How is Bengaluru International Airport faring as it approaches its first anniversary? Joe Bates reports.

Bengaluru International Airport is the latest in what seems like a conveyor-belt of new airports to be built across the Asia-Pacific region over the past 10 to 12 years.

The gateway opened on May 24, 2008 – almost two months to the day after India’s other new greenfield gateway, Hyderabad–Rajiv Gandhi International Airport.

Like all the others it is a state-of-the-art facility that has been built to replace an existing airport that was incapable of meeting future demand.

Indeed, the southern Indian city was desperate for the new $620 million facility to open as its predecessor handled around 7.5 million passengers in both 2006 and 2007, more than double its design capacity of 3.6mppa.

Bangalore’s status as India’s third biggest city and fastest growing metropolis in the world’s biggest democracy is the reason behind the huge surge in demand for air travel.

The gateway boasts a single 4,000m runway and a 70,000sqm terminal designed to handle up to 12mppa, which has already earned applause from both passengers and airlines because of its host of user-friendly facilities.

With future expansion, the airport – already one of the most operationally efficient in India based on its ability to accommodate 30 aircraft movements per hour – could handle up to 50 million passengers yearly.

New Bangalore International Airport Limited (BIAL) CEO, Marcel Hungerbuehler, certainly has no doubt that the airport offers the levels of service that its predecessor – now privately operated by Hindustan Aeronautics Limited and exclusively used to test and develop aircraft for the Indian military – could only dream about.

“Our aim was to provide a world class facility with a focus on world class service, and we believe that we’ve delivered, as recent passenger feedback on the airport’s performance and service levels has been nothing but positive,” enthuses Hungerbuehler.

“We have come a long way in our opening nine months of operations and have reached a high level of efficiency. It was an overnight transition from the old airport to the new one. As in the case with all new mega projects, it took some time for the processes to fall in place and all departments/systems to work hand in hand. It was, however, rather smooth when compared to other such airport openings around the world.”

He cites the airport’s “remarkably high punctuality rate” (which saw 77% of departing flights take-off on time during December), as a prime example of the gateway’s operational efficiency when benchmarked against international standards.

 

BIAL is also particularly proud of its recently opened Cargo Village, which it claims is the first of its kind in India.

Spread over 11 acres with adequate provision for future expansion, the facility – located close to the cargo terminals – is expected to strengthen Bangalore’s position as a trade and commercial hub while ensuring faster clearances of import and export consignments handled at the airport.

There are some negatives, of course, and the current global economic downturn means that passenger traffic at Bengaluru International Airport is expected to drop by 3.6% this year.

A total of 9.2 million passengers passed through Bangalore in 2008 – 3.3 million at the old Bangalore International Airport and 5.9 million during seven full months of operations at Bengaluru. But with the recession beginning to bite in India, BIAL has announced that it expects to handle 8.9 million this calendar year.

Hungerbuehler, however is certain that traffic will bounce back in 2011/2012 and is in no doubt that the decision to build a gateway initially capable of handling up to 12mppa will prove to be the right one.

Says Hungerbuehler: “These are tough times, but air traffic growth at airports across the country has slowed down and Bangalore simply reflects this trend. Even with the current slowdown, the traffic figures in this region are set to stabilise and grow at a steady pace. When the upturn happens we will realise our master plan and expand to accommodate increased traffic in terms of aircraft movements and passengers.”

November proved to be the worst month for Bengaluru, with the Airports Authority of India (AAI) reporting a 20% decline in passengers compared to the number handled at the old airport during the corresponding period in 2007. A 26.5% drop in domestic traffic was the primary reason for the slump.

But it was not all doom and gloom – Bangalore’s growing reputation as a global economic hub meant that in marked contrast to the domestic market, international passenger numbers soared by 14% during the same month.

Hungerbuehler points out that in recent months five airlines have launched new international services from Bangalore: Kingfisher Airways, Dragon Air, Tiger Airways, Oman Air and Air Mauritius.

In addition, existing carriers have launched a handful of new routes that include Indian Airlines’ new service to Abu Dhabi.

“Bangalore is increasingly being viewed as a preferred destination and connections have been significantly improved with the opening of the new airport,” states Hungerbuehler. “The new international flights have been complemented by the launch of new non-stop domestic services that have enhanced convenience of travellers.”

He is also delighted to announce that the critics who cast doubt about the airport’s location, due to its 40-kilometre distance from downtown Bangalore, appear to have gone away.

