Supported by the literature review, we made a first attempt at designing
a new methodological framework for the evaluation of flexible options
for the extension case of airport development. The framework was in-
spired by the stepwise process proposed by Neufville and Scholtes
(2011). We adopted the vision proposed by de Neufville and Cardin
(2008), Neufville (2008), Neufville and Scholtes (2011) and Eckart
(2012) that flexibility can be evaluated through the comparison of
different scenarios. As such, the flexibility of a system is herein seen as a
relative measure as previously stated by other authors (Chen and
Chung, 1996; Koste and Malhotra, 1999). Moreover, this methodolo-
gical framework is in line with the basic decision-steps suggested in
management for decision making, namely (Cascetta et al., 2015;
Vreeker et al., 2002): i) specification of choice problem, ii) analysis of
information, iii) choice of appropriate evaluation method, and iv)
evaluation of alternatives. The methodological framework is presented
in Section 4.
Although the conclusion of an inductive process is supported by the
premises, they do not entail it. Additional validation efforts were re-
quired (Bryman, 2012). We conducted a validation exercise of the
maps, following a triangulation tactic as proposed by Yin (2003). This
tactic entails gathering evidences from different sources, which will
collectively support the validity of the findings. In our case, the sources
were: interviews and case study.
We undertook a series of semi-structured interviews with open-
ended questions with key respondents. Respondents were chosen based
on their knowledge and role in the airport operations and development.
Nine interviews were conducted, as follows:

• Amsterdam Schiphol International Airport (AMS) – The

Netherlands:: January 11th, 2012
o Maurits Schaafsma, Urban planner and Airport City concept spe-
cialist
• Athens International Airport (ATH) – Greece:: January 13th, 2012
o Stratos Papadimitriou, Chairman of the board of directors
• Boston Logan International Airport (BOS) – E.U.A:: May 6th, 2015
o Flavio Leo, Deputy director of aviation planning and strategy
• Frankfurt International Airport (FRA) – Germany:: January 9th,
2012
o Sascha Schmitt, Senior project manager for business development
• Galeão International Airport (GIG) – Brazil:: June 15th, 2015
o Ana Torrontegui, Strategic development
• Guarulhos International Airport (GRU) – Brazil:: June 19th, 2015
o Rodrigo Jesus, Strategic planning
o Bruno Madureira, Strategic planning
• Santos Dumond Airport – Brazil:: June 15th, 2015
Fig. 2. Methodological framework for the implementation of flexibility.
o Aparecido de Oliveira, Strategic planning
• Viracopos International Airport (VCP) – Brazil:: June 18th, 2015

3
Urban planner and AirportCity concept specialist. Interview on January 11th, 2012.

4
L. Magalhães et al.
Fig. 3. Main components of Phase 2.
o Graziella Delicato, Airline relations manager
o Douglas Targa, Operational capacity coordinator
• Zurich International Airport (ZRH) – Switzerland:: January 12th,
2012
o Andrea Jörger, Marketing & real estate
Lastly, we developed a case study analysis. The conduction of the
case study closely followed the process suggested by Stuart et al. (2002)
and Yin (2003). The case study is presented in Section 5.
4. New methodological framework for flexibility implementation
The final version of the framework for supporting the im-
plementation of flexibility in airport terminals in case of extension is
presented in Fig. 2. The framework is organised in five phases, which
are herein briefly reviewed.
4.1. Phase 1 – Understanding the need for flexibility in the context of
extension
The framework begins with the acknowledgement that flexibility is
required and the airport is in the context of extension, which means that
additional capacity is required but the terminal cannot be expanded
beyond its current footprint.
4.2. Phase 2 – Setting the scene
This phase has two main parts: the determination of the decision
inputs and, the choice of scenarios and flexible options (Fig. 3). Con-
cerning the decision inputs, airport managers have to decide about the
scope of the work, the period of analysis and the decision variables.
