The official publication of ACI Asia-Pacific www.aci-asiapac.aero
Aviation: Connecting people, driving business Focus on: The importance of aviation
Issue 1, 2016
In the spotlight: Queensland Airports Limited
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Special report: ASQ Winners Plus: Game changing IT and New infrastructure
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ASIA-PACIFIC AIRPORTS MAGAZINE
CONTENTS
Asia-Pacific Airports Issue 1, 2016
6 View from the top
18 Looking to the future
Regional director, Patti Chau, reflects on some achievements, goals and milestones ahead of ACI Asia-Pacific’s Regional Assembly, Conference & Exhibition in the Gold Coast.
Joe Bates catches up with new Queensland Airports Limited CEO, Chris Mills, to find out how he has fared in his first six months in the role and learn more about some ambitious development plans.
8 News
24 Connecting Australia
A snapshot of some of the biggest current stories from the region.
10 Roll of honour
Asia-Pacific airports once again demonstrated their customer service credentials by excelling in ACI’s Airport Service Quality (ASQ) customer satisfaction awards.
16 ACI Asia-Pacific news Vivian Fung reports on the latest news and events from across the Asia-Pacific region.
Australian Airports Association’s policy manager, Simon Bourke, considers the national importance of aviation and some of the opportunities and challenges faced by the country’s gateways.
30 Happy talk!
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Pacific Asia Travel Association’s regional director-Pacific, Chris Flynn, reflects on the changing dynamics of Asia-Pacific tourism.
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ASIA-PACIFIC AIRPORTS MAGAZINE
CONTENTS 38 Spotlight on Myanmar and Vietnam
Asia-Pacific Airport’s editor, Joe Bates, reviews some of the exciting capital investment projects planned for airports in Myanmar and Vietnam.
42 Welcome aboard!
Asia-Pacific Airport’s takes a closer look at what’s in store for passengers using Dubai International Airport’s new $1.2 billion Concourse D.
46 Building bonds
Joe Bates finds out more about the rapidly growing trend of ‘sister airport agreements’ between Asia- Pacific gateways and their counterparts across the globe.
Asia-Pacific Airports (APA) www.aci-apa.com Editor Joe Bates joe@aci-apa.com +44 (0)1276 476582 Design, Layout & Production Mark Draper mark@aci-apa.com +44 (0)7495 611207
APA Issue 1, 2016
Published by Aviation Media Ltd PO BOX 448, Feltham, TW13 9EA, UK Managing Director Jonathan Lee jonathan@aci-apa.com +44 (0)208 707 2743 Advertising Manager Ellis Owen ellis@aci-apa.com +44 (0)208 274 1540
48 Winning hearts and minds
Harnessing the power of aviation’s information age to improve the passenger experience is key to customer satisfaction, writes Rockwell Collins’ Andrew Seow.
52 Design & build Work is underway on the new Terminal 2 at Mactan-Cebu International Airport.
54 World Business Partners All the latest news from the region’s WBPs.
Subscriptions Beth Owen subscriptions@ aviationmedia.aero +44 (0)208 707 2743
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Asia-Pacific Airports (APA) is published four times a year for the members of ACI Asia-Pacific. The opinions and views expressed in APA are those of the authors and do not necessarily reflect an ACI policy or position. The content of this publication is copyright of Aviation Media Ltd and should not be copied or stored without the express permission of the publisher.
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ASIA-PACIFIC AIRPORTS MAGAZINE
FINAL WORD VIEWPOINT
VIEW FROM THE TOP Regional director, Patti Chau, reflects on some achievements, goals and milestones ahead of ACI Asia-Pacific’s Regional Assembly, Conference & Exhibition in the Gold Coast.
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hanks to the support of our members and partners, 2015 was a busy and fruitful year for our region and this year promises to be just as memorable. In 2016, our primary focus will be member engagement and building up awareness about, support for and encouraging the adoption of two core programmes – Smart Security and Airport Carbon Accreditation. Without question, providing services that support and meet the needs of our members remains a top priority, and we are determined to deliver on the promises made to our members in the Middle East during my successful trip to the region in 2015.
AIRPORT ECONOMICS & FINANCE CONFERENCE
As usual, the first major ACI Asia-Pacific event of the year was the annual Airport Economics & Finance Conference and Exhibition in London – held in collaboration with ACI World and ACI Europe – and I am pleased to say that it was a great success. Indeed, more than 250 delegates and 11 exhibitors from 50 countries attended APA Issue 1 2016
this year’s event, where I took the opportunity to share some of the challenges facing Asia-Pacific’s airports. These include a slowdown in the development of the region’s low-cost carriers and the need to invest in new capacity enhancing airport infrastructure to ensure that cities, regions and countries are equipped to meet future demand. The latter requirement explains why the Asia-Pacific region continues to lead the world in both airport investment projects and the number of greenfield airports being constructed. I believe the year ahead is set to be one of volatility and challenges. Low oil prices, for instance, coupled with China’s economic slowdown and the Chinese government’s decision to devalue the RMB will stir up uncertainty, while fluctuating exchange rates will affect consumer behaviour.
ACI WORLD 25TH ANNIVERSARY
ACI World celebrates its 25th anniversary this year and I would like to be among the first to congratulate the organisation on reaching such a milestone.
ASIA-PACIFIC AIRPORTS MAGAZINE
AWARDS AND RECOGNITION ON PEOPLE DEVELOPMENT
I would like to congratulate this year’s Young Executive of the Year award winner, Sunil Kumar Munnangi, of GMR Hyderabad International Airport Limited for his submission on the topic of ‘Effective Collaboration and Cooperation among Airport Stakeholders’. His research provided an in-depth analysis on achieving good stakeholder management. Honourable mentions were awarded to Mohd Khairulfatin Zulhaimi of Malaysia Airports Holdings Berhad and Hideki Namiki of Narita International Airport Corporation. Introduced in 2009, the Young Executive of the Year award strives to honour and recognise our industry’s younger
generations and it has certainly identified a number of talented individuals who have all shared their innovative ideas and solutions on how they would tackle some of the industry’s key challenges. I would also like to congratulate Adelaide Airport, which received Gold Recognition in the ACI Asia-Pacific HR Excellence Recognition programme for 2016. Introduced to our region in 2013, the initiative promotes and recognises excellence in airport HR management.
AIRPORT CARBON ACCREDITATION
This year marks the fifth anniversary of the introduction of the Airport Carbon Accreditation programme to our region and, to date, 31 airports handling around 25% of the traffic across Asia-Pacific have gained certification under the only institutionally endorsed scheme designed to monitor, manage and reduce carbon emissions at airports. To celebrate our region’s success in this regard, we will be hosting a special ceremony, simply called ‘Airport Carbon Accreditation – Fifth year in Asia-Pacific’, at this year’s Regional Assembly taking place in Australia’s Gold Coast. All Asia-Pacific Airport Carbon Accredited airports are invited to join us as we celebrate and acknowledge their achievements.
NEXT ON THE AGENDA
Lastly, I would like to invite you to join us at two events that will be held in the Asia-Pacific region later this year, the Trinity Forum and the ACI Asia-Pacific Small and Emerging Airports Seminar, which will be held in Mumbai, India (September 12-14), and Siem Reap, Cambodia (October 24-26), respectively. Before then, of course, I look forward to meeting you at our Regional Assembly, Conference & Exhibition in the Gold Coast where I know you will enjoy a productive three days and some fantastic sunny weather!
APA
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VIEWPOINT
Airports worldwide share many of the same challenges and common goals. Security threats, natural disasters, pandemics and financial challenges, for example, are not unique to any one region, that is why ACI’s regions must continue to work closely with ACI World to respond to and overcome such crises as well as raise the bar on other key issues such as safety, security, the environment, training and customer service. We know all about celebrations, of course, as we celebrated the 10th anniversary of ACI Asia-Pacific in 2015 following the unification of ACI’s former Asia and Pacific regions. Under the leadership of presidents, Max Moore-Wilton, Tan Sri Bashir and Dennis Chant, our region has grown tremendously over the last decade in terms of recognition, membership and the variety of services we offer. With the support of our members, we have achieved many milestones of our own, and I believe that there is much more to come. Let’s work together and turn this silver jubilee celebration for ACI World into the beginning of a golden era for our industry.
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NEWS
TAV WINS $1.1 BILLION BAHRAIN CONTRACT Bahrain International Airport has awarded the $1.1 billion construction contract for its new state-of-the-art terminal to a joint venture comprising Arabtec and TAV Construction. The 220,000sqm terminal is designed to be a LEED Gold building, will more than treble the gateway’s capacity to 14mppa and is expected to take 51 months to complete. TAV Airports’ president and CEO, Sani Şener, states: “Since the İstanbul Atatürk Airport project in 2000 we will have built a total of 16 airports in the Middle East and North Africa region, seven of which are gateways of the capital cities of their respective countries. “We are proud to be announced as the preferred bidder and to add Bahrain Airport to our portfolio, which includes ongoing projects in the UAE, Oman and the Kingdom of Saudi Arabia.”
CHINA’S BIG BUILD CONTINUES China is set to invest $11.7 billion on the construction of new airports and other civil aviation infrastructure this year, according to the Civil Aviation Administration of China (CAAC). It has pledged to step up construction of important new airports in Beijing, Chengdu, Qingdao, Xiamen and Dalian this year in addition to starting work on more than 60 other projects, which will include dozens of upgrades and expansion programmes. CAAC notes that the construction of Beijing Daxing, the largest construction project in Chinese civil aviation history, is progressing well and is on target to be completed in June 2019 in readiness for an opening in December of that year. Dong Zhiyi, a deputy director at the administration, has previously stated that China plans to build 66 new civil airports in the next five years, raising the number of commercial airports in Mainland China from 206 to 272. APA Issue 1, 2016
PULLING POWER Staff at Dubai’s airports flexed their muscles on March 3 by taking part in a sponsored plane pull to raise funds for Orbis, an NGO which works to prevent and treat blindness around the world through training and education, and its flying eye hospital. The winning team from Dubai Customs managed to beat off stiff competition from nine others to pull a B747 National Air Cargo plane a distance of 18.3 metres in 30 seconds to help raise thousands of dollars for the charity. “It was very heartening to see the entire airport community getting together to support a noble cause and help raise awareness and funds for an organisation that spreads joy and wellbeing to communities in remote corners of the world,” said Paul Griffiths, CEO of Dubai Airports.
TOP OF THE POPS Hong Kong International Airport’s new capacity enhancing HK$10 billion Midfield Concourse is already proving popular with passengers, according to Airport Authority Hong Kong. The 105,000sqm facility, which is connected to Terminal 1 by Automated People Mover (APM), boasts 20 aircraft parking stands and the capacity to handle up to 10 million passengers per annum. The complex currently handles around 20% of the gateway’s daily passenger flights and is said to provide a “one-stop shopping and dining experience” for travellers. The airport hit new heights in 2015 handling 68.5 million passengers (+8.1%) and 4.38 million tonnes of cargo (+0.1%) respectively. “It is an important development as it will help the airport meet rising demand, has increased the number of flights using airbridges and enhanced the passenger experience,” enthuses says chairman, Jack So.
