NEWSLETTER

Other Articles Last modified on July 19, 2018

Back to the future

Joe Bates looks back at April’s ACI Asia-Pacific Regional Assembly, Conference and Exhibition in Narita and discussions about the future challenges and opportunities facing the region’s airports.

packed conference programme featuring aviation industry leaders from across the globe, a variety of hot topics to discuss and the chance to sample some Japanese culture both modern and old made this year’s ACI Asia-Pacific Regional Assembly, Conference and Exhibition 

in Narita one to remember for all 521 delegates and 41 exhibitors lucky enough to be in attendance.

The event officially began with opening addresses from Narita International Airport Corporation’s president and CEO, Makoto Natsume; Japan’s Parliamentary Vice Minister of Land, Infrastructure, Transport and Tourism, Kazuo Yana; Chiba Prefecture’s vice governor, Wataru Takahashi; and ACI Asia-Pacific president and Changi Airport Group (CAG) CEO, Seow Hiang Lee.

Lee told delegates: “Our region, which includes the Middle East, is the largest and fastest growing aviation market with passenger volumes growing year-on-year by 8% and 5.3% in Asia-Pacific and the Middle East respectively.

“Despite the looming challenges that continue on the horizon, many airports posted annual growth rates above the historical average in 2017. But to support this growing environment, a continuous investment in airport infrastructure remains an important imperative for all of us to ensure that the capacity is there when needed.”

He cited Tokyo Narita’s plans for a third runway and extension to its existing second runway as an excellent example of the capacity enhancing work being carried out by airports across the Asia-Pacific region. He also praised Muscat’s newly opened terminal and Incheon’s new Terminal 2, noted that Beijing Daxing is set to open late next year, mentioned other proposed or ongoing development projects at Hamad, Hong Kong and Dubai World Central and welcomed the Australian government’s decision to build the Western Sydney Airport.

A keynote address followed from NEC Corporation’s president and CEO, Takashi Niino, which gave delegates a glimpse of the high-tech future that possibly awaits the aviation industry and the world at large.

An all Japanese panel discussion followed with moderator, the University of Tokyo’s visiting researcher, Katsuhiro Yamaguchi, leading a panel discussion entitled ‘Sustainable Tourism in Japan: Stimulating Economic Growth Through Tourism Development’.

Tokyo Narita’s senior executive vice president, Futoshi Osada, and Kansai Airports’ representative director and CEO, Yoshiyuki Yamaya, represented the airport side of things during the debate.

BTTF2

Leadership Forum

Next up was the ‘Leaders Forum – Airport Industry Beyond 2020’, a panel discussion moderated by ACI World’s director general, Angela Gittens, which featured some of the best-known names in the industry in the shape of Oman Airports Management Company (OAMC) CEO, Sheikh Aimen Al-Hosni; Airports Company South Africa (ACSA) CEO and current ACI World chair, Bongani Maseko; Arup’s strategic aviation advisor and former Aéroports de Montréal president and CEO, James Cherry; and the re-appearing Lee and Natsume from CAG and Tokyo Narita respectively.

Topics covered included what they considered to be the top airport priorities for future proofing their businesses; the need for greater collaboration between airports and airlines; and the challenges of attracting and retaining staff.

In response to the top priorities question, OAMC’s Al-Hosni said: “It is important to make better use of our existing facilities before considering costly infrastructure expansions, and one way of doing this is to invest in IT and provide good solutions for passengers.”

He noted that simply making it easy to get online made passengers happy as today’s travellers want to be connected 24/7, and this sometimes had the added benefit of helping reduce queues at check-in, introduced them to the airport’s facilities and made wayfinding easier.

On the same topic, Cherry – a former ACI World chair – said: “I think [in planning terms] we don’t do enough to truly anticipate where technology is going or the changing demands of our passengers. So, I believe that every few years we should all sit down and reflect upon what are the emerging technologies that are going to affect us, and there’s dozens of them right now, and what are the things that are happening in our environment that are going to impact on us.

“Very often, and we’ve all been subjected to this, we get demands that are driven by security, government or immigration requirements and we can’t deal with them effectively so we shoehorn them into our buildings and our passengers suffer as a result.

“When I talk about anticipating new technologies, I am not thinking about this year or next I am thinking about five, ten, twenty years out as when you pour concrete you are typically building something that is going to last at least 30 to 40 years.”

Maseko revealed that as technology was almost certainly going to be the biggest disrupter in the future, ACSA was considering the possibility of co-developing solutions with IT service providers rather than waiting for them to come to ACSA with solutions.

