Asia-Pacific Airports magazine – Issue 2, 2014
The official publication of ACI Asia-Pacific www.aci-asiapac.aero
Airport design: Blueprint for success
www.aci-apa.com The official publication of ACI Asia-Pacific
In the spotlight: Airport design
Issue 2, 2014
Airports: Incheon & Osaka’s gateways
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Special report: IT innovation Plus: Environment & Being social
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ASIA-PACIFIC AIRPORTS MAGAZINE
6 View from the top Regional director, Patti Chau, reflects on upward traffic trends, the importance of partnerships, environmental initiatives and much more.
8 News
10 ACI Asia-Pacific news 13 Traffic trends 14 Great expecations Peta Tomlinson discovers more about the growth and ambitious development plans of Incheon International Airport.
20 Banking on success Kansai International Airport’s Keiichi Ando talks to Geoffrey Tudor about the ambitious development plans for Osaka’s gateways.
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26 Balancing act Keith Hui provides his thoughts on designing customer-friendly terminals in the Asia-Pacific region.
30 Terminal velocity Joe Bates takes a closer look at a handful of game changing infrastructure development projects across the Asia-Pacific region.
36 Beautiful Baku Sarah McCay examines the design and functionality of the new terminal at Heydar Aliyev International Airport.
40 Winning feeling Asia-Pacific airports once again stood out in ACI’s annual Airport Service Quality (ASQ) customer satisfaction survey, occupying the top spots in all the global by size categories, writes Joe Bates.
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CONTENTS
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Asia-Pacific Airports
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CONTENTS 42 Korean wave
Jeff Amiri discusses travel trends and enhancing the passenger experience in Korea through IT innovation.
46 Lofty ambitions John Jarrell, head of airport IT at Amadeus, considers the history of common use systems at airports and the consequences of moving them to the ‘Cloud’.
50 Points of view Asia-Pacific Airports meets Vinoop Goel, IATA’s regional head for airport, passenger, cargo & security in the Asia-Pacific region.
52 The X factor
57 Enviro report
Asia-Pacific Airports finds out more about Hong Kong International Airport’s ‘green dining’ initiatives.
58 Chinese IT Trends Asia-Pacific Airports reports on the highlights of SITA’s special focus on China in its latest Airport IT Trends Survey.
60 World Business Partners 62 Being social Asia-Pacific Airports reviews the regional winners of the industry’s newest digital, mobile and social media awards programme.
AirAsia X CEO, Azran Osman-Rani, talks to Lucy Siebert about the airline’s pan-Asian multi-base strategy.
Asia-Pacific Airports (APA) www.aci-apa.com Editor Joe Bates +44 (0) 20 8831 7507 joe@aci-apa.com Reporter Justin Burns +44 (0) 20 8831 7508 justin@aci-apa.com
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Design, Layout & Production Andrew Montgomery andy@aci-apa.com
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Website & Online José Cuenca Published by Aviation Business Media Ltd 26-30 London Road, Twickenham, TW1 3RW, UK Managing Director Jonathan Lee
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ASIA-PACIFIC AIRPORTS MAGAZINE
VIEWPOINT
VIEW FROM THE TOP
Regional director, Patti Chau, reflects on upward traffic trends, the importance of partnerships, environmental initiatives and much more.
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CI’s Asia-Pacific and Middle East regions have had a good start to 2014, each recording a 10.7% rise in passenger traffic in January and respective increases of 4.2% and 8.4% in February. This follows on from a terrific 2013 for our airports, which, according to ACI World’s Preliminary Traffic Results, posted strong growth of 7.4% and 9.2% in Asia-Pacific and the Middle East, respectively. Total passenger traffic across the combined regions was close to 1.7 billion, amounting to more than 30% of the world’s total traffic. The positives continued with air cargo, which, despite the continued impact of the global economic slowdown, soared by 5.1% in the Middle East in 2013 and inched up by 1% in the Asia-Pacific region. Indeed, 30% of the region’s gateways recorded double-digit passenger growth in 2013 and our airports now account for nine of the world’s 20 busiest passenger airports compared to just two a decade ago. Total cargo handled in the region was close to 36.6 million tonnes, contributing to 42% of the world’s total. APA Issue 2, 2014
AIRPORT PARTNERSHIPS
I recently spoke at the Myanmar Civil Aviation Development Conference in Yangon and, on behalf of our president, Tan Sri Bashir, shared with the participants our views on airport partnerships. Airports are, of course, the gateways to destinations and to a certain extent their operational flexibility and development capacity will determine the positioning and growth potential of the destination. However, there is no need for an airport to work alone. Indeed, airports cannot work in isolation, and often establishing partnerships with trade and tourism agencies/organisations is key to attracting the interest of airlines and tour operators. It is certainly important to recognise the significance of airport marketing, as despite the uniqueness and attractiveness of each destination, there are only so many airline seats in the world. I treasure the opportunity to engage with our stakeholders at conferences like this where we can exchange our views on managing airports in this constantly changing business environment.
ASIA-PACIFIC AIRPORTS MAGAZINE
On a completely different note, I would like to congratulate Narita International Airport Corporation’s Kazunori Ishida for winning this year’s ACI Asia-Pacific Young Executive of the Year Award (read more on page 10). This is the fifth year that ACI Asia-Pacific has held the award, which honours and recognises young executives in our region who contribute innovative solutions to our aviation industry challenges. I thank all entrants in this year’s programme and applaud their hard work in preparing the submissions. My heartfelt gratitude also goes to our judges who took time out from their busy schedules and provided valuable insight and input into the programme. Without their support, the Young Executive Award would not have been possible.
ENVIRONMENT
I am delighted to reveal that the Airport Carbon Accreditation Programme continues to gain momentum in our region. In fact, two-and-a-half years after the ACI Europe initiated scheme was extended to our region, the number of Asia-Pacific accredited airports has risen to 15, and I expect more to be accredited later this year.
SAFETY
Progress continues to be made across the region with regards to the Airport Excellence (APEX) in Safety Programme. The programme is designed to help ACI members improve their levels of safety and compliance with ICAO Standards and Recommendations Practices courtesy of an on-site safety review that identifies safety gaps and draw an action/ implementation plan for the Host Airport to address these vulnerabilities. In March, we conducted a safety review for Abu Dhabi International Airport and another is planned in Saudi Arabia shortly. It is perhaps important to note that ACI assists the Host Airport throughout
the implementation phase by providing support, training and access to a global network of expertise.
AIRPORT CHARGES/ ECONOMIC REGULATION
The impact of economic regulation on airports is a subject that continues to be a hot topic across the globe, and it is something I touched on during my speech at the recent Airport Economics & Finance Conference in London. Our region covers a vast area, of course, and some markets are more liberalised than others, but as a whole, our airports are still quite highly regulated. As a general rule, ACI advocates a light-handed economic regulation model to ensure that airports are able to operate, as much as possible, as commercial entities in order to respond to market changes and opportunities. We believe that with the right intensity, regulation can generate innovation and customer service improvements, and aid infrastructure developments much needed at capacity-constrained airports. With increased competition and a relatively low rate of return on investment, the capital intensive airport business demands a balancing act of ensuring a reasonable profit for our investors and shareholders, while maintaining adequate capital for infrastructure development, and keeping charges at a fair and reasonable level.
WORLD IN MOTION
Lastly, as this issue is being published for the ACI Asia-Pacific/ACI World Annual Assembly in Seoul, I would like to take this opportunity to welcome you all to the vibrant capital of South Korea and thank our generous host, Incheon International Airport, for putting on what I know will be a spectacular event! I also hope you will enjoy reading this issue between all the various activities that we have lined up for you in Seoul! APA www.aci-apa.com
VIEWPOINT
YOUNG EXECUTIVE OF THE YEAR
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NEWS
MACTAN-CEBU UPGRADE The Philippines has awarded a $390 million deal to renovate, expand and operate Mactan-Cebu International Airport to India’s GMR Infrastructure and local partner, Megawide Construction, according to reports. GMR and Megawide submitted the best bid for the biggest infrastructure deal offered to investors under the government’s Public-Private Partnership (PPP), the Department of Transportation and Communications (DOTC) explains. The two firms have been selected to renovate the passenger terminal building, build a new terminal to service international flights and operate the airport, which is the nation’s second-biggest gateway. The group aims to build a terminal that can accommodate 25mppa, more than three times the government requirement, Oliver Tan, chief finance officer at Megawide, said in December after his group emerged as the winning bidder. The existing terminal at Mactan-Cebu Airport was designed with a capacity of 4.5 million, but 6.2 million passengers passed through in 2011.
BATTLE OF THE FIREFIGHTERS! Meet the Airport Rescue and Fire Fighting (ARFF) team from the AB Won Pat International Airport Authority in Guam (GIAA), who in March battled it out with colleagues from across the nation in the annual ‘Island Firefighter’s Muster Challenge’. The muster challenge comprised of two, day-long events with each ‘platoon’ fielding teams of eight personnel that participated in three different events. They included the fire engine pull, a five-station relay obstacle course featuring five events, and a water pool activity, while the
competition also featured solo firefighter challenges. Asia-Pacific Airports can reveal that Guam’s airport fire team finished third overall, with a special mention going to Chad Ada who finished fourth out of 20 in the solo event. GIAA executive manager, Chuck Ada, said: “Kudos to all the fire chiefs and teams who actively participated, and especially to fire chief, Joey San Nicolas, of GFD and his team, on a successful week of events that allowed all firefighters on Guam to strengthen their partnerships and expand their skill sets.”
RUNWAY UPGRADE FOR DXB Dubai Airports says that a runway upgrade project to boost safety, service and capacity levels will start on May 1. The project involves the resurfacing of the entire 4,000-metre long northern runway, which is nearing the end of its design life, as well as the upgrading of runway lighting and construction of additional taxiways and rapid exits on the southern runway. During this period, the number of flights will be reduced by 26%, while aircraft movements at Al Maktoum International at Dubai World Central (DWC) are set to increase dramatically. APA Issue 2, 2014
Paul Griffiths, CEO of Dubai Airports, says: “We have planned this project to optimise capacity while protecting service levels and, in conjunction with Dubai Aviation Engineering Projects, airlines and other stakeholders, have deployed all the resources necessary to make it as smooth and seamless as possible. “While we regret any inconvenience caused to our airline customers and our passengers, these upgrades are necessary to heighten safety, boost capacity and pave the way for future expansion.” Dubai International Airport handled 66.4 million passengers in 2013.
ASIA-PACIFIC AIRPORTS MAGAZINE
NEWS
ALL SMILES IN CAMBODIA Cambodia Airports took a leaf out of Thailand’s book on April 11 and declared it ‘Smiling Day’ as part of a customer service drive designed to enhance the experience for passengers. Phnom Penh, Siem Reap and Sihanoukville airports all took part in the initiative, which also involved the wider airport community such as airline employees, shop staff and immigration and customs officers. All airport staff wore ‘Smiling’ pins, and joined hands to welcome passengers at the terminals with special events. Some lucky passengers also received gifts upon departure and arrival, free coffee-breaks and Khmer dance performances. CEO of Cambodia Airports, Emmanuel Menanteau, says: “Smiling Day was an opportunity to address customer service and help ensure that the issue is constantly on our agenda.”
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CARPET FORCE Huge new bespoke carpets have been rolled out in the new terminals at Bangalore’s Kempegowda and Mumbai– Chhatrapati Shivaji airports. Supplied and fitted by UK firm, Brintons, as part of a €1.5 million contract, the manufacturer says the carpets have a “blend of durability and design excellence” and feature designs based on local themes. The design for Mumbai International’s Terminal 2
draws inspiration from India’s national bird, the peacock, while the Bangalore design is based on traditional Indian Rangoli patterns. Both installations cover an area of 36,000sqm, and will withstand a combined footfall of more than 50mppa. Brintons has also completed installed carpets at Sydney, Singapore Changi Airport, and Shanghai Pudong airports.
