In the spotlight: New revenue streams Airport report: El Paso Build & design: Israel’s new airport Plus: Airport seating, Brands and ;OLTHNHaPULVM[OL(PYWVY[Z*V\UJPS0U[LYUH[PVUHS
Frankfurt’s Terminal 3
New revenue streams: Money matters Volume 24 Issue 3 www.aci.aero
Airport World Editor Joe Bates +44 (0)1276 476582 email@example.com Design, Layout & Production Mark Draper +44 (0)208 707 2743 firstname.lastname@example.org Sales Directors Jonathan Lee +44 (0)208 707 2743 email@example.com Gary Allman +44 (0) 7854 239 426 firstname.lastname@example.org Advertising Manager Andrew Hazell +44 (0)208 384 0206 email@example.com Subscriptions firstname.lastname@example.org Managing Director Jonathan Lee +44 (0)208 707 2743 email@example.com
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Big business Airport World editor, Joe Bates, reflects on the importance of income earned from non-aviation related activity in this ‘new revenue streams’ themed issue.
t seems hard to believe, but the last time ‘new revenue streams’ was the theme of Airport World was the autumn of 2011, and the thread running throughout it was that an ever increasing number of airports were beginning to think outside of the box when it came to generating non-aeronautical revenues. The issue’s themed articles included features about airports offering management and consulting services; airport sister agreements; car parking innovation; Panama’s airport city ambitions and how Florence Airport was generating some of the highest advertising sales per passenger in the world. Some of these issues naturally come under the microscope again this time around as airports continue to innovate and develop as businesses to reduce their reliance on aeronautical revenue. Why is this so important? Well, as the latest ACI Airport Economics Report reveals, the average airport cost of $13.69 per passenger exceeds the $9.95 they typically bring in from aeronautical revenues per passenger, making the average $7.08 per passenger earned from non-aviation related activity absolutely crucial. Retail concessions remain the largest source of non-aeronautical revenue for airports at 30.2%. Car parking revenue and property revenue/rent are the second and third largest sources of non-aeronautical revenues at 20.1% and 15% respectively. And, as ACI World director general, Angela Gittens, noted in Airport World back in 2011, airports with diverse revenue streams have “the fiscal muscle to ride out the inevitable downturns in the business cycle when air traffic declines”. She commented: “Worldwide, nonaeronautical revenue has become a key element in the airport business plan. Creative use of airport property includes the construction of a medical clinic at Dallas/Fort Worth International Airport, a casino at Amsterdam Schiphol, oil wells on the airport property in Denver, a golf course in the noise footprint at Tokyo Narita, and business and industrial parks at many airports.
“The attraction of the airport location can be very powerful. For example, office space at Schiphol commands rents higher than the equivalent space in downtown Amsterdam. “Beyond the airport perimeter, many airports have successfully branched out into trans-border ownership, management and consulting. In summary, airport operators worldwide are looking to create new business opportunities in the fast-paced aviation marketplace.” Her words are as relevant today as they were eight years ago and, as if to prove the point, we provide plenty of examples of non-aviation related business innovation in this mid-2019 issue of Airport World. Indeed, the ‘new revenue streams’ themed section of this issue contains features about retail trends both in the terminal and across the airport campus; daa International’s global business interests; car parking innovation; airport hotels; revenue generating IT; and Singapore Changi’s hugely impressive new addition, Jewel Changi Airport. Elsewhere in the magazine we catch up with some of the world’s top airport seating companies; learn about the power and benefit of brands; and turn the spotlight on Israel’s newly opened Ramon-Eilat Airport and Frankfurt Airport’s planned new Terminal 3. Our main airport feature is El Paso, where director of aviation, Monica Lombraña, tells us more about her gateway’s pioneering ways in terms of non-aeronautical land development, striving for customer service excellence and the challenges of expanding its route network. We also hear from ACI World’s Gittens about the importance of catering to customer needs in her View from the Top article; cover human resources in our regular ‘People matters’ column; and discover the latest route development and industry news in our regular ‘Cleared for take-off’ and World Business Partner pages. Some food for thought anyway as you prepare to head off on your summer or winter holidays depending on where you live in this great wide world of ours!
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ISSUE 3 Volume 24
In this issue 3 Opinion Airport World editor, Joe Bates, reflects on the importance of income earned from nonaviation related activity in this ‘new revenue streams’ themed issue.
8 World in motion ACI World’s communications manager, Sabrina Guerrieri, reports on strengthening partnerships on slots, aircraft noise management and celebrating the customer experience.
11 View from the top ACI World director general, Angela Gittens, reflects on the importance of catering to customer needs in today’s ‘phygital’ world.
12 Texas star Passenger numbers at El Paso International Airport hit an all-time high in 2018, and although it may still be one of the smaller regional airports in Texas and the USA, it is not to be underestimated, writes Joe Bates.
16 Catering to consumers Embracing the latest trends and seizing the opportunities created by a constantly evolving retail market will allow airports to sustain and grow non-aeronautical revenues, writes Chris LeTourneur.
20 Beyond borders Irish airport operator, daa, has business interests across the globe courtesy of its wholly owned subsidiaries, writes daa International CEO, Nick Cole.
23 Time to board? Investing in hotel accommodation is a strategic move that more airports could be capitalising on to boost revenues and customer satisfaction levels, writes ICF Aviation’s Stephen Freibrun.
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Director General Angela Gittens (Montreal, Canada) Chair Martin Eurnekián (Buenos Aires, Argentina) Vice Chair Aimen Al-Hosni (Muscat, Oman) Immediate Past Chair Fredrick J Piccolo (Sarasota, USA)
25 Jewel in the crown Airport World finds out more about Singapore’s new mega retail, hospitality and leisure development, Jewel Changi Airport.
28 Transformational technology Collins Aerospace’s Tony Chapman explains how new technology will help airports meet growing passenger expectations and boost their bottom lines.
32 Park and fly Airport World reviews some of the latest airport parking stories from across Europe and North America.
35 The bottom line Some of the biggest airport seating companies in the world provide their thoughts on the importance of seating, the latest trends and the challenges of changing passenger dynamics.
41 Oasis in the desert Airport World takes a closer look at Ilan and Asaf Ramon Airport, Israel’s new $470 million gateway to Eilat.
42 The power of brands Interbrand strategy consultant, Jan Glanzmann, considers the value and transformative power of a strong brand, which he believes have grown from nice-to-have to must have assets.
45 Cleared for take-off Airport World provides a snapshot of the latest route development news from Moscow-Sheremetyevo, Miami, Munich, Göteborg Landvetter and Stockholm Arlanda airports.
47 Project Watch: Frankfurt Airport New state-of-the-art Terminal 3 to raise the airport’s capacity to in excess of 90 million passengers per annum.
49 Going Green Spotlight on LAX’s handling of aviation’s most eco-friendly commercial flight, Gatwick reducing its noise footprint and the recycling efforts of Detroit Metropolitan.
51 WBP News The latest global news from ACI’s World Business Partners.
54 People matters Richard Plenty and Terri Morrissey provide their thoughts on how to encourage entrepreneurial spirt.
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Treasurer Emmanuel Menanteau (Osaka, Japan) ACI WORLD GOVERNING BOARD DIRECTORS Africa (2) Zouhair El Aoufir (Rabat, Morocco) 1 Vacancy Asia-Pacific (9) Aimen Al-Hosni (Muscat, Oman) Kjeld Binger (Amman, Jordan) Geoff Culbert (Sydney, Australia) Fred Lam (Hong Kong) Seow Hiang Lee (Singapore) Xue Song Liu, (Beijing, China) Emmanuel Menanteau (Osaka, Japan) PS Nair (Delhi, India) Sasisubha Sukontasap (Bangkok, Thailand) Europe (7) Daniel Burkard (Moscow, Russia) Elena Mayoral Corcuera (Madrid, Spain) Michael Kerkloh (Munich, Germany) Yiannis Paraschis (Athens, Greece) Stefan Schulte (Frankfurt, Germany) Sani Şener (Istanbul, Turkey) Nazareno Ventola (Bologna, Italy) Latin America & Caribbean (3) Ezequiel Barrenechea (Lima, Peru) Martin Eurnekián (Buenos Aires, Argentina) Andrew O’Brian (Quito, Ecuador) North America (7) Lew Bleiweis (Asheville, USA) Joyce Carter (Halifax, Canda) Howard Eng (Toronto, Canada) Deborah Flint (Los Angeles, USA) Joseph Lopano (Tampa, USA) Candace McGraw (Cincinnati, USA) Tom Ruth (Edmonton, Canada) Regional Advisers to the World Governing Board (10) Diego Arrosa (Montevideo, Uruguay) Arnaud Feist (Brussels, Belgium) Pascal Komla (Lomé, Togo) Bashir Ahmad Abdul Majid (Delhi, India) Hector Navarrete Muñoz (Merida, Mexico) Augustin de Romanet (Paris, France) Brian Ryks (Minneapolis-St Paul, USA) William Vanecek (Buffalo, USA) 2 Vacancies World Business Partner Observer Thomas Duffy (ADB SAFEGATE) Correct as of July 2019
ACI WORLDHEAD NEWS RUNNING
World in motion
ACI World’s communications manager, Sabrina Guerrieri, reports on strengthening partnerships on slots, aircraft noise management and celebrating the customer experience.
he aviation industry is up against many challenges and under a lot of pressure to accommodate future growth while being safe, secure and sustainable, both environmentally and economically, and while delivering a satisfying customer experience. The onus is on all aviation stakeholders to come together on key issues that most affect us and to overcome them through partnerships. On this note, we are pleased to report that ACI World, IATA and the Worldwide Airport Coordinators Group (WWACG) have announced the agreement of a new governance structure for the Worldwide Slot Guidelines (WSG) that puts the interests of the travelling public at the centre of the process. As a result, airport operators, airlines, and slot co-ordinators will now play an equal role in determining the global guidelines for the allocation of airport slots. More than 200 airports require slot co-ordination because they have insufficient capacity to meet demand at all times of the day. Co-ordination based on global standards helps to maximise utilisation of existing capacity, avoid delays and improve the passenger experience. The new industry-wide governance was signed in Seoul, South Korea, on June 3, 2019, by ACI World director general, Angela Gittens, IATA director general and CEO, Alexandre de Juniac, and WWACG chairman, Eric Herbane. All parties agreed that new governance and increased collaboration provides an opportunity to further modernise slot allocation mechanisms to the benefit of the travelling public and the aviation community at large. Another key priority in the face of future growth in air services is limiting or reducing the nuisance of significant aircraft noise, which must remain a key priority for all aviation stakeholders. Aircraft noise is the most significant cause of adverse community reaction related to airports’ license to operate and grow, a necessary component to meeting future growth. Speaking at the Air Transport Action Group (ATAG) Summit in Montréal in May, ACI World’s director general highlighted the importance of managing aircraft noise as the industry meets new challenges. She noted: “The industry has done a good job at managing aircraft noise, but new challenges are arising including the development of supersonic aircraft for business jets and commercial airplanes. While
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ACI supports the development of new technology, noise and emissions standards for supersonics must be stringent enough that they do not compromise the work that airports and the industry have been doing for decades.” ACI supports the ICAO Annex 16 Volume 1, dedicated to aircraft noise, and the current work at the ICAO Committee on Aviation Environmental Protection (CAEP) to develop Standards and Recommended Practices for new supersonic aircraft. Gittens also spoke on the importance of non-acoustic factors that make up a portion of variables responsible for community annoyance including the level of trust residents have in airport or authorities in general, as well as their attitude towards aviation. Further research on non-acoustic factors is needed to properly address aircraft noise annoyance. On a different note, ACI World has announced this year’s inductees into the Director General’s Roll of Excellence. This year’s inductees are: Changchun Longjia International Airport (Changchun, China), and Hohhot Baita International Airport (Hohhot, China). The Director General’s Roll of Excellence recognises those airports that have consistently delivered excellence in customer service by winning multiple Airport Service Quality (ASQ) awards over a five-year period. ACI’s ASQ programme is the only worldwide service quality measurement and benchmarking service that captures passengers’ impressions and opinions while still at the airport. The 2019 Director General’s Airport Service Quality Roll of Excellence induction ceremony will take place at the ACI Customer Excellence Global Summit in Bali, Indonesia, which is now open for registration. “In an increasingly competitive industry, airports acutely recognise the importance of delivering exceptional customer experience and have taken pains to learn what matters most to the passengers they serve,” said Gittens. “I congratulate Changchun Longjia International Airport and Hohhot Baita International Airport on their outstanding achievement. I hope they will continue to raise the bar for airport service quality excellence and work with ACI to share best practices within the industry.”