He also mentioned that airports needed to be flexible in their future planning to take into account new trends and, on a separate issue, touched on the difficulties ACSA faces in holding on to good, young staff.

In terms of the latter, he stated that a possible solution to the challenge could be to develop better defined career paths, which clearly outlined the growth opportunities for them within the aviation sector.

Cherry commented: “Aviation is a fascinating career and once you get into it, people rarely leave. It is an exciting place to be and great to be part of but we have to do a better job of selling it. We have to get into the universities and community colleges and sell aviation and that’s for the benefit of airports, airlines, pilots, air traffic control and the industry across the board.”

However, arguably it was the Association of Asia Pacific Airlines (AAPA) director general, Andrew Herdman, who set tongues wagging with his brutally honest assessment about whether today’s airports are delivering good value for customers, pondering whether passengers knew that airport charges accounted for around $40 of the cost of each airline ticket.

Herdman said: “I am not a proponent of saying we want tin sheds [as terminals] as even the big, successful LCCs need sophisticated baggage handling systems, air bridges and connectivity, so you need scale, service and good quality infrastructure. But, having said that, you have to focus on productivity and sweating the assets to get more throughput and improve efficiency to reduce the unit costs.

“I’d like to see more emphasis on capital efficiency measured in terms of what’s the impact on unit costs. I don’t know of any other industry that says we are going to double the size of the factory but the unit costs of doing this are going to be higher. It’s always lower, so we need to try and find a way in the airport infrastructure business of delivering a lower unit cost and better value to the customer as that is the key to sustainability.”

BTTF4

Airport privatisation

After lunch, ACI World’s director of economics, Stefano Baronci, introduced the organisation’s new Policy Brief on Airport Ownership, Economic Regulation and Financial Performance before taking part in an informative debate entitled ‘Airport Privatisation – To Be or Not To Be?’

Talking about using privatisation as a catalyst for developing airports, Kansai Airport’s co-CEO, Emmanuel Menanteau, responded by asking: “Do you think we have any other choices?

“Privatisation of any asset is the result of a government decision. In most countries when a government creates the regulation for privatisation, there are good reasons. The main reason, of course, is the need for investment as the government cannot afford the cost of building new infrastructure.”

He noted that the process often reduced and allowed for the reallocation of public debt and in many cases led to huge improvements in airport efficiency and customer service standards, “ultimately bringing the best results for passengers.”

Sydney Airport’s chief operating officer, Hugh Wehby, was as equally bullish about the advantages of privatisation, claiming that in his airport’s case the 2002 deal had achieved all of its objectives and more in terms of delivering on the Australian government’s original targets.

“Sydney, like a number of Australian airports, was facing a substantial investment regime. Service standards were slipping. One of our largest two airlines [Ansett Australia] had collapsed and there was enormous demand coming from passenger growth,” said Wehby.

“So, the government turned to the private sector to try and help solve these issues. Investment was needed in the first instance and we have spent around A$300 million a year without building a new terminal or runway because we have had to invest in so many facilities.

“The Australian government’s goal was also to create the best passenger experience so it set the regime up to succeed by introducing a regulatory framework that was transparent, consistent and had longevity.”

Also on the panel were GMR Hyderabad International Airport’s CEO, SGK Kishore; Societe Generale’s head of infrastructure finance for Asia-Pacific, Gavin Munro; and Masaharu Kubota, director general of aviation network development at Japan’s Civil Aviation Bureau.

BTTF5

Annual Assembly

Day 1 ended with ACI Asia-Pacific’s annual Regional Assembly followed by a Gala Dinner where an unexpected highlight of the evening’s entertainment was the sight of ACI World’s Gittens on stage kicking an animated ball that was being projected onto a huge screen behind her!

The Regional Assembly itself provided ACI Asia-Pacific’s regional director, Patti Chau, with the chance to highlight some of the Regional Office’s achievements over the past 12 months as well as for members to elect a new president and first vice president and celebrate the official presentation of a number of awards that included Airport Carbon Accreditation certificates, ACI Asia-Pacific Green Airports Recognition trophies and the ACI Asia-Pacific Young Executive of the Year prize.

CAG’s CEO, Seow Hiang Lee, was formally elected president of ACI Asia-Pacific and Kansai Airports’ Emmanuel Menanteau was named as the region’s new first vice president. Both positions are for two years.

Rejoining the Regional Board are Queen Alia International Airport’s Kjeld Binger (second vice president) and OAMC’s Sheikh Aimen Al Hosni (secretary treasurer) while Airport Authority Hong Kong’s Fred Lam was re-elected second vice president. New Sydney Airport CEO, Geoff Culbert, and Guangdong Airport’s general manager, Kejian Zhang, were also elected to the board for a period of three years.

