In the spotlight: Economics & Finance

Airports: Mumbai & Philadelphia

Special report: Social media
Plus: Leadership, CDM & airport design
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JuneJuly 2013
Volume 18 Issue 3
www.aci.aero
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3 AIRPORT WORLD/JUNE-JULY 2013
AW
OPINION
T
hey may not be quite so loud or as
vociferous as they used to be a few
years ago, but, in general, airlines
dont need much encouragement to
complain about high airport charges.
In fact, hardly a month goes by without
some airline bleating about overly high fees or
warning that they may have to scale back
services or axe routes altogether if an airport
doesnt reduce its charges.
Indeed, airlines in the UK recently criticised
the Civil Aviation Authority after it effectively
proposed real-term CUTS to the amount
Heathrow can charge them for using its facilities.
To put this into context, the CAA has
proposed that airline charges at Heathrow for
the period 2014 to 2019 should be capped at
the Retail Prices Index (RPI) rate of infation
minus 1.3% down from current charges of
RPI plus 7.5% for the period 2009 to 2014.
And there was good news of sorts for
airlines at Gatwick, too, where the CAA
proposed a price cap of RPI plus 1% for the fve
years to April 2019 from a current average
charge of RPI plus 2%. While at Stansted, where
passenger numbers have fallen, the CAA chose
to monitor charges rather than impose a cap.
Yet the response from the airlines has been
somewhat hysterical, IAGs Willie Walsh
claiming that the proposed rise at Heathrow
fails to address the hub being over-priced,
over-rewarded and ineffcient.
The fact that airport charges account for
just over 5% of airline operating costs
somehow seems to have been forgotten.
Maybe they can be forgiven for thinking
that airports are a licence to print money
because of the headlines airports such as
Incheon, Dubai and Heathrow make for their
commercial success the frst two make over
$1.6 billion per annum in duty free sales, while
the latter is often referred to as a shopping
mall with runways.
However, the economic reality is somewhat
different for most other airports, with 70% of
the worlds gateways actually losing money.
In this economics and fnance focused
issue we crush the myth that airports are
money-making machines, and try and fnd out
why so few make a proft.
We also have a special report on US airport
ownership and look at airport development in
China and the planned privatisation of
Greeces regional airports.
I once made an American airport manager
so mad at an ACI-NA lunch for daring to
suggest that the US should do more to
embrace airport privatisation, that he walked
away in disgust before his main course arrived!
Id be interested to know his thoughts now
that San Juans Luis Muoz Marin International
Airport has been privatised.
Still on the subject of money, we discover
why New Orleans has fnally decided to invest
in its airport; turn the spotlight on a global
airport investor; review the benefts of energy
effcient terminals and highlight F&B
innovation in Australia.
Making money, after all, is important as it
often funds crucial new infrastructure and can
help keep airline costs down!
Other issues under the microscope in this
bumper issue include social media; airport
leadership; rewards & recognition programmes;
IT innovation and airport sustainability.
I hope you enjoy it!
Airport World editor, Joe Bates,
reflects on airport profitability,
changing business models in the
US and finding the funds to pay
for future airport development.
Airport World
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Money
matters
CONTENTS
5
3 Opinion
10 News
12 Busy times
Joe Bates looks back at some of the highlights from the recent ACI Asia-Pacifc Regional
Assembly, Conference and Exhibition in Phuket.
15 Game on
Africa learnt more about the airport city phenomenon at the recent Airport Cities World
Conference and Exhibition (ACE) in Ekurhuleni, writes Steven Thompson.
16 ACI news
19 View from the top
ACI director general, Angela Gittens, refects on the importance of putting passengers frst
and the need to do more to promote a more positive public perception of airports.
20 Passage to India
Oliver Clark talks to GVK Power and Infrastructure Limited chairman, Sanjay Reddy, about his
companys plans to modernise its airports in India and further afeld.
24 Cautious optimism
An airline merger and a $6.5 billion capital improvement programme promise to breathe
new life into Philadelphia International Airport, writes Nicole Nelson.
28 Airport proftability
Despite the sizeable commercial profts of some of the worlds biggest gateways, the majority of
airports lose money. Graham Newton asks why and if anything can be done to reverse the trend.
34 New money
Is the airport industry going to be the next big benefciary of Islamic fnancing? Umar Moghul
considers its merits and appeal for gateways looking to fund key construction projects.
36 Chinas mission
Peter Morris and Joanna Lu report on the fnancial challenges facing Chinas airports as the
country bids to upgrade its infrastructure to cope with future growth.
AIRPORT WORLD/JUNE-JULY 2013
Issue 3
Volume 18
Cover image courtesy of
Rubberball/Mike Kemp/
Getty Images.