ACI WORLD NEWS
ACI-NA Annual Conference & Exhibition Tampa, USA
ACI-LAC Regional Assembly, Conference & Exhibition Bogotá, Colombia
ACI Africa Regional Assembly, Conference & Exhibition Accra, Ghana
The Trinity Forum Doha, Qatar
ACI Customer Experience Global Summit Bali, Indonesia
ACI offices ACI World Angela Gittens Director General PO Box 302 800 Rue du Square Victoria Montreal, Quebec H4Z 1G8 Canada Tel: +1 514 373 1200 Fax: +1 514 373 1201 firstname.lastname@example.org www.aci.aero
ACI Asia-Pacific Patti Chau Regional Director Hong Kong SAR, China Tel: +852 2180 9449 Fax: +852 2180 9462 email@example.com www.aci-asiapac.aero
ACI Africa Ali Tounsi Secretary General Casablanca, Morocco Tel: +212 660 156 916 firstname.lastname@example.org www.aci-africa.aero
ACI Latin America-Caribbean Javier Martinez Botacio Director General Panama City, Panama Tel: +507 830 5657/58 email@example.com www.aci-lac.aero
ACI Europe Olivier Jankovec Director General Brussels, Belgium Tel: +32 (2) 552 0978 Fax: +32 (2) 502 5637 firstname.lastname@example.org www.aci-europe.org
ACI North America Kevin Burke President & CEO Washington DC, USA Tel: +1 202 293 8500 Fax: +1 202 331 1362 email@example.com www.aci-na.org
As of January 2019, ACI serves 646 members operating 1,960 airports in 176 countries. ACI is a non-profit organization whose prime purpose is to advance the interests of airports and to promote professional excellence in airport management and operations. According to ACI’s 2018 Annual World Airport Traffic Report, in 2017 airports worldwide welcomed 8.3 billion arriving and departing passengers and handled 118.6 million metric tonnes of cargo and 95.8 million aircraft movements.
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View from the top ACI World director general, Angela Gittens, reflects on the importance of catering to customer needs in today’s ‘phygital’ world.
igital transformation is happening in all industries. For airports, it involves transforming established processes and services to improve their operations to deliver a better experience to all passengers and customers. With the extensive use of smartphones, tablets and laptops, the internet of things – as well as in-store touchpoints such as kiosks and magic mirrors – passengers now have different ways of interacting directly with businesses and purchasing goods. The border between the physical and the digital has blurred, and customers are increasingly navigating both worlds. As such, airports are catering to the needs of their customers by offering ‘phygital’ experiences. As the name suggests, phygital is a concept that describes the blending of digital experiences with physical ones, taking the best aspects from each space to create the optimal customer experience. While digital retail offers immediacy, for instance, immersion, and speed, physical retail offers the human experience and a more sensorial experience. ACI encourages airports to explore the phygital, which will be the theme of this year’s The Trinity Forum, the world’s most influential airport commercial revenues conference, taking place this year in Doha, Qatar, from October 30-31, 2019. Under the theme ‘Reimagining the Trinity’s role in a phygital world’, we will delve into topics such as: reimagining the airport commercial model, demographic challenges and online competition, new shopping frontiers, and the power of the trinity partnership, among other pertinent topics. Embracing the phygital helps airports to develop new revenue streams that are in line with evolving passenger needs and to gain a competitive advantage. Customer experience is crucial for an airport and ACI’s Research Report has shown that an increase in passenger satisfaction, as defined in the ASQ Survey, generates growth in non-aeronautical revenue. According to the latest ACI Airport Economics Report, airports worldwide earned more than $172 billion in 2017, up 6.2% from the year before. Airports’ revenues come from aeronautical (55.8%), non-operating (4.3%), and non-aeronautical revenue (39.9%). On average however, aeronautical revenue does not cover capital and operating costs, and airports very much rely on commercial, or non-aeronautical revenue, to determine their financial viability. In addition, non-aeronautical revenue generates a higher profit margin and thus contributes more to financial sustainability and the capacity to withstand traffic volatility. The challenge and opportunity for airports and airport retailers worldwide is to safeguard and develop the commercial side of airports by evolving in step with customer expectations. This involves forging
innovative business partnerships and developing new revenue streams and commercial models that embrace the digitalisation of airports – including the phygital. From the viewpoint of the passenger, a phygital experience may just mean a more personalised and individual experience, one that also offers a seamless flow through the airport. Many airports are already picking up on the trend, particularly through the offline/online shopping of products, food and beverage and services. While duty free airport zones are ideal venues for showcasing products, offering online purchasing options to reduce travelling inventory provides airport retailers and brands with a different revenue model adept for the future. Auckland Airport, for example, offers a digitalised downtown shopping experience where customers can purchase tax-free products from more than 200 retailers located in the city’s actual downtown without complicated tax-refund forms. Purchased products from these retailers are automatically delivered in a single shopping basket to the airport before the passenger’s departure. Another example is augmented Reality (AR), which blends the virtual with the actual to make real life more engaging and which is being used for wayfinding to help passengers navigate at the airport. Geolocation information can also enhance the passenger experience by offering purchasing recommendations, travel alerts and other personalised information. All of this will be explored at The Trinity Forum, a joint venture between The Moodie Davitt Report, ACI World and ACI Asia-Pacific, which this year is being jointly hosted by Hamad International Airport, Qatar Airways and Qatar Duty Free. I look forward to welcoming AW you to Doha.
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AIRPORT REPORT: EL PASO
Passenger numbers at El Paso International Airport hit an all-time high in 2018, and although it may still be one of the smaller regional airports in Texas and the USA, it is not to be underestimated, writes Joe Bates.
nlike some of its bigger neighbours to the east, El Paso isn’t connected to the world by a huge route network and doesn’t boast a huge population to drive the airport’s growth. El Paso International Airport is, however, a vital economic generator for the west Texas city. A rising star in terms of traffic growth, the airport is also in the final stages of putting together a new master plan that will determine how its key infrastructure will be developed over the next 20 years. Director of aviation, Monica Lombraña, cannot divulge the exact details of the master plan while it is still being drawn up, but after 18 years at the gateway, including the last decade in the top job, she is well aware of what is required to take El Paso International Airport (ELP) to the next level. “We want to make the airport even more accessible, easy to use and operationally efficient, and this will essentially mean improving and expanding the existing facilities to ensure that we are equipped to meet future demand,” enthuses Lombraña. “With two commercial runways, one of which is 12,010ft long, and a GA [general aviation] runway, we have more than enough airfield capacity for the foreseeable future, so our efforts will be concentrated on enhancements to the passenger terminal and experience.
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Expanding and reconfiguring ELP’s security checkpoint and ticketing areas are likely to figure high on the agenda as the airport looks to reduce today’s peak time congestion and equip it to handle more passengers in the future. Lombraña reminds me that the airport basically incorporates and has been built around the original terminal building that was built in 1941, and that this has not made developing the airport easy over the years. But develop it has, with today’s ELP boasting a terminal building and east and west piers (Concourses A and B) that between them offer 15 gates. Indeed, over $200 million has been invested on upgrading the airport’s facilities in the last five years as part of its ongoing capital improvement programme. This has included creating a playground area for kids and revamping the airport’s retail and F&B offerings in tandem with concessionaires HMSHost and Paradies Lagardère. ELP has also invested in a super-fast and free to use Wi-Fi service and introduced new lighting, flooring, comfortable seating and workstations to improve the ambiance of the airport. Talking about ELP’s new retail/F&B outlets, Lombraña says: “We want to offer passengers a good mix of local and national brands,
AIRPORT REPORT: EL PASO and I feel that we are getting there by listening to what our travellers want and delivering whenever possible.”
Boosting non-aviation related revenues One thing very much on ELP’s side in terms of its future development is the size of the airport site, which at 7,000 acres is considerable for a gateway handling under five million passengers per annum. The amount of land at its disposal has already allowed ELP to become a pioneer in non-aeronautical land development at a US airport and Lombraña certainly doesn’t hide the fact that this is a side of the business that she would like to expand more in the future. To date, over 200 commercial businesses and industrial operations are located within ELP’s Butterfield Trail Industrial Park and Butterfield Trail Air Cargo Center as well as the Global Reach Science & Technology Park and the Southern Industrial Park adjacent to the airport. Within the industrial parks are Butterfield Trail Golf Club, Lone Star Golf Club and more than 900 acres of fully developed industrial and retail property that supports light manufacturing, warehousing, distribution and transportation operations, as well as call centres, hotels, retail, and restaurants. And with no residential areas to worry about as ELP is bordered by a sizeable US Department of Defense facility to the north and the east (Fort Bliss), within reason, there is little to restrict it in the respect of the type of non-aviation relation commercial facilities it can develop on its doorstep. Lombraña says: “El Paso really has been at the forefront of the development of industrial parks on airports since the early 1980s to accommodate demand for the warehousing and US distribution of goods manufactured across the border in Mexico. “This is still an important part of the business today, but the industrial parks are also home to a number of companies carrying out aviation related services, and this is something we are well placed to develop further going forward.” Largely due to the success of its business parks, non-aeronautical activity today accounts for 72% of ELP’s total revenues, which is incredibly high for a US airport.
Customer service Lombraña is proud of ELP’s success in ACI’s 2018 Airport Service Quality (ASQ) customer excellence awards, the Texas gateway finishing equal top with Ottawa in the 2-5 million passengers per annum category for North America. She says the award means so much because it is based on direct feedback from passengers, but stresses that although the accolade is “awesome”, ELPs approach to the results each year is not to focus on what it does well, but rather on where improvements can be made. “I think taking this approach and looking at what we can do better is the best way to gain true value from the survey,” says Lombraña, noting that the faster Wi-Fi speeds, playground, new furniture and flooring are all the result of listening to the feedback of travellers in the ASQ programme. “I also have to add that El Paso International Airport is a department of the City of El Paso and, as such, our strategic plans are very much aligned and focused on providing exemplary customer service. “We live by our strategic plan. Staff training is based on it and customer service and safety and security really are
our priorities. Our mission is to make travelling through El Paso International Airport as easy and as enjoyable as possible.” This, she says, encompasses everything from being polite and courteous to passengers and having clean restrooms to making sure that any construction work has little or no impact on passengers and their airport experience.
Traffic development A total of 3.2 million passengers passed through ELP in 2018, a healthy 8% upturn on the previous year, which Lombraña attributes to a strong US economy and additional frequencies added by the airlines. The airport is served by seven airlines today (Alaska, Allegiant, American, Delta, Frontier, Southwest and United), which between them operate just over 50 daily flights to 14 US destinations. Dallas (American, Southwest), Los Angeles (American, Southwest), Houston (Southwest, United), Las Vegas (Allegiant, Southwest) and Austin (Southwest) are its top five routes in terms of traffic numbers. Other popular routes served non-stop from ELP include Phoenix Sky Harbor (American, Southwest), San Antonio (Southwest), Chicago (American, Frontier and United), Denver (Frontier, Southwest, United) and Atlanta (Delta). They ensure that Southwest and American are the biggest operators at ELP today, accounting for 42% and 31% respectively of the traffic. United (13%) Delta (9%) and Alaska (2.5%) complete the top five. The route network also means that ELP is essentially an O&D gateway that 100% serves the domestic market, and Lombraña is honest enough to admit that this is unlikely to change any time soon due to the hub and spoke system that US airlines utilise and the proximity of Juarez’s Abraham González International Airport, which is literally just the other side of the Rio Grande.
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AIRPORT REPORT: EL PASO
“Developing an international route network is one of our greatest challenges as Juarez, just over the border in Mexico, exclusively serves the Mexican market and the US carriers serving El Paso want to route passengers through their main hubs,” she tells Airport World. “We have had international flights before, but not since an inbound service from Mexico back in 2006, so getting them back will be a huge challenge. “Is there the demand? A lot of people ask about them, and we continue to meet with the airlines to discuss this with them as we believe that there is potential for services to Chihuahua and other cities, but providing the data to make a business case to them is difficult as we don’t have figures for the number of people that currently drive to Juarez to catch flights to Mexico.” Domestically, Lombraña has no doubt that the location of Fort Bliss and number of law enforcement agencies based in El Paso, alone, would justify the launch of services to Washington DC, and believes that there is enough demand for a New York service, but the long distances involved and airline economics have so far left her frustrated. “We are actively working to increase our route network, but there are challenges that come with being a small hub and our geographical location,” she muses. Having said that, ELP has managed to add three new airlines (Allegiant, Frontier and Alaska) and five new destinations to its network over the last three-and-a-half years, during which time it has also gained 19 new services on existing routes, so Lombraña and her team are clearly doing something right. Regardless of what the future holds for ELP in terms of its route development, Lombraña feels that the airport does, and always will play, a vital role in both Texas’ and the US’s airport system. “Geographically, El Paso is quite isolated from the rest of Texas and most of the US, so the airport provides an absolutely
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vital air transportation role for the 700,000 people that live in the city and 2.5 million within a two-hour drive of the airport,” she explains. “To put that in perspective, we are the same distance from Houston, Texas, as we are from Long Beach, California, which is three states away. The car or other means of transport just really isn’t an option for most journeys.” ELP is also a powerful economic engine for the region, directly employing 15,800 staff and contributing $2.2 billion to the local economy in 2017, according to an Economic Impact Study carried out by the Texas Department of Transportation.
Changing people’s perceptions El Paso will shortly host the annual SMART Airports and Regions Conference & Exhibition and Lombraña is very much looking forward to it and showcasing the city, region and, of course ELP, to the world. She also openly admits that changing people’s perceptions of El Paso is a major reason for wanting to host the conference as she believes that some have completely the wrong idea of the city based on its US-Mexico border location, Juarez’s reputation as a violent city and media coverage of migration issues. “People that think of El Paso as being an old, dusty old town which is quite dangerous could not be further from the truth,” she says. “We are actually one of the safest and friendliest cities in the US and I want people to experience this for themselves when they visit and leave with a whole new impression of our city.” Sounds like some true Texas hospitality awaits those lucky enough to be in El Paso for event on July 22-24 this year.