SYDNEY TO GET SECOND GATEWAY The Australian government has given the green light for the construction of a second airport for Sydney in Badgerys Creek, 50km west of the city’s Central Business District (CBD). The airport is part of a A$10 billion, 10-year infrastructure plan centred on Western Sydney, involving federal government, state government and private sector funding. Construction is expected to begin in 2016 and Prime Minister, Tony Abbott, says the bulk of the investment would come from the private sector, with government to take the lead on building surrounding infrastructure, including roads. The airport is estimated to come with a A$2.5 billion price tag and could be open for business by the mid-2020s.
Southern Cross Airports Corporation, the operator of Sydney’s gateway, has right of first refusal to build and operate the proposed new airport. A statement issued Sydney Airport admitted that it was “important that a secondary airport be developed as demand requires,” noting that “priority” should be placed on planning supporting infrastructure including roads, rail, public transport options, aviation fuel pipelines and utilities. It adds: “In the interests of the travelling public, airlines and our shareholders, Sydney Airport will apply appropriate commercial and financial discipline throughout any process.” Sydney Airport’s approved Master Plan 2033 shows that the facility could accommodate the forecasted demand of 74mppa in 2033. www.aci-apa.com
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ACI ASIA-PACIFC NEWS
Regional update Vivian Fung reports on the third ACI Airport Environmental Seminar in Kuala Lumpur and the Young Executive of the Year Award.
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CI World director general, Angela Gittens, was among the 80 delegates in attendance at the recent ACI Airport Environmental Seminar in Kuala Lumpur. It was the first time the event had been held in the Asia-Pacific region, and the high calibre of speakers – which included Gittens and members of ACI World’s Environment Standing Committee – ensured that it was a huge success. In welcoming delegates, Gittens said: “This region is well known for its solid traffic growth and the strategic development of its airports. We also want this region to be better known for the fact that many of its airports are exercising best practices in environmental management. “ACI is pleased that in partnership with Transport Canada, we have been able to develop a free software tool, the Airport Carbon and Emission Reporting Tool (ACERT) for airports to conduct in-house greenhouse gas emissions inventories and Malaysia Airports Holdings Berhad, our host of the seminar, has been adopting ACERT at 21 of its 29 airports in Malaysia.” Commenting on the environmental achievements of Asia-Pacific airports, ACI Asia-Pacific’s regional director, Patti Chau, enthused: “I echo our director general’s view that Asia-Pacific airports are committed to environmental sustainability. APA Issue 2, 2014
“Airport Carbon Accreditation is the only institutionally-endorsed programme specifically designed for the airport industry and was first launched in our region in 2011. In 2013, five airports were newly accredited, increasing the total number of accredited airports in our region to 12 as of February 2014.”
YOUNG EXECUTIVE OF THE YEAR
We are pleased to announce that Kazunori Ishida from Tokyo’s Narita International Airport Corporation is the ACI Asia-Pacific Young Executive of the Year for 2014. Ishida’s winning submission was on the topic of ‘Airport Energy Efficiency and Management’. ACI Asia-Pacific’s regional director, Patti Chau, says: “The Young Executive Award is about honouring and recognising young executives in our region who contribute innovative solutions to our aviation industry challenges. “Congratulations to Kazunori Ishida, our winner this year, for his great ideas on how airports can enhance energy efficiency and management. All other entrants should be proud of their hard work.” Introduced in 2009, the ACI Asia-Pacific Young Executive of the Year Award is designed to encourage and promote innovation and solutions to challenges facing airports and the aviation industry.
2014
September 17-19 The Trinity Forum Bangkok, Thailand
2014
November 3-5 Airport Exchange Paris, France
2014
May 26-28 ACI Asia-Pacific/ World Annual General Assembly Seoul, Korea
2014
October 22-24 ACI Asia-Pacific Small & Emerging Airports Seminar Bali, Indonesia
ACI ASIA-PACIFIC BOARD PRESIDENT Tan Sri Bashir Ahmad Abdul Majid* (Malaysia Airports Holdings Berhad, Malaysia)
SECOND VICE PRESIDENTS
REGIONAL BOARD DIRECTORS Keiichi Ando (New Kansai International Airport Co, Ltd, Japan)
Seok Ki Kim (Korean Airports Coporation, Korea) Seow Hiang Lee* (Changi Airport Group Pte Ltd, Singapore)
PS Nair (Delhi International Airport Limited, India)
Derun Li (Shanghai Airport Authority, China)
Alok Sinha (Airports Authority of India, India)
Suning Liu (CAM-Macau Int’l Airport Co, Ltd, Macau, China)
Prasanna J Wickramasuriya (Airport & Aviation Services (Sri Lanka) Ltd, Sri Lanka)
Rodolfo Echeverria* (Airport International Group, Jordan)
Hong-Yeol Choi (Incheon International Airport Corporation, Korea)
Kerrie Mather* (Sydney Airport Corporation Limited, Australia)
Kenichi Fukaya (Narita International Airport Corporation, Japan)
SECRETARY-TREASURER
Paul Griffiths (Dubai Airports, UAE)
Laurensius Manurung (PT Angkasa Pura II, Indonesia)
Saud AR Hashem** (General Authority Of Civil Aviation, Saudi Arabia)
Pedro Roy Martinez (AB Won Pat Int’l Airport Authority, Guam)
Dennis Chant* (Queensland Airports Limited, Australia)
Emmanuel Menanteau (Cambodia Airports, Cambodia)
REGIONAL BOARD DIRECTOR (WBP) Greg Fordham (Airbiz Aviation Strategies Pty Ltd, Australia)
Stanley Hui (Airport Authority Hong Kong, China)
* WGB member **Regional Advisor on WGB
The ACI Asia-Pacific region represents 97 members operating 526 airports in 43 countries and territories. www.aci-apa.com
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ACI ASIA-PACIFC NEWS
EVENTS
ASIA-PACIFIC AIRPORTS MAGAZINE
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TRAFFIC TRENDS
TRAFFIC TRENDS Year-to-date Airports in Asia-Pacific and the Middle East enjoyed respective 4.2% and 8.4% increases in passenger traffic in February 2014.
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“From a regional perspective, there were virtually no weak spots with respect to the rise in passenger traffic during the month of February,” says ACI World’s economics director, Rafael Echevarne. “Whilst certain regions posted higher growth than others, each region experienced positive year-over-year growth for the month of February. “DXB, Istanbul (IST) and Kuala Lumpur (KUL) are among the fastest-growing airports in the world with a significant critical mass of traffic as they continue to post double-digit growth rates month after APA month and year after year.”
he monthly increases mean that passenger traffic in Asia-Pacific and the Middle East was up 7.1% and 9.7% respectively in the first two months of 2014, and 7.5% and 10.3% for the year ending February 28. ACI attributes much of February’s growth to a 5% upturn in international traffic, with the Middle East leading the way with a healthy 8.6% increase in throughput. Dubai (DXB), which is poised to become the busiest airport for international passenger traffic in 2014, enjoyed an 11% rise in international traffic during the month.
SUMMARY OF ASIA-PACIFIC REGION TRAFFIC RESULTS (% YOY) Jan to Feb 2014 Over Jan to Feb 2013
February 2014 over February 2013
12-month rolling year
PaxFlash
International passengers
AsiaPacific
Middle East
AsiaPacific
Middle East
AsiaPacific
Middle East
4.2
8.6
7.4
9.9
8.4
10.5
Domestic passengers
4.4
-
7.1
-
7.0
-
Total passengers
4.2
8.4
7.1
9.7
7.5
10.3
FreightFlash
International freight
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AsiaPacific
Middle East
AsiaPacific
Middle East
AsiaPacific
Middle East
1.4
4.7
4.3
4.0
1.1
1.1
Domestic freight
9.7
-
3.0
-
2.8
-
Total freight
3.4
4.7
4.0
4.0
1.5
5.1
www.aci-apa.com
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AIRPORT REPORT: INCHEON
GREAT EXPECATIONS
Peta Tomlinson discovers more about the growth and ambitious development plans of Incheon International Airport.
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o the outside world, South Korea is probably best known for its IT innovation, beautiful scenery and national dish, kimchi. It’s also here that you will find the world’s fastest Internet speeds, and within the metropolis of the capital, Seoul, not one but two of Asia’s most efficient airports, at Incheon and Gimpo. Dispatching passengers at lightning speed, Incheon International Airport has earned an enviable reputation; its benchmark of processing international arrivals in just 11 minutes, and departing passengers in 19 minutes, is more than three times faster than the global average. APA Issue 2, 2014
CUSTOMER SERVICE
For travel-weary passengers, these are beautiful numbers, achieved largely thanks to the information and communication technology that Incheon adopted in the immigration system, including kiosks for check-in, and a computer system that dispatches manpower considering the number of expected passengers. Congestion is eased by 399 counters dedicated to international passengers, expanded waiting areas, and the provision of extra departure gates. The kudos deserved by such a sleek operation is reflected in a string of
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AIRPORT REPORT: INCHEON
awards for efficiency and outstanding customer service that have included being named Best Airport in the World handling between 25-40mppa for nine successive years in ACI’s prestigious Airport Service Quality (ASQ) awards. But not everyone is in a hurry. Indeed, with its 72-hole golf course, cinema, ice rink and a cultural precinct – which incorporates Korean-style bathhouses, chamber music performances and authentic food and drinks – many of the 40 million-plus passengers who pass through Incheon each year may feel compelled to linger longer and soak in the sophistication of one of Asia’s great success stories.
HISTORY
Fifty years ago, South Korea was a nation on its knees. Decimated by war, with over half the population living in poverty, it was a country dependent on overseas aid. But adversity had not broken the people’s spirit. Education was high, and the social fabric strong. As one record of the remarkable economic transformation known as the “Korean miracle” noted, “the potential workforce also had a high level of pent-up energy, borne from both a high work ethic, and from sheer desperation.” Progress was rapid, and when Gimpo International Airport, the original national gateway, no longer had the capacity to meet increasing air traffic demand, a www.aci-apa.com
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AIRPORT REPORT: INCHEON second facility at Incheon, some 60 kilometres away, was deemed the solution. “Few believed it could be done,” Hong-Yeol Choi, Incheon International Airport’s acting president and CEO, recalls of the proposal to build an airport between two islands on the Yellow Sea. The initial phase, to reclaim land, began in 1992, and “despite such doubts”, the project was completed after more than eight years of construction. In 2001, the new Incheon International Airport was revealed with an “unparalleled successful opening amid great public pride and fanfare”, Choi says. To the government that had built it, and Incheon International Airport Corporation, the public enterprise which runs it, the future of South Korea as Northeast Asia’s future aviation hub was secured.
BIG AMBITIONS
The goal was always ambitious; under the original development plan, Incheon International Airport could expand APA Issue 2, 2014
passenger capacity annually to 100 million by the year 2020. That vision was soon vindicated. The project was not only completed, it was done so well that despite being only 13 years old, Incheon has won more ASQ awards than any other airport on the planet. It may still be young, but rising passenger demand – arguably boosted by its reputation for delivering top quality customer service – means that Incheon is already into phase three of its multi-phased construction. Having fulfilled its objectives thus far, Choi says: “We feel that now is the right time to prepare for the next 20 years, based on the last 20 years of growth we have accomplished.”
SEOUL’S AIRPORT SYSTEM
While Incheon handles the bulk of international traffic, Gimpo International Airport, Korea’s second-largest, and one of 14 airports managed and operated by Korea Airports Corporation (KAC), is the main hub for domestic routes.
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AIRPORT REPORT: INCHEON Connected by a high-speed rail link, the two facilities complement each other to spearhead an airport system regarded as one of the best in the world. And it needs to be, as Incheon alone handled 41.5 million passengers in 2013 to cement its ranking as the world’s ninth busiest airport for international passenger traffic. Meanwhile Gimpo, which handled 19.9 million and 130,000 aircraft movements last year, continues to impress, being named Best Airport by Size in the 15-25mppa category in this year’s ASQ awards. Indeed, their combined reach is massive. Incheon is served by 88 airlines, operating flights to 182 destination cities, while on a daily basis Gimpo accommodates 338 domestic daily flights and serves 58 international destinations. APA Issue 2, 2014
As a result of the growth, Gimpo plans to revamp its domestic and international terminals by 2017 and 2019, respectively.