tn the spet|ight: cenemics & finance
Airperts: Mumbai & Phi|ade|phia
5pecia| repert: 5ecia| media
P|us: Leadership, CM& airpert design
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In this issue
Director General
Angela Gittens
Chair
Yiannis Paraschis (Athens, Greece)
Vice Chair
Fredrick J Piccolo (Sarasota, USA)
Immediate Past Chair
Max Moore-Wilton (Sydney, Australia)
Treasurer
Louis E Miller (Atlanta, USA)
ACI WORLD GOVERNING BOARD
DIRECTORS
Africa (3)
Dalil Guendouz (Casablanca, Morocco)
Pascal Komla (Lom, Togo)
Robinson Misitala (Livingstone, Zambia)
Asia-Pacifc (8)
Tan Sri Bashir Ahmad (Kuala Lumpur, Malaysia)
VP Agrawal (Delhi, India)
Ghanem Al-Hajri (Sharjah, UAE)
Dennis Chant (Gold Coast, Australia)
Zhiyi Dong (Beijing, China)
Seow Hiang Lee (Singapore)
Kerrie Mather (Sydney, Australia)
Kosaburo Morinaka (Tokyo, Japan)
Europe (7)
Declan Collier (London, UK)
Michael Kerkloh (Munich, Germany)
Yiannis Paraschis (Athens, Greece)
Tonci Peovic (Zagreb, Croatia)
Ad Rutten (Amsterdam, Holland)
Stefan Schulte (Frankfurt, Germany)
Jos-Manuel Vargas (Madrid, Spain)
Latin America & Caribbean (3)
Philippe Baril (Quito, Ecuador)
Fernando Bosque (Guadalajara, Mexico)
Hctor Navarrete Muoz (Merida, Mexico)
North America (7)
Thella Bowens (San Diego, USA)
David Edwards (Greenville, USA)
Frank Miller (San Antonio, USA)
Reg K Milley (Edmonton, Canada)
Fredrick J Piccolo (Sarasota, USA)
Mark Reis (Seattle, USA)
Maureen Riley (Salt Lake City, USA)
Regional Advisers to the
World Governing Board (7)
Larry Cox (Memphis, USA)
Stephen Gichuki (Nairobi, Kenya)
Seow Hiang Lee (Singapore)
Bongani Maseko (Johannesburg, South Africa)
Barry Rempel (Winnipeg, Canada)
Earl Richards (Jamaica)
Miguel Southwell (Miami, USA)
Observer
World Business Partner Board Chairperson
Randy Pope (Burns & McDonnell)
Correct as of May 17, 2013
CONTENTS
7
AIRPORT WORLD/JUNE-JULY 2013
40 American revolution
With Puerto Ricos main gateway successfully privatised and an increasing number
of airports adopting new business models, are times fnally changing in the US for
airport ownership? Joe Bates investigates.
46 Smooth operator
LeighFishers Annie Lindseth and Zoe Haseman and Albuquerques Felix Vivian
refect on several projects that reduce Albuquerque International Sunports costs
by making it more energy effcient.
49 Everybody wins
Susan Gray takes a closer look at F&B innovation in Australia as airports bid to boost
revenues and raise customer satisfaction levels.
52 The time is now
Joe Bates reports on Louis Armstrong New Orleans International Airports plans to
transform its image, facilities and operational capabilities with a new state-of-the-
art terminal.
56 Greek odyssey
Hans-Dieter Janecke talks us through the latest developments regarding the
governments plans to privatise Greeces regional airports.
58 Investor spotlight
Samsung C&T Corporations vice president, head of strategic development,
Kwan Young Chung, talks to Airport World about Incheon International Airport and
his companys aviation investment strategy.
62 More than just results
Dr Richard Plenty and Terri Morrissey refect on key skills and competencies required
by todays airport leaders.
66 Making the right connections
Using social media to communicate with todays new breed of connected traveller
can enhance an airports image, performance and boost revenues, write David
McMullen and Shubhodeep Pal.
70 The people business
Recognising and rewarding good work and holding an annual Awards of Excellence
programme is part and parcel of enhancing engagement and being an employer of
choice, writes Christiane Beaulieu.
RUNNING HEAD
8
AIRPORT WORLD/JUNE-JULY 2013
Airport World on Twitter
Airport World is now tweeting.
You can follow us @airportworldmag for the
latest industry updates.
72 The way forward
The evolution of airport IT systems and collaborative decision
making will transform operations at the worlds gateways in the
years ahead, writes John Jarrell.
75 Health monitor
Francis Stone reports on the challenges, opportunities and
benefts to airports of adopting a globally accepted framework for
reporting their sustainability performance.
78 Staff watch
Ajay Jain takes a closer look at the latest identity management
solutions airports are using to monitor, manage and control staff
access to restricted areas.
81 Project watch
Prince Mohammad Bin Abdulaziz International Airport.
83 Project watch extra
Joe Bates and Steven Thompson turn the spotlight on
airport development projects in Indonesia, the Philippines
and Kazakhstan.
84 ACIs World Business Partners
87 Environment news
88 The last word
Airport World talks to Dag Inge Rasmussen, chairman and
CEO of Lagardre Services.
90 ACI traffc trends

Airport World on Facebook
Airport World is now on Facebook.
Find us at www.facebook.com/airportworld
for the latest industry postings.
Airport World online
Visit our website at www.airport-world.com
for daily news, views and developments from
airports, ACI World Business Partners and
industry suppliers across the globe.

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CONTENTS
8
ACI Europe issues
State aid warning
The importance of Europes regional airports and an ever increasing
threat to their livelihoods due to proposed new EU legislation was top
of the agenda at ACI Europes Regional Airports Conference &
Exhibition in Lyon.
In his opening remarks, ACI Europes director general, Olivier
Jankovec, noted that over the last 15 years, regional airports have
been the most dynamic segment of the European airport industry in
terms of passenger growth.
He said: Regional airports have been the primary enabler of
European connectivity, with more than 70 of them now hosting single
or even multi-airline bases. With most of Europe mired in recession,
their role as essential public transport infrastructure driving local
economic capabilities is coming to the fore.
More than ever, communities across Europe are relying on their
airports to support inward investments, exports, tourism and wider
economic regeneration.
However, he warned that the European Commissions proposed
implementation of stricter rules on State aid for airports ACI Europe
believes that aid is crucial for airports handling up to one million
passengers per annum while the EU believes the fgure should be
only 200,000 posed a very real threat to future survival of many of
Europes smaller airports.