SPECIAL REPORT: NEW REVENUE STREAMS
Catering to consumers Embracing the latest trends and seizing the opportunities created by a constantly evolving retail market will allow airports to sustain and grow non-aeronautical revenues, writes Chris LeTourneur.
irport retailing has always been a critical element of the passenger experience, not only to serve basic convenience and dining needs but to generate non-aeronautical revenues. For international airports, the elaborate brand merchandising and tax-incentive pricing for duty free shopping has been the traditional anchor for airport retail sales. Over the past two decades, retail components of the world’s international gateways and domestic hub airports have come to resemble regional shopping malls. However, in the larger context beyond airports, traditional malls, shopping centres, main streets, shopping and dining places are experiencing a re-invention in response to various disruptions posed by digital innovations, online shopping, e-commerce supply chain management, generational shifts and globalisation. Almost anything can be purchased from anywhere that has an internet connection, and products are delivered to your door in less than two days. At the same time, the ‘Sharing Economy’ has stimulated a paradigm shift in how we communicate, exchange information, seek travel and accommodation, move around and view the world. Everything from personal information to government news is immediately available via Facebook, Twitter, YouTube and Instagram. And in many cities, mobility is just a click away with Uber, Lyft and a myriad of ride-sharing services that are revolutionising how we move around. Fast-paced change has already shaped the air travel experience ranging from how people purchase air tickets, travel to the airport, and select accommodation using online booking sites, to selecting restaurants recommended on Yelp or Trip Advisor. The change we’ve experienced in the past decade will seem snail-paced when compared to the change we’ll experience in the next decade. To sustain and grow non-aeronautical revenues, airport retailing will need to adapt to this change and embrace the following fundamental trends.
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– Online shopping and omni-channel retailing Consumer purchases are increasingly being made online from Amazon, Alibaba, eBay and the omni-channel platforms of retail operators, particularly by the Millennial consumer segment. Global e-commerce retail sales have consistently been growing over the past five years at an annual rate of just over 23%, now accounting for 12% of all global retail sales. In China, over 23% of retail sales are via online purchases. By 2023, global e-commerce retail sales are forecast to reach 20% of all retail sales. With this proliferation of online shopping, retail manufacturers, as well as bricks and mortar retail operators have recognised the importance of ‘omni-channel’ shopping platforms for offering goods through multiple retail channels. The goal is to get their brands and products in front of consumers – recognising sales may come later – either through bricks and mortar shops or virtual online purchases. Airports will increasingly become targets for retailers seeking brand exposure in support of growing omni-channel sales. As well, airside and landside developments at and around airports are critical elements of multi-modal logistics, supporting global retail supply chain management, as evidenced at the FedEx global hub at Memphis International Airport (and its relationship with the BNSF Inter-Modal Rail Facility), new 2.5 million square foot ‘Project Quattro’ e-commerce fulfilment complex at Charlotte Douglas International Airport (and its connectivity with the Norfolk Southern Intermodal Rail Facility), and evolving three million square foot Amazon Prime Air Hub at Cincinnati/Northern Kentucky International Airport.
– Personalised shopping A parallel trend involves shopping behaviour by younger generations shifting away from international brands and towards ‘personalised shopping goods’ they identify with and wish to participate in.
SPECIAL REPORT: NEW REVENUE STREAMS
With the advent of new manufacturing technologies (including 3D printing) and greater efficiencies in logistics, consumers are increasingly co-creating the products they buy, selecting specific features, colours and design elements. This unique product can then be manufactured and shipped to the customer or manufactured real-time on-site at a store. ‘Ministry of Supply’ out of Boston is an example of personalised shopping, which features ‘3D Knitting’ technology to make customised clothing. Airport retailing could benefit from personalised shopping, by offering passengers the opportunity to design and purchase personalised products, including picking-up these products at their arrival airport or having them delivered to their home or office.
– Showcasing and pop-up retailing As part of omni-channel retailing, brands are seeking to showcase their products through physical incarnations that reflect their values, for everything from consumer electronics and clothing to automobiles. Many consumers are visiting ‘showcase stores’ to view and try products, then purchase the goods online, having them delivered to their homes or offices. Showcase gallery concepts are emerging whereby products cannot be purchased and taken from the showcase, but rather they are ordered and delivered online, often using virtual reality technology. Similar to showcasing, duty free shops, established retailers and new brands are embracing pop-up concepts as temporary installations that are ever-changing with new concepts and products. Indeed, some new shopping centres have evolved purely as pop-up showcases. In the Middle East, for example, IKEA has created a pop-up store of approximately 3,000 square feet, which showcases a selection of the items available through IKEA’s online and catalogue channels, using the pop-up space as a gateway to the IKEA brand for markets that may not have a full-scale IKEA store. With exposure to an ever-changing abundant captive consumer audience with preferable demographics, airports are an incredible location for showcasing and pop-up concepts.
– Culinary exploration and the third place Food and beverage (F&B) is growing rapidly, becoming the dominant driver of retail places. In fact, F&B is shifting away from chain restaurants and towards unique local concepts, food trucks, culinary incubators, food halls and pop-up dining experiences.
Over the past decade, food and beverage has absorbed a larger share of commercial space due to the limited growth of traditional bricks and mortar retail shops. In the USA, F&B saw 4% average annual growth between 2000 and 2015. And according to the Urban Land Institute (ULI), restaurants account for almost 50% of new retail space in the USA, up from 33% in 2009. Chain restaurants are giving way to unique local concepts as younger generations prefer localised dining experiences, knowing the source of the food, how it’s made and its story. This intrigue with F&B includes the proliferation of craft brewery and micro distillery concepts offering small-batch curated products that are constantly changed-up. As a result, restaurants, cafés and F&B concepts have become social hubs referred to as the ‘third place’, whereby the public and private realms are merging, resembling kitchens and living rooms. Airports play an important role for showcasing local F&B concepts. With the rapid growth of pop-up concepts, airport dining is already transitioning from traditional food courts and chain restaurants to ever-changing showcases of local up-and-coming food concepts, including food trucks stationed within airport terminals, as experienced at the ‘Food Truck Alley’ at Minneapolis-St Paul International Airport’s Concourse E. Similarly, a ‘Deluxe Burger Bar’ recently opened in the Domestic/ International Departures Lounge of Edmonton International Airport featuring a 5,000 square foot restaurant, patio and bar offering customised burgers and a variety of local beverages. Deluxe Burger Bar also operates the DLX2GO quick serve take-away window, which serves the pre-security check-in (landside) terminal area.
– Collaborative workspace Already constituting 35% of the workforce, Millennials will soon dominate the labour pool, transforming the nature of workspace. Millennials, representing the majority of employees at next generation companies, demand amenity-rich collaborative workspaces involving connected technology, dining alternatives, social spaces and fitness facilities. Increasingly popular new workplace formats include combined co-working, F&B, event and tech demo space designed to incubate innovation. Outside of airports, there is an increasing blur between uses, with the rise of mixed-and-multi-use development. WeWork’s bespoke concept of fusing co-working, start-up incubators, events and technological demonstration space, provides a new type of anchor for shopping
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centres, including Westfield’s San Francisco Centre on Market Street in Downtown San Francisco.
– Outlet shopping After e-commerce, ‘Outlet shopping’, whereby retail brands offer their products at reduced prices for certain product lines, represents much of the new retail space, particularly in North America. Typical retail outlet shopping centres are unenclosed, featuring 230,000 square feet to 400,000 square feet of brand shops (predominantly apparel) on sites of 30 acres to 40 acres. Outlet shopping centres have recognised the opportunities for being situated adjacent to airports, as they derive their customers not only from a local region but are tourist destinations. Over the past four years, outlet shopping centres have been developed adjacent to Chicago O’Hare, Edmonton and Vancouver airports. The McArthurGlen Designer Outlet Vancouver International Airport opened in 2015 with its initial phase of 70 shops in 240,000 square feet. This project was created as a joint venture between Vancouver Airport Authority and McArthurGlen (a European and North American retail developer/operator) and will soon open its expansion adding 84,000 square feet. Similarly, the Premium Outlet Collection at Edmonton International Airport opened in 2018 with 100 shops in 430,000 square feet (with an ability to grow to 585,000 square feet). This project was developed by Canadian-based retail stronghold Ivanhoé Cambridge in partnership with the world’s largest retail developer/operator, Simon Property Group, and the airport.
– Authentic experiential retail In response to the threats posed by e-commerce and shifts in consumer behaviour, many retail centres and stores are shifting from simply distributing products to curating remarkable experiences that resonate with customers. The recent opening of the Jewel development at Singapore Changi Airport (See page 25 for more information) represents the pinnacle of creating an “authentic natural experience”.
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The $1.25 billion Jewel project was developed as a joint venture between Changi Airport and Capital Land Malls Asia, and features 280 retail and F&B outlets, 11 cinema halls (including an IMAX theatre) and a 130-cabin YOTELAIR hotel, built around the world’s tallest indoor waterfall, five dramatic gardens and multi-level green spaces over 10 floors. This 1.46 million square foot multi-use complex sits strategically between three of Changi Airport’s terminals and its MRT Airport Rail Station. The Jewel symbolises the innovative direction that airport retailing is taking as we look to the future.
Outlook Airport retailing will continue to evolve at an accelerating pace as the trends and concepts occurring in retailing overall make their way into airport terminals and landside areas. Recognising their involvement in supply chain management of bricks and mortar, as well as online retail distribution, airports will increasingly have an edge for quickly bringing new concepts and products to their passengers and regions. Airport retailing will need to be flexible to support ever-changing passenger demands and provide refreshed travel experiences by employing showcasing and pop-up concepts. Airport retailing will increasingly need to be local and authentic, mixing natural and cultural experiences paradoxically with next generation technology, to offer a balance of natural and virtual environments. As demonstrated by Jewel Changi Airport, such places will be enjoyed not only by airport passengers but as destinations for broader audiences.
About the author Chris LeTourneur is president and CEO of MXD Development Strategists.
SPECIAL REPORT: NEW REVENUE STREAMS
Beyond borders Irish airport operator, daa, has business interests across the globe courtesy of its wholly owned subsidiaries, writes daa International CEO, Nick Cole.
he daa Group is made up of four distinct businesses; Dublin Airport, Cork Airport, daa International and Aer Rianta International. My company, daa International, is a wholly owned subsidiary of daa plc, whose parent company was founded in 1937 and counts the Irish state as its sole shareholder. Although state-owned, daa operates under an entirely commercial mandate. In 2018, the daa Group had a turnover of almost €900 million and welcomed a total of 84 million passengers across the portfolio of airports it either owns, operates or has an equity stake in across the globe. In terms of international revenue streams, Aer Rianta International (ARI) has an annual managed turnover in excess of $1 billion through its international airport retail network spanning Europe, the Middle East, India, North America, the Caribbean and New Zealand. Formally established in 1988, but with an airport duty free pedigree stretching back more than 65 years, ARI also holds a 20% stake in Düsseldorf Airport and has an 11% interest in Hermes Airports Ltd, operator of Larnaca and Paphos airports in Cyprus, arguably making it one of the best known names in the global arena. In contrast, daa International is a relative newcomer to scene, having been established in 2013 to harness the skills inherent within the daa Group and make them available worldwide. As owner-operators of Dublin and Cork airports, our knowledge is based on first-hand exposure to the specific demands and requirements of the aviation industry.
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In essence, daa International is the key to delivery of daa Group’s corporate strategy through the diversification it provides as a significant source of unregulated income and geographic variation. It capitalises on the group’s core skills and relationships to extract value for daa. We offer a suite of services to clients across the following categories: 1) Advisory and consultancy services 2) Management and concessions contracts 3) Investments and partnerships The daa International approach, to all projects, is to develop partnerships with our clients and key stakeholders. It adapts over 80 years of group experience to provide optimal and bespoke solutions to its clients. Dublin and Cork airports and ARI have a history and reputation for being at the forefront of technology and innovation. We sell the experience and knowledge gained from the Group’s operations in 13 countries to allow clients to short-cut the learning process and expedite the introduction of technologies into their airports. Daa International builds all the lessons learnt into the project plan to mitigate risks, potential pitfalls and project delays and overruns. Specific initiatives developed by daa International include, ISO 55001 roadmap, self-service bag drop, transfer passenger processing, premium/general aviation services and logistics process mapping. While this is not an exhaustive list, it provides an overview of the range and breadth of experience possessed by daa Group and available to the market through daa International.
