Airport World, Issue 2, 2013 by Airport World

AIRPORT WORLD APRIL–MAY FEBRUARY-JANUARY FEBRUARY –2013 MARCH 2011 2013

In the spotlight: Airport Cities Airports: Helsinki & Toluca Special report: ASQ Winners Plus: Airport design, retail & IT innovation

THE MAGAZINE OF THE AIRPORTS COUNCIL INTERNATIONAL

Airport Cities: Business magnets April – May 2013 Volume 18 Issue 2 www.aci.aero

OPINION Airport World

Editor Joe Bates +44 (0) 20 8831 7507 joe@airport-world.com Deputy Editor Oliver Clark +44 (0) 20 8831 7514 oliver@airport-world.com Online News Reporter Steven Thompson +44 (0) 20 8831 7560 steven@airport-world.com Design, Layout & Production Andrew Montgomery +44 (0) 20 8831 7564 andy@airport-world.com Mark Draper +44 (0) 20 8831 7504 mark@airport-world.com Erica Cooper erica@aviationmedia.aero Website Design & Production José Cuenca +44 (0) 20 8831 7517 jose@aviationmedia.aero Sales Director Jonathan Lee +44 (0) 20 8831 7563 jonathan@airport-world.com Advertising Manager Kalpesh Vadher +44 (0) 20 8831 7510 kalpesh@airport-world.com Subscriptions Lauren Murtagh +44 (0) 20 8831 7512 subscriptions@airport-world.com

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Back to the future Airport World editor, Joe Bates, looks forward to the upcoming Airport Cities World Conference in Ekurhuleni and the ACI AsiaPacific Regional Conference & Exhibition in Phuket.

lthough the term ‘airport city’ is relatively new, I have personally considered airports to be mini-cities in their own right ever since I began working at one 30 years ago. This could be due to the fact that in my first weeks as a trainee journalist at Heathrow I attended a meeting with 4,000 cabin crew; got introduced to the airport’s chaplain (the Rev Harry Burlton); got drunk at the Control Tower Bar; met Kim Basinger and visited the morgue; well, at least the dedicated place set aside to store bodies in the event of a disaster! Later liaisons with Heathrow’s emergency services (I once went out on a training exercise with a team of fire fighters that involved racing around the old Perry Oaks Sludge Works in a dinghy just in case an aircraft crashed landed into it) and countless visits to airline offices, hotels, pubs, sports grounds and, of course, the dedicated press room, only served to reinforce my conviction that Heathrow is indeed a city. Crikey, it even had its own bylaws, newspaper, Skyport (at which I spent four happy years) and its own annual beauty pageants – Mr and Miss Heathrow Airport! For these reasons, I had no trouble accepting the airport city concept when it was first mooted or the idea of the ‘aerotropolis’ – new urban areas developed around airports. Airports are, after all, huge economic generators for cities, regions and, sometimes, entire nations, so it makes perfect sense to me that businesses/ commerce would gravitate towards them.

The word ‘aerotropolis’ was actually coined by Dr John Kasarda, director of the Center for Air Commerce at the University of Carolina’s Kenan Institute of Private Enterprise, so it is only fitting that he writes the introduction to the themed ‘airport cities’ section of this issue. The section also includes features about Malaysia’s airport city plans and global investment strategy; retail development; the creation of a ‘space coast’ in Florida; and ambitious projects at Belo Horizonte and Warsaw Chopin. The other big ACI event in April is the Asia-Pacific Regional Conference & Exhibition in Phuket, Thailand, where delegates will discuss the challenges and opportunities facing the region’s gateways and the key role airports play in driving economic development. I am certainly looking forward to it and leaving Europe’s wintery weather behind for a few days! In light of the event, this issue also contains ACI’s latest medium-term forecast for the Asia-Pacific region, a special report on AsiaPacific’s LCCs, and a Project Watch feature on Hong Kong International Airport. And if that’s not enough, we also report on ACI’s 2012 Airport Service Quality (ASQ) Awards – dominated again by Asia-Pacific airports – and learn more about the innovative use of light and sound in airport terminals; Heathrow’s social media strategy; and the latest global IT trends. Next up after Ekurhuleni and Phuket is the small matter of the ACI Europe/World Annual Conference & Exhibition in Istanbul. AW Doesn’t time fly when you’re having fun?

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CONTENTS

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Issue 2 Volume 18

Joe Bates looks back at some of the highlights of the recent ACI Airport Economics and Finance Conference in Singapore.

12 ACI news 15 View from the top ACI World director general, Angela Gittens, looks forward to the joint ACI Europe/World Annual Congress & Exhibition in Istanbul.

16 Mexican wave Toluca International Airport has experienced its share of highs and lows in recent years, but resurgent passenger traffic and expansion plans point to a new sense of optimism, reports Oliver Clark.

20 Quality hunter Steven Thompson discovers that communicating with customers is key for Helsinki Airport as it aims to enhance its facilities and increase its appeal.

24 Airport cities: The evolution Airport cities guru, Dr John Kasarda, reports on the growing worldwide phenomenon, the rise of the aerotropolis and their increasing economic importance.

28 Investing in airports Tan Sri Bashir Ahmad Abdul Majid, managing director of Malaysia Airports, talks to Joe Bates about Kuala Lumpur’s airport city plans and his company’s 16 years as a global airport investor.

32 Space odyssey Alex Hannaford finds out more about Melbourne International Airport’s aerospace ambitions as Florida’s self-proclaimed ‘Space Coast’ bids to reinvent itself after the end of NASA’s space shuttle programme.

36 Outlet retail

Creating Outlet Shopping Centres is potentially one of the most commercially successful ways of leveraging the airport location, writes Chris LeTourneur.

40 In pole position Lidia Maczynska reports on Warsaw Chopin’s ambitious plans to develop Poland’s first airport city.

AIRPORT WORLD/APRIL-MAY 2013

CONTENTS

Director General Angela Gittens Chair Yiannis Paraschis (Athens, Greece) Vice Chair Fredrick J Piccolo (Sarasota, USA) Immediate Past Chair Max Moore-Wilton (Sydney, Australia) Treasurer Louis E Miller (Atlanta, USA) ACI WORLD GOVERNING BOARD DIRECTORS Africa (3) Dalil Guendouz (Casablanca, Morocco) Pascal Komla (Lomé, Togo) Robinson Misitala (Livingstone, Zambia) Asia-Pacific (8) Tan Sri Bashir Ahmad (Kuala Lumpur, Malaysia) VP Agrawal (Delhi, India) Ghanem Al-Hajri (Sharjah, UAE) HH Prince Turki Faisal Al Saud (Jeddah, Saudi Arabia) Dennis Chant (Gold Coast, Australia) Zhiyi Dong (Beijing, China) CW Lee (Incheon, South Korea) Kosaburo Morinaka (Tokyo, Japan) Europe (7) Declan Collier (Dublin, Ireland) Michael Kerkloh (Munich, Germany) Yiannis Paraschis (Athens, Greece) Tonci Peovic (Zagreb, Croatia) Ad Rutten (Amsterdam, Holland) Stefan Schulte (Frankfurt, Germany) José-Manuel Vargas (Madrid, Spain) Latin America & Caribbean (3) Philippe Baril (Quito, Ecuador) Fernando Bosque (Guadalajara, Mexico) Héctor Navarrete Muñoz (Merida, Mexico) North America (7) Thella Bowens (San Diego, USA) David Edwards (Greenville, USA) Frank Miller (San Antonio, USA) Reg K Milley (Edmonton, Canada) Fredrick J Piccolo (Sarasota, USA) Mark Reis (Seattle, USA) Maureen Riley (Salt Lake City, USA) Regional Advisers to the World Governing Board (7) Larry Cox (Memphis, USA) Stephen Gichuki (Nairobi, Kenya) Seow Hiang Lee (Singapore) Bongani Maseko (Johannesburg, South Africa) Barry Rempel (Winnipeg, Canada) Earl Richards (Jamaica) Miguel Southwell (Miami, USA) Observer World Business Partner Board Chairperson Randy Pope (Burns & McDonnell) Correct as of April 5, 2013

42 A tale of two airports Dr John Kasarda reports on the impressive recovery of Belo Horizonte’s Tancredo Neves Airport, and how it went from a traffic nadir to a thriving international gateway.

46 Light and sound show Tina Milton discovers more about the increasingly sophisticated ambience- enhancing techniques being adopted by airports and the potential commercial and operational benefits.

50 Top of the class Asia-Pacific airports win the top five global awards in ACI’s annual customer satisfaction survey, writes Joe Bates.

53 Concessions news Airport World reviews some of the latest retail and F&B projects and developments across the globe.

54 Smart thinking Airport World reviews SITA’s Flying Into The Future report on IT innovation in the air transport industry.

56 Being social Marc Ellams, head of passenger communications at Heathrow, talks to Steven Thompson about the gateway’s approach to social media.

60 Where next for Asia’s low-cost airlines? Low-cost carriers have only scratched the surface of their potential within Asia, argues Gordon Bevan of ASM.

64 Thinking 3D Nigel Rees discusses the merits of utilising Building Information Management (BIM) and 3D crowd simulation software to design new terminals and ensure airports make maximum use of existing facilities.

67 Project watch Hong Kong International Airport.

69 Environment news 70 ACI’s World Business Partners 73 ACI traffic trends 74 The last word Joe Bates gets up close and personal with sports psychologist and leadership expert, Dr Gregory Dale.

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NEWS

Big plans for Philippine gateways

The Philippine government has extended the bidding deadlines for Mactan-Cebu International Airport’s new terminal to April 5 after claiming to be “overwhelmed” by more than 1,000 queries for it and two other private public partnership projects. The deadline for investors submitting pre-qualification documents in Mactan-Cebu’s $240 million terminal project had initially been set at March 22 as the government looked to push through the deal this year. “Ensuring that the government receives the most advantageous deals with long-term stability is our priority,” the Department of Transportation and Communications (DOTC) said in a statement. In addition to a new 3.5mppa capacity international terminal at Mactan-Cebu, the government wants the successful bidder to invest a further $185 million on expanding the domestic terminal to 41,000sqm. Vinci Airports is widely tipped to be one of the potential bidders for Mactan-Cebu in the PPP project, which is being facilitated by the government-owned Public-Private Partnership Center. Executive director of the Public-Private Partnership Center, Cosette Canilao, told Airport World: “We need to update existing terminals and build news ones and new airports to meet future demand, and believe that PPP projects are the best way to develop them.”

Stansted to sparkle!

The new owners of London Stansted claim that they plan to put the ‘sparkle’ back into the airport. New managing director, Andrew Harrison, appointed in March following Manchester Airports Group’s (MAG) €1.75 billion purchase of the London gateway from Heathrow Airport Holdings, said MAG’s challenge was to allow Stansted to fulfill its “great potential”. Harrison told Airport World: “It has great raw material, a Lord Foster-designed terminal, the best terminal facilities in the UK, and it is the fastest and most efficient terminal in the UK. “The main thing we’ll be looking to do is add a bit of sparkle to the experience. It has great design but the experience is a bit transactional. What comes across is that everyone who works here is really proud to work in this airport, so now we have an opportunity to unleash that enthusiasm.”

Winds of change

North America will lose two key aviation figures this June – ACI-North America president, Gregory Principato (pictured above) and Las Vegas-McCarran’s airport director, Randall Walker. Principato, who succeeded David Plavin in the ACI-NA hotseat in July 2005, said that he believed the time was right to “seek new challenges and opportunities”. He added: “I am incredibly proud of the ACI-NA team and what we have accomplished in redefining ACI-NA and its position as the ‘voice of airports’ on legislative and regulatory issues in the United States and Canada, but after eight years, I reached the conclusion that the time is right to seek new challenges and opportunities.” Walker, who retires after 16 years in the Las Vegas hotseat, said: “Our vision is to ‘Be a Global Leader,’ and we have certainly accomplished this in several areas. I know the team will continue to work toward that vision for all areas of the operation going forward.” He will be succeeded by long serving deputy, Rosemary Vassiliadis, who will become the first female to head the Clark County Department of Aviation.

Pittsburgh to drill for oil

Allegheny County Airport Authority has approved a $500 million deal with Consol Energy for the rights to drill for natural gas and oil on the Pittsburgh International Airport site. Under the deal, Consol is expected to drill at least 50 wells across 9,000 acres of land that could generate more than $1 billion in economic benefit for the region over the next 20 years. The airport authority claims that it will use the windfall to make Pittsburgh more competitive by reducing airline costs and enhancing its infrastructure. “It isn’t often that the County is able to announce a billion dollar investment,” quipped Allegheny County executive, Rich Fitzgerald. Officials think the first wells will be drilled in late 2014 or early 2015, after lengthy reviews from both the state Department of Environmental Protection and the Federal Aviation Administration.

News in brief Dublin Airport Authority has been recognised for its innovative use of social media by picking up the Communications Award at the 2013 Irish Logistics and Transport Awards. The judges were impressed by Dublin Airport’s significant position on Twitter, the high engagement levels that the airport generates on its Facebook page, and the airport’s use of new social media channels such as Pinterest, SoundCloud and Instagram. Vienna Airport chiefs believe the Austrian gateway is “on the right course” after recovering

from a poor 2011 to report large profit increases for 2012. Revenue rose by 4.4% to €607.4 million; EBITDA by 17.1% to €221.4 million, EBIT increased 60.8% to €108.0 million. Günther Ofner, CFO of operator Flughafen Wien AG, said: “Our company is on the right course. In 2012 we significantly increased productivity and also generated profitable growth. Abu Dhabi Airports Company (ADAC) has received a trio of ISO certificates for the provision of quality services at the Emirate’s gateways.

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Its Airports Operations Division, which provides services at Abu Dhabi, Al Ain and Al Bateen Executive airports, has received the ISO 9001: 2008 (Quality Management System), ISO 14001: 2004 (Environmental Management System) and OHSAS 18001:2007 (Occupational Health and Safety Management System) certifications for its activities. ADAC claims that the third-party certification is international recognition of its standards and work to embrace a culture of quality and excellence.

NEWS

Battle on for Galeão

On track in Phoenix

The PHX Sky Train at Phoenix Sky Harbor International Airport is set to open to the public on April 8. The electrically-powered Automated People Mover will transport passengers between the METRO Light rail, East Economy Parking and Terminal 4, which serves 80% of Sky Harbor’s passengers. Aviation director, Danny Murphy, said: “We are especially proud that the environmentally-friendly project has achieved a Leadership in Energy and Environmental Design (LEED) Gold certification from the US Green Building Council.” The system will be extended to serve all of Sky Harbor’s terminals by early 2015.

LaGuardia interest hots up

A TAV Airports/Aéroports de Paris (ADP) joint venture is thought to be among five bidders to have issued preliminary submissions for the $3.6 billion project to replace the central terminal building at New York–LaGuardia. TAV Airports has made no secret of its interest in bidding to build and operate the new terminal, although LaGuardia operator, the Port of New York and New Jersey (PANYNJ) remains tight lipped about interested parties. “The Port Authority is reviewing five qualification submissions from companies for the LaGuardia Airport Central Terminal Building project, but has not yet finalised the process. We will make further information available at the appropriate time,” spokesman, Ron Marsico, told Airport World. When ADP acquired a 38% stake in TAV Airports early last year, TAV’s chief strategy officer, Waleed Youssef, declared: “Our new strategic partner can add geographic depth to our operation as, up until now, our focus has primarily been on emerging markets in the Middle East, North Africa and former CIS states.”

Concerns that the winning bidders paid way over the top for their concessions in the first wave of airport privatisations in Brazil does not appear to have put off the Schiphol Group or Aéroports de Paris, which are set to form a consortium to bid for Rio de Janeiro–Galeão International Airport. Their potential partners in the bid for the 30-year concession up for grabs are Brazilian companies Carioca Engenharia and Gp Investimentos. Brazilian airport operator, Infraero, would maintain a 49% stake. New ADP chairman, Augustin de Romanet has publicly expressed an interest in acquiring a shareholding in Galeão, while Schiphol Group president and CEO, Jos Nijhuis, recently revealed his company’s interest during a Dutch TV interview. Brazil wants to sell 51% stakes in Galeão and Belo Horizonte’s Confins Airport to operators who can upgrade them in time for the 2014 football World Cup football tournament and the 2016 Olympic Games. However, the $3.1 billion asking price and high figures received for São Paul–Guarulhos ($9.4 billion) Campinas–Viracopos ($2.2 billion) and Brasilia ($2.6 billon) on top of the huge investments required was expected to deter bidders.

All change at Abertis

Abertis Airports, which earlier this year saw the Bolivian government nationalise its 90% owned airport concessions company SABSA, has sold Cardiff Airport to the Welsh government for €61.2 million. The sale follows protracted negotiations with airport operator TBI – an Abertis subsidiary – and is viewed by some as the first move in the disposal of its airport assets. Abertis is believed to want to sell its entire airport division to one buyer, but with interests in the UK (Belfast, Luton), Europe (Stockholm Skavsta) and the US (Orlando Sanford), a single transaction seems unlikely. Meanwhile, Abertis insists that it will back the Bolivian government’s decision to privatise SABSA – and effectively the operation of La Paz, Santa Cruz and Cochabamba airports – as long as it is duly compensated. “The company is prepared to negotiate appropriate compensation, but rejects the accusations that it has failed to fulfill investment commitments in Bolivia, where SABSA has invested $12.6 million in CAPEX at all three airports since 2005,” said a statement.

For daily news updates, visit www.airport-world.com Canberra Airport is confident that its newly opened western concourse will boost its capacity by 10mppa and attract international flights to Australia’s capital city gateway. The facility, which is linked to the terminal’s southern concourse by a three-storey glass atrium, adds five airbridges and 12 check-in desks. Former Air Berlin head, Hartmut Mehdorn, is the new chief of Berlin-Brandenburg Airport. Transport Minister, Peter Ramsauer, said Mehdorn’s appointment was “an important step” in putting the much-delayed airport on the path to success.

The new airport will replace the city’s two existing airports, Tegel and Schönefeld. Heathrow Airport has warned the UK’s Airports Commission that airports such as Dubai and Istanbul are already making major investments that will exploit the UK’s hub capacity constraints. In its submission to the Airports Commission, the airport states: “The current political and planning landscape means that it will likely be 2024 before significant additional hub capacity could be operational in the UK, with Heathrow being the location where this can be delivered the quickest. By then the UK’s hub will

have been capacity constrained for two decades and a significant proportion of the unserved hub demand will have been lost, either for good, or for the very long-term until it can be recaptured.” With the clock running down to the 2015 end of the current concession, Chile has issued a prequalification call to international investors interested in participating in operating and developing Santiago’s Arturo Merino Benitez International Airport. The successful consortium will be expected to construct a new international terminal and upgrade the domestic terminal in return for a 15-year concession.