He said that he feared that if the Commission gets its way, up to
80 airports across Europe faced the risk of closure.
Jankovec stated that the facts dont lie and that size really does
matter, with 51% of airports handling less that 5mppa and 65% of
those with less than 1mppa operating at a loss.
He told Airport World: We believe that the critical threshold for an
airport to be able to cover all of its operating costs is generally around
one million passengers per annum. So, on that basis, we are telling
the Commission that for airports handling less than one million
passengers, you need to allow some form of operating aid.
We are not saying that this should take the form of a blank cheque,
but there must be some possibility of public fnancing for these smaller
airports in recognition of their inability to cover their losses.
You have to remember that because of their size, it is much more
diffcult for small airports to develop their retail and F&B concessions
and other sources of non-aeronautical revenue which they can then
use to attract airlines and develop their facilities.
To put it simply, in many ways public fnancing plays the role that
non-aeronautical revenues do for the bigger guys. Losing any small
regional airport will decrease connectivity and have damaging
consequences for surrounding communities and economies.
Jankovec also claimed that it was time for the EU to address and
effectively outlaw the one-bag policy being imposed by certain
low-cost carriers due to its detrimental impact on vital retail/F&B
revenues at regional airports.
Later in the conference, the Europe Commissions head of unit,
Alain Alexis, came under fre from delegates for the EUs alleged
anti-competitive legislation towards small airports and for allocating
32 billion to the rail industry and just 7 billion to aviation, which
was argued didnt allow for a level playing feld.
Other topics covered during the conference included enhancing
relationships with the community/local businesses/government; marketing
and social media; and regulatory framework opportunities and threats.
10
NEWS
AIRPORT WORLD/JUNE-JULY 2013
News in brief
The Australian Competition and Consumer
Commission (ACCC) has revealed that passenger
satisfaction levels at Sydney Airport are at their
highest levels for 10 years. According to the ACCCs
monitoring report, greater value and choice across the
airport and strong investment in improved facilities
are the key reasons for rising satisfaction levels.
Los Angeles International Airports new breed of
volunteers are a lively bunch, drink a lot of water
and are a bit furrier than normal but its alright,
as they are dogs! The four-legged volunteers are
part of the gateways new PUP (Pets Unstressing
Passengers) initiative.
Dubai International Airport has become the
worlds leading hub for A380 operations,
according to published airline industry fight
schedule data for 2012. The data shows the
airport had 7,259 A380 scheduled fights to
28 destinations, the majority of which were
operated by Emirates. Paul Griffths, CEO
of Dubai Airports, said: The opening
of Concourse A earlier this year was a
$3 billion validation of our intention to be
the worlds premiere A380 hub.
Italian specialty store Bottega dei Sapori will
open at Pittsburgh International Airport (PIT)
this summer. In March this year, AIRMALL
announced its partnership with Airest Collezioni
to bring a selection of luxury brands to PIT. The
new stores are part of a $10 million upgrade, a
yearlong construction project that will result in
the most signifcant overhaul of the concessions
programme since the airport opened in 1992.
AIRPORT WORLD/JUNE-JULY 2013
NEWS
11
Terminal 2B at Paris-CDG has closed for a
facelift. Operator, Aroports de Paris (ADP),
claims that after 30 years service, the time
is right for its signifcant redevelopment. It
insists that the revamp is part of its drive to
increase the satisfaction of passengers and
airlines by adapting facilities to the highest
standards of quality.

Melbourne Airport has welcomed the Federal
Governments approval of its Southern Precinct
Program. Phase 1 of the project includes
development of a new domestic terminal facility,
17 new aircraft parking bays, dedicated ground
transport facilities and signifcant road upgrades.
Melbourne Airport CEO, Chris Woodruff, said: We
will look to fnalise discussions with our airline
customers with a view to the new terminal being
operational by mid 2015.
The UKs Lydd Airport is to be revived as a small
regional airport after the government gave the
go-ahead for a 9 million expansion plan. The
airport also known as London Ashford Airport
was frst opened in the 1950s and, at its height
in the mid 1960s, handled 250,000 passengers
a year. The new plans will increase passenger
capacity to 500,000 per year and create more
than 300 new jobs for the area.
Stockholm Arlanda has offcially inaugurated its
new-look Terminal 2, claiming that a 2,000sqm
expansion of the facility makes it bigger, better
and more passenger-friendly. The expansion
has allowed for the introduction of a range of new
retail and F&B outlets and is expected to boost
passenger fows. The near 50 million upgrade
is expected to be completed in 2015 with the
addition of a new baggage sorting system.
For daily news updates, visit www.airport-world.com
Honolulu upgrade commences
An extensive improvement project at Honolulu International
Airport has begun with groundbreaking for a new Aloha Air Cargo
(AAC) facility.
The $12m AAC terminal, being built with private investment, will
consolidate cargo operations, support offces and customer service
operations into a single location.
The facility is part of the gateways $750m overhaul under a
state-wide Hawaii Airports Modernisation Program designed to ensure
that it is equipped to handle rising traffc demand.
The facelift will include runway and taxiway improvements as well
as the new Diamond Head Commuter Terminal and L-shaped
Muaka Concourse, which is to be built on the site of the current
commuter terminal.
Completion of the entire project is scheduled for the third
quarter of 2017.
Whats cooking at Heathrow
The hosts of the TV show MasterChef UK John Torode and Gregg Wallace
have been signed up as offcial food tasters for Heathrow Airport.
The pair two of the UKs best known food lovers have been
given six months to improve the dining experience at the airports
73 F&B outlets. They have also been tasked with introducing
healthier food choices across the terminals and creating a platform
to champion British culinary talent. Their experiences will be used
to form Heathrows frst ever food guide.