“The connectivity between the airport and the city was another large debate before we opened. However, we silenced this criticism almost instantly,” he notes. “It is a fact that you can reach the airport from the centre of the city in 45 to 60 minutes. Passengers have even written to us applauding the comfort and convenience of the road travel options available.”

With regard to future plans, when Bengaluru International Airport opened its management team thought that it would only be two or three years before they would have to consider upgrading its facilities to keep pace with demand. Is this still the case?

“The industry slowdown probably means that we won’t need the new facilities as soon as we thought, but expansion some time in the not too distant future is inevitable,” comments Hungerbuehler.

“The land at our disposal allows us to develop the airport up to a capacity of approximately 45 to 50 million passengers a year. We have also made provisions for commercial real estate developments such as office parks, retail, entertainment and hospitality facilities within the airport’s boundary as we look to develop our own airport city.”

BIAL envisages that its airport city will stretch a distance of 2.5 kilometres alongside the main access road to the terminal building. In addition, land has been reserved for a future rail link to downtown Bangalore.

“We want our airport city to be a flourishing destination in its own right with people going there to relax, do business and shop as well as possibly catch a flight. It will create thousands of job opportunities and it will strengthen and foster the economic growth of the city and the state,” he notes.

Hungerbuehler says that Bengaluru’s airport city will feature hotels, destination retail, serviced apartments, office parks, software campuses and public parks that all add up to a “a truly global enclave”.

The airport’s huge 4,000-acre site, located four kilometres south of the town of Devanahalli, certainly means that it has the space to grow when the time is right.

The fact that three private investors hold a 74% stake in BIAL – Siemens Projects Ventures (40%), Larsen & Toubro (17%) and Unique Zurich Airport (17%) – also ensures that it is in a better position than most Indian airports when it comes to raising capital to fund the projects.

The State holds the remaining 26% interest in BIAL, equally split between AAI and the Karnataka State Investment and Industrial Development Corporation.

Hungerbuehler’s absolute faith in the fact that demand will return is based entirely on the business appeal of Bangalore and its growing reputation as a trade and commercial hub. Indeed, massive development in the hi-tech and IT sectors in particular has fuelled the city’s growth earned it the sobriquet of ‘India’s Silicon Valley’.

“The international community, both business and leisure, still finds Bangalore an important and attractive Indian destination,” says Hungerbuehler. “Bangalore’s business strength presents an attractive passenger profile for airlines. Furthermore, we have a very well functioning airport that offers enough capacity and slots, a very good service at a competitive rate, excellent transfer opportunities and facilities and domestic as well international connections.

“The city has the third highest domestic air traffic in the country after Mumbai and Delhi, which makes us the highest in the south. No national airline network can be complete in India without including Bangalore.

“Aside from this, the city is the country’s IT and BT hub, has a high per capita income, higher percentage of high yield business class traffic, and is increasingly a MICE (meetings, incentives, conventions and exhibitions) destination due to its year-round good weather. Geographically, Bangalore is at the centre of the southern peninsula and this makes it a good domestic hub.”

Can Indian aviation learn from the BIAL business model and repeat it elsewhere in the future? “The uphill task for other such PPP projects has certainly been eased due to all the ground work done by BIAL,” muses Hungerbuehler.

“We are committed to establishing the new Bengaluru International Airport as India’s leading airport in terms of quality and efficiency and set a benchmark for the future commercial development of Indian airports.”

There is no denying that BIAL has a plan for the gateway, and with Bangalore clearly better equipped than most Indian cities to ride out the current economic storm, its airport city may begin to take shape sooner rather than later.

 

ASIA-PACIFIC AIRPORTS//JANUARY-MARCH 2009

HH Prince Turki Faisal Al-Saud talks to Joe Bates about plans to upgrade and improve Saudi Arabia’s airport system.

With so many high-profile projects going on elsewhere across the Gulf region, it is fair to say that Saudi Arabia hasn’t grabbed too many headlines for its airport development plans.

There is simply no denying that the size and scale of the ongoing multi-billion dollar airport projects in Abu Dhabi, Doha and Dubai have stolen the limelight and continue to attract global attention.

Indeed, while they have become familiar names to everyone – without question helped by the incredible growth of their respective airlines Etihad, Qatar Airways and Emirates – it is quite possible that few people outside of Saudi Arabia could name the country’s top gateways let alone be aware of their development plans.

