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Five Steps for Successful GASB 87 Implementation at Airports

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In May 2020, the Governmental Accounting Standards Board (GASB) announced the postponement of the effective date of Statement No. 87, Leases, by 18 months. Previously, airports were expected to adopt GASB 87 for all reporting periods after December 15, 2019. GASB 87 is now scheduled to be effective for fiscal years beginning after June 15, 2021. While the implementation of the GASB 87 has been extended, earlier application is encouraged. Airports have significant preparation ahead to effectively apply all provisions of GASB 87.

 

GASB Overview

The Governmental Accounting Standards Board issued Statement No. 87 in 2017 with the objective to better meet the information needs of financial statement users by improving accounting and financial reporting for leases by governments. GASB 87 is based on the foundational principle that leases are financings of the right to use an underlying asset. Under this Statement, a lessee is required to recognize a lease liability and an intangible right-to-use lease asset, and a lessor is required to recognize a lease receivable and a deferred inflow of resources, thereby enhancing the relevance and consistency of information about governments’ leasing activities. GASB 87 impacts accounting, including calculation of lease terms, interest rates, variable payments, and Minimum Annual Guarantee (MAG) amounts, as well as financial reporting and disclosures.

 

GASB Applicability to Airports

GASB 87 has a significant impact on airports’ processes, as airports engage in various lease agreements with airlines, concessions, hangars, etc. that meet the definition of a lease under GASB 87. There are many factors that airports must consider when evaluating whether an agreement meets the definition of a lease under GASB 87. A single agreement may contain more than one lease. Some lease components may meet the GASB criteria while some may not. Certain regulated leases that are subject to external laws, regulations, or rulings are exempt from the provisions set forth in GASB 87. For example, leases between airports and air carriers are subject to the Federal Aviation Administration’s (FAA) regulations and are therefore exempt from GASB 87 requirements. Airports must thoroughly understand GASB 87 provisions for successful implementation.

 

Five Steps for Airports to Successfully Implement GASB 87

  1. Get a lay of the land.

 

  1. Identify all applicable leases.
  • Evaluate all lease agreements and determine whether it meets the criteria for compliance with GASB 87.
  • Pay close attention to embedded lease agreements and ensure that all applicable leases are identified.
  • Remember that certain regulated leases are exempt from GASB 87.
  • Maintain a list of all applicable leases to ensure compliance for each fiscal year.

 

  1. Organize all leases.
  • Group similar leases into categories for seamless application of GASB provisions. For example, leases can be separated into two broad categories – aeronautical use and non-aeronautical use. Non-aeronautical use can be further split into subcategories, such as food and beverage, retail, rental car, etc.

 

  1. Find a suitable tool.
  • GASB 87 compliance is too complex to effectively and efficiently execute via a manual paper process.
  • Excel can be a great tool for calculations, but it is extremely limited for overall lease tracking.
  • Lease management software with GASB functionality can help airports maintain a repository of leases in a central location, automate complex calculations, and provide ease of financial reporting for streamlined GASB 87 compliance. A robust software can also track Key Performance Indicators (KPIs) for strategic planning.

 

  1. Document new processes.
  • Maintain a record of the new processes for easy reference.
  • Train all relevant employees to provide them with the knowledge and tools to effectively carry out their duties.

 

Summary

GASB 87 significantly impacts airports’ lease and accounting processes. Airports must thoroughly understand the requirements of the new standard and proactively take the necessary steps towards successful implementation. With effective preparation and the right tools, airports can expect a seamless transition in adopting the new processes outlined in GASB 87.

 

Need help implementing GASB 87 at your airport? Learn more about ProDIGIQ’s solution:

Efficient Gate Management is a Must in COVID-19 Pandemic

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COVID-19 has significantly impacted airport terminal operations. Several airport terminal expansion projects have been put on pause as airports lack the financial resources to support these projects due to economic crises. As a result, airports have insufficient space to accommodate flights. COVID-19 has exacerbated this issue with the introduction of new health guidelines. Airports must be cognizant of the impact of their gate allocations to ensure compliance with new health guidelines while accommodating passenger volume. Airports need to transform their typical operations to meet the changing demands and health guidelines while maintaining economic efficiency. Airports can particularly benefit from innovative technology to enhance gate management during COVID-19 and alleviate passenger health and safety concerns.