SPECIAL REPORT: NEW REVENUE STREAMS Our experts allow daa International to provide advisory and consultancy services covering all aspects of airport operations from logistics to car parking to airside training. The company has completed projects across the world including the US, Middle East and Far East. In February 2016, daa International signed the management contract for Terminal 5 at King Khalid International Airport (KKIA) in Riyadh, Saudi Arabia. This contract sees daa International managing terminal operations, hard and soft FM contracts and acting as the master concessionaire. Terminal 5, which is a domestic terminal at KKIA, has recorded impressive growth in the first three years of operation. Passenger numbers have increased from 13 million per annum in 2017 to 14.7 million in 2018, and look set to pass the 15 million mark this year. A key tenant of daa International’s contract and approach to KKIA’s Terminal 5 is local knowledge transfer. We have a small management team based in Riyadh, supported by a 100% Saudi team of 90 people. Indeed, daa International has recruited, trained and developed this team of bright, talented and ambitious young Saudis. And daa international has worked closely with our client, Riyadh Airports, to develop a series of bespoke training and development programmes, as developing Saudi talent is a key component of the country’s national Vision 2030 strategy. One of the most significant changes that daa International has witnessed since it first held a presence in KSA is the role of women in both society and the workplace. In early 2016, women were only permitted to work in a small number of professions (none located in airports) and only if they were segregated from male members of the public. However, we were keen to include women in our frontline operations team and, working with the authorities and our client, daa International is very proud that KKIA’s Terminal 5 was the first to introduce frontline female staff from late 2016. Following on from that first pioneering step, airlines and concessionaires began recruiting women to their operational teams. In three short years, King Khalid International Airport has gone from zero Saudi female frontline staff to hundreds in roles ranging from check-in, ticket sales, lounges, retail, restaurants and cafés. The latest development will see four out of six of the newly recruited Terminal 5 operations supervisors being Saudi women. All of these welcome developments culminated in the now annual, ‘Women in Aviation’ conference which is a collaboration between daa International and Dublin City University through Princess Noura University, Riyadh. Elsewhere in the world, daa International is also currently advising Aboitiz InfraCapital in the Philippines on all operational aspects of Bohol-Panglao and Laguindingan airports. As an example of a totally different type of advisory service, daa International has developed and delivered training and development programmes for all levels of airport personnel for airports in Oman, Saudi Arabia and other countries. These bespoke programmes are developed in conjunction with the airport authority and are delivered by daa subject matter experts. Often training includes international visits to Dublin and Cork airports. Through decades of operating Dublin and Cork airports, daa has the experience and expertise of operating both a large hub airport and a smaller regional airport. Increasingly, the market is looking for international operators to invest in airports. This would be a new development for the business
and is key to the medium/long-term growth of daa International. We are actively working on a number of potential airport investment opportunities and considering different consortia partners. Our key geographic focus is the Middle East and particularly Saudi Arabia. In January 2019, daa International opened a regional office in the newly launched Riyadh Front business park. This demonstrates our firm commitment to growing the company’s Saudi Arabian operation beyond Terminal 5 in Riyadh. The Far East is also a region of interest with governments looking to the market for international experience and in some instances, investment. Perhaps not surprisingly, daa international intends to leverage the contacts and regional expertise of sister company ARI to enter other markets in which it has an established presence. This will see North America becoming a bigger focus area towards the end of 2019. Increasingly, governments and public authorities are looking to airports as lucrative revenue streams. Key to this approach is the commercialisation of airport services and land. The daa Group has a proven track record in developing and optimising commercial revenues. Since 2015, it has paid dividends of around €125 million to its Irish state shareholder. From daa International’s perspective, our commercial projects include developing commercial strategies, running tendering programmes and assuming the role as master concessionaire. In addition to acting as master concessionaire for KKIA’s Terminal 5, daa International has led the recent project to in-source the car-parking operation in conjunction with its client Riyadh Airports. And since taking over the operation in March 2019, the T5 car park has recorded record revenue through space optimisation and changes to the operation. In this instance, daa International leveraged its extensive carparking experience at both Dublin and Cork airports to drive the project. Car parking is a highly sophisticated product in both Dublin and Cork with the majority of business booked online, allowing for dynamic pricing and revenue maximisation. This is the perfect example of how daa International uses the knowledge and experience of the parent company to deliver world-class solutions to its growing list of clients.
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Time to board? Investing in hotel accommodation is a strategic move that more airports could be capitalising on to boost revenues and customer satisfaction levels, writes ICF Aviation’s Stephen Freibrun.
he buzz around airport hotels has taken off in recent months – from May’s opening of the hotly anticipated TWA Hotel at New York’s John F Kennedy Airport (pictured above) to San Francisco’s new Grand Hyatt, which is set to debut this summer. And there’s a direct link to another global trend: passenger demand is on the rise. In fact, according to recent data from STR, airport hotel demand growth outpaced supply growth every month in 2018. Further, airport hotels see higher occupancy rates (74%) compared to the overall hotel market (66%). The bottom line: more people are staying as they go. For airports and hotel stakeholders, high demand underscores a somewhat untapped business line. A well-located, well-appointed hotel is a strong contributor to the customer experience – serving as a point of differentiation in connecting markets and considerable revenue driver. Despite being a strategic move, many airports do not offer an on-site hotel at all; let alone one that successfully marries convenience with quality, while holding the passenger experience sacred. Whether or not a trip goes as planned, hotels play an important role in the passenger journey and experience. Both travellers with long layovers and those facing unexpected delays require a comforting respite that will integrate seamlessly with the rest of their trip. This, in part, explains why there was so much anticipation and excitement about the opening of the new TWA Hotel. Investing in passenger-centric accommodation also shows a thriving operation and increases the pressure on existing airport hotels to deliver flawless service. Among those getting it right is The Westin Detroit Airport. Located in-terminal, this hotel offers customers the added convenience of a designated security line. According to the Certification Activity Tracking System (CATS) database, The Westin comprises a notable 15% of the airport’s total non-aeronautical revenue. Other industry players can benefit from studying what Detroit’s airport hotel executes effectively. Located past security, transit hotels take the element of passenger convenience to a new level entirely. Some international connecting airports are catching on to this concept, including the impressive Aerotel in Abu Dhabi.
However, while convenience is paramount, more must be done by hotels and host airports to enhance traveller experiences and, in turn, maximise revenue for all parties. Most on-site hotels still miss a chief consideration: price stratification. Airlines see all kinds of travellers. Although some guests may not mind the high price point of luxury airport hotels boasting myriad amenities, this singular model excludes passengers travelling on a tighter budget or those facing unexpected layovers due to flight cancellations. Simply put, there is a segment of price-conscious customers whose needs could be better met with mid-range rates. In order to reap the economic benefits of operating a hotel, airports must work with hotel stakeholders to cultivate a positive experience for all passengers – not just those in the front of the plane. Creating a number of options at various price points ensures that airport hotels are broadly accessible and represent a seamless element of the passenger journey. Hartsfield–Jackson Atlanta International Airport, for example, addresses this need by offering three separate Marriott properties connected to the airport via SkyTrain. Others, meanwhile, could consider providing a wider array of price points within a single hotel in order to service more travellers. Airport and hotel executives considering capitalising on this lucrative market must make decisions with the customer in mind to attain global notoriety. Ultimately, having a thoughtfully-designed hotel that prioritises the passenger experience will lead to a significant new revenue stream and enhanced satisfaction ratings. A successful, multi-dimensional approach will transform the airport into a destination in its own right, rather than simply a means to an end. AW
About the author Stephen Freibrun is a principal focusing on commercial and customer experience master planning in ICF’s Aviation practice, one of the world’s largest global aviation and aerospace consulting firms.
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SPECIAL REPORT: NEW REVENUE STREAMS
Jewel in the crown Airport World finds out more about Singapore’s new mega retail, hospitality and leisure development, Jewel Changi Airport.
he eagerly awaited opening of Singapore Changi’s mega retail and lifestyle development, Jewel Changi Airport, has arguably taken non-aviation related activities at an airport to a new level and provided one of the world’s biggest hubs with a host of new revenue earning opportunities. According to Singapore Changi operator, Changi Airport Group (CAG), the concept for Jewel’s design represents the juxtaposition of a park and a marketplace. This, it says, is exemplified by the lush Forest Valley and majestic 40-metre high Rain Vortex – the world’s tallest indoor waterfall – that take centre stage in the glass and steel domed complex that boasts its own Canopy Park and over 280 shops and F&B outlets. Designed by a consortium comprising Safdie Architects, RSP Architects Planners and Engineers and Benoy, the 137,000-squaremetre retail, hospitality and leisure space acts as a central hub, connecting three of Changi Airport’s current four terminals, making it easily accessible to the public and passengers. Benoy, which led the interior design, retail and aviation facility planning for Jewel, believes that it will quickly become a new landmark for Singapore. “We’ve created a dynamic environment that becomes a unique place for travellers and residents alike. This addresses the important question of placemaking in the aviation context,” says Benoy’s director and head of its Singapore studio, Terence Seah. “In the process too, Jewel has enhanced the already world famous Changi experience. We are confident that this development will inspire other cities to rethink the future of airports.”
Canopy Park Located on the top level of Jewel, the picturesque Canopy Park covers 14,000sqm and is home to seven iconic play attractions and creative gardens in Singapore Changi’s groundbreaking new facility that promises to redefine the airport experience. Jean Hung, CEO of Jewel Changi Airport, said: “Changi Airport holds a special place in the hearts of many, especially Singaporeans, and we want to extend this special bond for everyone who visits Jewel. “The attractions and gardens in Canopy Park are designed for guests to relax or have a fun time with their families and friends, whether they reside in Singapore or are international travellers visiting Jewel. “When Canopy Park was conceptualised, we envisaged a green natural environment with play and leisure activities for people of all ages. Importantly, we wanted to create a space where activities that are traditionally conducted outdoors, are brought to an indoor environment so that they can be enjoyed in all weather conditions.” Canopy Park guests can look forward to navigating their way through the Mirror Maze and Hedge Maze, walking or bouncing on the Manulife Sky Nets, exploring the sculptural playscape of Discovery Slides, and enjoying a gripping view of the HSBC Rain Vortex and Shiseido Forest Valley from the Canopy Bridge, a bridge with glass panel flooring suspended 23 metres above ground. Integrated with the attractions are interactive garden spaces that encourage play and imagination. Foggy Bowls, for example, features four gentle concave bowls with an element of mist and fog to create the experience of playing amongst clouds. While Topiary Walk features animal topiaries such as
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orangutans, a crocodile, elephant, peacock and chameleon. Elsewhere, Petal Garden will boast seasonal displays of flowers. Along the main loop that connects these attractions are four noteworthy trees, including a pair of olive trees and the Lover’s Tree which earned its name because of its conjoined trunks. The entrance fees to Canopy Park is S$5 (US$3.70), while access to the various attractions range from S$7.20 (US$5) to S$19.80 (US$14).
Changi Experience Studio Level 4 of Jewel is home to the state-of-the-art digital experience attraction, the Changi Experience Studio. Described as a first-of-its-kind for Singapore, this aviation-themed attraction is designed to be a fun space that also takes visitors on a journey of discovery about Changi Airport. CAG’s managing director for airport operations management, Jayson Goh, enthuses: “We want the studio journey to be one where visitors can actively participate in a playful journey full of surprises that allows them to understand the story and spirit of Changi in an experiential manner. “Beyond the entertainment, visitors can learn about the past and present of Singapore’s air hub, the inner workings of the airport, and experience what makes Changi tick. “Importantly, through the various touchpoints that showcase different airport functions, Changi Experience Studio is a living tribute to the 50,000-strong airport community that makes Changi Airport what it is today. “We aspire for the studio to be a showcase of the Changi experience and service innovation. As an innovation space, the interactive exhibits will not remain static, but continue to evolve as new stories on Changi are written.” Changi Experience Studio attractions include a garden that sings, an adrenaline-pumping runway race, a quest to collect airport trolleys, a battle of smiles and more. CAG promises that with a collection of over 20 different touchpoints and 10 content zones spread over 3,000sqm, the Changi Experience Studio utilises technology to present a diverse mix of unique experiences under one roof, including interactive games, projection storytelling, immersive shows and gallery exhibits. The studio opens daily from 10am to 10pm, with the entrance fees costing S$25 (US$18) for adults and S$17 (USD$12.50) for children or seniors.
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The passenger is king Benoy says that its design approach to airport projects, and Jewel Changi Airport was no exception, is grounded in a design ethos and capability it calls ‘airports for people’. It is an experience-led approach which incorporates Benoy’s history and expertise in retail, public spaces and consumer-centric design, while the central aim is to help optimise airport capacity, improve the passenger experience and increase commercial revenue. ‘Airports for people’ is said to encompass a range of major disciplines, such as commercial master planning, terminal design and airport repositioning, alongside more nuanced specialisms such as biophilia, wellness and digital relationships. In all areas, this work is underpinned by rigorous data analysis which provides a deep understanding of passenger demographics. Benoy’s head of aviation, David Coyne, explains: “Airports for people is aligned to the reality of the modern airport experience. The passenger has become increasingly important in terms of time spent in airport terminals. In fact, today the passenger is king. “In our approach, we conduct detailed reviews of the passenger journey to ensure our designs are calibrated to passenger profiles, needs and expectations. As passengers move through an airport towards departure, we aim to minimise stress, maximise comfort and convenience, while increasing dwell time and, therefore, spend.” No longer the utilitarian places they once were whereby people arrived, boarded a plane and departed, the best new airports, according to Benoy, are built around an expanded passenger experience which offers a greater variety of retail, pop-up, F&B and leisure options. Coyne says: “In the last five or six years, airports have become destinations in their own right. People are wanting and expecting more. By offering diversity and quality in retail and food, for example, we’re responding directly to passenger demand. “We’re also creating a holistic passenger experience which considers key transition areas, circulation routes and wayfinding, looking for opportunities to strengthen brand representation and deliver commercial value to our stakeholders.”
SPECIAL REPORT: NEW REVENUE STREAMS
technology Collins Aerospace’s Tony Chapman explains how new technology will help airports meet growing passenger expectations and boost their bottom lines.
igh-end boutiques, five-star restaurants, cinemas, golf courses, even indoor parks and waterfalls … no longer the sole domain of luxury destinations, these are just a few of the amenities you’ll find in modern airports around the world. More and more, airports are transforming from traditional centres for air transit to integrated hubs for shopping, dining, entertainment and recreation. Oh, and travel. By all indications, passengers love this evolution. In fact, some will go out of their way to spend time in an airport that has more of these special features and, conversely, steer clear of the ones that don’t. And, as passengers acquire a taste for the little luxuries of a modern airport, they also expect a better overall travel experience. These gleaming venues set the tone for high passenger expectations, and when an airport falls short, the world knows about it in minutes through social media. For airport operators, this new business model means dealing with massive complexity. They’re supporting all the technical processes and functions of an airport combined with the business operations of a shopping mall. When they do it right, the rewards can be significant: These airports attract more passengers (and even non-passengers), they draw revenue from more sources, and they enjoy a stronger brand and reputational benefits. But how do you manage all this complexity? With global air travel expected to double within the next ten years, how do you meet passengers’ sky-high expectations and give them a consistently positive experience? And most importantly, how do you stay profitable? The answer to these questions, in large part, is technology. The newest information technology systems, properly applied and managed, can knit together all the component parts of the modern airport to deliver both an exceptionally positive experience for passengers and an exceptionally easy-to-manage airport operation.
