Winning hand
Macau’s casino vision has helped transform it into the ‘Las Vegas of Asia’, writes Peta Tomlinson.
When the $1.1 billion construction of Macau International Airport began in 1989 it was by far the biggest project ever undertaken in Macau.
How times have changed. For what seemed at the time to be an ambitious project for the tiny Special Administrative Region (SAR) in southern China has now been dwarfed by a seemingly never ending string of tourism and gaming mega-projects, each more grandiose than the last.
The development frenzy of recent years has brought unprecedented arrivals to Macau, at times leaving its airport struggling to cope with demand.
And drawing a roadmap for the way forward is proving both exciting and challenging, for the stakeholders involved. Though only 28 square kilometres in size, Macau has long been a region of prosperity.
In the Ming Dynasty (1368-1643), Chinese fishermen moved there to trawl the mouth of the Pearl River Delta, and utilise its sheltered harbours as their southern-most trading centre.
In the early 1500s, Portuguese navigators arrived; soon after Portugal established Macau as a trading colony of its own, where it was to remain that way until the 1999 handover to China, becoming the last European territory in Asia.
Under Portuguese rule, gambling had long been part of Macau culture, and upon handover, it became the only place in the vast People’s Republic of China where casinos were legal.
This – and the opening up of Macau’s casinos to foreign ownership, breaking the monopoly of Hong Kong tycoon Stanley Ho Hung-sun – was to change Macau’s fortunes forever. Suddenly propelled into the stratosphere of gaming opportunity, Macau was targeted by the world’s highest rollers.
Las Vegas Sands received the first foreign gaming permit seven years ago, spent $250 million on its first casino and thanks to a flood of Chinese gamblers, made its money back in one year.
It has since added the new $2.4 billion Venetian Macau and others rushing to build casinos in the newly dubbed ‘Las Vegas of Asia’ included the US gaming powerhouses Wynn Resorts – with the $1.2 billion Wynn Macau – and MGM Mirage which opened the $1.25 billion MGM Grand Macau in 2007.
The Venetian Macau is billed as the world’s biggest casino, with 3,000 hotel suites, 1,150 gaming tables, 7,000 slot machines, 350 shops, a 1,800-seat conference centre and a 15,000-seat entertainment arena.
But Australia’s James Packer, in partnership with Lawrence Ho, the son of Hong Kong’s Stanley Ho, aims to give The Venetian a run for its money with its gargantuan three-casino complex, called the City of Dreams. In a classic case of ‘build it and they will come’, the casinos drew more visitors than even those on the ground could have imagined.
And their continued popularity helped ensure that Macau welcomed a record breaking 30 million visitors in 2008 – an 11% rise on 2007 and nearly 400% up on a decade ago. True, figures did decline in the last few months of the year and some of the casinos have even had to lay off staff recently as the global recession has begun to impact on the region. However, the Macau Government Tourist Office (MGTO) is hopeful that the current economic downtown won’t do any long-term damage to the SAR’s winning hand.
Indeed, it remains ‘optimistic’ about 2009 as Macau celebrates its 10th anniversary, although director Joao Manuel Costa Antunes admits that his organisation’s efforts this year will concentrate more on ‘cultural tourism’. Says Antunes: “The continued diversification of tourism products and source markets are the main objectives for this year.
We will utilise tourism resources to enhance the development of cultural tourism. Thematic tour routes will be developed to attract visitors of different interests, while multi-destination tourism itineraries will be explored to build up a regional tourism brand.”
Although it may not appeal to gamblers, there is no denying that the territory’s prize cultural asset is its historic old centre, a designated UNESCO World Heritage site that was popular with visitors long before the casinos arrived.
While there are various ways to enter Macau – by ferry from Hong Kong or the Chinese mainland, via People’s Republic of China (PRC) border crossings, or, in future, by the proposed Hong Kong-Macau- Zhuhai bridge project – there is only one airport, and it has certainly been one of the main beneficiaries of Macau’s casino vision.
In fact, last year’s drop in passenger numbers, (when throughput fell 7% to 5.1 million from the 2007 all-time high of 5.5 million), was only the second time Macau International Airport has registered a year-on-year decline in traffic since its 1995 opening.
Years of double-digit growth have indeed led operator, CAM, to draft plans to upgrade the airport’s key infrastructure to avoid it becoming a victim of its own success.
The master plan, which is subject to final government approval, includes proposals to expand the existing passenger terminal to double the airport’s capacity to 12mppa. The extension will allow for the addition of more shops and restaurants, six new boarding bridges and enhanced IT systems designed to improve the airport experience for passengers and subsequently satisfaction levels.
Macau International Airport will also benefit from an upgraded Communication, Navigation and Surveillance (CNS)/Air Traffic Management (ATM) system and fire rescue facilities to meet future demand and high safety standards.
New aprons allowing for additional aircraft parking and other airfield enhancements are expected to raise today’s runway capacity from 16 to 28 movements per hour. The gateway will also get a new 1,000-vehicle car park.
Says executive director Suning Liu: “We have already started to improve the infrastructure to better equip Macau to cope with long-term demand at the same time as ensuring safe, efficient and effective aircraft operations.”
Funding for the gateway’s development programme will be 100% provided by CAM, whose shareholders include the Macau Government (55.4%) and Macau casino billionaire, Stanley Ho, whose STDM company holds a 33.3% stake in the airport.
However, with passenger throughput expected to remain around the same level this year, the need to raise the gateway’s capacity is not as urgent as it was a year ago and CAM now has the luxury of implementing the master plan over the next five to ten years.
Nevertheless, with all the glitz and glamour of the casinos on its doorstep, does Macau International Airport need to glam up to meet the expectations of travellers? Macau is beyond question the Las Vegas of the East, and according to local government figures, the tiny territory has overtaken Las Vegas as the world’s biggest earner of gambling revenue, once again raking in more than $10 billion in 2008.