While some airports have digital solutions in place, many airports still rely on a manual process for gate allocation which is prone to error. Optimal gate assignment must consider gate availability, dynamic flight schedules, airport traffic constraints, airline preferences, and passenger experience. With COVID-19, gate assignment must also factor in new health guidelines and time windows to accommodate cleaning protocols between flights. The incorporation of new rules in gate assignment is integral to instilling passenger confidence and providing assurance of passenger safety. Innovative technology for gate assignment has built-in flexibility to adjust to airport-specific rules as well as accommodate the ever-changing needs of the aviation industry.

The gate assignment  process can be automated and streamlined with a robust gate management system. Gate management systems can help airports adapt and implement rules for gate assignment. For example, airports may implement new rules during COVID-19, such as reduced allocation of nearby gates at the same time, to ensure that there is sufficient space for passengers to practice social distancing. Advanced gate management systems have the flexibility to easily incorporate this new rule to create robust gate assignments while taking existing rules into account. Gate management systems can detect and alert airport personnel of gate assignment conflicts and discrepancies in real-time which enhances communication and facilitates a prompt response. Airports can use gate management systems to simulate gate assignments before publishing it to airlines, in order to reduce the risk of conflicts and ultimately increase operational transparency and efficiency.

In addition to automating gate management for passenger travel, gate management systems can streamline cargo operations. Cargo operations have recently spiked as they are vital in facilitating the transport of medical equipment during the global pandemic. The national lockdown has contributed to a boost in e-commerce, further increasing the demand for cargo operations. Airports can utilize gate management systems for efficient stand assignments to accommodate the increased volume of air cargo transport.

Gate management systems are a valuable tool for airports to effectively address the challenges of gate assignment during COVID-19. Gate management systems can also be highly beneficial to airports in dealing with the aftermath of COVID-19, as passenger traffic gradually increases. Gate management systems will equip airports with the necessary tools to efficiently manage gate assignments and easily adapt to the evolving needs of the airport under any circumstance.

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Transforming Wildlife Hazard Management at Airports with Digital Solutions

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Wildlife activity poses a significant challenge to airports. Airports have encountered seals on the runway, deer in surrounding vegetation and various bird species in trees. Wildlife are attracted to airports due to the landscape structure that may resemble certain species’ natural habitats. Some airports are also situated in the bird migratory path. Regardless of the species and attractant, wildlife activity is a safety hazard for all airports.

According to the Federal Aviation Administration (FAA), the number of wildlife strikes reported per year in the U.S. increased steadily from about 1,800 in 1990 to 16,000 in 2018, which indicates that, on average, over 40 strikes are reported daily. Wildlife activity presents a major safety hazard that can lead to deadly collisions, resulting in the loss of many lives as well as financial loss due to aircraft damage. This safety hazard can be mitigated with the implementation of a robust wildlife hazard management system. Airports can particularly benefit from investing in digital solutions that provide airports with real-time tools to aid in effective mitigation.

While some airports have a digital solution in place, most airports rely heavily on a manual process or a disparate combination of manual, Excel, and internal software documentation to capture various aspects of wildlife management. Digital wildlife hazard management solutions allow airports to automate and streamline the process from end to end, from recording the wildlife sighting to denoting the actions taken, submitting strike reports to the FAA, and analyzing trends and harassment techniques.

A digital wildlife hazard management system is crucial for detailed reporting and real-time analyses. With such systems in place, airports can attach an image of the wildlife sighted to the report. This feature is especially useful as a reference to aid in the identification of unknown species. Some systems also have a map feature that enables airports to easily view the concentration of wildlife sightings as well as the breakdown of sightings by species. Wildlife hazard management systems have the capability to integrate with other systems for seamless data sharing. For example, any strike reports created in the system are automatically sent to the FAA’s Wildlife Strike Database. Any changes made to the strike report will be reflected in the system as well as the FAA Wildlife Strike database. Wildlife hazard management systems can also be integrated with internal systems, such as Part 139, allowing the ability to create a report in the event that wildlife is sighted during an airfield inspection. Digital wildlife hazard management systems allow airports to capture all wildlife data in one holistic solution.