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EVENTS NEWS: ECONOMICS

Money talks Joe Bates looks back at some of the highlights of the recent ACI Airport Economics and Finance Conference in Singapore.

fter four years in London it was Asia’s turn to shine with Singapore hosting ACI’s annual Economic & Finance Conference. However, if the surroundings were a little different – the Gala Dinner was held on a Chinese style river boat cruising around the calm waters of Singapore – the key issues of discussion about privatisation, government regulation, investment opportunities and good financial practice were very familiar. The event also featured two firsts: a Pre-Conference Seminar, and one speaker presenting two opposing presentations! The latter task being performed by The World Bank’s lead air transport specialist, Dr Charles Schlumberger, who during his keynote address about the state of the global economy, literally put on different jackets for the different viewpoints from characters he called ‘Dr Good’ and ‘Dr Bad’. For the record, 74% of the 92 people to vote in a poll at the end of his presentations about whether the plane was ‘half full or half empty’, unanimously opted for the more positive scenario. During her welcome address, ACI World director general, Angela Gittens, commented: “According to the World Bank’s January 2013 global economic prospects, although the major risks to the global economy are similar to those of a year ago, the likelihood that they will materialise has diminished, as has the magnitude of estimated impacts, should these events occur.” She listed the risks as the loss of access to capital markets by vulnerable euro area countries; lack of agreement on US fiscal policy and the debt ceiling, and the potential for commodity price shocks. Gittens pointed out that Asia-Pacific continues to record strong growth, although the Middle East (+12%) led the way in 2012, followed by Asia (7%), Africa (+7%) and Latin America & Caribbean (6%) compared to just 2% growth in Europe and North America. “We forecast that, by 2030, the world’s largest aviation markets will be China, the USA, India and Brazil, in that order,” said Gittens, who noted that “access to air transport continues to be absolutely fundamental for social and economic development”. ACI Asia-Pacific’s regional director, Patti Chau, was equally upbeat and talked about dynamic growth across the region, although ACI Europe’s director general, Olivier Jankovec, was more subdued

in his presentation, revealing that “the new Europe” of Russia and Turkey continues to outperform “the old Europe”. On the subjects of different economic regulation and the US’s reluctance to embrace airport privatisation, the FAA’s deputy associate administrator, Catherine (Kate) Lang insisted that “the best business model is the one that works as long as it’s not illegal, anti-competitive or discriminatory”. Arguably, one of the liveliest sessions of the event occurred during the Pre-Conference Seminar when a host of speakers gave their views on the lessons learned from airport privatisations to date and the way forward for the industry. They included ANA administrator, Luís Ribeiro, who remarked that the €3 billion sale of the Portuguese airport operator to Vinci Airports happened “remarkably quickly”, while Cosette Canilao, executive director of the Public-Private Partnership Center talked about the Philippine government’s new strategy for PPP projects. She told Airport World: “We are aware that mistakes were made before with the T3 concession at Ninoy Aquino [Milan], which without doubt, damaged the reputation of the Philippines for international investors. However, we have learned from the experience, which is why we have set up the Public-Private Partnership Center to assist in the preparation of projects. This includes negotiating the terms of the concessions with the government and overseeing the bidding process. “We now have a clear strategy. We know what the government wants and the obligations it expects from the private sector. We are also developing clear exit strategies so that the mistakes of the past cannot be repeated.” Also on the podium were TAV’s chief strategy officer, Waleed Youssef, who talked about his company’s ventures in Saudi Arabia and Islamic financing, and ACI Europe’s economics manager, Donagh Cagney, who stated that “size is a key factor in determining whether an airport can be profitable”. Cagney, who revealed that 48% of Europe’s airports lose money, said: “History tells us that, as a general rule, airports handling passengers below certain passenger thresholds are not viable. Current events also suggest that larger airport projects may not be suitable for the private sector alone.” Clearly, when it comes to airport economics and finance, one size definitely does not fit all. AW

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ACI WORLD NEWS

World in motion

ACI World reflects on the recent ICAO organised Air Transport Conference in Montréal. From March 18-22, ACI World Governing Board’s vice president, Rick Piccolo, and other senior airport executives converged at the headquarters of the International Civil Aviation (ICAO) in Montréal for the once-a-decade Air Transport Conference. The five-day conference, which is only the sixth such event since ICAO was formed in 1944, sought to address and resolve economic policy issues in favour of a future that includes an economically viable and sustainable air transport sector. Attended by over 1,000 delegates from more than 200 states and international organisations, over 100 working papers were presented, including seven from Airports Council International. The papers presented at the conference sought the development of ICAO policy on aviation economics, liberalisation, fair competition, taxation and charges, and consumer protection. Speaking on the Freedom to do Business Panel at the pre-Conference Symposium on Sunday March 17, Piccolo stated that the regulatory environment was very different at the time of the last Air Transport Conference in 2003. Today, regulators needed to allow market forces to work for airports in the same fashion that was made possible for airlines. ACI supported the principles of effective market access, transparency, non-discrimination and fair competition. He said that the market could be harsh, and airports took risks investing in new infrastructure since there was no guarantee that airlines would utilise this infrastructure in the long-term. On the Symposium Panel discussing Consumer Protection, Tan Sri Bashir Ahmad Abdul Majid – ACI World Governing Board member, managing director of Malaysia Airports Holding Berhad and chair of ACI-Asia Pacific – observed that passenger expectations were increasingly

demanding and that handling their many needs was challenging, but for the most part service provided to those passengers by airports and airlines was very high. Problems generally arose when things went wrong, and it was important for industry to work together to develop common procedures, and here ICAO could provide a suitable forum. He warned that if industry did not act there was a risk that government regulations would be introduced which could be out of step with industry’s capabilities. Speaking on the symposium’s panel on taxation, Robert Deillon, CEO of Geneva Airport and ACI Europe Board member, noted the need for light touch regulation as the increased competitiveness of airports meant that concepts such as ‘single till’ were outdated, and that competition and contestability meant that detailed regulation could impede infrastructure development and improvements to customer service. ACI director general, Angela Gittens, said that ACI was consolidating its international representation role as the voice of the world’s airports. Indeed, the level of engagement that ACI was able to muster is testament to the increased stature and importance of airports in shaping the international aviation policy agenda. In addition to the speakers at the Pre-Conference Symposium, airports were represented by the chair of ACI-North America, David Edwards, executive director of Greenville-Spartanburg International Airport and its president, Greg Principato, and the director of the Asia-Pacific Region, Patti Chau. During the conference, ACI presented working papers on Market Liberalisation, Slots and Night Curfews, Passenger Protection, Airport Competition and Economics of Airports, and jointly presented papers with CANSO and IATA on taxation and modernising air traffic management.

Woman of the Year

ACI director general, Angela Gittens, has been named as Woman of the Year by Air Transport News (ATN). Gittens, who has spearheaded the organisation since 2008, received the honour at ATN’s annual awards ceremony, held in Montréal on the eve of ICAO’s Sixth Worldwide Air Transport Conference. ATN states that the awards celebrate the companies and key players who make outstanding contributions to the air transport industry, and whose vision and determination positively impact the industry, and the countless individuals and communities touched by the economic and social spin-offs of aviation. Gittens enthused: “I am thrilled to receive this inaugural Woman of the Year award from Air Transport News. I share this award with all the other women in aviation who represent this dynamic industry and who work day-in and day-out to ensure its safety and sustainability. “It is particularly gratifying to share the stage with my colleague, Raymond Benjamin, who has been named Leader of the Year in the ATN Awards, and I assure you that ACI will continue to work alongside ICAO and our other aviation stakeholders to attain the benefits that commercial aviation brings to the world’s communities.”

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ACI WORLD NEWS

ACI events

2013

September 22-25

May 13

June 10-12

April 24-26

April 22-25

ACI North America Annual Conference & Exhibition San Jose, USA

Aviation & Environment Workshop Montréal, Canada

ACI World Annual General Assembly

Airport Cities World Conference & Exhibition Ekurhuleni, South Africa

ACI Asia-Pacific Regional Assembly, Conference & Exhibition Phuket, Thailand

ACI Europe Congress & Exhibition Istanbul, Turkey

ACI offices ACI World Angela Gittens, Director General PO Box 302 800 Rue du Square Victoria Montréal, Quebec H4Z 1G8 Canada Tel : +1 514 373 1200 Fax : +1 514 373 1201 aci@aci.aero www.aci.aero

ACI Fund for Developing Nations’ Airports Angela Gittens, Managing Director c/o Geneva, Switzerland Tel: + 1 514 373 1200 Fax: +1 514 373 1201 acifund@aci.aero ACI Asia-Pacific Patti Chau, Regional Director Hong Kong SAR, China Tel: +852 2180 9449 Fax: +852 2180 9462 info@aci-asiapac.aero www.aci-asiapac.aero

ACI Africa Ali Tounsi, Regional Secretary Casablanca, Morocco Tel: +212 619 775 101 atounsi@aci-africa.aero www.aci-africa.aero ACI Europe Olivier Jankovec, Director General Brussels, Belgium Tel: +32 (2) 552 0978 Fax: +32 (2) 502 5637 danielle.michel@aci-europe.org www.aci-europe.org

ACI Latin America & Caribbean Javier Martinez Botacio, Director General Quito, Ecuador Tel: +593 2294 4900 Fax: +593 2294 4974 jmartinez@aci-lac.aero www.aci-lac.aero ACI North America Greg Principato, President Washington DC, USA Tel: +1 202 293 8500 Fax: +1 202 331 1362 postmaster@aci-na.org www.aci-na.org

ACI represents 573 members operating 1,751 airports in 174 countries and territories, which in 2011 handled 5.4 billion passengers, 93.1 million tonnes of cargo and 77 million aircraft movements. ACI is the international association of the world’s airports. It is a non-profit organisation, the prime purpose of which is to advance the interests of airports and promote professional excellence in airport management and operations.

AIRPORT WORLD/APRIL-MAY 2013

ACI VIEWPOINT

View from the top ACI World director general, Angela Gittens, looks forward to the joint ACI Europe/World Annual Congress & Exhibition in Istanbul.

nder the direction of Dr Yiannis Paraschis, chair of ACI-World, and Declan Collier, chair of ACI-Europe, members will gather in Istanbul on June 10-12 for the 2013 ACI Europe/World Annual Congress and Exhibition. ACI World is delighted to partner with ACI Europe to bring the world’s airport leaders to Istanbul, and I am equally pleased that TAV Airports Holding will be our host. Home to an estimated 14 million people, Istanbul is Turkey’s economic and historic hub and an intriguing blend of Eastern and Western culture. What you will find is a remarkable city where contemporary living coexists with a fascinating past. In fact, many of our members are already planning to explore Istanbul, prior to and following the meeting. At our annual meeting this year, some one thousand aviation colleagues, government officials, business and academic leaders and other top industry professionals will gather to advance solutions on successful business transformation through dynamic leadership. Highlights of the educational programming include: the airline conversation; business transformation for airports from a passenger experience perspective and how airports can advocate for the interests of the passengers; the investor conversation; and business transformation for airports from a sustainability and Corporate Social Responsibility (CSR) perspective. I look forward to our stellar speaker line-up that includes Recep Tayyip Erdoğan, Prime Minister of Turkey (invited); ACI World chair, Dr Yiannis Paraschis; Dr Sani Sener, president and CEO of TAV Airports Holding; Tony Tyler, director general, IATA; Rosemarie Andolino, commissioner, Chicago Department of Aviation; Howard Eng, president

and CEO, Greater Toronto Airports Authority (GTAA); Declan Collier, CEO, London City Airport, and president, ACI Europe; and Olivier Jankovec, director general, ACI Europe. Also speaking will be Gunnar Heinemann’s co-owner, Gebr Heinemann; Tan Sri Bashir Ahmad, managing director, Malaysia Airports Berhad and president, ACI Asia-Pacific; Augustin de Romanet, CEO, Aéroports de Paris; Paul Griffiths, CEO, Dubai Airports; Stewart Wingate, CEO, London Gatwick Airport; Stanley Hui, CEO, Airport Authority Hong Kong; Christa Fornarotto, Associate Administrator for Airports, FAA; and Jim Boult, CEO, Christchurch Airport, to name just a few. The event will also provide you with many opportunities to network with your peers from around the globe and gain valuable insights on how others are coping and thriving with the challenges we face. As for the exhibition, it will display the very latest technology, products and services to help maximise efficiency and effectiveness in airport management. New this year is a Safety Symposium open to all registrants ahead of the General Assembly on Monday 10 June. The General Assembly is particularly important this year as members will elect the chair and vice-chair for the 2014-2015 term of office. We will also ask members to endorse those policy positions we will take to the ICAO Assembly later this year. And, of course, we will have the inspirational AMPAP graduation where up to 80 proud airport experts will allow us to congratulate them! I look forward to joining you to partake of an outstanding programme, catch up with industry colleagues, meet new ones and learn the best approaches to the opportunities and challenges of today and tomorrow. See you in Istanbul. AW

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AIRPORT REPORT: TOLUCA

Mexican wave Toluca International Airport has experienced its share of highs and lows in recent years, but resurgent passenger traffic and expansion plans point to a new sense of optimism, reports Oliver Clark.

hen low-cost carriers first burst onto Mexico’s commercial aviation scene in the middle of the last decade, one of the big beneficiaries was Toluca’s Adolfo López Mateos International Airport (TLC). Located just 40km from Mexico City and boasting good surface links to the capital, Toluca proved an attractive alternative to Mexico City’s congested Benito Juárez International Airport (MEX) for low-cost carriers (LCCs), and in December 2005 Interjet made Toluca its launch base, followed by Volaris in 2006. Being the home base for two of Mexico’s biggest LCCs catapulted TLC into the big league with traffic jumping from two million in 2006 to 3.3 million in 2007 and four million in 2008, and it seemed that Toluca would quickly become Mexico City’s second airport. Then disaster struck. The collapse of Mexicana in 2010 opened a gap in the market at MEX; Interjet and Volaris took the opportunity to move the bulk of their operations to the capital gateway, and Aeroméxico, which had launched operations from Toluca in 2009, withdrew less than a year later. Consequently, TLC’s traffic slid from a peak in 2008 to 1.5 million in 2011 and fell to less then a million in 2012, opening up the possibility that Toluca would go back to being just another one of Mexico’s regional airports. Toluca’s fortunes appear to have improved dramatically in recent months, however, with carriers including Aeroméxico, VivaAerobus and US carrier Spirit breathing new life into its terminals.

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Aeromexico launched services to Guadalajara and Monterrey in February, followed by Acapulco, Spirit Airlines operates international flights to Dallas/Fort Worth and Fort Lauderdale. Such is the spirit of optimism about the future that Toluca’s management are preparing a new masterplan that could see the building of a new runway and terminal over the next two years to deal with increased passenger demand, which is forecast to hit 5.5 million by 2015. Speaking to Javier García Bejos, CEO of TLC, it is clear why he is so confident about the gateway’s future. “Toluca Airport is a very uncommon airport in Mexico because it’s the only one that shares the market with Mexico City International Airport and we have a huge challenge handling that demand because, as you know, Mexico City is completely saturated. “Over the next 10 years Toluca International will grow faster than any other airport in Mexico,” he predicts. According to Bejos, Toluca’s role as an alternative to Mexico City has never been more relevant. MEX handle nearly 30 million passengers in the 12 months to February 2013 and is at saturation point, and Bejos believes that a key enticement of Toluca is that the small airport facility offers a much less stressful and friendly passenger experience compared to its bigger neighbour. “We have a culture of service. What we are doing and saying in the market is ‘Fly easy, fly Toluca’ which is not just aimed at passengers but also airlines.

AIRPORT REPORT: TOLUCA

“We want to be the premium cargo destination “Fly easy is an important message as people in Toluca Airport in central Mexico. What we are seeing is that central Mexico are facing the saturation of Mexico City passenger traffic Mexico City is completely full, while just 30km north, Airport on a daily basis. They face delays and often 2006-2012 Toluca has the best ground connectivity of any problems with their connections and what we want is a 2006: 2,051,895 airport in the country, highways are being friendly airport that is easy to use, easy to move around 2007: 3,300,275 developing and we are looking at a new cargo and easy to do business at.” 2008: 3,949,611 terminal for Toluca Airport.” Toluca is also easy for people to leave. The airport 2009: 2,489, 577 Expansion will come from primarily private is close to the two main motorways linking Toluca with 2010: 2,270,767 sources. Toluca Airport is operated through a Mexico City and is particularly well located for the business 2011: 1,579,115 public-private partnership with Spanish construction and financial district of Santa Fe to the west of the 2012: 972,414 company OHL, the majority stakeholder (49%) city centre. Source: Aeroportos y in operating company Administradora Mexiquense Equipped with a 30,000sqm, L shaped terminal – split Servicios Auxiliares. del Aeropuerto Internacional de Toluca (AMAIT), into international domestic wings – and the longest runway with local state government (26%) and the Federal Government in Mexico (4,200m), Toluca has the capacity to handle large widebody controlling the rest. aircraft and is capable of handling eight million passengers a year, with a OHL is licensed to manage the airport until 2055 and also manages growth potential of up to 25 million. all commercial and complementary services. With passenger numbers expected to rebound in the coming years, Toluca is planning expansion and Bejos talks about equipping the gateway with up to 10 passenger jetways with construction to start Mexico’s Gatwick Airport “this year and end one year later” Bejos believes that Toluca’s mission should not be to rival MEX, a fight it Commercial areas, restaurants and VIP lounges will be given a can never win, but to operate a complementary service within a wider revamp, English signage will be introduced, and a renewal of the airport’s airport system, taking excess capacity from its congested neighbour and international lounge and arrivals area and an expansion of Toluca’s offering genuine choice. His vision is that the Toluca of the future could be cargo facilities are all under consideration. the Gatwick or LaGuardia of Mexico City.

AIRPORT WORLD/APRIL-MAY 2013

AIRPORT REPORT: TOLUCA

“I believe the Toluca vision could be different. At this moment we need to be as aggressive as possible. We need to be more like Gatwick Airport, which continues to compete against Heathrow and positions itself as a reliever gateway for the UK’s saturated hub airport. “But in the future, I can see Toluca and Mexico City International Airport as LaGuardia is to New York’s JFK. We need to have complementary services.”

A second Mexico City airport While Toluca busies itself with plans to become the alternative airport of choice for Mexico City, it seems the government has other plans. In March, Secretary of the Economy, Ildefonso Guajardo, announced the government was investigating ways to reduce the congestion at MEX. All options were on the table he said, including the option of building a second international airport, a proposal long mooted in the capital. So if a new airport does go ahead, will this leave Toluca’s dreams in tatters? Not at all says Bejos. “This is one of the most important decisions to be made in Mexico’s aviation market for the last 20 years and I strongly believe the new government needs to solve this issue. Of course, we need a new airport, but this will not change Toluca’s plans – we aim to work together as complementary airports. “Geographically speaking we are a very easy airport for business travellers. You also have to remember that the new Mexico City airport will not ready for many years,” explains Bejos. “Until then, we can attend the market and then we will be part of a big system for the whole of Mexico State.”

Route development While it remains to be seen whether Toluca can attract and retain carriers for the long-term, recent airline arrivals look encouraging. Interjet is once again cranking up its services; Aeroméxico returned earlier this year, and VivaAerobus operates to Tampico and Villahermosa. But, perhaps the most significant thing, is that Toluca’s resurgent traffic is

AIRPORT WORLD/APRIL-MAY 2013

now international as well as domestic, and that’s a trend Bejos expects will continue as US carriers seek more market share of Mexico’s capital. “The market is changing a lot and many LCCs are no longer as low-cost as they once were. These include Allegiant, JetBlue and WestJet, which are growing aggressively south from Canada and the US and want to go to central Mexico. Ideally, they want to serve Mexico City, but if they cannot due to the lack of available slots, they will fly to Toluca if they want to serve this market. “Because of profitability requirements and [their status as] new players in the Mexico market, bringing in those airlines is a challenge. “Today, we are aggressively growing our domestic market. In April this year four of the five carriers in Mexico will fly from Toluca; Aeroméxico is starting a sky bridge between Monterrey and Guadalajara; Interjet is encouraging routes from Toluca to leisure destinations, and VivaAerobus are doing a tremendous job connecting small towns and cities in regional Mexico. “What we foresee in the short run is that our network in the domestic market will expand with greater frequencies, and now the priority is to attract those international airlines,” predicts Bejos. Other advantages he outlines include: no bilateral restrictions on US carriers wishing to open up new routes; a seven minute aircraft turnaround guarantee; and last but not least, an incentive scheme that effectively slashes airport fees for new routes and offers landing fees that are lower than Mexico City’s Benito Juárez International Airport. While the debate over the need for a second international airport for Mexico City looks set to rumble on, Toluca’s management clearly feel confident that their facility can thrive on its own merits. Not only is it likely to be many years before a new airport is built, but Toluca is positioning itself to be a viable alternative to MEX based on ease of use, modern uncongested facilities, transport links, and a strong belief in accommodating the needs of both passengers and airlines. “Perhaps we will never be a complicated hub with fancy big terminals to connect people with trains, but we will have an easy to use airport,” concludes Bejos. AW

AIRPORT REPORT: HELSINKI

Quality hunter Steven Thompson discovers that communicating with customers is key for Helsinki Airport as it aims to enhance its facilities and increase its appeal.

uality is an important word at Helsinki Airport. Whether you are talking about the Finnish gateway’s approach to social media, customer service or passenger comfort, you will keep coming across it. And while the strategy has yet to pay noticeable dividends in terms of traffic – the airport saw a slight decline in passenger throughput in 2012 – operator Finavia is confident that it will pay off long-term. When it comes to customer service, the 2011 launch of its Quality Hunters programme is, arguably, Finavia’s best example of thinking outside the box. Jointly launched with Finnair, the groundbreaking initiative saw a group of passengers report back on some of the most innovative ideas they witnessed on their travels to 40 airports in seven weeks. Using social media channels, such as Twitter, Facebook and Pinterest, and through blogs and YouTube, Quality Hunters snowballed into a near global phenomenon. It is estimated that the online community, which comes up with passenger-friendly suggestions for the airport and airline, has a reach of nearly 10 million people. Such has been the success of the scheme that feedback from followers has persuaded the gateway to open a free 24-hour art gallery and a book-swap station, in addition to shortlisting a host of other ideas for possible consideration in the future. The ideas wish-list includes the proposed introduction of an airport casino, hostel, Finnish/Asian fusion kitchen, the strategic theming of gates and bringing Finnish nature to the airport. It is this dedication to the passenger, and this willingness to embrace social media and online communication – coupled with Helsinki’s location as a springboard between Asia and Europe – that leads airport CEO, Kari Savolainen, to believe that the airport is on the right track. “As you know, flying is not so fancy these days, because airlines are competing on price, so service suffers when the focus is on cutting costs, which means the nice part of flying is more and more the airport,” he says. “As a result, we have to continue improving our offering. Quality Hunters is one good example of how we do this and it is something we have continued. In today’s highly competitive world, we have to utilise social media and open our services earlier. Before the trip, passengers should have information on what is the best way to spend their time at the airport.

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“What are the customers’ needs? How can we improve the customer experience? It is a big issue because there is not a standard or typical airport passenger and there is no one single solution to satisfying people.” While Helsinki has yet to see traffic soar as a consequence of its efforts, the same cannot be said of its passenger satisfaction levels, as the gateway’s Airport Service Quality (ASQ) score jumped from 3.92 to 4.02 (on a scale of one to five) in 2012. According to the results, which saw 1,400 travellers polled, the airport has improved its services in almost all of the topics covered in the survey. In 2012, passengers were happier than ever before with queuing times, Wi-Fi, and the politeness and helpful attitude of the airport’s security staff. Other strengths noted were the ease of switching planes, the well-functioning border control procedures, the feeling of security, and the ease of moving around at the airport. “We have worked hard to make the airport an even smoother hub,” admits airport director, Ville Haapasaari. “The results show we have performed very well indeed. However, the airport will never be perfect, which means we will continue to work hard for a smooth and comfortable passenger experience.” On that note, Helsinki continues to make changes in anticipation of increased passenger numbers. Terminal 2 underwent an expansion and revamp in 2011, and last year the gateway invested €1 million on new

AIRPORT REPORT: HELSINKI

bus gates and immigration and security enhancements to ensure that it can continue to offer impressive 35-minute connection times for transfer passengers. Ground transportation to the airport is also set for a major boost, with the anticipated 2015 opening of a new high-speed train service to downtown Helsinki. And it is not only the Quality Hunters initiative which proves Helsinki is on the ball when it comes to online communication with its passengers – the airport also won SimpliFlying’s Best Airport on Social Media in 2012. “We like to think that smooth travelling starts online,” says Markus Haapamäki, head of social media at Finavia. “What we would like to see in our social media channels is an interaction with our passengers to improve their travel experience. “But we also want to share accurate information with the public, allowing people to become aware of who we are and what is on offer for them when they get to Helsinki and any of our other Finnish airports. “The best result has got to be if we can invent something new via interaction with our passengers via our social media channels. “Quality Hunters was born out of our decision along with Finnair to hire eight people to travel the world and come up with suggestions for making air travel more convenient. This has now snowballed into a truly global community.” Helsinki is certainly out to impress its business travellers, with Savolainen saying the airport wants to do more for its hard-working passengers.