All this is about to change, however, as Saudi Arabia’s General Authority of Civil Aviation (GACA) looks to complete the biggest shake-up of its airport system in the Kingdom’s long aviation history.

Major new facilities are planned or already being built in Jeddah, Riyadh and Dammam and GACA has unveiled plans to invest up to $5 billion on five new gateways, including a possible fourth airport designed to serve the Muslim holy city of Medina.

And in all cases, private investors are involved, either in terms of newly appointed management companies responsible for operating the airports on behalf of GACA or through Build Operate Transfer (BOT) projects such as the current upgrade of the Hajj Terminal at Jeddah–King Abudulaziz International Airport.

“Yes, times are changing in Saudi Arabia,” admits HH Prince Turki Faisal Al-Saud, GACA’s vice president of international organisation affairs and ACI Asia-Pacific board member.

“We have awarded six-year contracts to Fraport to manage Jeddah–King Abdulaziz International Airport and Riyadh–King Khaled International Airport and appointed Changi Airports International (CAI) to manage Dammam–King Fahd International Airport.

“As part of our strategic development plan, GACA has also taken the decision to enter into joint venture agreements with the private sector to participate in the development and operation of the Kingdom’s airports, and we expect to grow this strategy in the future

“As part of the shake-up, three of our four international airports are also in the process of being transformed into independent companies that will be expected to operate on a commercial basis from now on, as happens in most of the rest of the world.”

Fraport assumed responsibility for operating Jeddah–King Abdulaziz and Riyadh–King Khaled in June 2008 while CAI’s recent $42 million deal to manage Dammam’s King Fahd International Airport is the largest contract to date for the international investment arm of Singapore Changi.

Elsewhere Aéroports de Paris Management (ADPM) in partnership with the Saudi Binladin Group (SBG) operates the Hajj Terminal at Jeddah–Abdulazziz International Airport.

With little serious investment in Saudi Arabia’s airports in recent times, GACA is acutely aware of the need to enhance the country’s gateways to ensure that they are equipped to keep pace with demand.

Between them, the country’s 26 airports officially have the capacity to handle 43mppa, but a total of 42.

5 million passengers (+4.7%) passed through them in 2008, and with even greater numbers expected this year the need to raise capacity is obvious.

GACA estimates that in excess of $13 billion needs to be invested on modernising and expanding Saudi Arabia’s airports, with Jeddah– King Abdulaziz being the main beneficiary of the largely government funded upgrade.

“King Abdulaziz International Airport is already operating above its design capacity of 14 million passengers per annum, so is clearly most in need of extra facilities,” reveals Prince Turki.

“We have expanded and refurbished the existing terminals to improve passenger comfort, but this has not been enough and we are currently building a new terminal that will raise the airport’s capacity to 30 million passengers per annum by 2015.

With further expansion, dictated by demand, the airport will eventually be equipped to handle up to 80 million passengers and 1.6 million tonnes of cargo by 2035.”

In addition to a new 400,000sqm crescent-shaped passenger terminal, the gateway’s $1.5 billion upgrade includes new runways, a state-of-the-art 450,000 tonnes per annum capacity cargo complex, new ATC tower and railway station in readiness for a rail link to both downtown Jeddah and the holy cities of Mecca and Medina.

A planned Automated People Mover will provide the ground transportation links between the new 42-gate terminal and the Hajj Terminal, which is being expanded and redeveloped by the Hajj and Umrah Terminals Construction and Development Co (HTDC) on behalf of concessionaire SBG.

But King Abdulaziz is not alone in getting a facelift.

GACA also has big plans for Riyadh and Dammam’s gateways as it looks to increase the long-term capacity of Saudi Arabia’s airports to in excess of 140 million passengers yearly.

It is believed that a masterplan currently being drawn up by Netherlands Airports Consultants BV (NACO) will involve increasing the capacity of King Khaled International Airport from 14mppa to 40mppa by 2038.

“Capacity constraints at King Khaled International Airport are currently being addressed by its masterplan which outlines proposals for modern, new facilities,” says the prince.

“We are also conducting studies at King Fahd International Airport and 13 other regional gateways, which we believe are most in need of extra capacity.

Of these, Abha is our top priority as it is the fifth busiest airport in the Kingdom.”

The bulk of the anticipated $13 billion in funding needed to modernise and expand Saudi Arabia’s airport system will come from the government, with the rest provided by investment partners, according to GACA’s vice president of international organisation affairs.