DEVELOPING INCHEON
Incheon has grown at an annual rate of over 6.4% since opening, requiring the second phase of its construction – a third runway and concourse – to be completed by June 2008. Further expansion is now necessary, given that, at the current rate of growth, the existing facilities would be saturated in their capacity by 2017. The third phase of Incheon Airport’s construction began in September 2013. Creating 93,000 new jobs, and KRW17 trillion of economic effects, the project takes on the mighty task of building a second passenger terminal. Once again, the goal is ambitious. This latest construction will expand passenger capacity to 62mppa from
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AIRPORT REPORT: INCHEON
today’s 44 million, and cargo handling capacity from 4.5 million to 5.8 million tons. Accepting the task with “a solemn sense of duty”, workers involved in the construction would ensure that the new facilities are ready for the 2018 PyeongChang Winter Olympic Games, which South Korea is hosting, former Prime Minister, Chung Hong-won, said at the ground-breaking ceremony.
AIRPORT PIONEER
In these days, when aviation is a primary means of travel, an airport hub can create vast economic value. Many Asian nations are paying attention to this potential, resulting in fierce competition in the race to be foremost for airport facilities, services, and related businesses. By building the second terminal, Incheon aims to not only expand its capacity, but also lead the aviation industry.
According to Hong-Yeol Choi, three initiatives – Green, Eco and Smart – will infuse the facility with South Korea’s legendary state-of-the-art technology, while meeting world best practice in energy efficiency. Through safe and efficient operation following its historic opening in 2001, Incheon Airport has gone on to set new standards in all areas, including airport operations, service and logistics, while raising its profile from Korea’s premier airport to one of the best airports in the world. In the words of Hong-Yeol Choi – “We have strived to better our services not only to meet our customer’s needs, but to exceed them.” Delegates will experience these achievements for themselves when Incheon International Airport hosts the 2014 ACI Asia-Pacific/World Annual General Assembly, Conference & Exhibition APA in Seoul, May 26-28, 2014. www.aci-apa.com
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AIRPORT REPORT: OSAKA’S AIRPORT SYSTEM
BANKING ON SUCCESS
Kansai International Airport’s Keiichi Ando talks to Geoffrey Tudor about the ambitious development plans for Osaka’s gateways.
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anker turned airport boss, Keiichi Ando, faces one of the biggest challenges ever faced in Japan’s civil aviation history – the successful delivery of a unique long-term privatisation initiative for the combined operations of Osaka’s airports. Up for grabs are Kansai International Airport (KIX) – located on a man-made island in Osaka Bay – and Osaka International Airport (ITM), situated just 10 kilometres from the city centre. Kansai, the second largest international airport in Japan handled 17.8 million APA Issue 2, 2014
passengers in 2013, while 13.8 million passed through ITM, which enjoys the status of the nation’s second biggest domestic gateway. Both airports are operated by the newly created New Kansai International Airport Company Ltd (NKIAC), which was established in 2012 with the ultimate objective of preparing them for a long-term concession package that will attract investors.
KEY TARGETS
One of the first things it did was merge the management of the two airports – two of the biggest and busiest in Japan outside the Tokyo
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metropolis – and, as result, KIX and ITM, also known as Osaka-Itami, now work more closely together than ever. Ando’s mission is to direct the development of NKIAC through three crucial steps. First, to establish and secure an independent management structure without relying on government subsidy. Second, to develop and increase the business value of the company prior to the operating rights sale, and third, to deliver an attractive proposition to private investors. It is also looking to appeal to foreign as well as Japanese investors, as Airport World recently revealed when it reported that Ferrovial Aeropuertos was potentially interested in bidding, and had even sent
a team to Japan to find out more about the deal. Ando is clearly unfazed by the size of the task ahead, and that will come as no surprise to those that know him or remember his days as a ‘fearless’ ski jumper at university. Now the only flying he does is when he boards a plane and flies around the world promoting the twin airport concession project. Ando’s team is currently studying how to handle the sale of operating rights, discussing the many aspects involved, including financial, legal and human resources issues. He is quick to point out that unlike like a typical private mergers and acquisition (M&A) deal, the transaction will be based on Japan’s private finance initiative (PFI) law, www.aci-apa.com
AIRPORT REPORT: OSAKA’S AIRPORT SYSTEM
A HISTORY LESSON In the 1970s, 11 local townships spearheaded a movement to shut down Osaka–Itami, based on their opposition to noise pollution. In response, a decision was made to construct a completely new replacement airport, Kansai International, on a man-made island in Osaka Bay. But in the late 1980s the anti-Itami movement made a dramatic U-turn as the former opponents realised the economic value of the airport to the Kansai region’s economy. Kansai International (KIX) opened in September 1994 handling international and domestic flights, but Itami remained open as a purely domestic airport. Being more popular to Osaka area travellers because of better access it took business away from KIX. As a result, the new off-shore airport failed to develop sufficient revenue. Massive construction costs to counter subsidence had left the new airport with interest-bearing debt of $12 billion, subsidised annually by an increasingly reluctant national government. Facing economic shortfalls and unwilling to continue the annual subsidy, the government adopted a new strategy. The objectives were to reduce the debt burden and to increase the competitiveness and efficiency of both KIX and Itami airports by merging their management and bringing in an experienced operator and investors.
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which stipulates public revelation of the terms of bidding. There is no timetable yet, although the government’s plan was to sell as early as FY2014. However, the complexities of the PFI Law require careful handling and the company is speeding up the process needed to meet legal requirements.
BUSINESS STRATEGY
As well as addressing the sale issue, NKIAC has been concerned with two elements – first, developing a private management style and second, raising the company’s asset value. The company has a strong financial base. Overall financial targets for FY2014 are EBITDA of $593 million with revenues of $1.4 billion. It’s obviously difficult to repay $12 billion of debt quickly, and NKIAC is looking at a realistic spread over 45 years or so. He also believes in attracting as many airlines as possible to boost aeronautical revenues, and regularly travels overseas to visit clients and potential clients as well as participate in major industry conferences and meetings. “We recognise the importance of sharing our vision with the upper level executives of our airline clients, and the appeal that a face-to-face meeting brings,” says Ando. APA Issue 2, 2014
“Such promotions are not only done by the airport itself, but together with leaders of the Kansai business community and local government, and together we present the appeal of business opportunities and attractiveness of Kansai and Japan as a whole.” His 36 years experience in one of Japan’s top banking groups, known today as the Sumitomo Mitsui Banking Corporation, stands him in good stead for such events as he is well-known in Kansai business circles. As CEO, he is very focused on the operating rights sale process. His banking experience makes him very much aware that NKAIC needs to communicate well with national and local governments, residents, employees and airport users to gain their acceptance and support.
LOW COST CARRIERS
Low-cost carriers (LCCs) are a key target for new business growth, and NKIAC has been successful in attracting both Japanese and foreign companies. In fact, Kansai was successful in attracting Japan’s first home-grown LCC, Peach Aviation, to establish its operations base at Kansai and hopes to attract more in future. “Peach flew just seven daily domestic flights when it started in March 2012, but has now expanded its domestic service to 30 flights a day, almost half (46%) of our total
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AIRPORT REPORT: OSAKA’S AIRPORT SYSTEM domestic flights during winter 2013/2014,” reveals Ando. On March 15 this year, Spring Airlines launched its Kansai-Shanghai service with a daily round trip flight. This is the 11th LCC to serve Kansai. Ando points out that in just five years, the proportion of LCC services among international flights has gone from 10 flights a week, or 1.6% of the international total in winter 2008, to 140 flights per week, or 20% of the international total. Kansai aims to become a major LCC hub in Asia. Ando emphasises that KIX is Japan’s second biggest international airport, with full 24-hour operational capability. Indeed, it is located one hour closer to Asia than Tokyo and the number of KIX-based LCC flights is the biggest in Japan. And, Ando believes that LCCs will play an important role in creating new demand. KIX is also working hard on foreign carriers, offering three year, staged landing fee APA Issue 2, 2014
discounts on a sliding scale of 80% off for the first year of operations, reducing to 50% off for the second and 30% off for the third year.
DEVELOPING KANSAI
In October 2012, Kansai opened Terminal 2 as a dedicated LCC terminal – the first such facility in Japan – and today, it is exclusively used by Peach Aviation, which handles around 3mppa at the airport. The 30,000sqm terminal boasts nine aircraft stands and is capable of handling up to four million passengers per annum. And, it is set to be joined by a second LCC terminal in late 2016 following the planned design and construction of Terminal 3, which, according to Ando, will effectively equip KIX to accommodate up to 8mppa in dedicated LCC facilities. “We will continue to aggressively attract LCCs through our advantage of being a 24-hour airport”, Ando tells Asia-Pacific Airports magazine, noting that there is still
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NON-AVIATION REVENUES
great potential for growth in this area based on Osaka’s population of 17 million people. “Demand for LCCs has been robust, but for a city with almost as many people as there are in the whole of Australia, I believe there’s more to come,” Ando enthuses. But KIX is not just about LCC traffic, of course, with the bulk of its passengers travelling on legacy carriers. And, with the airport set to celebrate its 20th birthday in September 2014, Ando admits that the time was right to start work on a revamp of Terminal 1. As part of the revamp, which is expected to be complete by March 2015, NKIAC plans on adding a host of new retail and F&B outlets to improve the offering to passengers and boost revenues. The airport is also continuing to develop its cargo facilities. It boasts its own cargo and logistics area which contains Japan’s only temperature-controlled pharmaceutical warehouse, as well as FedEx’s newly opened North Pacific Regional Hub.
Retail presently only accounts for 28% of KIX’s revenues, and Ando says that this is something he would like to see increase going forward to reduce the airport’s reliance on aeronautical income. As a result, NKIAC plans on expanding its commercial zones for retail, F&B and other concessions, and the revamp is set to include a 40% increase in duty free floor space at KIX’s Terminal 1. While last year’s acquisition of the Osaka International Airport Terminal Company building at Itami enables a major renovation there and adds considerable value to the enterprise. For Ando, the biggest challenge is the concession project, which is one of the projects included in the national ‘Japan Revitalization Strategy’ action plan promoted by Prime Minister, Shinzo Abe, under the ‘Abenomics’ banner. “It is being promoted as a national strategy which enables Japan to show the ingenuity of its private sector through the sale of public facilities concessions – including airports administered by the national government – to the private sector,” he says.
GOING FORWARD
Ando believes that planned privatisation of Kansai and Itami represents a major milestone for the country that, if successful, could set the bar for other airport concessions to follow. He says: “The concession is a potential win-win for Osaka’s airports, the government and passengers. The knowledge, experience and expertise the private sector can bring will allow the airports to fulfil their potential, address the company’s debts of about $12 billion and raise customer service levels for the APA airlines, tenants and passengers.” www.aci-apa.com
AIRPORT REPORT: OSAKA’S AIRPORT SYSTEM
The new FedEx facility will serve as a consolidation point for shipments from northern Asia to the US.
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BALANCING ACT
Keith Hui provides his thoughts on designing customer-friendly terminals in the Asia-Pacific region.
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assengers are customers for airports and airlines; having paid for the journey, passengers deserve a high level of respect and customer service. The challenge is to define the specific customer service expectations for travellers within the wide range of demographics in the location that an airport serves. The design of ‘customer friendly’ airports presents an interesting challenge, particularly within the Asia-Pacific region. The cultural diversity intrinsic here is reflected in a travelling community with disparate needs, and expectations of customer service will correspondingly vary in significant ways. Business travellers, families, and tourists to and from each country will each have their own unique demands, and it becomes the obligation of airports trying to maintain or expand their share of the highly competitive air travel market to exceed these sundry service expectations. APA Issue 2, 2014
DOES BIGGER MEAN BETTER?
Does planning a bigger passenger terminal building equate to a more customer-friendly traveller experience? In theory, more building area enables airports to provide more space per passenger, minimising the potential for congestion and poor passenger flow. More space can also increase processing capacity at check-in, security, and immigration, shortening passenger queue times. On the other hand, a larger terminal can require passengers to walk longer distances, increasing stress levels that result in negative perceptions of an airport’s level of service. Airport planning is not an exact science and its definition of ‘level of service’ is limited in the context of customer service. Hence, to create a customer-friendly airport that exceeds travellers’ expectations, airport planners must look beyond space standards.