There are already neat little touches around the airport, such as wireless charging points for passengers’ mobile phones, a hairdressers, and art exhibitions for those with a longer wait between flights. The airport’s free Wi-Fi is a huge success, too, with the number of users increasing by an impressive 3,000% in four years. There are 30 times more users now than there were in January 2009, and the figure has rocketed by 168% in the last 12 months. There is also Suvanto, a new lounge introduced in May last year. Finavia, with partners such as Clear Channel, launched the concept, giving passengers separate spaces to work and relax. There are currently three Suvanto lounges in the airport and they each provide ergonomic workstations, as well as power points for various electronic devices.

Traffic It is fair to say that the gateway’s passenger numbers were not great last year, with a slight decline on 2011 figures. The dip was particularly alarming in the final quarter of the year with a 2.3% fall, meaning the final total dropped just short of the 15 million mark. However, the airport still maintains it is in a good position – both economically and geographically speaking – to see growth in the coming years.

AIRPORT WORLD/APRIL-MAY 2013

AIRPORT REPORT: HELSINKI

Savolainen maintains that Helsinki is ideally placed as a stop-off between Europe and Asia, and believes that once the global economy begins to recover its location will ensure it will be one of the first to benefit. Indeed, the silver lining for the airport in 2012 came in the form of Helsinki’s Asian traffic, which continued its rapid growth to 1.8 million passengers, an enviable 8.3% rise. This was primarily due to Finnair’s new direct route to the Chinese city of Chongqing. And the number of direct connections to

“Our main role here is our hub status between Asia and Europe, which means long-haul network opportunities,” he says. “Sure, some low-cost carriers do serve Helsinki, but the bells and whistles we offer here doesn’t really suit their business model. “We want to be a good quality, cost-effective airport with the customer and quality service at the centre of what we offer.” Which airports does he consider to be Helsinki’s greatest rivals? “All airports that are bridges or hubs between Europe and Asia are effectively competing with us,” says Savolainen.

We want to be a good quality, cost effective airport with the customer and quality service at the centre of what we offer Asia will further increase this year as Japan Airlines introduces a new service to Tokyo, and Finland’s national flag carrier launches routes to Xi’an and Hanoi in June. Savolainen admits that Helsinki is confident that these new “quality routes” will be a success and should ensure that the gateway records an upturn in passenger traffic in 2013 and for the next few years. “We are in a very strong position to bridge between Asia and Europe,” explains Savolainen. “This is, economically, a growing area, and it means that when the global financial situation gets better, we will see growth immediately. In the next five years we anticipate quite good numbers for growth.” Helsinki does not go out of its way to attract budget airlines – it is certainly not a no-frills airport – but it still has some low-cost traffic. However, Savolainen is a firm believer in long-haul transfer traffic, and thinks this will always be Helsinki’s main traffic driver.

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“This means Stockholm, Copenhagen and Frankfurt in Europe, the Gulf countries in the Middle East and, more recently, St Petersburg–Pulkovo in Russia, which is investing heavily. “Helsinki Airport’s importance to the Finnish economy, however, means that we have to be the winners of this competition.” He maintains that Helsinki Airport is changing, adapting and growing by evolution, rather than revolution, and admits that this policy is likely to continue for the foreseeable future. Talking of the future, Savolainen believes that the current gateway could handle up to 20mppa, after which the Finnish government would have to think seriously about “revolutionary investment and infrastructure”. Whether this means upgrading the existing gateway or building a new one remains open to debate, but whatever the future holds, one thing remains certain, the search for quality will remain at the heart of Finavia’s business strategy. AW

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SPECIAL REPORT: AIRPORT CITIES

Airport cities: The evolution

The impressive 160 acre Rossypole development at Paris CDG.

Airport cities guru, Dr John Kasarda, reports on the growing worldwide phenomenon, the rise of the aerotropolis and their increasing economic importance.

irport city and aerotropolis development is gaining substantial traction, multiplying rapidly on a global scale. Using qualitative and quantitative techniques, I’ve identified over 80 airport cities and broader aerotropolises (airport-centred urban economic regions) around the world that are either already operational or in early stages of development. Their distribution is widespread with 38 identified in North America, 20 in Europe, 17 in Asia-Pacific, seven in Africa and the Middle East and one each in Central and South America. Various criteria were used to designate operational or developing airport cities and aerotropolises. Some of the criteria are clearly subjective, so this list is by no means definitive. Without doubt, new sites will be added while some shown here may fall by the wayside.

Airport City evolution Airport cities have developed along different paths. A portion of them were planned from the start. Most, however, evolved in a largely organic manner responding to (1) airport land availability, (2) improved surface transportation access, (3) growing air traveller consumer demands, (4) airport revenue needs, (5) new business practices, and (6) sitespecific commercial real estate opportunities.

AIRPORT WORLD/APRIL-MAY 2013

Regardless of process, airports continue to transform from primarily air transport infrastructure to multimodal, multi-functional enterprises generating considerable commercial development within and well beyond their boundaries. Today, virtually all of the commercial functions of a modern metropolitan centre are found on or near most major air gateways, fundamentally changing them from ‘city airports’ to ‘airport cities’. The passenger-terminal has led this transition. Airside (past security), gallerias and retail streetscapes have been incorporated into concourses, as have multiple leisure and consumer services. Upscale boutiques offering high-end fashion clothing and accessories, along with gourmet and themed restaurants, have been complemented by health, fitness and entertainment facilities including spas, clinics, multiplex cinemas and, in some cases, museums, art galleries, concerts and gaming venues. Depending on your tastes, you can play roulette at the Holland Casino at Amsterdam Schiphol or view famous Dutch master paintings at its branch of the Rijksmuseum. Again, depending on taste, you can visit Dr Müller’s sex shop situated along Frankfurt Airport’s concourse or listen to the London Philharmonic at Heathrow.

SPECIAL REPORT: AIRPORT CITIES Should an overnight stay be desired for airport area get-togethers or to simply to shop and relax in the airport city, a growing number of gateways have Terminal-linked 4 and 5-star hotels offering fine dining, nightclubs, and comfort amenities.

Proceeding outwards, there is an additional 770,000 sqm of offices in the immediate vicinity of the airport along with many hotels and logistics facilities. Approximately 250,000 jobs in the Paris region are directly or indirectly related to CDG.

Airports as corporate headquarters

The rise of the aerotropolis

Corporate headquarter functions were once the domain of downtown office buildings. No longer. Go to Terminal D at Dallas-Fort Worth International Airport or to the concourse of Detroit Metro’s magnificent McNamara Terminal and you will see business people with bulging briefcases walking from their arrival gates into DFW’s Grand Hyatt and Metro’s swanky Weston Hotel. They are pouring into these concourse-connected business class hotels not to sleep, but to meet. DFW’s Grand Hyatt and Detroit Metro’s Weston increasingly serve as virtual headquarters for geographically dispersed corporate staff, executives, and board members who fly in for sales meetings, client contacts, and high-level decision-making. The full-range of office services and business support staff of a traditional corporate complex are available, including meeting rooms, computers and advanced telecom, secretarial and tech assistance. Some airport hotels, such as the Sheraton at Amsterdam Schiphol, Hilton at Frankfurt and Sofitel at Heathrow’s Terminal 5 now even rank among the most popular places to hold business meetings in Holland, Germany and the UK respectively. And airports in Asia are taking ‘doing business’ in them to a new level. For example, in 2010, Hong Kong International Airport opened the world’s largest terminal commercial lounge. Its 15,000sqft facility is a full-service business centre that supports up to 300 users with wireless office workstations, projectors, meeting rooms, advanced videoconference stations, and tech assistance. Large-screen TVs and an all-day buffet provide the entertainment during any downtime. In tune with today’s corporate needs for quick access to their widely dispersed clients and enterprise partners, The Squaire (designated ‘New Work City’) opened at Frankfurt Airport in 2011. This two million square foot, mainly office and hotel complex, is over 2,000ft long (650 metres) and nine stories high. Its primary value-proposition is speedy connectivity, not only local and national, but also global. The Squaire is just eight minutes via covered walkway to the airport’s international check-in counters. In addition to an adjacent high-speed motorway, rapid ground connectivity to much of the region and beyond is provided by the inter city rail station underneath the complex. Served by some 230 long-distance trains daily, The Squaire is without doubt the best-connected office building in Europe. Excellent surface connectivity, together with Frankfurt Airport’s extensive international flight network, has fashioned it into a magnet for offices of travel-intensive firms. One prominent multi-national accounting, auditing, and consulting firm, KPMG, has made The Squaire its European corporate headquarters, occupying 400,000sqft. A number of major airports now actually exceed many downtown metropolitan central business districts in office space and employment. Rossypole, occupying 160 acres (65 hectares) in the middle of Paris CDG has over 2.5 million sqft (230,000sqm) of offices. There are around 700 firms based on the 3,200-hectare (7,900 acre) airport property, employing a total of 87,000 people.

Airports have become not just 21st century business magnets, but also regional economic accelerators, catalysing and driving business development outward for many miles. As aviation-oriented businesses increasingly locate at major airports and along transportation corridors radiating from them, an aerotropolis emerges stretching up to 25km (nearly 20 miles) from some major airports. Analogous in shape to the traditional metropolis made up of a central city core and its rings of commuter-heavy suburbs, the aerotropolis consists of an airport-centred commercial core (airport city) and outlying corridors and clusters of aviation-linked businesses and associated residential development. Some of these largest aerotropolis clusters such as Amsterdam Zuidas, Las Colinas, Texas, and South Korea’s Songdo International Business District – near Incheon International Airport – have become globally significant airport edge-cities whose business tentacles routinely touch all major continents. The aerotropolis, in fact, is the concrete urban manifestation of the global meeting the local, with the airport serving as its physical interface. Among the most prominent are Amsterdam Schiphol, Chicago O’Hare, DFW, Dubai, Hong Kong, Incheon, Memphis, Paris CDG, Singapore and Washington Dulles international airports. Each has attracted a remarkable number of businesses to their properties and broader airport areas, generating huge economic returns to their regions and nations. For example, more than 1,000 firms have located in the Amsterdam Aerotropolis (including the world headquarters of ABN Amro and ING banks located just six minutes from Schiphol’s terminal) in part because of the superb connectivity this airport provides their executives. Likewise, four Fortune 500 world headquarters are located in Las Colinas Texas, only a 10-minute drive from DFW, while Chicago’s O’Hare airport area has more office and convention space than most major cities. The Washington Dulles airport region is the second largest retail market in the US (just behind New York City’s Manhattan Island) and has become a high-tech business and consulting hub, as well. Hong Kong, Incheon, Memphis, and Paris CDG boast leading cargo and logistics complexes, with the former two airports sustaining, respectively, Hong Kong Disneyland and New Songdo IDB, an airport edge city the size of downtown Boston. Dubai and Singapore have emerged as a full-fledged aerotropolises with their large leisure, tourism, commercial and finance sectors dependent on aviation. Both may legitimately be described as global aviation hubs with city-states attached. The employment scale and industry mix of the aerotropolis is much greater than many realise. Research by Dr Stephen Appold and myself on employment around the 25 busiest passenger airports in the US, found that 3.1 million jobs as of 2009 were located within a 2.5-mile radius of these airports (2.8% of total US employment); over 7.5 million jobs within a five mile distance (6.8% of all US employees) and 19 million jobs (17.2% of the US total) within 10 miles. Assessment of wages and salaries in these airport radii showed that the respective percentages from payrolls were 3.4%, 8.2% and 21.9%.

AIRPORT WORLD/APRIL-MAY 2013

SPECIAL REPORT: AIRPORT CITIES Airport City & Aerotropolis Locations Worldwide Operational Aerotropolis Developing Aerotropolis Operational Airport City Developing Airport City

Europe

Amsterdam Schiphol Athens International Airport Eleftherios Venizelos Barcelona El Prat Airport Bremen Airport Budapest Ferenc Liszt International Airport Dublin Airport Frankfurt Airport Frankfurt-Hahn Airport Helsinki-Vantaa Airport

London Heathrow Airport Manchester Airport Moscow Domodedovo Airport Munich Airport Oslo Airport, Gardermoen Paris Charles de Gaulle Airport Paris Vatry Airport Stockholm Arlanda Airport Vienna International Airport Warsaw Chopin Airport Zurich Airport

Asia-Pacific

Bangkok Suvarnabhumi Airport Beijing Capital International Airport Bengaluru International Airport Brisbane Airport Clark International Airport Cochin International Airport Delhi Indira Gandhi International Airport Guangzhou Baiyun International Airport Hong Kong International Airport Hyderabad Rajiv Gandhi International Airport Incheon International Airport Kuala Lumpur International Airport Shanghai Pudong International Airport Singapore Changi Airport Subic Bay International Airport Taiwan Taoyuan International Airport Zhuhai Jinwan Airport

North America

Baltimore-Washington International Airport Charlotte Douglas International Airport Chicago O’Hare International Airport Cleveland Hopkins International Airport Dallas-Ft. Worth International Airport Denver International Airport Detroit Metropolitan Wayne County Airport Edmonton International Airport Fort Worth Alliance Airport Hartsfield-Jackson Atlanta International Airport Huntsville International Airport Indianapolis International Airport Jackson-Evers International Airport John C. Munro Hamilton International Airport John F. Kennedy International Airport Kansas City International Airport LA/Ontario International Airport Lambert-St. Louis International Airport Los Angeles International Airport Louisville International Airport McCarran International Airport Memphis International Airport Miami International Airport Milwaukee General Mitchell International Airport Minneapolis-Saint Paul International Airport Newark Liberty International Airport Northwest Florida Beaches International Airport Orlando International Airport Philadelphia International Airport Phoenix Sky Harbor International Airport Phoenix-Mesa Gateway Airport Piedmont Triad International Airport Pittsburgh International Airport Raleigh-Durham International Airport Rickenbacker International Airport Ted Stevens Anchorage International Airport Vancouver International Airport Washington Dulles International Airport

Central & South America

Belo Horizonte International Airport, Brazil Tocumen International Airport/Panatropolis, Panama

Africa & Middle-East

Abu Dhabi International Airport Cairo International Airport Dubai Al Maktoum International Airport Dubai International Airport Durban King Shaka International Airport Jeddah King Abdulaziz International Airport Johannesburg-Ekurhuleni OR Tambo International Airport

Aerotropolis and airport city selection criteria for sites and assignment of status (operational or developing) The subjectivity of these must be recognised, and actual development (or lack of progress) may alter these selections and statuses.

Criteria include: • Dr John Kasarda’s assessment based on his qualitative knowledge and quantitative research of the airport and surrounding aviation-linked business and industry clusters that correspond to the airport city and aerotropolis models.

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• Demonstrated commitment to the aerotropolis or airport city model as seen in the establishment of aerotropolis steering committees, strategic planning, and development initiatives. • Government/regulatory support of the aerotropolis or airport city through aerotropolis legislation, tax incentives or other mechanisms. • Media announcements by proponents with substantiated evidence that an aerotropolis or airport city initiative is moving forward.

SPECIAL REPORT: AIRPORT CITIES

A spatially compressed model of the aerotropolis.

This indicates that many jobs near major airports are relatively well paid. When we studied individual airports, we found that those located a greater distance from the metropolitan city centre generated significant employment clusters of their own. Fostered by these clusters, Chicago O’Hare has 450,000 jobs within a radius of five miles; DFW 395,000 jobs, and Washington Dulles almost 240,000 jobs. Fully 9.3% of all US employment in transport and warehousing is located within 2.5 miles of the 25 airports we analysed. The disproportionately high concentration of these jobs continued outward at least as far as a 10-mile radius of the airport fence. Even traditional downtown employment sectors such as finance, insurance, and administration are moving to airport areas. Our research comparing airport area employment with metropolitan central business district area employment, showed that zones within five miles of the airport register 55% of the finance and insurance jobs that are located within five miles of the city centre and 78% of the administrative and support jobs. Hotels, of course, are mushrooming around airports. There are 49 hotels within 2.5 miles of Hartsfield-Jackson Atlanta, with the heaviest concentration just one to 1.5 miles away. This compares to 51 hotels located within 2.5 miles of Atlanta’s city centre. And, the largest concentration of hotel rooms on the entire US west coast is adjacent to Los Angeles International Airport’s fence. Areas surrounding airports are also attracting businesses in a full range of professional, medical (life-sciences) and information and communication functions. Sports, recreation and entertainment complexes as well as showrooms, exhibition and convention centres are also gravitating towards them.

A spatially compressed model of the aerotropolis depicting its main components is presented above. No aerotropolis will look exactly like this illustration, but most will eventually take on similar features, led by newer ‘greenfield’ airports less constrained by many prior decades of non-aviation oriented surrounding development. The aerotropolis is thus much more a dynamic, forward-looking concept than a static, cross-sectional model where much existing development reflects historic airport-area growth over many prior decades, some in the distant past. Future development of the aerotropolis will be driven by further global integration and the need for speedy connectivity. Both will be enabled and catalysed by the continuing expansion of aviation routes operating as a Physical Internet moving people and products quickly worldwide, analogous to the way the digital Internet moves data and information. With airports serving as key nodes (or routers) of this Physical Internet, aviation, globalisation, and urban development converge, creating the 21st century aerotropolis.

Concluding comment We have entered a new transit-oriented development era where cities are being built around airports instead of the reverse. In the process, the urban centre is being relocated in the form of globally significant airport cities and aerotropolises. Propitious opportunities await metropolitan regions (including their traditional central cities) that can marshal the vision, planning skills, and co-ordinated actions to capitalise on them.

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SPECIAL REPORT: AIRPORT CITIES

Investing in airports Tan Sri Bashir Ahmad Abdul Majid, managing director of Malaysia Airports, talks to Joe Bates about Kuala Lumpur’s airport city plans and his company’s 16 years as a global airport investor. Why does the airport city/aeropolis concept appeal to MAHB and Kuala Lumpur International Airport? The simple answer is because the current airport was born to be an airport city from the moment in the early 1990s that the Malaysian government took the brave and astute decision to develop it on a near 100 square kilometre greenfield site some 60 kilometres from downtown Kuala Lumpur. Moving to the new site, in effect, meant that Malaysia Airports Holdings Berhad [Malaysia Airports] had the opportunity to develop nearly 6,750 acres of developable land around the airport into a standalone airport city concept. We knew from the outset that doing this would potentially propel the KLIA Aeropolis or airport city, into a destination in its own right. The airport has now been open for close to 15 years and we have had a number of airport city developments. It is, and always will be, the responsibility of Malaysia Airports to ensure that we make optimum use of this highly lucrative location to maximise Malaysia’s unique position in the region as a leading shopping and Muslimfriendly tourism destination, and thus by extension, potentially the most family-friendly tourism destination.

What are the key projects of KLIA Aeropolis airport city plan? The groundbreaking Mitsui Outlet Park KLIA mall is scheduled to open its doors in the last quarter of 2014. This modern outlet mall will be the first for a capital city in South East Asia and will serve to reinforce and enhance the retail diversity of Kuala Lumpur. More immediately, a soft launch of a 350,000 square-foot suburban mall named Gateway@klia2, will be announced in mid-2013. It is part of the integrated multi-modal transport hub that will link the high-speed train to downtown Kuala Lumpur and other modes of land public transportation with KLIA’s new mega terminal for low-cost carriers, klia2. In terms of the bigger picture, the KLIA Aeropolis masterplan has set aside tracts of land for hospitality, commercial offices and industrial, logistics and leisure use that includes cinemas, a golf course, horse riding centre, a small lake for fishing and a shooting range. Unprecedented congestion around most of our neighbouring capital city airports has fuelled unparalleled interest and demand in our KLIA Aeropolis masterplan. The next few years promise to be very interesting for future development.

What has been built to date? To date we have the Formula One racing circuit and the Pan Pacific Hotel as standout projects as, in the early years, we prioritised office

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and support facilities for the home carriers and aviation service related businesses, such as caterers. However, we also planted most of the unutilised land bank with palm oil plantations and the investment has paid off handsomely in terms of revenues. Now Malaysia Airports is in a position to substitute the plantations with higher value commercial, retail and other asset classes. Indeed, with the needs of Malaysia’s home carriers and assorted aviation service players fully accommodated and their future needs fully provisioned for, there is a greater impetus to attract the best-in-class airport city experienced partners to KLIA Aeropolis. In our view, KLIA Aeropolis’ success will be our capital city Kuala Lumpur’s success – that is what drives us to make KLIA Aeropolis a truly remarkable new airport city development with top-class tourism attractions.

Why have you decided to set up your own airport hotel brand? It was an easy decision to make really because running an airport hotel is a highly specialised business and we realised that nobody was likely to know the guests better than us as they would primarily be made up of passengers and airline staff. Also, as the active airport operator, we actually hold the key relationships with the airlines and retail concessionaires. Subsequently, we realised that with a little active engagement with these core client segments, Malaysia Airports was able to translate a lot more latent interest into more room-nights, higher utilisation of the hotel’s myriad of facilities and ultimately happier airport users. It is worth mentioning that we received a substantial amount of public support upon announcing the setting up of our own, SamaSama Hotel brand. In fact, many public parties and airport users have strongly urged us to open similar airport hotels at some of our other key international airports such as in Kota Kinabalu, Kuching and Penang. The caveat, of course, is that they would also want to see our similar Sama-Sama brand of hospitality at these other locations as people are now familiar with it at KLIA and I suppose it would be like staying in a home away from home.