Ben Crowley, head of F&B at Heathrow, said: We want to continue
to innovate to be the best in our league for airport dining.
Big money for new
Istanbul airport
The Turkish government has awarded the concession to build and operate
Istanbuls new 8 billion gateway to Turkeys Cengiz-Kolin-Limak-Mapa-Kalyon
consortium.
The consortium won the contract after agreeing to pay the Turkish
government a hefty 22.1 billion over a 25 year period following the airports
planned 2017 opening.
The news is a huge blow for both Turkish airport operator, TAV Airports
Holding, and Germanys Fraport Group, both of which made it through to the
fnal stage in the bidding session.
Both TAV and Fraport the latter bidding in a joint venture with Turkeys
IC Holding withdrew from the race when the price for the airport soared
beyond their expectations.
TAV Airports CEO, Dr Sani Sener, commented: Knowing that this is not
solely a construction project, but operational capability is pivotal, we have
declared that we would not aim at winning the tender at any cost. Such an
approach would jeopardise the companys health, as well as the future of the
Turkish economy and aviation sector.
As per our smart growth strategy, well continue to pursue new
opportunities around the world. I hope that the result of this tender would
beneft highly our country and its aviation industry.
The new airport will eventually have three runways for simultaneous
use and a capacity of up to 150mppa.
Russia looking to the East
The Russian government is planning to invest $3.2 billion on upgrading the
airports in its Far East Federal District, according to Economic Development
Minister, Andrei Belousov.
According to preliminary design documentation revealed by the Belousov,
work will start on the revamp in the coming months in a bid to modernise the
main gateways of the largest of Russias eight federal districts by 2017.
The frst airports to beneft from the modernisation and reconstruction
programme are expected to be Petropavlovsk-Kamchatsky and Ulan-Ude, as
Russias Ministry of Transport recently announced that they lacked the
infrastructure and technology to match their strategic importance.
They will be followed by projects at a further 59 small to medium
size airports across the Far East Federal District.
Belousov claims that the upgrade will act as a catalyst for the growth of
long-distance domestic fights within Russia as well as new international
services to destinations such as the Middle Asia and North America.
12
EVENTS: ASIA-PACIFIC CONFERENCE
AIRPORT WORLD/JUNE-JULY 2013
D
espite the beautiful backdrop of Phuket, business and the
opportunities and challenges facing Asia-Pacifcs airports
remained top on the agenda at the recent ACI Asia-Pacifc Regional
Assembly, Conference and Exhibition in Thailand.
This years Airports Authority of Thailand hosted event attracted over
400 delegates from 33 countries, few of which would have been left in any
doubt about the huge growth potential of the region.
Indeed, conference sessions about the role airports play in advancing
tourism and economic development; sustainable development; as well as
planning the future of airport operations and driving cultural changes
within airport organisations, all provided a brief snapshot of the type of
challenges and opportunities facing ACIs fastest growing region.
In his opening remarks, Tan Sri Bashir Ahmad Abdul Majid, managing
director of Malaysia Airports Holdings Berhad and president of ACI
Asia-Pacifc, reminded delegates that traffc across the region increased by
7.5% in 2012, and showed no signs of slowing down.
Our airports handled 1.5 billion passengers last year thats 30% of
the world market. The top fve airports in the world in terms of service
delivery, also always come from our region. So, in terms of traffc growth,
operational effciency and service levels to customers, we did very well.
But this is just the start, as forecasts predict that this region will grow
much further and become the biggest aviation market in the world. There is
huge potential as far as Asia-Pacifc is concerned. But this also brings its
challenges. Passengers will become more selective, more discerning and
want even higher levels of service from us in the coming years.
We must be up for the challenge. We must ensure that our airports
have the capacity to accommodate the growth that is going to take place
in this part of the world. We must have the capacity to allow airlines to
grow and ensure that we have the facilities and services to meet
customer expectations.
They are huge challenges, but I am very confdent that based on what our
airports have done in the last couple of years, we will be able to meet the
challenge. But we certainly wont be able to do it by ourselves, we must realise
that in order for us to deliver what we are expected to do as airports, we must
work with our stakeholders. This means governments, World Business
Partners, tourism ministries, the airlines and others to achieve our goals.
He added: ACI will continue its efforts in advancing the interests of
airports and together with other stakeholders, will aim to provide the
travelling public with an air transport system that is safe, secure, effcient
and environmentally responsible.
In his keynote address at the conference, Xiaoyu Zhao, vice president
of the Asian Development Bank noted that Kathmandus Tribhuvan
International Airport and others in Bhutan, Afghanistan, Laos and Fiji
were among the many smaller airports across the region to have
benefted from fnancial aid from the bank.
The theme of the 2013 conference was Sustainable Airport Business
Expanding Aviation Beyond Boundaries, so it was ftting that tourism, and
specifcally the role airports play in tourism development, was the subject
of the frst session.
Moderator, ACI Worlds World Business Partner chairman and Airbiz
managing director, Greg Fordham, noted that Melbourne Airports success
in attracting Emirates to the gateway in the mid 1990s was a perfect
example of what can be achieved.
Back then, Melbourne was considered the rust belt of Australia due to
the industries it had lost, recalled Fordham. People were leaving it in their
droves and all international traffc to Australia came through Sydney, so its
decision to work with the government of the State of Victoria to attract
Emirates came somewhat from the left feld.
The strategy seemed even more bizarre because back then nobody had
heard of Emirates or Dubai, let alone thought about travelling with a Middle
Eastern carrier. But they made it happen, and in 1996 it launched three
services a week to Melbourne. Today it operates three services a day to
Melbourne and 84 weekly to Australia, many with A380 aircraft.