ASIA-PACIFIC AIRPORTS MAGAZINE
I, ROBOT Nao has joined the growing list of airport robots by providing Japan Airlines passengers at Tokyo Haneda Airport with information about flight schedules, security requirements and weather reports. Japan Airlines started trials of the humanoid robot guide at Haneda in February and the tiniest member of its workforce at just 60 centimetres tall proved popular with customers. Now the airline has to decide whether he impressed them enough to become a more permanent fixture at the airport. Built by a French company, it speaks Japanese, English and Chinese and was placed in the departure hall and security check areas for maximum impact.
BEIJING LEADS THE WAY ACI Asia-Pacific has confirmed that Beijing Capital, Dubai International and Tokyo Haneda were the busiest airports in the Asia-Pacific region in 2015. The airports handled 89.9 million (+4.4%), 78 million (+10.7%) and 75.4 million (+3.8%) passengers respectively during the year, which saw an 8% upturn in passenger traffic across the region. In China, passenger traffic growth was led by Shanghai Pudong (PVG), which registered a healthy 16.3% upturn in throughput. Indeed, ACI notes that despite the slowdown in the Chinese economy, most airports in China reported positive results for the year.
It also says that “solid economic growth” in India led to many of the country’s airports posting significant increases for the year. The pack being led led by Delhi–Indira Gandhi (+15.7%), Mumbai–Chhatrapati Shivaji (+16.1%), Bengaluru’s Kempegowda International Airport (+25.2%) and Hyderabad–Rajiv Gandhi (+22%). Among all airports across the region, Bangkok– Don Mueang (DMK) delivered the highest growth rate 40.6% for the year driven by a strong increase in domestic and international traffic. Other major airports in the region to generate sizeable growth included Kansai (+19.9%) and Busan (+19.6%). www.aci-apa.com
NEWS
HIGH FIVE The new Terminal 5 at Riyadh’s King Khaled International Airport (KKIA) will be managed and operated by daa international, the international business arm of Irish airport operator, daa. Set to open later this year, the new 106,500sqm domestic terminal is the Saudi Arabian gateway’s flagship development and will have the capacity to accommodate up to 12 million passengers per annum. “This is daa International’s first airport management contract and our intention is to build on this win by adding further significant contracts in the months and years ahead,” enthuses daa International chief executive, Colm Moran. Sulaiman Al Hamdan, president of the General Authority of Civil Aviation (GACA), notes: “This is the first project of its kind for GACA and we are very excited to be working with daa International who submitted a very attractive and competitive bid for managing and operating this brand new terminal at KKIA.” KKIA, which is located 35 kilometres north of Riyadh, handled a record 22.3 million passengers in 2015 to cement its status as Saudi Arabia’s busiest gateway.
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ASQ WINNERS
Roll of honour Asia-Pacific airports once again demonstrated their customer service credentials by excelling in ACI’s Airport Service Quality (ASQ)customer satisfaction awards.
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he introduction of new categories and the results in others being too tight to call means that a record-breaking 62 airports won awards in ACI’s Airport Service Quality (ASQ) customer satisfaction survey for 2015, with Asia-Pacific airports once again dominating the global sections. Indeed, the region’s airports won all of the global by size categories, including the coveted award for the world’s best gateway handling over 40 million passengers, which this year was shared by Incheon and Singapore Changi. The duo finished ahead of an all Chinese cast on the runner’s up rostrum in the Over 40mppa category, with Beijing Capital and Shanghai Pudong tied in second place and Guangzhou Baiyun finishing third. A new name on the winner’s podium this year is Jaipur International Airport in India, which won both the global Best Airport by new Size and Best Airport by Size and Region (Asia-Pacific) awards in the 2-5mppa category. Fellow Indian gateway, Lucknow’s Chaudhary Charan Singh International Airport in the northern state of Uttar Pradesh, finished second to Jaipur in the global 2-5 million passengers per annum section. Asia-Pacific airports completed clean sweeps in the final three global by size groups with Mumbai– Chhatrapati Shivaji and Delhi–Indira Gandhi APA Issue 1, 2016
sharing top spot for airports handling 25-40mppa; Sanya Phoenix winning the 5-15mppa category and Seoul–Gimpo retaining its title of best airport on the planet welcoming 15-25mppa. Chhatrapati Shivaji operator, Mumbai International Airport Limited (MIAL), is quick to point out that it is the fifth consecutive year that it has ranked among the top five airports in the global 25-40mppa category. “We started off with a vision to be among the best airports in the world, and the award is validation of the fact that our efforts towards establishing world-leading service quality are headed in the right direction,” enthuses MIAL managing director, Sanjay Reddy. “We have continuously upgraded our services to delight guests and offer best-in-class comfort and convenience. Terminal 2 has been both the proving ground and the pedestal of success for our initiatives to serve our passengers with unwavering focus on excellence, efficiency, safety, sustainability and environmental care.” Seoul–Gimpo narrowly beat off the challenge of China’s Wuhan Tianhe International Airport and Denpasar–Ngurah Rai Internatonal Airport in Bali, Indonesia, to win the 15-25mppa category for the fifth successive year. While Asia-Pacific gateways Tianjin Binhai (China) and Hyderabad¬–Rajiv Gandhi (India) finished second and third place respectively
ASIA-PACIFIC AIRPORTS MAGAZINE
ASQ WINNERS
Best Airport by Size Over 40 million pax per year First place (tie)
Second place (tie)
Third place
Seoul Incheon
Beijing
Guangzhou Baiyun
Singapore
Shanghai Pudong
25-40 million pax per year First place (tie)
Second place
Third place
Mumbai
Taiwan Taoyuan
Shanghai Hongqiao
First place
Second place
Third place
Seoul Gimpo
Wuhan
Denpaser
First place
Second place
Third place
Sanya Phoenix
Tianjin Binhai
Hyderabad
First place
Second place
Third place
Jaipur
Lucknow
Guayaquil
New Delhi 15-25 million pax per year
5-15 million pax per year
2-5 million pax per year
behind Sanya Phoenix in the 5-15mppa section and Taoyuan (Taiwan) and Shanghai–Hongqiao (China) were runner’s up to joint winners Mumbai and Delhi in the 25-40mppa category. Seokki Kim, president and CEO of Korean Airport Corporation (KAC), believes Seoul-Gimpo’s continued success demonstrates just how good its customer service levels are as he admits that the gateway is currently utilising “outdated facilities”. He says: “Gimpo’s achievement of ranking the first in the world in airport services for the fifth consecutive time, despite its outdated facilities, is the result of combined efforts of all airport employees who share the mutual goal of providing the best airport services and strive to achieve it. “We will do our best to continue to innovate and make improvements to remain a customerfriendly and business-oriented airport.” In addition to its success in the global Over 40mppa category, customer service king, Incheon
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International Airport, retained its Best in Asia-Pacific title for the eleventh-year running, although once again it had to share the honour with Singapore Changi as the two super hubs couldn’t be separated on the score cards.
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ASIA-PACIFIC AIRPORTS MAGAZINE
ASQ WINNERS
ACI’s ASQ benchmarking programme is the key to understanding how to enhance passenger satisfaction and improve business performance Chung Il-young, the newly appointed president and CEO of Incheon International Airport Corporation, says: “We continuously strive to do better and honour our status as one of the world’s best airports. “We will successfully complete the construction of our second passenger terminal in 2017 and this will greatly help us in our goal to provide the best quality of service to customers. In addition we continue to make improvements to our existing facilities and operational systems.” Changi Airport Group’s senior vice president for corporate and marketing communications, Ivan Tan, says: “At Changi Airport, we believe in delivering a passenger experience that is personalised, stress-free and positively surprising. We call this the Changi Experience and we can only deliver it with the strong and steadfast commitment of our frontline personnel including our dedicated and hardworking Changi Experience Agents (CEAs). “The CEAs are our roving service ambassadors who comb our terminals armed with tablets. Rather than have our passengers walk to information counters, our on-the-go CEAs spot passengers in need and provide assistance such as giving flight details and directions. “All the information they need is in their tablet. Together, our CEAs can speak close to 20 languages to cater to our international audience”. An incredible four airports (Beijing Capital, Mumbai–Chhatrapati Shivaji, Delhi-Indira Gandhi and Sayna Phoenix) tied for second place in the most competitive category in the ASQ survey and another four (Guangzhou Baiyan, Taiwan Taoyuan, Tianjin Binhai and Shanghai–Pudong) for third spot. In the Middle East, which in the ASQ awards has historically been ranked as a separate region APA Issue 1, 2016
Best Airport by Size - Asia-Pacific 2-5 million passengers per year
Jaipur
5-15 million passengers per year
Sanya Phoenix
15-25 million passengers per year
Seoul Gimpo
25-40 million passengers per year
New Delhi
Over 40 million passengers per year
Seoul Incheon
Most Improved Airport ASIA-PACIFIC
MIDDLE EAST
Denpasar
Dammam
despite forming part of ACI Asia-Pacific, the honours were shared around with Jordan’s Queen Alia International Airport once again being voted Best Airport in the Middle East and Dammam–King Fahd in Saudi Arabia winning the prize for the Most Improved Airport. Kjeld Binger, CEO of Queen Alia International Airport, certainly couldn’t hide his delight at retaining the Middle East crown as it meant that the Amman gateway had held off the challenge of major airline super hubs Abu Dhabi (Etihad), Doha (Qatar) and Dubai (Emirates) for at least another year. “The fact that we have been recognised once again by our passengers through such a prestigious global organisation is further testament to our consistent track record of achievements and of our dedicated efforts toward sustaining our standing as one of the top 20 airports, which serves five to 15 million passengers,” enthuses Binger. “Looking back at how far we have come since the new terminal was inaugurated by His Majesty King Abdullah II in 2013, it is clear that our competitive advantage lies in our conveniently smaller size, which makes for shorter transit processes and walking distances, not to mention Jordan’s stability and strategic proximity to Europe and Africa, making QAIA an ideal gateway for business and leisure passengers.” For the record, Abu Dhabi and Doha’s Hamad International Airport finished joint second and Dammam–King Fahd International Airport, Dubai International and Tel Aviv–Ben Gurion International Airport equal third in the Middle East section. Finally, in the new Best Airport by Size and Region section for Asia-Pacific, in addition to Jaipur triumphing in the 2-5mppa category,
ASIA-PACIFIC AIRPORTS MAGAZINE
ASQ WINNERS
Best Airport by Region (over 2 million pax per year) ASIA-PACIFIC First place (tie)
Second place (tie)
Third place (tie)
Seoul Incheon
Beijing
Guangzhou Baiyan
Singapore
Mumbai
Taiwan Taoyuan
New Delhi
Tianjin Binhai
Sanya Phoenix Shanghai Pudong MIDDLE EAST First place
Second place (tie)
Third place (tie)
Amman
Abu Dhabi
Dammam
Doha
Dubai Tel Aviv
the winners were Sanya Phoenix (5-15mppa); Seoul-Gimpo (5-15mppa); Delhi–Indira Gandhi (25-40mppa); and Seoul–Incheon (Over 40mppa). The award for Delhi-Indira Gandhi International Airport means that India’s capital city gateway scooped two first places in the 2015 ASQ survey and was ranked joint-second best gateway in the entire Asia-Pacific region. It claims that the performance helps set it apart from other Indian airports and provides further evidence of the transformation that has taken place in Delhi since the GMR led consortium took over the running of the gateway in 2006 and set about improving its lowly ASQ ranking of 101st in the world. The opening of the its new state-of-the-art Terminal 3 in 2010 certainly helped as operator, Delhi International Airport Limited (DIAL), proved good on its pledge to enhance service standards across the airport. DIAL CEO, I Prabhakara Rao, says: “Staying motivated in business and working together as a team is really less about what you hear and think, and more about what you do and achieve. “The airport’s partners and employees have relentlessly delivered a distinct and enjoyable experience to our passengers enabling us to achieve three coveted ASQ awards “These achievements reiterate our commitment towards fulfilling our Honourable
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Prime Minister’s ‘Make in India’ mission and also act as a constant catalyst to create a new paradigm of passenger experience.” Rao notes that the awards are the result of the efforts of a number of airport stakeholders ranging from all airport staff – including those working for the government and security agencies, airlines and retail/F&B operators – to DIAL’s shareholders. He adds: “In the fast-changing landscape of worldwide aviation, ACI’s ASQ benchmarking programme is the key to understanding how to enhance passenger satisfaction and improve business performance.” ACI World’s director general, Angela Gittens, heaped praised on all the winners, noting that an increased concentration on “ensuring a stellar passenger experience” appears to be part of a larger trend. She comments: “Airports have evolved into complex, customer-focused businesses in their own right that in many cases are in competition with each other for passenger traffic. “From duty free and restaurants to ambience, cleanliness, courtesy of staff, amenities, efficiency and more, air travellers are expecting big things from the airports through which they travel. “More than anything, ASQ is a way for participants to measure the extent to which they APA deliver on these expectations.” www.aci-apa.com
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ASIA-PACIFIC AIRPORTS MAGAZINE
ACI ASIA-PACIFC NEWS
Regional update Vivian Fung reports on the latest news and events from across the Asia-Pacific region.