What difference will the dedicated new low-cost carrier terminal, klia2, make to Kuala Lumpur International Airport? It will have a huge impact, as klia2 is a 45 million passenger per annum capacity terminal and will be joined by a brand new four-kilometre-long third runway. In facts and figures, replacing the current LCCT with klia2 effectively raises the airport’s capacity by 30mppa to 70 million. We believe that this 75% increase in capacity

SPECIAL REPORT: AIRPORT CITIES

is necessary to accommodate the expected rise in demand for air travel as Malaysia remains on track to attain developed economy status in 2020 under the government’s ongoing Economic Transformation Plan. It will also significantly reduce our carbon footprint as the high-speed train that links the city centre and KLIA Main Terminal Building in 28 minutes is being extended to klia2. Buses and coaches are currently the only way for passengers to travel between the main terminal building and the existing LCCT. At the request of our business partners, klia2 will also have its own fully functional Air Traffic Control (ATC) Tower.

What can passengers expect from the new terminal? Klia2 is designed to provide all the convenience and amenities that our guests would normally want in both an airport and a mall. What does this mean in reality? Well, in line with the concept of “airport in the mall, mall in the airport”, it will have over 160 outlets and its facilities are designed to showcase brands, products and services. Walking distances are also kept to a minimum, which should appeal to the myriad of less physically able passengers such as young children, the elderly, parents pushing baby strollers and physically disadvantaged groups. It will also be much easier and convenient to use and get to and from than the existing LCCT. For example, in contrast to having to walk of up to 500 metres across the apron to the aircraft in hot and wet conditions, passengers will wait in air-conditioned gates just metres from their aeroplanes. Its status as a fully multi-modal facility served by the high-speed train (ERL), buses and taxis should make getting to klia2 quick and easy. I am confident that our passengers will be impressed by the new terminal, which I hope embodies our commitment toward operational excellence and passenger comfort and safety.

How will klia2 compare to other LCCT’s across the globe? It will be the largest purpose-built LCCT terminal in the world with a footprint of 257,000sqm. We have also delivered a purpose-built terminal designed to stand the test of time, which we didn’t do with the existing LCCT. However, we have learnt from the experience and used that hindsight to listen to the demands of users – both companies and individuals – and do things right this time. I suppose the biggest thing we have learnt is that LCC passengers do not want to be treated less favourably than any other. They also want to be given the choice of adding extras. For instance, at the airline’s request, AirAsia X will boast a premium lounge to cater to their front-end passengers. This is a world first for dedicated low-cost carrier terminals.

What percentage of the passengers at KLIA does LCC traffic currently account for? In 2012, just less than half of all passengers that used KLIA travelled on a LCC. Whilst we expect traffic at klia2 to rise, we remain acutely aware that the variety of LCCs operating in and to Malaysia reflects a highly diverse group and that their respective business models and requirements continue to evolve. It is therefore a distraction to talk about whether LCC traffic will rise or flatten in the future. What the airport must provide is sufficient capacity, flexibility and related services to cater to the needs of all airlines and their passengers.

What is the philosophy/business strategy behind MAHB’s decision to invest in and operate airports outside of Malaysia? Malaysia Airports takes a very collaborative and holistic view to investing in airports overseas. From the beginning, Malaysia Airports (and Malaysia) has been known for its operational competency and openness to sharing of knowledge. It is simply part of the wider Malaysian culture.

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SPECIAL REPORT: AIRPORT CITIES

All our ventures to date have been in countries with developing economies from neighbouring Cambodia to India, Turkey and the Maldives. In all instances, Malaysia Airports looks to partner with locals as we always seek to be mindful of local sensitivities. In the case of Hyderabad and Delhi in India, for instance, we have a solid local partner in the GMR group. GMR can then take on the role of being the local face and supply chain for homegrown talent, whilst Malaysia Airports provides the technical advisory, support and consultancy. To fully communicate our commitment to the commercial viability of these projects, Malaysia Airports is steadfast in investing directly in these airports. So it is not a one-sided arrangement where Malaysia Airports collects fees regardless of the financial performance of the jointly managed airport.

What criteria/investment potential does an airport need to have to appeal to MAHB? We look for airports where we can leverage our key competencies and competitive advantages, which are: 1. An intimate understanding of cross-pollinating LCC growth alongside full-service carriers’ growth, 2. Operating a diverse mix of small and large airports efficiently in a developing country environment, and 3. Operating an end-to-end integrated airport business model in order to levy very low charges whilst still maintaining world-class facilities

Who are your investment partners and are all your international airport projects profitable? We invest with partners on a case-to-case basis, depending on each project’s merits. However, we have found the GMR group to be such complementary partners that we have invested in a total of four airports overseas with them across three different nations. To date we have invested in airports that have required the building of new terminals and airside facilities. These projects therefore have a longer gestation period. Indeed, the major returns of airport investing only occur when these investments are crystallised.

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Therefore, we do not expect early stage airports to demonstrate high levels of profitability in the initial ramp-up stage. Operationally, all the three airports we are currently investing in are doing very well. Indeed, they handled over 60 million passengers between then in 2012. The airports are thus cash flow positive and profitable. However, they will normally only cross into accounting profits on the net profit level once the capital cost of the terminal is into 25-40% of its depreciation.

What is the latest news on the Maldives government’s decision to cancel your (GMR Malé International Airport Ltd’s) concession to operate and develop Malé International Airport ? Our consortium is contesting the decision via the appropriate channels as we believe that whilst a nation can exercise its right to nationalise assets or expropriate concessions, where a contract signed and endorsed by the government exists in the first place, it has to abide by the termination clauses enshrined in the agreements administered and overseen by a wholly-owned subsidiary of The World Bank.

Under what circumstances would MAHB sell/dispose of an airport asset? Malaysia Airports, like any listed entity has a duty to its investors to achieve the best possible return on investment and equity. Therefore, it would only make sense to sell/dispose of an asset where Malaysia Airports has been offered a profitable return, and when we feel the timing is right to exit such an investment.

Are you looking to add to the company’s airport portfolio in 2013/14? Yes, we are actively looking to add to our domestic portfolio. Currently, our largest stake in any overseas airport is a 20% stake in the highly dynamic Istanbul Sabiha Gökçen International Airport. We are actively exploring opportunities that provide a comprehensive management contract on top of a larger minority stake if there is no opportunity for majority control.

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SPECIAL REPORT: AIRPORT CITIES

Space odyssey Alex Hannaford finds out more about Melbourne International Airport’s aerospace ambitions as Florida’s self-proclaimed ‘Space Coast’ bids to reinvent itself after the end of NASA’s space shuttle programme.

ASA staff in Florida will never forget the date July 21, 2011, as it officially marked the end of its 30-year Space Shuttle programme. Indeed, when the Space Shuttle ‘Atlantis’ emerged in the night sky above Cape Canaveral, there was the inevitable sadness at witnessing the historic end to the programme, but also unease about what next for the 8,000 employees about to be made redundant. Almost two years on, while Florida’s Space Coast — a palm-fringed region that encompasses Kennedy Space Center and Cocoa Beach, and which was for so long synonymous with the space programme — has been affected by the biting global recession, nobody could have predicted its tenacious ability to fight to rebuild its aerospace and aviation sector. According to Lynda Weatherman, president and CEO of the Space Coast Economic Development Commission (EDC), it had had some time to prepare for its reinvention, as former US president, George W Bush, warned that the Space Shuttle programme would be coming to an end as long ago as 2004. In short, NASA would pull out of sending astronauts into low-earth orbit, leaving that to the private sector, and instead focus on future manned missions to Mars and an asteroid, via the Orion project. “To me, it said there was going to be a gap – we just didn’t know how deep or how long. But we had seven years to prepare,” admits Weatherman, who reveals that the Space Coast EDC almost immediately set about telling its story and attempting to raise funds in order to mitigate the inevitable. “Did I know back then that we’d be quite so successful as we have been?” muses Weatherman. “Well, I can’t tell you I was confident in 2004, but we had a plan at least, and we couldn’t afford to worry about what happened next.” The first ray of light shone through the clouds the same year, when Lockheed Martin Space Systems, based on the Space Coast, won a contract then valued at $8.15 billion to build Orion. The first tests of that vehicle are on course to take place next year when it will orbit Earth without a crew. But as Weatherman says, 400 jobs weren’t going to make up for the 8,000 lost.

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The Shuttle launch site was reconfigured for commercial use and SpaceX, PayPal-founder Elon Musk’s aerospace company, hushed sceptics when in the summer of 2012, its rocket-powered launch system Falcon 9 shot heavenwards from Cape Canaveral, becoming the first privately held company to send a payload to the International Space Station. “The market is now commercial,” enthuses Weatherman, noting that in addition to SpaceX, aerospace start-ups like XCOR and Rocket Crafters have also moved in. Weatherman says both near-term and long-term opportunities appeared in the void that NASA’s Space Shuttle programme left, but part of the frustration for organisations like the EDC wanting to see economic prosperity return quickly to the Space Coast, is that there hasn’t been any aggressive movement by the federal government in its space policy. “It hasn’t decided what it wants to do,” claims Weatherman. “While we see heavy lifting in the long-term and private opportunities in the short-term, we want as many opportunities as possible. And it’s up to us to go after them.” Even with the private sector investing in the Space Coast, it wasn’t going to match NASA for job-creation — at least not in the short-term. And so the area had to expand its aerospace sector too.

SPECIAL REPORT: AIRPORT CITIES “We were under the radar. We had Harris Corporation, so we knew we could put together a good package. We had history,” she says. It also had the legacy of a workforce that had proved itself more than capable in 30-plus years of space engineering for NASA and Melbourne International Airport, which located just 28 miles from Cape Canaveral, was ideally placed to develop as an aviation gateway and centre for aerospace development. Eight commercial flights a day already operated out of the airport, which also handled charter flights to the Bahamas, international corporate flights, a big flight training facility, and three or four specialty cargo flights a month. Its other tenants included Plus Liberty Aerospace, Evektor Aircraft Inc and Embraer, one of the world’s largest manufacturers of commercial jets. And LiveTV, the world’s leading provider of inflight entertainment for commercial airlines, had its world headquarters in a 40,000-square-foot facility there. However, according to Melbourne’s assistant director, Larry Wuensch, the gateway wanted to actively try and turn the layoffs at the Space Center to its advantage. “Aerospace engineers were just some of the highly qualified people laid off by NASA at the end of the Space Shuttle programme,” says Wuensch. “Suddenly, there was a huge talent pool available, so we decided to use this to our advantage and focus our marketing efforts on encouraging the recruitment of those highly skilled people who were looking for work and didn’t want to relocate. “One of reasons Embraer moved so quickly with its engineering facilities was because it wanted to capture some of that engineering talent before it dissipated.”

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SPECIAL REPORT: AIRPORT CITIES

In addition, Wuensch says it was economically advantageous for the airport to develop land it owned in excess of its needs for aviation. “It was a marvellous way to develop a revenue source that would help finance our airport operations,” he says. There are four separate parks on Melbourne’s property. Of these, a traditional industrial park goes after high-tech manufacturing companies; another contains hotels, motels and hospitals and there’s a residential park that houses more than 1,200 people in a large mobile home facility which, Wuensch says, nets around $800,000 a year for the company. It also boasts its own research park that the airport has developed in conjunction with the Florida Institute of Technology. The newest addition to its tenant list is Archo Solutions Engineering, another Brazilian company, which in March announced it would establish operations at the tech park, focusing on design engineering in the aeronautical, automotive and naval sectors. The move is expected to create 50 jobs by 2016. “Some of the companies that have come here absolutely require an aviation environment, but we also have companies that want to be in a high tech centre because of the ability to attract employees and interact with like-minded companies,” says Wuensch. “You get a synergy when you have a large number of these companies and they start relying on each other for support. After you get the ball rolling it takes on a life of its own.” Harris, a communications company based at Melbourne International Airport, announced in September that it had been awarded a seven-year, $331 million contract to provide air and ground communications for the US Federal Aviation Administration. Weatherman says the company, which provides expeditionary airlift and specialised aircraft modifications, brought 200 jobs to the area. Another major coup for the airport is Northrop Grumman’s recent announcement that it plans to establish a Manned Aircraft Design

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Center of Excellence in Melbourne, bringing with it more than 1,000 new jobs. And Embraer said last year it would be expanding its operations at the airport, adding a new research and development facility and creating 200 new engineering jobs in the process. Weatherman says Embraer employed some of the 8,000 people who were laid off by NASA (others were employed in the Orion programme; some went to Charleston to work for Boeing; some chose to retire). Today, the Space Coast has an 8.5% unemployment rate – the same as the US does nationally — which, while not perfect, Weatherman points out is better that the 20% some people were predicting. Wuensch also believes that the airport’s strategy of investing in the development of its facilities over the last 20 to 30 years has proved instrumental in helping it attract the new tenants. “We saw a slow down, but we’ve been developing the airport site for years in terms of our industrial sites, road system and utilities such as water and sewage, and the policy is beginning to pay off,” says Wuensch. “In fact we’ve put millions of dollars that we generated from the industrial park back into the ground and that has helped us. When companies like Embraer saw that we had already made millions of dollars worth of improvements, they were able to hit the ground running, so to speak.” Weatherman certainly has no doubts that Melbourne International Airport and the surrounding Space Coast region are unique, and the place to live and do aerospace business in the USA. “It’s a fascinating, family oriented place,” she says. “We have beaches, fishing and boating. And although we have a lot of major Fortune 500 companies here – not to mention everything going on in the aviation and aerospace sector – it still has a small-town quality about it. It’s a phenomenon.” AW

SPECIAL REPORT: AIRPORT CITIES

In pole position

Lidia Maczynska reports on Warsaw Chopin’s ambitious plans to develop Poland’s first airport city.

hopin Airport City is the first development of its kind in Poland and arguably the most ambitious project ever undertaken at the gateway. For, in the next ten years, 22.5 hectares of land near Warsaw Chopin’s passenger terminal will be transformed into a business and leisure area that will boast 17 A-class office buildings and two premium class hotels situated in a park with paths and water features. And thanks to the opening of a new rail link between the airport and the Polish capital in June 2012, it will only take 25 minutes to get to this new ‘city’ from downtown Warsaw. Warsaw Chopin’s director general, Michał Marzec, admits that the opportunity to boost his gateway’s income was the key driving force behind Polish airport operator PPL’s 2009 decision to unveil its Chopin Airport City dream. Marzec has absolutely no doubts that the massively ambitious project will be good for jobs and have economic benefits for the airport and the entire Warsaw region.

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Chopin Airport City – key figures • Total area: 22.5 hectares • Gross covered area: 13,27 hectares • Number of office buildings with additional functions: 17 • Usable floor space of the buildings: Over 170,000sqm • Height of buildings: 25 to 40m (6-8 storeys) • Storey area: Between 1,800-2,000sqm • Parking spaces: At least one space per 50sqm of area leased “The project will boost our non-aeronautical revenues, making us less vulnerable to the volatility of the aviation industry,” says Marzec, who notes that Chopin Airport City has already attracted interest from potential investors. “We believe that the development of real estate in this way will provide us with a stable source of non-aeronautical revenue for the company and increase value of the real estate itself,” he continues.

SPECIAL REPORT: AIRPORT CITIES

Useful information • Close to Warsaw’s ring road and conveniently linked to other places in Warsaw • Walking distance from the airport • 15 minutes (7km) to the city centre • Access to Warsaw public transport network • Limited vehicle traffic inside the airport city • ‘A’ class modern headquarters and office park • Profitable retail and service facilities • Up-to-the-minute technological and IT solutions • Eco-friendly solutions (‘Green Certificates’)

“It is true that many offices and commercial buildings have been built around Chopin Airport in recent years, but none will be so close to the terminal or as well connected by rail and motorway systems [S7,S8 and A2] to the centre of Warsaw and other regions across Poland.” The airport handled over 9.5 million passengers (+2.7%) in 2012, with PPL data indicating that a healthy 36% travelled on business. Although construction of Chopin Airport City is not officially due to begin until next year, work is close to completion on the addition of the new hotels – a five-star Marriott Renaissance and a two-star economy Hampton by Hilton – which are set to open at the end of 2013. With 11 floors, 225 rooms, five conference rooms covering a total area of 650sqm and its own swimming pool, spa, fitness centre and three-level car park, the Renaissance is set to make quite a striking new addition to Chopin’s skyline. The airport already has a four-star Courtyard by Marriot hotel, meaning that by the end of the year it will be able to offer more than 500 guest rooms a night and more than 20 conference rooms. PPL is now finalising the necessary environmental, zoning and land use permits to ensure that its blueprint becomes reality. It will then set-up a holding company, Chopin Airport City SA, to assume responsibility for developing and managing the project. “Once the company is registered, it will take over all responsibilities for implementing the project and preparing business plans for each of the development initiatives,” explains PPL’s authorised representative for Chopin Airport City, Aleksandra Matuszewska.

“As a special purpose vehicle it will be able to pursue development projects on its own or in co-operation with different business partners. Therefore, during the real estate development stage, developers and real estate investment funds will be invited to come onboard. “The benefits to us include the injection of additional capital and, of course, their expertise and knowledge of the real-estate market, in particular with regards to office developments.” Matuszewsk is, however, quick to point out that PPL has no intention of selling its 100% stake in Chopin Airport City. “Chopin Airport City project will contribute to the economic development of this part of Warsaw by creating new jobs during the construction phase and for many years to follow,” says Matuszewsk. “Indeed, within the next few years this neglected and seldom visited area by the inhabitants of Warsaw will be transformed into a modern, vibrant business park with recreational and entertainment facilities open to the public. People and companies will want to come here. “It would, therefore, make no sense at all to sell our investment, as it would mean giving up all future financial benefits and losing control over the real estate. It is simply not an option,” she insists. Matuszewska notes that Chopin Airport City has twice been showcased at the MIPIM real estate shows in Cannes and also at last year’s EXPO REAL in Munich, and on each occasion it was well received. “It has attracted a lot of interest among a large number of international developers and investment funds, although it is still too early to discuss the specific terms of any potential deals,” says Matuszewska. “We expect the first buildings to open to the public in about three to three and-a-half years’ time and the whole Chopin Airport City project, including the construction of the office buildings, to take at least 10 years.” Late last year, Warsaw Chopin unveiled a new-look airport city website (www.chopinairportcity.pl) designed to allow potential investors and leaseholders the opportunity to follow its ongoing development. A promotional video on the website allows viewers to take a look around the area and learn some key facts about the project. It also features an interactive plan showing buildings and visualisations of different parts of the airport city. The final word on Chopin Airport City goes to the airport’s director general, Marzec, who believes that its creative use of commercial land and public space will attract a host of international companies to locate their offices there. “The increased importance of this part of Warsaw for business will mean growth in prestige for the airport, city and region, and that can only be good for future route development,” enthuses Marzec. “Ultimately, we hope that Chopin Airport City will become the new symbol of Warsaw and one of its favourite places for work and leisure.” AW

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SPECIAL REPORT: AIRPORT CITIES

Outlet retail Creating Outlet Shopping Centres is potentially one of the most commercially successful ways of leveraging the airport location, writes Chris LeTourneur.

n the shadow of the global economic crisis, Destination Outlet Shopping Centres are the fastest growing retail concept across the Americas, throughout Europe and in Asia. The potent combination of premium brand merchandise offered at value prices has attracted local population bases and the travelling public alike to enjoy ‘affordable luxury’. Given this unique crossover between locals and tourists, Outlet Shopping Centre developers are strategically locating new retail projects at and around international airports to access this broad and appealing customer base. They are also becoming a vessel for introducing international retail brands into evolving retail markets in countries ranging from Canada and Australia, to the emerging mega-markets of China, Brazil and South Korea. Destination Factory Outlet Shopping Centres are proving to be one of the more lucrative land uses for airports as they leverage their landside properties to generate non-aeronautical revenue, stimulate regional economic diversification and become more active participants in property development. They have also demonstrated the important role of reinforcing air route development and establishing stronger destination appeal.

The Outlet Shopping Center concept Although the Factory Outlet Shopping Centre concept originated in the USA on the premise of liquidating out-of-season merchandise, which then lead to selling ‘factory-produced’ merchandise direct to the consumer (without the added costs of wholesale to retail), the concept has been further refined throughout Europe to include ‘luxury’ and ‘premium brands’. Unlike traditional High Streets and enclosed Regional Malls, Outlet Shopping Centres are characterised by the following features: • Destination oriented whereby most customers arrive by car. • Unenclosed single level open air formats. • Traditionally organised in long ‘strip retail’ configurations around vehicle parking lots, but now more inward-oriented evolving around ‘lifestyle village’ or ‘H-configuration’ pedestrian cores and connective armatures, around which parking areas are situated. • Started by selling ‘off-season discounted’ merchandise. • Evolved to sell ‘factory direct’ merchandise specifically produced for Outlet centres at discounted value-labelled prices. • Largely oriented towards fashion and homeware. • Not anchored by department stores, but rather by Destination Sports & Recreation Anchors. • Smaller shop size than standard regional shopping centres and higher sales turnover.

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• •

• • •

Total centre size ranging from 20,000 square metres to 40,000 square metres on 30 to 40 acres of land. Traditionally located 45 minutes out from downtown High Street areas and existing enclosed Regional Malls, so as not to compete with full price – full service stores in these established locations and to respect retailer radius clauses. Situated at gateway locations to metropolitan regions. Situated at major ground transportation highway interchanges. Increasingly situated at and around major airports.

The International Council of Shopping Centers (ICSC) publication, International Outlet Journal (IOJ) Pipeline 2012 catalogues the largest Global Outlet Centre portfolios around the world, which include: • Simon Property Group/Premium Outlets/Mills Malls USA – 90 centres around the world in the USA, South Korea, Japan, Malaysia and Mexico, as well as expansion of 12 additional centres in Brazil and 1 in Canada. • Tanger – 39 centres in the USA and Canada. • McArthurGlen Group – 21 centres in Europe and one in Vancouver, BC, Canada under development. • NEINVER – 14 centres in Europe. • Craig Realty Group – 11 centres in the USA. • Value Retail PLC – nine centres in Europe. • Horizon Group Properties – six in the USA. • Ivanhoe Cambridge Mills Canada – two in Canada and up to 3 being planned. • Taubman Centres – two in the USA. • Macerich – planning at least two in the USA.