GACA certainly doesn’t appear to lack for suitors ready to invest in its airports, with the most recent example of this being the $66 million desalination plant under construction at Jeddah–King Abdulaziz.

A consortium comprising Abdullah Ali Riza & Co, WTD and SETE Technical Services will build and operate the facility under the terms of a BOT agreement.

And the prince has no qualms about stating that GACA is looking for further investment partners to help fund and play their part in the creation of a new-look Saudi airport system.

“Part of our new strategy is to attract private investors to finance new projects that can also act as a new source of revenue for GACA,” he says.

“We have seen the value and proven success of BOT agreements and are actively considering more such deals.”

GACA will definitely be looking for investment partners to help build, fund and operate different components of its planned ‘airport city’ project at Jeddah–King Abdulaziz, but as the plans are in their infancy they are very much top secret for now.

Around 65% of all passengers handled in the Kingdom pass through either Jeddah or capital, Riyadh, ensuring their status as the country’s two busiest airports.

A total of 16.6 million passengers and 390,000 tonnes of cargo were handled in Jeddah in 2008 making King Abdulaziz Saudi Arabia’s biggest gateway by some distance.

Its dominant position is almost a given due to the city’s centuries old tradition of being a centre for trade and commerce, located close to the holy mosques of Mecca and Medina and the home base of national flag carrier, Saudi Arabian Airlines.

Riyadh–King Khaled handled just over 11 million passengers in 2008 while the next biggest airports, Dammam–King Fahd and Medina’s Prince Mohammed Bin Abdulaziz, welcomed 4.3mppa and 3.7mppa respectively.

Saudi Arabian Airlines enjoys the lion’s share of the market but faces growing competition on international routes from carriers such as Austrian Airlines, Emirates and Jet Airways, which recently launched daily flights from Riyadh and Jeddah to Mumbai.

Indeed, a record 16.8 million people arrived or departed on international flights last year meaning that international traffic now accounts for 44.7% of all passengers handled at Saudi airports.

Religious tourists – over two million pilgrims alone fly to Jeddah for the Hajj each year – and business travellers make up the bulk of international visitors to Saudi Arabia.

Saudi Arabia hasn’t been completely unscathed by the global economic downturn, however, as in marked contrast to the booming international market, the number of Saudis travelling on domestic flights dropped by 11.2% during 2008.

GACA blamed the downturn on high fuel prices forcing airlines to scale back services, and the government responded by taking the unprecedented step of lowering the cost of oil for Saudi Arabian low-cost carriers nas air and sama to encourage them to up frequencies and relaunch services.

It appears to have worked because sama currently serves 16 destinations within Saudi Arabia and its neighbouring countries and nasair flies to 20 domestic cities.

Saudi Arabia’s 26 airports comprise four international gateways (Jeddah, Riyadh, Dammam and Medina), six regional airports (Tabuk, Abha, Hail, Taif, Gizan and Gassim) and 16 domestic gateways (Yanbu, Qaisumah, Dawadmi, Sharorah, Rafha, Arar, Turaif, Wedjh, Al Ahsa, Bisha, Hafr Al Batin, Najran, Wadi Al Dawasir, Al Jouf, Gurayat and Al Baha).

Prince Turki Faisal Al-Saud would be the first to admit that few of the Kingdom’s smaller gateways would be known outside of Saudi Arabia, but he is confident that more people will know about them in the future as their facilities are upgraded and passenger numbers grow.

He is also genuinely excited about the prospect of Jeddah–King Abdulaziz being transformed into one of the region’s best equipped hubs and believes the future is bright for Saudi Arabia’s airports.

Saudi’s development strategy and the ongoing mega projects in the UAE and Qatar ensure that the Gulf is one of the hottest places on earth for airport development, but does the region really need all this capacity? “There is no doubt in my mind that the capacity will be needed as the growth of the Middle East travel market is expected to be bullish in the years to come,” enthuses Prince Turki.

“My confidence is based on the potential for strong economic, tourism and trade growth between the Middle East and other regions.

Given this backdrop, it is only natural to expect airport authorities across the region to plan for capacity expansion in order to meet future demand.”

If you had to think of Gulf countries with big ambitions for the future development of their airports, you would almost certainly write down the UAE and Qatar and may possibly include Oman and Kuwait.

Add Saudi Arabia to that list.