When formulating its wish list for the future, it comes as no surprise to learn that Macau’s airport management looked to the entertainment capital of the world, Las Vegas, for inspiration. Recognising the similarities, CAM sent a delegation to Las Vegas-McCarran International Airport “to discuss issues in common”. Liu, who led the delegation, said the mission’s aim was to “share experiences, learn from the past experience of McCarran, to ascertain their business model and to see how they plan their future developments to cope with their growing numbers of visitors”.
They learned that Las Vegas’ diverse entertainment and gaming facilities attract around 90 million visitors per year, making McCarran the second busiest origin and destination (O&D) airport in the world, second only to Los Angeles, according to director of aviation, Randall Walker.
Despite these huge passenger numbers – and significantly for CAM executives – Walker noted that most of his airport’s income is from non-aeronautical streams. A completely self-sufficient enterprise, requiring no government subsidy, McCarran International Airport earns 60% of its income through fuel surcharge, food and beverage commissions, transportation services, parking, car rental, corporate advertising – but mostly through the rich ace up its sleeve, slot machines, which are spread throughout the airport terminals.
In fact, McCarran has 1,300 slot machines strategically placed across the terminal that regularly contribute annual revenues in excess of $40 million.
In the past, the total has accounted for up to 20% of the airport’s non-aviation revenue and 11.5% of total revenue for the Department of Aviation.
With the stakes so high, and with gamblers 'instinctive willingness to empty their pockets of every last cent, are airport slot machines something that Macau International Airport might consider?
The official line is that such a concept “should be considered very carefully to see how to balance profit and social responsibility under existing regulations.” CAM’s executive director, Suning Liu, wouldn’t be drawn, though marketing director, Antonio Rato concedes that airport slot machines may be inevitable. Indeed, the law already allows for them.
Says Rato: “The possibility of the airport having slot machines was created in law, but only at the departures restricted area, meaning that only passengers waiting for their flight can eventually access them. So, we cannot have the situation of Las Vegas airport where slot machines are all over the place and in massive quantities.
“Personally, I would not like to see Macau Airport following the same pattern. However, I also think we should implement it, with good sense, as it is a source of potentially significant income that CAM needs not only to help finance the development but also to cover some of the operating costs, allowing us to keep aeronautical prices at highly competitive levels.
“Up until now there has been some reluctance in applying the airport’s right to operate slot machines, but doing it seems logical as the airport is in Macau and should reflect the city’s entertainment and fun conceptual definition.”
Does some form of gambling have a future at Macau International Airport and, indeed at other airports across the Asia-Pacific region? You can almost bet on it.
ASIA-PACIFIC AIRPORTS/JANUARY-MARCH 2009
All change
It would be no easy mission to head up one of the world’s busiest airports, but Lim Kim Choon, director-general and chief executive officer of the Civil Aviation Authority of Singapore (CAAS), has all the right credentials for the job.
The former chief of the Singapore Air Force took up the top post in July 2007, accepting a personal challenge “to upkeep Changi Airport’s leading position and ensure it stays ahead of the competition”.
One year on, the former major general says his new role called for a revision of strategy.
“Stepping in to the new position, I had to review my management style and assess CAAS’s culture to find the best fit,” admits Lim. “When required I was open to changing or challenging the status quo if necessary to obtain the best results for the airport.”
A review of CAAS’s organisational structure quickly followed and has led to various business activities being assigned into key groups that are now more closely aligned with CAAS’s corporate objectives.
“The previous organisational structure had served us well in the past and was instrumental in helping develop Changi into a world-class airport and air hub,” explains Lim. “However, the external environment is ever changing. Newer airports are opening and the airline industry is undergoing an interesting period of change.
“After an internal review, we decided that a re-organisation was needed so that CAAS can adapt faster to the changing landscape and stay nimble in an increasingly competitive environment.”
Changi already has an enviable track record, of course. The 36.7 million passengers that passed through its facilities in 2007 cemented its status as the sixth busiest airport in the world in terms of international passenger traffic.
And it has one of the biggest route networks in the Asia-Pacific region with a total of 80 airlines between them operating more than 4,400 weekly scheduled flights to 191 cities in 61 countries.
Changi also consistently bags a host of prestigious international awards, this year’s accolades include being voted the third best airport in the world for customer satisfaction in ACI’s Airport Service Quality (ASQ) awards.
A series of passenger friendly innovations such as its roof top swimming pool, wide range of shops and restaurants and number of leisure and entertainment facilities ensure that Changi enjoys the reputation of being one of the world’s most popular airports.
The airport is also constantly reinventing itself. Its impressive new S$1.75 billion Terminal 3 has boosted Changi’s capacity to 70 million passengers per annum. The gateway’s S$45 billion Budget Terminal is currently being expanded and government ministers are already talking about the addition of a fourth passenger terminal in 10 to 15 years’ time.
In May this year work began on a $500 million revamp to Terminal 1. The biggest overhaul of Changi’s original terminal to date will last three years and involves work on its facade and the creation of a new, more user-friendly interior similar in style to that of the newly opened T3.
Yet despite these works-in-progress shoring up Changi for the future, Lim has no feeling of complacency. Rather, with well-honed precision, he is looking even further ahead.
The grand plan? “I would like to guide CAAS and Changi towards the vision of becoming a world leader in aviation and a truly global air hub,” admits Lim. “With increasing competition in the aviation industry, CAAS must not be lulled into complacency as our competitors are fast closing the gap.
“Besides focusing our efforts on enhancing Changi’s hub status to meet existing and new challenges, CAAS will also place high emphasis on improving our own capabilities. We need to further strengthen our corporate culture and company structure to ensure effective delivery of our strategies.”
And as you would expect from a former military man, he’s prepared to meet challenges head on and is not scared by the prospect of a little competition.
“Like all businesses, there will always be competition for Changi. We have always been mindful of the competitive environment and believe that it is healthy and will keep us on our toes,” says Lim.
“In my view, any airport that is aiming to do more than us to meet passengers’ needs is competition. I am therefore particularly pleased to note that, even though competition from other airports has intensified in recent years, Changi has maintained its position as a major air hub in the region.”