Why Outlet Shopping Centres are locating at airports Unlike traditional shopping malls, Destination Outlet Shopping Centres have the unique ability to attract not only local trade area residents, but also regional residents and visitors from within a 200 mile drive time radius. Destination tourists arriving by air and vehicle are also a significant shopper segment, in some cases accounting for up to 50% of Outlet Shopping Centre sales volumes. This is why Outlet Shopping Centres increasingly co-locate with hotels and tourist attractions, at and around airports to extend dwell times and destination shopping trips. The correlation between Destination Outlet Shopping Centres and airports dates back to the mid-1990s when two of the largest developers and operators of Outlet Shopping Centres began to emerge in the USA (by the Simon Property Group) and Europe (by McArthurGlen Group).

SPECIAL REPORT: AIRPORT CITIES Edmonton International Airport’s Highway Commercial project.

In the USA, the world’s largest retail developer/operator, the Simon Property Group, evolved the ‘Mills’ Destination Shopping Centre concept, with projects strategically situated in proximity to airports. They include Grapevine Mills at Dallas/ Fort Worth International Airport (DFW), Arizona Mills at Phoenix Sky Harbor and Ontario Mills at Ontario Airport in California. Each of these Mills Malls targets an intra-state trade area of regional population as well as tourists flying-into these airports. Value Retail News (VRN) reports that Canadian ‘snowbirds’ vacationing in the Palm Springs/Coachella Valley comprise a dominant customer segment at Ontario Mills and similarly, these desert-bound air-travelling winter Snowbirds comprise one of the largest segments shopping at the Arizona Mills. Grapevine Mills, located 3km from DFW’s main terminals, takes advantage of vehicles and air travellers going to and from the terminals along the International Parkway. It features over 200 shops in 150,000 square metres of retail, dining and entertainment, anchored by the adjacent Bass Pro Shops store (outdoor recreation, hunting and fishing), which acts a destination hub attracting not only ‘airport-related’ customers, but also customers from around the Dallas-Fort Worth Metroplex trade area and beyond. Opened in 1997 and managed by Simon Property Group, Grapevine Mills takes advantage not only of the airport location, but also its access and visibility from the regional highway system that connects to DFW. The adjacent Great Wolf Lodge Waterpark Resort Hotel and 1,500-room Gaylord Convention Centre and Hotel further establish this airport commercial development cluster as a regional destination for shopping, dining and entertainment, situated at the northern gateway to DFW.

Simon Property Group also operates the world’s most prolific Outlet Shopping Centre operation, ‘Premium Outlets’, with 82 current properties worldwide and expanding. The term Premium Outlets refers to the tribal cluster of ‘international brand tenants’ that Simon Property Group has assembled and transported worldwide. It also refers to purchasing ‘premium brand merchandise’ at reduced prices. Similarly the Dolphin Mall operated by the Taubman Centers near Miami International Airport is a destination for Caribbean, South and Latin American visitors who are in pursuit of international brands at affordable prices. Like many North American Shopping Centre Developers/ Operators, including Simon Property Group, Macerich, the Cordish Company, Caruso Affiliated, Ivanhoe Cambridge, Riocan and Smart Centres, Taubman Centers is looking towards Outlet Shopping Centres as a key component of their operations moving forward to respond to the Premium Brand Outlet Centre trend. In response, to bring the Destination Outlet Centre concept to Canada, the ‘Mills Mall’ has been manifest by the Canadian shopping centre operator, Ivanhoe Cambridge. Vaughan Mills, the first of its Canadian Mills Malls, was built in 2004 in the Greater Toronto Metropolitan area, to capture the trade region of Canada’s most populous city. More recently, Ivanhoe Cambridge’s second Mills Mall is CrossIron Mills, opened in 2009 and situated only 11 km north of Calgary International Airport in Alberta, Canada. Similar to the Grapevine Mills at DFW, CrossIron Mills is anchored by the Bass Pro Shops store and the entire mall contains approximately 206 shops in 109,440 square metres of retail, entertainment and leisure space. In Europe, the McArthurGlen Group operates 21 Designer Outlet Centres throughout Europe. Originally from the USA, McArthurGlen

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SPECIAL REPORT: AIRPORT CITIES Bass Pro Shops at Grapevine Mills, DFW.

Group has its European roots in airports and travel retail, as it was originally established in London UK as a 50/50 joint venture with BAA (formerly the British Airport Authority), developing Outlet Retail Centres across Europe. In 2002, BAA left the venture to focus on its core operations after the 9/11 events, while McArthurGlen Group has become the strongest Outlet Shopping Centre developer/operator in Europe, with a portfolio of ‘Designer Outlets’ spanning eight countries.

Proactive approach from Canadian airports Now Canadian airports have taken a pro-active stance to embrace the Destination Outlet Shopping Centre wave. At Vancouver International Airport (YVR), the Vancouver Airport Authority has invested considerable efforts to master plan, market and implement the development of metropolitan Vancouver’s first Outlet Shopping Centre on airport property. YVR’s Vancouver Designer Outlet Centre (DOC) is being developed as a joint venture between the Vancouver Airport Authority and the McArthurGlen Group (from the UK), becoming McArthurGlen Group’s first Outlet Centre outside of Europe. Gary Bond, managing director of development for McArthurGlen Group, told IOJ and VRN that Vancouver International Airport “offers a fantastic opportunity, in terms of the partner, the catchment, the location, the economic strength of Vancouver and the tourism potential, in particular as the gateway to the Asian consumer”. With 57 flights weekly from YVR to China alone, one in seven of YVR’s passengers traveling to/from Asia, and a diverse population base with strong household incomes, Vancouver is a prime location for McArthurGlen Group’s Designer Outlet Centre concept. The YVR Vancouver Designer Outlet Centre ultimately involves approximately 39,000 square metres of leasable space, beginning with an initial phase of about 20,000 square metres. McArthurGlen Group plans on introducing its designer brand partners, particularly of the ‘luxury’ fashion stores at the Outlet Centre

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price point. The concept involves creating a ‘Village-like’ open-air pedestrian space around which exaggerated building facades will invoke a sense of place similar to a European Village, with most shop spaces being less than 250 square metres in size. A unique feature will be the districting of the Designer Outlet Centre to reflect the merchandise mix ranging from ‘Luxury’ and ‘Premium’ shops to ‘Lifestyle’ and ‘Active Wear’ shops, mixed together with experiential dining and a diversity of food options. The centre will also benefit from direct access to the Canada Line rapid transit connection to the Airport Terminal and Downtown Vancouver, facilitating capture of local trade area residential markets and tourists alike. The YVR Vancouver Designer Outlet Centre will clearly raise the bar for Factory Outlet Shopping Centres in North America. In Alberta, Canada, for the past two years Edmonton International Airport (EIA) has been proactively planning and marketing its Commercial Development Strategy. A key component of this strategy involves the airport’s 280 acre Highway Commercial (HC) property, planned by MXD Development Strategists and Stantec, which has a variety of uses ranging from retail and hotel, to office, exhibition centre and recreation. With exposure to over 65,000 vehicles per day and over three kilometres of direct exposure to Highway QE2, the north-south artery of Alberta through to USA and Mexico, and connecting to the prosperous Northern Alberta Oil Sands and Diamond Fields, this site is perfectly positioned for Destination Retail Development. The first phase of the Highway Commercial development is underway with the grading and installation of roads and infrastructure on 80 acres at the gateway to EIA. The primary emphasis of this first phase will be to develop the Destination Retail Centre components including shops, entertainment, leisure, dining and a Hotel cluster. Myron Keehn, vice president of commercial development at EIA, says: “The first phase of the Highway Commercial project has already

SPECIAL REPORT: AIRPORT CITIES

Vancouver International Airport’s Designer Outlet Centre.

attracted interest from globally recognised retail development and hospitality companies, which is symbolic of the site’s ability to serve air passengers, the airport community (6,000 employees and 10 million meeters/greeters per year), tourists, the traveling public, local and regional residents. “This project will become the ‘Gateway to Northern Alberta’ for shopping, business and recreation, responding to Alberta’s strong economy where retail sales have been growing at 7% per annum (the fastest in Canada) and there is virtually no unemployment with rates of less than 4%”. The EIA Phase 1 Destination Retail project is forecast to create 1,000 new jobs and stimulate eight to 10 million customer visits per annum. Similar to Edmonton International Airport, Halifax Stanfield International Airport (HSIA) in Nova Scotia, Canada, is exploring opportunities to establish commercial retail facilities on its landside properties to enhance its position as ‘Canada’s Atlantic Gateway’. MXD Development Strategists and Stantec are assisting HSIA in evolving plans to include the creation of a Core Commercial Shopping and Dining Village that will serve passengers, meeters/greeters and the airport employment community, while capturing the traveling public on Highway 102, the main highway connecting Halifax and Atlantic Canada. Recognising the strength of this key gateway location not only for air passengers and cargo, but also for capturing Atlantic Canada tourists travelling on Highway 102, Halifax International Airport Authority (HIAA) is also planning the development of a ‘Highway Commercial’ area, that will accommodate destination Retail, Leisure and Hotel functions. Michael Healy, HIAA’s vice president of infrastructure and commercial development says: “HSIA’s evolution to become Atlantic Canada’s gateway, commercial development is a primary objective for enhancing the regional economy while stimulating non-aeronautical revenues to offset major airport roads and infrastructure improvement costs”.

Healy reports that “a number of internationally recognised third party retail and commercial developers, investors and operators have expressed interest in participating in the landside retail development at HSIA”. Accordingly, HIAA is strategically positioning its landside properties to proactively respond to this interest. The Destination Outlet Shopping Centre concept has also been embraced in Australia, at Adelaide and Brisbane airports, where Direct Factory Outlet (DFO) shops have enjoyed the strategic airport location capturing locals and visitors. Based on the trends occurring in Canada, the USA, Asia and Australia, a direct and prosperous relationship is evolving between airports and Destination Retail Outlet Shopping Centres, harnessing the incredible connectivity of airports and their interface with regional transit and ground transportation systems. The result is a potent retail platform targeting local and regional trade area population bases, as well as lucrative tourist and visitor segments. Additionally, the non-aeronautical revenues stimulated through airports’ involvement in the development of Destination Retail Outlet Centres on their properties is substantial and the ability to introduce ‘new-to-market’ international brands at affordable price points has resulted in a win-win for everybody. Globally, we will definitely see more announcements of airport-based Destination Retail Outlet Centres in the near future.

About the author Chris LeTourneur is the president & CEO of Vancouver-based MXD Development Strategists, which is involved in the creation of airport cities, airport commercial development, landside airport master planning and mixed-use retail projects around the world. He can be contacted at chris@mxddevelopment.com

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SPECIAL REPORT: AIRPORT CITIES

A tale of two airports Dr John Kasarda reports on the impressive recovery of Belo Horizonte’s Tancredo Neves Airport, and how it went from a traffic nadir to a thriving international gateway.

t’s an increasingly common story – an older commercial airport located near to the city centre reaches saturation with limited or no prospects for expansion. Based on traffic forecasts, a new state-of-the-art airport is built on the periphery of the metropolitan area with considerable expansion capacity, but with far greater travel time between the airport and the urban centre. What should be done with the old airport? If it is kept open, how should routes be distributed between the two airports? In many cases, the older airport is simply closed with all flights transferred to the new peripheral airport. In others, the older city airport remains open, ostensibly as a domestic facility, but manages to compete effectively by retaining, and often winning, new passengers and by doing so stifling the growth of the new airport. As is usually the case, accessibility and convenience trump modern facilities. The latter was the case at Belo Horizonte in Brazil, with major consequences for passengers, cargo and route development at the new airport but also its anticipated surrounding economic development. This story has a happy and quite remarkable ending for the new airport, but it took tough decisions on route redistribution and major land-based infrastructure investment for this to occur. Let me explain.

Pampulha and Confins Pampulha’s Carlos Drummond de Andrade Airport, located 8km from downtown Belo Horizonte, opened in 1933 as a support facility for the Brazilian Air Force and became the city’s commercial gateway in 1936 when Panair do Brasil launched a flight between Belo Horizonte and Rio de Janeiro. Pampulha’s traffic expanded substantially in the latter part of the 20th Century in tandem with the growth of Belo Horizonte – the capital of the State of Minas Gerais – and Brazil’s third largest metropolitan area, containing 5.2 million residents. By the 1970s, Pampulha had reached capacity. While periodic facility upgrades occurred, it was cramped and outdated by emerging airport standards. Its single runway had no parallel taxiway and with

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Belo Horizonte’s urban expansion surrounding the airport ruling out further infrastructure development. There was no option but to construct a new airport. The site selected was Cofins, a semi-rural municipality on the northern periphery of the metropolitan area, 38km north of Belo Horizonte. The airport opened in 1984 as Brazil’s most modern aerodrome, with a terminal equipped to handle five million passengers. Known for decades simply as Cofins, the airport was formally renamed Tancredo Neves International Airport (TNIA) in 1986 after the former Brazil President. Like Pampulha, TNIA was operated by government airport agency, Infraero. Early forecasts showed that TNIA would be handling up to 20 million passengers by 2020, many of them international. The original design therefore called for two long-range runways and four 300,000sqm passenger terminals to meet forecast demands. The problem was that for 20 years after TNIA’s opening, the passengers didn’t arrive. By 2004, the airport was handling under 400,000 passengers per annum. In fact 10 years after opening, the new airport actually began to shrink while Pampulha’s traffic skyrocketed.

SPECIAL REPORT: AIRPORT CITIES

Between 1994 and 2004, Pampulha’s passenger volume grew from 735,010 to 3,194,715 (nearly four times official capacity) creating chaotic conditions. During this same 10-year period, TNIA’s passenger volume plummeted from 900,476 to 388,580 – only 19% of its single terminal’s capacity. TNIA’s biggest challenge, as noted, was accessibility – 38km from downtown was no match for Pampulha’s 8km. Moreover, the narrow, winding roadway through the hills from Belo Horizonte to TNIA was congested with dangerous intersections. This frequently made the trip from the centre to the new airport more than 90 minutes with a taxi ride costing more than $40. TNIA’s time-cost accessibility was simply too high to compete against Pampulha, despite its state-of-the-art facilities and the old airport’s constraints.

Bold recovery It became clear to federal and state agencies that if TNIA’s poor surface accessibility was not addressed the airport might forever be labelled a ‘white elephant’. All hopes for it becoming Belo Horizonte’s 21st Century engine for economic development would be dashed.

Led by the Minas Gerais State Secretariat for Economic Development, huge investments commenced in 2005, upgrading the 18km segment of TNIA’s highway into the downtown, making it a limited access four-lane expressway, starting near the airport. Other upgrades were made along this corridor called Linha Verde (Green Line) closer to Belo Horizonte along with improving airport area access roads. Within three years, travel time from downtown to the airport was cut nearly in half. A related accessibility challenge is being met by the development of a new northern metropolitan ring road that will connect the TNIA area to many of Belo Horizonte’s time-critical businesses and industries that are located at the opposite side of the metropolitan area. Expressways are also being built to major economic clusters that will form the backbone of the Belo Horizonte Aerotropolis (airport-integrated urban economic region). An even bolder, yet equally critical, action was taken by the State of Minas Gerais and Infraero in March 2005. Legislation was enacted to restrict Pampulha Airport to aircraft with no more than 50 passengers.

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SPECIAL REPORT: AIRPORT CITIES

This had the effect of shifting 130 daily flights from Pampulha to TNIA, immediately boosting the newer airport’s passenger volume to approximately three million, almost a 10-fold increase. TNIA’s enhanced route structure had a reinforcing effect through transfers supporting more routes development, catalysing passenger growth. TNIA’s passenger volumes accelerated, climbing to 5.6 million in 2009, 7.3 million in 2010, 9.5 million in 2011 and an estimated 11.5 million in 2012. In 2011, TNIA became the second fastest growing airport in the world, just behind Brazil’s Campinas-Viracopos International Airport, whose percentage increase was on a much lower base. By late 2012, TNIA was serving 233 flights per day to 32 cities throughout Brazil. The airport also has five flights to four international destinations: two to Miami (American Airlines and TAM), one to Panama City (Copa Airlines), one to Lisbon (TAP Portugal) and another to Buenos Aires (GOL) via São Paulo. Pampulha itself has carved out a successful new niche as a regional airport for interstate flights to many of Minas Gerais’ 90 regional airports and adjoining states. It also serves as a hub for corporate jets and other general aviation aircraft, meeting urban business community needs.

Economic impact As strategic decisions were being implemented to substantially upgrade TNIA’s surface connectivity and concentrate all major commercial flights at the newer airport, other strategic decisions were taken to attract industry, foster business development, and create jobs at and outward from TNIA. These included Minas Gerais government officials working with the Federal Ministry of Finance, Brazil Customs and Infraero to establish special economic zones at TNIA making it Brazil’s first airport to activate the country’s new industrial airport policies. Firms locating in these special economic zones receive tax relief, customs facilitation, and other business advantages. The state, through its Secretariat for Economic Development, recruited Brazil’s largest airline, GOL, to set up a major maintenance repair and overall facility at TNIA, creating 1,100 well-paying jobs.

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At the same time, virtually all state government jobs were relocated to an architecturally spectacular Administrative City constructed along the Green Line to TNIA. More than 16,000 people are currently employed there, with further commercial development evolving around it. The Administrative City is part of a broader Belo Horizonte Aerotropolis plan that covers a radius of 20km around TNIA. Aerospace is a major target with an expansive aerospace training and technology center (CTCA) being developed in Lagoa Santa about 6km from the airport where Embraer is locating its engineering research facility. Local universities are also co-operating with the National Civil Aviation Agency to provide pilots and university students with advanced aeronautical training facilities, and aircraft component manufacturers are being solicited. Approximately 8km south of the airport, a major multi-modal logistics platform is under development. North of the airport, IBM is partnering with five other entities to construct a $500 million semiconductor production facility that will be the most modern in the southern hemisphere. A high-tech aerotropolis corridor is also in the works, and this will constitute the spine for other microelectronics, biotechnology, and time-critical industries that benefit from airport access. Most of this development would not have taken place without the strategic vision and bold actions of Minas Gerais State government officials in partnership with others to make TNIA far better connected by surface and by air. State officials are working diligently to intensify service on existing routes and foster new domestic and international routes. In the process they are demonstrating that connectivity drives competitiveness and corresponding economic development – AW a remarkable achievement indeed.

About the author Dr John Kasarda is director of the Center for Air Commerce at the University of North Carolina and CEO of Aerotropolis Business Concepts, LLC. He can be contacted by email at johndkas@hotmail.com.

SPECIAL REPORT: AIRPORT DESIGN AIRPORT CITIES

Light and sound show Tina Milton discovers more about the increasingly sophisticated ambience-enhancing techniques being adopted by airports and the potential commercial and operational benefits.

n ever-increasing number of airports are beginning to realise that light and sound are powerful drivers of ambience within airport terminals. Used correctly, sound can soothe passengers’ moods by creating a feeling of calm that has been proven to increase spend at retail stores. While ambient lighting can be among the design elements used to set the background atmosphere, aid wayfinding, highlight retail offers and improve efficiency at boarding gates. But it is much more than just about putting in a few extra lightbulbs or turning up the sound on a public address system, as creating the right lighting and sound levels in the right places at the right times – in often huge terminal buildings – is a sophisticated job and sometimes, quite literally, a work of art. Acoustics expert, Julian Treasure, has long since realised the benefits of getting sound levels right in buildings and, just as importantly, the pitfalls of getting it wrong. Indeed, together with Biamp Systems, he recently published a report calling for a more integrated approach to acoustic design that incorporates sound technology with a more thoughtful approach to architectural design. The paper, called Building in Sound, suggests that everyday noise levels regularly exceed the World Health Organisation’s recommended rates, and it draws clear links between excessive noise/poor acoustics and ill-health, distraction and loss of productivity. Treasure, chairman of UK-based consultancy, The Sound Agency, comments: “Noise is a major threat to our health and productivity, but until now we have been largely unconscious of its effects because of our obsession with how things look. We need to start designing with our ears, creating buildings and public spaces that sound as good as they look. “Though academic research in this area is as yet, patchy, compelling initial evidence linking better sound to a heightened sense of well-being

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is emerging. In many cases, building in sound has been linked to far more fundamental measures, including increased sales, higher employee satisfaction and lower crime rates.” It is widely accepted that a relaxed and happy passenger is more likely to spend money at airport shops and restaurants than an unhappy one, but people seldom quote examples of airport acoustics when talking about improving conditions for travellers. However, Treasure claims that a pilot study to create a more ambient soundscape at Glasgow Airport several years ago proved that there can be a direct correlation between noise levels and a rise in shop/F&B sales. The soundscape was developed by The Sound Agency, working in collaboration with former owners BAA back in 2006, and Treasure claims that when played in the main lounge and walkways (but not in the stores themselves) during a three-month trial, it helped alleviate stress levels among passengers and led a 10% increase in retail sales. How did it work? Treasure recalls that the “de-stressing” soundscape contained some birdsong and musical elements, which were designed to be calming and slow. He also notes that it was generative – meaning that it was played live by a computer rather than being recorded and played – according to probabilities and algorithms inputted by The Sound Agency. “The feedback from passengers was that in a closed space like an airport, it gave them a feeling of openness and connection with nature,” states Treasure. “Birdsong is a sound that many people find re-assuring because we have learned over hundreds of thousands of years that when birds are singing we are safe. If they suddenly stop singing we get worried because something bad is about to happen. “Also birdsong acts like nature’s alarm clock and you know that when you hear the birds, it is time to wake up. So it is very good for putting you in a body relaxed, mind alert state.”

SPECIAL REPORT:AIRPORT AIRPORTDESIGN CITIES

Detroit Metro’s unique sound and light underground tunnel.