The scope defines the unit of analysis (e.g., check-in area). As
flexibility can be applied from strategic to operational levels, defining
the scope is essential to assure that the appropriate flexible options will
be chosen. For example, if the unit of analysis is the arrival hall,
moveable walls is a possible flexible option. However, if the unit of
analysis is the check-in area, other options might be considered such as
moveable check-in counters.
The period of analysis will influence the scenarios which will be
used. For instance, a season analysis will consider scenarios that can
occur within a six-month period. But a 5-year analysis implies other
type of uncertainties, and therefore, different scenarios. Thus, it is ne-
cessary to define with precision the time horizon (medium-term or
short-term). This will generate different scenarios within the time scope
analysis. Long-term is not considered as the framework developed for
extension is used as a short- to medium-term solution. Long-term re-
quires the analysis of the need to pursue expansion.
Decision variables are the indicators considered as the most im-
portant to take into account in the evaluation. As stated above, our
understanding is that flexibility will influence the terminal processes in
terms of throughput and, financial and economic results. Hence, deci-
sion variables are related with the processes for passengers. The IATA
recommendation is that airport’s capacity should be evaluated based on
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Case Studies on Transport Policy xxx (xxxx) xxx–xxx
Fig. 4. Matrix to support the analysis of the results obtained at the ex-ante operational
evaluation phase. (For interpretation of the references to colour in this figure legend, the
reader is referred to the web version of this article.)
the level of service (IATA, 2004). As the level of service is focused on
the aeronautical processes, the decision variables should be based on
the indicators that allow to determine the level of service (e.g., waiting
time). Once the level of service is defined, it is necessary to assure that
the values for the decision variables are within the limits. The Key
Performance Indicators provided by the ACI are also viable options. It is
possible to use both types of indicators as decision variables. Different
airport managers might have different perspectives upon the main
variables that should be considered. Therefore, this framework offers
the opportunity to embed the analysis with specifications for each case.
However, they will always have to be reflected on the processes. As for
the number of variables, it varies significantly. Since the evaluation will
be based on a matrix (Fig. 4), as the number of variables increase so
does the complexity of the matrix.
The airport stakeholders experience and knowledge are crucial for
the identification of the main sources of uncertainty and the scenarios.
User engagement techniques, such as the Delphi method, can be used
here (Schuckmann et al., 2012). This technique provides a platform
where experts are invited to think and exchange their knowledge,
through a multi-stage process based on questionnaires. This can also be
complemented with research on the evolution of similar airports. Some
of the sources of uncertainty were already identified by authors
(Neufville, 2008; Magalhães et al., 2013), being demand fluctuations,
economy cycles and technological developments the most noticeable. It
is unlikely to consider all the uncertainties and scenarios. However, the
goal should be listing the more relevant ones. Since the framework was
developed for the extension airport development case, the scenarios
should be of short- to medium-term. We are looking for scenarios, for
instance, related with seasonal or daily fluctuations on demand.
Each scenario should have an associated probability of occurrence.
This is not mandatory for a successful application of the framework.
However, it is useful. It might be preferable to choose a flexible option
L. Magalhães et al.
that provides the best results for a scenario with a higher probability,
instead of one flexible option with average results for most scenarios.
Several techniques can be used to determine the probability of occur-
rence, such as the Delphi method or numerical analysis.
As explained above, flexible options can be diverse. Different sce-
narios might require different flexible options, and therefore, it is im-
portant to evaluate (in the next phase) the results obtained for each
alternative flexible option for each scenario. For each scenario, various
flexible options can be tested. A flexible option is herein defined as a
solution that allows airport managers to alter the capacity of an infra-
structure in time to respond to a certain need, and stop with its use
when no longer necessary to, at least, keep performance stable towards
change.