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acau International Airport’s marketing department director, Eric Fong, and chairman of the executive committee, Dr Deng Jun, joined ACI Asia-Pacific’s regional director, Patti Chau, and CAPA executive chairman, Peter Harbison, at the Opening Ceremony of the 2015 ACI Small and Emerging Airports Seminar in Macau. Over 120 aviation professionals from across the region attended the event, which was jointly organised by Macau airport operator, CAM, and ACI Asia-Pacific. The event provided an excellent platform to exchange thoughts and new ideas about the challenges and opportunities facing the industry as well as the opportunity to celebrate the 20th anniversary of Macau International Airport (MIA) and 10th anniversary ACI Asia-Pacific. In welcoming delegates, Chau first congratulated MIA for its twenty years of success and thanked the host for their generous support in organising the seminar. She then talked about the services available for Small and Emerging Airport group members in the region, which include the ACI Developing Nations Airport Assistance
THREE IS THE MAGIC NUMBER
Adelaide Airport Limited (Gold), GMR Hyderabad International Airport Limited (Silver) and Yangon Aerodrome Company Limited (Bronze) scooped the three top awards in the ACI Asia-Pacific Human Resources Excellence Recognition programme for 2016. The awards recognise airports’ outstanding achievements in HR management and the objective of the programme is to promote professional excellence in airport HR management. APA Issue 1, 2016
Programme; APEX in Safety Program; and APEX in Airport Business, a new programme that aims to promote airport financial viability and business best practices. She said: “At ACI, we believe that all airports, whatever their size, serve a key role in the transportation of people and goods; hence, providing dedicated programmes for this group is one of our priorities.” The 2016 ACI Asia-Pacific Small and Emerging Airports Seminar will be held in Siem Reap, Cambodia, 24 – 26 October 2016. More details about the event will be available on ACI Asia-Pacific website soon.
Chair of the judging panel, Sydney Airport’s managing director and CEO, Kerrie Mather, said: “This year’s submissions demonstrated excellent best practices in HR management and presented many very innovative HR projects, which are driving airport business sustainability. “The judges were impressed by the submission presented by Adelaide Airport Limited. It showed proven contribution to the airport business by the HR function which clearly met the objectives of this programme.”
September 12-14 Trinity Forum Mumbai, India
October 24-26 ACI Asia-Pacific Small and Emerging Airports Seminar Siem Reap, Cambodia
2016
November 15-17 ACI Airport Exchange Istanbul, Turkey
2017
TBC ACI Asia-Pacific Regional Assembly, Conference & Exhibition Doha, Qatar
ACI ASIA-PACIFIC BOARD PRESIDENT
Dennis Chant* (Queensland Airports Limited, Australia)
FIRST VICE PRESIDENT
Seow Hiang Lee* (Changi Airport Group Pte Ltd, Singapore)
SECOND VICE PRESIDENTS
Kerrie Mather* (Sydney Airport Corporation Limited, Australia) PS Nair* (Delhi International Airport Limited, India)
SECRETARY-TREASURER Emmanuel Menanteau* (Cambodia Airports, Cambodia)
Correct as of March 26, 2016.
IMMEDIATE PAST PRESIDENT
Tan Sri Bashir Ahmad Abdul Majid** (Malaysia Airports Holdings Berhad, Malaysia)
REGIONAL BOARD DIRECTORS
Sulaiman Zainul Abidin (Pioneer Aerodrome Service Co Ltd, Myanmar) Youssef Al-Abdan (General Authority Of Civil Aviation, Saudi Arabia) HE Ali Salim Al Midfa (Sharjah Airport Authority, UAE) Keiichi Ando (New Kansai International Airport Co Ltd, Japan) Kjeld Binger* (Airport International Group, Jordan)
David Fei (Taoyuan International Airport Corporation, Taiwan)
ACK Nair (Cochin International Airport Limited, India)
Kenichi Fukaya* (Narita International Airport Corporation, Japan)
Ravindra Kumar Srivastava (Airports Authority of India, India)
Datuk Badlisham Bin Ghazali (Malaysia Airports Holdings Berhad, Malaysia)
Sasisubha Sukontasap (Airports of Thailand, Thailand)
Fred Lam (Airport Authority Hong Kong, Hong Kong)
Mark Young (Adelaide Airport Limited, Australia)
Derun Li (Shanghai Airport Authority, China)
Waleed Youssef (Tibah Airports Operation Co Ltd, Saudi Arabia)
Xue Song Liu** (Beijing Capital International Airport Co Ltd, China)
REGIONAL BOARD DIRECTOR (WBP)
Pedro Roy Martinez (AB Won Pat International Airport Authority, Guam)
Vikas Gupta (GrayMatter Software Services, India)
* WGB member **Regional Advisor on WGB
The ACI Asia-Pacific region represents 99 members operating 573 airports in 47 countries and territories. www.aci-apa.com
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ACI ASIA-PACIFC NEWS
EVENTS 2016 2016
ASIA-PACIFIC AIRPORTS MAGAZINE
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ASIA-PACIFIC AIRPORTS MAGAZINE
AIRPORT REPORT: QUEENSLAND AIRPORTS LIMITED
Looking to the future
Joe Bates catches up with new Queensland Airports Limited CEO, Chris Mills, to find out how he has fared in his first six months in the role and learn more about some ambitious development plans.
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t is still early days in the role for new Queensland Airports Limited boss, Chris Mills, who in many ways literally moved into the hot-seat six months ago as he succeeded the long-serving and popular Dennis Chant and some of his gateways are located in areas where the summer temperatures often exceed 30°C. Indeed, Chant was the first and only CEO of Queensland Airports Limited (QAL) until his retirement last October, and in many ways the team he assembled over the last 17 years reflected his personality and determination to do the best for the group’s four gateways – Gold Coast, Townsville, Mount Isa and Longreach. However, if Mills is feeling the pressure he certainly isn’t showing it as he has already brought APA Issue 1, 2016
in a few additions to the management team and is busy fine-tuning QAL’s plans for key new facilities at both Gold Coast and Townsville airports. The fact that he has been promoted from within – Mills joined QAL as its chief financial officer in June 2014 – also ensured that he was able to hit the ground running due to his familiarity with QAL’s airport system and knowledge of its future requirements. Since taking on the CEO role, Mills has restructured the business and the management team. Internal promotions have been balanced with some new faces, including a new chief financial officer with an airline industry background, a commercial expert from a major Australian airport, and someone to oversee the
ASIA-PACIFIC AIRPORTS MAGAZINE
REFLECTIONS ON 2015
So how would he describe 2015 for QAL? “I’d say it was a good year for a number of reasons and 2016 is off to a great start,” says Mills. His assessment is primarily based on traffic growth, new routes and the green light for a handful of projects across his airport network.
In terms of traffic growth, Mills notes that Gold Coast Airport – the jewel in QAL’s crown – handled more than six million passengers in a calendar year for the first time in its history in 2015. And it achieved another major milestone in September with the introduction of services to Mainland China, courtesy of Jetstar flights to Wuhan. The route was joined by Hong Kong (Hong Kong Airlines) in January 2016 and contributed towards a best ever month for the gateway, when it handled more than 600,000 passengers. He notes: “Our first Mainland China route wasn’t something that just happened overnight, it was years in the making and involved a lot of time and effort and being on the ground in China to build up our relationship with the travel agents and tourism companies. “With our services to Wuhan and Hong Kong, I now feel that we have a foothold in China, but we have only just scratched the surface in terms of the potential.” Some 1.6 million passengers (+0.2%) passed through Townsville Airport in 2015, which, most significantly, says Mills, saw the resumption of international services with the introduction of Jetstar flights to the Indonesian holiday island of Bali. And an excellent period for that airport was capped off in January this year when QAL gained government approval for a $42 million terminal redevelopment project. Developing sustainable businesses is a key focus for the future, and will be evident in the terminal redevelopments. Mills also notes that a $3.75 million project is currently underway at Mount Isa Airport to upgrade the gateway’s existing car park and equip it with solar panels which will provide over half of the airport’s energy needs. Around 200,000 passengers passed through the airport last year. This year also saw the completion of a project to install 396 solar panels on the roof the terminal building at Longreach, providing enough power to offset almost all of the airport’s energy needs during the day. The smallest airport in its network by quite some way, Longreach handled 37,000 passengers in 2015. www.aci-apa.com
AIRPORT REPORT: QUEENSLAND AIRPORTS LIMITED
human resources and information technology aspects of the business. He enthuses: “I’ve been given an exciting opportunity to take a successful and well-run company to the next stage over the coming years. Who could ask for more?” “Our management team has changed significantly. We have a great team, a good blend of experienced and established QAL people together with new faces who are bringing a different perspective to the organisation. Across the business we have wonderful people to make it all happen. “I’m not here to see the business stay still – we want to grow, and we are well positioned to make that happen.” He adds: “Because I didn’t come into the role cold, people know me and I know them and that has definitely made the transition to CEO much easier. “My management style is about setting a clear strategy and goals, and working with the team to achieve those goals. I am visible and accessible – my door is always open. I have an experienced and supportive Board to guide me along the way.” Mills describes his first few months as being “incredibly busy”, and he is not exaggerating. For, in addition to the new faces, QAL has also welcomed a number of new routes and gained approval for major revamps of the terminals at both Gold Coast and Townsville airports. In fact approval of the $300 million terminal redevelopment project at Gold Coast was granted in February this year and, as a result, construction of an extension building will begin later this year with completion expected in late 2017. He also notes that in January the federal government approved plans to install an Instrument Landing System (ILS) at Gold Coast Airport, which despite being the sixth busiest gateway in Australia is the only one of the country’s top 12 airports not to have one today.