Lim states that under his leadership the airport will continue to adopt the strategy of investing in the key infrastructure that Changi needs to ensure that it is capable of meeting future demand.
Says Lim: “One very important philosophy we have is to ensure that our capacity stays ahead of demand. Changi is now equipped to handle 70 million passengers per annum, but we know that more needs to be done and we are doing it now.
“The S$10 million expansion of the Budget Terminal, scheduled for completion in early 2009, will increase the terminal’s handling capacity from the current 2.7 million passengers per annum to seven million.
“We also continue to strive to create an enjoyable experience for passengers by constantly refreshing the airport to enhance the Changi experience for visitors. We have already upgraded Terminal 2 and are now working on improving Terminal 1 at a cost of S$500 million. The project will rejuvenate the terminal building and enhance the passenger experience at Changi Airport.”
New and unique facilities, services and events are constantly being introduced at the airport, enthuses Lim. In May a new entertainment deck at Terminal 2 opened with features like a free LAN gaming room, Xbox 360 and Playstation 3 game consoles and cosy music corners.
Other facilities at Changi Airport include some 500 free Internet terminals, family zones and themed gardens.
The airport has also introduced a host of initiatives that are designed to surprise and amaze passengers. They include its ‘famous personalities programme’ that enables passengers to get up close and personal with different celebrities at the airport.
Celebrities to take part in the scheme to date have included members of the bands Air Supply and the Backstreet Boys and individuals ranging from Bollywood star Shah Rukh Khan and singer Elaine Paige to golfer Colin Montgomerie and Mickey Mouse.
In July a mini version of Munich’s Oktoberfest beer festival was held at Changi. The event saw passengers dressing up in Bavarian costumes and taking part in games.
When it comes to shops and restaurants, Lim feels that passengers are spoilt for choice as Changi has more than 230 stores and 110 F&B outlets throughout its three terminals.
He is particularly pleased with the offering in T3 where Sony Style and FIFA Official Store opened their first ever airport outlets. In addition Apple i-Store has set up its first fully-fledged airport concept store, while Ferrari as well as fashion stores Marc O’Polo and Fat Face have opened their first airport stores outside Europe.
Passengers can also enjoy innovative elements at T3’s perfumes and cosmetics outlets, which have a full suite of beauty services such as a make-up studio and fragrance sensory Internet kiosks.
Adds Lim: “We are committed to providing excellent customer service to our passengers. All front line staff must attend a one-day orientation programme to familiarise themselves with the Changi service culture and standards.
“It also helps staff gain the basic service skills and knowledge of Changi and gives new recruits a better understanding of the different agency roles at the airport. We feel that it is very important to build a sense of pride and belonging to the Changi family.
“In addition, there are ongoing customised training programmes such as Quality Service Management. Last but not least, an annual airport reception is held to express CAAS’s appreciation to the management and staff of the various airport agencies that have, in one way or another, contributed towards the success of Changi Airport.
“Awards such as ‘service personality of the year’ and ‘outstanding service providers’ are given out during the reception to promote and inspire quality service among front-line staff at the airport.”
Although happy with the airport’s route network that now extends to nearly 200 destinations in 60 countries, ambitious Lim admits that CAAS is always on the lookout for new airlines and destinations.
Incentives offered to airlines to encourage them to develop their route networks out of Changi include rebates on landing fees and marketing support to help promote all new services to Singapore.
“We are also working closely with our airline partners to grow their business here and help them keep their operational costs down,” says Lim.
Singapore’s liberal aviation policy had led to it signing Open Skies Agreements with 20 countries that include the US, United Arab Emirates and 13 countries in the European Union.
Earlier this year Denmark, Norway and Sweden became the latest countries to sign a bilateral agreement with Singapore and Lim openly admits that his country’s openness to Open Skies Agreements has played a major factor in Changi’s success as a hub.
CAAS is certainly happy to acknowledge the role that its airlines contribute towards the airport’s success, each year hosting a special awards evening to honour its top performing carriers in terms of passenger and cargo carriage and growth.
Concludes Lim: “The awards celebrate the strong partnership we have with our airlines who underpin Changi’s success.”
He may have retired from the air force but appears as if Singapore Changi is on the right course under the leadership of Lim Kim Choon and the only way is up.
Asia-Pacific Airports 2008 Issue 2
Cream of the crop
Marketing managers are supposed to pitch their product, although it’s not only duty that calls Frances Cream, newly crowned ACI Asia-Pacific’s Young Executive of the Year, to wax lyrical about the joys of Australia’s Gold Coast.
“What’s not to like?” asks the 31-year-old marketing manager at Gold Coast Airport in Queensland.
“I live opposite the beach, and the airport overlooks the beach.
I can walk along the sand every morning, and swim in the ocean most months of the year.
I can’t imagine a more beautiful place to live and work,” she says.
Cream, an ex-Sydneysider, espouses the Gold Coast Airport’s mantra that “you feel like you’re on holiday the minute you arrive”.
She has held her current position for two years, after Cream and husband Glenn decided on a sea-change.
“I was living in the heart of Sydney, while Glenn, from Tasmania (an island, and Australia’s southern most state) is not really the city type.
When we got married we wanted a different lifestyle, and the Gold Coast seemed perfect.”
Cream had always been drawn to travel and tourism.
Originally a travel agent, she went back to study a masters degree in marketing, starting her new career at Tourism Australia.
Her arrival on the Gold Coast two years ago coincided with its airport needing a new marketing manager, a role Cream considers to be her dream job.
of it all, and the way it brings people together from all over the world.
“We have an internal word for people who are into aviation – aerosexuals – and that’s me, so this job is a perfect fit.”
When she first arrived, Cream explains, the Gold Coast Airport was already a powerful brand.
It’s the aviation home of Australia’s favourite seaside playground, world renowned for its glorious subtropical climate, seemingly endless kilometres of golden surf beaches, spectacular hinterland, award-winning restaurants, great shopping and thrilling theme park attractions.