Biometrics: A transformational technology One of the technologies at the heart of this transformation is biometrics. Utilising facial recognition and other biometric information to identify passengers reduces or eliminates many of the pain points associated with air travel.
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Just about every passenger survey ever conducted indicates that Pain Point No.1 is waiting in line – at ticket counters, baggage drop, security, at border control and the gate. Infusing biometrics into these check points is like straightening out the kinks in a garden hose: suddenly, the processes flow like water. Transportation security agents no longer stop passengers one-by-one, checking their photo IDs by hand. Baggage check-in is self-administered. No stops are required at the gate. Even entry into another country becomes a quick walk through Customs. Some biometric solutions even allow airport visitors to link their profile to a credit or debit card, enabling purchases at the duty-free shops, restaurants or other airport facilities with a simple verbal confirmation. And imagine what this improved flow does for the airport’s revenue. When passengers are moving faster through the check points, they’re free to spend more time and money in other parts of the airport. Simply put, lines are lost revenue. In addition to increasing efficiency, biometric systems reduce risk and cost. Drawing from government data and using highly sophisticated algorithms, these systems can quickly identify problematic individuals or unusual activities, helping security personnel narrow their focus to potential threats.
It’s all about the flow Just as biometric solutions improve the flow of people through the airport, the integration of IT systems amps up the flow of information.
SPECIAL REPORT: NEW REVENUE STREAMS Some of the world’s largest airports and airlines have already recognised the value of this approach and have started making major investments. For instance, SelfPass is now being used with fully integrated self-boarding gates by a major airline, reducing passenger boarding time to a matter of seconds.
Partnering for profitability
Bringing together all the back-end IT that supports the passenger journey into a cohesive cloud-computing environment speeds the transfer of data to the people and systems that depend on it. Among other benefits, that translates to faster and more informed decision-making by airport personnel and better communications with passengers. If, for instance, a major storm disrupts operations, the information is channelled to all stakeholders immediately and simultaneously. This enables faster adjustments to flight schedules, quicker re-booking of flights, a speedier return to normal operations, and, of course, happier passengers. In addition, managing a fully networked, cloud-based IT infrastructure requires far less manpower than a warehouse full of local servers. The right solution can provide airport operators with an IT ‘dashboard’ from which they can view, assess and control every aspect of the airport ecosystem. Obviously, this robust infrastructure must be continuously protected with the most aggressive cyber security solutions available. Here again, the inter-connectivity helps. A unified network can be protected through a single, holistic approach to cyber security instead of separate, disjointed solutions for individual networks throughout the enterprise. A single solution needs less monitoring, less manpower, less money. Collins Aerospace’s concept of the ideal airport envisages a fully connected airport ecosystem running in a cloud environment with ironclad cybersecurity, and robust identity management through our biometric solution, ‘SelfPass’.
Another example of smart investing is Dublin Airport, Ireland’s busiest airport. To accommodate an ever-increasing number of passengers, the airport authority had planned a terminal expansion to include more physical facilities – more ticket counters and baggage drops. However, this all changed when they recognised that technology would be a smarter investment. Rather than expanding facilities, they decided to invest in ways to make the existing facilities more efficient. If you can smooth the path for passengers every step along the way, they reasoned, you can move more people through the airport faster and free them up to enjoy – and spend – on all those amenities. Working with Collins Aerospace, Dublin Airport added 64 self-service bag drop kiosks, primarily for Ryanair and Aer Lingus, reducing passenger check-in times by 60%. The implementation took just five months with no disruption in service. At Aer Lingus, the transaction time is now three to four times faster than it would be at an agent’s desk, so the airport floor is clear and there are no queues. The technology allowed the airline to increase throughput without capital expenditure on building and facilities. And passengers are more satisfied as well. Because the solutions are self-service, agents who were typically working behind a check-in desk are now able to provide additional assistance to passengers. The kiosks are just one step toward making Dublin Airport more efficient, more passenger friendly and more profitable. The airport’s vice president, programme management office, Frances O’Brien, said: “We see self-service as a platform that we can use to sell our own services, like lounge access or our FastTrack passenger programme where passengers can purchase access to shorter queues in security. “The technology also gets passengers through to security and to retail much faster, which obviously gives them the opportunity to spend more time in our award-winning retail areas.” Dublin, like many of the world’s biggest and most complex airports, has recognised that an investment in the infrastructure and processes to enable a fully connected airport ecosystem that make air travel more efficient and enjoyable for passengers, also boosts revenue. With an IT company as their trusted partner, these airports are positioning for the explosive growth in air travel expected in the years ahead – and profiting from it.
About the author Tony Chapman is director for global product management and strategy at Collins Aerospace’s Information Management Services division.
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SPECIAL REPORT: NEW REVENUE STREAMS
Park and fly Airport World reviews some of the latest airport parking stories from across Europe and North America.
ondon’s Gatwick Airport has signed a framework contract with Stanley Robotics that will see it become the first UK airport to trial robots to valet park passengers’ cars. The trial will run from the second half of 2019 to early 2020 and passengers will simply leave their car in a well-lit, spacious ‘parking station’ close to the South Terminal entrance and – without handing over keys – the driverless robot will gently lift up the car and store it in a secure car park. The system will also be connected to real-time flight information so the robot simply returns the vehicle to the parking station. The user then receives an SMS that the vehicle is ready and waiting for their arrival. Gatwick’s chief commercial officer, Guy Stephenson, enthuses: “The valet parking robots could revolutionise parking at Gatwick and may also become common-place at airports and other businesses across the world. “The new service will be a convenient, personalised experience that will save passengers time, while also reducing vehicle emissions. “With the potential to significantly increase car park capacity, this new automated system could also help the airport meet the increasing demand for air travel with only limited changes to our existing infrastructure.” Stéphane Evanno, COO of Stanley Robotics, says: “We are proud to be leading this innovation with Gatwick Airport, whose excellence in operations is recognised globally. “The UK is of strategic importance to Stanley Robotics; the market provides exciting potential for our product. Thanks to this first partnership, we have established an office and team in the country to further this agenda. “We are now working with Gatwick to offer visitors a world class experience. We aim to completely reinvent the parking experience and create a seamless customer journey. “In addition, we will be maximising the efficient use of land for Gatwick and bringing them a sustainable solution, allowing us to envisage long-term collaboration.”
Assisting San Antonio In the US, Park Assist’s M4 Parking Guidance System (PGS) is to be installed in the Long Term Garage at San Antonio International Airport, which spans five levels and contains more than 5,400 parking spaces.
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The Texas gateway says that it chose to implement Park Assist’s M4 PGS because of features such as Park Finder, Park Alerts, and Park Surveillance. The M4 camera-based smart-sensor PGS is used to help quickly and effortlessly guide visitors to available parking spaces. The patented, camera-based technology guides customers upon entry to vacant spots using colour coded, smart-sensors, reducing dwell time and getting customers to their gates faster. And upon their return, travellers can easily locate their vehicle using the company’s Park Finder integrated with a Mobile API. Customers simply enter their license plate number and Park Assist’s M4 system quickly searches the database to find the car’s exact location using License Plate Recognition (LPR) technology. Parking management will also be able to ensure compliance with the airport’s parking policies by deploying the company’s software product, Park Alerts, which provides automated alert signals to parking management when a vehicle has been improperly parked. Park Surveillance is an extension of the camera based smart-sensor that captures streaming video whenever motion is detected in or around a space. Captured streaming video helps manage risk for the facility owner and provides customers peace of mind while away from their vehicle. San Antonio International Airport is an existing client and has Park Assist’s M4 Camera-based PGS installed in their Short Term Garage and, because of its reliability and accuracy, decided to extend the system into its Long Term Garage. The US gateway is confident that the new technology will help it fulfill its objective of enhancing the customer experience through an elevated parking experience. “We are looking forward to once again partnering with San Antonio International Airport to provide travellers with a timely, simplified and stress-free parking experience,” says Vince Balsamo, Park Assist’s general manager for North America.
SPECIAL REPORT: NEW REVENUE STREAMS
Scottish power AeroParker has been contracted by Glasgow Airport to power its online and mobile pre-booking service for car parking and other services at the gateway. According to AeroParker, its platform will enable a new slick customer experience for passengers wishing to guarantee a parking space and any available ancillaries in advance of their arrival at the airport. It notes that the new system’s functionality will include AeroParker’s loyalty module that is being integrated with Glasgow Airport’s CRM provider; third party channel integration via REST API for speed of delivery of pricing and availability; and destination products for the return leg, such as lounges, purchased in the basket before travel. Passengers will also have a number of payment options that include PayPal, Apple Pay and Google Pay as well as debit and credit cards. Frasor Ralston, e-commerce and digital manager for Glasgow Airport, commented: “We continually strive to provide a frictionless digital passenger experience and AeroParker was a natural choice to fit in with our objectives. “We are delighted to be able to offer our passengers a one-basket approach which provides a simplified and efficient booking process that is increasingly important to our customers.” Jon Keefe, CEO of AeroParker, noted: “We are very pleased to welcome Glasgow Airport as a customer together with the exciting innovations in delivering a slicker passenger experience for their customers.”
Nashville’s new technology-integrated parking facility Parking just got easier at Nashville International Airport following the opening of a new $102 million Atkins Global designed technology-integrated parking and ground transportation centre. Built by JE Dunn Construction, the new complex is a component of the Metropolitan Nashville Airport Authority’s BNA Vision, a $1.2 billion expansion and renovation plan to accommodate
regional population growth and the airport’s record-breaking passenger increases. The new parking and transportation centre project was completed under budget, and features a six-level, 2,200-space garage equipped with parking guidance which includes sensors to direct drivers to open parking spaces. The facility also features car-locator kiosks. Other amenities include electric-vehicle charging stations and a fee-free tyre-inflation location. A covered walkway connects the parking garage and terminal, and flight-information displays at five passenger elevators on the first level guide travellers on the move. Level 1 of the garage is a dedicated hub for taxis, limos, buses, shuttles and ride-sharing services, and provides three passenger waiting areas. The project’s sustainability features include a rainwaterharvesting system supporting landscape irrigation, and a greenscreen irrigated wall.
ParkVia expands in Poland ParkVia continues to grow in Poland, signing a deal with Katowice International Airport earlier this year and recently agreeing an extension to its partnership with Lodz Airport. The company has enjoyed a successful six-year collaboration with Lodz, during which time it has worked with the airport on the marketing and online distribution of its parking products and delivered a pre-booking engine, which has created a streamlined reservation process for customers looking for parking online. Robert Makowski, head of route and business development at Lodz Airport, said: “With 31 European capitals within the range of regional flights from Lodz Airport, the potential to capture passenger interest in pre-bookable parking is vast, which is why effective marketing is essential. “As the airport remains in a phase of intensive development, it’s important that we continue to build upon partnerships that assist us in delivering a more comprehensive journey experience for our passengers. We’re delighted to be pushing forward with our joint collaboration with ParkVia and look forward to another successful year.”
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The bottom line Some of the biggest airport seating companies in the world provide their thoughts on the importance of seating, the latest trends and the challenges of changing passenger dynamics. Paul Williams, CEO of the Zoeftig Group
What is the average lead time on a new seating contact?
Why should airports care about seating?
This is very dependent on the regions of the world. Generally, we are aware of potential projects for many years ahead, but we are often one of the last suppliers, which leads to shorter delivery times than are ideal. Typically, from bid to delivery is six months, but there are many cases of periods as long as 18 months and as short as three months. We have a very flexible supply chain and can normally accommodate most demands.
The passenger experience is coming more into focus and the provision of seating in the right location, quantities, cleanliness and state of repair are important. Passengers don’t want to feel they need to make a purchase of any description in order to be able to sit and wait. Many passengers now have a choice as to which hub or airport they fly through, if they do not feel cared for, then they go to somewhere that does.
What are the trends driving the latest developments in airport seating? In-seat electrical power continues to be a major conversation, but comfort is a returning message. For years airports focused almost exclusively on durability, and as a consequence, many airports have great, but quite hard, seating. The needs of passengers are more at the fore today, and as a result the hospitality feel is creeping more into the equation. This, of course, presents a whole new range of issues for us and the airport to contend with.
What is the biggest airport contract you are working on today? We are currently delivering the seating for the new Beijing Daxing Airport, it’s in excess of 7,500 seats. The Chinese are very efficient in their construction schedules and adhere to the dates which are very challenging at the best of times. The product is to a high specification and all seats are leather in custom colours. Thankfully, we have a great team in China that understand the local needs, it’s the benefit of having our own local people.
Can seating make airports money? Helping make the airport money would be difficult to justify, it’s more about the whole passenger experience, and seating can have a direct affect in this area. When passengers feels valued, and that the airport cares about them, then this will lead to improved revenue.
Are your seat designs evolving to better equip airports to cope with larger travellers and passengers with reduced mobility? We already have ranges where the seat sizes are variable, and a full range of options are available for the PRM seating. It’s part of our basic brief on any new designs.
Who is your oldest airport client and has your long association with them involved many contracts? Our oldest client in airports is probably McCarran International Airport (Las Vegas), we have supplied in excess of 19,000 seats to them over the past 15 years under several contracts and our relationship remains strong to this day.
