Sensitivity Analysis 3

The social competitiveness of the Lleida - Alguaire Airport has been analysed taking into account the scenario considered in the main cost-benefit analysis realized in this project, due to the fact that it is the most realistic: 70% of the English passengers that land in the Lleida - Alguaire Airport are keen on going to Andorra, whereas the other 30% of passengers remain in the airport where they land.

Therefore, the main objective of the sensitivity analysis 3 is to compute how many passengers the Lleida - Alguaire Airport ought to have so as to be profitable when compared with the other analysed airports. In fact, regarding each specific scenario, the number of passengers has been increased so as to achieve an Internal Rate of Return (IRR) equal to zero or equal to the applied discount rate (r=3’5%).

Furthermore, in relation to the necessary amount of passengers, demand has been obtain as follows:

 On the one hand, the real amount of passengers that have landed in the Lleida - Alguaire Airport from 2010 until 2016 has been considered.

 On the other hand, in relation to the period (2017 - 2040), the annual amount of passengers has been set according to the following lineal formula and depending on the amount of passengers in the last analysed year (2040):

𝑉_{𝐼(2016) ,} 𝑉𝐼+1(2017) ,………….. 𝑉_𝐹(2040)

𝑟 = ^𝑉_𝑉^𝐹(20040)

𝐼(2016) 1

𝑛 ; n = (2040 - 2016)

𝑉𝐼+1= 𝑉𝐼· 𝑟

Note that the entire calculations related to the sensitivity analysis 3 are shown in Annex 5. In fact, in relation to Annex 5 and regarding the item “other cash flow”, it has been considered an

investment of (-90.000.000€) at the first year, a constant maintenance cost of (-78.700€) until the year 2039 and, eventually, a residual value of (+36.000.000€) at the last year.

Therefore, the following results have been obtained so as to ensure that the Lleida - Alguaire Airport is profitable when compared with each of the analysed airports:

CBA Lleida - Girona:

In connection with the calculations carried out, when analysing the CBA Lleida - Girona, it can be shown that if the number of annual passengers is increased, the social surcharge produced when operating from Lleida increases. In relation to the IRR criteria, if the number of annual passengers is increased, the IRR becomes more negative, thus it is not possible to achieve neither IRR = 0% nor IRR > 0%.

Consequently, it is not possible to make the Lleida - Alguaire Airport profitable if it is compared with Girona’s Airport.

CBA Lleida - Reus:

In relation to the Lleida - Alguaire Airport, it has been computed that the following annual amount of passengers would be necessary so as to achieve a social Internal Rate of Return equal to 3’5% and equal to 0%, respectively (Annex 5):

 SOCIAL IRR = 3’5% ; ANNUAL PASSENGERS (year 2040)= 1.450.000

Figure 18: CBA Lleida - Reus, Demand evolution IRR=3’5% (Own elaboration)

 SOCIAL IRR = 0% ; ANNUAL PASSENGERS (year 2040) = 380.000

Figure 19: CBA Lleida - Reus, Demand evolution IRR=0% (Own elaboration)

Nevertheless, it has to be considered that Andorra would not be able to manage such an increase in relation to its demand, which would increase a 70% of the computed amount of passengers (1.015.000 passengers and 266.000 passengers, respectively).

CBA Lleida - Barcelona:

In relation to the Lleida - Alguaire Airport, it has been computed that the following annual amount of passengers would be necessary so as to achieve a social Internal Rate of Return equal to 3’5% and equal to 0%, respectively (Annex 5):

 SOCIAL IRR = 4% ; ANNUAL PASSENGERS (year 2040) = 3.153.100

Figure 20: CBA Lleida - Barcelona, Demand evolution IRR=4% (Own elaboration)

 SOCIAL IRR = 0% ; ANNUAL PASSENGERS (year 2040) = 900.000

Figure 21: CBA Lleida - Barcelona, Demand evolution IRR=0% (Own elaboration)

Nonetheless, it has to be considered that Andorra would not be able to manage such an increase in relation to its demand, which would increase a 70% of the computed amount of passengers (2.207.170 passengers and 630.000 passengers, respectively).

CBA Lleida - Toulouse:

In connection with the calculations carried out, when analysing the CBA Lleida - Toulouse, it can be stated that if the number of annual passengers is increased, the social surcharge produced when operating from Lleida increases. In relation to the IRR criteria, if the number of annual passengers is increased, the IRR becomes more negative, thus it is not possible to achieve neither IRR = 0% nor IRR > 0%.

Consequently, it is not possible to make the Lleida - Alguaire Airport profitable if it is compared with the Airport of Toulouse.

Capacity of the Lleida - Alguaire Airport:

It is very important to analyse the capacity of the airport so as to know whether the infrastructure is able to manage the amount of passengers needed to ensure its profitability.

Hence, the capacity of the Lleida - Alguaire Airport is determined by its two boarding gates, which make the infrastructure able to board two aircrafts A-321 of 180 passengers each, per hour; therefore, providing that the airport was opened 24 hours per day, the Lleida - Alguaire Airport would have a maximum capacity of 48 flights A-321 per day. Furthermore, it has to be considered that the analysed charter aircrafts only operate at the airport at weekends and during the skiing season; hence, if it is assumed that the analysed charter aircrafts operate each weekend from September until March (both included), there are 28 available weekends, thus it has to be considered that the necessary passengers get to the airport along 28 days, due to the fact that charter flights only bring tourists to the Lleida - Alguaire Airport on Friday and take them back to their house on Sunday. Therefore, the following numbers of flights per day are obtained: Table 26: Capacity of the Lleida - Alguaire Airport

(Own Elaboration)

Therefore, despite the capacity of Andorra, the Lleida - Alguaire Airport would not be able to attend any of the necessary amount of passengers to make the airport profitable when compared with the other analysed infrastructures due to the fact that the maximum capacity of the Lleida - Alguaire Airport is to attend 48 flights A-321 per day.

Consequently, in relation to the sensitivity analysis 3, it is not possible to make the Lleida - Alguaire Airport profitable despite the fact that it had the necessary amount of passengers due to the fact that, because of its design and maximum capacity, it is not able to attend the amount of passengers that would be required so as to make the airport profitable when compared with the airports of Reus and Barcelona.