With a A$100 million terminal redevelopment then about to begin (and now in its final stages, due for completion in March 2010), Cream’s goal was to ramp up the marketing to cement Gold Coast Airport as a first-choice destination for southeast Queensland.
“My aim was to get more locals to use it, and having Brisbane people look at the Gold Coast as their airport as well – even for (some) international departures,” says Cream.
How? “Well Gold Coast is a more affordable option for outbound passengers, with lower car-parking costs and lower fees,” she explains.
“And with our nearly completed terminal extension bringing a wide choice of retail and F&B offerings, it’s no longer a small-town airport.”
For arriving passengers, Cream adds, the airport, with its stylish interior design and views over the surrounding hinterland, will be “part of their Gold Coast experience”.
Being from the new school of marketing, Cream has drawn on technology to help spread the word: in addition to traditional media, she leverages the cost effective, broad-reaching online environment, including Facebook, news feeds, email alerts, even Twitter.
“To my knowledge, we are the first airport in Australia to have a Twitter site,” she says.
As a result, the Gold Coast Airport’s website hits are up 50%–70% from last year.
Cream’s marketing strategy has also focused on working with airline partners to develop new routes and restore flight frequency that was cut during the economic slowdown.
Marketing co-operatives were formed so the airport could join hands with airlines and the tourism industry to do larger campaigns, and the results again are proven.
Last financial year the Gold Coast Airport recorded over 4.6 million passengers, up 11.6% on the previous year, including a 97% jump in international numbers.
And the numbers so far this year look promising, too.
Working with the airline’s research department and passenger focus groups to propose new routes has also paid off, notably with Virgin Blue’s new Gold Coast–Townsville service, and the introduction of new carrier Airnorth with a Gold Coast–Mount Isa–Darwin route.
“I don’t think Virgin Blue would have thought to go to Townsville if not for that,” Cream says.
Low-cost carriers (LCCs) were targeted to give the airport a competitive edge.
When the new terminal is finished, it will be the largest purpose-built facility for LCCs in Australia, streamlining efficiency for carriers and their passengers by having a common check-in for all airlines, self-service kiosks, a single baggage collection and screening point and one main departures and arrivals area.
Cream saw her entry in the ACI Asia-Pacific Young Executive of the Year award as a way of contributing her ideas on how the airport industry can rise above the challenges of the financial crisis.
Despite the intensity of the current economic climate, she stresses the need not to lose sight of long-term sustainability.
To this end, Cream feels airports must be more strategic and innovative, becoming “more accountable for the fate of the airport user, whether it is the airline, or airline customer or concessionary owner”.
Her solution, as evidenced in initiatives at the Gold Coast Airport, involves all stakeholders in aviation business pulling together in an integrated approach.
“It is during these tough times that airports have opportunities to grow and develop partnerships and work collaboratively yet competitively to ensure sustainability and growth in the ever changing aviation industry,” Cream says.
“By knowing their position in the market, who their key customers are and understanding their needs, airports can continue to manage infrastructure costs with revenue while facilitating growth for airlines.”
Cream will be presented with her award on November 3 in Kuala Lumpur at the 19th ACI World & Asia-Pacific Conference and Exhibition.
Her $1,000 prize money won’t be spent on flying lessons, or even more trips abroad – indeed, after Kuala Lumpur, Cream will be grounded for a while as she prepares for her next challenge: the birth of her first child, due early next year.
But no doubt, during her happy time ahead while on maternity leave, at least part of this young executive’s head will be in the clouds, still dreaming of ever new heights and clever new marketing ideas for her beloved aviation business.
Asia-Pacific Airports 2009 Issue 4
Out of the blue
The once unimaginable prospect of passenger flights to Antarctica could now be a possibility following the opening of an ice runway in the sub-zero continent.
The four kilometre long, 500 metre wide runway some 70km inland from Australia’s remote Casey Research Station, cuts a blue swathe through the stark white wilderness of Antarctica and creates a world of future possibilities for air travel to the world’s coldest continent.
For the runway is capable of handling widebody aircraft and on January 11, 2008, welcomed its first ever commercial flight –an A319 service from Hobart, Tasmania, nearly 80 years after polar explorer, Sir Hubert Wilkins, first flew over the icecap.
This much anticipated landing filled the final ‘missing link’ in global air travel. Until the opening of Wilkins Runway, and the commencement of regular services, Australia and Antarctica had been the last two continents on the planet not yet linked by air.
Pilot, Garry Studd, captained the history-making four and a half-hour flight from Hobart, and the 3am arrival was appropriately spectacular, marked by brilliant sunlight, perfectly still conditions and a brisk minus 16C. After touchdown, he remarked on the smoothness of the laser-levelled runway. “I’ve certainly landed on worse at international airports in plenty of places in the world,” joked Studd.
The landing was conventional – just like any other – and helped by weather conditions that were described as perfect. Studd could see the runway from 10 kilometres out, but having for years landed smaller planes directly onto the ice at Australia’s Antarctic research station, knew that in different conditions, he might not have been able to see it at all.
The idea of building a runway in the frozen continent was first mooted 50 years ago, when the Australian Government began its scientific expeditions. Antarctica is a rich resource for research, but it’s fair weather access only. The scientist’s window is the southern hemisphere’s summer, which can run from around late October to mid-February, and by conventional means (sea travel), there’s only one boat in, and one boat out, each season.
“Which means that even if a scientist needed only two or three days to collect moss samples, he could be there for four months,”explains Stuart McFadzean, senior project officer for the Australian Antarctic Division (AAD).
The air link cuts travel times from several weeks at sea to just hours on the plane. “It will revolutionise the way we can do our research,” adds AAD chief scientist Michael Stoddart.
Building a runway for scientific purposes would doubtless improve both efficiency and outcomes, yet nothing of this scale had been attempted before.
So, how do you construct a runway on ice – the longest runway in the southern hemisphere – with limited resources and in appalling weather conditions?