What has been your most unique or unusual airport seating contract to date? I cannot go into this at the moment, but we are working on several new projects that when they come to fruition will break the mould. Within our company we have a specialist division called MtM (Made to Measure), which is allowing our customers to create their vision of the future gate and lounge areas without the limitations or constraints of existing designs. They are looking to provide the passenger experience of the future and Zoeftig is well placed to help them to achieve these ambitions.
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Lynn Gordon, vice president of business development, Arconas Why should airports care about seating? Comfortable, well-designed seating with innovative features, such as power for recharging and tablet arms, have a direct impact on the ambience and experience of an airport, an important driver of customer satisfaction. Now, more than ever, airports are not just places to catch a flight, but rather destinations in and of themselves that compete with other airports and attractions. Making an airport more competitive is good business and being customer-centric is a way to do so. The strategic placement and choice of seating can also increase concessions and retail revenue. It also matters that it is clean and well-maintained. Just like having clean restrooms, passengers notice quickly if the seating is not up to snuff.
What are the trends driving the latest developments in airport seating? A major trend of course is at-seat power and the integration of the latest technologies such as wireless and USB-Type C charging. The demand for power is huge and has become as expected as free Wi-Fi. The newest trend is wireless charging options built into tables, tablet arms, and surfaces of airport furniture now that most new phones have the technology built in. Rather than rows upon rows of uniform tandem seating, there is a shift to a hybrid mix that includes lounge and lifestyle seating where passengers can spread out and have a degree of privacy in a very public space. Facility operators are increasingly using this as a means of catering to an increasingly diverse passenger mix. Accessories such as acoustic panels, drink holders, tablet arms, and footrests are also in demand. There is also greater experimentation with colour, textures, and environmentally friendly materials such as wood and CFC-free, low-VOC components.
Who is your oldest airport client? That’s going back over 20 years, but I would say our original three were JFK (Terminal One) in New York, Vancouver International Airport (YVR) with our original Landings tandem seating and
Toronto Pearson International Airport (YYZ) as our first Flyaway seating client. We’ve come a long way since then with some 400 airport client installations, but we are proud to say we are still working with these airports today.
Are your seat designs evolving to better equip airports to cope with changing passenger dynamics? Always! In fact, Arconas never stops innovating just like our airport customers. We were the first company to offer modular at-seat charging and the first to roll-out tablet arms instead of armrests on tandem seating. Our ‘Place’ seating features wider 3” (7.5cm) gaps between seats using tablet arms to create more personal space. More personal space equates to happier passengers and dramatically higher seat utilisation rates. Universal design and accessibility are extremely important to Arconas which is why we work closely with such great organisations as Open Doors in Chicago. Features such as PRM seating with a raised seat position makes it easier for people with reduced mobility to get in and out of seats. Our seating lines can also be made with an arm removed on the end for lateral transfers from a wheelchair, as well as embroidered with customisable accessibility symbols. We also offer wheelchair accessible row end-mount power as well as wheelchair height charging counters.
What has been your most unique or unusual airport seating contract to date? I would have to say both Boston Logan and Los Angeles International have been very innovative in their forward-thinking use of diverse seating styles and finishes and their commitment to providing power recharging for all their passengers. We also recently outfitted a beautiful quiet reading area with gorgeous, colourful wooden slat seating and trees from our partner Green Furniture Concept at Guadalajara Airport in Mexico, and a ‘hugging zone’ at a small airport in Fort McMurray, Alberta.
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Ingmar Krupp, head of transport division at Kusch+Co Why should airports care about seating? As with all other buildings, the character of a room is defined decisively by the interior arrangement. The design and aesthetics of the furniture, the colour concept, the layout planning and the comfort thus determine whether the passenger feels comfortable. And what could be more important than the feel-good factor?
What are the trends driving the latest developments in airport seating? The demands placed on a modern waiting room have changed dramatically in recent years. In general, people have become more courageous when it comes to colour concepts. In addition to excellent functionality and freedom from maintenance, passengers now want almost homely levels of comfort that makes them forget the stresses and strains of a journey. This has an impact on the variety of furniture used. Homely armchairs and seating landscapes are used just as much now as row seating for effective use of the room. Charging options for mobile devices are a must, sofa-like upholstered furniture is the choice.
Can seating make airports money? In many cases, yes! By means of intelligently worked out positioning plans for seating it is possible to influence the flow of passengers and this can have a positive impact on purchasing behaviours. Our own CAD planning team has many years of experience in this field and supports our customers significantly.
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Are your seat designs evolving to better equip airports to cope with changing passenger dynamics? When designing and developing new furniture, we draw on our wealth of experience in the field of ergonomics. In this way, we take into account the special requirements of different passenger groups and offer flexible solutions so that the traveller feels comfortable and in good hands.
Who is your newest airport client? Beijing Daxing International Airport. The new airport is currently being built in the Chinese capital and is set to open later this year. It will eventually become one of the largest airports in the world. The architectural highlight, created by star architect, Zaha Hadid, will be complemented by our innovative 8000 Studio F.A. Porsche range of seats. In co-operation with Kusch+Co, a world-class airport is currently being built here.
What has been your most unique or unusual airport seating contract to date? It may sound like a clichĂŠ, but even after all these years in the airport sector, every new project is still interesting and unique for us. Since we tailor our furnishing solutions to each customer, we can look back on countless exciting project solutions. For example, I like to remember the Wroclaw Airport project. The plannersâ€™ task was to integrate the ventilation ducts of the heating and ventilation system attractively and unobtrusively into the furniture. The flight information displays and additional electrical sockets for mobile devices were also to be integrated into the furniture. We implemented all this on time and to the complete satisfaction of the customer. A typical Kusch project.
DESIGN & BUILD
Oasis in the desert
Image courtesy of Hufton + Crow.
Airport World takes a closer look at Ilan and Asaf Ramon Airport, Israel’s new $470 million gateway to Eilat.
srael has opened its first commercial greenfield gateway, Ilan and Asaf Ramon International Airport (Ramon-Eilat), located in the Timna Valley, about 18 kilometres north of the Red Sea resort city of Eilat. Commissioned by the Israel Airports Authority (IAA) and designed by Amir Mann-Ami Shinar Architects and Planners in partnership with Moshe Zur Architects, the new airport has replaced both the downtown gateway in Eilat and nearby Ovda Airport. Located on a 1,250 acre site in the Negev Desert and more popularly known as Ramon-Eilat, the new airport features a minimalist and futuristic design. It is also the first airport in the state of Israel to have been planned and constructed from scratch for commercial and not military use. And it is already proving popular with passengers, with hugely positive reviews from the travellers that have passed through its facilities in its first few months of operations. It is widely believed that the new airport will become a major game changer for tourism to the region as well as to nearby Jordan and Egypt’s Sinai Desert. Ramon-Eilat’s facilities include a 50,000sqm passenger terminal building and a 3,600-metre long runway that will allow it to handle domestic and international traffic and aircraft up to the size of the B747-400. The two support structures surrounding the terminal measure a combined 36,210 square-metres and include a 45-metre high Air Control Tower. “The futuristic world of aviation” and “the seemingly timeless natural surrounding of the airport’s desert location” were the key influencers behind the airport’s design, according to the design team, which worked together with ARUP and 45 consulting firms, nearly all local Israeli engineers, on the $470 million project. “In designing the airport we learned from the desert scenery,” says Amir Mann. “It required a vision of the most suitable design solution that responds to the existing landscape and climate.
“Our objective was how not to compete with the overwhelming emptiness of the site, while creating a place that welcomes passengers through the departure and arrival processes, reflecting through that experience the uniqueness of the desert environment, as a functioning international southern gate to Israel.” According to the design team, the mushroom-like rock formations found in Israel’s National Timna Park served as inspiration for the initial geometry of the Passenger Terminal Building and create a self-shading volume. It notes that Ramon-Eilat’s envelope consists of a steel and concrete skeleton structure, cladded to the exterior with insulating pristine-white aluminum triangular panels. While the building’s interior features a contrasting bamboo-wood cladded scheme. The design team adds that both the interior and exterior claddings are continuous from wall to roof, forming a singular cohesive and complete architectural space and object. Describing the interior, the design team says: “Glass curtain walls divide the Passenger Terminal Building at its entrances, exits and patios, sectioning the passenger traffic and controlling the security processes. “Light wells allow sunlight to penetrate the depth of the building, allowing spatial incisions to enrich the interior by making all streams of passenger movement visible for the incoming and outgoing traveller. “The design introduces the building into the desert landscape through exterior patios and a central open-air café with a biological pool and garden.” The use of locally sourced natural materials, including flora and fauna – trees and plants were uprooted, preserved and replanted on site – and installation of eight hectares of photovoltaic panels that ensure that the terminal is a zero-energy building, also make RamonEilat one of the world’s greenest new airports. The airport is expected to handle around 1.8 million passengers in its first year of operations, with the figure expected to rise to 2.2 million by 2022 and up to 4.25 million by 2030. AW
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Image courtesy of The Coca-Cola Company.
Interbrand strategy consultant, Jan Glanzmann, considers the value and transformative power of a strong brand, which he believes have grown from nice-to-have to must have assets.
am often asked what I consider to be a company’s biggest single asset, and in many cases, it is the brand. The brand value of one of the world’s best-known companies, Apple, is estimated to be $2.1 billion and this is just one example, albeit a market leading one, of the power of a brand. However, brands being the biggest single asset of a company, doesn’t only apply to the B2C market as a growing number of B2B companies are discovering. Unfortunately, this tenet is often neglected or ignored when it comes to B2B brands. A risk, which can limit the growth of B2B companies’ financial business value. This also applies for a broad variety of brands across the travel value chain and thus also the aerospace industry, which is still driven by the forces of engineering and sales when it comes to growing companies’ business. The definition of various brand values in the industry – worth multiple millions or even billions – brought new arguments to the table. Those arguments indicate that there are great reasons to add a third force for growth: brand(s) as business assets. While the present financial value of a brand – a static number – might be one reason to redefine the priority of actively managing a companies’ brand, the even more important one should be its future growth potential. Like in many other industries, the value of brands in the aerospace sector – including airports – is expected to further accelerate their growth in the future. There are two key indicators that substantiate this assumption: rising traffic demand driven by globalisation – global passenger
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numbers have soared by 130% in the last 15 years according to Statista data – and the expansion of former aerospace focused companies into new business fields. With regards the latter, one example of such a development is Airbus, which in 2017 launched an on-demand helicopter booking platform called ‘Voom’ to directly engage with passengers. Another example is Munich Airport, which recently announced the creation of an innovation and collaboration campus (LabCampus). However, expanding an airport into real estate, retail or entertainment businesses is not only an operative challenge, but also challenging from a brand perspective. Indeed, several studies conducted as part of Interbrand’s annual Best Global Brands ranking show that the influence of subjectivity and emotionality in the purchase decision– referred to as ‘Role of Brand’ – increase across those businesses up to an industry average of 45%. This suggests that when it comes to business transformation, a brand is a must-have rather than nice-to-have asset. The increasing importance of brands in the airport business illustrates that neglecting an active and profound management asset can cause serious damage to the growth of a business. In contrast, conscious management of the brand can unlock long-term growth potential. A strong brand, for instance, offers “enhanced value” by influencing customer orientation, trust and the desire to achieve the company’s purpose. This in turn drives customers’ choice, loyalty and willingness to pay a price premium. Consequently, this pays off in revenue growth, profit margin, risk migration and thus financial value.
Brand Strength Internal Factors
External Factors External Factors
1 Clarity Clarity internally about what the brand stands for in terms of its values, positioning and proposition. Clarity too about target audiences, customer insights and drivers. 2 Commitment Internal commitment to the brand, and a belief internally in its importance. The extent to which the brand receives support in terms of time and influence.
3 Governance The degree to which the organization has the required skills and an operating model for the brand that enables effective and efficient deployment of the brand strategy. 4 Responsiveness The organization’s ability to constantly evolve the brand and business in response to, or anticipation of, market changes, challenges and opportunities.
While these mechanics apply for every market that relies on subjectively influenced purchase decisions, the increasing role of brands in the aerospace and airport industry unlocks additional potential. It is a playground to shift customer expectations, force internal engagement, achieve a monopoly position and so transform and shape of the whole industry. The aerospace companies which understand and address the relevance of brands in the purchasing decisions of their customers, will be able to create momentum by influencing their behaviour and building loyalty. An added benefit is also usually fully committed and engaged staff. This makes the near future an exciting time for brand activists in the industry as it means that airport management teams have the opportunity to step up and take brave brand decisions for the sake of their gateway’s success. Success, however, is certainly not a given thing, and no matter how brave some decision might be, they will ultimately fall short of their target if they fail to improve the brand’s strength. This rule applies to the success of professional brand management in general. Thus, it is indispensable to understand what exactly makes a strong brand and how to measure the progress of building and achieving it. Based in the nature of intangible assets, the management and measurement of a brand’s strength is multi-dimensional and therefore linked to high theoretical and practical complexity. Dissolving this complexity requires clarity about and focus on what is essential. For this purpose, Interbrand developed 10 Brand Strength factors (see list above) which inform and guide the management, growth and measurement of brands as valuable intangible business assets. Strong brands start from within – having clarity about the brand, commitment towards it, the right tools and processes to manage it and, finally, the flexibility to react to changing market demands. With such a well attuned brand management in place, a company is able to optimise the external brand experience of customers to perfection – ensuring consistency across all touchpoints, being omnipresent to the customer and engaging on a constant basis. Finally, the brand experience drives customer’s brand perception, which is centred around the following questions: Does the brand feel authentic and credible? Is it relevant to the needs and wishes of customers? And finally, is it sufficiently recognisable and distinctive towards competition?