Asia-Pacific Airports 2009 Issue 3

 Will Hong Kong’s cargo ‘super terminal’ continue to dominate the Pearl River Delta region market for years to come? Ian Putzger and Joe Bates report.

With the notable exception of FedEx’s Memphis hub, quite simply no other airport on the planet handles as much international cargo as Hong Kong.

Over 3.7 million tonnes of cargo passed through the airport last year with over 70% of the total – 2.6 million tonnes – being handled by Hong Kong Air Cargo Terminals (HACTL) at its US$1 billion SuperTerminal 1.

With a total floor area of 390,819sqm, the complex is the world’s largest cargo terminal, its size and handling technology ensuring it is capable of accommodating up to 3.5 million tonnes of freight per annum.

HACTL currently boasts 90 international airlines and more than 1,000 freight forwarders as customers.

And it is actively looking to add to the list as Hong Kong’s air cargo and logistics industries continue to flourish despite economic downturn in other parts of the world.

Around 70% of all cargo handled at the terminal either originates or is destined for mainland China, the giant on Hong Kong’s doorstep with a population of more than 1.3 billion people.

Indeed with the vast majority of cargo exported out of Hong Kong originating in the surrounding Pearl River Delta (PRD) region, HACTL has introduced a number of innovative schemes designed to ensure that it captures much of the business.

These include launching a bonded trucking service between half-a-dozen different PRD locations and SuperTerminal 1 rather than waiting for consignments to be shipped to Hong Kong.

The service, operated by subsidiary HACIS, includes pick-ups at Shenzhen, Guangzhou, Xiamen and Fuzhou airports as well as at Humen Port in Donguan and the Huangpu free trade zone. Over the past few years the trucking service has shown growth rates in the 20%–25% bracket.

“We are working on adding two more points to expand our coverage in the Pearl River Delta,” enthuses HACTL managing director, Anthony Wong. Back on home turf HACTL recently completed a HK$2.7 million project to construct three canopies at SuperTerminal 1 to enhance protection to cargo on the ramp in adverse weather conditions. Another current endeavour is increasing the terminal’s ULD handling capacity.

Wong says that the project – scheduled for completion in the second quarter of 2009 – clearly shows HACTL’s commitment to continuously upgrading its prize asset to improve operational efficiency and customer service levels.

HACTL certainly appears to value the importance of customer services for its business partners, with the company recently starting a revamp of the service desks next to the customs examination halls at SuperTerminal 1 in a bid to improve convenience for forwarders and truckers.

“We are sensitive to our customers’ feedback and needs,” insists Kenneth Bell, HACTL’s director of service delivery. “This means that we are dedicated to continuously investing in our facilities and services to advance our product. Hopefully our efforts will help uphold Hong Kong’s unique position as a leading air cargo hub.”

Wong has no qualms in admitting that a large chunk of the company’s future investment will be geared towards enhancing HACTL’s IT infrastructure. “We will invest HK$93 million per year over the next three to five years,” he notes.

He also emphasises the importance of a close dialogue with the airlines and forwarders in the development of new solutions.

As far as industry-wide efforts to improve processes go, HACTL is supporting IATA’s e-freight initiative, which aims to drive paper out of the airfreight cycle. Hong Kong was one of the original six test markets for the global undertaking, which kicked off last November with trials moving cargo between those six global points.

Now the handling company is getting ready to join Cargo 2000, a global initiative aimed at standardising airfreight processes and developing performance measuring metrics to bring more transparency in terms of quality and performance into the industry.

Three years ago HACTL obtained certification from TAPA, an organisation that promotes air cargo security, and it is still the world’s only cargo terminal operator with that badge, claims Wong.

Wong proudly claims that SuperTerminal 1 has the lowest “pilferage rate” of any cargo terminal in the world and firmly believes that this is one of the major reasons why shippers use Hong Kong.

The appeal of Hong Kong was certainly apparent in the first half of 2008 when HACTL recorded a 6% rise in tonnage at SuperTerminal 1. Stratospheric fuel prices and the sluggish US economy, however, mean that such growth is unlikely to be matched in the second half of the year.

Says Wong: “I am always optimistic and hopefully we will still have growth, but realistically it will now probably be in the low single digits.”

Other storm clouds on the horizon include the construction of a rival cargo terminal at Hong Kong and growing competition from neighbouring mainland China airports.

The new cargo terminal is being built by Hong Kong-based Cathay Pacific Airways, which has unveiled plans for its own $620 million facility capable of handling up to 2.6 million tonnes of freight per annum.