Airlink project manager, Charlton Clark, knew the project would test the limits of human innovation and endurance and that the momentous task would be entrusted to a small handful of determined expeditioners.
The first consideration was the runway site needed to be flat, at an altitude neither too warm nor too cold, and in an area of low snow accumulation.
“The site we selected is about 70 kilometres inland from Casey (research) station,” Clark explains. “It has low snow accumulation over winter, which minimises the amount of work we need to do at the outset of each season to remove snow from the infrastructure and the runway.
“It has a slope of less than two per cent, so it is as close to flat as we can get. And it is at an altitude of 700 metres above sea level, which provides the best temperature conditions for runway construction.”
The runway is situated on a blue ice glacier, which on its own, would be slippery and difficult to maintain, due to melting of the dark blue surface in the sunlight. To overcome this, the construction team capped the ice with a snow pavement, using techniques adapted from the US Antarctic Programme.
“As well as reflecting sunlight, the snow pavement increases the co-efficient of friction of the runway,” says Clark. “For example, blue ice is like an ice-skating rink, with a co-efficient of friction of 0.1. The snow pavement increases it to 0.3, which is equivalent to a concrete runway under very heavy rain at Melbourne Airport.”
The pavement is made from fresh snow, which is spread across the graded blue ice surface and compressed with a roller to approximately 100mm, so it is like concrete.
“We start compressing with a light weight and low tyre pressure, then add more and more weight up to 57 tonnes and increase the tyre pressure,” says Clark. “This is like going from a sandshoe to a stiletto. Once we have achieved 100% coverage with the roller we let the snow crystal structure bond for 24 hours.”
The integrity of the pavement is then tested with a proof roller, which mimics the pressure of an A319 aircraft.
The pavement could only be built in temperatures of between – 2°C and 3°C, and the construction team spent many hours in blizzard conditions and with de-icing equipment. Despite the obstacles work progressed on time.
The project has suitably impressed the Governor General of Australia who describes Wilkins Runway as a remarkable feat of ice engineering.
He says: “It is fitting that it is named after Sir George Hubert Wilkins, one of the great pioneers of polar exploration and aviation. He encountered many of the same perils that face our Antarctic aviators today — ferocious wind, ice and snow blizzards and absolute isolation.”
A certified aerodrome under the approval of the Civil Aviation Safety Authority (CASA), Wilkins Runway will initially be used only for scientific purposes, but who knows about the future?
Up until now feasibility, funding, inclination and environmental concerns have all served to frustrate plans to land passenger planes from Australia on the continent, but with the basic aviation infrastructure now in place, who knows what the future might hold?
Asia-Pacific Airports 2008 Issue 1
Positive thinking
CEO, Simon Moutter, talks to Peta Tomlinson about his future development plans for Auckland International Airport.
Many long-time industry players expected the climb back up would be long and slow.
To newcomer Moutter, however, the downturn was an almost welcome pause in the airport’s growth momentum and offered him the space and time to fine-tune the business he’d just inherited.
Like most airports worldwide, Auckland was challenged by the macro-economic conditions of 2008, but investor confidence was never a concern.
Even during that period of extreme financial uncertainty, for example, its bond offer was fully subscribed.
A measure, Moutter believes, is down to its perceived status as “a relatively safe port in an economic storm.”
By year’s end, the lucrative international seat capacity had halted its downward trend, and 2009 brought better news for New Zealand’s aviation gateway.
Continued growth in revenue and earnings featured in the annual report, and with a new management team in place and a slew of prestigious international awards in the bag, the way forward looked promising.
Moutter’s appointment at the airport marked a change of direction for the 49-year-old Aucklander and married father of four, whose previous positions included chief operating officer (business) at Telecom New Zealand, and before that chief executive at Powerco, the country’s fourth largest electricity and gas distribution business.
He now reveals, though, that Auckland International Airport had long been on his radar.
“I’m an engineer in my distant background, and so have a natural interest in businesses that deal with physical assets. I’ve run gas, electricity, telco and IT companies, and airports are similarly positioned infrastructure businesses but with three dimensions: property, retail and aeronautical.
“Most of all, aviation had for a number of decades been a growing sector, which makes it a very positive, vibrant, buzzing environment to be in. Auckland International Airport enjoys a high profile as an important international business. I’d always had an interest in it and thought that if ever an opportunity arose, I’d have a look.”
Moutter was appointed after an international search, but he admits that his new company was “a very different business” from when he signed the contract in May 2008, to starting work in August, due to the impact of the global economic downturn on the aviation industry.
At Auckland International Airport passenger numbers had fallen, profits were hit, and the share price dropped – by as much as 30% at the lowest point.
“It wasn’t the ideal starting point,” he concedes.
The pause in the airport’s growth trend, however, gave Moutter time to rebuild his management team, and the space to refocus the business away from a building emphasis towards a yield management emphasis.
When he began dialogue with investors and stakeholders, Moutter found a lot of mixed views around what was happening, and how the airport should grow going forward.
He drilled down, wanting to know more.
“We spent a lot of time with government, tourism agencies and airlines seeking to better understand their business drivers, objectives and their brands.
From that, we worked on how we could support each of their ambitions differently,” he remembers.
Moutter believes this move away from a “one size fits all” approach has become Auckland’s market differentiator, particularly when it comes to airlines.
“We don’t want to force all airlines to take the one solution.
We say, if any airline wants to innovate, we’ll support that,” Moutter enthuses.
It was a big shift, and not the most cost effective to begin with.
Says Moutter: “I could have reduced my cost base by having one version and telling everyone they had to use it, but that is not healthy, and it’s not the way to grow travel markets.
” To this end, “choice is essential,” admits Moutter.
“If a passenger’s journey is slow, frustrating or boring, it adds an unwelcome overhead to the business,” says Moutter.
“On the flip side, an airport experience that is fast, efficient, fun and enjoyable will encourage people to travel more often, and this has strong economic benefits.