5 Authenticity The brand is soundly based on an internal truth and capability. It has a defined story and a well-grounded value set. It can deliver against the (high) expectations that customers have of it. 6 Relevance The fit with customer/consumer needs, desires, and decision criteria across all relevant demographics and geographies. 7 Differentiation The degree to which customers/consumers perceive the brand to have a differentiated proposition and brand experience. 8 Consistency The degree to which a brand is experienced without fail across all touchpoints or formats. 9 Presence The degree to which a brand feels omnipresent and is talked about positively by consumers, customers and opinion formers in both traditional and social media.
The degree to which customers/consumers show a Brand valuation methodology deep understanding of, active participation in, and a 1. Financialstrong Analysis sense of identification with, the brand.
Measures the overall financial return to an organisation’s investors or its economic profit. Economic profit is the after-tax operating profit of the brand, minus a charge for the capital used to generate the brand’s revenue and margins.
2. Role of Brand Measures the portion of the purchase decision attributable to the brand as opposed to other factors (for example, purchase drivers such as price, convenience, or product features). The Role of Brand Index (RBI) quantifies this as a percentage.
3. Brand Strength Brand Strength measures the ability of the brand to create loyalty and, therefore, sustainable demand and profit into the future. Brand Strength analysis is based on an evaluation across 10 factors that Interbrand believes constitute a strong brand. Improving brand strength starts with a data-based assessment of the status quo and the definition of clear objectives where to improve. It is essential to keep in mind that it is difficult to improve across all 10 Brand Strength factors at the same time, especially with a limited budget. Therefore, the right strategic focus is indispensable, and the main goal is to close the gap between the assessed status quo and the defined objectives. The good news is there is a wide range of brand management, marketing and communication tools and techniques at hand. Facing this wide range requires confidence of those responsible to select the right actions to improve. Applying data science – for example through brand related business case modelling – can ensure making the right decision that has the expected impact on both, brand and business. In conclusion, a profound understanding and management of the importance of brands to business today and in the future will enable companies in the industry to elevate their business growth to new altitudes – no matter if it is ‘just’ about managing a brand right or ‘even’ by making brave brand moves that will transform the whole industry.
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Cleared for take-off
Airport World provides a snapshot of the latest route development news from MoscowSheremetyevo, Miami, Munich, Göteborg Landvetter and Stockholm Arlanda airports. Munich’s network continues to expand
Belgium Day in Moscow Moscow-Sheremetyevo International Airport held its own ‘Belgium Day’ on June 2 complete with waffles and, of course, a Smurf as the gateway celebrated the launch of Brussels Airlines’ new service to the gateway. Indeed, the first flight was served by an ‘Aerosmurf,’ a unique plane with a livery featuring the legendary Belgian comic book creations of Pierre Culliford. The Ambassador Extraordinary and Plenipotentiary of Belgium in Russia, Jean-Arthur Regibeau, said: “Regular Brussels Airlines flights to and from Sheremetyevo is an important event that marks the beginning of the effective co-operation of Belgium’s national airlines and Russia’s largest airport. “This will undoubtedly contribute to the enhancement of cultural ties and business relations between our countries.” Brussels Airlines will operate A319 aircraft on the new four times weekly service to Sheremetyevo’s Terminal E.
New American Airlines services to Charlotte and Dallas/Fort Worth and increased frequency to Chicago (Lufthansa and United) will ensure that Munich Airport handles 133 weekly departures to 13 US destinations this summer. Munich Airport’s intercontinental route network this summer has also been boosted by daily Lufthansa and Thai Airways flights to Bangkok; double daily departures to Singapore (Lufthansa and Singapore Airlines); and daily flights to Osaka and Seoul (Lufthansa). All ensure that in the summer of 2019, 22 airlines will offer 342 departures per week to 41 intercontinental destinations in 22 countries.
Air Serbia returns to Gothenburg Air Serbia will resume operations to Göteborg Landvetter Airport on July 17 after a seven-year absence when it commences a twice weekly non-stop service to the Serbian city of Niš. Located in eastern Serbia on the river Nišava, Niš is the third largest city in the country and considered to be at the very heart of the Balkans. “It is gratifying that Air Serbia is now returning to Göteborg Landvetter,” enthuses airport director, Anna Strömwall. “We see steady growth in traffic to eastern Europe and can offer a wider selection of exciting new weekend destinations. “The route will also make travel easier for passengers with Serbian roots who can conveniently visit friends and family.” Air Serbia, which will use an A319 aircraft on the route, started operations in 2013 and is the successor to the carriers Aeroput (1927), JAT Yugoslav Airlines (1947) and Jat Airways (2003).
Welcome to Miami
Miami International Airport’s international route network just got bigger with the addition of new non-stop B787-8 Dreamliner services to Warsaw operated by LOT Polish Airlines. LOT is confident that its four weekly flights will appeal to some 500,000 Florida residents that are of Polish origin. “LOT Polish Airlines is an exciting addition to MIA’s growing roster of international carriers,” said Miami-Dade County Mayor, Carlos Gimenez. “This new connection to Eastern Europe will go a long way toward expanding MIA’s role as a true global gateway.”
Scandinavian Airlines (SAS) has revealed that it will launch a new direct service between Stockholm Arlanda and Luxembourg on November 4. The airline will utilise a 90-seat Bombardier CRJ-900 aircraft on the route which will operate three times weekly. Swedavia’s director of aviation business, Elizabeth Axtelius, enthuses: “The majority of people who fly this route are travellers coming to Sweden, and one third are travelling for business purposes. That indicates there is demand for a direct air link to Stockholm Arlanda, which will enhance access between Luxembourg and Sweden.” AW
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Frankfurt Airport New state-of-the-art Terminal 3 to raise the airport’s capacity to in excess of 90 million passengers per annum. project details Location: Frankfurt, Germany Important developments: New Terminal 3 Scheduled completion: 2023 Principal companies involved: Fraport AG; Fraport Ausbau Süd GmbH; Christoph Mäckler Architects Total investment: Up to €4 billion
rankfurt Airport has laid the cornerstone for its new Terminal 3, the benefits of which operator, Fraport, claims will be felt across the whole of Germany. The size of the project will mean that up to 5,000 workers a day and around 75 tower cranes will be deployed on the Terminal 3 construction site at various times over the next five years. The new 21 million passengers per annum capacity terminal – complete with Piers G, H and J – is scheduled to fully open in 2023, ensuring that Germany’s aviation hub is equipped to accommodate in excess of 90 million passengers yearly. With a record 69.5 million passengers (+7.8%) using Frankfurt Airport in 2018 and forecasts projecting that its annual throughput could reach 78 million per annum by 2025, the additional capacity will certainly be most welcome. Terminal 3’s Pier G, with an initial capacity of 5mppa, will come onboard first as it is scheduled to be completed by 2021 in the southern part of Frankfurt Airport. It will be add an extra 55,000sqm of floorspace and 13 gates and when joined by the Main Terminal Building and Piers H and J – all of which are slated to open in 2023 – Frankfurt’s new Terminal 3 will be a sizeable complex with a 130,000sqm footprint and 360,000sqm of floor space. According to Fraport, there is a future option to add a Pier K, thus increasing the new terminal’s total capacity to 25mppa. Fraport supervisory board chairman, Karlheinz Weimar, commented: “Frankfurt Airport is a premium air traffic hub. This is obvious from the growing number of travellers wishing to fly from and via Frankfurt.
“In view of the buoyant growth in passenger volumes, it is high time to enlarge our capacity. So, it’s good news that one pier can be completed ahead of the rest. “Pier G will begin operating and providing additional capacity as early as 2021. This leaves no doubt that we were right to opt for an architectural design that could be flexibly adjusted as required.” When fully open in 2023, Terminal 3 will have 95 check-in desks/drop-off points, 48 aircraft gates and nearly 11,600sqm of shops and restaurants. It will also have its own 8,500 vehicle capacity car park. Explaining the concepts behind the terminal’s design, architect, Christoph Mäckler, said: “More than anything else, passengers want to be able to rest and relax before, and after, their flights. “This was an essential leitmotif for designing Terminal 3, alongside maximising the technical and functional flexibility of the building complex. “The light-flooded interior spaces feature high-quality materials in warm natural hues to evoke a pleasant ambiance that invites passengers to relax and stay a while. “In this respect, the new terminal will be the first of a new generation worldwide.” Fraport Ausbau Süd GmbH, a wholly owned subsidiary of Fraport AG, is responsible for managing, supervising and monitoring the construction project. The approved budget amounts to between €3.5 and €4 billion, Fraport’s largest single investment at Frankfurt Airport. Fraport AG CEO, Dr Stefan Schulte, enthused: “We are building the future with Terminal 3 – for Frankfurt Airport, the entire Rhine-Main region and far beyond.
“By employing state-of-the-art technology and intelligent processes to create an outstanding passenger experience, we are meeting the promise inherent in our slogan, ‘Gute Reise! We make it happen’. “Frankfurt is already an international leader in terms of connectivity. No other aviation hub in the world offers more destinations to business or leisure travellers than Frankfurt Airport. And Terminal 3 will further strengthen Germany’s most important gateway to the world.” Speaking at the cornerstone laying ceremony, Dr Thomas Schäfer, Minister of Finance for the state of Hesse, noted: “Today we aren’t just laying the cornerstone for a new airport building. We are also establishing the basis for more jobs, more opportunities, and greater economic vitality. “The construction of Terminal 3 is an important step for strengthening the airport’s competitiveness and therefore also that of the state of Hesse as a centre of economic activity. “Over the next few years, Fraport AG will invest up to €4 billion in the project. This has the potential to create many new jobs while increasing the importance of Frankfurt Airport as Germany’s largest place of employment. “But even though the airport is the powerhouse of Hesse’s economy, this doesn’t mean that it has free rein. The state government will continue to insist that the aviation industry uphold its strong commitment to reducing noise and environmental burdens.” Some 500 individual contracts are being awarded for a wide variety of tasks, which is benefitting a large number of small and mid-sized construction companies, including in the Frankfurt region. AW
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Spotlight on LAX’s handling of aviation’s most eco-friendly commercial flight, Gatwick reducing its noise footprint and the recycling efforts of Detroit Metropolitan. Gatwick reduces noise footprint
LAX makes history on World Environment Day Los Angeles International Airport (LAX) claims to have welcomed the most eco-friendly commercial flight in aviation history on World Environment Day. Operator, Los Angeles World Airports (LAWA), makes the claim because it says that United Airlines flight 310, a Boeing 737-900ER with a special Eco-Skies livery, was the first to demonstrate the following key actions on a single commercial flight: • Use of sustainable aviation biofuel • Zero cabin waste • Carbon offsetting; and • Operational efficiencies including all-electric ground handling equipment. The ‘Flight for the Planet’, as United is calling it, departed from Chicago and landed at LAX, the company’s ‘eco-hub’ for sustainable operations, on June 5. Its arrival coincided with United’s commitment to purchase up to 10 million gallons of sustainable aviation biofuel at LAX. “LAX is proud to be United’s eco-hub for its most sustainable operations, highlighting our shared commitment to leading the industry in emerging sustainable aviation practices,” said Samantha Bricker, LAWA’s deputy executive director, environmental programmes group. “Los Angeles World Airports is an international leader in airport sustainability, and partnerships like this one are leading the way to a greener future at our nation’s airports.” The eco-hub designation comes in part from United’s recent commitment to continue buying and utilising sustainable biofuel for all of its departing flights at LAX over the next two years.
London Gatwick may be one of the UK’s busiest airports with rising passenger numbers, but its noise footprint is getting smaller, according to the Civil Aviation Authority (CAA). The CAA’s noise exposure contour analysis shows that Gatwick’s noise footprint (54dBA Leq) reduced by 7% in 2018. The decline is being attributed to improved operational procedures – including smoother descents that reduce drag and use less power – as well as the phasing out of the noisiest aircraft and the introduction of new, quieter jets. Using the nationally recognised standard measurement (54dBA Leq), Gatwick’s noise footprint shrank from 82.7 square kilometres to 77.1 square kilometres in 2018 – compared to 2017 – with the number of people living within this noise contour also falling to 10,200 from 10,950. Cumulatively, over the last two years, 900 people have been taken out of this noise footprint as it shrank 11% – reducing in area from 86.5 square kilometres in 2016 to 77.1 square kilometres in 2018. Gatwick’s noise footprint has reduced by 48% over the last 20 years and by 14.5% over the last decade. In terms of future noise reductions, the next generation of aircraft – including the Airbus A320neo, A321neo and A350; and Boeing’s 787 (Dreamliner) – are up to 50% quieter than their predecessors. The airport notes that in the future, the airline fleets that operate from Gatwick will be dominated by these quieter aircraft, with forecasts showing that this type of next generation aircraft will make up 86% of Gatwick’s aircraft fleet by 2032/33, up from 3% in 2017/18. Andy Sinclair, Gatwick’s head of airspace, said: “We are making good progress against our objective of reducing the impact that aircraft noise has on our local communities, but we recognise that more must be done. “We will continue to challenge ourselves and our industry partners and will be introducing a range of new initiatives to reduce noise further in coming years.”
Space for waste grows in DTW’s North Terminal Wayne County Airport Authority (WCAA) is improving the public recycling programme in Detroit Metro Airport’s North Terminal in response to customer suggestions and the State of Michigan’s efforts to improve recycling throughout the state. WCAA has added 45 coloured recycling receptacles to the North Terminal, the contents of which will be brought to an in-terminal recycling compactor before being transported to a local recycling facility. “Our new waste receptacles use colours, shapes and pictures to help simplify the recycling process for our passengers,” comments AW WCAA sustainability programme administrator, Sara Kaplan.
