February 10, 2023
By Karl Schulz

Since most aviation projects are funded by either passenger plane tickets, airport tenants, or the airline companies themselves, the amount of money available for new projects can be impacted by a variety of factors. For example, in today’s current post-pandemic climate, we’ve seen an uptick in travel, which is resulting in an increase in the available construction budgets for many aviation projects.

Costs can also be highly variable due to the scale of aviation projects. The sheer quantities and diverse mix of materials needed include massive amounts of steel and concrete as well as specialized items such as runway lights. A potential economic downturn could have some benefits on the cost side.

Clients need to observe these trends in order to have a clearer picture of funding and cost realities for their projects. Planning for the additional variability in funding and cost for aviation projects is important too. For that reason, pressure testing budgets and building in additional contingencies to account for how quickly the market can change is critical.

Airport terminal with several airplanes at the Port of Portland where Cumming Group provided aviation project management services
As a part of their $2 billion PDXNext terminal redevelopment program, the Port of Portland continues to work on terminal upgrades from now until 2025 to make the Portland International Airport more open, flexible and energy efficient. Clients like the Port of Portland are often looking for aviation experts with cross-sector expertise in sustainable materials in an effort to reduce their carbon footprint. Photo credit: Port of Portland.

Master Planning to Stay Ahead of the Curve

In order to properly plan aviation projects and flex to afford the various deliverables, it’s especially important to have a robust master plan built out into components, so you are prepared to build in a cost-effective manner. Aviation projects require intense planning due to the complexities involved.

The challenge is always customer satisfaction, which in aviation projects, is usually tied to staying operational to meet demand and avoid revenue losses. Airport closures are both costly and cumbersome, so careful planning is necessary to avoid or mitigate any operational disruptions.

Knowing what to expect and planning in advance is essential when it comes to aviation. For example, to clear the use of cranes on site, teams need to submit for clearance at least six months in advance. Failure to do so could result in costly delays. Pedestrian safety is also critical – travelers need to be able to make use of the facilities while being completely isolated from the construction site. For that reason alone, specially trained construction personnel must be onsite to manage traffic.

Public safety is another major consideration for construction in the aviation sector. You must staff appropriately during projects and ensure internal security controls when hiring, due to the sensitive nature of the airport space. During Cumming’s work with the Port of Portland, for example, the Port ran security and managed the screening process for workers. Failure to account for the many nuances that are specific to aviation would almost certainly cost both time and money.

Supply Chain and Sustainability Challenges

Sustainability is another key area of focus when planning aviation construction projects, as aviation is one of the biggest carbon-burning industries and is under intense pressure to find ways to be more environmentally friendly. Clients like the Port of Portland are looking to make sure they are forward-thinking when it comes to sustainability and are often looking for aviation experts with cross-sector expertise in sustainable materials and practices.

It’s important to include both the design team and contractor in sustainability planning in order to ensure both the availability and suitability of sustainable materials for the project at hand. High-traffic zones in the aviation space require unusually durable materials, for example.

The required materials also need to be identified and sourced early, since supply chains are already strained, and it may take longer to fulfill orders. In some cases, suitable alternatives must be explored when first-choice materials are not available due to supply chain issues. Our team over at the Port of Portland, for example, had to find an alternative material when thermal plastic striping for runways was not available.

Interior shot of the Port of Portland with several travelers walk where Cumming Group provided aviation project management services
Photo credit: Port of Portland.

Creative Solutions for Funding Flexibility

Being flexible is essential in budgeting for aviation projects. Here are a few effective ways to ensure your project stays on track:

  • Detailed cash management: Organizations need to have sophisticated systems to track project budgets when financing large aviation projects. Owners need accurate projections to make sure cash flows are on track.

  • 3rd-party procurement + purchasing advice: Independent forecasting and risk tracking/analysis can help inform purchasing decisions and determine when to release contingencies.

  • Labor considerations: In an already tight labor market, the additional security requirements can deter or exclude many workers. The cost impact of this reality needs to be considered, and creative solutions like recruitment incentives should be considered.

  • Material pricing: It is important to consider not only the up-front cost of materials used in aviation construction but also the maintenance costs over time.

Planning for the Unexpected

Sometimes things don’t go according to the planned budget. Planning ahead for the unexpected requires care and expertise – contingency funds can help to mitigate the cost of unexpected issues.

The right team of experts can also help go/no-go cost containment items. Proper cost-benefit and risk analyses will help consider the overall cost (both long- and short-term), quality, and schedule impacts. Process matters, too: a proper approvals process can triage smaller impact items and establish which stakeholders must sign off at various financial thresholds. Of course, proper auditing practices must be upheld throughout the process.

Expertise Matters

Construction in the aviation space is complex, and due to the scale of these projects, seemingly minor details can have huge time and cost implications. Planning ahead and working with proven experts can help ensure projects get the most bang for their buck, and avoid unnecessary surprises or at least mitigate the impact of the unexpected.

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