4.3. Phase 3 – Ex-ante operational evaluation
At this phase, flexible options will be evaluated for each scenario in
order to understand if they provide better results than the “do nothing”
option. This phase requires information from the previous one. The
values of the decisions variables for the base case which correspond to
the current situation, as well as for each alternative flexible option for
each scenario, are estimated. Regarding the evaluation method, it
should reflect as outcomes the results for the decisions variables for the
base case in each scenario, as well as the results of each alternative
flexible option in each scenario. The choice of the method also depends
on the period of analysis and the scope. Short-term periods of analysis
have an operational scope and typically rely on simulation modelling
(Neufville and Odoni, 2003). Evaluation methods can be various. They
vary from static indicators to complex simulation models. The aspects
defined in the previous phase will influence the type of analysis.
Moreover, the possibility of associating a probability of occurrence or
not has to be taken into consideration. Some evaluation methods are
not able to incorporate probabilities. Once the method is chosen, it is
time to apply it to the base case for different scenarios. The results for
the decisions variables for the base case in each scenario are then cal-
culated. These results are the basis of this ex-ante operational evalua-
tion and will feed the following steps. Then, we need to calculate the
values of the variables for the flexible option of each scenario using the
same evaluation method of the previous step. Once this is done, it is
time to calculate the differences of each variable for each alternative
flexible option relative to the base case for each scenario, and fill a
matrix similar to the one presented in Fig. 4. This matrix presents the
differences for each flexible option and the base case for each scenario.
If the difference is positive, it means that the flexible option produces
better results when compared with the base case and it is marked in
green. When the difference is negative, the flexible option does not
produce better results than the base case and it is marked in red. It is
important to observe that the same option can be used to respond to
different scenarios. This phase serves the purpose of checking if flex-
ibility is an option to extend the capacity and delay expansion. Thus, at
the end of this phase if the flexible options do not provide better results
than “do nothing” (base case), the analysis should stop. This means that
flexibility is not the answer to the problem. If it is not the case, we
should proceed to the next phase.
4.4. Phase 4 – Understanding if flexible options are useful
According to Vreeker et al. (2002) four types of evaluation styles
can be distinguished, namely: monetary decision approach, based on
cost and benefits (or effectiveness) principles; utility theory approach,
based on a multicriteria analysis which is used to rank the decision-
makers’ preferences; learning approach, which is based on a sequential
articulation of the decision-makers’ views, and; collective decision ap-
proach, which is based on a multi-person negotiation or voting proce-
dures. A series of interviews with airport experts (list presented in
annex) evidenced the advantage of pursuing a monetary decision
6
Case Studies on Transport Policy xxx (xxxx) xxx–xxx
approach with a cost-effectiveness analysis, as this seems the preferred
type of evaluation for airport managers to decide upon flexible options.
This phase is another decision moment. Once the previous phase is
finished, it is time to look at the results and decline all the flexible
options that, for each scenario, produce worse results that the base case
(current situation). If there are any positive differences, it is logical to
proceed.
4.5. Phase 5 – Ex-ante economic evaluation
Once airport managers decide to proceed with flexible options, it is
time to observe which flexible option provides a higher value for
money, using a cost-effectiveness analysis. This framework does not say
which option should be chosen. It evaluates the results obtained for
each flexible option for each scenario, pointing out the flexible option
that provides the best results for each scenario. This evaluation is based
on the probability of occurrence, if available. It is also based on the
value for money by taking into account the costs of the flexible options,
as well as their benefits. Value for money measures the cost a good,
feature or service as well as its benefits. So, at this point, for each
flexible option of each scenario it is necessary to determine the costs for
the period of analysis (e.g., set up, operation and maintenance). If the
period of analysis is longer, it is necessary to update the costs to the
reference year. To determine the value for money of each flexible op-
tion, it is necessary to weigh the costs against the results obtained for
the decision variables and against other possible benefits. Once this is
done, one can advise the airport manager upon which flexible option
should be chosen.