The soundscape was tested by alternating the days of use – one day on, one day off, for example – and results were analysed by passenger opinion polls, which were generally positive, says Treasure. Among other things, the strict routine allowed for a 100% accurate check of till receipts on the days when the soundscape was used and when it was switched off. “This was the interesting part, as the objective was to improve the passenger experience and reduce passenger stress levels,” insists Treasure. “But it did push sales up by between 3% and 10%, the biggest chunk of which was recorded at the World Duty Free store. That was the significant result and we proved the case.” Although the results have not been developed any further in an airport environment, Treasure notes that multi-sensory experiences are being examined for future use in European shopping centres. According to Treasure, four elements can create the correct sound and ambience in an airport environment, the first of which is acoustics. He cites Helsinki and several Scandinavian airports as examples of locations with strong acoustics, which are soft and not too reverberant, an essential point when dealing with buildings of vast scale. The second layer is noise, so every banging door, squeaky trolley or escalator, buzzing air conditioner unit or chiller cabinet, needs to be taken out or silenced. Following this, the right sound system is crucial, as is the content itself. “Using the correct equipment with clarity, quality and consistency, such as beam steered loudspeakers so the user can target where the sound goes and line arrays of speakers at ear level to eradicate echo is important,” notes Treasure. “Behind all that, we now have some very sophisticated DSP [digital signal processing] devices.” A quieter but equally as effective way of influencing the spending habits of passengers at airports can be provided by lighting, according to an increasing number of experts.

Amsterdam is a pioneer in this field courtesy of the March 2011 creation of “a multi-sensorial ambience” with LED lighting at a confectionery store in its busy Lounge 2. A Schiphol spokesperson explains: “It was installed to attract, engage and convert customers in order to drive sales in-store. We increased sales by 3% with this ambience. “It was measured with interviews and switching off these elements. In the future, the use of a lighting concept may be considered again for other retail projects.” Also interested in airport illuminations is UK-based lighting design consultancy JPLD, which works closely with The Design Solution – a company of architects and designers – on a number of national and international airport projects. Creative director, James Poore, emphasises that getting the basics of lighting ambience right is essential and adds a cautionary note on setting the background mood. He says: “Everyone is trying to save energy and, as much as possible, we would rather use natural daylight because of the health benefits and being resourceful. But if you get it wrong, you can actually completely change the mood of a space and give it a very negative feel. “By reducing the energy but keeping the light colour temperature – the colour of white light – cold, it actually reduces the perception of the space and how you feel when you walk through it, and you don’t feel comfortable being there. “The lower the light output, the warmer it needs to be to make it more appealing to the human psyche. That’s why a candle is so appealing, it’s a very low light but very warm, so you are drawn to it.” Lighting is used to make retail space seem bigger, but also give it more interest with multi-layering, adding some “body and soul”, says Poore, who adds that lit backwalls highlight products and trigger passengers’ inquisitiveness, as do jewels or pockets of light.

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SPECIAL REPORT: AIRPORT DESIGN AIRPORT CITIES

Amsterdam Schiphol’s Innovative Gate, which uses lighting to aid the boarding process.

“You want to guide travellers through the retail areas, but also make them hover and spend money,” insists Poore. Within a retail environment, different qualities and colours of light (in terms of temperatures of white light) can be used to showcase products, notes Poore. “For example, in a jewellery unit, you would use a cool crisp white light to illuminate something like a diamond and platinum, but you would not use that light to illuminate something made of gold, as it would lose its luster and becomes very flat,” explains Poore. “The key is using light fittings that have a very good colour rendering and this comes down to the quality of specification.” Aside from its use in retail scenarios, once the background lighting is implemented, multi-layers of light can also be used to guide passengers through the terminal to key areas and as a wayfinding tool through transient pathways, according to Poore. At Amsterdam Schiphol, impactful lighting is just one element of the ‘ambient experience’ created by the gateway in partnership with Philips at G7’s Innovative Gate. The gate, the first of its kind in the world, is specifically designed to eliminate passenger stress, improve “the travel experience”, drive boarding efficiency and improve passenger flows. The creative use of elements such as images, design, information services and entertainment were also used to further the comfort of passengers. Opened in June 2010, Schiphol’s unique Innovative Gate covers 700sqm and boasts features such as 200 seats, 700 ceiling panels, 1,000 fluorescent (LED) lamps and five kilometres of cables. Unlike the traditional gate set-up, passengers are greeted first by airline staff at a special reception area before being guided through a discreet security screening process. After passing through security, a seating area includes integrated lighting and audio to guide passengers to the right place, at the right time, as well as areas where people can work, and an enhanced comfort zone for first-class passengers. To increase the visibility of the airline – which most travellers view as their hosts at the airport – lighting at the gate reflects the colours of the carrier. This creates a feeling of continuity for the passenger and, as an added benefit, increases the visibility of the airline’s brand.

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Philips Design’s global director for ambient experience design and lead for the Schiphol G7 project, Jos Stuyfzand, says: “We introduced lighting to the whole process to support it. When passengers are waiting [at the gate], there is a big ceiling and side lighting component with a warm, light element for relaxing and when the boarding process starts a cool light prompts passengers to move, [which is activated by staff].” He indicates that one of the most important points of the project came from its emphasis on the needs of the end users as opposed to the designers or the professionals. “There was a substantial passenger experience improvement, and increased satisfaction from security and airline staff,” Stuyfzand notes. As the security area was much more open and collaborative, so that passengers could anticipate what was ahead, throughput increased from 3.2 people per minute to 4.5 people per minute (during the first three months of installation). Elsewhere, at Detroit Metropolitan Wayne County Airport in the US, both sound and light have been combined to create a tunnel ‘experience’ of an otherwise bland transfer walkway. Connecting concourses B/C with Concourse A and the McNamara Terminal building, the underground light tunnel is an artistic display of light and sound, which was installed in 2002 as part of the terminal’s design from conception. Detroit Wayne County airport authority spokesperson, Scott Wintner, comments: “We recognise the connection between ambience as a whole, and passenger satisfaction and the resulting impact on revenue. “The light and sound tunnel is one component of our facility that certainly impacts [that] ambience and has become one of the most talked-about features of the airport – particularly through social media.” It might not make Detroit Metro any money, but there is no doubt that the airport’s light and sound tunnel creates a memorable experience for passengers and helps create a unique ambience at the Michigan gateway. As airports strive to become more customer friendly, raise retail revenues and increase operationally efficiency, maybe it is time for more of them to place a greater emphasis on the sound and light experience in their facilities. AW

SPECIAL ASQ WINNERS REPORT: AIRPORT CITIES

Top of the class Asia-Pacific airports win the top five global awards in ACI’s annual customer satisfaction survey, writes Joe Bates.

total of 18 airports scooped the top honours in ACI’s Airport Service Quality (ASQ) Awards for 2012, with Asia-Pacific gateways leading the way by winning all five of the global best-by-size categories. Indeed, Asia-Pacific airports led by Singapore Changi, Incheon and Nagoya respectively, occupied the top five positions in the Over 40mppa, 25-40mppa and 5-15mppa categories and accounted for four out of the five in the 15-25mppa group, which was won by Seoul Gimpo. Hohhot, located in the Inner Mongolian Autonomous Region of China, was named Best Airport in the final 2-5mppa category, where Thailand’s Chiang Mai International Airport once again claimed fourth spot. ASQ king, Incheon, also picked up the top prize for being the Best Airport in the Asia-Pacific region, although ACI’s decision to discontinue the Best Airport Worldwide category denied it the opportunity to be named the world’s most customer friendly gateway for an eighth successive year. ACI made the decision at its 2012 World Annual General Assembly in Calgary as it wants to focus more attention on the categories that facilitate comparison, particularly airport size and region. The award winning performance of the region’s airports certainly hasn’t gone unnoticed by ACI Asia-Pacific’s regional director, Patti Chau, who enthuses: “I am delighted to see that Seoul Incheon is once again the top performer in our region and I’m particularly thrilled to see that out of the entire top performing airports under the Best Airport by Size category, over 80% are from the Asia-Pacific region. “This is a well-deserved recognition for airports in our region who are continuously striving for and committed to delivering excellent customer service.” It was a case of all change in the Best Airport by Region categories for Europe (Moscow Sheremetyevo), North America (Indianapolis) and Middle East (Abu Dhabi) while status quo was maintained in Africa (Cape Town), Latin America & Caribbean (Cancun) and, as previously mentioned, Asia-Pacific (Incheon). Sheremetyevo CEO, Mikhail Vasilenko, claims that his airport’s award is a testament to the “high professionalism and commitment of his team” to raise the bar on customer service based on the ambition of becoming the best airport in Europe in terms quality service by 2015. Indianapolis Airport Authority’s executive director, Robert Duncan, also paid tribute to his staff for helping make Indianapolis International Airport the Best Airport in North America. “Being the best airport in North America wouldn’t be possible without world-class employees,” comments Duncan.

AIRPORT WORLD/APRIL-MAY 2013

“I am proud of their dedication and I especially thank our frontline staff who greet our guests and keep our facilities clean, safe, and operational around the clock.” Special regional awards for airports handling less than two million passengers per annum were won by Upington (Africa), Skopje (Europe) and Victoria (North America). While Mombasa (Africa), Sanya (Asia-Pacific), Faro (Europe), Santo Domingo (Latin America & Caribbean), Abu Dhabi (Middle East) and Winnipeg (North America) shone in the Best Improvement by Region category. Sanjay Reddy, managing director of Chhatrapati Shivaji International Airport (CSIA) operator, MIAL, claims that his gateway’s third place award in the 25-40mppa category is a “reaffirmation of its vision to transform CSIA onto one of the world’s best airports that consistently delights customers” and be the “pride of Mumbai.” ACI World director general, Angela Gittens, says: “This an exciting time for airports. As airports and their operators increasingly accept the positive correlation between passenger satisfaction and airport revenues, we see more and more airports striving to meet, and in some cases exceed, the levels of customer service that their passengers expect from their favoured product and service providers. “Airports that deliver superior customer service stand apart from the competition and superior customer service remains one of the most important differentiators in the increasingly competitive airport industry. “Highly structured measurement, analytical reporting and open discussion forums are all features that have built the ASQ programme’s reputation as the premier airport customer service benchmarking tool in an era where customer loyalty translates into repeat passengers, healthy traffic and an improved financial bottom line. “I am delighted to see long-standing favourites take home ASQ awards as it is testament to the growing and accepted wisdom in the airport community that maintaining customer service excellence is central to a winning business strategy.” And she had some special words of praise for airports such as Hohhot (China), Skopje (Macedonia), Sanya (China) and Moscow Sheremetyevo, all of which joined the ASQ hall of fame in 2012. Their addition demonstrating their respective commitments to raising the bar on customer service. “I am equally excited to see other airports rank for the very first time this year, which stands to prove that it is never too late to adopt a winning customer service orientation to which the ASQ programme is fundamental,” adds Gittens.

SPECIAL REPORT: AIRPORT ASQ WINNERS CITIES

ASQ AWARD WINNERS BY REGION (8523( 1257+ $0(5,&$ %(67 %< 5(*,21 1. Indianapolis 2. Ottawa 3. Tampa

%(67 %< 5(*,21 1. Moscow Sheremetyevo 2. Malta 3. Edinburgh

)(:(5 7+$1 0 3$; Victoria

)(:(5 7+$1 0 3$; Skopje

%(67 %< 5(*,21 1. Seoul Incheon 2. Singapore 3. Beijing

%(67 ,03529(0(17 Winnipeg

%(67 ,03529(0(17 Faro

%(67 ,03529(0(17 Sanya

$6,$ 3$&,),&

$)5,&$ %(67 %< 5(*,21 1. Cape Town 2. Durban 3. Cario

/$7,1 $0(5,&$ &$5,%%($1 %(67 %< 5(*,21 1. Cancún 2. Guayaquil 3. Montego Bay %(67 ,03529(0(17 Santa Domingo

0,''/( ($67

)(:(5 7+$1 0 3$; Upington

%(67 %< 5(*,21 1. Abu Dhabi 2. Dubai 3. Doha

%(67 ,03529(0(17 Mombasa

%(67 ,03529(0(17 Abu Dhabi

BEST AIRPORT BY SIZE

2-5

5-15

15-25

25-40

40+

MILLION PAX 1. Hohhot 2. Guayaquil 3. Ottawa

MILLION PAX 1. Nagoya 2. Hyderabad 3. Tianjin

MILLION PAX 1. Seoul Gimpo 2. Chongqing 3. Taipei

MILLION PAX

1. Seoul Incheon 2. New Delhi 3. Mumbai

1. Singapore 2. Beijing 3. Hong Kong AW

AIRPORT WORLD/APRIL-MAY 2013

SPECIAL REPORT: CONCESSIONS AIRPORT CITIES NEWS

The buying game Airport World reviews some of the latest retail and F&B projects and developments across the globe.

All change at New York JFK’s Terminal 4 New York JFK’s Terminal 4 is to get 16 “stunning” new F&B outlets, which are expected to generate over $1 billion in sales over the next 13 years. The new additions will include an Uptown Brasserie, Shake Shack and Blue Smoke restaurant as the airport bids to bring a touch of New York’s culinary scene to the gateway. All are being introduced by concessionaire SSP, in partnership with JFKIAT LCC, which leases and operates T4 in a public/private partnership with the Port Authority of New York and New Jersey (PANYNJ). The $28 million project is part of the ongoing $1.4 billion expansion of the terminal, which is set to open Delta’s new Concourse B extension in May. SSP is the sole F&B provider in T4. Andrew Lynch, CEO of SSP, said: “Our new bars and restaurants include concepts created by some of the brightest and best-known chefs from New York and across the country. They will serve as a showcase of outstanding American dining at one of the most important airports in the world.” Other new outlets set to open in T4 include Dunkin’ Donuts, Street Food by Marcus Samuelsson, Central Diner, La Brea Bakery and The Palm Bar & Grille.

Pittsburgh facelift

AIRMALL USA and Italian retail operator, Airest Collezioni, have signed a seven-year agreement to open up to eight new outlets at Pittsburgh International Airport (PIT). The stores will be spread across a 10,000sqft area in PIT’s AIRMALL and form an integral part of an ongoing $10 million overhaul of the facility – the biggest since it opened over 20 years ago. When complete, AIRMALL expects the enhanced concessions programme will grow its annual revenue by between 10% and 20% over current figures. Jay Kruisselbrink, vice president of development for AIRMALL USA, says: “Airest Collezioni is responsible for bringing the most enviable lifestyle and fashion brands to airports in cities such as Venice, Dublin, Moscow and Glasgow. “Their global reach and relationships with the top brands worldwide make them the perfect partner for us as we transform the concessions program at Pittsburgh International Airport.” Monica Scarpa, CEO of Airest, adds: “Pittsburgh is the first North American operation for our business – with more soon to follow – and the AIRMALL at Pittsburgh is the ideal location for us in 2013.”

Elsewhere in T4, The Hudson Group is set to open five new specialty fashion stores – Michael Kors, Coach, Thomas Pink, Solstice and Victoria’s Secret – in a joint venture with the airport. The global travel retail outfit will also open seven new Hudson travel essentials stores, as well as a Discover New York souvenir shop in three phases between May and October of this year. Alain Maca, president of JFKIAT LLC, says: “One of the key benefits of Terminal 4’s redevelopment for the passengers is the shift to a post-security selling environment, so that passengers can shop at their leisure. Hudson’s team has worked closely with our group to deliver a world-class programme that will appeal to our diverse passenger mix.” Hudson Group CEO, Joe DiDomizio, adds: “Hudson first became part of the terminal’s concession programme shortly after the opening of T4 back in 2001. I am grateful to JFKIAT’s management for having the confidence in Hudson to allow us to play a major role in this dynamic project.” Hudson will operate 14 outlets in T4 when everything is up and running.

Taste of things to come

Toronto Pearson has brought a flavour of the city to the airport with the opening of two new restaurants – Fetta Panini Bar and Heirloom Bakery Café in Terminal 1. The new restaurants form part of the airport’s new partnership with F&B operator OTG to bring the best of Toronto’s culinary talent to the airport. Customers at the new restaurants can order food from their seat using iPads. The intuitive visual menu can be converted to one of 12 languages, including Chinese, Japanese, German, English, Hebrew, Greek, French, Hindi, Italian, Arabic, Korean and Spanish. Nine chef-driven concepts were announced last year and these are the first two to open and feature the culinary talent of Canadian celebrity chef Mark McEwan and restaurateur, Devin Connell. “Dining at the airport continues its ascent,” enthuses OTG’s CEO, Rick Blatstein. “Working closely with our partners at the GTAA, and talented chefs such as Mark and Devin, we’ve dedicated our focus on delivering a wonderful customer experience. “From the quality of the menu to the inviting atmosphere, these openings mark an exciting debut of what’s to come for Toronto Pearson.”

AIRPORT WORLD/APRIL-MAY 2013

53 53

SPECIAL IT TRENDS REPORT: AIRPORT CITIES

Smart thinking Airport World reviews SITA’s Flying Into The Future report on IT innovation in the air transport industry.

ew technology will continue to have a significant impact on the way we travel over the next decade, with IT innovation in the industry fuelled by airports, airlines and passengers. According to SITA’s new Flying into the Future report, over the next three years, the industry will see a major transformation in the way passengers buy travel services and use self-service technology along their journey. In addition, these journeys will take place in a fully mobile and social environment with airlines and airports intelligently using vast quantities of data to deliver real service and operational improvements. Nigel Pickford, director of market insight for SITA, says: “Information technology has already had a major influence on air travel, and with the number of global travellers expected to double by 2030, it will continue to lead the way for the industry. “Our survey analysis shows four major IT trends that will shape the entire travel experience, from how we book flights to how we interact with airlines and airports during the journey, to the kinds of services we expect.” Based on the findings of its four annual industry research initiatives – the Airline IT Trends Survey, Airport IT Trends Survey 2012; Passenger Self-Service Survey; and Baggage Report – SITA claims that four major trends which will shape the future of global air travel are:

1. The way passengers buy travel will change By 2015, both airlines and airports expect the web and the mobile phone to be the top two sales channels. Passengers are asking for a more personalised buying experience, and the industry is responding. For example, Alaska Airlines is one of several airlines with a travel app that alerts fliers to airfare deals from their hometowns and to cities where their friends live.

2. Passengers will take more control By 2015, 90% of airlines will offer mobile check-in – up from 50% today. Passengers will use 2D boarding passes or contactless technology such as Near Field Communications (NFC) on their phones, at different stages of their journey, such as at boarding gates, fast-track security zones and to access premium passenger lounges. Japan Airline’s Touch & Go Android app will allow passengers to pass through boarding gates using their NFC-enabled phones. France’s Toulouse-Blagnac Airport is piloting a similar service.

3. Customer services will become more mobile and social By 2015, nine out of ten airlines and airports will provide flight updates using smartphone apps. The industry is also exploring apps to improve the customer experience. At Tokyo Narita Airport in Japan, roaming service employees personalise the customer experience by using iPads to provide airport, flight and hotel information to passengers. In addition, Edinburgh Airport is one of several airports with apps that help passengers plan their journeys to and from the airport, track their flights, access terminal maps and reserve parking spots before they arrive.

AIRPORT WORLD/APRIL-MAY 2013

By 2015 BUYING BEHAVIOUR FOR TRAVEL SERVICES WILL HAVE CHANGED ning Good mor y John, enjo ry ta en im compl s with beverage asts all breakf t or in the airp y da lounge to

70% of airline executives believe that mobile apps will be an equally dominant sales channel

61% of passengers want more ‘personalization’ before engaging more with mobile commerce

89%

of airlines will sell tickets via mobile apps by 2015

74%

Today, of passengers book through airline websites

4. The passenger experience will improve thanks to better business intelligence By 2015, more than 80% of airports and airlines will invest in business intelligence (BI) solutions. Most will focus on improving customer service and satisfaction, often through personalised services. For example, one European airline, Vueling, researches customers via social media in an effort to understand them better. It then integrates this information into their BI programs to improve loyalty. Pickford adds: “Passenger needs and preferences are changing. Today’s passengers want more control throughout their journey. “They expect transformation in both the kinds of services airlines and airports offer, and the way they communicate with them. “At the same time, the industry is investing in business intelligence solutions and collaborating more to increase operational efficiency and improve customer service and loyalty.”

Smartphones and social media The findings should come as little surprise to industry leaders as aviation has historically been quick to adopt new technology and embrace new ways of doing business. In 2012, three-quarters of the people interviewed for SITA’s Passenger Self-Service Survey had booked their travel online, either directly or via online travel agents. The survey also discovered that while only 3% of passengers purchased airline tickets via smartphone apps and social media, there is convincing evidence that buying via these emerging channels will increase in importance. Indeed, the smartphone has rapidly become the must-have travel accessory, says SITA, with ownership among airline passengers soaring from just 28% in 2010 to 70% in 2012.

SPECIAL REPORT: AIRPORT IT TRENDS CITIES

By 2015 THE INDUSTRY WILL HAVE HIGHER QUALITY BUSINESS INTELLIGENCE

31%

53%

80%

of airlines will be sharing data with airports

of airports will be sharing data with airlines

By 2015

PASSENGER INTERACTION FOR CUSTOMER SERVICES WILL BE BOTH MOBILE AND SOCIAL GO TO

91%

of airlines believe that mobile apps and social media will become a dominant customer service channel

62%

of passengers are active on social media today

GO TO GATE 12

GATE

80%

of airports/airlines will invest in business intelligence solutions in the next 3 years

55% of passengers say to sharing personal data

It would appear that air travellers are also more comfortable than most using social media – 62% of passengers interviewed for the self-service study are active on social media, a higher rate than recorded for the general population in most regions. And SITA says that it is worth noting that social media will be one of the major sales channels for 13% of airlines and 14% of airports, predicting that kiosks will be an important sales platform for 20% of airports, but only 6% of airlines.