Cathay, which together with subsidiary Dragonair handled 1.6 million tonnes of cargo in Hong Kong last year, claims that the terminal will increase competition and stimulate cargo growth when it opens in the second half of 2011.

It will be operated by CPSL, a wholly owned subsidiary of Cathay Pacific, and is capable of being expanded to handle an additional four million tonnes of cargo per annum when demand dictates.

As a result of its plans, Cathay will sell its entire 10% stake in HACTL. There is no doubting its threat to HACTL’s future dominance at Hong Kong, but if Wong is worried he certainly isn’t showing it and appears positively bullish about the future.

“Am I losing sleep over it? Absolutely not,” says Wong. “When one door closes another opens and the potential loss of Cathay’s business will give us more capacity to use in the future.”

Meanwhile competition from Guangzhou Baiyun and other emerging airports in the Pearl River Delta continue to snap at Hong Kong’s heels.

Guangzhou Baiyun International Airport, for example, is preparing for the start of intra-Asian hub operations by Federal Express despite only opening for business four years ago.

And rival UPS announced in June that it will be moving the epicentre of its Asian operation in the Pearl River Delta to nearby Shenzhen in 2010.

Last year Guangzhou Baiyun clocked up 6.4% growth in cargo throughput, while Shenzhen – buoyed by the start of Jade Cargo Airlines, an all-cargo carrier founded by an alliance of Lufthansa Cargo and local stakeholders – saw tonnage rise 10%. Both eclipsed Hong Kong, which reported a 4.5% increase in cargo volume.

Wong, however, remains unfazed by the rise of Shenzhen and Guangzhou Baiyun, arguing that the Pear River Delta market is massive and growing fast enough to keep all three airports on the expansion track.

He says: “Why worry about what others are doing when the market is easily big enough to support all three gateways?

“You also have to remember that one of Hong Kong International Airport’s main assets is its route network and it is an advantage that it will take the likes of Guangzhou and Shenzhen years to catch up.”

Should he be concerned about the fact that rising costs in the region appear to be nudging some manufacturers to the periphery of the Pearl River Delta and beyond?

Wong acknowledges the trend but again claims that he is not unduly worried about the situation, as he believes that the goods being manufactured by the companies that are moving away are mostly low-cost products that typically are shipped by ocean vessel.

He is also quick to crush any suggestion that Hong Kong is expensive for shippers compared with airports on the Chinese mainland.

“Forwarders tell me that now the cost in Hong Kong to process cargo is the same as in Guangzhou and Shenzhen,” he says, pointing to the rise of the Chinese currency and China’s inflation rate, which has eclipsed Hong Kong’s.

Moreover, a study produced two years ago by consulting firm GHK claimed that moving manufactured goods from the Pearl River Delta to Frankfurt was 5% to 8% cheaper through Hong Kong than going via Guangzhou and Shenzhen respectively.

HACTL’s position in the cost debate has been that the answer lies in improving productivity to bring down overall costs. Since the airport’s 1998 opening some 20 initiatives have pushed up the capacity of SuperTerminal 1 from its original 2.6 million tonnes to 3.5 million.

Wong points with pride to a number of awards that the operator has won over the years and stresses that more investment will be made.

So much for the competition from mainland China then; has HACTL any plans to export its handling expertise outside Hong Kong and possibly turn the heat up on its rivals?

“We have plans, we are talking to possible partners but no such move is imminent,” admits Wong. Limiting HACTL’s cargo handling efforts to Hong Kong certainly wouldn’t appear to make much business sense with a market as vast as mainland China on its doorstep.

Without doubt the Asia-Pacific cargo market is hotting up with competition to Hong Kong’s dominance seemingly growing by the day. HACTL for one is looking forward to the challenge.

Aisa-Pacific Airports 2008 Issue 2

Joe Bates looks back at some of the highlights of ACI Asia-Pacific’s Assembly in tropical Queensland.

As if the tropical Queensland setting wasn’t enough, some uniquely Down Under entertainment and, of course, plenty of lively debate and discussion all went to make the third ACI Asia-Pacific Regional Assembly, Conference & Exhibition in Cairns a huge hit with delegates.

From a traditional Aboriginal welcome on the opening day of the conference to a closing ceremony featuring fire dancers and plain old-fashioned song and dance, the event once again demonstrated the diversity and dynamism of the Asia-Pacific region.

