Aviation Investment uniquely addresses investment appraisal methods across the key industries that make up the aviation sector, including the airports, air traffic management, airline and aircraft manufacturing – or aeronautic – industries. This practice-oriented book presents methods through realistic case studies. It covers both economic appraisal, or cost-benefit analysis, measuring the value of projects to society, and financial appraisal, valuing projects as cash generators.
This substantially expanded second edition covers in greater detail the treatment of environmental emissions, paying particular attention to climate change. It addresses the treatment of Market-Based Mechanisms (MBMs), including cap and trade systems like ETS and offset systems like CORSIA, and compares them to environmental taxes. It also addresses the adjustments needed to measure the foreign exchange generating value of projects, relevant in the presence of trade barriers. The new edition includes two new project types. One is airport relocations, perhaps the most complex type of airport projects, where the economic case is often more nuanced than may be apparent. The second is the re-introduction of supersonic travel.
Aviation Investment offers all aviation sub-sectors a single-source reference, bringing together the theoretical background of the economic appraisal literature and aviation investment in practice. It is written in a style that is accessible to non-academic professionals, using formulae only where strictly necessary to enable practical applications, and benefits from the substantial practical experience of the author.
Table of Contents
Chapter 1. Introduction
Chapter 2. Identifying Benefits
Chapter 3. The Basic Framework
Chapter 4. Airports
Chapter 5. Air Traffic Management
Chapter 6. Airlines
Chapter 7. Aeronautics
Chapter 8. Concluding Remarks
Doramas Jorge-Calderón is an economist at the European Investment Bank, the EU project financing bank, based in Luxembourg. He appraises investment projects mostly in the aviation sector in Europe and in countries throughout the world with which the EU has development cooperation agreements. He was previously with economic consultants NERA in London working on regulatory and competition projects. He holds a PhD in transport economics from the University of Leeds and has written a number of papers in academic journals on air transport economics and investment appraisal.
‘There are many manuals and cookbooks for the evaluation of investments but surprisingly not one focusing on Aviation. Doramas Jorge-Calderón has made an impressive attempt to fill this gap. The book will be the natural reference guide for those evaluating aviation investments. In addition, the book will be useful for those teaching courses in applied welfare economics at universities and business schools.’ Per-Olov Johansson, Stockholm School of Economics, Sweden
‘This is an excellent book on aviation investment. The book is soundly and clearly written by an author with a thorough theoretical background and deep knowledge of the aviation industry. I have learned and enjoyed reading this book and highly recommend it to anyone interested in the aviation industry or in investment evaluation.’ Ginés de Rus, University of Las Palmas de Gran Canaria and University Carlos III de Madrid, Spain
'This is a new edition of the author’s "Aviation Investment", which is a must-have reference on airport and airline investment evaluation. Of particular value are the new sections on the handling of aviation’s effects on greenhouse gas emissions. These explain in detail how policies such as taxes and emissions trading schemes affect the evaluation process. These make an already comprehensive book even more valuable.' Peter Forsyth, Monash University
'Investment in aviation has been problematic, leading to many failures like white elephant airports in Germany and Spain. These investments were rationalized by the thousands of jobs they were supposed to create. These have never been realized and instead we have aviation infrastructure not fit for a decarbonized future. Jorge-Calderon’s book offers a robust method to get these investment decisions right. It should be read not only by academics, but regulators, and aviation managers. The book is excellently written, and the author is a master in this field.' Prof. Dr. Hans-Martin Niemeier, Bremen University of Applied Sciences