5. Case study: Terminal 2 at the International Airport of Lisbon
In this manuscript, we apply our methodological framework to the
case study of Terminal 2 of the Lisbon International Airport. The ob-
jective is to exemplify the applicability of our methodological frame-
work to a case study. Moreover, we also seek the validation of our
methodological framework through the use of a case study (Yin, 2014).
We develop a case study based on simulation modelling since it was not
possible to test our methodological framework under real-world con-
ditions. The simulation model is a representation of the departure
processes for passengers at Terminal 2. Simulation model has been
described as the appropriate tool to evaluate features at operational
level, such as the processes (Neufville and Odoni, 2003).
5.1. Context
Lisbon Airport is the most important Portuguese airport. The
number of passengers reached 20 million in 2015 and the airport serves
47 airlines companies with 110 different destinations. It is located
within the city, and therefore, it cannot be expanded beyond its current
limits. Nevertheless, the traffic has been growing rapidly, particularly
for low-cost airlines. The airport is managed by ANA – Aeroportos de
Portugal, S.A.
Terminal 2 serves the low-cost companies and it only has de-
partures. The terminal has recently been the object of a series of in-
terventions to increase the capacity for some aeronautical activities
(security and boarding). Nonetheless, there are other activities that also
present capacity issues such as the check-in which is the scope of the
application of our methodological framework. By the time we con-
ducted this case study,4 there were four low-cost airlines operating at
Terminal 2, namely: EasyJet, Ryanair, Transavia and WizzAir.
There are twenty-two check-in counters but only twenty-one are
available for the airlines. One counter is specifically used for oversized
luggage. The airlines operate their check-in and luggage drop-off
4
Operation day is October 26th, 2016.
L. Magalhães et al. Case Studies on Transport Policy xxx (xxxx) xxx–xxx

activities at specific counters, that is, each airline always operates the
same counters. The airlines do not share counters. Moreover, they re-
quire a different number of check-in counters. EasyJet operates their
check-in and luggage drop-off activities with six counters, Ryanair with
4 counters and both Transavia and Wizzair with two counters.
There is a need to accommodate demand without compromising the
quality of service at the check-in by avoiding expansion. Thus, it is a
good case study for the extension scope, and therefore, our methodo-
logical framework can be applied.

5.2. Application of the methodological framework

The following is a brief presentation of the application of the

methodological framework to Terminal 2. The objective, as described
above, is twofold: i) to demonstrate how it can be applied in practice,
and; ii) to serve as a validation exercise of our methodological frame-
work. This application had the collaboration of two members of ANA –
Aeroportos de Portugal, namely: the head of Aviation Marketing and a
Board Advisor. The presentation follows the organisation of the fra-
mework.
• Phase 1 – Understanding the need for flexibility in the context of
extension
o Step 1.1: Decision – As there is no possibility of further expanding
Terminal 2, extension seems a proper solution to maintain effi-
ciency before a context of growing demand;
• Phase 2 – Setting the scene
o Step 2.1: Scope – The focus of this research was on the check-in
area, which presents capacity issues as explained above;
o Step 2.2: Period of analysis – Standard operation day (October
26th, 2016) which had 41 flights of the four low-cost companies.
The standard time departure (STD) ranged from 5.15 am
to 9.20 pm;
o Step 2.3: Decision variables – Upon discussions with the airport
manager and aiming at keeping the exercise simple, we decided to
use one representative decision variable related with the level of
service – waiting time. This variable is used to assess the level of
service which was the ultimate goal of the airport managers;
o Step 2.4: Sources of uncertainty and scenarios – The current situa-
tion, in terms of demand – that is, the daily operation of the four
low-cost companies – was used as the scenario of analysis. There
are two reasons underlying this choice. Firstly, at the current time,
the terminal already exhibits congestion. Secondly, for validation
purposes, since we know this is a plausible scenario and we know
the actual impact on the operations.
o Step 2.5: Probability of occurrence – The probability of occurrence
is 100% since we are using the current situation as a scenario;
o Step 2.6: Flexible options – Based on the low airport managers’
willingness to invest, one flexible option was chosen to increase
the capacity at the check-in area – that is, the dynamic opening of
Fig. 5. Waiting time at check-in counters for the base case (simulation software).