The theme of the event – hosted by Cairns Port Authority and held at Cairns Convention Centre – was ‘Building sustainable new growth markets for business and tourism’, ensuring that aviation’s need to limit its impact on the environment was very much the topic of the day.



ACI chairman, James Cherry, claimed that it was time for airports to do a better job of publicising and promoting their often innovative environmental programmes to counter the popular misconceptions about the extent of aviation’s impact on the environment.

Said Cherry: “We don't seem to be doing a very good job of telling people about the many exciting and successful environmental initiatives taking place at airports in this region and across the globe. Aviation is on the right track, although there’s much to be done. Nevertheless, ACI firmly believes that our goal of accommodating growth in an environmentally sustainable framework is achievable.”

On the hot topic of emissions trading, Asia-Pacific president, Max Moore-Wilton, warned that the region should not blindly follow in the footsteps of the European Union.



Noted Max: “I am always very sceptical of legislation that comes out of Europe as it based on an entirely different system to ours. We must develop our own solution as the European model will be based on a Continental system of short-haul routes and not long-haul services which typify the Asia-Pacific region.”

While Brisbane Airport’s managing director and CEO, Koen Rooijmans, pondered whether it was feasible for airports to actually use their runways to make energy. “It is clear that we need to do more as an industry and necessity is often the mother of invention,” he commented.

On the business side of things, four new members were elected to ACI Asia-Pacific’s regional board – Suning Liu (Macau International Airport), Kosaburo Morinaka (Narita International Airport Corporation), Atsushi Murayama (Kansai International Airport) and Han’an Zhang (HNA Airport Group). They directly replace Don Huse (Auckland), Katsuji Doi (Tokyo Haneda) and Larry Berg (Vancouver).

ACI Asia-Pacific also officially welcomed three new member airports – Rockhampton (Australia), Hyderabad (India) and Zhenghzou Xinzheng (China).

Next year’s Regional Assembly, Conference & Exhibition will be held in conjunction with ACI World and hosted by Malaysia Airports Holdings Berhad (MAHB) in Kuala Lumpur, November 2–5, 2009.

Asia-Pacific Airports 2008 Issue 2

Shanghai’s airport system is more than ready for the millions of extra passengers that are expected to pass through its facilities this year for the World Expo, writes Joe Bates.

When Shanghai–Pudong International Airport opened its new Terminal 2 as part of an ongoing $2.8 billion development programme two years ago, it did so with the 2010 World Expo in mind.

True, it desperately needed the new facility as soaring demand since the airport’s October 1999 opening meant that throughput had already exceeded the 20mppa design capacity of Terminal 1.

But, with the Chinese government predicting that the event will be bigger than the Beijing Olympics, not having it by now was simply not an option.

How can the World Expo possibly be bigger than the Olympics? Well, because it will feature over 20,000 cultural shows, runs for six months from May and is expected to attract over 70 million visitors from across the globe.

Indeed, with participants from nearly 200 countries and 50 international organisations, it will be the biggest World Expo of all time, and one that the Chinese authorities believe will cement Shanghai’s status as a major economic and cultural centre.

And for an estimated 16 million visitors, Shanghai’s Pudong and Hongqiao airports are the first and possibly last experience they will have of the city, so Shanghai Airport Authority (SAA) was determined to create a good impression with its facilities.

“We now have the facilities that can help showcase Shanghai to the world.

We think visitors to the 2010 World Expo will like what they see,” says Ruijun Jia, president of Shanghai International Airport Co Ltd, which operates Pudong for SAA.

Pudong is the city’s main gateway – serving as the main hub for China Eastern Airlines and Shanghai Airlines and the major international base for Air China – while Hongqiao effectively serves as a domestic airport. Between them they handled 56.9 million passengers and nearly three million tonnes of freight in 2009.

Shanghai Airports Authority expects a record 42.3 million to use Pudong this year because of the World Expo – a remarkable 33% rise in throughput.

A significant 30% increase in domestic passengers proved the catalyst for last year’s 13% upturn in throughput at Pudong.

Built at a cost of $1.6 billion when it opened a decade ago, Pudong currently boasts two terminals, three runways and an assortment of cargo facilities capable of accommodating 60 million passengers, 4.1 million tonnes of cargo and 490,000 aircraft movements per annum.

The master plan, however, calls for a total of three terminals, a satellite building and two additional parallel runways by 2015, raising Pudong’s capacity to 80mppa.