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ROLE OF AIRPORTS
QAL employs around 200 staff across its four airports, which all have a distinct and very different role to play. Gold Coast Airport, located around 100 kilometres south of Brisbane, is tourism and leisure focused so the market it serves is very much concentrated on inbound holidaymakers and outbound passengers travelling on vacation or visiting friends and relatives (VFR). Indeed, 65% of its passengers are visitors to the region and the bulk of its traffic can be broken down to leisure (46%), VFR (28%) and business travel (14%). Its biggest markets are the domestic routes to Sydney and Melbourne, but the airport also serves a growing number of international destinations in New Zealand and South East Asia. Townsville’s more diversified economy and the fact that it is home to a sizeable military base means that its passenger mix is more varied, with people travelling on business accounting for 37% of its throughput followed by leisure (33%) and VFR traffic (30%). The presence of the army defence base ensures that the airport is operated under a joint use agreement with the federal government and its biggest market is Brisbane, which is served by 12 daily flights. QAL’s smaller gateways of Mount Isa and Longreach serve the mining industry (coal and minerals) and farmland dominated regional and rural Queensland respectively. Brisbane is Mount Isa’s biggest market and only regularly serviced domestic route. Locals account for 34% of all passengers and the figure has significantly increased over the last four years due to the slowdown in the mining sector. Its current mix is largely business (61%), VFR (18%) and leisure (9%), although up to 13% of its passengers pass through the gateway for medical and other reasons. APA Issue 1, 2016
GOING FOR GOLD
The importance of Gold Coast Airport to QAL cannot be underestimated and is one of the primary reasons behind its infrastructure development plans. The airport expansion is being designed to meet the needs of the airlines and their passengers. Mills and his management team also know that they have to improve its facilities to accommodate future growth and ensure that it can continue to compete against neighbouring Brisbane Airport for new international routes. “The terminal redevelopment programme and new ILS will allow us to provide a product that can compete with Brisbane. It is a step change for the airport,” assures Mills. The planned $300 million terminal revamp falls under the umbrella of Project LIFT (Let’s Invest For Tomorrow) and includes proposals to build a three level, 28,000sqm extension to the existing complex to almost double the size of the airport’s passenger facilities. Designed by Australian firm Cox Architects, it will allow for more aircraft stands, four airbridges, 16 more retail/F&B outlets, and improved amenities for passengers. Mills says that when integrated with the current terminal in late 2017 it will help create the first phase of a bigger, better and new-look passenger complex. “It’ll be a real game changer for us in terms of our facilities and capabilities including common use check-in, self-bag drop and other opportunities to bring in current technology. We want the customer experience to be central to what we deliver,” he enthuses. Next on the agenda after the completion of the 2018 Commonwealth Games in the Gold Coast, QAL will start work on a revamp of the existing terminal. And Mills reveals that QAL has longer-term plans to develop 30 to 40 hectares of its land for non-aeronautical related activities to diversify the
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ROUTE DEVELOPMENT
Is it safe to say that the introduction of low-cost services by airlines such as Tiger Airways, Jetstar, Air Asia X and Scoot have breathed new life into Gold Coast Airport? “Yes, absolutely, low-cost carriers have been, and will continue to be, an integral part of Gold Coast Airport’s business and the Gold Coast as a leisure destination,” admits Mills. “However we are seeing a shift in the mix, and the mix of full service has grown over the last three years. Full service operators include Qantas, Virgin, Air New Zealand and Hong Kong Airlines. This reflects the continued evolution of the Gold Coast as a whole, providing offers and experiences to all demographics.” Although international traffic is on the rise, growing by a healthy 5.1% last year, domestic services continue to dominate at Gold Coast
Airport with five of the gateway’s six million passengers travelling on flights within Australia, principally to Sydney and Melbourne.
AIRPORT ECONOMICS
We hear a lot from ACI about the economic realities of running the world’s airports and, that typically, smaller airports operate at a loss. Is this true for QAL and, if not, how have you bucked the trend? “In the Australian landscape it is challenging for regional airports that run under singular control,” concedes Mills. “QAL is an experienced airport operator, and by operating a group of airports we are able to create synergies through our corporate structure. We provide corporate support services such as business development and marketing, finance, IT and human resources. “This structure ensures the assets retain local autonomy whilst also possessing the ability to tap into the human assets of larger airports. Purchasing power is one example of the leverage we can achieve for the smaller airports.” Sounds like QAL is in safe hands under Mills, who let slip the fact that he is actually a ‘Pom’ having been born and raised in London for the first few years of his life before his family emigrated to Australia. He once returned to work in the UK for two-and-a half years but returned to Australia because he jokes that he couldn’t face a third British winter! A wise move indeed. Mills certainly seems to have found his niche in Queensland, although now it is the hot summer weather keeping him awake at night and not the APA cold winter nights in London! www.aci-apa.com
AIRPORT REPORT: QUEENSLAND AIRPORTS LIMITED
Gold Coast Airport’s offering and provide alternate sources of revenue for years to come. Indeed, QAL is currently formulating a ‘property strategy’ to decide what opportunities are available to develop land on the airport site or just over the perimeter fence to complement existing development with new facilities such as hotels, offices and retail parks. “It’s a very exciting opportunity and we are talking 20 to 30 years in terms of the full realisation of this strategy. The airport can continue to build on its aero success, and provide a broader offering in the years to come,” suggests Mills. He adds: “We are also looking to improve connectivity and our master plan provides for rail connections to the airport in the future.”
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Connecting Australia
Australian Airports Association’s policy manager, Simon Bourke, considers the national importance of aviation and some of the opportunities and challenges faced by the country’s gateways.
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ustralia’s network of airports spread across major urban centres and regions form an integral part of the national economic infrastructure and are critical to connecting communities and enhancing broader economic performance. Perhaps more than almost any other country, Australia relies on an efficient and reliable aviation sector and airport network for its citizens to remain physically ‘in touch’ with each other and the rest of the world. Indeed, it is now conceivable that Australians can fly from any population centre to any other country in around 24 hours or less. Australia’s airport sector has also undergone substantial structural change over recent decades. Privatisation and corporatisation, especially involving larger airport facilities, has helped drive new infrastructure developments, better operational efficiencies and a greater commercial focus. In 2011, it was found that Australia’s airports generated a total economic contribution of A$17.3 billion, equivalent to around 1.2% of GDP. National employment at airports was estimated at approximately 115,200 full-time equivalent (FTE) workers. These significant contributions highlight the importance of the role Australia’s airports play in driving forward our national economy.
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VOICE OF AUSTRALIAN AIRPORTS
The Australian Airports Association (AAA) is the national industry voice for airports in Australia. It represents the interests of more than 260 airports and aerodromes Australia wide – from local country community landing strips to major international gateway airports. Our members include Adelaide, Brisbane, Cairns, Canberra, Darwin, Gold Coast, Hobart, Perth, Melbourne and Sydney airports. There are a further 135 corporate members who provide goods and services to airports. The Charter of the AAA is to facilitate co-operation among all member airports and their many and varied partners in Australian aviation, whilst maintaining an air transport system that is safe, secure, environmentally responsible and efficient for the benefit of all Australians. In representing such a diverse range of airport operators, AAA is acutely aware of both the opportunities and challenges that are facing Australian airports in this dynamic, constantly evolving and growth driven industry.
OPPORTUNITY KNOCKS
In terms of opportunities, Australia’s airports are utilising the continued growth in aviation by
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CHANGING TIMES
If we cast our minds back 20 years to 1996, the airport industry was very different to the one that operates today. In 1996, Australia’s major airports were still owned and operated by the Federal Government and, at this time, there were over 66 million passengers moving through the nation’s gateways. Over the course of 1997-2003 all of the major airports were sold off under lease agreements to the private sector and, to this day, remain privately funded and operated. The airport privatisation process followed, and over the next 20 years Australia’s aviation industry has grown steadily to the point that in 2014-15 we had more than 147 million passengers moving through our airports. This is well in excess of double the amount of passengers that airports had to cater for pre-privatisation.
INVEST AND BUILD
As a result there has been significant investment in recent years to ensure that our airport infrastructure and facilities can compete on the world stage and meet the evolving requirements of both airlines and passengers. In 2013-14, Australia’s international gateway airports (Sydney, Melbourne, Brisbane and Perth) collectively invested over A$893 million in
aeronautical infrastructure alone. They are not alone, of course, as most major and regional airports are making significant investments. These efforts are expected to lead to a nationwide commitment to invest somewhere in the order of A$9 billion on Australia’s airports over the next decade.
AERONAUTICAL INVESTMENTS
All of this aeronautical investment is focused squarely on creating additional capacity to meet projected demand, as well as ensuring that both airlines and passengers have the facilities and services to make the travel experience to and from the airport as seamless as possible. These improvements cover a wide range of areas, from the development of new parallel runways and upgraded terminal facilities, through to improved airport road and transport networks and higher capacity, and more efficient baggage handling systems. The AAA has also been working closely with its members and government departments to ensure that the border processing experience for international travellers is as quick, efficient and effective as possible. While there is still much work to be done, there have been significant investments in smart gate technology to drive improved facilitation rates, as well as trials and research into innovative ways to improve the security screening process.
NON-AERO INVESTMENTS
Beyond the aeronautical investment, Australia’s airports are continually developing business diversification strategies to mitigate the pitfalls of the sometimes-unpredictable aviation market. While investment in non-aeronautical developments does potentially provide the airport with an additional revenue stream, these developments also provide travellers with additional options for accommodation, food and beverage, retail outlets and other services.
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SPECIAL REPORT: THE IMPORTANCE OF AVIATION
striving for continual improvement in the infrastructure and facilities that they provide both airlines and passengers. While airports do invest heavily in aeronautical infrastructure, there is an increasing need for airports to diversify their business models to counteract the volatility that can occur in the aviation market. Australia’s airports are therefore constantly exploring opportunities to develop nonaeronautical facilities and services that not only add value to passengers using the airport but also provide benefits to the local community.
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The local communities surrounding an airport also benefit from these developments through the utilisation of additional business parks, diversified retail outlets, job creation, as well as providing a significant boost to the local economy.
SOME BIG CHALLENGES
While Australia’s airports are striving to seize the opportunities that have arisen from strong aviation growth over the years, there are a number of significant challenges that AAA and its members are working hard to address. The most topical of these challenges are centred on funding for regional airports, regulations and standards, an evolving security environment, and developing more options for education and training. While Australia’s major airports have been privatised, the overwhelming majority of our regional airports are owned and operated by the local government authority for the community they serve. As result, these regional airports must compete for funding with other local government municipal services, and in the context of local government budgets, the costs associated with maintaining and improving airports is considerable.
REGIONAL RECOGNITION
In light of the challenges faced by regional airports, AAA has commissioned a study to demonstrate the critical importance of regional aviation to Australia’s economy. It also aims to identify the funding shortfall that exists for regional aerodromes to maintain APA Issue 1, 2016
on-going operations and demonstrate the economic impact this will have on a local region. We also plan to use the report and its findings as evidence to justify the creation/ expansion of specific Commonwealth and state government funding programmes for regional aerodromes to undertake essential aeronautical infrastructure maintenance and upgrades. The report is expected to befinalised and publically released in the first half of this year.