Mobile apps Based on IT trends research, SITA suggests that there is a strong desire among both airlines and airports to enable revenue generation via smartphone apps. Already, 44% of airlines enable ticket sales via apps and many more are gearing up, with 89% expecting to offer mobile booking by the end of 2015. Airports have been much slower off the mark, but 71% plan to be selling services direct to passengers via apps three years down the line. For today’s travellers, functionality such as flight status updates that take the stress out of their journey, are the highest priority for mobile services, says SITA. It adds that while there is interest in mobile promotions and retail offers, only 57% of those interviewed in the Passenger Self-Service Survey are currently open to receiving mobile advertising from their travel suppliers. However, that acceptance could reach 85%, if the advertising is relevant to customers’ needs

Self-service technology According to SITA, today’s passengers are very comfortable with self-service check-in and multi-channel interaction is commonplace. Over three quarters of respondents in the passenger self-service survey are regular or occasional users of both airport kiosks and online check-in. However, smartphones are rapidly gaining ground, with about a third of passengers now using this channel for check-in, and airlines predict that smartphones and websites will be the two most important channels driving passenger processing beyond 2015. This prediction is underscored by the speed with which passengers have taken to smartphones, tablets and other connected mobile devices. Travellers’ enthusiasm for smartphones currently outstrips the availability of airline apps.

YOUR FLIGHT NO.654 WILL LEAVE FROM GATE 10

89% of passengers want mobile flight updates, only 65% do via social media

70% 58% of airlines

of airports

will implement flight status updates via social media

Recent technology initiatives, such as the Passbook on Apple’s iOS6 operating system for the iPhone (launched in autumn 2012), flag up some of the opportunities ahead for smartphones to be used to self-process journeys. Passbook, which stores boarding passes and displays them on the iPhone lock screen when users get to the airport, is already supported by a limited number of airlines, and that support is growing. Another technology on the horizon is using near-field communication (NFC) chips embedded in smartphones to enable passengers to simply tap and check-in or tap and board their flight. As NFC is short range and supports encryption, it will allow secure, contactless transactions that will work even when the device is powered off. France’s Toulouse-Blagnac Airport became the world’s first to trial SIM-based NFC in a joint effort with SITA, Orange and BlackBerry during 2012. Selected passengers used the service on BlackBerry smartphones to access car parking, the boarding area, a premium passenger lounge and received immediate updates on changes to flight times, departure hall or boarding gate.

Baggage and self-boarding SITA admits that baggage is often identified as the biggest barrier to achieving full self-service check-in, with many of the passenger selfservice respondents still not using self-service check-in because they needed to check-in a bag at a counter. However, it says self-service baggage processing gained momentum across the industry in 2012, the year even saw Denmark’s Billund Airport implement the world’s first home-printed bag tag solution, allowing international travellers to avoid queues and simply present their boarding passes and drop off their pre-tagged bags.

Final word Pickford concludes: “Passenger needs and preferences are changing. Today’s passengers want more control throughout their journey. They expect transformation in both the kinds of services airlines and airports offer, and the way they communicate with them. “At the same time, the industry is investing in business intelligence solutions and collaborating more to increase operational efficiency and AW improve customer service and loyalty.”

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SOCIAL MEDIA

Being

social

Marc Ellams, head of passenger communications at Heathrow, talks to Steven Thompson about the gateway’s approach to social media. What social media channels does Heathrow use?

We’re predominantly on Facebook and Twitter @HeathrowAirport although we do have a presence on Foursquare, which people use to ‘check-in’ to places they visit, and that’s something we’d like to explore more.   We also have a LinkedIn presence, which is minimal, and we have a toe in the water on Pinterest and Instagram, and we’re looking at evolving those channels later in the year. With Foursquare there is an obvious synergy there for us, with the ‘check-in’ concept. In the future, we hope we can add value to the journey for passengers who ‘check-in’ with us by giving them more relevant information.

How many followers/likes do you have? We have around 130,000 on Twitter and around 50,000 ‘likes’ on Facebook. The immediacy of Twitter makes this the most popular channel for us. Ideally, we want to get to the point where our online community becomes increasingly self-serving and advice about travel is swapped between virtual friends.   You know you’re winning, and we’re starting to see this, when people in your community are answering queries asked by other people within the community. It becomes this self-serving beast, which really works, because ultimately, social media is a community tool.   As an airport we want to be able to say, ‘this is the Heathrow community space, come and talk in this space’, and hopefully people can get what they want and need out of it, with us helping and sharing where we can.   In terms of industry benchmarking, we look to companies like Lego, for example, who very much have that community feel, and that’s the model we’re working towards. What Lego do really well is they manage to get other people to put content in their space, and when you manage to do that then you’re really winning. We’re always keeping our eye on market leaders, even though people are also looking towards us as well, which is nice.

Who do you communicate with?   Predominantly, we talk to passengers, although more and more we’d like to be talking to influencers, who shape debates, people out there who are potential passengers. We look at our approach to social media across three fundamental elements: adding value to the journey, engaging with our passengers, and supporting their requirements.

AIRPORT WORLD/APRIL-MAY 2013

Currently, we work on a query-resolution basis, in the future we would like to work in a funkier, sexier and more ‘real’ way. If a passenger says to us, ‘can I buy baby milk at the airport?’ Rather than just saying ‘yes you can’, we want to send someone to find you in the airport and help you out, and really look to add value.   To this end, we’re already getting far more traction in terms of conversations, so rather than it being transactional – you ask me something, I reply, and that’s it – instead, we are establishing a relationship. So what we’re seeing more and more is people who come back and initiate the conversation when they are next at the airport.

How do you deal with an angry passenger on Twitter? It’s easy to panic and think, oh my God, it’s out there on social media, but actually, you have to be open and honest, you have to understand the fundamental problem.   You have to look at it from the customer’s point of view – put yourself in the customer’s shoes. What is this customer feeling at this point? They’re in the airport, it might be that their bag’s lost, you have to understand how that feels for them, and if you’re in social media, then you have to engage with them directly because that’s the medium they are in. You have to show them that you care and empathise, even if you can’t give them an answer immediately, you have to tell them that you’re going to deal with this for them, because we do care! The risk-reward factor is that, if you get it wrong with social media, it can go viral very quickly, but equally, if you’re backing yourself and you’re confident in what you do, then the opposite is true and you are recognised for your efforts. That’s kind of where we are now at Heathrow, which is encouraging.   Obviously, if you do get something that looks particularly sensitive then it’s a good idea to take it offline and go down the direct messaging route to resolve it, but ultimately believe in yourself and know that if you do give a good experience and handle the situation, then people will talk about it.

SOCIAL MEDIA

You’ve heard the old metric that people will talk 10 times more about a bad experience than a good one? Well, on social media, I think that dynamic has shifted, and it feels like people are far more willing to be positive, because there is that immediacy.    If you’ve had a good experience on social media then you have that same route to say immediately, ‘hey look what just happened’. Social media drives excellence because you have to be on your game.

How many people do you have working on social media? We have three to four people on it at any one time, but we do have the ability to extend the team if the airport is disrupted. We’ve made sure we have enough flexibility to support any issues that we might have, so if London experiences severe snow disruption, like we did in 2010, then you need to be able to deal with the demand, because that’s what customers want.

How has social media changed the way an airport communicates with its passengers? It has made everything more immediate. Today it is all about the here and now, whereas in the past in was more about tomorrow as the traditional ways of communicating – telephone calls, handwritten correspondence and feedback cards around terminals – inevitably delayed the process. Social media allows us to capture the stuff that people otherwise wouldn’t necessarily tell us about, even if it involves a point of friction on their journey through the airport. It is always good to be aware of potential problems, and from our point of view, this type of information is invaluable. True, it is a bit of a Pandora’s box, and you have to be ready to deal with an influx of feedback because there’s potential for it to be overwhelming, if you don’t know what you’re getting yourself into. But you just have to relax and accept that these issues were always there, we just never got to hear about them before, let alone were able to give our view or respond.   It is also worth remembering that if you weren’t on social media, those conversations would still be happening, you just wouldn’t be involved in them and you wouldn’t be able to shape the debate, help, or give information to inform opinion. One of the things we’re really

pleased about is the fact that being in this online space lets you deal with misconceptions.

What are the pitfalls of using social media for an airport?   There really aren’t any, although the fear is that you potentially leave yourself open to negative feedback. Having said that, it is worth remembering that how you present your brand online is critical to making social media work for you. We’ve a lot of debates about how our brand should be presented on social media, because in my opinion, it needs to change. After all, social media is the people’s channel and if you come in there in a corporate suit, so to speak, people won’t engage with you. In fact, they are most likely to turn off and won’t talk to you.   You need to translate what you want to say into something compelling. Content is key, ultimately. You have to check it by saying: “Would I want to retweet this? Would I send this to a friend?”   Don’t forget that you want to support your passengers – that should be the fundamental basis of what you’re doing. Tone of voice is important, and getting that right that is a key skill for the staff that you have working on social media.

In what ways can social media help an airport? It can help an airport massively in terms of understanding your passengers’ view of their experience passing through the airport. It can help you understand what they’re feeling at every point throughout that journey, which helps you then to find ways to improve. It also provides an opportunity to engage, and for us, one of the key things it has done is allowed us to get across some of our personality.   It’s taking that large corporation but interacting in a way that makes people think of a 1950’s corner shop. That’s what a lot of businesses have struggled with. You can start to be more human and have a relationship with your passengers. We’re getting there. We’ve got a large amount of people who are regular tweeters with us because they feel they’ve got some resonance with us, and I think that’s a great opportunity for airports to tap into. AW

AIRPORT WORLD/APRIL-MAY 2013

AIRLINES

Where next for Asia’s low-cost airlines? Low-cost carriers have only scratched the surface of their potential within Asia, argues Gordon Bevan of ASM.

t still amazes me that so many airports see low-cost carriers (LCC) as a recent phenomenon despite it being a model that has been working in every other sector for so long. There is nothing mysterious about it – if you keep airport fees down, LCCs will go and find passengers. Ryanair started back in 1985. EasyJet started in 1995, while AirAsia has been flying since 2001. JetBlue started operations in 1999. Don’t forget that Southwest has been operating low-cost flights since 1971, and in 2011 it carried more domestic passengers than any other US airline. Even in Asia, LLCs are hardly ‘new’. The trend is clear, and has been for many years: LCCs are a permanent fixture and they are growing. Asian airports cannot afford to be sniffy about them as part of their customer base.

AIRPORT WORLD/APRIL-MAY 2013

LCCs stop at the border Globally, Asian markets – with their huge order book of B737s and A320s – echo a global trend for LLCs to take up to 30% of seats on scheduled services. An interesting disparity is, however, clear in the potential growth of LCCs within Asia and on routes to and from Asia-Pacific (see opposite). In fact, it is far easier to enter the LCC market if you operate in a single region and stick to narrowbody aircraft that can sustain both international and domestic services. Many LLCs start on domestic routes, where regulatory approval is easier and they pose less threat to prestigious national carriers. But LCCs have slowly overcome policy constraints to operate largely between ASEAN states, following a path already blazed by US and European LCCs.

AIRLINES

Annualised global capacity growth share – LCC and legacy seat capacity

LCC seat capacity

Legacy seat capacity

Source: ASM

Success in the LCC path rests on: a sizeable source market; a significant price differential with incumbent competitors; being the first into the market; efficiencies of new aircraft; a sympathetic national aviation authority; sizeable markets within two to three hours from your base; and a rising level of discretionary spend within your source markets. Yet the evidence is clear, even within Asian economies: LCC expansion is rapid and tangible. Asia’s surge in LLC seat capacity can be seen in the data opposite.

throughput. AirAsia estimates it has expanded the Taiwan–Malaysia market by 87%, bringing airport traffic that simply could not exist under the legacy airline model. But it is tougher to drive the LCC model past the three-hour range of narrowbody aircraft. While some airlines operate between five and eight hours, legacy carriers dominate beyond this threshold.

Unique challenges in Asia

• they involve more uncontrollable costs, such as en route costs and fuel burn • yield drops dramatically with distance, especially in long-haul • scheduling freedom evaporates as airlines become subject to curfews, unsocial hours arrival/departure limits • crews need to be scheduled in different ways • airlines have to enter non-core markets such as airfreight to generate revenues • fleets need to introduce other aircraft types, raising complexity • legacy airlines can compete on price, as there is always an inventory at the back of the plane to deep discount • traffic right issues become obstructive • few long-haul markets require and can deliver traffic on a regular, year-round basis • a feeder market starts to become essential when you enter smaller, more seasonal or directional markets.

One aspect in which Asia differs from Europe or the US is the lack of airport competition. Asia has few out-of-town airports. Even secondary airports can be much smaller than those of a primary city, as urbanisation is heavily focused on capital cities. So, inevitably, LCC operations go head-to-head with national carriers. In Japan, domestic LCC operations have followed a stuttering but upward trend in capacity, which will continue with AirAsia’s expansion in the country. South Korea’s domestic and international markets have grown exponentially, and although domestic expansion has faded over the last three years with the availability of high-speed train services, the international market still seems hungry for LCC operations. The same can be said for Taiwan, where LCC growth is following the trend in other North Asian markets, despite a sticky political regulatory environment, particularly for flights to/from or over Mainland China. Even China has LCC rapid growth trajectories. While growth has been measured, this huge market clearly holds great potential at least on domestic routes, which are less heavily regulated than the international market.

Long-haul limits All markets behave the same. In a restrictive airfare environment, introducing LCC products makes a significant impact on an airport’s

Several factors work against the business model on longer distances:

And there are many more daunting obstacles. If long-haul low-cost operations were as simple to replicate as short-haul, it seems certain that Condor/Thomas Cook, Air Transat and TUI would have branched into this business. Jetstar, a unique success in this market, gets a leg-up from Qantas in terms of cross-selling and frequent flyer participation.

AIRPORT WORLD/APRIL-MAY 2013

AIRLINES

South Korean LCC capacity evolution – average monthly seats

Low-cost South Korean (domestic)

Low-cost South Korean (international) Source: ASM

So, unsurprisingly, lessons can be learned from a graveyard of long-haul LCCs, including Air Comet, Air Madrid, Air Europe, Oasis and Zoom. Australian Airlines was closed down and Flyglobespan’s entry into the long-haul scheduled market was swiftly overwhelmed by cost. All these airlines tried to corner tight market niches to focus their resources, but in doing so restricted their earning potential and lost their ability to grow. The growth trajectory of short-haul airlines provides an instructive contrast to the ultra-cautious growth of surviving European long-haul leisure airlines over 15 years.

How airports attract LCCs Aside from identifying the market, airports need to actively play their part – and not exclusively through airport charges. In fact, discounting airport charges is probably the simplest part of the equation and provides no guarantee of LCC participation, although it does get an airport on the list of potentials. Analysis shows that some of Asia’s largest passenger markets already have cheap airport charging regimes. Some of the largest airports with some of the biggest congestion issues do not differentiate between peak and off-peak pricing – so operations to Hong Kong, Taipei, Singapore, Manila and Guangzhou airports could be considered a bargain. Indian airports also appear to offer value for LCCs. The real savings come through airports creating more efficient operational procedures for LCCs. Although much of this is outside the control of airport companies, ramp licences for airport-handling companies should reflect the opportunity to provide more efficient work practices. Another area where airports can expand their appeal to LCCs is handling. If market conditions permit, handling can be opened up to non-airline handling companies, free from ingrained airline operating procedures suited to fully laden widebody aircraft operating to long-haul destinations.

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Non-airline handlers can cope with the flexibility of offering multi-tasked personnel that can turn a plane around without wing-walkers, with dual door entry and with bulk-loading baggage practices. Many turnarounds can be handled by a team of five or six, rather than the 10 that traditionally cover a legacy airline turnaround, bringing a huge cost-saving for the LCC. The traditional model is not sustainable and will either result in an LCC leaving, or curtailing any expansion opportunities. LCCs like power-in/power-out operations. A slab of ramp concrete that enables this form of operation is cheap, low-tech and efficient, cutting pushback time and costs. Despite the weather challenges, LCCs love their passengers to walk out to their aircraft. A central holding area and ground-level gates enable faster and cheaper turnarounds. Although it requires greater marshalling efforts, the LCC can control the speed of embarkation – especially if dual-door embarkation is also enabled. Much of this runs counter to the trend for Asian countries to construct larger and more complex – as well as more costly – airport infrastructure. So far, few airports have included bespoke LCC facilities within their redevelopment plans. In fact, airport planners acknowledge the importance of terminal design to legacy alliances, whose membership and commitment are extremely fluid, but not to LCC operations. Much airport development is proposed in order to avoid offending incumbents, rather than to embrace a business model that has demonstrated its viability in Asia every year for more than a decade. Some airports are only now starting to take LCCs seriously. But Asia needs LCCs. We are conditioned into thinking that growth at Asian airports is unstoppable. Yet strip away the ‘China Effect’ and some Asian airports would have no growth. This is worth remembering when you next chat to an Asian LCC at Routes Asia – they may bring a balance to your network that creates a more sustainable airport operation. AW

IT INNOVATION

Thinking 3D Nigel Rees discusses the merits of utilising Building Information Management (BIM) and 3D crowd simulation software to design new terminals and ensure airports make maximum use of existing facilities.

irport operators, passengers, the airlines and retail/F&B concessionaires are just a few of the many customers that planners have to please when designing an airport terminal. Indeed, the need to take so many stakeholder considerations into account means that it is crucial that airports get the planning process right, and then make the best use of the new facilities when they get them. It is said that the Asia-Pacific region alone is going to need 350 brand new airports over the next decade as demand soars from 4.6 billion passengers in 2012 to 12 billion by 2031, according to ACI. It might not feel like it now due to the still deflated economies of much of the world, but aviation faces a race against time to build the new airports, terminals and runways to meet future demand. As strange as it sounds, the creation of new terminals or even whole new airports from scratch, as is now happening in Mumbai (Navi Mumbai) and Doha (Hamad International Airport), represent a relatively easy challenge for designers as planners have a blank sheet of paper. The true challenge ahead for aviation is how it can squeeze more capacity out of its existing facilities. This essentially means finding ways of using and adapting available space to meet increasing demand and a changing way of doing business. The growing popularity of online check-in, for example, is likely to mean that the familiar sight of row after row of check-in desks in Departure Halls is likely to become a distant memory in the future. Similarly, the advancement of contactless technology is almost certain to replace physical ticket checks at gates, and the introduction of new aircraft could lead to the need for new facilities such as Pier 6, which was built at Heathrow’s Terminal 3 to allow it to accommodate the A380. Whatever the project, the movement of people will have to be a central consideration. It is increasingly likely, too, that any new infrastructure project will involve Building Information Management (BIM). BIM is the process of generating and managing building data during its whole life cycle. It calls for the use of real-time, three-dimensional (3D), dynamic, building-modelling software so that everyone collaborating on the design, construction and ongoing facilities management of a building shares all of the project information. AEC (architecture, engineering and construction) software developers have been highly focused on ensuring that their products are BIM compatible. Modelling crowd behaviour in real 3D, as required by BIM and which reflects the true nature of a building’s use, is still very much in its infancy and has so far only been truly achieved by MassMotion. This really does matter because BIM is becoming a global requirement. In the core markets for air travel growth, too, uptake is seemingly inevitable.

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In the greater Asian market, the seeds have been planted with projects like Gensler’s Shanghai Tower, which is due to become China’s tallest building when completed next year. It is generally believed that BIM will become the de facto methodology in the region by the end of the decade. The sheer size of the USA construction industry is making altering course towards a universal acceptance of BIM difficult, but there is no real doubt about the eventual result. Crowd simulation has to keep pace. In the UK it will be mandatory for all suppliers involved in any public sector project to use BIM tools by 2016 and, as a result, BIM is, in effect, a standard methodology in both public and private worlds.

IT INNOVATION

Originally developed for emergency evacuation planning, these programmes are now enabling building owners and operators to make better-informed decisions about, say, where best to site an extra check in desk or walkway, or whether the cost of them is really justified at all. Advanced modelling will take into account the behavioural characteristics of a building’s users – for instance asking if they are they more likely to give way to the left or right (something which does vary from country to country) – or factoring in preferences for using stairs to avoid minor hold up and how far people are likely to be prepared to walk. The latest releases can now give an unlimited number of individual virtual passengers specific tasks, such as going through check in, picking up a ticket or taking lunch, and imbue them with ‘intelligence’ to make decisions on what to do when they reach a bottleneck on their journey. Intelligent agents will linger in front of signs and puzzle over directions, and they’ll also go for a cigarette together outside of exits. “These predictions are probably as near to real life as it is possible to get statistically,” says Wieger Pasman, planning and transit consultant for Royal Haskoning DHV in the Netherlands. And underpinning all of these choices is real-life observation data.

A boost for business intelligence

Of course, it played a key role in the successful development of the 2012 Olympic Park, and it is often the case that big sporting projects like this accelerate uptake. South Africa’s BIM boom was catalysed by the opportunity to use it in the building of new stadiums for the 2010 World Cup, and there can be little doubt we will see the same thing happen for Rio 2016.

One of the first projects to benefit from 3D simulation and the insight of Erin Morrow, the Arup transport consultant who inspired, and continues fervently to drive the development of Oasys’ MassMotion 3D crowd simulation software, was the JetBlue’s terminal (T5) at New York JFK. In the few short years since Terminal 5 opened to accolades as the state-of-the-art, the potential for understanding crowd behaviour in and around airport terminals has broadened. The benefits of such smart simulation are no longer restricted to the design phase of a building or refurbishment projects. With more than 80% of airports expected to have invested in business intelligence software solutions by 2015, the list of “what if we tried this?” questions to be answered, is only going to grow. Crowd simulation also means that experimenting with different ideas and asking ‘what if?’ is no longer prohibitively expensive. While the algorithms ‘under the bonnet’ are complex, the output of these modelling programmes is not. Gaming-quality graphics can ensure that the outputs are easily interpreted on screen by nontechnical business managers, who are able to watch the flow of pedestrians through the building and between floors. Continually advancing his art, Erin Morrow now predicts that we will soon see crowd simulation that will model entire business districts or whole airports, showing how up to half a million people will occupy and use the space within and around buildings at any time. Suddenly, creating those 350 future-proof new airports doesn’t look so daunting. AW

Bringing it all together

About the author

Keeping people moving, ensuring that they can get from A to B efficiently and optimising their use of retail facilities, can be streamlined almost beyond imagination with the use of crowd simulation software.