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SPECIAL REPORT: AIRPORT DESIGN
THINK OUTSIDE THE BOX
In Hong Kong, the seamless connection between the airport and the city is a powerful convenience contributing to a sense of extraordinary customer service. An arriving passenger will disembark from a plane and go through immigration, baggage claim and customs before boarding the Airport Express train; critically, the entire process occurs with minimal changes in level or direction. The improved wayfinding and legibility inherent in the design, reduces travel stress for arriving passengers and improves level of service. Upon leaving the airport terminal, passengers walk directly onto the train without even going through a turnstile, until they exit at one of the city’s metro stations. This reduces the perceived number of steps to reach the city, and the passenger’s sense of arrival occurs in the city itself. All of this typically occurs in less than an hour from landing on the tarmac. When departing, passengers can check in for flights at a downtown Airport Express check-in facility. By integrating baggage services with check-in within the downtown
area, passengers are free from handling their baggage until they reach their destination. This level of service reflects the convenience found at a hotel, allowing passengers to spend more free time in the city unencumbered by baggage. Downtown check-in also increases departure function capacity and relieves potential congestion at the airport’s check-in desks. In Hong Kong, a culture that places tremendous value on convenience and speed, the express train and in-town check-in contribute to a high level of perceived customer service.
ENERGY EFFICIENCY AND SUSTAINABILITY
The use of ‘daylighting’ benefits occupants of all building types, helping to relax and lift people’s spirits. In an airport terminal, where stress levels can be high, the use of daylighting can have a significant positive impact on the passenger experience. Indeed, a properly planned and designed daylighting system works with enhanced www.aci-apa.com
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legibility signage to improve wayfinding and reduce the stress of passengers trying to get somewhere in a new environment. Views to the exterior, sightlines, and signage help to orient the traveller and allow intuitive wayfinding, resulting in passenger confidence in navigating through a busy terminal. For airport staff, natural light creates a brighter, more pleasant work environment that can enhance performance and customer service. Daylighting strategies also contribute to energy efficiency and sustainable design goals, and as prodigious consumers of energy with some of the world’s largest building footprints, airports are increasingly seizing the opportunity to impact their ecological footprint.
not slowed down. In fact, many affluent passengers are attracted to low-cost regional flights because they can use the money saved on the cost of the flight to purchase more retail goods. In response, airports are making changes to accommodate this growing demographic’s needs and expectations for customer service. Airports are further attempting to boost customer service by increasing the availability of passenger amenities such as dining, spas, cafés and lounges. Providing electrical outlets and free Wi-Fi enables passengers to stay connected and to co-ordinate arrangements with work, families and friends.
Some airports have integrated museums and theatres into the airside retail area By designing facilities to take advantage of enhanced daylighting, artificial lighting demands are reduced. In conjunction with ‘green’ goals and sustainability programmes, which can include waste and recycling, improved building maintenance and airport operations, as well as public transport connectivity, airports are reflecting global as well as passenger demands for improved building performance.
RETAIL AND AMENITIES
The Asia-Pacific region has the world’s highest overall airport retail sales, as reported in Global Airport Retailing 2013. In 2013, Singapore’s Changi Airport alone had more than S$2 billion in retail sales. The desire for high-end luxury products remains strong for Asian passengers, who expect airports to provide a dynamic, appealing shopping experience. Despite the increasing popularity of low-cost carriers in the region, retail sales have APA Issue 2, 2014
Some airports have integrated museums and theatres into the airside retail area. Customer service takes on different meanings for parents travelling with young children, who value active play areas where kids can release energy and enjoy a reprieve from their journeys.
CUSTOMERS FIRST
In the increasingly competitive Asia-Pacific region, airports can and should identify and accommodate customer-friendly facilities and services. While specific strategies for exceeding the service needs of passengers will vary based on cultural and geographic circumstances, airports focusing on higher levels of customer service APA will offer the most value to travellers.
ABOUT THE AUTHOR Keith Hui is HOK’s Hong Kong based director of aviation and transportation planning. He can be contacted at keith.hui@hok.com
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Terminal velocity Joe Bates takes a closer look at a handful of game changing infrastructure development projects across the Asia-Pacific region.
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ith China in the middle of a three-year programme to build 70 new airports and upgrade 100 more, and an estimated $40 billion alone set aside for airport development projects in the Gulf states, there is simply no disputing that ACI’s Asia-Pacific region is the hottest place on Earth right now for airport investment. Indeed, the upcoming Airport Show in Dubai (May 11-13) will turn the spotlight on many of the key projects in the Gulf region and the challenges associated with such huge development projects. ACI World’s director general, Angela Gittens, says: “Simply put, airports are capital intensive businesses, highly dependent on economies of scale. Even in a downturn, airports have to invest to provide capacity for the future. “The future is going to be challenging, of course, for airports. The aviation sector is definitely going to grow. There will be winners and losers but growth is inevitable.” ACI forecasts that passenger traffic across both the Asia-Pacific and Middle East regions will grow by around 7% per annum up until 2017, when it anticipates that up to 3.9 billion people will pass through the world’s airports. IATA claims that the current success of airports in the Arabian Gulf is largely down to the “far-sighted” policies of governments that have recognised the importance of aviation, and continue to upgrade their airport systems. Tony Tyler, IATA’s director general and CEO, notes: “The fact that the Middle East APA Issue 2, 2014
will deliver the strongest growth in international passenger numbers over the forecast period is not surprising, as governments there recognise the value of the connectivity provided by aviation to drive global trade and development.”
THE APPEAL OF AVIATION
A recent report by PricewaterhouseCoopers (PwC), claims that the propensity to fly is affected by a lot of different, interrelated forces ranging from the economic health of a country, demographic changes, market maturity, geographical features and competition. It observes: “Airports are a unique class of asset. They offer greater potential for growth than more traditional infrastructure assets. Unlike more traditional infrastructure assets, airports serve airlines as their primary clients, and therefore share in the fortunes and woes of a highly cyclical industry.” While Daniyal Qureshi, director of the Airport Show 2014, comments: “Airport expansion is a major area of focus for the aviation industry in almost every part of the world, especially the Middle East. “Everyone now realises the importance of investment in airports keeping in mind the massive surge expected in air travellers in the coming decade.” In these circumstances then, Asia-Pacific Airports thought the time was right to turn the spotlight on a handful of key terminal development projects that have either recently been completed or are in the pipeline for development over the next few years.
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AIRPORT: KUALA LUMPUR COUNTRY: Malaysia PROJECT: New low-cost carrier terminal OPENING DATE: May 2014
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uala Lumpur International Airport’s eagerly awaited new low-cost carrier terminal, klia2, is set to open for business on May 2. The size and capacity of klia2 – it covers 257,000sqm facility and is equipped to handle up to 45mppa – will instantly make it the world’s largest dedicated low-cost carrier terminal. Arguably the $1.2 billion terminal’s most iconic facility is Asia’s first Skybridge and only the third airport Skybridge in the world. Spanning 300 metres with 60 metres of walkways, the Skybridge will connect the main passenger terminal building at klia2 to the satellite building, allowing passengers to travel between these two points in just over five minutes. Operator, Malaysia Airports Holding Berhard (MAHB), notes that the Skybridge was purposely built to cross over the taxiway and features glass walls that give passengers a spectacular birds-eye view of the airside.
Unlike its predecessor, the new LCC facility will boast 80 airbridges and an assortment of facilities for passengers that include 93 shops and 48 F&B outlets, which has led the airport to describe it as “an airport within a mall”. Puan Faizah Khairuddin, the airport’s senior general manager for commercial services says: “Klia2 is constructed with one of the highest percentage of retail space offered by any commercial airport. Around 12% of its gross floor area (GFA) is dedicated to customer fronting commercial offerings – approximately 60% of which has been earmarked for retail and 40% for F&B. “The terminal will be a highly-desirable venue for Malaysian and international brands to showcase their products and services, pushing the envelope in terms of travel retail and redefining the travellers’ airport shopping experience.” YB Datuk Abdul Aziz Kaprawi, Malaysia’s Deputy Minister of Transport, says, “klia2 is poised to be another landmark in Malaysia that will do the nation proud. The airport retail experience championed by Malaysia Airports will add significant value and flavour to building Malaysia as a preferred transit point and tourist destination.” www.aci-apa.com
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Image courtesy of Studio Fuksas/Leonardo Finotti.
SPECIAL REPORT: AIRPORT DESIGN
AIRPORT: SHENZHEN BAO’AN COUNTRY: China PROJECT: New Terminal 3 ARCHITECTS: Studio Fuksas OPENING DATE: November 2013
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henzhen Bao’an International Airport’s new $1 billion Terminal 3 has opened for business. The new state-of-the-art facility is the first airport terminal to be designed by architects Massimiliano and Doriana Fuksas, from Studio Fuksas, Phase 1 of which has taken three years to come to fruition. Operator, Shenzhen Airport Company, is confident that T3 will quickly become an iconic landmark in Shenzhen, which is one of the fastest-growing cities in the world and will help boost its economic development. According to Studio Fuksas, “stand-out features” of the interior design include stylised white ‘trees’ that serve as air conditioning vents, and check-in ‘islands’, gates and passport-check areas with a stainless steel finish that beautifully reflect the honeycomb patterns from above. Phase one of the project has seen 63 contact gates built, along with a further 15 remote gates, the first phase of the Automated People Mover (APM), new road traffic system, car parking, landscaping, and a shopping centre. APA Issue 2, 2014
The new high-tech terminal is the largest public building in Shenzhen at 500,000sqm and will increase the capacity of the airport by 58%, allowing it to handle up to 45mppa. According to the architects, a manta ray was the inspiration behind the design of the terminal, which features an external double ‘skin’ honeycomb motif that wraps the structure. At 1.5km long, with roof spans of up to 80 metres, honeycomb shaped metal and glass panels punctuate the façade of the terminal allowing natural light to filter through. On the interior, the terminal is characterised by distinctive white conical supporting columns that rise to touch the roof at a cathedral-like scale. Studio Fuksas reveals that “the human experience” was at the heart of its thinking when designing T3, and with this in mind, issues such as ensuring rapid processing times, minimum walking distances and ease of orientation were a main focus. Future development phases of the terminal up to 2035 will result in the addition of new satellite concourses, which will be built according to demand and connected to T3 by an expansion to the existing APM.
Image courtesy of SOM; Photographer, Robert Polidori.