Melbourne Airport has since developed the strategy and is now
focusing very much on China. As a result, the airport is tailoring its retail,
branding and even signage to the Chinese traveller. Victorias government
is signing sister city agreements and trade deals and Tourism Victoria is
looking at marketing campaigns with airlines.
Busy
times
Joe Bates looks back at some of the highlights from the recent ACI Asia-Pacific Regional
Assembly, Conference and Exhibition in Phuket.
AIRPORT WORLD/JUNE-JULY 2013
EVENTS: ASIA-PACIFIC CONFERENCE
13
It just shows what can be done if you dont always focus on the
obvious and recognise that airports have a key role to play as the team
leader in co-ordinating targeted strategies for the growth and development
of air services.
Next up, ACI Worlds senior manager, environmental protection, Xavier Oh,
called sustainable development, aviations permission to grow, and warned
airports not to forget the importance of communicating with local communities.
Day two began with a lively and entertaining debate about driving
organisational change. Dubai Airports senior vice president, Jill Nealon,
noting that her companys commitment to delivering integrity at the same
time as coping with huge growth and expansion, was no easy task.
For Dubai Airports, said Nealon, the process included re-writing all of
its strategic policies; introducing a new code of conduct; giving managers
clear guidance notes (in six different languages as 37 different
nationalities are employed at the airport); making leaders more
accountable; fne-tuning its performance management system (PMS)
and developing new training and educational programmes.
Nealon told delegates that Dubai Airports had also introduced an
employee engagement survey that provides staff with the opportunity to
give feedback on their bosses, and underpinned everything with
communication, communication, communication.
She cited a cleaner that recently found and handed in a bag containing
passports, $10,000 in cash and jewellery as a fantastic example of honesty
and integrity at Dubai Airports.
In other news, Eric Miart, environment activities account manager
and consultant to ACI World on A-CDM, warned that airports failing
to adopt collaborative decision making would continue their business
as usual, miss a lot of opportunities and probably become a future
second class airport.
He said: However, with A-CDM, you will be in a better position to
meet the coming challenges. You will remain a frst class airport, you will
improve your effciency and get other benefts such as improved safety
and environmental performance.
And Bangkoks Suvarnabhumi International Airport, Mumbai
Chhatrapati Shivaji International Airport and Hong Kong International
Airport were congratulated for their efforts in managing and reducing their
carbon emissions at the airports, under ACIs Airport Carbon Programme.
ACI Asia-Pacifcs regional director, Patti Chau, said: Airport
Carbon Accreditation was frst extended to our region in November
2011 and eight airports have been accredited since then. I am especially
delighted to welcome Hong Kong International Airport as the frst
airport in Asia-Pacifc to achieve the Airport Carbon Accreditation
Optimisation level.
The CEO and Leaders Forum featuring Tan Sri Bashir Ahmad Abdul
Majid; Sydney Airport chairman, Max Moore-Wilton; Ghanem Al-Hajri,
chairman of Sharjah International Airport; and Vince Scanlon, general
manager airport operations for Adelaide Airport, provided an entertaining
and sometimes humorous end to an enjoyable conference. AW
AIRPORT WORLD/JUNE-JULY 2013
15
EVENTS NEWS: AIRPORT CITIES
I
t is surely a sign of the increasing importance of emerging markets
that the Airport Cities World Conference and Exhibition (ACE) was
held, for the frst time, in Africa.
The annual event was hosted by the City of Ekurhuleni, known as
South Africas workshop and home to the continents busiest
gateway, Johannesburgs OR Tambo International Airport.
The city, just to the east of Johannesburg, already has bold plans
to become Africas frst aerotropolis, and more than 700 delegates
from 45 countries, representing over 100 airports or airport
authorities, were in Ekurhuleni to hear more about its ambitions.
The conference was also given updates and progress reports from
some of the most signifcant airport city projects across the globe.
Following sight-seeing tours, including a trip to the Apartheid
Museum, Nelson Mandelas family home, Desmond Tutus home, and
the Oliver Reginald Tambo cultural precinct, delegates were taken on
an Airport City Tour and then attended pre-conference master-classes
run by event chairman, Professor John Kasarda.
The conference, held at the Emperors Palace Hotel, saw Deputy
Minister of Transport for South Africa, Sindisiwe Chikunga, deliver the
welcome address.
She noted that ACIs most recent forecast predicts that global
passenger numbers will grow to 12 billion in the next 20 years and
said that despite the current economic climate, this positive outlook
should encourage us to address the long-term aviation needs of our
respective countries.
Developing airports remains a priority for this South African
government. We must deliver airport infrastructure to deliver
economic growth, added Chikunga.
She said South Africa had a network of 135 civil aviation airports
which played a signifcant part in the 2010 FIFA Football World Cup.
Chikunga also commended the City of Ekurhuleni for its vision in
developing the Ekurhuleni Aerotropolis, concluding: The Department
of Transport embraces the concept of the airport city and aerotropolis
to meet the social and economic goals of this country.
The frst day of the conference culminated in the Gala Evening at
the nearby Germiston Lake.
On day two, delegates split into two streams and attended
sessions on topics including governance and strategic roadmaps,
investment and infrastructure management, commercial
development and real estate, airport design and non-aeronautical
revenue development.
The emerging markets session saw Kasarda introduce speakers
such as Sanjay Khanna, of GVK, who talked about Mumbais
ambitious SkyCity project. He revealed GVK was on the brink of
gaining government approval for the development.