“Our objective at Auckland International Airport is that whatever you want, whether that be a car park, somewhere to eat, a place to sit or choice of airline, you have three options (at three different pricing levels): good, better and best.
Offering customers choices subsequently improves their service experience.
” Ensuring everyone pulls together is no mean feat for a business district that employs 12,000 people, only 300 of whom actually work for the airport company.
Moutter says his job is to make it all work.
“I see the role of an airport CEO rather like that of the conductor of an orchestra,” he reveals.
“The end result is the net effect of having all the instruments in tune, and combining them to deliver the symphony.”
That also means accepting accountability.
Airports are one of the business sectors most likely to receive customer feedback, which Moutter views as a cherished gift among CEOs.
He comments: “This is fantastic. Feedback enables us to take the right steps to lift our game, and recognise great outcomes too.”
Ideas for improvement are especially well received, he says.
“We listen intently, and will always take accountability. It is a conductor’s role to keep the orchestra on song.”
Patently obvious from the feedback was that old chestnut: a frustration with delays.
In a pilot programme to test the Lean Six Sigma business efficiency tool in an airport setting, Moutter’s management team applied its methodologies across all aspects of border processing.
They started with the trans-Tasman market, aiming to get the immigration processing time for passengers travelling between New Zealand and Australia “as close as possible to a domestic experience.”
The system was taught to everyone involved in cross-border business, from ground handlers to airline staff.
Within one year of rollout, the peak time wait in international Arrivals went down from 55 minutes in 2008, to 26.5 minutes in 2009.
“This is a significant service improvement, especially for arriving passengers who are invariably tired and just want to get to their destination quickly,” says Moutter. Another strategy is to move the airport environment towards “a uniquely Kiwi look and feel”, so visitors can have an authentic experience from the moment they arrive.
These outcomes of measures, he believes, have been reflected in the most recent Skytrax passenger satisfaction awards, which ranked Auckland as one of the top 10 airports in the world in 2009 and best gateway in the Australia Pacific region.
The improvements made in the past 18 months have been “an incredibly uplifting process” for all involved, Moutter says.
“Some staff members have been here for 20 years, and they say this is the first time they’ve had a genuine opportunity to make a difference to the business in a positive way.”
As the aviation industry began climbing out of the doldrums – mercifully sooner than many had predicted – it seemed Auckland International Airport’s new direction was on track.
The 2009 calendar year saw a return to positive growth and “a clear revival from airlines in view of their future plans,” notes Moutter.
The recent announcement of a 450% increase in its half-yearly profits – Auckland International Airport Limited (AIAL) registering a net profit of NZ$54 million in the six months to December 31, 2009 – will certainly have pleased shareholders.
Time, then, to review its horizons.
In January 2010, the airport authority expanded offshore by announcing its purchase of a quarter-share stake in North Queensland Airports, the operator of Cairns and Mackay airports in Australia.
With Cairns being Australia’s seventh busiest airport and its closest on the eastern seaboard to Asia’s lucrative tourism market, Moutter says the acquisition opens up exciting opportunities to grow AIAL beyond its core business.
Noting that a strategy since March 2009 has been to pursue opportunistic but carefully selected step-outs, the Cairns/Mackay deal offered the right synergies.
“We believe that Asian tourism markets offer the greatest opportunity for volume growth, and that one of the keys to growing Asian traffic is improved air services connections,” says Moutter.
“Driving more travel demand out of Asia will be crucial to the future growth of both Auckland International Airport and the New Zealand tourism sector.”
The move to purchase a stake in the Australian airport operator followed last July’s decision by AIAL to enter the hospitality arena by opening an airport hotel in time for the 2011 Rugby World Cup.
It recently announced that the budget 125-room hotel will be branded Formule 1 and operated by French hotel group Accor Hospitality, which also operates the gateway’s Novotel.
Moutter says that the Australia deals will be the last such transaction for a while.
“Our objective from here is to really hold ourselves accountable for that investment, and to be incredibly supportive in furthering its development on a significant growth trajectory.”
Judging by its recent performance, Auckland International Airport will be both in tune, and on song, to achieve that goal.
Asia-Pacific Airports 2010 Issue 1
Hangar homes
Peta Tomlinson reports on the creation of Australia’s first residential community built around a runway.
A man who once dreamed he could fly has become Australia’s most innovative airport developer. Passionate about aviation since boyhood, Jeffrey Ruddell ended up not only buying his own airport, but transforming it so that others too could live the dream.And what better place for a visionary residential ‘airpark’ than one of the world’s natural wonders – the Great Barrier Reef.
Ruddell is the sole investor in the $65 million WAVE (Whitsunday Aviation Village Estate) project at Airlie Beach in tropical north Queensland, which is not surprising to those who know him. “I’ve always had a reputation for sticking my neck out,” admits the sugarcane farmer who was just 14 years old when he quit school to go and earn a living.
An airpark is a residential community built around a runway. The homes are usually designed to include an aircraft hangar. The concept is hugely popular in the US, where over 500 airparks have been developed, but Australian authorities have not been so keen. Despite grandiose proposals from various developers in various locations, WAVE is the only one yet to gain all the necessary government approvals.
And Ruddell is in little doubt that Australia’s first airpark will give the best in the US “a run for their money”.
“Through extensive research and working with expert engineers, we have designed an airpark that offers the ultimate lifestyle for those just as passionate about aviation as myself,” enthuses Ruddell. “Where else in the world can you stroll down the stairs of your architecturally designed tropical home, climb into your aircraft and within minutes reach famous island resorts and coral reefs?”
A Whitsunday local, Ruddell couldn’t wait to explore the Great Barrier Reef by air. By 16 he had obtained his private pilot’s licence, and nearly three decades later, his enthusiasm hasn’t paled.
“It’s just awesome to fly like a bird over this tremendous living thing that’s one of the world’s natural wonders. And it’s so spectacular,” he says. “Where else could you find 74 magic islands with the Great Barrier Reef on the doorstep?”