The utilization of digital solutions to monitor and assess wildlife activity can transform wildlife management at airports. Digital solutions deliver innovative, empowering, and intuitive tools for effective mitigation.  Airports can leverage technology to establish a streamlined and comprehensive wildlife hazard management system.

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Airport Management Software Helps Airports Adapt to COVID-19

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The COVID-19 pandemic has profoundly impacted the vast majority of industries worldwide, with the aviation sector suffering one of the biggest blows. Mandatory quarantine and social distancing measures have greatly disrupted air travel as some airports report a 95% reduction in passenger traffic. In addition, airports are having to limit the number of onsite personnel, adding further complications in managing day-to-day operations. To help sustain operations, airports have found the use of Airport Management Software (AMS) to be critical during this global outbreak. With AMS solutions, airports have been able to maximize their limited personnel and resources as well as provide a tool to allow for remote collaboration on airport business.

To maintain efficient operations, airports are utilizing AMS solutions to manage property, safety, maintenance, airside operations and other critical processes. As some airport personnel continue to work remotely, AMS solutions provide the capability to easily retrieve and/or submit documents/forms from anywhere using a mobile phone, laptop, tablet or any other internet-enabled device. This has been crucial in maintaining efficient operations as airport personnel easily access and submit airport data while they work remotely. Furthermore, airports are maintaining effective communication as they are able to automatically share pertinent data through automated alerting and real-time analytics dashboards. An additional area where AMS solutions have helped during this crisis is in optimizing utilization of an airport’s aircraft parking stands. Research shows that 62% of passenger jets worldwide have been grounded, leaving airports with complex aircraft parking challenges. Utilizing AMS, airports have been able to quickly and efficiently optimize use of their aircraft parking spaces. These solutions have provided the capability of enhancing the visibility of aircraft parking spots as well as help utilize airport facilities to the fullest.

With the various benefits that AMS solutions provide, airports have been able to sustain their operations with their limited resources and personnel. Although the global pandemic has greatly disrupted the day-to-day operations of airports worldwide, airports have luckily been able to get through this difficult time through leveraging AMS.

 

Sources –  https://aci.aero/news/2020/04/01/economic-analysis-shows-covid-19-is-an-existential-threat-to-airport-business/

https://www.internationalairportreview.com/article/114585/aviation-industry-covid-19-pandemic/

https://www.bloomberg.com/news/features/2020-04-16/coronavirus-travel-what-happens-to-planes-grounded-by-covid-19

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ProDIGIQ's Operations Management System (SANTORINI)

Digital Solutions – A Gateway to Long-Term Environmental Sustainability for Airports

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One of the biggest challenges that airports currently face is long-term environmental sustainability. According to a recent study, airports are one of the major contributors to the world’s global carbon emissions. Considering that air traffic is expected to nearly double by the Year 2037, airports will continue to be one of the world’s major contributors to carbon emissions, unless proper sustainability initiatives are taken.

Investing in technology, such as digital solutions can be a great first step in making an airport more sustainable. An airport’s operations, safety management and training processes have traditionally been very paper-intensive. Considering the amount of required inspections, operations reports, daily logs, training records, safety reports and investigation findings that are documented on paper, it is easy to see how the digitization and automation of these processes can help airports significantly decrease their carbon footprint. Thus, making themselves more sustainable.

In addition, some airports heavily rely on the use of paper to document important information for their leases. Airports typically need to document and monitor lease terms, lessee information, plots, insurance requirements, security deposits, rent, etc. Utilizing digital solutions to electronically document this information can increase an airport’s sustainability.

More than reducing paper usage, the use of a Resource Management System can also greatly decrease an airport’s carbon footprint. Resource management systems offer airports various benefits such as optimized gate utilization, increased efficiency and maximization of current infrastructure. More importantly, it can reduce an airport’s carbon footprint by reducing jet fuel usage. By fully optimizing the gate assignment process, airports will limit the amount of time aircraft spend taxiing on the runway. One study suggests that 18 tons of CO2 are released into the atmosphere during taxiing operations alone. Lastly, one additional benefit of optimized gate utilization is increased customer satisfaction by reducing time spent on the tarmac.

In conclusion, investing in digital solutions can greatly align with an airport’s sustainability goals by decreasing CO2 emissions and eliminating the need for paper usage. Certain government agencies are also willing to offer funding for certain projects that assist with long-term environmental sustainability efforts.

