Airport owners across the world are recognising the potential of generating non-aeronautical related revenue on land once set aside for future infrastructure.
Indeed, as overall development expands beyond the airport site and as surrounding landowners develop their property, the recognition of regional land use planning beyond traditional noise and environmental compatibility and ground access planning becomes increasingly important.
Further, realisation that airports are economic engines for the communities they serve causes airport owners to recognise other responsibilities to their communities. Therefore, it is worthwhile to assess the key factors of success, and how they may apply.
During our global work on various airport master plans, airport-vicinity land use plans and aerotropolis planning, we have found overwhelming evidence supporting what we know about non-aviation revenue developments on and near airports, and what it takes to make them succeed.
Demand is the key to success
Cities create demand for airports; airport activity in turn creates demand for related and catalytic activities throughout the airport’s region.
Arguably, the most successful examples of collateral development are those that evolved spontaneously in response to existing regional demand.
With the maturation of airports that were developed to serve important cities, the industries and populations that initially created the need for those airports also drove the demand for adjacent development.
This has been the case for developments surrounding LAX, Chicago O’Hare, Toronto Pearson and New York–JFK airports. None of these refer to themselves as an aerotropolis, however, their levels of development and property values highlight their success at attracting collateral non-aviation activity.
Location, location, location
Regional demand does not translate directly to demand within an airport’s vicinity. Demand is location sensitive.
Adjacency to transportation implies convenience of access, but adjacency to major transportation facilities also includes living in the shadow of negative impacts such as noise, pollution and congestion.
Economic benefits flow to and from the greater region, while negative impacts sit within adjacent boundaries. This creates a halo effect of benefits and a shadow effect of impacts.
Consequently, some of the great global cities, with the highest passenger and cargo activity, lack airport-adjacent demand.
Hartsfield-Jackson Atlanta, for example, is the world’s busiest airport in both passengers and total aircraft operations, home to one the largest global airlines (Delta) and 13 Fortune 500 headquarters yet the area directly adjacent to the airport has great capacity for further economic development.
Greenfield airports far from central business district (CBD) invariably have a lower population density, as the very nature of their development often requires them to be built sufficiently away from city centres so as to minimise their noise impact.
This is preferable for aircraft movements, but not for adjacent development. If regional population growth expands toward the airport, demand may occur more quickly. But if not, it may take decades to develop.
Replacement or relocation airports such as Denver, Incheon, Shanghai-Pudong and Tokyo Narita are world airports serving major metropolitan regions, yet each has seen slow growth in airport-adjacent development.
Creating demand where there is none is possible
Both Las Vegas and Dubai were deserts, and not the destination oases they are now. Absent any sense of place or desirability as destinations, the visionaries behind them used money and connections to create something where there was nothing.
In both cases, they were decades in development and there was an ongoing effort to attract interest and activity from elsewhere in order to fabricate totally new destinations.
Initially, the airport was not central to the success of Las Vegas. But the convenience of air travel facilitated greater patronage. Dubai was similarly isolated, and needed the airport to bring significant numbers of visitors to a location lacking a large population.
Today, these cities are major destinations and financially successful, one on a regional scale and the other globally.
Successful airport-vicinity development
Success requires local as well as regional demand, along with a clear vision and shared objectives that are supported by political policy, financial investment and social sentiment.
Yet, having these elements is not enough. Without the right timing and strategic support, results may be slow and less-than-desired. Existing or evolving competition can also affect the degree of success.
The ideal planning and implementation sequence will vary by circumstances and culture. Where stakeholders have common objectives for development (increased employment, new industries, for instance) forming alliances for support may come ahead of the planning process.
The Aerotropolis: KZN for Durban’s King Shaka International Airport is one of the most thoroughly developed plans, well-supported politically and socially, yet its development has been very slow.
Development plans need to be physical and strategic
Planned collateral development occurs within artificially created boundaries. For reality to follow the planner’s dream, proponents need to provide incentives that focus the developments where they want them.
To create or refocus development demand that is consistent with physical plans, there really needs to be an alliance of stakeholders with shared objectives. And this alliance needs to define and execute strategic implementation steps, usually involving financial incentives.
Special economic zones, public-private partnerships, conditional use agreements and tax breaks have all been used to coax developers and businesses into the planned areas.
Hubstart Paris’s training programmes, the Incheon Free Economic Zone (IFEZ) and the tax incentives offered to Porsche by the Atlanta Aerotropolis Alliance are examples of incentives used to refocus and increase airport-vicinity activity.
Getting the planning right
Airport-conscious planning does not necessarily mean airport-centric planning. The key factors are connectivity and compatibility.
The best planned and the most successful spontaneously developed projects rely on functional connectivity and access. Airport corridors frame the locations and determine the forms of airport-collateral development. Such developments may occur in zones between the airport and the CBD or radiate along regional corridors to other activity nodes.
This occurs where there is no available land adjacent to the airport for development or when demand and compatibility are greater at other locations.
Differing costs of available property along the primary corridors may occur randomly throughout an area, creating pockets of opportunity in a series of discontinuous nodes. Not easily contained within a normal plan, these pockets can be linked together through physical corridors and alliance organisations.
In the areas between Detroit-Wayne County and Willow Run airports, for example, VantagePort aerotropolis aims to create a transportation, logistics and manufacturing hub.
While Hubstart Paris is refocusing from spontaneous, demand-driven uses to planned development in the space between Paris-Charles de Gaulle and Paris-Le Bourget.
Adjacent non-aeronautical development may be at the expense of future airport expansion.
Cities that have developed a second or relocated airport have done so because the original was constricted by adjacent development. Care should be taken not to repeat this at the new airport.
It is, after all, all too easy for authorities to feel that their job is done when the new airport opens, yet this is clearly not the case as major cities such as New York, London, Los Angeles and Paris have discovered as each is served by multiple commercial airports due to constantly rising demand.
Airport owners have differing needs and desires for on-airport, non-aviation development and adjacent land planning with development.
It is important to understand how development occurs and what an owner can do to maximise the position of the airport.