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AIRPORT: CHHATRAPATI SHIVAJI COUNTRY: India PROJECT: Terminal 2 ARCHITECTS: Skidmore, Owings & Merrill (SOM), Larsen & Toubro Ltd OPENING DATE: February 2014
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t says much about the importance of aviation to India’s future development that Prime Minister, Dr Manmohan Singh, was on hand in February to inaugurate Chhatrapati Shivaji International Airport’s new $2 billion Terminal 2. Airport operator, Mumbai International Airport Ltd (MIAL), claims to have built the new integrated Terminal 2 as an “iconic mega-structure that will set global benchmarks in airport infrastructure development.” Said to symbolise India’s global future, while the celebrating the country’s heritage, Terminal 2 covers 4.4 million square feet and is equipped to handle up to 40mppa. Its key features include a uniquely sculpted roof supported by 30 ‘mushrooming’ columns, and impressive ‘sense of place’ fixtures such as a Bollywood mural, which forms part of India’s largest public arts programme. Indeed, a three kilometre long multi-storey ‘Art Wall’ has over 7,000 pieces of artwork and artefacts from Maharashtra and allegedly every region and corner of India. In terms of facts and figures, the Skidmore, Owings & Merrill (SOM) designed terminal uses
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an incredible four kilometres of LED lighting to illuminate its glass façade and contains the equivalent of 1.85 million square feet of granite. It also contains a 15 metre high cable-stayed wall – the longest in the world – and 30,000sqft of skylight glass. According to MIAL, the design of Terminal 2 draws inspiration from India’s national bird – the Peacock. Says MIAL: “It portrays the magnificent character of the white peacock, representing flight, as well as rare beauty. The architecture of the new airport terminal quintessentially reflects India’s proud heritage and draws on its rich culture. “It unmistakably and proudly presents a new contemporary India and its possibilities. Throughout T2, there are fixtures and details, such as 1,000 chandeliers inspired by the lotus flower, a Diya curtain with 10,000 diyas waiting to welcome international travellers and the check-in hall, which is inspired by 1,000 white peacocks in the sky.” Leadership in Energy and Environmental Design (LEED) Gold certification, also means that Terminal 2 is one of India’s most environmentally friendly terminals. In fact, GVK insists that T2 was built to be highly energy and water efficient. It states: “Sewage recycling, water recycling and rain water harvesting technologies will contribute to a 20% reduction in water use, over and above the LEED baseline.” www.aci-apa.com
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AIRPORT: SHANGHAI PUDONG COUNTRY: China PROJECT: New South Satellite Concourse ARCHITECTS: Corgan, IPPR OPENING DATE: 2018
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he world’s largest satellite concourse is to be built at Shanghai Pudong Airport (PVG). Designed by US architect Corgan, in association with Chinese partner IPPR, the complex is expected to boast 100 boarding gates when fully operational. The company was one of six that submitted concept bids as part of a design competition held by the Shanghai Airport Authority (SAA). Expansion of PVG is part of a plan by the SAA to make it the premier international hub airport in Asia, and to keep pace with growth of China’s largest city and financial capital. David Lind, chairman of Corgan, says: “We are thrilled to be working with the Shanghai Airport Authority. This project reflects Corgan’s growth internationally and the quality of our work, especially in the aviation industry.” There are currently two terminals at PVG with 28 and 42 gates, respectively, but SAA aims to welcome 80 million passengers to PVG and handle 4.7 million tonnes of cargo annually by 2020, to make it Asia’s primary aviation hub. Jonathan Massey, principal for Corgan’s aviation design studio, says: “The Shanghai Airport Authority has a bold plan for Pudong Airport’s future so we’ve conceived a bold design concept that truly balances form and function. APA Issue 2, 2014
“The result is a building that creates a sense of excitement for passengers while expanding commerce for the SAA and its tenants.” Corgan’s concept will focus on maximising passenger flow and experience in an efficiently organised building that is designed to be “beautiful yet efficient in both its operation and maintenance”. Massey enthuses: “Our mission is to take the passenger experience to a higher level.” Another important aspect of the design of the terminal satellite concourse is that it is built so it can grow and change with the aviation industry and city, says Massey. “Shanghai is the business leader of China, with a population today of some 24 million people. Its airport should reflect that role and position in the global economy,” he notes. “In today’s travel age, it’s about enhancing the time passengers spend in the airport by providing environments that are enjoyable and alleviating the inherent stress of flying. “Airport terminals are complex machines which facilitate a journey using multiple processes and modes of transportation. Given the nature of airports, where processes are repeated thousands of times a day by passengers and employees, the careful crafting of the environment and functionality are critical to the long-term success of the facility. The design must look past the obvious response of dynamic structure and roof, and address the true needs of passengers and operations. Form and function must be intertwined.” APA
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Beautiful Baku Sarah McCay examines the design and functionality of the new terminal at Heydar Aliyev International Airport.
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new, sleek and modern international terminal opened at Heydar Aliyev International Airport in Baku in October 2013, providing 60,000sqm of usable area, a capacity of 6mppa and 13 passenger boarding bridges. Azerbaijan Airlines (AZAL) wanted to create an international gateway to the country that would increase its airport’s capacity by 50%. Triangular in shape, with rounded off angles to reflect the Azerbaijan Airlines logo, the building measures 190 metre long and 280 metre wide. The creation of aviation design masters Woods Bagot, Buro Happold and Arup, with interiors by Autoban, the new terminal is arguably an architectural marvel. Built in a seismic zone, the four-storey structure provided a design challenge for all parties, particularly because it was contracted on a fast-track build time of just two years. When Arup designed the concept for the building, the aim was to provide generously proportioned spaces, lit with natural light when possible. The design includes a tapered façade, giving the building a unique appearance. APA Issue 2, 2014
The organic shape allows light from the façade and roof to enter the building, while skylights form an integral part of the steel structure of the roof. The design uses a frame resistant system to allow for seismic forces and is constructed from a steel perimeter and underlying concrete structure. ArcelorMittal Construction Projects worked as suppliers and engineers for the Hacierco metal decking manufactured by ArcelorMittal Construction Poland. In total, 25,000sqm of Hacierco deck, galvanised with an architectural finish in white, was supplied for the project. Built over two main floor levels to allow for the vertical separation of arriving and departing passengers, the terminal is carefully crafted for stability as well as ‘wow factor’. The construction of a new air traffic control tower was also part of the project. In addition, the existing terminal was refurbished; the old façade was stripped and replaced with metal mesh which incorporates additional insulation, a design more in harmony with the new adjacent terminal building.
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According to Buro Happold, who worked on structural engineering and building services, key challenges included the development of a smoke ventilation and fire engineering strategy that met Eurocodes. A public address and voice alarm system that delivers audibility and intelligibility with a centrally integrated fire and security system proved the solution. Buro Happold’s building services design was also tailored to suit the relatively harsh and variable climatic factors in Baku. Specialist systems were incorporated into both the architecture and the core engineering disciplines to provide an integrated multi-functional final design that optimised operations and reduced running costs. “Energy reduction and conservation is the cornerstone of the building services design,” enthuses Buro Happold’s project director, Paul Crayford. “Various strategies, including day lighting control, tightly controlled infiltration and pressurisation strategies, dynamic system operations, energy recovery systems, along with variable volume controls, have resulted in a low carbon producing terminal, when benchmarked against other similar facilities throughout the region.” Sustainability carries through to the interiors, where Istanbul-based interior design firm Autoban created spaces from heavy-duty yet lightweight materials.
“The environmental and sustainable design started with balancing the choice of materials and production techniques. For the floor covering of the entire terminal we chose a quartz-based material that is both natural but also industrial at the same time,” says Seyhan Ozdemir, partner and designer at Autoban. “Quartz is one of nature’s most durable materials, which makes it low-maintenance and able to stand up to high-use.” Synthetic materials, such as plastic, were also avoided in keeping with the eco-friendly design, while low energy lightbulbs and efficient lighting systems prove key to sustainability. Lightweight materials were also used in the interiors to help tailor the design around its seismic zone location.
LIGHTWEIGHT INTERIORS
To eliminate excessive construction and speed up fit-out time, Autoban designed a series of ‘cocoon’ semi-structures from a lightweight wood. The cocoons are used for a private check-in, luggage room, Internet information room, as well as café, restaurant, tea house, champagne and caviar bar, spa and beauty shop, music and book store, and a children’s play area. The wooden cocoons form an integral part of the interior design and, according to Sefer Caglar, partner and designer at Autoban, have been used to create different perceptions of height to break the monotony of the usual immense terminal structure and bring the airport down to human scale. www.aci-apa.com
SPECIAL REPORT: AIRPORT DESIGN
KEY CHALLENGES
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“The largest and most striking components of the terminal interior are the custom-made wooden cocoon units installed at social areas,” notes Caglar. “With heights changing between 6.2 metres to 10.5 metres, and containing cafés, ticket kiosks and other amenities, these organicshaped cocoons create a sequence of spaces within the shell of the airport’s vast interior. “They serve as interior landmarks and, while showcasing a compatible approach to the airport that is already built on the notion of mobility, they also strongly define our general approach to design. “With their presence and organisation, as well as being made of a natural material, these cocoons create a visually exciting and unexpected environment within the airport. Their success lies in the way they trigger a sense of discovery and lead to unexpected passenger experiences.” Autoban’s Ozdemir says that the interior design of Heydar Aliyev International Airport also reflects Azerbaijani culture. “As a nation, they are very welcoming and hospitable people. We believe that our design for the Heydar Aliyev International Airport reflects this aspect in every corner – from materials to colour palette, from textures to lighting – while its contemporary atmosphere refers to the country’s recent social and economic transformations,” he says. “Azerbaijani people are quite epicurean when it comes to pleasure, which explains why we gave so much thought to creating more pleasure areas, like the APA Issue 2, 2014
cocoon units, which serve a variety of entertaining functions.” Passenger amenities and services include a special waiting lounge that overlooks to the baggage claim area at arrivals. There is a Marhaba Lounge for business-class travellers where their check-in is taken care of by the staff. There are also two other departure lounges for frequent flyers.
BREAKING WITH CONVENTION
According to Ozdemir, Autoban aimed to break away from the typology of conventional airports that overwhelm passengers with their scale, standards and technology. “Instead, we opted for a welcoming, comfortable and contemporary environment that generates a sense of belonging and homeliness for its users. This leads to a brand new passenger experience at an airport. “Because more people are travelling at this age and we are spending more time at airports than before, these facilities have become destinations in their own right. Therefore, as designers, it is our goal to create airports that provide an uplifting environment for the passengers and create a warm welcoming gateway to the city or country. “It was essential to create a unified interior design identity in such a large facility, and, make it as comfortable and visually exciting as possible. Giving natural materials the lead role, we provided a calm and relaxing atmosphere within an APA industrial structure.”
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ASQ WINNERS
Winning feeling Asia-Pacific airports once again stood out in ACI’s annual Airport Service Quality (ASQ) customer satisfaction survey, occupying the top spots in all the global by size categories, writes Joe Bates.
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ake a bow Changchun (China), Haikou Meilan (China), Seoul Gimpo (South Korea), Seoul Incheon (South Korea) and Singapore Changi (Singapore) for topping the 2-5mppa, 5-15mppa, 15-25mppa, 25-40mppa and Over 40mppa categories respectively. ASQ champion, Incheon, was also named Best Airport in Asia-Pacific – ahead of Singapore Changi, Beijing Capital, Shanghai Pudong and New Delhi – while Abu Dhabi was voted Best Airport in the Middle East (ACI’s Asia-Pacific region incorporates the Gulf airports). Kolkata (India) and Amman (Jordan) also won awards for being the most improved airports in Asia-Pacific and the Middle East respectively, while Langkawi was named best airport handling under 2mppa in Asia-Pacific. And the success for the region’s gateways didn’t end there, because Dubai (DXB), Hyderabad Rajiv Gandhi and Taiwan Taoyuan airports have all been inducted into the ACI Director General’s Roll of Excellence. The honour recognises those airports which, in the opinion of the passengers who participated in ACI’s Airport Service Quality (ASQ) surveys, have consistently held service excellence as a top priority. To qualify for inclusion in ACI’s customer service ‘hall of fame’, an airport must have
been ranked in the top five airports by size or region category in the ASQ survey for five of the last six years (2008-2013). Since 2011, 21 airports have been inducted into the Director General’s Roll of Excellence. “A focus on exceeding passenger expectations is crucial if airports are to remain competitive,� says ACI’s director general, Angela Gittens. “The six new inductees not only understand that passengers place a high value on customer service, but have also taken steps to ensure they are going above and beyond in this regard. “I would like to congratulate these airports for their commitment to serving passengers; they are a testament to the effectiveness of the ASQ survey, which provides the information airports need to improve the passenger experience,� ACI’s ASQ Survey, which has won industry recognition as a world-class benchmarking programme, has grown steadily since its inception in 2006 and now boasts more than 285 airport participants. Hong-Yeol Choi, acting president and CEO of arguably the most successful ASQ champion of all-time, Incheon International Airport, claims that its top performing ways are down to its total commitment to customer
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APA Issue 2, 2014
ASIA-PACIFIC AIRPORTS MAGAZINE
%(67 %< 5(*,21 1. Seoul Incheon 2. Singapore 3. Beijing )(:(5 7+$1 0 3$; Langkawi %(67 ,03529(0(17 Kolkata
0,''/( ($67 %(67 %< 5(*,21 1. Abu Dhabi 2. Dubai 3. Doha %(67 ,03529(0(17 Amman ',5(&725 *(1(5$/·6 52// 2) (;&(//(1&( 1(: $6,$ 3$&,),& ,1'8&7((6 1. Dubai 2. Hyderabad Rajiv Gandhi 3. Taiwan Taoyuan service – and the fact that this philosophy is shared by its staff and the Korean government. “Our success is only made possible with the full support and confidence of the government and the united efforts of over 40,000 airport,” he says. “We will continue to work to become a leader in the global aviation industry by sustaining service competitiveness and upgrading every aspect of airport management.” Incheon was first named as the Best Airport in the World in 2005, four years after opening in 2001, and held on to the title until last year when it was phased out.