And with the airport fast expanding over its 50 square kilometre site around 30km from downtown Shanghai, there has even been talk of Pudong’s fifth runway being built on land reclaimed from the sea.

Further expansion is likely to take place between now and 2012 in-line with the company’s Three Year Plan.

Something the airport is keen to talk about is the difference Terminal 2 has made to customer service standards and operational efficiency at Pudong, Ruijun Jia citing its light and bright design, comfortable environment and a host of passenger-oriented facilities as the key reasons for the huge rise in customer satisfaction levels at the airport since its opening.

A quick snapshot of T2 shows that its ‘customer friendly’ facilities include nearly 14,000 seats; children’s play areas; 54 nurseries; easy to find meeting points; free WiFi services; and free drinking water dispensers every 70 metres in waiting areas that offer instructions in Braille and voice prompts once clicked.

Despite its 485,000sqm size, T2 also boasts some impressive minimum connecting times – just 18 minutes for passengers without luggage on domestic flights and 29 minutes for those transferring between international services.

Both terminals between them cover 763,500sqm of floor space that includes more than 30,000sqm dedicated to retail and F&B outlets.

A total of 31.9 million passengers and 2.5 million tonnes of freight passed through Pudong in 2009 ensuring that it enjoys the status of China’s second busiest passenger hub after Beijing Capital and the world’s third biggest cargo airport.

It actually handles more international traffic than Beijing Capital but cannot match, for now at least, the 65 million passengers per annum handled by China’s biggest gateway.

The huge freight volumes easily make Pudong the largest cargo airport in Mainland China and its status is reflected by the fact that China Eastern Airlines, Shanghai Airlines, UPS and the Shanghai Pudong International Airport Cargo Terminal Co Ltd (PACTL) all operate mega-terminals at the gateway.

In addition to the mega-terminals, Pudong also has three express handling centres where FedEx, DHL and UPS all have facilities.

The planned addition of an integrated bonded area will also boost the airport’s appeal to shippers.

A ground transportation centre located between the terminals houses Pudong’s maglev station and provides bus, rail, coach and taxi links to downtown Shanghai and beyond.

A top speed of 432km/h ensures that it takes trains operating on the world’s first commercial high-speed maglev service just seven minutes and twenty seconds to reach Shanghai city centre.

What can Pudong ultimately achieve as an airport? “The aim is to become the best airport in China, a first-class airport globally and one of the most attractive hubs in the Asia-Pacific region,” says Ruijun Jia.

Things haven’t exactly been quiet 40km away at Shanghai–Hongqiao International Airport either, as the airport only recently finished its expansion programme, the project ending with the March 2010 opening of its very own Terminal 2 and second runway.

At 362,600sqm, Hongqiao’s T2 is around four times the size of its Terminal 1 and will be home to all but one of the 12 domestic carriers serving the airport.

Spring Airlines, China’s sole low-cost carrier, remains the only carrier still operating out of the old terminal.

The opening coincided with inauguration of the gateway’s new Metro Line 2 railway station which allows passengers swift journey times to downtown Shanghai.

Hongqiao’s terminals are managed by Shanghai Hong Kong Airport Management Co Ltd, a new joint venture formed by Shanghai Airport Authority and the Airport Authority of Hong Kong.

The new joint venture will also manage the retail business of the two terminals and aims to raise the quality of airport service for visitors and delegates to World Expo 2010 in Shanghai.

SAA chairman and president, Wu Nianzu says: “Forming the joint-venture has enabled us to leverage Hong Kong International Airport’s wealth of management experience and skills in operating a renowned hub airport, thereby further improving our operating efficiency and management to equip ourselves for the upcoming World Expo.”

The new facilities effectively mean that Shanghai Airport Authority has triumphed in its goal to transform Hongqiao into a gateway capable of handling 40 million passengers, one million tonnes of cargo and 300,000 aircraft movements yearly by 2015.

The new terminal and 3,300m long runway were the key projects of a $1.5 billion development programme, and they were also desperately needed as, according to press reports in China, the airport’s former infrastructure was only really built to handle 10mppa but handled over 25 million passengers last year.

Indeed, the huge demand for both passenger and cargo services in Shanghai is the reason why the city decided to open a second airport just over a decade ago.

With passenger traffic rising by 12% across Shanghai’s airport system last year and a significant jump expected in 2010 due to the World Expo, the decision to operate two airports was clearly the right one.

Asia-Pacific Airports 2011 Issue 1