AIRPORT WORLD/ISSUE 3, 2019
RUNNING WBP NEWS HEAD
The latest news from ACI’s World Business Partners
Amadeus completes acquisition of ICM
Amadeus has completed the acquisition of ICM Airport Technics (ICM), a global leader in passenger automation and self-service bag drop solutions for airports and airlines, for an undisclosed sum. Thanks to this deal, Amadeus is now able to design, configure, implement, operate and support all airport systems needed to manage passengers and their baggage from end-to-end. Importantly, the addition of ICM’s leading portfolio of solutions strengthens Amadeus’ ability to re-imagine check-in, boarding and security in ways that significantly enhance the traveller experience, improve efficiency of operations and reduce costs. ICM serves a range of world-class airports and airlines, principally in Asia-Pacific and Europe. Since 2009, the group has processed more than 77 million bags worldwide and is a global leader in providing airports and airlines with either retro-fitted or replacement type Auto Bag Drop (ABD) units. Amadeus’ executive vice president for airport IT, Bruno Spada, says: “Airports are investing in open self-service solutions to address capacity challenges and take the friction out of the airport experience for passengers. By combining Amadeus’ and ICM’s software and hardware capabilities, and by using the power of biometrics, this deal will ensure that together we can deliver better journeys for passengers in the future.” With the deal now complete, approximately 150 ICM employees will join Amadeus. The group will also formally become part of Amadeus’ Airport IT division, largely operating as a selfcontained business. This will allow Amadeus to take advantage of all possible synergies with ICM, while also exploring and continue developing each unit’s capabilities. ICM will retain a local presence close to its customers via offices in both Sydney and Melbourne. ICM’s CEO, Richard Dinkelmann (pictured above), will now report directly to Spada.
Upgrade BRU’s baggage handling system
Vanderlande has been awarded the contract to execute a significant upgrade to the baggage handling system (BHS) at Brussels Airport. The proposed operational improvements will allow the airport to handle an expected growth in annual passenger numbers from 25 to 40 million within the next 25 years. To continue to deliver excellent and compliant airport operations and aeronautical infrastructure on a daily basis, Brussels Airport is rolling out a large-scale investment programme. This includes the replacement of the existing conventional BHS with Vanderlande’s TUBTRAX technology, an upgrade to the high-level controls, and the integration of new hold baggage screening (HBS) machines to comply with the latest EU Standard 3 regulations. The new BHS system will connect the existing check-in and transfer areas with the new HBS systems and the existing sorters, make-up carousels and the sortation area in Pier A. According to Vanderlande, by transporting one item of baggage per tote, TUBTRAX ensures complete track and trace of each piece of luggage at any time, regardless of its location in the system. On this project, Vanderlande will co-operate closely with ENGIE Fabricom Airport Solutions, a key supplier in respect to BHS-related activities at Brussels Airport. Vanderlande’s executive vice president for airports, Andrew Manship, says: “Brussels Airport has a clear vision on its future and we look forward to playing a vital role in support of this.”
Location: Singapore Contact: Jeremy Norton, vice president, sales, Asia-Pacific E: firstname.lastname@example.org W: www.rapiscansystems.com Rapiscan Systems is a leading global provider of security inspection solutions, with more than 100,000 products installed in over 170 countries. Rapiscan Systems has an extensive portfolio of baggage and parcel inspection, cargo and vehicle inspection, hold baggage screening, people screening, trace detection, radiation detection, tray return system and enhanced security solutions, which are supported by a global service network.
FetchyFox Location: Sunnyvale, CA, USA Contact: Christina Apatow, CEO E: contact@FetchyFox.com W: www.fetchyfox.com FetchyFox was founded by frequent flyers who dreaded going to the airport. Whether it was the long lines, poor choices to eat in the terminal, or never being able to find a free outlet, the airport was consistently the worst part of their experience. So, they sought to solve these problems with FetchyFox: convenient delivery of any airport goods at their fingertips.
PSI Logistics GmbH Location: Dortmund, Germany Contact: Karsten Rauner E: email@example.com W: www.psilogistics.com PSI Logistics GmbH is one of the leading providers of logistics software in Germany and develops intelligent solutions for transparent material flows and efficient logistics management. PSIairport optimises the process sequences in baggage handling thanks to integrated networking and user-friendly software.
Horton Automatics Location: Corpus Christi, TX, USA Contact: Scott Lawson, product manager E: firstname.lastname@example.org W: www.hortondoors.com The automatic powered pedestrian entrance doors you use daily began at Horton Automatics. In the 60 plus years since our founder invented them, Horton has remained a leader in the industry.
AIRPORT WORLD/ISSUE 3, 2019
New concessions software solution for Kempegowda
Sweet Maple lands at SFO’s Terminal 2 SSP America has followed the opening of The Manufactory Food Hall in SFO’s International Terminal earlier this year by unveiling Sweet Maple in Terminal 2. Serving San Francisco’s Lower Pacific Heights community since 2010, Sweet Maple serves classic American dishes with a touch of Asian influence and is ranked among the top breakfast and brunch destinations in the city. Indeed, it is so popular with locals and food tourists alike that its Millionaire’s Bacon has become one of the city’s most Instagrammed dishes and earned Sweet Maple – and owner and former scientist Steven Choi – a cult following across the globe. Other popular dishes include Corn Flake crusted ‘Crunch’ French Toast, Frisco Burgers, Stonepot Rice and Sweet Maple’s signature Mimosas, Bloody Marys and freshly pulled coffees. “We are delighted to bring one of San Francisco’s favourite breakfast and brunch spots to SFO,” enthuses SSP America’s vice president for business development, Paul Loupakos. “For Terminal 2, Sweet Maple brings a leading, Bay Area community restaurateur who has put Sweet Maple on the culinary world map. Visitors and locals alike seek out Sweet Maple for its memorable food and warm hospitality. Now passengers can visit Sweet Maple and enjoy the famous Millionaire’s Bacon whenever they fly through SFO.”
Bengaluru’s Kempegowda International Airport has chosen GrayMatter’s Airport Analytics (AA+) solution to better manage its concession-based commercial business, provide a better passenger experience and help improve non-aeronautical revenues. The solution effectively delivers data-driven business insights around performance of F&B outlets, retail stores, duty-free shops, product categories, products as well as around customer preferences. The scope of the engagement includes real-time, non-intrusive extraction of sales data from POS terminals at the airport stores using Store Sense, GrayMatter’s proprietary IoT device. Data extracted from Store Sense interfaces with operator BIAL’s billing system and is further used for income computation that forms the basis for invoicing concessionaires. Information can also be analysed to enable decision making and reporting using state-of-theart data warehousing, dashboarding and visualisation techniques. Kempegowda’s chief commercial officer, Kenneth Guldbjerg, said: “We work with partners such as GrayMatter to offer our passengers a technologically-superior and seamless airport experience. “I look forward to the envisaged outcomes of this implementation, including the expected transparency that it will lend to retail revenue reporting.” Vikas Gupta, CEO of GrayMatter, said: “I am proud to have our home airport as one of our esteemed customers.”
African expansion for Aelia
New Aelia Duty Free and RELAY shops have opened at Libreville Leon Mba International Airport in Gabon. Their opening marks the first phase of a partnership between Lagardère Travel Retail and the airport to operate more than 600sqm of retail and F&B outlets at the African gateway. The Aelia Duty Free store offers a broad range of local brands and products in addition to the wide range of international brands. “We are very pleased with these openings, that demonstrate our ability to bring the best international operational standards to Africa, while developing a very strong and successful local offer,” says Lagardère Travel Retail’s managing director for Africa, Bruno Bouchacourt. “This is yet another important milestone in Lagardère Travel Retail’s journey towards new successes in Africa.” Libreville Leon Mba International Airport is the only international airport in Gabon and, as such, a key location for air traffic between Western Africa and Europe. The airport is currently served by 14 scheduled airlines that between them fly to 23 destinations in 15 countries.
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matters Richard Plenty and Terri Morrissey provide their thoughts on how to encourage entrepreneurial spirt.
ack in 2012, we delivered a keynote address at ACI Europe’s Regional Airports Conference in Ljubljana on ‘Building an entrepreneurial mindset’. At the time, many airports were facing economic challenges which could not be met by simply providing ‘more of the same’. They needed to explore other sources of revenue to stay in business. Innovative thinking was required. This requires a combination of creative thinking mixed with commercial ‘nous’. It quite often means looking at the ordinary in different ways, of putting on different lenses when viewing the day to day, of seeing new patterns or combinations or of re-imagining alternative methods of delivery. It may also mean designing new products, services or of anticipating a new trend or demand. Those who are best suited to this type of environment usually demonstrate characteristics such as curiosity, measured risk taking, openness to change, a willingness to experiment, perseverance and resilience. They generally see the big picture. People who understand the customer and can anticipate customer experience and need – along with a good measure of empathy – are good candidates. Fast forward to 2019 and an innovative mindset is still relevant. This time round it’s not just about money: it’s about sustainability in the broadest sense. Take Dublin Airport, for example. Back in 2012, they launched a scheme to sell ‘plane water’ at €1 a bottle, which was a great success. In 2019 this popular offering has been augmented by an imaginative system of ‘hydration stations’, water fountains fitted with swan necks where passengers can fill their own bottles with less environmental impact.
So, what can be done to create a more ‘entrepreneurially friendly’ workplace environment and develop more ‘entrepreneurially minded’ employees? After all, many people who work in airports weren’t recruited for these kinds of skills, but for their ability to work in an operational environment where the priorities are consistent delivery and abiding by a rigorous set of rules and regulations. A good place to start is to create space and time for reflective thinking and conversation. Many workplaces are far too busy, with little headspace for considering how the work is done and how it might be delivered in alternative or more effective ways. Many day-to-day activities and experiences provide fertile material for thinking about better ways of working and of delivering new value adding services. Creating an environment where people feel more free to express themselves and to challenge the tried and tested in a psychologically safe space can lead to surprising results. It really doesn’t require much investment except the willingness to give it a go. A few tips: • Review the tried and tested and see if it’s still relevant for today • Bring the outside in by looking at what other organisations have done • Wear new lenses when viewing the passenger experience
Leeds Bradford Airport (LBA) in the UK has a new boss, former London Luton and Newcastle airport board member, Hywel Rees. He joins LBA from AMP Capital, where he has been a senior member of the asset management team for around five years, with a focus on airports. He said: “I am delighted to join Leeds Bradford Airport and look forward to working with the team to grow the airport long-term and deliver a high-quality service experience.” Los Angeles World Airports (LAWA) has announced the retirement of chief operating officer, Samson Mengistu. Mengitsu enjoyed a 30-year career with the City of Los Angeles, more than 25 of them at LAWA. He has served under four Los Angeles mayors, and numerous Airport Commissions and LAWA administrations. Brisbane Airport Corporation (BAC) has announced changes to its executive leadership team with Martin Ryan taking up the leadership of the newly created Consumers Group as executive general manager. Following an organisational restructure that came into effect on April 1, 2019, the Consumers Group was created to better serve passengers and other visitors to Brisbane Airport. Hong Kong International Airport operator, Airport Authority Hong Kong (AAHK), has welcomed three new board members – Stuart Thomson Gulliver, Dr Lo Wai-kwok and Thomas Jefferson Wu. All will serve three year terms. Keith Ludeman is the new chairman of London Luton Airport (LLA). The former CEO of Go-Ahead Group Plc joins the UK’s fifth busiest airport ahead of the December 2018 completion of its £160 million transformation project. Tulsa Airports Improvement Trust (TAIT) has made two new additions its executive leadership team after promoting Chuck Hannum to the role of chief operating officer and appointing Jonathan Gobbo as its new director of real estate. “Chuck and Jonathan bring over 30 years of experience to our leadership team, and we could not be more excited for their fresh perspective,” said Alexis Higgins, CEO of Tulsa Airports.
And most importantly, make sure you don’t just ‘think’ about things – but try them out to see if they work. ‘Trial and success’ can be a winning formula. Who knows where the new pot of gold lies?
Terri Morrissey is chairperson of This Is… as well as chair of the Science and Public Policy Committee of the Psychological Society of Ireland. Dr Richard Plenty is managing director of This Is… and runs the ACI World Airport Human Resources Programme. Contact them through email@example.com
AIRPORT WORLD/ISSUE 3, 2019
About the authors
MARKET-DRIVEN DEVELOPMENT STRATEGIES
MARKET ANALYSIS CLUSTER ANALYSIS FINANCIAL ANALYSIS LAND USE PLANNING MIXED-USE & TOD PLANNING AIRPORT-CONNECTED DEVELOPMENT ECONOMIC DEVELOPMENT COMMERCIAL DEVELOPMENT RETAIL OFFICE HOTEL INDUSTRIAL
CONNECTING A WORLD OF OPPORTUNITIES MXD is a full-service development consulting practice based in Vancouver, Canada, working in 45 countries. Our expertise includes Master Planning, Economic Development and Land Use Development of Airport Connected Cities, Aerotropoli and Multi-Modal Transport Centers, as well as Mixed-Use, Retail, Urban and Commercial Development Projects. info@MXDdevelopment.com
• In the spotlight: New revenue streams • Airport report: El Paso • Build & design: Israel’s new airport • Plus: Airport seating, Brands and...
Published on Jul 23, 2019
• In the spotlight: New revenue streams • Airport report: El Paso • Build & design: Israel’s new airport • Plus: Airport seating, Brands and...