It was the first airport to be inducted into the ACI Director General’s Roll of Excellence in 2011. Haikou Meilan attributes its success to its dedication to “providing passengers with the best airport service experience”. Its customer service focused initiatives include the introduction of airport volunteers, special events such as theatrical performances and the launch of its We-Chat Public Platform to speed up passenger processing. Ahmed Al Haddabi, senior vice president of airports operations for Abu Dhabi Airport Company (ADAC), praised the hard work of Abu Dhabi International Airport for the gateway’s ASQ success. “Naturally, we thank our customers and passengers for affording us these ratings,” he says. “They clearly vindicate the hard-work of all our staff and related agencies at the airport who are striving to ensure Abu Dhabi offers some of the world’s best airport environments. “I thank and congratulate the whole team for their continued efforts and can promise our customers we will continue to work even harder during the coming year.” Talking about the latest additions to the Director General’s Roll of Excellence, Gittens, says: “As airports face the increasingly competitive and demanding aviation market, it is crucial to keep a focus on meeting and exceeding passenger expectations. “Airport managers need factual intelligence to guide their efforts and optimise their investments. The ASQ Survey is a tool that provides data that enables airports to identify what their passengers value most and what the airport community needs to do to achieve excellence in customer service. “The results, over time, demonstrate that airports are paying close attention to the feedback from their passengers and undertaking corrective action to improve the passenger experience. “We can see that airport community leaders are continuously reviewing and enhancing their services. Airports work diligently to improve their performance by adopting customer focused strategies.” APA www.aci-apa.com
ASQ WINNERS
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IT: SPOTLIGHT ON KOREA
KOREAN WAVE
Jeff Amiri discusses travel trends and enhancing the passenger experience in Korea through IT innovation.
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ore affordable fares, business travel from an expanding economy, exciting new destinations and the ubiquitous ‘Korean Wave’ or rise in Korean popular culture have all helped drive the strong growth of the South Korean travel industry in the past few years. In fact, industry reports have indicated passenger growth of about 6% over the last five years and we expect the outlook to be positive going forward. International travel has been growing more rapidly than domestic travel in South Korea, fuelled by the growth of the low-cost carrier market and a more affluent society, although the majority of the travel industry is still supported by domestic tourism. While certainly good for the industry, growth also means that airports need to
APA Issue 2, 2014
constantly monitor passenger processing and tackle congestion, maintain security, cope with increased competition and continue to be profitable. Trying to monitor all of these at the same time is no easy matter, and it takes the combined will and strategy of people, processes, technology and constant innovation to achieve effective results. According to a report published by Timetric, the South Korean government has allocated $166 billion for the expansion and modernisation of airports, roads, railways and seaports over the coming decade. Additionally, the growing e-commerce sector is making it essential for the industry to use information technology. In fact, Bloomberg’s Global Innovation Index last year ranked South Korea as the second most innovative country worldwide.
ASIA-PACIFIC AIRPORTS MAGAZINE
CUSTOMER SERVICE
In fact, airports across South Korea have done a stellar job in anticipating the needs of passengers and launching new services and ideas to respond to those needs. In recent years, they have upgraded their systems to process large volumes of passengers more efficiently and cope with the requirements and expectations of an increasingly more informed, more travelled, more sophisticated and more demanding passengers. Incheon’s baggage handling system, for instance, can process 31,000 pieces of luggage through an automated tilt-tray system that sorts pieces of luggage with barcode readers. Without exception, all of South Korea’s airports boasted common use systems from the moment they opened their doors. The philosophy has allowed them to make maximum use of airport infrastructure through shared airline workstations, extend check-in processing to mobile, off-site and remote locations, and, incorporate convenient baggage drop technologies. There have been pilot projects and trials at various remote check-in and airport locations throughout South Korea. They include Seoul’s downtown City Airport, Logis & Travel, Korea, and Incheon International Airport for self bag drop, which it hopes will dramatically reduce check-in times and
congestion at the check-in counters, resulting in an improved passenger experience. But these upgrades and improvements do not necessarily mean that airports have to abandon existing infrastructure. Indeed, strategic use of IT will allow airports to continue to use their internal technology and resources in order to create an innovative approach to seamless passenger processing. South Korean airports have been very successful in their ability to drive smart changes through innovative thinking. As a result, they are able to constantly measure and analyse processes as well as regularly monitor the ‘health’ of airport operations in areas such as passenger processing, ground handling, baggage processing, security measures and passenger travel habits, which are then shared amongst relevant stakeholders. For instance, Incheon’s Operator Control Centre serves as a central base for the airport to monitor and support core processes. Aside from a Security Operations Centre, Incheon is also one of the few airports that have an Emergency Operations Centre, a centralised facility where officials can compile and analyse all data in the event of an emergency, reducing response time to issues considerably. South Korea was also one of the first countries to make eBorders mandatory. They believe that this forward-thinking attitude will help drive more innovative applications to support seamless travel. Technology such as near-field communications (NFC) and smart cards provide capabilities that will shift the check-in process ‘out of the airport’ and ‘into the hands’ of the passenger. For this technology will facilitate the implementation of self-boarding and self bag drop systems that speed-up check-in processes and reduce or completely eliminate queues and congestion. In Asia, airports are seen as service-oriented businesses where the www.aci-apa.com
IT: SPOTLIGHT ON KOREA
Being a technologically-savvy society that thrives on innovative uses of IT and its various applications, local passengers are increasingly sophisticated and expect the latest in passenger processing technology. Indeed, Koreans are constantly looking out for ways to make travel simpler and more exciting through services such as mobile boarding passes, self check-in, self bag drop and even self-boarding. And, Incheon International Airport Corporation (IIAC) has been a key driver in the creation of new products and services in passenger processing.
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IT: SPOTLIGHT ON KOREA focus is to make airports convenient, attractive and pleasant. This is even more relevant in South Korea’s hospitable culture where, as part of their strategy to enhance the passenger experience, airports there can look at ways to make travel ‘fun and exciting’. This could also be a way to generate new sources of revenue for the airport. These include renting out office spaces, building shopping malls and retail outlets, convention centres, hotels, food and recreation, theme parks and the like. This is all part of the transformation into ‘airports of the future’, the latest evolution of airports that transforms them into ‘aerotropolises’ or cities with their own economies revolving around the airport. Incheon International Airport has taken a creative approach to generating non-aeronautical revenue with the introduction of a golf course, spa, private sleeping rooms, ice skating rink, a casino, indoor gardens and even a Museum of Korean Culture. We believe that more will be in store when their second terminal opens in a few years’ time. The value of technology in these non-aeronautical areas is plenty. For example, future investments on self-boarding and self bag drop systems will open additional APA Issue 2, 2014
opportunities for airports to partner with new tenants and other business entities. With these systems in place, passengers will then spend more time shopping rather than at check-in and boarding queues. Also, passengers interacting with self bag drop mechanisms that calculate baggage weight can pay for excess baggage through methods such as credit cards or mobile phones. Technology, for all its uses and benefits, must include a good balance of security measures to mitigate against fraud and threats. The ability to communicate across all levels and areas in the aviation eco-system is also a critical success factor. South Korea has done exceptionally well to recognise the role of IT and anticipate the future needs of its tech savvy passengers. They also have had the foresight, with a sophisticated airport like Incheon, to partner with different vendors who manage specific functions, so that the airport can focus on their core business. Little wonder then why Incheon has been rated the world’s best airport for many years APA and is so well respected by its peers.
ABOUT THE AUTHOR Jeff Amiri is the senior director for aviation and ground, systems solutions of the Information Management Services (IMS) division of Rockwell Collins.
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IT: COMMON USE
LOFTY AMBITIONS
John Jarrell, head of airport IT at Amadeus, considers the history of common use systems at airports and the consequences of moving them to the ‘Cloud’.
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ommon use’ refers to the sharing of airport facilities regardless of the airline involved. Typically, airlines will have their own check-in and boarding applications but share a physical desk and IT infrastructure at airports with other airlines. By allowing airlines to share physical space and IT resources, airports are able to free up more space for initiatives that can drive revenue growth such as commercial or retail ventures. Common use also helps travel providers – airports, airlines, and ground travellers – to maintain flexibility and reassign check-in counters and gates easily. APA Issue 2, 2014
Common Use Terminal Equipment (CUTE) originated in1984 to support the expected influx of travellers during the Olympic Games in Los Angeles. It lacks a detailed technical specification, which means any supplier that is able to meet certain requirements can provide a CUTE platform. This can be very costly for airlines; they need to manage a different variation of their passenger processing applications for each supplier, each of which requires airlines to both invest in and undergo a different certification process. CUTE can also have implementation challenges, particularly in terms of updating systems. Airlines have to develop their
ASIA-PACIFIC AIRPORTS MAGAZINE
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IT: COMMON USE
applications separately from the platforms. If the airlines and platform suppliers choose to update the CUTE platform, but airlines have not yet upgraded their applications, the change cannot fully take effect throughout the system. These drawbacks were noted and, in 2004, IATA began to develop the Common Use Passenger Processing Systems (CUPPS) standard. It has a much more clearly defined technical specification and airlines can now have one application that runs on any CUPPS certified platform. It is simpler to install and provide support for passenger processing operations, which means lower costs for airlines and airports. It is designed to ensure product and service consistency across the network, moreover, enabling airlines to share equipment and space. However, CUTE was never fully retired and it is estimated that more airports today are using CUTE than CUPPS. CUPPS was made available in 2009, but technology has naturally developed since
then to surpass what is allowed in the system. A number of new technologies â&#x20AC;&#x201C; application virtualisation, improved networks, mobile connections, and new devices â&#x20AC;&#x201C; have contributed a changing technological landscape that make this the right time to make Cloud computing a reality for common use systems. Application virtualisation, or decoupling applications from hardware and allowing them to be accessed remotely, allows airlines to centralise their computing and make changes to the passenger processing system more easily. Networks have improved both in terms of capacity (bandwidth) and speed. Alongside higher capacity, new network technologies are being rolled out, such as fibre and optical network links which can transfer data at the speed of light. Mobile connections have become significantly faster, allowing ground handlers and other travel providers to use new devices such as tablets and other portable screens. Together, these new technologies allow for true location-independent passenger processing and give airlines, ground handlers, and airports the flexibility to adjust their systems according to their needs. Many passengers use their own mobile devices to check themselves in to flights on their own schedule. Travellersâ&#x20AC;&#x2122; rising interest in managing the process themselves has led to a number of new developments, such as self-service bag drops, which are commonuse and work for all passengers, regardless of which airline they fly with. Migrating to a new system requires a lot of care and planning, particularly in the case of airports. But there is a strong business case for moving to the Cloud; above all, moving to the Cloud results in lower hardware, IT maintenance, and network costs. The Cloud also allows for a more secure system. By switching to the Cloud, travel providers need one IT infrastructure for common use in a dedicated data centre versus multiple servers in a local server room in the airport.