RULES AND REGULATIONS
Government legislation, regulations and standards impact on almost every facet of an Australian airport’s operations, security and safety measures. This simple truth means that the AAA and its members are committed to developing close, collaborative working relationships with government officials to ensure that the policies governing the airport industry are not restrictive, burdensome or impractical to implement. This work has included taking a leading role in the Civil Aviation Safety Authority’s review of the CASR and MOS Part 139 for aerodromes, which is the cornerstone safety standard framework for Australian airports. Additionally, AAA and its members have been giving attention to the regulations that cover planning around airports. Indeed, the number of instances of high-rise developments impacting on an airport’s airspace is increasing as Australia’s cities continue to grow. And, like in many other parts of the world, residential developments continue to encroach on airports, which can give rise to noise issues.
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SECURITY
The global aviation security environment has experienced some significant changes over the past 15 years and, unfortunately, it appears that the threat of terrorist related activity is not set to diminish any time soon. The challenge for Australia’s airports, and indeed airports globally, is ensuring that we are able to quickly adapt and respond appropriately to any changes in threats to the aviation security environment. Achieving this requires airports to closely collaborate with intelligence agencies and government regulators to ensure that security policy settings are appropriate for the operating environment. The AAA and its members are very supportive of government taking an intelligence driven, risk-based, and proportionate approach to the implementation of aviation security measures.
TRAINING AND EDUCATION
Prior to the airport privatisation process in Australia, the Commonwealth Government facilitated much of the education and training for airport operators.
However, these educational opportunities were discontinued after privatisation and consequently left a significant gap in the training and development options available to the industry. We have made a commitment to assist in delivering educational opportunities for airport operators, particularly those in regional and remote locations where undertaking training can be cost prohibitive. Over the course of 2016-17, AAA is planning to launch an online education offering for industry, with initial course offerings on airside safety and wildlife hazard management. In fact, we are looking forward to addressing the educational and training challenges facing the industry, both through the development of online courses and through our continued involvement in bringing ACI’s AMPAP courses to Australia. Continued professional development opportunities are essential for Australia’s airports and we are proud to play a role in assisting the industry.
THE FUTURE’S BRIGHT
Overall, the outlook for Australia’s airport industry is a very positive one as with unprecedented infrastructure investment, exciting technological innovations and continued growth, there is much to look forward to. While we still face challenges in the years ahead, the dynamic nature of the industry offers constant opportunities to innovate and adapt to changing conditions. AAA is excited for what the future holds for the aviation sector and we are confident that airports will continue to deliver significant economic and social contributions for the benefit of all Australians, as well as our international visitors. APA www.aci-apa.com
SPECIAL REPORT: THE IMPORTANCE OF AVIATION
In recognition of this, the Australian Government developed a National Airport Safeguarding Framework that aims to ensure appropriate land use planning decisions are made that recognise aviation safety requirements and minimise noise sensitive developments near airports. We are strongly encouraging each state and territory government to adopt this framework and its guidelines within their respective planning schemes in order to adequately safeguard the operations of Australia’s airports.
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Happy talk! Pacific Asia Travel Association’s regional director-Pacific, Chris Flynn, reflects on the changing dynamics of Asia-Pacific tourism.
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t’s a well known fact that travel to, from, and within the Asia-Pacific region has undergone a huge surge in recent times. Changes in airline operating models, the establishment of new carriers, improved infrastructure and increased investment have all served to bring new opportunities for both leisure and business travellers alike.
INTERNATIONAL VISITOR ARRIVALS
Preliminary data for 2015 shows that Asia-Pacific continues to be one of the world’s most in demand destinations. According to the World Tourism Organization (UNWTO), International Tourist Arrivals (ITAs) across the globe peaked at 1.184 billion (+4.4%) in 2015, with AsiaPacific accounting for 277 million of the total or 23% of the market. The economic statistics for last year are not yet in, but UNWTO’s figures for 2014 show that back then 263 million APA Issue 1, 2016
arrivals to the Asia-Pacific region delivered $377 billion to regional economies, a year-on-year increase of 30%. This positive shift in visitor arrivals correlates directly with the increase of affordable air services right throughout the Asia-Pacific region. Indeed, this expansion in route network development has delivered a range of opportunities that continuing to stimulate the growth of new destinations and drive trade and investment to new heights. And improved infrastructure such as airport expansions, port facilities and new road systems to high speed rail networks are all serving to support, enhance and improve the visitor experience. But as new opportunities arise so, too, does competition with destinations and industry stakeholders alike all vying for an increased share of the expanding visitor economy. Nowhere is this more evident than in the accommodation sector where hotel companies are investing billions of dollars
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in an effort to broaden their respective Asia-Pacific footprints.
ACCOMMODATION EXPANSION
In 2015 we witnessed hotel room supply reaching record numbers, with thousands of additional rooms in the development pipeline. But we are also witnessing other accommodation providers growing at unprecedented levels. One such operator relatively new to the market is Airbnb, a company that has literally re-written the hospitality rulebook. On January 10, 2014, for example, co-founder Brian Chesky tweeted, “Marriott Hotels plan to open 30,000 new hotel rooms in 2014. We will add that in the next two weeks!” According to Fortune.com, in 2015 the company’s annual revenue had grown to $900 million with predictions that they will achieve $1 billion annually by 2020. There is no denying that this additional and previously unrecognised potential has changed much about the way people think in terms of
accommodation options. Just like the introduction of the Low-Cost Carrier (LCC) operating model, Airbnb and other online booking providers offering similar options have changed the mindset of the consumer in an almost immediate and irreversible way. As a result of the sustained growth in visitor number many countries and territories are now viewing the visitor economy as a significant economic driver, and one with the capacity to stimulate significant longterm sustainable investment. And without doubt as emerging economies compete to capitalise on the benefits of increased visitation, travel and tourism has become the recognised catalyst for positive change. This is especially true in some of the smaller economies of the Mekong and South Pacific, where traditional exports now take a back seat in favour of responsible tourism growth and expansion. The rise and rise of Asia-Pacific aviation is without question the main driver of increased visitation throughout the region. The rush to www.aci-apa.com
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secure new air services is therefore paramount in the minds of many government policy makers as increased access usually results in increased economic wealth. Network expansion and connectivity is happening on an unprecedented scale both in terms of volume and timeframe. With increased capacity and competition generally resulting in the availability of more affordable air services, it’s an exciting scenario that benefits all concerned in the equation.
THE IMPACT OF LOW-COST CARRIERS (LCCs)
The emergence of LCCs and other more cost effective and profitable operating models in the Asia-Pacific region has enabled carriers to expand at records levels. However, competition remains tight as airlines compete head to head in one of the largest and most competitive regionsof the world. Currently LCCs vie head to head with more traditional airlines as they, for the most part, operate in heavily regulated environments. This drives operators to seek new destinations in an attempt to establish new more lucrative markets that offer less competition. In spite of the heavily regulated environments, we have already seen spectacular growth and innovation in terms of route network development and expansion. APA Issue 1, 2016
The desire for change and the effect this has had on everyday consumers is selfevident. As a result, we’ve seen a scramble of activity as more traditional carriers attempt to mirror these operations as a means of capturing and securing a share of these new market opportunities. This surge in new airlines has served to open up the region in previously unthinkable ways. Cross border trade, once considered off limits for most SMEs due to the high cost of facilitating new business in far flung regions, has now become standard practice. Likewise, the investment in tourism infrastructure and development has sought to successfully capitalise on conditions a surge in new visitors creates. All this has been due, for the most part, to a landscape of sustained network expansion and promotion and the swift impact this has had on consumer demand and expectations.
TECHNOLOGICAL DEVELOPMENTS
Another key aspect of tourism expansion is the advancements in aircraft and engine design. New aircraft types now permit airlines to access markets previously off limits due to the restrictions on range coupled with associated high fuel costs.
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RISING MIDDLE CLASS
Growing economies and more affordable travel options than ever before means that for many, air travel is no longer something only the wealthy can afford. In fact, most consumers now consider air transport as just another item on the shelf – something to be stacked high and sold cheap. Supermarket mentality if you will. Certainly not the luxury, unattainable experience it was once considered to be. At this point it’s worth taking a look back to see how things have evolved and will continue to develop. Back in the early 1990s, Europe and North America accounted for more than 70% of global air traffic. Both regions enjoyed a stable middle class and, with the onset of air space deregulation, the opportunity to expand air services to the masses. What we are now witnessing is the economic baton being passed to the new
emerging economies of the world. And with it, the anticipation that the sustained growth of travel and tourism in Asia-Pacific and the Middle East means that the regions are set to become the dominant force in global aviation. With ongoing plans to deregulate the ASEAN region, some of which has already occurred, we will see an explosion of air connectivity similar to that which occurred in North America and Europe – but on a much larger scale. As a result, Boeing predicts that we will begin to see the European and North American markets roll back and shrink to 38% of global traffic by 2034. Coincidentally, as this shift takes place, we will see the explosion of a new AsiaPacific middle class, coinciding with the shrinkage of the middle class in western markets. The opportunities then are clearly self-evident.
AIRPORT GROWTH AND EXPANSION
This rapid and unprecedented shift brings with it both opportunity and risk. To meet the challenge of growth is no easy feat. There is a constant need for careful planning, especially for airport and/or associated stakeholders as they seek continued success. To capitalise on growth but also meet the growing demand of the new traveller, it’s necessary to be prepared. The most sustainable requirement for any business is ‘profit’ because without it you cease to be. Therefore, the primary focus for all businesses has to be sustained revenue streams. www.aci-apa.com
SPECIAL REPORT: THE IMPORTANCE OF AVIATION
In early March, Emirates launched one of the world’s longest non-stop services between Dubai and Auckland, with A380 operated flights taking around 17 hours and 15 minutes from New Zealand to the UAE and 16 hours in the other direction. Indeed, announcements of new route network expansions offering non-stop flights of 16 to 17 hours in duration are becoming commonplace and this could have potential issues for traditional stopover destinations, but I would suspect the rate of growth and the ability to compete in an ever-expanding market could nullify these concerns.
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How to achieve this is a constant challenge, especially if you are expected to provide the products and services demanded by today’s travellers, but for no apparent increase in fees. Not the most desirable equation. It is generally agreed that ‘ancillary revenue’ will become an even more significant aspect of future business development for both airports and airlines alike. Finding new ways to sources additional revenue through external or third party products and services is already a key function of many airports, but it will become even more critical in the years ahead due to the constant demands of growth and external pressure this creates. Therefore, doing things the same old way simply does not work anymore. Instead, it requires innovation and an ability to think beyond our current offerings if sustainable profits are to be achieved. Airports need to morph into complete business and social environments – something that can only be achieved through the provision of services and lifestyle experiences designed to attract new ‘customers’, independently of whether or not they are travelling. The days where airports were seen as merely transit hubs for people to leave or enter a destination is a thing of the past. Better utilisation of space, both airside and landside to drive profit through the provision of better services will become an increasingly critical factor. But this provision of services also allows airports to become ‘the place to do business’ rather than just the gateway to a business environment elsewhere. APA Issue 1, 2016
The provision of these services will become a critical factor in the decisionmaking process for owners of emerging SMEs who effectively conduct their business ‘on the run’. These are companies with little if any access to professional facilities or budgets offered by some of the larger corporate employers. Yet their needs are the same. The winners then will be those airports that invest in attracting this massively expanding sector through the provision of tools and facilities required to enable them to do business, not just remotely but also on site. The establishment of strategic partnerships with third parties and/or other service providers as a mechanism to offer these services will, and must become, standard practice if airports are to achieve the returns needed to remain competitive.
