Posted: August 7th, 2013
Denver airport project a communication plan and questions
- It is a sound decision to build a new airport at Denver because of the expected passenger traffic in the year 2000. It is also necessary to transport people and goods to and from Denver since it is 500 miles from other major cities.
- Strengths- it would earn Denver more revenue from increased flights. Weaknesses- before the decision to build a new airport, Denver’s Stapleton Airport caused massive losses due to bad weather. With the new airport, more losses would be encountered due to bad weather. Opportunities- this would be a great opportunity to expand business investments and generate more revenue. Threats- according to the airport design, the runways were placed where they would be intercepted by high wind shears.
- The stakeholders are the passengers and their interests are convenience and efficiency at the airport. Denver’s regional council of governments is also a stakeholder and they wanted to improve the airport services to handle more passengers and cargo.
- Not all airlines supported of the decision to build a new airport. Some airlines such as United and Continental objected to the idea.
- United was against the construction of the Front Range airport out of fear of the added cost burden.
- The baggage handling system was significant because it meant that baggage would be transferred between different gates in less than ten minutes.
- The DIA is a good strategic fit for Continental because the airline was struggling to survive in the industry and the DIA would help boost its ratings.
- The single greatest risk in the decision to build DIA is the bad weather during winter. Bad weather would slow construction, which would in turn affect flight plans, increase workers overtime pays, et cetera.
- United can issue tax-free municipal bonds by lowering their ratings on bonds.
- The rating agencies have a significant impact in the financing of the airport because had they both lowered their ratings, the future of DIA might have been compromised.
- Standard & Poor’s lowered the rating on DIA bonds to BBB while Moody’s did not lower their rating on the $1 billion of the DIA bonds. Moody’s believed in the efforts of DIA to service its debts.
- United bonds were issued at an interest rate of 6.875 percent. This was an appropriate coupon for the bonds because of the recession.
- If the DIA opens up with a debt of $3 billion, the revenue stream would not be sufficient to pay interest rates each year because Continental pulls out and this proves costly to the DIA.
- If the coverage falls below 100 percent, the available options to DIA include raising their bond ratings.
- If the debt coverage were this good, the ratings on the bonds would be BB depending on the rating agencies involved with the DIA.
- According to exhibit V, the cost per enplaned passenger cannot be lowered because between 1992 and 1993 the price shows remarkable increase.
- There might be additional revenue space available in the airport project especially after expanding the baggage handling system.
- The project management team coordinates schedules, cost control, and manages information and contracts. The two companies involved were picked because of their area of expertise in architecture, engineering, airport planning and design construct.
- The effectiveness of the project management team begun to be questioned when the PMT did not sort out the disparity between the city’s objectives and the maintenance orientation of the operators. In addition, the cost and issues of the first design was not properly looked into by the PMT.
- The statement of work provided by the city to the PMT was vague for the design phase because the city was concerned that the design did not express a $2 billion project. In addition, the PMT did not probe further into the statement.
- The capabilities of the PMT do not reflect in the design phase because the objectives of the project were not being met especially since the estimates kept changing. This raises suspicions on the competence of the PMT.
- The PMT should not be qualified to perform risk analyses for the project because their proficiency is questionable given by the doubts and suspicions of their operations and expertise.
- The architects were coordinating the changes at the construction site because there were problems with the roofing design in place and the second architectural firm took over from the design to construction development. Moreover, the cost savings from the new design required extensive consultative expertise of the architects.
- PMT should have been replaced because their effectiveness was being questioned. They should have constituted another project management team to look into the issues of the project and apply their expertise on the matters at hand.
- Scope changes reflect upon the ineffectiveness of a project management team because the PMT should investigate all the happenings during the duration of the project and come up with suitable solutions. The project management team should be involved in the project from the design phase to the construction phase and ensure that everything goes according to plan.
- The United Airlines decided to act as the project manager for the baggage handling system on concourse B because it had more considerable changes such as broadening concourse B by 8 feet, adding a second level of service cores and redesigning the roof.