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IT: COMMON USE Travel providers can increase or decrease servers as necessary based on need, rather than spending to maintain a potentially unnecessary and underserved hardware capability. Additionally, the space formally used to house servers can be used instead for business processes such as servicing passengers or retail locations, allowing travel providers to maximise revenue potential. With the current CUTE/CUPPS set-up, airports need to maintain a number of specially trained IT employees. These employees need to be available at all times should there be a system failure or a need to update. Travel providers can put the weight of maintaining an IT department on the shoulders of the Cloud provider and can maximise the efficiency of local IT staff, redeploying them to manage new strategic IT programmes, rather than infrastructure. Network costs, too, will be decreased; instead of managing links to potentially hundreds of airport locations, each airline is connected via a single, redundant link to a Cloud provider, which then manages connections to airport locations. A Cloud-based approach to common use requires airlines and airports only pay for a single, redundant connection to the central data centre with a private Cloud. APA Issue 2, 2014
It is now possible to deploy a highly encrypted, secure connection, allowing airlines and airports to take advantage of the cost efficiencies that Internet based networks offer. Companies offering Cloud computing in a purpose-built centre generally provide firewalls, security codes, and other practices to mitigate the risk of a breach. Additionally, having dedicated staff with Cloud expertise means there are more resources to keep abreast of the latest security technologies. It takes time and effort to move to a new system. But moving to a Cloud-based system is a relatively quick and inexpensive prospect. It needs to be set up once, and then it can be used from any location. Cloud computing has already spread through many critical industries from finance to manufacturing. Some aspects of passenger processing already exist on the Cloud; it is now time to bring the rest of the industry on board. Cloud computing opens the door for innovation and new applications. It is a secure way to free airports, airlines, and ground handlers to grow and differentiate themselves. Above all, bringing passenger processing systems to the Cloud frees travel providers to focus on their core business of serving customers quickly and effectively. APA
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FINAL WORD POINTS OF VIEW
Points of view Asia-Pacific Airports meets Vinoop Goel, IATA’s regional head for airport, passenger, cargo & security in the Asia acific region. How important is aviation to the economic development of countries across the Asia-Pacific region?
Air transport is an integral enabler of business and tourism in Asia given the vast distances and islands involved. In fact, air transport provides essential connectivity that supports livelihoods in a number of locations. It accounts for 24.1 million jobs and $470 billion in GDP in Asia-Pacific.
How healthy are the region’s airlines?
Asia-Pacific airlines are expected to post profits of $3.7 billion and an EBIT margin of 3.4% this year. This is an improvement over 2013, helped by a slightly better outlook for cargo markets. Airlines in this region have the largest share of the international air cargo market. But there are financial challenges due to strong competition and government regulations.
What are some of these challenges?
Asia-Pacific airlines are leaders in service standards, and many are trendsetters for the industry. But there are challenges due to strong competition and government regulations. In addition, there are limitations on traffic rights and restrictions on ownership and control. These can severely limit airlines and airports’ ability to maximise their asset utilisation and revenue potential. Air cargo in Asia-Pacific is facing a tough time similar to other regions but we are hoping that 2014 will be more positive than the last few years.
What impact have the low-cost carriers had on traffic trends in Asia-Pacific?
Low-cost (or new-model, or point-to-point) carriers account for 19% of seat capacity in Asia as compared to the global average of 25%. They have had a very positive impact on APA Issue 3 1 2013
traffic in Asia-Pacific. These airlines represent both competition and feed for the traditional network carriers. Passengers will always have different service expectations – ranging from a no-frills origin and destination service to a first-class, all-inclusive round the world personalised luxury experience. Thus, there is room for all given the high growth prospects, and, a positive impact has been the focus on efficiency by the network carriers. Overall, it is true that these carriers have contributed to the growth and have enabled many cities to get connected to the global aviation network.
What is your take on dedicated facilities/terminals for the LCCs ?
Any facility should be open to access by all airlines, and all airlines should have a choice of facilities and services to provide to their customers. But most airports have limited space and thus generic facilities that serve all airlines and passengers may be the way to optimally utilise the space. If there are specific facilities for LCC operators, there should be no crosssubsidisation between terminals and groups of users. Also, there have been cases in the region where airports have had to change their LCC terminal plans due to changes in LCC expectations and traffic demands. The LCC model is also evolving – some now have assigned seating, business-class and also do interlining. A no-frills terminal without interline baggage facilities, lounges or air-side transfer capabilities may not meet the business needs of all LCCs. The last thing that we all want is an under-utilised facility at an airport given the high demand for space at an airport.
ASIA-PACIFIC AIRPORTS MAGAZINE
VINOOP GOEL
AGE: JOB TITLE:
46 Regional head – airport, passenger, cargo & security, Asia-Pacific, IATA
NATIONALITY: Indian
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BEST KNOWN FOR: LITTLE KNOWN FACT:
His very loud laugh
Worked for about 15 years in Japan
Should we be concerned that the region currently lacks the airport infrastructure to meet future demand? Yes! There are projections that the market in the region can grow multi-fold over the next couple of decades. We need to ensure that airport and ATC facilities are built ahead of the demand curve.
Are you and IATA happy at what is being done across the region to address the situation?
We have seen plans, but we need all parties – including governments – to co-operate and actually put the plans to action. A comprehensive analysis needs to be undertaken to identify chokepoints [on the ground and in the air] for the different traffic flows. Given the interconnected nature of aviation, a bottleneck in one location can have far reaching effects. This can impact airline efficiency, passenger experience and the overall health of the industry. Given the social and economic impact of air transport, governments need to enable these changes – not for aviation’s sake – but for the benefit of their own economies and societies.
Will private investment play a key role in the development and expansion of the region’s airports?
Private investment can play a role, but we need to ensure that the interests of airport users is
protected as the private investor will naturally focus on share holder returns. Economic and service regulation frameworks need to be in place prior to such investments.
In your opinion, is China’s plan to build up to 70 new airports by 2015 achievable?
We have seen China achieve amazing things within a short span of time, so I would not rule out China actually achieving what it has set out to do.
What’s your response to those that say that aviation can never be environmentally friendly?
Aviation contributes only 2% of man-made emissions and was the first industry to come together and develop emission goals that include CNG from 2020 and 50% reductions by 2050.
Do you have a favourite airport and why?
I live in Singapore and obviously my favourite airport is Changi! Where else in the world can you see a butterfly garden? But seriously speaking, the service levels at the airport are best in class with minimum waiting time and lots to do, shop and eat. I am also very excited about the upcoming developments at Changi and am eagerly looking forward to new technologies and processes that take Changi to new heights. APA www.aci-apa.com
FINAL WORD POINTS OF VIEW
NAME:
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AIRLINES
The X factor AirAsia X CEO, Azran Osman-Rani, talks to Lucy Siebert about the airline’s pan-Asian multi-base strategy.
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n many ways AirAsia X has put the long-haul, low-cost debate to bed in the Asia-Pacific region. Indeed, with a network of 17 destinations from Kuala Lumpur, the airline believes it has demonstrated the strength of the model in Asia-Pacific. Listed on the Bursa Malays (formerly known as the Kuala Lumpur Stock Exchange) last year, AirAsia X is currently focused on beefing up its presence in key markets, including Korea, China and Australia. Its new sister, Thai AirAsia X, is also expected to get off the ground during 2014. And, it even has an eye on potentially resuming European operations in the future and has mentioned the possibility of one-stop services to North America in the long-term. But all its plans are based around establishing strong, sustainable bases in its main markets. CEO, Azran Osman-Rani, believes the initial public offering (IPO) really signalled to the rest of the industry that AirAsia X had well and truly arrived. “It is the first time a long-haul LCC has reached the stage of an IPO, which means the business model is not just about us saying it works, but investors have put their money behind it, that this is a viable business model, which is important psychologically,” he tells Asia-Pacific Airports.
EUROPE RETURN?
Going public also raised somewhere in the range of $230 million for the carrier, part of which has gone towards its $6 billion aircraft order (at list prices) for 25 additional A330-300 aircraft, which, if all goes according to plan, could eventually allow APA Issue 2, 2014
the carrier to return to Europe with more efficient equipment. AirAsia X’s first attempt to crack the European market resulted in it pulling flights to Paris and London in 2012, after operating to the capitals for one and three years respectively. Now, it believes with new technology and more investment behind it, a second incursion could be on the cards later this decade. AirAsia X currently operates 15 A330-300s on services from its Kuala Lumpur base to 18 destinations in Asia, Australia and Saudi Arabia. In addition to A330s, it also has 10 A350-XWB aircraft on order for future delivery. The order of 25 additional A330-300s, which includes extended range versions, means it could look at a return to Europe after 2016 – or could even consider a one-stop transpacific service from Asia to North America. Osman-Rani tells APA he is excited about the opportunities the aircraft order presents. “That obviously makes the economics a lot more attractive. This variant we are slated to take delivery of is in 2016, so it gives us the option to look at Europe as a possibility in that timeframe,” he says. Adding: “But we are not going to commit now as it’s a few years away.” For North America, Osman-Rani says the new A330-300s could allow AirAsia X to look at a one-stop transpacific service via Japan, Taiwan or even the Philippines. “It [North America] still wouldn’t be accessible direct from Kuala Lumpur, but for example if AirAsia Japan takes off again, and it has a strong domestic network in Japan, that would give us the option to use that as a hub to go transpacific,” he says.
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AIRLINES
TEAMWORK
While Osman-Rani is open-minded about the network possibilities for the future, he is adamant the long-haul airline will base its operations around its sister carrier AirAsia’s bases to ensure sufficient local and regional feed. “We are shadowing AirAsia as they set up hubs. Regions like Thailand, for example, is of immediate interest to us is because Thai AirAsia already has a very strong short-haul network there,” he says. “As AirAsia expands with a number of short-haul hubs, those become candidates for us to put long-haul planes in and set up our own hubs.” His comments come after the airline axed Maldives from its network, notes “challenging business conditions” for the decision.
The CEO cites the Philippines, India and Japan as potential markets for AirAsia X, but stresses that any incursions would depend on AirAsia’s scale and ability to provide feed to hubs in those countries. Despite AirAsia India expecting to get off the ground this year, Osman-Rani says AirAsia X would take a cautious approach to that market. The airline previously served Mumbai and New Delhi before pulling out in 2012, but he says India remains a tough market for low-cost carriers due to its high airport and fuel costs and bureaucratic regulatory regime. “It is a very large and complex market. It requires a lot of investment to build a brand, to build a distribution network, and we were simply sub-scale,” he says. www.aci-apa.com
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AIRLINES “If AirAsia India were to invest there, lay the groundwork, set up a distribution system, build up the AirAsia brand to the point that it becomes a household brand name, then it paves the way for AirAsia X to ride on that. “It is something we are looking at very keenly but we want to make sure AirAsia India leads it from the front.” One market where AirAsia X appears to have found success beyond what it could first have imagined is Australia. It now flies to five Australian cities (Gold Coast, Sydney, Adelaide, Brisbane and Melbourne), making it the country’s fourth biggest international carrier. Not bad for a brand that only entered Australia in 2007 with its first ever long-haul flight to the tourism and leisure capital of the Gold Coast. Despite missing its target of serving five Australian cities within five years of operation – it got to Adelaide in its sixth year – the market has, nonetheless, proved to be a major success for AirAsia X. Osman-Rani attributes much of the airline’s success in Australia to its competitive airports and the support from its tourism organisations. “It is certainly a market that has taken well to the low-cost carrier proposition, people feel comfortable buying online, airports are APA Issue 2, 2014
competitive, they understand that they need to structure pricing and services that suit a low-cost carrier,” he says. Despite the success AirAsia X has found in Australia, Osman-Rani says the carrier won’t be making any sudden moves across the Tasman to New Zealand. Having launched to Christchurch in April 2011, it pulled out in May 2012. While the CEO says he is “personally interested” in the market, he adds: “for 2014 we really need to focus on concentrating and building up a stronger position in our core markets”. Thailand is one of those core markets and Thai AirAsia X is preparing to get off the ground soon. The carrier now has its Air Operator’s Certificate (AOC), and former music and entertainment executive, Nadda Buranasiri, has been appointed CEO. Osman-Rani says he is hopeful of a launch in the first quarter of 2014 and says the Thai subsidiary will focus on routes and destinations where the AirAsia brand is already known – likely to mean a network that includes Australia and China. So, while the long-haul low-cost question is debated in conference rooms around the world, Osman-Rani believes AirAsia X will be leading from the front, with sustainable growth APA in its most important markets.
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Asia-Pacific Airports finds out more about Hong Kong International Airport’s ‘green dining’ initiatives.
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ong Kong International Airport has long been proud of the food selection available in its terminals, often citing it as one of the top attractions for visitors. Well, it can now probably claim to be one of the world’s greenest airports for dining after introducing a raft of new ‘sustainable food practices’ to decrease its environmental footprint. They include ‘Go Green Monday@HKIA’, a joint campaign with NGO Green Monday, which has led to 59 airport restaurants, lounges and business partners offering a vegetarian option every Monday or even on a daily basis. Wilson Fung, executive director, corporate development of Airport Authority Hong Kong (AAHK), says: “We are proud to collaborate with Green Monday on this special campaign to promote Hong Kong International Airport as the world’s first airport to fully support and advocate a meat-free green diet and lifestyle.”
