Quick quantitative estimations

Some months ago I wrote a blog post on "Testing the numbers, on the fly". Well, yesterday I was flying - literally - out of Frankfurt and saw a sign that said, "New A Plus Pier in Terminal 1 under construction". It went on to say that the pier could handle 6 million passengers a year and was 180,000 square meters in floor area.

It's interesting to know this ratio of passengers to floor area, I thought.

Then I thought, hmm... does this ratio make financial sense? So I began to guesstimate.

Let's say that real estate here is about the cost of real estate where I live. At bulk discounted rates, it might be 100 dollars per square foot, plus minus a bit. Or 1000 dollars per square meter approximately.

So the new pier is 180 million dollars in investment. 30 dollars per passenger.

For a payback period of 5 years, you need 6 dollars per passenger per year - probably taken out of retail concessions in the West. But Indian airport retail doesn't do well yet.

Well, 6 dollars is equal to Rs. 300. Then it hit me - the airport tax at Delhi airport used to be Rs. 300. And I smiled.

Of course the calculations won't be exact. But it is always fun to get close.