Fig. 6. Waiting time at check-in counters using flexible option (simulation software).
new check-in counters when the waiting time exceeds 10 min. The
contractual agreement between ANA – Aeroportos de Portugal,
S.A. and the Portuguese Government obliges airports to comply
with a waiting time of 10 min or less at the check-in counters for
90% of the passengers. When the waiting time takes longer, the
airport manager pays a fine and therefore, this flexible option is
helpful.
• Phase 3 – Ex-ante operational evaluation
o Step 3.1: Assessment tool – We decided to pursue modelling simu-
lation to assess the waiting times at the check-in area, which is
explained in detail elsewhere (Magalhães et al., 2016). We used
AnyLogic® software to develop a hybrid simulation model. The
model is organised in three layers: the physical, refers to the ac-
tual infrastructure’s footprint (terminal); the logical, refers to the
actions of the passengers, and; the resources, which refer to the
existent equipment, staff and others. We use discrete-events ap-
proach to model the processes and agent-based to model passen-
gers and resources’ behaviour, which are limited by the infra-
structure while running through the process. The simulation
model was calibrated based on observations as well as the in-
formation provided by the airport manager. Our inputs are related
with processes and staff performance (e.g., counters’ processing
per unit of time, passengers’ arrival flows), as well as passengers’
information (e.g., percentage of business versus touristic, per-
centage of international versus domestic). The outputs of the
model will be focused on processes’ performance for the flexible
option. In this case, the output used is the waiting time. This
output will then be used to assess the flexible option;
o Step 3.2: Calculate the value of the decision variables for the base case
– The maximum waiting time currently reaches 50 min (Fig. 5).
However, 75% of the passengers wait 10 min or less. It is im-
portant to notice that 50% of the passengers wait between 0 and
2 min at the check-in counters. This is possible because almost
50% of the passengers use online check-in with no luggage to
drop-off;
o Step 3.3: Calculate the value of the decision variables for the flexible
option – The flexible option in test is the opening of new check-in
counters for each one of the four airline companies, when waiting
time exceeds 10 min. For all four airlines, this flexible option re-
presents a major increase in their performance as the maximum
waiting time is now 25 min (Fig. 6). Moreover, 80% of the pas-
sengers wait 10 min or less. It is important to notice that the value
of the first column increased. Each column is an interval and
therefore, for the first interval the percentage of passengers
waiting less than 3 min has increased.
• Phase 4 – Understanding if flexible options are useful
o Step 4.1: Decision – The flexible option provides better results than
the base case, hence we should proceed;
• Phase 5 – Ex-ante economic evaluation
o Step 5.1: Value for money assessment of flexible options – in terms

7
L. Magalhães et al.
of benefits, the time saving at the check-in counter represents
more time available to spend on non-aeronautical activities at the
terminal, particularly on shopping. More shopping at the terminal
means more revenues for the airport manager. Based on the sea-
sonal questionnaires at the terminal conducted by the airport
manager, leisure passengers tend to arrive early at the airport.
Moreover, the percentage of leisure passengers using Terminal 2 is
high. Therefore, this time saving at the check-in should not be
reflected in a later arrival at the terminal. Additionally, since
passengers spend less time on queues, they become less stressed
about their flight departure time and consequently, more willing
to visit shops and restaurants. The results reveal that with the
flexible option there was an increase of 7% of the passengers
visiting shops and restaurants. In terms of costs, this flexible op-
tion does not represent a direct cost for the airport manager as the
check-in counters are already installed. One could argue that this
flexible option does not allow the counters to be used by other
hypothetical interested airlines, which would generate an oppor-
tunity cost. However, at this moment the counters are already
there and not being used, so this cost does not currently exist.