OUTLOOK
It’s often the speed of change that has commentators flummoxed, as predictions increasingly fail to meet the true reality of growth. This is a situation set to continue, with UNWTO forecasting that global visitor arrivals will reach 1.8 billion by 2030. PATA’s five year Asia-Pacific forecast supports these predictions, indicating that this trend is set to continue for the foreseeable future. The prognosis therefore is good. This resilient industry we call tourism is set for spectacular growth, delivering with it a range of opportunities – some of which, to use JFK’s famous line, ‘have not been invented yet’.
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PATA FORECAST
The 38 Asia-Pacific destinations for which PATA produces five-year annual forecasts are expected to collectively continue with the overall growth momentum of the last few years and pass 550 million foreign arrivals this year and 600 million by 2018. It predicts that each year between 2016 and 2020 will set new records for foreign arrivals, which will reach a near-term collective record high of close to 650 million by 2020. At the sub-regional level, average growth rates between 2015 and 2020 are expected to range from around 3% per annum for the Americas and the Pacific to 3.4%per annum for Northeast Asia, says PATA. Southeast Asia is forecast to show an average annual growth rate of 6.8% to 2020 while South Asia will set the pace with average annual growth of 7.6%. Overall, Asia is predicted to see its foreign arrivals count increase by an average of 4.5% per annum between 2015 and 2020. And just over 80% of the foreign arrivals into Asia-Pacific in 2020 – adjusted for the Greater China influence – will come from just APA Issue 1, 2016
20 source markets and two-thirds of that volume will come from Asia. Mario Hardy, CEO of PATA, says: “It is heartening to see that the momentum of the Asia-Pacific tourism sector will continue until at least the end of this decade and that it continues to play a significant role as both a receiver and generator of international visitors. “The region’s identity as the engine of growth in international tourism is well justified. While this strong and sustained growth is a positive sign, it brings with it a number of responsibilities that require changes in mindset and measurement. “We must ask ourselves if we are able to maintain high service delivery in the face of such continued growth and whether or not we have the correct software in place. “The protocols and policies to manage effectively this growth are vitally important and we must also question how such increases in visitor arrivals may be managed to remain both rewarding to the destination citizens and sustainable in the longer-term. “Growth brings with it rewards, but also responsibilities.”
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Spotlight on Myanmar and Vietnam Asia-Pacific Airport’s editor, Joe Bates, reviews some of the exciting capital investment projects planned for airports in Myanmar and Vietnam.
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ith traffic across Asia-Pacific rising by 8% to 2.67 billion passengers in 2015, there is little doubt that the region remains one of the global hotspots for traffic growth and is likely to remain so for the foreseeable future. The total cemented Asia-Pacific’s status as the world’s biggest aviation market and arguably acted as another timely reminder that the region has to continue to develop its airports to ensure that it has the capacity to avoid becoming a victim of its own success. Many of the biggest airports are already doing this, of course, as the huge ongoing or recently finished development projects in Australia, Bahrain, China, Hong Kong, Saudi Arabia and the UAE testify, but what about elsewhere in the region and in particular some of the fast developing countries? Well, as you would expect, it is very much a mixed bag with a number of different projects planned, underway or in the pipeline, although finding the funds to carry out the work, like elsewhere in the world, remains the biggest obstacle to their development. And this is a slight worry as according to a new report looking specifically at airport development in South East and East Asia, APA Issue 1, 2016
capacity constraints at many major airports are slowing growth. In terms of what is being planned today, the Brooks Market Intelligence report, Airports in South-East and East Asia, Capital Investment Programmes – 2016, notes that the general upward trend in passenger traffic, fuelled by the liberalisation of air travel and trade and increased economic activity across the region, has led to a number of ASEAN countries taking steps to increase their airport capacity. The report covers developments in ASEAN’s ten member countries (Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam) as well as Japan, South Korea, Taiwan and Timor-Leste. Below we review a snapshot of the report’s findings on what is going on in two ASEAN countries – Myanmar and Vietnam.
WINDS OF CHANGE IN MYANMAR
Times are certainly changing for The Republic of the Union of Myanmar, formerly Burma, which has plans to build new airports and upgrade others in a bid to enhance the country’s aviation infrastructure.
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INVESTING IN VIETNAM
These are heady days for Vietnam, which has a rapidly growing aviation market and, according to a prediction from Goldman Sachs, will become the world’s 21st largest economy by 2025. To meet the growing needs of the country, the government has developed a draft plan for air transport that estimates that it will cost in excess of $10.2 billion to develop an airport network of at least six international and 18 domestic gateways. The lion’s share of the investment is expected to come from ODA loans from foreign governments such as Japan, as well as financing from the private sector. Foreign investors will, however, be allowed to www.aci-apa.com
SPECIAL REPORT: THE IMPORTANCE OF AVIATION
The nation’s principal gateways today are Mandalay International Airport, which serves the main tourist centre, and the capital‘s Yangon International Airport However, with tourism expected to soar from 4.2 million visitors in 2013 to 30 million by 2030, Myanmar’s government is acutely aware of the need for more airport capacity. Indeed, a third international airport capable of handling up to 3.5mppa was opened in Naypyidaw in 2011, and contracts have been awarded for the expansion of Yangon and Mandalay airports and the construction of a new hub to the northeast of Yangon. And the Department of Civil Aviation (DCA) is expected to seek local and foreign finance for the upgrade of 39 underdeveloped domestic airports. The development of Myanmar’s eagerly awaited new Hanthawaddy International Airport appears to be back on track after an early setback when the preferred bidder chosen by the government – a South Korean consortium led by Incheon Airport – decided not to take up the option of building, operating and maintaining the $1.5 billion gateway. Now the contract has been awarded to a consortium comprising Singapore’s Changi Airport Planners and Engineers (CAPE), Yongnam Holdings of South Korea and Japan’s JGC Corporation and construction of the 12mppa capacity gateway is finally expected to begin in 2016 paving the way for a 2020 opening.
Set to be located in Bagu, 50 kilometres north east of Yangon, the initial cost of Hanthawaddy will be equally split between the consortium and the Myanmar government, which has secured an Official Development Assistance (ODA) loan from the Japanese government for 40% of the $750 million it needed to fund the project. When completed, the new airport will be the country’s largest and will replace Yangon Mingaladon Airport as the main gateway into Myanmar. A second development phase could raise its passenger capacity to 30 million per annum. Elsewhere in Myanmar, a consortium comprising Jalux, Mitsubishi Corporation and local company SPA Project Management Ltd has signed a concession agreement to operate Mandalay International Airport for 30 years and began work on a $135 million project to raise the gateway’s capacity to 3mppa last year. While Yangon International Airport is set to get a near $200 million facelift in an expansion programme financed by an international consortium led by Pioneer Aerodrome Services Co, an affiliate of Asia World, a major Myanmar conglomerate. The upgrade will result in a new domestic terminal and additional apron that will allow the airport to handle up to 6mppa. It welcomed 4.3 million in 2014.
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SPECIAL REPORT: THE IMPORTANCE OF AVIATION
develop some airports under the BuildOperate-Transfer (BOT), Build-Transfer (BT), or Build-Operate-Own (BOO) concepts. The newly created Airports Corporation of Vietnam (ACV) is currently responsible for managing and operating the nation’s 21 existing commercial airports, which include eight international and 13 domestic facilities. It has raised close to $50 million from an IPO for 25% of its shares and recent media reports in Vietnam suggest that the government is seeking private investors to buy another 20% stake, which would help fund its ambitious airport development plans. One of the country’s newest high-profile developments is the $900 million Terminal 2 at Hanoi’s Noi Bai International Airport, which nearly doubled the capacity of the gateway when it opened just over a year ago. The new 10mppa capacity terminal covers 140,000sqm across a main building and two piers that between them feature 96 check-in counters, 17 boarding gates and 283 flight information display system (FIDS) screens. Ho Chi Minh City’s Tan Son Nhat International Airport opened the first phase of its expanded Terminal 2 last year and will complete the job this year. However, with little land left for further development, the government has decided to build a replacement hub for international services 50 kilometres north of the city. If all goes to plan Vietnam’s new $5.5 billion super hub could ultimately APA Issue 1, 2016
boast three terminals and four runways between them capable of handling up to 100 million passengers annually, although it is likely to have just a single passenger complex and two runways designed to accommodate 20mppa when it opens in 2025. Tan Son Nhat is likely to become a domestic airport after the first phase opening of the eagerly awaited Long Thanh International Airport, which will eventually replace it. Elsewhere in Vietnam there are plans for a new international terminal for Danang International Airport, which will raise its capacity to 10mppa by June 2017, while a terminal revamp and two new runways are on the cards for Chu Lai International Airport in a $520 million project. The government is also seeking foreign investors to develop Hue’s Phu Bai International Airport into a gateway capable of handling 5mppa and wants to build new airports for Ha Long City – in the eastern province of Quang Ninh – and Lao Cai, in its northern border province with China, by 2025. This article is based on extracts from Brooks Market Intelligence’s new report, Airports in South-East and East Asia, Capital Investment Programmes – 2016, which is based on a review of the planned development projects at 105 airports in 14 countries. Copies can be purchased at www.brooksreports.com
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SPECIAL REPORT: THE IMPORTANCE OF AVIATION
Welcome aboard!
Asia-Pacific Airports takes a closer look at what’s in store for passengers using Dubai International Airport’s new $1.2 billion Concourse D.
