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AIRPORT PROFILES Last modified on November 10, 2015

Lofty ambitions

How is Quito’s Mariscal Sucre International Airport faring two-and-half years after opening? Joe Bates met up with Quiport president and CEO, Andrew O’Brian, to find out more. 

The opening of a 10,500 square metre terminal extension earlier this year effectively completed the initial development phase of Quito’s Mariscal Sucre International Airport.

For the $22 million extension has allowed operator, Corporación Quiport SA (Quiport), to effectively raise the airport’s capacity from 5.5 million to in excess of 7.5mppa, meaning that it can now comfortably cope with demand. 

Significantly, the expansion includes two additional boarding bridges, which ensure that 75% of domestic flights (arrivals and departures) now use jetways as opposed to just 40% when the airport opened. 

It has also allowed the number of international services using boarding bridges to rise from 90% to 95% and paved the way for a new Domestic VIP Lounge, 870 more seats and the addition of a host of new customer service-enhancing and revenue generating retail and F&B outlets, the latter operated by Cancún-based concessionaire Mera Corporation.

And most importantly, according to Quiport’s president and CEO, Andrew O’Brian, it has given the airport the opportunity to make the airport experience more comfortable and enjoyable for all passengers.

“We are now able to offer a fantastic facility with the type of high quality levels of service everybody wants and expects of a major airport,” he says.

Indeed, O’Brian is quick to point out that both passengers and airlines love the newly expanded terminal and believes that this has been reflected in the fact that Mariscal Sucre is in the running to retain the prize of ‘South America’s Leading Airport’ in the World Travel Awards for 2015.

So why didn’t the airport just build a bigger terminal in the first place? The answer is effectively down to a number of factors that caused a delay in the airport’s construction.

“What I like to say to people is that the T-shirt was a little tight when we opened. In airport language that means that we were at capacity, in particular in our domestic holdrooms during peak hours when we face weather issues or maintenance delays,” says O’Brian.

The situation meant that work on the terminal expansion project began not long after the airport’s opening with Quiport working closely with US based TransSolutions to ensure that it made optimum use of the added space.

O’Brian explains: “We have a fabulous new airport that has transformed flying to Ecuador. Everything about it is better than before from the parking lot to the runway. And because the airport was built on a greenfield site everything was new and purpose built and so much more customer focused.

“Our master planner Landrum & Brown with input from Houston Airport Systems Development Corporation (HASDC), our engineering contractor, Mott MacDonald, and a host of other experts did a great job and it ticks all the right boxes, but we always knew that more would be needed almost immediately as the delay in the construction process meant that the terminal design was based on 2003 traffic forecasts.

“The operating environment and subsequently the traffic forecasts back in 2003 were very different than today. Back then domestic traffic was dominant and growing significantly while there was very little growth in international traffic. Almost the exact opposite is true today.”

He adds: “With the expanded terminal we are able to provide more space for our passengers and subsequently provide them with better levels of service.”

 

Impact on route development

Quiport’s likeable Canadian-born boss is also quick to point out that the new-look terminal has hugely increased the Ecuadorian gateway’s appeal to potential new carriers. 

Today, 11 airlines operate 195 non-stop services out of Quito to 14 destinations across the world that include Madrid, New York, Fort Lauderdale, São Paulo, Buenos Aires, Mexico City and Lima.

Not bad by any stretch of the imagination, but O’Brian is eager for more and remains confident that the new, better equipped airport’s facilities ensure that it is now on the radar of more airlines than ever before.

And O’Brian, who takes a personal interest in route development and ensures that he is part of Quito’s small route development team, is optimistic of adding a number of new services over the next year to the ones that they have already added since the move to the new airport site in 2013.

“In terms of air service development, the new airport was like the field of dreams, you build it and they will come,” he says.

“Airlines that always wanted to fly to Quito but couldn’t because of the infrastructure of the old airport and flying restrictions [it was only possible to fly for four to five hours with a full payload before having to stop and refuel] now can.

“As a result we’ve welcomed a handful of new passenger and cargo airlines that have included Aeromexico and VivaColombia, while our existing carriers have upped frequencies or added new routes.

He notes that the airport’s route development strategy is based on identifying city pairs and targeting specific airlines and signing sister airport deals where both gateways involved in the potential new route join forces to incentivise the airline to launch services.

A soon to launch five-times weekly American Airlines A320 service between Quito and Dallas/Fort Worth (DFW) is one such example of the sister airport approach.

Quiport, supported by the Ministry of Tourism in Ecuador, has
also signed sister agreements with Houston’s airport operator and the City of Chicago.

According to O’Brian another “significant” new route for Quito on the horizon is the JetBlue service to Fort Lauderdale, with flights between Ecuador’s capital city gateway and Florida set to launch in February 2016.

The biggest airlines serving Quito today are local carrier TAME, LAN Ecuador, Avianca and Copa. Iberia, American Airlines, KLM, Delta, Aeromexico and United are among the international carriers serving Mariscal Sucre.

Next on the agenda

There is no denying that Quiport has invested big time in the airport to date, O’Brian revealing that it has spent around $950 million so far on the new gateway. 

It is, however, far from finished, with O’Brian remarking that he expects the airport’s new master plan, currently being drawn up in conjunction with Landrum & Brown, to be announced within a matter of weeks.

What is it likely to contain? O’Brian is a little hesitant to say too much other than state the fact that the next stage of the airport’s development will be called Phase 2B and be implemented according to demand. 

His hesitancy to reveal more, he explains, is due to the fact that IATA is currently conducting a level of service review at the airport – as required under the conditions of the concession – and its yet to be announced findings could have a direct bearing on what is planned.