According to Green Monday’s statistics, if passengers choose to eat meat-free meals every Monday, a total of 4,000 tonnes of carbon emissions would be reduced as a result. HKIA is already one of the great airport food recyclers – recycling 1,600 tonnes of food waste in 2013 – and, since last August, the HKIA Environmental Fund has supported food rescue NGO Food Angel to collect all unused food from restaurants, caterers, airlines and lounges at the airport for redistribution to underprivileged communities. And, most recently, AAHK introduced a Sustainable Seafood Pre-order Dining Policy, which requires banquet menus for 12 or more people to refrain from using any of the 13 species on the WWF Hong Kong’s ‘Seafood to Avoid’ list. The list includes all shark products, Bluefin tuna, Humphead wrasse and Hong APA Kong grouper. www.aci-apa.com
ENVIRONMENT NEWS
ENVIRO REPORT
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IT TRENDS: CHINA
Chinese IT Trends Asia-Pacific Airports reports on the highlights of SITAâ&#x20AC;&#x2122;s special focus on China in its latest Airport IT Trends Survey.
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ccording to SITA, Chinaâ&#x20AC;&#x2122;s progress in modernising its airport infrastructure is reflected in the latest Airport IT Trends Survey, by the fact that over half of the participating airports are refurbishing, extending or building new terminals. The survey reveals that Mainland Chinaâ&#x20AC;&#x2122;s top airports expect their total IT spending to grow by 23% from 2012 to 2013, more than double the 11% rate of revenue growth rate for the same period. Investment is set to rise further in China with 80% of these airports expecting IT budgets to increase again next year as the country prepares to manage more than 870 million passengers by 2016. These are the results from 10th edition of the SITA/ACI/Airline Business Airport IT Trends Survey, which in 2013 includes responses representing the view of mainland Chinaâ&#x20AC;&#x2122;s top 25 airports. Together these airports represent 66% of total passenger traffic in China, or 453 million passengers. The analysis shows that self-service is in the early stage of adoption in mainland China. Only 8% of airports report that self-service kiosks are the primary check-in method. But by 2016, self-service technology will go mainstream. By then, 54% of airports expect that most passengers will use self-service kiosks for check-in. More than 70% of airports plan to introduce new self-service initiatives for check-in areas including assisted bag drop and self-bag tag printing. New passenger-facing information technologies will become an integral part of APA Issue 2, 2014
CHINA: TOTAL IT SPEND AS % OF REVENUE
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Source: SITA.
CHINA: STRATEGY FOR KIOSKS
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Source: SITA.
ASIA-PACIFIC AIRPORTS MAGAZINE
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Source: SITA.
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airports’ customer service strategies, which will increasingly integrate social media and mobile Apps as well. May Zhou, vice president and general manager for SITA China, said: “The main challenge for Chinese airports is to keep up with rapidly rising passenger numbers. “By 2016, we can expect to see 200 million more passengers every year in China. That’s why airports are investing in technology to streamline their operations and improve the passenger experience. “Information technology will play a key role in managing the country’s rapid growth in air travel, while ensuring passengers enjoy a seamless journey through its airports.” SITA’s survey shows the importance of social media to airports in China. By 2016, more than 87% of the top 25 Chinese airports plan to use social media to provide flight status information. Already, Chinese airports are ahead of the rest of the world in this area; 42% have already implemented ‘notifications about airport status’ via social media, ahead of the global average of 29%.
Chinese airports recognise the importance mobile technology will have in the future and nearly four out of five expect that mobile will be the dominant channel for customer service communication by the end of 2016. Mobile Apps will play a key role in passenger interaction, particularly to provide status information on flights and the airport, and, for customer service. Almost half (48%) of Chinese airports are investing in business intelligence solutions for airport operations, which transform data into useful and actionable information. However, airport stakeholders are not always willing to share data, and this may slow progress. In 2013, the Chinese airports surveyed said they planned to increase their total IT expenditures to 5.85% of revenues, higher than the 5.43% of revenues for all airports globally. In 2012, Chinese airports spent 5.25% of revenues on IT, above the global IT spend of 4.9% of revenues. IATA estimates passenger traffic in China will grow to 873 million by 2016, up 29% from 679 million in 2012. APA www.aci-apa.com
IT TRENDS: CHINA
CHINA: AIRPORT IT INVESTMENT IN 2013
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WBP NEWS
WORLD BUSINESS PARTNERS
IN THE SPOTLIGHT AUSSIE RULES Australia’s first new airport in 50 years, Brisbane West Wellcamp Airport, has chosen a Queensland firm for its flight information display system (FIDS). The Toowoomba located airport is set to be operational later this year, and Intersystems has been awarded the contract. Intersystems CEO, Bruce Allen, says he is delighted to able to provide the company’s RapidFIDS and RapidADS systems. “The Brisbane West Wellcamp project was important for us to secure because of its uniqueness in the Australian context and its proximity to our head office. “The runway is already taking shape and we’re looking forward to delivering the project this year. “With Brisbane West Wellcamp Airport’s first flights expected in October, the airport is undoubtedly going to be a key infrastructure asset for Toowoomba, Queensland and Australia as a whole.” The A$100-million-plus airport, will feature a terminal with extensive retail space, a 2.87 kilometre runway and business park when it opens in October this year. APA Issue 2, 2014
NEW ‘LUXURY’ BOUTIQUE Abu Dhabi International Airport has joined forces with the DFS Group to open a luxury new fragrances boutique. Simply called ‘Fragrances by DFS’, the new 2,726 square foot outlet boasts a range of fragrances from around the world, many of which are exclusively available in the Middle East. The unveiling coincides with DFS’s Masters of Fragrances exhibition, which is taking place in Terminal 1 over the next two months. During this time, passengers will have the opportunity to discover and purchase one-of-a kind fragrance art pieces from various brands. Abu Dhabi Airport Company’s chief commercial officer, Mohammed Al Bulooki, enthuses: “The opening is another milestone in Abu Dhabi Airports’ commitment to redefining the passenger shopping experience within the airport.”
He notes that Abu Dhabi Duty Free “maintained a steady yet significant growth momentum last year”, when it reported a 13% increase in duty free revenue and launched a rebrand. “The new Fragrances by DFS boutique in Terminal 3 has been artistically designed across 2,726sqft retail space similar to a luxury high street store,” adds Al Bulooki. “The products will be displayed in a way that will offer passengers a unique experience created through timeless quality design with unique character.” ADAC claims that “highly sought out niche premium brands” from over 65 fragrance houses will be exclusively available at the new Fragrances by DFS boutique. They include Bond No.9, Byredo, Diptyque, By Kilian, Penhaligon’s, The Different Company, The Fragrance Kitchen and Xerjoff.
ASIA-PACIFIC AIRPORTS MAGAZINE
CASUAL DINING IN HONG KONG Passengers departing from Hong Kong International Airport now have a new casual dining option to frequent after a FoodPlaza opened up. The new concept has been launched by Plaza Premium Lounge and gives travellers the chance to enjoy some diverse culinary options. FoodPlaza is located near Gate 36, and is made up of four brands: The Terrace Express, Lee Fa Yuen Express, The Green Market Express and Moon Bar. The Terrace Express offers visitors a final chance to enjoy local Cantonese favourites
before departure, while Hong Kong favourite, Lee Fa Yuen Express, Terminal 1’s only Korean restaurant, is home to Korean favourites. The Green Market Express offers slow pressed fresh juices and nutritious salads, and the MoonBar offers a full bar offering in a relaxed tall-table setting, where a glass of wine and beer and rustic charcuterie platters and hot sandwiches can be enjoyed. Plaza Premium Lounge explains that it will also be rolling out the new concept to an airport in Malaysia this summer.
WELCOME ABOARD ACI Asia-Pacific is pleased to announce that it welcomed three new World Business Partners in the first quarter of 2014 – Airport Solutions Limited, Commercial and Business Aviation Services Pvt Ltd, and Scarabee Systems & Technology BV. Quality of advice, training, procedures and policies developed by Airport Solutions Ltd have been recognised by both ICAO and ACI, which continue to work in partnership with
Airport Solutions Ltd on different projects. Based in Bangalore, Commercial and Business Aviation Services (CBAS) provides a range of aviation and safety management services and is India’s first accredited aviation auditors. Scarabee works closely with airports, airlines and their business partners to develop unique, innovative and tailor-made solutions for passengers and the baggage handling and security sectors.
AECOM Asia Co Ltd Contact: Neil Gerard Bentley Address: 300 Beach Road, #03-00 The Concourse, Singapore Tel: +65 6580 2797 Email: neil.bentley@aecom.com Website: www.aecom.com AECOM is a global provider of professional technical and management support services to a broad range of markets, including transportation, facilities, environmental, energy, water and government. A Fortune 500 company, AECOM serves clients in more than 150 countries and had revenue of $8.1 billion during the 12 months ending December 31, 2013. Flemingo International Ltd Contact: Rasiklal Rattilal Thakker Address: PO Box 61239, Jebel Ali Free Zone, Dubai, 61329, UAE Tel: +917 6444431 Email: rasik@flemingo-intl.com Website: www.flemingo-intl.com Flemingo International is a Dubai based global travel retail operator with a focus on emerging markets. Iin 1997 we saw potential in the traditional trade routes between East Africa and the Middle East and opened our logistics facilities in Dubai and subsequently our first outlet in Africa. Since the beginning, our agile and speedy decision-making has helped us establish operations in emerging markets and partnerships globally. Today, Flemingo is a leading player in the industry through acquisitions, tenders and joint ventures across three continents, with around 120 outlets in 26 different countries. www.aci-apa.com
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WBP PROFILES
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SOCIAL MEDIA
Being social ASIA-PACIFIC AIRPORTS MAGAZINE
Asia-Pacific Airports reviews the regional winners of the industry’s newest digital, mobile and social media awards programme.
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ydney Airport has won the Best Airport/ Concessionaire Website category of The Moodies 2014 – airport digital, mobile and social media awards. The Best Airport/Concessionaire Website category is a best-in-class award for airports, which best utilise social and digital media to connect with their customers. The gateway’s website was judged on areas including quantifiable impact, customer engagement, visual appeal and quality of content. “It’s fantastic to see the work we’ve done to enhance our digital offering – starting with the launch of a holistic, integrated website solution catering for mobile devices – has been recognised by The Moodies awards,” says Sydney Airport’s CEO, Kerrie Mather. “Our win in this category reflects our work to harness digital channels and engage with all travellers. For example, Sydney Airport’s website now includes a mobile site and a simplified Chinese site for our Chinese-speaking passengers. “We’re committed to innovation and providing the best possible experience for our customers, be it through an in-person experience or engaging with them digitally.” Sydney Airport, recognising an ever-increasing number of passengers are looking to plan their journey before they reach the airport, launched a holistic digital solution in 2013. It features a range of channels and customer touch points. Examples of initiatives launched on Sydney Airport’s website over the past year include the online travel guide for Australia and overseas, an online product guide with a ‘wishlist’ feature, and new online pre-booked parking deals. Another big winner based in Asia-Pacific was Delhi Duty Free Services, which won the APA Issue 2, 2014
Best Twitter Feed – Concessionaire category at The Moodies. Delhi Duty Free Services Pvt Ltd (DDFS) – which runs one of India’s largest duty free spaces in Terminal 3 at Delhi’s Indira Gandhi International Airport – was also highly commended for Best Use of Social & Digital Media (Concessionaire) in the awards. Driven by the desire for ‘customer happiness’, Delhi Duty Free launched its digital initiatives back in 2011 and has not looked back since. CEO, Duncan Lawley, said: “We are extremely honoured and delighted to win the Best Twitter Feed award and being highly commended for Best Use of Social & Digital Media. I am glad that the commitment level of our teams is getting recognised. “Our aim has been to have one-on-one conversations with people out there, understand what they love about us, what they dislike about us and finally react. Achieving the same and getting recognised for it consolidates our beliefs and motivates us to go another APA extra mile for our consumers.”
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