Lastly, this flexible option does represent a cost for low-cost air-
lines. Therefore, the airport manager might need to encourage the
airlines with some incentives (e.g., monetary). Whether this is the
case, this flexible option might represent a lower revenue for the
airport manager. Nevertheless, it is an option worth considering in
order to delay the need for expansion (e.g., building new airport)
and consequently, a high investment.
o Step 5.2: Advise the airport manager – Based on the results ob-
tained, the flexible option should be implemented.
6. Conclusions
The traditional airport development approach based on master
plans reveals relevant shortcoming in current times, characterised by
increasing uncertainty. Alternative approaches, such as flexible devel-
opment, are being sought. Flexible development has been used to assist
airports in different conditions, such as: i) when they cannot increase
their footprint (extension case); ii) when they are building new infra-
structures, and therefore, need to be prepared to deal with new re-
quirements (expansion case), or; iii) when they see a decrease in pas-
senger demand and need to cut costs (reduction case).
So far, flexible options have been used without any robust or sys-
tematic approach to quantify their benefits. Some frameworks have
been presented but without the possibility of quantifying the benefits
and the costs of flexibility. However, it is important to evaluate the
trade-off between the gains and the costs. From an airport manager’s
point of view, the pursuit of flexibility is highly dependent on this
trade-off.
This manuscript is intended to make a contribution to overcoming
this limitation by proposing a new methodological framework for the
evaluation of alternative flexible options for extension. We adopted an
economic perspective based on a cost-effectiveness analysis. We con-
ducted a literature review on airport flexibility to build this framework.
Moreover, we held a series of interviews with airport managers
worldwide to empirically validate this framework.
The framework is organised in five distinct phases: two decision
moments and three main groups of steps. Phase 1 is a decision moment
to determine if the framework is being considered for capacity exten-
sion purposes. Phase 2 is when all decision inputs are defined, as well as
the scenarios and the flexible options that will be used in the next steps.
Phase 3 corresponds to the ex-ante operational evaluation, where all
flexible options are evaluated for each scenario. This evaluation allows
to understand if flexible options provide better results than “do
nothing”. Phase 4 is a decision moment where the flexible options
which present worse results than the base case (current situation) will
be abandoned, and therefore, will not proceed to the next phase. Phase
8
Case Studies on Transport Policy xxx (xxxx) xxx–xxx
5 corresponds to the ex-ante economic evaluation of the flexible options
based on a cost-effectiveness analysis.
We applied the framework to a case study – Terminal 2 of Lisbon
Airport. The purpose of this application was twofold: 1) exemplifying
the applicability of our methodological framework to a case study, and;
2) validating our methodological framework through the use of a case
study (besides the interviews that we conducted) as the application to a
real-world environment was not possible.
Flexible options proved to increase the performance of the decision
variable that we chose (waiting time). As we only considered one sce-
nario and one decision variable (waiting time), no complex matrix was
necessary. Although we were not able to accurately determine the costs
and benefits, some important considerations are presented concerning
the value for money assessment.
This framework provides an organised approach for the evaluation
of flexibility and by doing so, it contributes to increase the knowledge
of airport flexibility and in turn contributes to fill a gap of knowledge in
the current literature on this topic. Moreover, the general nature of
some of the steps allows the application of this framework in other
contexts. In terms of future developments, it would be interesting to test
if this methodological framework can be applied to the other two mo-
ments of airport development, namely: reduction and expansion. Some
adjustments might be required, but the general nature of the framework
suggests that its application to the other moments is possible.
Acknowledgements
This research was supported by the Portuguese Foundation for
Science and Technology (FCT) under Grants [SFRH/BD/52361/2013
and SFRH/BPD/75122/2010]. The information related with the case
study was kindly provided by ANA – Aeroportos de Portugal, S.A. We
would also like to acknowledge Duarte Amorim da Cunha for the sup-
port with the simulation software.
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