Khanna said: It has been a three year planning process and we
are just about to get approval from the government. I think it will be a
nice development for the city of Mumbai.
Graham Bolton, of ARUP, then painted an encouraging picture of
the scene in emerging markets. He said there was fertile ground for
aerotropolis developments, adding that they already form an integral
part in master planning for new airports.
ACE was brought to a close with the Farewell Reception held by
Malaysia Airports Holdings Berhad (MAHB), the host for next years
event in Kuala Lumpur.
The farewell event saw the unveiling of the new Airport Cities
Excellence Awards, which will take place for the frst time in
12 months time. With so many promising airport city and
aerotropolis projects on show this year, there is bound to be plenty
of competition for the top awards in 2014.
Africa learnt more about the airport city phenomenon at the recent Airport Cities World
Conference and Exhibition (ACE) in Ekurhuleni, writes Steven Thompson.
AW
Game on
Images courtesy of airportcities.aero.
A
CI World Governing Board vice president, Rick Piccolo, and other
senior airport executives met at the headquarters of the
International Civil Aviation Organization (ICAO) in Montral this
March for the once-a-decade Air Transport Conference.
The fve-day conference, which was only the sixth such event since ICAO
was formed in 1944, sought to address and resolve economic policy issues in
favour of a future that includes an economically viable and sustainable air
transport sector.
Attended by over 1,000 delegates from more than 200 States and
international organisations, the conference included the presentation of over
100 working papers, including seven from Airports Council International.
The papers presented at the conference sought the development of ICAO
policy on aviation economics, liberalisation, fair competition, taxation and
charges, and consumer protection.
Speaking on the Freedom to do Business Panel at the pre-Conference
Symposium on Sunday March 17, Piccolo stated that the regulatory environment
was very different at the time of the last Air Transport Conference in 2003.
Today, regulators needed to allow market forces to work for airports in the
same fashion that was made possible for airlines, said Piccolo, who noted
that ACI supported the principles of effective market access, transparency,
non-discrimination and fair competition.
He said that the market could be harsh, and airports took risks investing
in new infrastructure since there was no guarantee that airlines would utilise
this infrastructure in the long-term.
On the symposium panel discussing Consumer Protection, managing
director of Malaysia Airports Holding Berhad and chair of ACI Asia-Pacifc,
Tan Sri Bashir Ahmad Abdul Majid, observed that passengers expectations
were increasingly demanding and that handling their many needs
was challenging.
But he remarked that, thankfully, for the most part, service provided to
passengers by airports and airlines was very high.
Problems generally arose when things went wrong, and it was important
for the industry to work together to develop common procedures, and here
ICAO could provide a suitable forum.
He warned that if industry did not act, there was a risk that
government regulations would be introduced which could be out of step
with industry capabilities.
Robert Deillon, CEO of Geneva Airport and ACI Europe Board Member,
speaking on the symposiums panel on Taxation, called for the need for
light-touch regulation. He said that this was necessary as the increased
competitiveness of airports meant that concepts such as single till were
outdated, and that competition and contestability meant that detailed
regulation could impede infrastructure development and improvements to
customer service.
Speaking about the ICAO conference, Angela Gittens, director general of
ACI, said that ACI was consolidating its international representation role as
the voice of the worlds airports.
She added that the level of engagement that ACI was able to muster was
testament to the increased stature and importance of airports in shaping the
international aviation policy agenda.
In addition to the speakers at the pre-Conference Symposium, airports
were represented by the chair of ACI-North America, David Edwards, executive
director of Greenville-Spartanburg International Airport; ACI-NA president,
Greg Principato; and the regional director of the Asia-Pacifc, Patti Chau.
During the Conference, ACI presented working papers on Market
Liberalisation, Slots and Night Curfews, Passenger Protection, Airport
Competition and Economics of Airports; and jointly presented papers with
CANSO and IATA on taxation and modernising air traffc management.
ACI WORLD NEWS
AIRPORT WORLD/JUNE-JULY 2013
16
ACI brings the Voice of the Worlds Airports to ICAOs Air Transport Conference.
World in motion
ACI WORLD NEWS
ACI offices
ACI World
Angela Gittens,
Director General
PO Box 302
800 Rue du Square Victoria
Montral, Quebec H4Z 1G8
Canada
Tel : +1 514 373 1200
Fax : +1 514 373 1201
aci@aci.aero
www.aci.aero
ACI Fund for Developing
Nations Airports
Angela Gittens,
Managing Director
c/o Geneva,
Switzerland
Tel: + 1 514 373 1200
Fax: +1 514 373 1201
acifund@aci.aero
ACI Asia-Pacifc
Patti Chau,
Regional Director
Hong Kong SAR, China
Tel: +852 2180 9449
Fax: +852 2180 9462
info@aci-asiapac.aero
www.aci-asiapac.aero
ACI Africa
Ali Tounsi,
Regional Secretary
Casablanca, Morocco
Tel: +212 619 775 101
atounsi@aci-africa.aero
www.aci-africa.aero
ACI Europe
Olivier Jankovec,
Director General
Brussels, Belgium
Tel: +32 (2) 552 0978
Fax: +32 (2) 502 5637
danielle.michel@aci-europe.org
www.aci-europe.org
ACI Latin America & Caribbean
Javier Martinez Botacio,
Director General
Quito, Ecuador
Tel: +593 2294 4900
Fax: +593 2294 4974
jmartinez@aci-lac.aero
www.aci-lac.aero
ACI North America
Greg Principato,
President
Washington DC, USA
Tel: +1 202 293 8500
Fax: +1 202 331 1362
postmaster@aci-na.org
www.aci-na.org
ACI represents 573 members operating 1,751 airports in 174 countries and territories, which in 2011 handled 5.4 billion passengers, 93.1 million
tonnes of cargo and 77 million aircraft movements. ACI is the international association of the worlds airports. It is a non-proft organisation,
the prime purpose of which is to advance the interests of airports and promote professional excellence in airport management and operations.