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fter months of intensive testing and a successful operational trial involving 2,000 members of the public, Dubai International Airport (DXB) celebrated another milestone moment on February 24 with the official opening of its new Concourse D. And as you would expect from the world’s busiest international airport, the new $1.2 billion complex has added a host of new state-of-the-art facilities and services for passengers and the 70 airlines that now operate out of it. Designed around a central atrium and linked to DXB’s newly renovated Terminal 1 by automated people mover, Concourse D offers a light and bright atmosphere, short walking distances and, of course, a wide selection of shops and restaurants. Indeed, operator Dubai Airports claims that the short distances to its gates allows travellers to board directly from the waiting area, “giving them more freedom and time to enjoy the full array of exciting food and beverage outlets”. “We continue to invest in the development of top-flight infrastructure to augment service levels for our international APA Issue 1, 2016
airlines and their customers while providing the capacity needed to meet growing demand,” enthuses HH Sheikh Ahmed bin Saeed Al Maktoum, chairman of Dubai Airports. “Concourse D has been designed with the customer at its heart. Shorter walking distances, more comfortable seating areas, more choice in lounges and a world-class retail and F&B offering are sure to impress and delight our passengers and our airline partners.” According to Dubai Airports, it has introduced a number of world-renowned brands to Dubai and the region for the first time. They include the casual dining concept The Kitchen, which offers passengers creations from celebrity chef Wolfgang Puck, and the first Pret a Manger in a Middle Eastern airport. Other firsts for DXB include Butlers Chocolate Café and Camden Food Company, which claim to bring “healthy, yet tasty” dining options using organic and natural products. For those who enjoy a little theatre with their food, YO! Sushi is likely to be another popular new addition to the airport, while the CNN News Café has already become a
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award-winning fine wine and luxury spirits retailer. Dubai Airports’ executive vice president, commercial and communications, Eugene Barry, says: “ELR and MMI have been long-time partners of Dubai Airports, and have played an integral role in the development of the customer experience at the airport. “We believe in creating world-class experiences for our travellers and Concourse D has an exciting portfolio of popular and new retail and food and beverage brands, all integrated to take the traveller’s experience at Dubai International to new levels of engagement.” As has become the norm at DXB, the new concourse also offers plenty of comfortable seating spaces and wellbeing concepts such as Be Relax and the ever-popular ‘SnoozeCubes’, which provide a convenient way to rest between flights. JCDecaux exclusively operates Concourse D’s advertising concession, introducing Dubai International’s largest provision of digital and other advertising structures to date. While the airport’s existing successful partnership with JTI will see the provision of three additional smoking lounges in Concourse D. Dubai Duty Free has a total of 175 vendor installations in Concourse D spread over an area of 7,000sqm, bringing the operation’s total retail space at DXB to 33,000sqm. www.aci-apa.com
SPECIAL REPORT: THE IMPORTANCE OF AVIATION
favourite for news junkies who want to stay connected to world affairs over coffee. Other new outlets include Lebanese favourite Sharwarmanji and Taqado Mexican Kitchen, both popular local examples of street food, in addition to a second Masale by Taste of India outlet but on a larger scale. In addition Concourse D boasts established traveller favourites such as Giraffe – which will open its second outlet at Dubai International – Starbucks, KFC, Krispy Kreme, McDonald’s, Brioche Doree, The Noodle House, Cavier House & Prunier, Draft House sports bar, and Costa Coffee. Concourse D’s retail/F&B concessionaires include Emirates Leisure Retail (ELR) and Maritime & Mercantile International (MMI), both subsidiaries of the Emirates Group. Kevin Zajax, ELR’s chief commercial officer, ELR, comments: “Our aim is simple – to delight and excite travellers with world-class F&B and retail experiences. “At Concourse D, we have some new partnerships and we are delighted to be bringing Pret A Manger to the region, as well as being selected to work with chef and restaurateur Wolfgang Puck for our first opening together. “We are sure passengers will be excited by the culinary offerings at Concourse D and we are proud to continue to work with Dubai Airports in, once again, raising the bar and enhancing guest experiences.” MMI, which is celebrating its 100th birthday this year, expands its footprint with the opening of its sixth Le Clos, the
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Fashion offers cover a total of 1,000sqm divided into two zones, perfumes and cosmetics cover a total area of 1,500sqm while liquor and food occupies nearly 1,000sqm. Described as a flagship facility, dnata’s Marhaba Lounge in Concourse D has a modern and contemporary design as well as a raft of new features and services that include as a mini theatre, bedrooms with double and single bed options, a special kids area, designated smoking zone and a VIP room. Open 24-hours a day, it welcomes walk-in customers or advance bookings from travelers expected to arrive in Concourse D. “Marhaba is very popular service that enhances the airport and travel experience for tourists, families, VIPs, and corporate customers,” says divisional senior vice president, Jon Conway. “In keeping with the increased traffic in Dubai, we anticipate serving more than one million passengers this year across all our lounges. Our new facility at Concourse D will be the sixth Marhaba Lounge in Dubai, and we will continue to look at new ways to enhance and expand our services to delight our customers.” The marhaba service is provided by dnata, which will handle all flights and baggage at Concourse D, as well as all passengers transiting though this new part of Terminal 1. Approximately 3,000 dnata staff have been assigned to the new facility, working APA Issue 1, 2016
in various capacities from check-in, special handling, airside operations and premium meet and greet service, marhaba. “We are excited to be a part of this milestone in Dubai International’s history,” enthuses dnata’s Conway. “Our team is ready to face the challenge to ensure each passenger and piece of baggage arrives seamlessly in Concourse D. “From aircraft appearance, baggage and passenger handling, ramp services, and cargo, every person plays an integral part in making sure that operations run efficiently in the new concourse. “Our ultimate goal is to ensure our customer airlines and their passengers enjoy a smooth travel experience.” On the apron, Concourse D provides 21 contact stands, of which four will be able to accommodate Airbus A380 or Boeing 747 aircraft, and 11 remote stands with a design capacity for 18 million passengers. The addition of Concourse D has raised the airport’s capacity from 75 million to 90 million passengers per annum, and with a record breaking 85 million passengers expected to use DXB this year, it’s opening could not have been better timed. “Aside from its many customer-centric features, Concourse D continues our legacy of providing timely capacity,” admits Paul Griffiths, CEO of Dubai Airports. “With the addition of Concourse D, Dubai International is getting both APA bigger and better.”
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AIRPORT PARTNERSHIPS Fred Lam and John Holland-Kaye sign the historic partnership agreement between Hong Kong and Heathrow.
Building bonds
Joe Bates finds out more about the rapidly growing trend of ‘sister airport agreements’ between Asia-Pacific gateways and their counterparts across the globe.
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hile ‘sister’ agreements between airports are not exactly a new phenomenon, the movement appears to have gained traction across the region in the first quarter of the year with a number of alliances forged. In mid-March, two of the world’s major gateways, Heathrow and Hong Kong International Airport, announced the formation of a new partnership agreement to share their expertise and experience. The collaboration is the first of its kind for Heathrow, and as a result the two gateways have pledged to work together with the aim of improving operations, driving up innovation, achieving world class service for passengers and developing industry leading environmental performance. According to Heathrow, as two of the world’s leading international hub airports, APA Issue 1, 2016
they have many similarities that form the basis for a strong relationship. It notes that they serve a similar customer profile and both have a global network of carriers, including home-based airlines, along with substantial cargo and retail businesses. And it is quick to point out that both are currently constrained but have high profile expansion plans that would bring economic benefits and jobs to their respective communities. Under the agreement, colleagues from each airport will work on joint projects, looking to take advantage of emerging trends or opportunities and help shape industry standards. Areas identified for the first phase include the central management of airport operations, crisis planning, passenger service, future terminal design and the opportunities to be gained from expansion.
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trust and deepen friendships to open a new chapter for future co-operation,” says Liu Xuesong, president and CEO of CAH and chairman of Beijing Capital International Airport Company Limited (BCIA). Finally, in March, Taiwan’s Taoyuan International Airport announced that it had signed an agreement with Munich Airport for the German gateway to provide it with “expert support” on two major projects. The airport, located 30 kilometres to the west of capital, Taipei, plans to redesign and expand its existing Terminal 2 and add a third terminal. The complex will be initially capable of accommodating 45mppa and eventually upto 86mppa with future expansions. Under an MoU signed on March 1 between operators FMG and Taoyuan International Airport Corporation (TIAC), experts from Munich will provide advice and assistance with both projects. Elsewhere in the region, Macau International Airport has proved quite prolific with sister agreements, boasting ten as far back as April 2008 when the list included Gold Coast, Hainan Meilan, Incheon, Winnipeg, Xi’an Xianyang and Wuxi. However, Tokyo Narita, is arguably one of the leading players today courtesy of sister agreements with ten major airport operators across the world. The list includes Airports of Thailand; Changi Airport Group; Abu Dhabi Airports; Korea Airports Corporation; Incheon Airport; Beijing Capital; the Port of New York and New Jersey (PANYNJ); Fraport; Denver International Airport; and Saint Petersburg-Pulkovo. And the Japanese gateway makes its feelings about their importance to its future growth and development very clear on its website, revealing that it believes that sister agreements are one of its key strategies for raising the quality of the airport. It states: “The aim of these agreements is to stay abreast of changes in the aviation industry, provide quality services catering to a broad range of requirements, and undertake advanced initiatives that cannot be achieved APA by individual airports alone.” www.aci-apa.com
AIRPORT PARTNERSHIPS
Heathrow CEO, John Holland-Kaye, says: “This relationship will see two of the world’s most successful hub airports working together to make our operations and service to passengers industry leading in every aspect. “Heathrow has similar challenges and different skills to Hong Kong – this will be a great opportunity to draw the best out of each other to the benefit of our passengers, our communities and the environment.” While Airport Authority Hong Kong, CEO, Fred Lam, says: “We are delighted to sign this agreement which will enable our two airports to work closer together in the future. “Our co-operation is poised to bring exciting opportunities for the two airports. And by sharing experience and knowledge, we will bring even better airport experiences for our passengers.” Another Asia-Pacific gateway to be busy forging sister relationships with other airports this year has been Beijing Capital, which has signed Memorandums of Understanding (MoUs) for the establishment of Sister Airport Relationships with both Helsinki and Stockholm Arlanda airports in Europe. Officially the MoUs pave the way for “extensive collaboration” between Beijing Capital operator, Capital Airports Holding Company (CAH), and the two Scandinavian gateways operated by Finavia and Swedavia respectively. According to Finavia, the objectives of the co-operation are benchmarking best practices and sharing knowledge, creating co-marketing activities in respective home markets, exchanging personnel and building competence. Staff exchange activities between Helsinki Airport and Beijing Capital International Airport are also expected to begin later this year. Talking about the Swedavia deal, CAH states that it is eager to learn about its “rich experiences” of operating a green airport, sustainable development and airport management. “Through the bond of sisterhood, the two sides will bring closer ties, enhance mutual
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CUSTOMER SERVICE
Winning hearts and minds Harnessing the power of aviation’s information age to improve the passenger experience is key to customer satisfaction, writes Rockwell Collins’ Andrew Seow.
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ccording to IATA, 2015 witnessed the strongest surge in air travel demand in five years with international passenger traffic across the globe rising by 6.5% and by a healthy 8.2% in Asia-Pacific. Indeed, IATA predicts that as many as 2.8 billion passengers could be travelling annually in the Asia-Pacific region alone by 2034, and these figures certainly point to a positive outlook for the industry. Yet, consistent and robust profitability remain volatile for many players. And with competition intensifying, many airports and airlines are realising the need to redefine their offerings, and providing travellers with the experience they demand in the digital age while looking at ways technology can help to improve the bottom line.
AUTOMATED SERVICES TO DRIVE BETTER PASSENGER EFFICIENCY
Technology has certainly changed the face of travel. According to data from IATA, around 75% of worldwide passengers want more self-service options to speed up their journey. Overall, the industry-wide push towards improving the travel experience has led to greater focus on the seamless progression for passenger travel across all touch points, from check-in to boarding. And as convenience becomes key in enhancing the travel experience, facilities APA Issue 1, 2016
such as self-service kiosks for check-in, bag-tag and bag-drop counters, security clearance and boarding are becoming more prevalent in Asia. Tokyo’s Narita International Airport, Japan’s second busiest airport, and MactanCebu International Airport in the Philippines have recently implemented Rockwell Collins’ passenger processing system and self-service kiosks to enable faster check-in. Self-service, of course, allows for greater flexibility as passengers gain more control over their journey and an increasing number of airports are keen to embrace and develop such technology. Delhi’s Indira Gandhi International Airport (IGIA), for example, has taken it one step further by equipping its staff with mobile and portable check-in devices, enabling agents to help passengers check-in from anywhere within the airport. This shift has also been witnessed on a macro level. IATA’s Fast Travel Program, for instance, is facilitating industry adoption of projects in six areas of the airport journey including check-in, bag drop, document check, flight re-booking, self-boarding and bag recovery. And in line with this, airports are looking into fully integrated, end-to-end solutions that include these self-service solutions. The increased demand for self-service is also driving the use of biometric technology and improved tracking solutions.