ACI Asia-Pacific now boasts 106 members that between them operate 605 airports in 49 countries and territories with the newest airport members being Qeshm International Airport (Iran) and Ras Al Khaimah International Airport (UAE).

Members took a unified stance to empower airports’ economics and environmental efforts with two new resolutions.

Resolution 1 was a Call for Support and Recognition to Create Fertile Ground for Sustainable Infrastructure Development to Serve and Support the Asia-Pacific Communities; and Resolution 2 was a Call for Airports to Adopt Waste Management and Renewable Energy.

Chau noted: “As one of the most diverse regions in the world, economically and geographically, it is important to recognise that there is no one-size fits all solution on how airports should be run.

“Airports should have the flexibility to determine the most appropriate charging system, ownership and management models to best serve and support their communities.”

BTTF6

It was noted that in 2017, air traffic in Asia-Pacific and Middle East reached approximately 3.3 billion passengers and is expected to double by 2029, meaning that significant investment in airport infrastructure, operations and developments is required to equip the region to cope with surging traffic growth.

Gittens said: “The diversity of airports in our Asia-Pacific region is mirrored in each country’s economic and infrastructure development. Even among airports within the same country, the needs and conditions they individually face can be vastly different.

“Requiring all airports to conform to any single particular model of ownership and management would significantly inhibit them from responding to the specific needs of their passengers and unique local challenges of growth.

“It is therefore essential that our airport members be allowed to be flexible in how they are managed to best serve their passengers’ and the economic needs of their local, regional, and national communities. This is consistent with ACI World’s position for airports across
the globe.”

On sustainability, Chau said: “Just as important, airports are encouraged to continue engaging in industry-led sustainable development initiatives such as the Airport Carbon Accreditation programme, waste management and renewable energy strategies, not just as a means of responsibly protecting the environment but also for achieving cost savings in the long run.”

According to the recent ACI Asia-Pacific Environment Survey, waste management and renewable energy are two of the environmental priorities for Asia-Pacific airports.

BTTF7

Day 2

Day 2 of the conference began with a keynote address by Stephen Perkins, head of research and policy analysis for the International Transport Forum and the OECD, followed by a panel discussion on ‘Airport Capacity Expansion Plans in Asia and the Impact on International Air Transport’ and a debate about ‘Technological Innovation On Airport Operations’ moderated by IATA’s regional director for airport, passenger, cargo and security, Vinoop Goel.

In the panel discussion on airport capacity expansion, Airports of Thailand (AoT) senior executive vice president, Sasisubha Sukontasap, revealed that all six AoT airports are undergoing expansion projects in order to meet growing demand and the government’s expansion plans.

The projects include a new terminal, satellite concourses and runways at Bangkok Suvarnabhumi raising its capacity to 90mppa.

And such is the demand for air travel she noted that although a non-AoT project, the Thai government has announced plans to develop a new international airport on the site of an existing naval air base in U-Tapao, about 140km south east of Bangkok and an hour’s drive from Pattaya.

“The new airport and Suvarnabhumi and Don Mueang will all be served and connected by an express rail link and between them be able to handle future growth and tourism demand for Central Thailand,” said Sukontasap.

She noted that Bangkok’s Suvarnabhumi and Don Mueang currently handle a combined 700,000 air traffic movements annually and AoT’s gateways welcome 85% of all passengers handled in Thailand.

BTTF8

During the ‘Technological Innovation on Airport Operations’ session, Airport Authority Hong Kong’s Vivian Cheung revealed that she and her colleagues use the made-up word ‘technovation’ – created from technology and innovation – to describe the innovative work being done in Hong Kong by the airport in tandem with local research laboratories and universities to develop technology that will enhance the passenger experience, raise the airport’s capacity and reduce the need to recruit new staff.

“Passenger demand is growing and everybody wants to travel, but we are finding it increasingly hard to recruit staff, so automation and new technology will help us improve this workforce issue,” said Cheung.

The conference closed with the official launch of ACI’s new Landside Security Handbook and a lively debate about ‘New Trends Affecting the Airport Business’ moderated by Airbiz’s managing director, Greg Fordham, whose own idea for a new Intelligent gate concept can be viewed on page 40 of this issue.

Next year’s joint ACI Asia-Pacific/World Annual General Assembly, Conference & Exhibition will be held in Hong Kong on April, 2–4, 2019. Put a date in your diary, you won’t want to miss it!

Share on social media

Author

Joe Bates

Written by

Article Options

Latest from Joe Bates

Related items