ACI events
September 22-25
ACI North America
Annual Conference
& Exhibition
San Jose, USA
2013 2013
June 10-12
ACI World Annual
General Assembly
ACI Europe Congress
& Exhibition
Istanbul, Turkey
2013
November 2-5
ACI Latin America &
Caribbean Regional
Conference &
Exhibition
Montevideo, Uruguay
2013
October 19-23

ACI Africa Regional
Conference &
Exhibition
Lom, Togo
July 29-31
ACI World/ACI Latin
America & Caribbean,
Airports Economic
Regulation Conference
Mexico City, Mexico
2013
AIRPORT WORLD/JUNE-JULY 2013
17
A
irport directors and operators pride themselves on
placing passengers at the heart of their operations.
In my travels, I see countless examples of thoughtful
design and well-managed passenger facilitation
initiatives, and learn of many more in my conversations with ACI
members, government officials and other industry stakeholders.
Airports leaders know the value of placing passengers first and
consequently have invested in facilities and woven airport
business strategy around passengers. This we know.
From the passenger perspective however, airport facilitation
efforts are often an airports best kept secret. As airport leaders,
we are often so busy managing our operations and rolling out new
initiatives that we fail to invest in promoting the value and even
existence of our passenger facilitation investments and projects to
our most important stakeholder the passenger.
We can all attest to the fact that without a gentle nudge in the
right direction, airport passengers can choose to view the glass
half empty rather than half full. But pointing out what we do
today, can go a long way in helping airports to move the
public perception needle to accurately reflect the reality
that airports facilitate the travel experience, protect passengers
and serve as the passengers advocate in our dealings with
the many parties that control or affect the passenger journey
through the airport.
As a key priority, ACI is developing strategies and practical
tools to help our member airports better promote the tangible
and intangible ways in which they positively impact the
passenger journey.
Our goal is to help the airport sector assume its earned seat in
the arena of positive public perception for its efforts to minimise
disruptions, problems and delays and continuously strive to
improve the passenger experience as well as boost local and
national economies by facilitating commerce, tourism and
generating employment.
We will share news with you very shortly as we reach final
consensus on a co-ordinated global industry approach.
AW
ACI VIEWPOINT
AIRPORT WORLD/JUNE-JULY 2013
19 19
19
ACI director general, Angela Gittens, reflects on the importance of putting passengers
first and the need to do more to promote a more positive public perception of airports.
View from the top
Oliver Clark talks to GVK Power and Infrastructure Limited chairman, Sanjay Reddy, about his
companys plans to modernise its airports in India and further afield.
20
AIRPORT WORLD/JUNE-JULY 2013
Passage to India
S
tanding on the waterfront in central Mumbai is the
Gateway to India; a huge stone archway built in Victorian
times to celebrate the arrival of what has become an
enduring image of the city and an attraction visited by
millions every year.
So, it is perhaps ftting that later this year, Mumbais Chhatrapati
Shivaji International Airport (CSIA) will unveil its own gateway to India
which it hopes will be equally iconic the revamped Terminal 2.
Dubbed T2, the refurbished facility will consist of four
integrated levels covering more than 439,000sqm, with new
taxiways and aprons, 21,000sqm of retail space and give the
airport the capacity to cater to 40 million passengers annually.
Offering what has been billed as unrivalled levels of customer service
and state-of-the-art facilities, T2 will handle the airports international
operations and will be the frst thing millions of international tourists
experience as they arrive in India for the frst time.
A huge exhibition area will showcase Indian art through the
centuries with touch screens for visitors to explain each piece and
learn about its history and origin.
It is also the culmination of years of work by operating company
GVK to modernise and expand CSIAs facilities to ensure it can
handle the ever-growing passenger numbers registered by
the gateway, while also positioning it to become a leading
international hub.
I think the opening of Terminal 2 represents one of the
most important milestones in the history not only of CSIA but also
of Mumbai, says Sanjay Reddy, chairman of GVK Power and
Infrastructure Limited.
AIRPORT REPORT: MUMBAI
T2 will make CSIA a gateway to both the city of Mumbai and the
hinterland for millions of international passengers and, more
importantly, we are setting new benchmarks in ways of operating, it
will receive global recognition for its design and quality of service.
Reddy, the son of GVK founder GV Krishna Reddy, has a diverse
portfolio of businesses to oversee. They include energy, resources,
airports and transportation infrastructure.
And he has steered the groups ever-expanding airport profle,
which now includes Chhatrapati Shivaji, Bengaluru, and, will soon
include a terminal at Denpasar in north Bali and a new greenfeld
airport at Yogyakarta.
Reddy says the T2 project was not without its challenges. GVK
planners were hampered in the frst instance by the fact the airport is
hemmed in by urban development making expansion diffcult. Delays
and the regions weak fnancial outlook also had a knock on effect on
passenger growth forecasts, but the construction is now on track.
The new facility represents the cornerstone of GVKs route
development strategy, which seeks to attract new carriers from
Europe, Asia, Russia and the CIS and North America under the
campaigning title A hub in the making.
With this in mind, T2 has been designed to handle large volumes
of connecting passengers and to allow airlines to easily organise banks
of arrivals and departures, two elements that are seen as crucial by
GVK to make CSIA an enticing proposition for long-haul carriers.
