Developing an ERM maturity index for European airports

Abstract

Airports can be considered as prime candidates for ERM implementation and an ERM maturity assessment would support the development of an ERM process which will help these organisations improve their capabilities to anticipate, manage and possibly turn risks into opportunities. The purpose of this study is to investigate and identify the best practises that represent ERM maturity in the business context of a European airport and to develop an ERM Maturity Index as a resource to assess and evaluate their ERM implementation. The researcher tried to contribute to this field by conducting original empirical research, prompted by existing literature. Structured interviews with ten airport risk management practitioners and consultants were conducted. Data generated from these interviews attested to twenty-two applicable ERM best practices which were divided into eight categories. From the interviews it has also been noted that senior management commitment, an optimum communication process, and well-defined ERM roles and responsibilities are the three most crucial factors for airports to achieve a high degree of ERM maturity. Moreover the study’s hypothesis, crucially that the best practices representing ERM maturity at organisations operating in the financial and insurance industries are equally applicable for European airports, was contradicted following the exclusion of two not significantly applicable best practices. Following the development of the proposed maturity index, a case study was created and conducted in order to illustrate the use and interpretation of the resulting information. The developed maturity index is a resource that can also be utilised by researchers in their empirical research and could therefore contribute to fill the gaps in the existing academic knowledge regarding the implementation of ERM in the airport industry.