Nigel Rees is commercial manager of Oasys, the software house of Arup and the developers behind the BIM-compatible MassMotion modelling software. www.oasys-software.com

AIRPORT WORLD/APRIL-MAY 2013

PROJECT WATCH

Hong Kong International Airport New Midfield Concourse and expanded apron to boost airport’s capacity.

project details Location: Hong Kong

ong Kong International Airport’s Midfield development is on course for completion at the end of 2015. Since the Midfield project began in January 2011, parts of the development have been tweaked as the Airport Authority of Hong Kong (AAHK) looks to maximise the potential of its remaining development space. Changes include expanding the size of the Midfield Concourse to 105,000sqm and incorporating a host of new green initiatives, such as the installation of one of the largest arrays of rooftop solar panels in Hong Kong. In addition to the five-level Midfield Concourse, which will have 20 parking stands, the first phase of the development will deliver a new cross-field taxiway, a major expansion of the West Apron and an extension of the airport’s Automated People Mover (APM) between the new satellite building and Terminal 1. In terms of design, the Midfield Concourse will boast a high-performance glass designed to allow a good level of natural light into the building whilst reflecting over 40% of solar heat. High efficiency water-cooled chillers – cooled with recycled condensate, grey and rain water – will provide air conditioning for the complex, which was designed by Aedas working as a sub-consultant to the Mott MacDonald-Arup joint venture. The expansion of the West Apron, which will be fully completed by the end of 2014, will add an extra 28 remote parking stands. The new additions will boost the passenger handling capacity of Hong Kong International Airport (HKIA) by around 10 million passengers a year, and with forecasts predicting that the gateway could be handling up to 97 million travellers and 602,000 flights annually by 2030, the need to raise capacity is obvious. Last year, HKIA welcomed a total of 56.5 million passengers and handled 352,000 aircraft

movements, representing annual growth of 4.7% and 5.3% respectively. AAHK’s chief executive, Stanley Hui Hon-chung, believes the Midfield Concourse development is not only a milestone project to enhance the airport’s handling capacity, but also an example of AAHK’s commitment to environmental protection and sustainable growth. “The Midfield Concourse is designed to be highly environmentally friendly,” enthuses Hui. “It has more than 35 green initiatives covering issues such as the building’s site, materials, energy, water and construction methods.” Alongside the Midfield project, the airport has also set out its long-term ambition for a third runway in its 2030 masterplan. “Our airport’s future development into a three-runway system is crucial if we are to maintain Hong Kong’s status as a leading international and regional aviation centre,” says Dr Marvin Cheung Kin-tung, chairman of AAHK. “The planning and development of airport infrastructure is very complex and requires a long lead time. With the government’s approval, we will immediately embark upon a three-phase process of project planning, approval and implementation.” The maximum capacity of the existing tworunway system is about 420,000 flight movements annually and it is estimated the airport will reach its maximum capacity between 2019 and 2022. In 2011, the airport authority carried out a three-month consultation to gauge public opinion on HKIA’s future development and 73% of people supported a three-runway system. The third-runway development received “in-principle” backing from the government last year and the airport is now carrying out a statutory Environmental Impact Assessment, which is expected to take two years. Once this is signed off, the project will take another eight years AW to complete.

Important developments: Expansion of Midfield Terminal Concourse and West Apron, new APM and crossfield taxiway

Scheduled completion date: 2015

Principal companies involved: Aedas, Mott MacDonald/Arup JV

Total investment: €1.2 billion (HK$12 billion)

AIRPORT WORLD/APRIL-MAY 2013

ENVIRONMENT NEWS

Going green

Steven Thompson takes a closer look at some of the latest environmental stories from across the globe.

Europe leading the way on environment

San Diego’s green build

A newly constructed distribution centre at San Diego International Airport has received LEED (Leadership in Energy and Environmental Design) Gold Certification from the United States Green Building Council (USGBC). The centre is the first newly built facility at SDIA to meet this level of environmental distinction and is the first LEED Gold-certified receiving and distribution facility in the world. In 2012, the authority received gold certification for the redevelopment of its Facilities Management Building. Gold is the second highest LEED certification available, after platinum. “This is a signature achievement for the developer and the airport authority,” notes airport CEO, Thella Bowens. “We’re committed to incorporating significant sustainable features into each new construction project at SDIA and to working with airport partners to achieve the same level of commitment to sustainable building and operating practices.” Located on the northside of the gateway, the 23,000sqft Receiving and Distribution Center provides a central delivery location for food, beverage, retail and other goods used at the airport. C&S was the project management and construction management lead for a team of consultants who developed the $8.7 million facility.

The success of its Airport Carbon Accreditation programme means that more than half of all European passengers now arrive at environmentally friendly airports, according to ACI Europe. The addition of London City, Malaga, Palma Mallorca, Tallinn and Tirana to the ACI Europe backed scheme ensures that the continent now boasts 71 carbon accredited gateways. ACI Europe’s director general, Olivier Jankovec, believes that the ever-increasing number of airports joining the initiative shows that the continent’s airports are leading a “quiet revolution” in lowering aviation’s carbon footprint on the ground. “Airports welcoming more than 56% of Europe’s annual passenger traffic are now Airport Carbon Accredited,” he enthuses. “It’s great to see new airports becoming accredited, but we also have a lot of airports renewing their accreditation and advancing towards carbon neutrality by reducing their carbon emissions and engaging others to do so as well.” Airports can gain accreditation at four different levels, working towards the top level of carbon neutrality. Currently, 14 airports, accounting for 5.3% of traffic, are carbon neutral. The programme recently partnered with the ‘A World You Like’ campaign, which was launched by EU Commissioner for Climate Action, Connie Hedegaard, last year to promote innovation in carbon reduction. ACI Europe’s Airport Carbon Accreditation was launched in June 2009 and expanded to Asia-Pacific in November 2011, when it gained the support of ICAO. To date, six airports in the Asia-Pacific region have become accredited – Abu Dhabi, Bengaluru, Singapore Changi, Delhi, Hyderabad-Rajiv Gandhi and Mumbai-Chhatrapati Shivaji. Further proof of Chhatrapati Shivaji International Airport’s environmental credentials came in the March announcement that the Mumbai International Airport Ltd (MIAL) operated gateway had been awarded ISO certification for its Carbon Emissions Accounting by Bureau Veritas. GV Sanjay Reddy, managing director of MIAL, says: “We are committed to being at the forefront of the aviation industry’s drive towards carbon-neutral growth.”

Sustainability key to aviation growth The importance of working together to ensure sustainable growth for aviation was top of mind at the inaugural Asia-Pacific Aviation/Aerospace Leaders Summit in Melbourne. Speaking at the summit, Paul Steele, executive director of the Air Transport Action Group (ATAG), said: “Air transport supports over 21 million jobs in Asia-Pacific and more than $470 billion in economic activity for this region. “As the world enters what is becoming known as the Asian Century, aviation’s important contribution to the region’s economies is becoming even greater. “While world air traffic grew by around 21% between 2005 and 2010, intra-Asian traffic grew by 135%. Passenger traffic between China and Africa went up 311%, between China and Brazil 256%. “And each time a large passenger jet flies across the world, its hold is full of high-value goods making their way to market.”

Steele said sustainability was the key to “worthwhile long-term growth”, adding that much-needed infrastructure must be delivered with environmental imperatives in mind and an emphasis on long-term land-use planning. He said: “Looking at the broader global issue of climate change, the aviation industry has set some of the most ambitious targets for reducing CO2 emissions of any sector. “All parts of the industry are responding with collaborative actions and many governments are stepping up to the challenge too.” ATAG joined with Aviation/Aerospace Australia in signing a memorandum of cooperation between the two organisations. Aviation/Aerospace Australia CEO, Jim Carden, said: “The summit clearly comes at a time of great challenge and change, as the Asia-Pacific region becomes home to most of the world’s middle class and the largest producer AW and consumer of goods and services.”

AIRPORT WORLD/APRIL-MAY 2013

WBP NEWS

The latest news from ACI’s World Business Partners Year to remember

Lufthansa Consulting GmbH (LCG) is celebrating its 25th anniversary as an independent Lufthansa subsidiary. It initially specialised in government-related, politically motivated projects – often in co-operation with the Federal Ministry for Economic Cooperation as well as the then German Society for Technical Cooperation (GTZ) – before establishing itself as a leading aviation consultancy in the 1990s. The last five years have been mainly taken up with complex airline and airport projects, particularly in Africa and the Middle East, where Lufthansa Consulting has advised on airport privatisation in the Republic of Congo and the restructuring of Saudi Arabian Airlines. “The management and staff of LCG are proud of having held their own in the face of increasingly complex challenges in the aviation industry and beyond for more than a quarter of a century,” says managing director, Dr Andreas Jahnke. “We are also continuing to provide tailor-made, individual solutions and innovative services for our customers so as to offer them a solid basis for business success.”

Dressing down

Victoria’s Secret has opened its first beauty and accessories store in Prague Airport, Czech Republic, in partnership with LS travel retail. The store offers customers access to an assortment of best-selling Victoria’s Secret beauty products as well as branded accessories. The store interior features lit focal walls, a gallery of iconic black and white imagery, and a video wall featuring Victoria’s Secret Supermodel video footage.

News from Nuance

The Nuance Group has completed the acquisition of its Turkish joint venture with Net Holding AS, acquiring the outstanding 18% of the company, which operates at Antalya, Kayseri and Zafer airports in Turkey. The company has also strengthened its executive team by naming Nicolas Girotto as its new chief financial officer. Girotto has worked across Europe in a number of senior finance roles in retailers such as Conbipel, Grand Optical and Grand Vision. He brings over 15 years’ experience to the position having successfully improved the financial structure, reporting and performance in different business. Commenting on the new appointment, Roberto Graziani, president and CEO of Nuance, says: “I am confident that his strong financial expertise and understanding of the retail market dynamics will benefit our business.”

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Raising the customer service bar at Dubai International The watchwords for a successful airport used to be safety, security speed and efficiency, but passengers now also expect top quality customer service involving ‘the human touch’ from kerbside to boarding gate. One gateway that takes its customer service commitment very seriously is Dubai International Airport (DXB), which has developed its unique ‘May I Help You?’ programme in a bid to ensure a positive passenger experience. Since 2011, G4S has provided the service, and its staff assist passengers – DXB handles 30,000 daily – with everything from wayfinding and flight queries to providing advice about the security screening process and local hotels. Indeed, over 800 G4S staff provide a range of services under the ‘May I Help You?’ banner that includes acting as customer service agents, scanning boarding passes and serving as lost and found personnel, in line with Dubai Airports’ wish for the programme to go far beyond employing a few extra members of staff to assist passengers. As a result, G4S describes ‘May I Help You?’ as an overarching programme of training, which includes role-play scenarios where staff learn about every aspect of what a passenger experiences passing through the airport. And, if excellent passenger feedback is anything to go by, it appears as if passengers seem to appreciate the airport’s efforts. According to G4S, there is also now plenty of data to show that DXB’s ‘May I Help You’ programme has improved the airport’s operational performance and boosted retail/F&B revenues by allowing passengers more time to spend in the gateway’s vast shopping and dining areas. Dubai’s vice president of operations, Majed Al Joker, says: “The contribution of G4S has been significant. They understand the demand of an ever-growing international airport and comprehensively meet the high standard of aviation security and facilitation.” David Stockton, G4S’s global aviation director, said: “We are really proud of our achievements in partnership with Dubai Airports, in particular with our involvement in the opening of Concourse A, and we are looking forward to delivering a better service for the passenger and our client.” G4S reported an 8% increase in its aviation sector business in 2012 to register a turnover of €350 million.

WBP NEWS

Lounging around

Plaza Premium Lounge has opened its seventh pay-in lounge in Malaysia in the International Terminal at Kota Kinabalu International Airport in Sabah state. Open to all passengers for a small fee, the 355sqm lounge is located directly after security and offers comfortable seating, complimentary Wi-Fi, a range of beverages and hot food, television, newspapers and magazines, shower booths and computer stations. Founded by businessman Song Hoi See, Plaza Premium Lounge claims that its lounges enable all passengers to enjoy premium lounge facilities without having to travel business or first class.

Vancouver to install new state-of-the-art BHS

Vanderlande Industries has started work on the phased installation of a comprehensive new baggage handling system (BHS) at Vancouver International Airport. Scheduled to come online in early 2016, Vanderlande says the new state-of-the-art BHS has been designed to accommodate future expansions and various growth scenarios over the next decade. The current scope of the ‘baggage backbone project’ focuses on a faster connection between existing baggage handling systems, a new sortation system and modernising the controls system for the airport’s daily operations. The new BHS system will utilise TUBTRAX, a high speed conveying system, and Vanderlande’s integrated control solution VIBES. Vanderlande’s project director, Robbert Faas, says: “This is an exciting challenge bringing these new technologies to YVR, an endeavour we are confident will be a great success.” In other news, Vanderlande has won the contract to supply a new baggage handling system for Brazil’s second busiest gateway – São Paulo-Guarulhos International Airport. Work on-site will start in August 2013 and the project is scheduled for completion in April 2014, in time for football’s World Cup Finals tournament in Brazil.

New remote tower system to become reality The Saab Remote Tower (r-TWR) is set to gain full operational certification later this year after becoming the first system to pass Site Acceptance Testing (SAT). Swedish air navigation service provider, LFV, has deployed r-TWR technology at Sundsvall and Örnsköldsvika airports to provide the Remote Tower Center (RTC) in Sundsvall with high-resolution video of the airports. “This is a brand new, cutting-edge technology for the industry, which allows us to safely deliver services while reducing costs for our customers,” says Pia Johansson, marketing manager for LFV Tower and Approach Control Remote Tower Services. The system uses a number of video, audio and other sensors to provide a continual, comprehensive view of an airport. “Achieving SAT is a major step forward toward the broader acceptance of this new approach to air traffic control and was accomplished due to close collaboration between Saab and LFV,” says Ken Kaminski, senior vice president of Saab Sensis. “Remote towers hold great potential for safe, cost-effective delivery of air traffic services to new locations and as a replacement for outdated facilities. It also opens the opportunity to merge multiple tower operations into one centre for more efficient services.” Saab is also deploying r-TWR systems for Avinor in neighbouring Norway and Airservices Australia.

Independent Consulting FZ-LLC Contact: Kim Silander, group chairman Address: Level 41, Emirates Towers, PO Box 31303 United Arab Emirates Tel: +971 4 313 2846 Email: info@independent.aero Website: www.independent.aero Independent Consulting supports airports, air navigation service providers (ANSPs), airlines and the ATC industry by providing operational and technical expertise by freelance consultants from around the world. It has three main business units – an Under Independent Academy; Under Independent Services; and Under Independent Aviation Efficiency – and has been involved in projects for customers ranging from EUROCONTROL, Dubai Air Navigation Services, AEROTHAI and DCA Malaysia to CAD Hong Kong. Most recently, the company was awarded a contract to support Gatwick Airport with aviation efficiency and CDM expertise for its A-CDM55 project. OTG Management Contact: Jaimini Erskine, director, business development Address: 352 Park Avenue South, 10th Floor, New York, NY 10010 USA Tel: + 1 212 776-1478 Email: Jaimini.Erskine@otgmanagement.com Website: www.otgmanagement.com OTG is an award-winning airport F&B operator with more than 175 restaurants and retail boutiques in 10 airports, including Minneapolis-St. Paul, John F Kennedy, LaGuardia, Toronto Pearson, Boston Logan, Tucson, Washington National, Orlando Chicago O’Hare and Philadelphia. Since its entry into airports in 1996, OTG has been recognised throughout the industry for its strong customer focus and groundbreaking innovation, growing to become the second largest privately held airport food operator in the United States in just over a decade. Wells Fargo Securities Contact: Kevin Carney, director Address: 375ParkAvenue,6thFloor,NewYork,NY10152USA Tel: (212) 214-6557 Email: kevin.g.carney@wellsfargo.com Website: www.wellsfargo.com The company provides investment banking services and commercial lending for airport operators. Wells Fargo & Company is a diversified financial services company providing banking, insurance, investments, mortgage, and consumer and commercial finance through more than 9,000 stores and more than 12,000 ATMs and the Internet (wellsfargo.com) across North America and internationally. One in every three households in the US does business with Wells Fargo, which has $1.4 trillion in assets and more than 265,000 team members in more than 35 countries across our 80+ businesses. “We want to satisfy all our customers’ financial needs and help them succeed financially,” is its vision.

AIRPORT WORLD/APRIL-MAY 2013

TRAFFIC DATA

ACI traffic trends ACI projects a 7.2% increase in passenger traffic in Asia-Pacific for the period covering 2013 to 2017. This positive outlook is in large part due to expectations that the region’s economy will continue expanding at a robust pace, on the heels of a global economic recovery. China is expected to be the principal driver of traffic growth in the region due to the sheer size and strength of its economy. Japan on the other hand, despite accounting for a large share of traffic will not be a major driver of growth due to the maturity of its economy.

Asia-Pacific traffic growth to peak in 2014 8%

Growth rate

8% 7.5% 7%

7.1%

7.3%

7.2%

7.1% 6.8%

2012

2013

2014

2015

2016

2017

Medium-term passenger forecast for Asia-Pacific – 2012-2017 (millions) 10% 9%

9.5%

Growth rate

8% 7%

7.9%

7.2%

6.1%

4% 3% 2% 1% 0%

1.6% Total Asia-Pacific

China

Japan

India

Rest of Asia-Pacific

A forecast prepared by TFAS (Traffic Forecast Advisory Services) A partnership between ACI and DKMA, TFAS offers world-class traffic forecasting services. We provide airport specific traffic forecasts for the purpose of infrastructure development, investments and business planning. Recent projects include traffic forecasts for several Australian airports, including Perth and Mount Isa. For more information: Telephone: +41 22 354 07 54, Email: info@dkma.com, Website: www.aci-forecast.aero

For 2012, preliminary passenger figures are sourced from ACI and, for the remainder of the forecast period, data is projected using regressions developed based on the most recent forecasts of economic growth. If and when necessary, adjustments were made to the regression-driven results.

AIRPORT WORLD/APRIL-MAY 2013

The last word Joe Bates gets up close and personal with sports psychologist and leadership expert, Dr Gregory Dale.

Factfile

Are there parallels to be drawn between managing an airport and managing a sports team?

Name: Gregory Dale Job title: Director of Sports Psychology and Leadership for Duke University Athletics Nationality: American Time in the aviation industry: Three years Best known for: Helping individuals and teams achieve their goals and dreams Little known fact: I spent my childhood in Alaska where I developed my love for flying in a Piper PA-18 Super Cub 150.

There are many parallels because there is a lot of pressure to managing an airport. They [airport leaders] have to build and perform to a high level and are accountable, and it’s very much like that in the athletics world. You talk about team culture and team dynamics and leadership and leading teams and it’s very much the same. The terminology may be different, but the principals are very much the same, so I learn a lot in athletics that helps with airport teams and vice versa.

Can you make someone a team player? It’s very difficult, especially if they are highly talented and successful as you have to get them to put aside their agendas and what’s best for them for the betterment of the team. I would argue that the art of being a great leader is getting people to do this and learn that if team does well, everybody is more likely to achieve their goals.

Can you tell us more about the team building exercises you’ve conducted for ACI World? I worked with Angela and her colleagues after they moved offices to Montréal and really tried to help them think about how they work together as a team and understanding each other’s different personalities. Many of them were new to the roles, of course, and the ones that moved from Switzerland had to embrace a different culture. I suppose I was really starting to help the new members of staff start off on the right path, so to speak. They are a great team and they seem to get along very well.

Have you worked for any airports? Absolutely, I’ve provided team building and leadership training at Dallas/Fort Worth International Airport and a couple of airports in Florida in the US. I am currently working with ACI Global Training, The Ohio State University and Concordia University to launch a leadership programme for airport supervisors and managers this June. The plan is for this three-day programme to then be offered at various airports and locations around the globe. I am very excited about that opportunity.

Do you have any leadership success stories in sport that airports bosses could possibly relate to and learn from? Too many to mention in this article! However, one that springs to mind, is the job US Olympic basketball coach, Mike Krzyzewski, did in basically taking a team of individual superstars in their own teams and moulding them into a gold medal winning team. He did this by getting them to put aside their egos, differences and agendas to be the star player to play as team to win the gold medal for their country.

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In athletics we talk a lot about having a purpose every day. In fact, at some of the teams I work with, in the morning when the players are stretching and warming up, the coach asks them what their purpose is for that day. He tells them what he’s working on and wants to know the same, because in athletics there are no half measures. You are either getting better every day or getting worse as there is no such thing as coasting along, because if your competitors are working harder than you are, they are improving more than you. So always focus on improving. Another principle we focus on is the process of performance because you are much more in control of that than you are outcomes. Everyone wants to get to the next level and ultimately the ‘big time’, so what we say in order to get there you’ve got to make the ‘big time’ at the level you are at now. You may do what you do really well, but do it exceptionally well and you will have a better chance of reaching your outcome goals. It is also important to remain focused and leave outside distractions at the door when you come to work.

Do you believe that you can be taught to become a good leader? I definitely believe that there are certain qualities a leader must have, and that everyone has the potential to be a leader, but not everyone has the courage to do it or wants to be a great leader. However, you can develop skills that can help you grow into a great leader. You don’t have to be like William Wallace on your white horse leading the charge and being this great motivational speaker all the time. You can be very quiet and reserved and be a fantastic leader, you just have to surround yourself with people that can take on some of those roles that you’re not so comfortable with and complement you. However, there will be times you have to do something you are less comfortable with and step up and lead the troops so to speak. In essence, I guess I am saying we all have strengths. We should play to those strengths and surround ourselves with people who compliment us because they have strengths in areas where AW we are lacking.