 

 

Sources – https://www.bbc.com/news/science-environment-49349566

https://www.greenaironline.com/news.php?viewStory=2342

https://www.iata.org/en/pressroom/pr/2018-10-24-02/

Airside and Safety Automation: Planning for Sustainability

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Through the Airport Carbon Accreditation program, 133 European Airports have taken on the challenge to reduce their airport’s carbon footprint.  The program has set ambitious goals and is currently working towards 67 of its member airports to reach carbon neutrality by 2030. While a portion of European Airports have met their goals, the majority of program members will need to find innovative and cost-effective solutions to help them meet their objectives.

In today’s day and age, the new world of technology provides a plethora of innovative solutions which enable airports to meet mission-critical objectives. Increased productivity, streamlining business processes, reducing costs, enhanced communications, increased operational insights are all major benefits of technology, but a major benefit that is sometimes overlooked is increased sustainability.

European airports looking to improve their airport’s sustainability efforts can begin by further enhancing their most critical operations by utilizing software. Software is an ideal solution to improving sustainability in that it is a solution that pays for itself.  European airports that have tight budgets can invest in software knowing that by eliminating process deficiencies and increasing productivity, the cost savings will ensure a complete ROI. Critical areas which can greatly impact airport sustainability when automated include airside operations, safety management, and resource management. In addition to increasing sustainability, automating these processes can also increase airport safety and enhance operational efficiencies.

Documentation and tracking of information relating to airside operations has traditionally been very paper intensive. Automation of these processes can reduce an airport’s carbon footprint by drastically reducing paper usage. Research shows that airports can reduce paper printing and consumption by up to 50 percent by automating the majority of airside operations processes alone. This helps airports achieve quantifiable and measurable success in becoming eco-friendly.

Safety management operations are also very paper intensive. From safety reports to submission of investigative findings, tracking of safety data can consume a tremendous amount of paper.  In providing a digital platform to submit and archive this information, it will help to further reduce paper usage at airports.

The use of resource management software is also an excellent way to reduce carbon emissions. Resource management software allows airports to optimize their gate and resource assignments to maximize the use of the airport’s current infrastructure. By optimizing these processes, the system would decrease time aircraft spend taxiing to a gate, thus reducing jet fuel usage. According to a recent study, it is estimated that around 18 million tons of CO2 are emitted annually during aircraft taxiing operations and, for Heathrow Airport, aircraft taxiing contributes to 30% of the airport’s total CO2 emissions. In addition to improving sustainability, resource management software can also help to improve other critical airport priorities including customer satisfaction, due to decreased aircraft congestion, and reduction of labor costs.

In conclusion, implementation of airside operations, safety management, and resource management software is an innovative way to help make airports “green”. Software implementation in these areas provides a multidimensional solution that provides various benefits which can help European Airports meet their sustainability goals.

 

Works Cited

Surgenor, Christopher. “Early promise of green aircraft taxiing solutions has yet to materialize although progress on regulatory approvals.” Green Air, Green Air Communications, February 24, 2017

https://www.greenaironline.com/news.php?viewStory=2342

 

Koumelis, Theodore. “Europe’s airport industry commits to set new vision of sustainability.” Travel Daily News, Travel Daily News, June 20, 2018

https://www.traveldailynews.com/post/europes-airport-industry-commits-to-set-new-vision-of-sustainability

 

 

 

GIS Now And Into The Future

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Geographic Information Systems (GIS) capture, store, manipulate, analyze, manage, and present spatial or geographic data. This evolving technology has been adapting into the airport space since the FAA launched the Airports GIS program in 2009 for the gathering and storage of airport data. This put the spotlight on GIS as an available data tracking platform to improve how airports currently store and manage various data sets for a range of reasons.

GIS has many benefits with present technology and will continue to become even more valuable with future advancements. Investing in GIS is critical to optimizing an airport’s operational processes and in doing so now will not only improve current procedures but also set an airport up for success in the future.

GIS allows airports to improve a range of processes including asset tracking, lease management, maintenance management, and everyday operations. GIS provides a unique way for airports to map/visualize any important assets as well as visualize airport properties.