 

quito airport2

Investor challenges

In many ways Quito’s Mariscal Sucre International Airport is the perfect example of how a public-private partnership (PPP) project can transform an airport’s fortunes for the better.

Indeed, the opening of the new $750 million greenfield airport on February 20, 2013, signalled the dawn of a new era for air travel to Quito and Ecuador, which for too long had been dependent on its out-dated, capacity constrained, downtown predecessor.

The new gateway, located on a 1,500 hectare site around 20 kilometres from downtown Quito, is incomparable to the old Mariscal Sucre International Airport other than the fact it is also high up in the Andes – 2,411 metres above sea level to be precise.

In terms of facilities it boasts a single, state-of-the-art terminal and a 4,098 metre long runway capable of accommodating non-stop flights to Europe and the North East coast of the US with full-payloads, something its predecessor could not achieve,
which is why so many long-haul international services used to operate via Guayaquil.

The airport’s retail and F&B offering include more than 20 shops and restaurants upon opening and more than 1,000sqm of duty free stores – operated by Attenza Duty Free, the commercial entity of Motta Internacional SA – so its commercial offering is outstanding compared to the handful of outlets at the old gateway.

To think it has all been a breeze would be a huge mistake, however, as not all has gone to plan since 2002 when Quiport and its consortium partners were awarded the 35-year concession to operate Quito’s old airport and build its replacement.

When Mariscal Sucre opened, the access roads were not completed, which meant that for the first 18 months of the airport’s life passengers had to use existing local roads and navigate across a small, temporary bridge to get between it and Quito and the surrounding area.

Thankfully this is now all in the past since the opening of the new six-lane Ruta Viva highway to downtown Quito, which means that journeys to and from the airport and the city centre now take around 40 minutes compared to up to an hour and a half before.

“The new highway has completely eliminated any ground transportation problems we had and made life much easier for everyone,” says O’Brian, who not so fondly recollects the fact that the journey previously involved passing through 22 sets of traffic lights.

“Another new government funded highway providing access between the airport and northern Quito opened six months earlier, so we now have wonderful access and the roads are no longer an issue,” he adds.

 

Commercial developments

O’Brian openly admits that the airport is looking to boost its commercial revenues from aviation and non-aeronautical related activities across its 1,500 hectare site.

A new 150-room Wyndham Gran Condor Hotel is currently being built on a 22,000sqm plot to the west of the airfield and O’Brian has ideas for other projects that he’d like to see developed at Mariscal Sucre as part of its own ‘airport city’.

The airport has already established a Special Economic Zone on a 200-hectare site to the east side of the airfield and O’Brian believes that the airport has the potential to become home to MRO facilities for Airbus and Boeing to the north of the airport.

Like the developments at other airport cities across the world and its own $17 million hotel, O’Brian envisages that Quito’s projects would be a mixture of third party investment and Quiport funded or co-funded facilities.

“We see endless possibilities to build this airport city,” enthuses O’Brian, who is well acquainted with Quito and Ecuador’s potential having joined Quiport from Dominican Republic airport operator, Aerodom, three-and-a-half years ago.

 

quito airport3 

Shareholders

Corporación Quiport’s shareholders are currently Aecon (45.5%), Houston Airport Systems Development Corporation (3%), Airport Development Corporation (7%) and Brazilian transportation and concession company CCR – Companhia de Concessões Rodoviárias – (44.5%).

However, this is about to change, as subject to approval Aecon and ADC have agreed to sell their entire shareholdings to Colombia’s Grupo Odinsa for $232.6 million.

The deal means that Odinsa and CCR will effectively own Quiport between them with HASDC continuing as a minor shareholder and key technical partner. 

Odinsa is a major shareholder in Opain, which operates Bogota’s El Dorado International Airport, and has been looking to expand its interests in airports in other South American countries.

Construction and infrastructure development company Aecon built the airport as part of a 50/50 joint venture engineer/procure/construct contract with Brazil construction firm, Andrade Gutierrez Constructores SA, so its decision to bail out now is not a complete surprise.

O’Brian says the new owners will bring the collective expertise of operating nine airports across the Latin America-Caribbean region that between handle about 70 million passengers and close to 750 thousand tons of cargo per annum. 

 

First year review

He describes 2014, the first full year of operations at the new Mariscal Sucre International Airport as “a year of growth and consolidation” based on a 12% rise in passenger numbers and a solid operational performance.

The upturn in passengers, driven by a 15% rise in international traffic, meant that more than six million passengers passed through the airport last year and he expects that figure to rise by at least
4% this year.

He attributes the rise in throughput to the latent demand for new services that the gateway has been able to accommodate due to its enhanced operational capabilities compared to Quito’s former gateway to the world.

O’Brian also believes that last year marked the company’s unofficial transformation from a construction company to a more customer/passenger focused airport concessionaire.

 

Community spirit

He is particularly proud of the airport’s close relationship with the local communities living within a few kilometres of the airport, many of which helped build the gateway and currently account for around 40% of its 7,000 strong workforce.

The airport has introduced a number of initiatives under the umbrella of its ‘Shared Value’ programme that have helped financially support the local communities.

The programme, which is being developed in association with the Washington DC-based Inter-America Development Bank (IDB), has led to the identification and creation of new business opportunities at the airport for people living in its surrounding towns and villages.

To date these have included local farmers selling produce to airport staff and the planned creation of a new jointly owned company to manage, collect and recycle airport garbage.

A new state-of-the-art airport and a hugely ambitious operator that is dedicated to developing its prize asset for the long-term at the same time as helping the local community. Sounds like a win-win-win scenario to me.

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