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Risky business: Using enterprise risk management at an airport

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Operating an airport is fraught with risks. Identifying, assessing and managing these risks should therefore be an important part of strategic planning. This paper outlines the key elements of enterprise risk management (ERM) and how it can be used by an airport. It describes both well-known, and less well known, exposures experienced by a major North American aviation facility and ranks these based on their likelihood and potential impact. The risks identified requiring immediate attention included problems with commercial airlines, terminal tenants, property taxes, government intervention, viral epidemics, inter-modal transportation and vehicle parking. The majority of the risks noted were financial or operating in nature. The most commonly identified concern related to major capital projects, while the activities of the airlines were also frequently mentioned. Of the 220 risks noted, 74 were considered to be above the risk tolerance threshold. The information in this paper can be used by airport operators to help identify, assess and mitigate the potentially negative effects of threats in their internal and external environment.

Keywords: controls; enterprise risk management (ERM); risk management; strategy

Document Type: Research Article

Publication date: March 1, 2017

More about this publication?
  • Journal of Airport Management is the essential professional journal publishing in-depth, peer-reviewed articles and real world case studies on airport management, finance, development, ground-handling, airport-airline relations and regulation - with no advertising or sales pitches.

    Guided by an expert Editorial Board and published in association with Airports Council International, each quarterly 100-page issue publishes original, authoritative articles and case studies written by and for airport managers, ground-handling companies, airlines and regulators, as well as their advisers, service providers, researchers and academics. Each issue provides detailed analysis, new thinking, 'lessons learned' and 'how to' guides from fellow professionals around the world that can be applied in your organisation, plus the latest research in the field.
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