GIS is extremely helpful for airports due to the “drill down” capabilities. Not only are you able to map and visualize assets and properties using GIS, but the added benefit is associating helpful data which provides insights into the particular property/asset. With a single click, one could pull up information such as:

  • Lease records regarding a specific plot.
  • Manuals and maintenance records associated with a particular asset.
  • Current inventory of specific parts associated with an asset.

Currently, GIS is an incredibly useful tool for an airport’s operations and, with future improvements, will be even more critical to further enhancing an airport’s operational efficiencies. Aniruddha Banerjee, Ph.D., an expert in GIS technology, explains that advances in predictive digital mapping will help to provide more in-depth operational insights than is currently possible. This technology could potentially analyze GIS data to identify and notify airport stakeholders of problem areas/assets at airports. For example, if an asset needed to be continuously replaced, in a non-random fashion, GIS would be able to identify that there may be underlying issues that are causing this issue and then notify airport personnel of the problem.

Another prospective innovation of GIS is its simulation/modeling capabilities, otherwise known as Simulation GIS.  Advances in Simulation GIS will allow for more accurate modeling of various airport specific scenarios. One relevant example would be the modeling of air or ground transport systems. With the potential for mass drone usage at airports, airports will have to prepare for new safety concerns regarding organizing operations for not only manned but unmanned aircraft. Specific safety scenarios through Simulation GIS will be more easily predicted and will assist with informed decision making and strategizing.

When put into action, Simulation GIS can assist an airport in implementing new and improved policies/procedures, an example being the decision on what wind speed should trigger a no-fly zone aided by simulating different wind speed scenarios with Simulation GIS. This technology can also be used for optimizing of ground transport to maximize resource usage, like finding the most efficient routes for taxiing aircraft to their gates.

Additionally, the advancement of light detection and ranging technology, also known as LIDAR, will help provide an accurate 3D measurement of factors that can become part of GIS maps.  Many studies, like the LIDAR Deployment for Airport Obstruction Survey from 2010, have shown that using LIDAR technology to map trees allows an airport to accurately plan maintenance, such as tree trimming, using growth simulations. Adding trees, fences, new construction, etc. can allow an airport to have a precise look at every part of the airports’ dynamics.

Utilization of GIS maps supports airport procedures in a variety of ways. Being able to associate data to specific layers and future improvements in predictive mapping and simulation add a resource that increases not only an airports efficiency but also reduces cost. Utilizing GIS is not just critical for present-day functions, but it is essential for future productivity.

The New Snow and Ice Control Plan (SICP)

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Snow and ice are two of the most serious contaminants for airport runways. Airports have strict processes for how they assess the safety of their runways when these contaminants are present. However, their carefully planned processes will need to change soon.

In the latest news from the FAA, all Part 139 certified airports must revise their Snow and Ice Control Plan (SICP). This change in FAA policy affects airports that conduct snow operations. The deadline for the SICP revisions is here. The FAA requested all submissions by September 1, 2016. The revised SICPs are expected to be put in effect October 1, 2016.

AC 150/5200-30D, released by the FAA on July 29, 2016, explains the proposed changes that airport operators will have to make in their SICP. Luckily for airports, many of the proposed changes are not major. The biggest change is the addition of RCAM.

RCAM, or Runway Condition Assessment Matrix, is, “the method by which an airport operator reports a runway surface assessment when contaminants are present.” RCAM is designed to be a simpler method of reporting runway conditions. For example, the assessment of the slipperiness of the runway are no longer reported in Mu measurements. In RCAM, the observed contaminants on the runway are assigned numeric values, called Runway Condition Codes (RwyCC). These codes are then reported to pilots.

With the winter snowfall coming up soon and the deadline for new SICP implementation having passed, Part 139 certified airports will have to adjust quickly to meet the new guidelines.

One option available to airports for the management of these new requirements is the use of software. With software, the data reported by airport operators will be intuitively managed to meet the new requirements. Additionally, software can include the capability to analyze and provide insight into past trends. Furthermore, airports can keep their carefully planned processes of assessment. Software can intelligently replicate each airport’s specific process. Airports can find software that operates in this manner beneficial, especially in light of these new regulatory requirements.

To view AC 150/5200-30D:

http://www.faa.gov/documentLibrary/media/Advisory_Circular/150-5200-30D.pdf