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CUSTOMER SERVICE
Biometrics in the form of iris, fingerprint and facial recognition can enable seamless progression through different points of the customer journey by eliminating the most time-consuming aspect of airport operations – human interaction. Technology solution providers are seeing a growing demand in this area and have identified two different approaches to the deployment of biometrics and their application to the airport departure process – namely “1-to-1 matching”, also known as the Verification approach, and “1-to-Many matching”, a more extensive identification approach. A growing number of airports, in partnership with border control agencies, will begin to leverage these solutions to create the airports of tomorrow, with fully integrated, self-sufficient operations. Airports in the US, for example, are amongst the early adopters of such solutions, with an American airport being the first to roll out Rockwell Collins’ new Automated Passport Control (APC) kiosk some time in June 2016.
ENGAGING AND EMPOWERING PASSENGERS WITH NEXTGENERATION CONNECTIVITY
In today’s 24/7 connected world, passengers want to replicate their connected digital lifestyles from their homes and offices in airports and aircraft cabins, with a recent study finding that many travellers are more likely to pay for such services than ever before. With this in mind and the flood of smartphones, tablets and laptops making their way into cabins, it is probably fair to
say that the current industry term for inflight entertainment (IFE) is woefully inadequate to describe what passengers want to do on their journey. While looking at the broader IFE Connectivity is a step in the right direction, the industry needs to be thinking about a whole new term – passenger engagement. With next-generation connectivity, passengers can surf the Internet, send and receive email and use social networking and text messaging on mobile devices while on-board aircraft. All of which present revenue potential for airlines. Carriers also have the opportunity to deliver more targeted content to its frequentflyer passengers. Sichuan Airlines, for example, has recently deployed a seatcentric IFE system that allows the airline to develop their own IFE system look and experience for passengers. Kuwaiti airline, Jazeera Airways, has also jumped on board, implementing a brand new inflight entertainment and connectivity (IFEC) solution that it believes provides unique services that drive customer satisfaction and loyalty.
LEVERAGING DATA TO ENHANCE THE PASSENGER EXPERIENCE
The information age of aviation provides a wealth of data generated from the extensive use of technology across different touch points, which can be processed and analysed within a protected environment to provide valuable passenger insight that can enable a more personalised service. www.aci-apa.com
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CUSTOMER SERVICE Big Data can help airports and airlines track passenger behaviour, travel history and retail preferences to provide customised information and services across different segments of the travel journey. This could, for example, be in the form of giving priority to loyal and premium passengers, addressing the grievances of dissatisfied customers or providing relevant flight information for transit passengers. Solutions like state-of-the-art 3D and mobile wayfinding, multi-media communications and full content management capabilities enable airports to gain insights and identify trends around how passengers are making their way around the airport before they head for the boarding gates. Such information can allow airports to better tailor relevant retail promotions or content to passengers, thereby enhancing passenger experience while taking the opportunity to drive ancillary revenue. Additionally, new airport operations technologies will help airports improve operations and reduce flight delays, which are all critical aspects of today’s airports operations to cope with growing passenger capacity and enhancing the passenger experience within the airport. The possibilities are endless. With self-service technologies such as self check-in and bagdrop, for instance, airports APA Issue 1, 2016
have the ability to determine if a passenger has checked in and arrived at the airport for his or her flight, and deliver targeted content on airport activities of relevance or interest to the passenger. Personalised advertisements or messages can be sent to passengers based on their purchase preferences and travel patterns. This not only enhances their travel experience, but also opens up channels to boost the bottom line for different players such as airports, airlines and retailers. As we can see, there are number of exciting ways in which the industry can benefit from the aviation information age, from streamlining the journey of a single passenger through an airport to more efficiently managing an entire airspace of flights every day. As the digital revolution continues to transform the industry landscape with emerging technologies such as the Cloud and Internet of Things, airports and airlines must adapt their services to stay ahead of the curve and meet increasing consumer expectations.
ABOUT THE AUTHOR
Andrew Seow is Rockwell Collins’ regional director for global airports, Asia Pacific Information Management Services. Visit www.rockwellcollins.com for more information.
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CONSTRUCTION NEWS
DESIGN & BUILD
Work is underway on the new Terminal 2 at Mactan-Cebu International Airport.
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concrete pouring ceremony earlier this year marked the start of the construction of the eagerly awaited new Terminal 2 at Mactan-Cebu International Airport (MCIA) in the Philippines. The new $370 million terminal is expected to bring new levels of comfort, operational efficiency and sense of place to the airport in addition to increasing its appeal to the airlines and almost trebling its capacity from 4.5mmpa to up to 12.5mppa. Hong Kong-based Integrated Design Associates (IDA), which has previously worked on projects at Beijing Capital, Delhi-Indira Gandhi and Hong Kong airports, forms part of Terminal 2’s design team. At Mactan-Cebu, IDA is working in tandem with the country’s three “kings of interior design” – Budji Layug, Royal Pineda and Kenneth Cobunpue – on the design, look and feel of the new terminal. And according to operator, GMR Megawide Cebu Airport Corporation (GMCAC), the architecture of Terminal 2 will pay tribute to the Cebu’s heritage. Indeed, the shape of the new terminal has been designed to resemble a native canoe known as a Bangka, which is very much a part of Cebu’s cultural inheritance. APA Issue 1, 2016
KEY FACTS AIRPORT: PROJECT: KEY PLAYERS: COMPLETION:
Mactan-Cebu International Airport New Terminal 2 GMR-Megawide Cebu Airport Corporation (GMCAC), Integrated Design Association (IDA), Budji Layug + Royal Pineda Design Architects, Kenneth Cobonpue Asia February 2018
While GMCAC reveals that the new 50,000sqm facility will feature a blend of modern building materials and Cebuano culture and heritage. Speaking during the groundbreaking ceremony, the GMR Group’s chairman for airports, Srinivas Bommidala, said: “The new terminal will be specifically developed to enable passengers to enjoy the Cebuano experience the moment they set foot in the Philippines.” Located next to the existing terminal and designed with modular expansion in mind, Mactan-Cebu’s new T2 will have a distinctive two level forecourt, which its designers assure will be fully integrated with the complex’s landside developments. In terms of facts and figures, the terminal will initially boast 48 check-in counters – expansion will raise this number to 72 – and
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seven boarding bridges capable of handling both wide and narrow-body aircraft. A further five boarding bridges are planned. GMCAC says that the goal of ensuring that the complex is passenger-friendly ensures that T2 will boast an array of retail and F&B outlets and be equipped with 12 escalators and 15 elevators to “facilitate the easy movement of passengers, including those with reduced mobility and disabilities”. It notes that the concessions offering will cater to the “taste and aspirations” of both local and international travellers as well as providing additional sources of revenue for the airport. The potentially game changing new terminal for Mactan-Cebu International Airport will also have its own 550-vehicle capacity car park, which can be expanded to 750 spaces in the future if demand dictates. And the airport is not going to stop there as potential future developments already under discussion for some time after Terminal 2’s opening include proposals for a new shopping mall and an airport hotel. “Our vision is for Mactan-Cebu International Airport to become the world’s friendliest gateway that demonstrates the warmth and hospitality of the Cebuano people,” says an airport spokeswoman. “It will be an airport that will make guests feel that their resort experience has started the moment they set foot in the terminal.” In addition to the economic benefits it will bring upon opening, T2’s design and construction over the next three years is
anticipated to provide a massive boost to local communities through the creation of up to 3,000 jobs. The terminal is expected to provide the catalyst for growth for Mactan-Cebu and as such was one of the key projects GMCAC agreed to invest in when winning the bid to operate the gateway. “The development of Terminal 2 and the expansion of the airport will allow GMCAC to launch more direct international services to Cebu and expand the number of domestic connections such that Cebu becomes a major gateway into the Philippines,” says a spokeswoman. “As a result, we believe that tourism, business and leisure travel will increase significantly and positively contribute to the economic prosperity of Cebu.” In many ways the potential of MactanCebu was demonstrated by the launch of four new international services to Los Angeles, Dubai, Taipei and Xiamen in the first quarter of 2016. In fact when announcing the planned launches earlier in the year, GMCAC’s chief executive advisor, Andrew Acquaah Harrison, revealed the ambition to transform Mactan– Cebu into a regional hub connected to the rest of the world. If current growth rates continue, the airport expects its annual passenger numbers to reach 8.9 million by 2018 based on handling 350 daily flights as opposed to around 220 today. APA www.aci-apa.com
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WBP NEWS
WORLD BUSINESS PARTNERS
IN THE SPOTLIGHT WBP PROFILES
ROOM WITH A VIEW Plaza Premium Group has opened the only airport transit hotel in the world to be equipped with an outdoor swimming pool, jacuzzi and pool side bar at Singapore Changi. Called Aerotel and located close to Gate 41 on Level 3 of Terminal 1, it is described as a stylish hideaway in the heart of the Singapore hub by its creators. “Aerotel Singapore is our first airport transit hotel which meets the demand of transit passengers by promising a comfy airport accommodation, swimming and gym facilities, and convenient booking hours, bringing them a brand new homeaway-from-home experience in Changi,” enthuses Song Hoi-see, founder and CEO of Plaza Premium Group.
LEAN AND GREEN Bengaluru’s Kempegowda International Airport has become the first Indian gateway to be awarded a GreenCo Platinum rating by the Confederation of Indian Industry’s Green Business Centre. HOK provided design and planning services for the expansion of Terminal 1, which has previously earned LEED Gold certification from the Indian Green Building Council. Bengaluru International Airport Limited’s president of airport operations, Hari Marar, enthuses: “We see this rating as a testimony toward our efforts in building an energy efficient and green airport. “The award was evaluated on criterion like implementation of water-saving projects, energy efficiency, utilisation of renewable energy, greenhouse gas emission, waste management, optimising the three Rs of reduce, reuse and recycle, and green supply chain, among others.” APA Issue 1, 2016
DRA INTERNATIONAL AVIATION SERVICES Location: Sydney, Australia Contacts: Cpt Desmond Ross, managing director; Simon Proudman, director Email: DLR@drainternational.aero; sproudman@yahoo.com Website: www.drainternational.aero DRA International offers professional management and operational services to the aviation industry and government regulators, particularly in developing nations. Our team includes experts in flight operations, aviation security, air traffic management, airport management, corporatisation and rehabilitation, IT support and development, overall project management, staff recruitment, terminal and ramp management, and legal services. NUCTECH SYDNEY PROPRIETARY LIMITED Location: Sydney, Australia Contacts: Aron Chi Zhangi, marketing supervisor; Michelle Lu Sun, marketing manager/company deputy director Email: zhangchi@nuctech.com, sunlu@nuctech.com Website: www.nuctech.com Nuctech Sydney Pty Ltd, a subsidiary of Nuctech Company Limited, is a security inspection product manufacturer and security solutions supplier specialising in own-brand radiation imaging equipment.
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