Though farming is his business – having bought the first in a series of cane farms when he was 28 – Ruddell had long flirted with the idea of owning an airfield. He “didn’t think it would come to anything”, but opportunity knocked when he went to his local Whitsunday Airport to see about doing some charter flights. The previous owner mentioned that the airport was for sale, prompting Ruddell to make what he maintains was the best move of his life.
Immediately he began growing the commercial precinct of the airport, investing $1.7 million in seven new buildings (including hangars) and related infrastructure. This allowed for the introduction of various new businesses including a flying school and helicopter sales, as well as expansion of existing businesses.
Tenants now include HeliBiz, Australia’s leading helicopter business selling 50 per year, and Air Whitsunday, with the largest fleet of sea planes in the southern hemisphere.
Ruddell admits that he had “heard about airparks”, but never seen one – and as a businessman he thought this could be the solution for the part of his 60-acre site that couldn’t be used for commercial aviation.
As part of his research, Ruddell visited over 50 airparks in the US and “incorporated the best bits of each” into his WAVE masterplan. And, as a pilot himself, he also knew what not to do – hence the decision to spend $3.4 million on a 15-metre wide sealed runway made of asphalt, not bitumen, for safer, quieter and smoother landings.
Each of the village’s 57 homes will have its own hangar with space for a rotary or fixed wing aircraft up to the size of a small jet. All are located on a dual taxi-way to eliminate the hassle of driving to the airport and finding parking.
It’s no coincidence that the architect tasked with designing the hangar homes is a pilot himself. Gary Hunt, like Ruddell, also understands the aviation culture and recognises how important it is for aircraft to be both secure and easily handled. He’s also the architect behind some of the Whitsundays’ most innovative developments, Peppers resorts and the new Port of Airlie marina precinct.
“Our design solution was a series of hangar homes uniquely tropical and reminiscent of traditional Queensland homes and values,” Hunt says. “The homes incorporate lots of shade and are designed to capture the sea breezes but are carefully thought out and user-friendly so the owner can safely hangar their aircraft.”
The village also has an eco-focus. Existing mature trees have been maintained and natural creeks enhanced, and noise minimised through double glazing, insulation and extensive landscape buffering. It’s a gated, self-sufficient community with its own supermarket, restaurants and shops.
Ruddell believes his decision to assemble the best planning and engineering teams possible played a key role in securing a permit for what he confidently says is Australia’s first purposebuilt airpark community (a few hangar homes do exist in rural areas, but these are add-ons to existing airfields).
And, there will be no more in the Whitsundays. WAVE’s permit allows only for 57 lots, and there is no scope for future airport development in the region.
WAVE’s approval came through in April, after three and a half years of planning and a significant investment. Ruddell withstood long periods of stress and offers from developers to buy his land, and was rewarded when a waiting list of buyers were quick to snap up many of the lots, which range from 1,000sqm to 1,400sqm and sell for $430,000-$780,000 (land only).
Owners can then either build their own designs within the covenant guidelines, or choose from four of Hunt’s designs.
Ruddell is a little coy when asked for details about buyers, admitting that most of his new neighbours are from other Australian states and “the kind of people who want a luxury holiday home with their plane or helicopter in the hangar and a boat in the marina.”
Being the creator of the village has entitled Ruddell to one very important perk – the right to select the best plot of land and home for himself. Well, you would, wouldn’t you?
Asia-Pacific Airports 2007 Issue 1
Delhi’s success story
With a new state-of-the-art terminal and soaring passenger traffi c, the future looks bright for Delhi’s Indira Gandhi International Airport, writes Peta Tomlinson.
The world’s second fastest growing major economy has made enormous advances in the past 10 years, and if you haven’t been there for a while or ever before, the surprises begin immediately upon arrival.
Forget any preconceptions about the airports of old. For ‘Incredible India’, as it’s fondly known, now boasts two of the world’s best gateways – Delhi’s Indira Gandhi International Airport and Rajiv Gandhi International Airport in Hyderabad both ranked highly in ACI’s Airport Service Quality (ASQ) customer satisfaction survey – and huge investment elsewhere continues to transform the nation’s airport system.
Both Delhi (DEL) and Hyderabad (HYD) airports are operated by private consortia led by the GMR Group, and the elevation of these key aviation gateways to world-class standard is a response to the phenomenal growth of air travel in India and the result of substantial public and private sector investment.
Indeed, annual traffi c growth across India has more than tripled from 6% to 20% per annum in less than a decade and Delhi–Indira Gandhi has seen its annual throughput soar from 16.5 million passengers in 2006 to over 28.5 million last year.
Delhi is a standout example of the Public Private Partnerships (PPPs) that are paving the way for the transformation of India’s gateways. Its ownership structure comprises Delhi International Airport (DIAL) as a joint venture company, infrastructure company GMR Group (54%), Airports Authority of India (26%), Fraport and Malaysia Airports (10% each).
DIAL is mandated to fi nance, design, build, operate and maintain the Delhi Airport for 30 years with an option to extend it by another 30 years. Visitors arriving in Delhi this April for the ACI Asia-Pacifi c Conference, Assembly and Exhibition will be greeted by the airport’s “wow factor”, according to new airport CEO, IP Rao.
He’s referring to the gateway’s new Terminal 3, opened last year to cement Delhi’s place among the largest and most modern in the world. Since opening, the new terminal has been wowing all fi rst time visitors, Rao says, who believes that its grandeur is a refl ection of India’s galloping economy and new-found confidence.
The 34 million passengers per annum capacity of the new showpiece terminal ensure that India’s gateway to the world is capable of accommodating up to 46mppa.
The 502,000sqm showpiece complex boasts 78 gates and sprawling piers spanning 1.2 kilometres from one end to the other. Automated baggage technology capable of handing up to 12,800 bags per hour mean that long waits for luggage upon arrival are all but a thing of the past. While 168 check-in desks and 95 immigration counters are designed to facilitate swift movement through the terminal.
