PRM Service charges – are you looking at the right figures?

Having listened to a number of managers involved in PRM Service provision, almost without exception they can quote the “Cost per Departing Passenger” both for their airport and similar ones they benchmark themselves against (whilst complaining that it’s not enough to provide a good service).

Most airline managers can quote the same figures but their complaint will be that their costs are too high and they will say they get a better service at a lower cost at other locations.

Pre-notification rates are often cited a major reason for cost variations so let’s have a look – in the table below we have ranked 6 UK airports based on cost per departing passenger

Airport 1 2 3 4 5 6
Cost per departing PAX £ 0.44 0.37 0.35 0.31 0.305 0.23
Pre notification rate % 85% 75% 93% 79% 77% 83%

So, how much would charges reduce with 100% accurate pre-notification? Answers on a postcard please…….

Clearly, at these airports, with these levels of pre-notification, there’s no obvious correlation with the charge per departing passenger so perhaps we need to look elsewhere. If the charge per departing passenger results from the equation;

“Cost per PRM x number of PRM’s / number of departing passengers“

and we assume that for any individual airport the number of PRM’s and number of departing passengers are outside the control of the Airport or the PRM Service, perhaps the focus should be on what drives the Cost per PRM.

Assuming that number of PRM’s and number of departing passengers are outside the control of the PRM Service, perhaps the focus should be on what drives the Cost per PRM.

Our analysis shows;
– Airports 4 and 5 have similar Cost per Departing Passenger, but Airport 4 Cost per PRM is 60% higher
– Airport 1 Cost per Departing Passenger is 91% higher than Airport 6, yet it’s Cost per PRM is only 9% higher

What drives such discrepancies and where would your airport be in this table? Understanding what really drives your Cost per PRM is crucial if charges are to be kept in check whilst maintaining and improving the service quality and performance.

With PRM numbers set to double by 2020, a knowledge of these cost drivers will enable you to confidently predict the impact on your operations and the cost to the airlines.

If you’d like more information or to explore the real cost drivers at your airport, please get in touch – we’d love to hear your thoughts.