Analysis of real options involved in airport development

Abstract

The aim of the project is to gain an understanding of the various real options that come into play during airport construction, to develop a few rudimentary models to appraise the value of these real options and to apply the case of the Bangalore International Airport to the models. This way, it is expected that a few issues regarding the construction of the airport, such as whether the costs were appropriate, whether the timing was right and what future path of expansion is optimal, can be determined. Ultimately the goal is to develop a decision making framework that would allow us to take all these real options into account before coming up with an optimal solution for airport expansion / new airport construction.