While its ultra modern facilities will no doubt prove attractive
to airlines, Mumbai serves as the beating heart of Indias financial,
business and entertainment industries, many offering compelling
reasons for carriers to come, says Reddy.
I think airlines are going to be attracted to Mumbai because
it is the commercial centre of India and ideally located for
international routes. There is currently a good mix of different
carriers, but we are targeting long-haul airlines connecting Europe
and the US and emerging markets such as China, Africa and South
America, says Reddy.
According to its route development action plan, GVK is seeking
new services to Manila, Ho Chi Minh, Jakarta, Beijing, Guangzhou,
Moscow and Tehran in the next one to two years, followed by
services to Rome, Lisbon, Manchester and Seoul amongst others
over the coming decade.
The airports efforts are already bearing fruit and it celebrated a
new Air China service to Chengdu last year.
Customer service
The new Terminal 2 represents the culmination of GVKs brief to
improve the customer experience and capacity of CSIA.
When it was awarded the contract to operate CSIA in 2006, the
airport was congested, its facilities were in a bad state and it had
a reputation among passengers for delays and lengthy queues.
Proof of what has been achieved since can be found in the
host of awards for customer service and safety, including the
prestigious Golden Peacock National Quality Award for 2012
from Indias Institute of Directors, and the ACI ASQ award for
2011 in the 25-40 million passengers per annum category.
For Reddy the awards are a nice recognition of what has been
at the core of GVKs business philosophy for decades.
As far as customer service is concerned, I believe it is of
paramount importance. Our family business began in the
hospitality sector and we have hotels as well as airports; as
a family, we very much believe in hospitality as the core of our
business, he says.
But Mumbai was only the beginning of GVKs airport ambitions,
and just three years after taking over Mumbai, the company
formed the major part of a consortium that was awarded
the contract to manage Bangalores newly opened Bengaluru
International Airport.
AIRPORT WORLD/JUNE-JULY 2013
21
AIRPORT REPORT: MUMBAI
Indian aviation the facts
One state-owned airline (Air India), and six private airline groups
India has 130 airports. They include 17 that handle
international traffc and around 80 which handle regular
scheduled domestic services
Over 160 million passengers passed through Indias airports in
2012 60% of them being handled at privatised airports. This
compares to just 40 million in 2002, when privatised gateways
accommodated only 2% of the traffc
Low-cost dominates the domestic market, accounting for
a 70% share of traffc
Passenger numbers are expected to reach 452 million per
annum by 2021, making India the third largest aviation
market in the world
AIRPORT WORLD/JUNE-JULY 2013
22
Navi Mumbai
With scope to expand CSIA limited by its location, the Indian
government has given the go-ahead for a new international airport
to be built on the outskirts of the city.
Named Navi Mumbai International Airport, it will be managed
by a private company on a similar model to CSIA. So does Reddy
see it as a potential threat? Not at all he says, as Navi is intended
to be primarily a domestic airport.
It is not going to be a threat at all. We have a very unique
situation. Perhaps Mumbai is the only case in the world in which
an international airport is rebuilt but because of traffic increases,
a new secondary airport is built. Typically, the existing airport is
destroyed or turned into a secondary airport.
Reddy also points out that GVK can bid to also run Navi Mumbai
and if this contract was forthcoming we would develop it as a
complementary airport to the facility we have here and not competing
for traffc.
Bengaluru
Bengalurus traffic grew rapidly after its completion, and once
again, the Indian governments brief was that the private
operator should expand the facility and improve services as
befitting of an airport that serves as the home of the countrys
burgeoning IT capital which has been described as the Silicon
Valley of India.
A year after taking over Bengaluru, operating company Bangalore
International Airport Ltd (BIAL) unveiled an ambitious development
programme including the expansion of the existing Terminal 1 to
cater for 36 million passengers.
Work began in August 2011 at a cost of $221 million, and involves
the extension of the terminal in both directions with improvements
including better access to seating, amenities and commercial
facilities and smoother check-in and departure processing.
The project is expected to be completed by the summer of 2013.
When we decided to expand Bengaluru, our priority frst and
foremost was to improve the passenger facility and expand the
terminal because there was a dire need for more capacity as it was
handling more than 12 million passengers. With the completion of
this work, the facilities will be able to handle between 18-20 million,
explains Reddy.
Passengers will also experience a next generation of facilities
and amenities, beams Reddy.
Meanwhile, BIAL is pursuing a route development strategy that
centres on making Bengaluru the gateway to southern India. In
2011, the airport attracted six new international airlines including
Etihad, Tiger, Cathay Pacific and Bangkok Airways.
According to Reddy, BIAL sees IndiGo and Jet Airways as partners
who can help develop the airports regional network further.
Indonesia
In November 2012, GVK took a step in a new direction with the
signing of a contract with Airports Authority of Indonesia (Angkasa
Pura Airports) to manage to manage non-aeronautical commercial
operations at Balis Ngurah Rai Denpasar International Airport
under a five-year operations and management contract.
Ngurah Rai is Indonesias second busiest airport after the
capital, Jakarta, and is severly congested leading to the need for
an overhaul of its facilties.
GVK also has signed a memorandum of understanding with the
Indonesian government to develop an international greenfield
airport in Yogyakarta in central Java.
Reddy is excited about the prospects of both projects.
The government is very keen on the [Yogyakarta] project; there
is a lot of potential as a tourism attraction but currently transport
is severely limited.
With GVKs already long experience of managing and modernising
overcrowded airports into award winning facilities, they should have
little trouble with their new Indonesian projects. AW
AIRPORT REPORT: MUMBAI
Airport World 3 2013
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