Airport management has been keen to identify strong performers in the industry and adopt what are seen as best practices (Graham, 2008). Benchmarking is also being used for internal performance comparison. The benefit of benchmarking is that one airport's management team investigates other airports' best practices or that of their own former year's and tries to incorporate those ideas to improve their performance. This, according to Camp (1989), is likely to lead to efficiency and profitability. Benchmarking offers potential to improve the efficiency and effectiveness of an airport and hence serves as an important tool for the airport management for decision making (Graham, 2005). In contrast, Cox and Thompson (1998) highlight that benchmarking poses strategic risks and costly failure if the airport is not able to implement someone else's best practice effectively. Furthermore, there are difficulties in meaningful benchmarking as it must be carried out with airports of similar activities and operations. For instance, if a small regional airport like Hamilton is compared with Changi Airport of Singapore, it would be a biased representation. Despite these difficulties, benchmarking has the potential to identify new opportunities and is a proactive process that changes operation in a structured way to achieve best performance.
Knowledge of competitive strategies practised by some airports provides an insight for less efficiently operating airports. PFP is a technique that is commonly used to measure airport performance. This is a traditional and most commonly used method to compare airports. PFP analyses the productivity of inputs relative to outputs which in turn compares airports in terms of cost efficiency, revenue generation and profitability. PFP measures cost performance, productivity of capital employed, performance of commercial activities and overall profitability. Moreover, PFP may be used to calculate passenger per gate, passengers per terminal square metre, variable cost per passenger, variable cost per Work Load Unit (WLU), variable cost per aircraft movement and overall labor productivity.
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