ThyssenKrupp – which provided the bulk of the terminal’s airbridges – also provided the 77 elevators, 34 escalators and 92 moving walks that help make T3 one of the world’s most passenger friendly terminal’s in terms of ease of access.
One 118 metre long moving walkway in Terminal 3 is actually thought to be the longest in Asia. Terminal 3’s huge retail mall is the largest of any Indian airport, encompassing almost 20,000sqm of duty free stores.
Over 3,000 security cameras keep a close eye on every corner of the airport premises, while trained security personnel, passenger support staff and registered taxi operators with biometric cards ensure much safer travel to and from the airport terminal.
It is this attention to detail that makes Delhi–Indira Gandhi International Airport the gateway to modern India, according to Rao. “Delhi is now a witness to a new airport building with eye-catching design, attractive interior space, tranquil landscaping, and safe and effi cient movement systems,” enthuses Rao.
“Delhi’s T3 offers not just an airport facility, but an experience in itself. With this terminal, DIAL is poised to transform the airport into a hub connecting passengers internationally and domestically, thereby allowing India to take its rightful place on the global aviation stage by providing passengers and airlines with the choice of an effi cient, safe, secure and customer focused airport.”
The new facility is regarded as a big step forward for India, and a source of national pride. Feelings that were reinforced by Delhi’s performance in the 2010 ASQ survey, which saw it ranked fourth behind Incheon, Singapore Changi and Shanghai Pudong and above Kuala Lumpur in the 25–40mppa category.
Rao claims that the lofty ranking has well and truly established DEL as one of the Asia-Pacifi c region’s top 10 airports.
“Our success in the awards is testimony to the diligent approach of not just the GMR staff but all airport stakeholders,” says Rao. “This list includes the entire airport community comprising the airlines, retail and food outlets staff, the CISF and Customs and Immigration, in providing a world-class experience to the passengers.
“I also believe that our performance in the ASQ survey speaks volumes of how a true Public Private Partnership (PPP) can become successful with all the stakeholders and the airport community working in tandem.”
Former DIAL CEO and newly appointed CEO, GMR Corporate Airport Sector, PS Nair, admits that Delhi had achieved its vision of being among the ‘Top Ten’ airports in the 25–40mppa category ahead of its 2011 target.
“For us, ASQ is a valuable tool to help improve performance in a scientific manner, identifying problem areas that can then be addressed. Service quality at airports is gaining immense importance today,” he says.
DIAL’s commitment to honing Delhi airport’s competitive edge did not stop with the opening of T3. In December 2010, it partnered with IBM India to establish a common-use infrastructure that would automate its operations and improve customer satisfaction through quality service.
The unified network solution integrates all of the communications across T3 and its facilities so that airport operations, airlines and other tenants can better share and exchange key information across their related operations to more efficiently deploy their resources and meet the growing demands of the India aviation market.
A milestone event this year saw the long-awaited opening of a new metro rail link that gets passengers to the airport from the centre of Delhi in just 20 minutes.
In March 2011, Hong Kong-based Langham Hotels opened a mid-range Eaton Smart hotel inside the terminal, split across the domestic and international wings.
Rooms can be reserved overnight or in blocks of five hours, so business travellers can sleep, freshen up and connect to domestic flights or arrive in central Delhi ready for a day’s work.
But the gateway is certainly not resting on its laurels in terms of infrastructure, as T3 is part of a flexible, long-term development programme that could eventually result in the airport being equipped to handle 100mppa.
They include proposals to build four more new passenger terminals and add a fourth runaway by 2026 to ensure that the gateway is equipped to meet future demand.
In any burgeoning economy today, it is the airports that represent the arrival of a nation on the global economic stage. The new-look Delhi–Indira Gandhi International Airport is just that – a stalwart symbol of the Indian economy.
High-tech Terminal 3
Delhi’s new Terminal 3 incorporates a number of ARINC provided
solutions specifi cally designed to enhance the ‘passenger
convenience’, streamline airport operations and strengthen security.
These solutions include vMUSE for check-in and boarding
stations, SelfServ Common Use Self Service (CUSS) kiosks, BagScan
for baggage reconciliation system and BagLink for baggage
messaging solutions.
Over 100 hand-held scanners for the automated baggage
reconciliation system were also installed in partnership with
Quantum Aviation Solutions.
ARINC’s vMUSE solution is also available at three metro stations
along the Airport Express Line, which allows travellers to check-in at
these stations before taking the express line to Delhi–Indira Gandhi
International Airport.
Local Departure Control Systems (L-DCS) were also deployed to
simplify and boost the effi ciency of check-in processes at the
terminal. ARINC provided its AviNet Airport network connectivity
solution in the terminal to allow reliable access for the airlines to their
DCS hosts and back offi ces at the airport.
The company is also trialling its passenger reconciliation system,
VeriPax, at the airport. The technology is designed to improve airport
security by validating all types of boarding passes at the terminal.
VeriPax is currently undergoing trials at the terminal.
ARINC Managed Services (AMS), a subsidiary of ARINC
Incorporated, manages the operations and maintenance services for
the deployed systems.
IT partner
When Delhi’s Indira Gandhi International Airport began
using UFIS Airport Solutions’ (UFIS-AS) product portfolio
in June 2008, it became the third airport, and the first
brownfield airport in India to use the Universal Flight
Information System (UFIS).
Rajiv Gandhi International Airport, Hyderabad, and
Bengaluru International Airport, Bangalore – both
greenfield airports – began using UFIS in March and May
2008, respectively.
Delhi also premiered WebFIDS, which provides the same
reliability and industry-proven functionality as the classic
FIDS solutions with the added flexibility of being able to
use any PC-based controller running Windows or Linux as
the display controller.
UFIS also provided Delhi’s Airport Operational Database
(AODB), Flight Information Processing System (FIPS), Flight
Information Display System (FIDS), and interfaces to 14
sub-systems through the Information Broker.
Since the initial installation, Delhi has added the Data
Changes module to its UFIS package.