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ECONOMICS Last modified on October 17, 2011

Sister act

Who really benefits from the new trend of 'sister agreements' between airports? Robin Stone reports.
The old saying ‘it takes two to tango’ has been taken to heart by the world’s airlines for many years in the shape of bilateral agreements and alliances covering codesharing, customer service and cost efficiencies.

Indeed, airline partnerships have gone from strength to strength over the years while airports – with a few notable exceptions such as e-sourcing website AirportSmart – have continued to act very much alone.

But airports, too, are now seeing the benefits of closer ties, with a spate of ‘sister’ agreements signed in recent years – frequently underpinning the launch of a new route between the two gateways concerned.

Given the burgeoning economies of the Far East, it is hardly surprising, perhaps, that the majority of these partnerships involve Asia-Pacific airports in Japan, China, South Korea, Thailand, Hong Kong and India.

Most are formalised in the shape of a Memorandum of Understanding (MoU), as signed by Hong Kong International and Chicago O’Hare earlier this year.

It coincided with the announcement of a new Cathay Pacific service between Chicago and Hong Kong, which launches in September.

Stanley Hui, CEO of the Airport Authority Hong Kong (AAHK), said the agreement would promote co-operation between the two airports in the areas of airport management and customer service.

“Hong Kong and Chicago O’Hare are both leading aviation gateways, and therefore we have much in common and a lot to learn from each other,” enthused Hui.

“With this agreement, we will be able to form closer ties, and exchange our know-how in airport management while maintaining and exceeding passenger expectations.”

Rosemarie Andolino, commissioner of the Chicago Department of Aviation, saw it as forming the basis of a wider relationship, which went further than the interests of the two airports.

She said: “This agreement reflects our commitment to work co-operatively in all aspects of our respective airports, and to promote business, commerce, trade, tourism and cultural relations between Hong Kong and Chicago.”

Chicago has similar agreements nailed down with four other airports – Abu Dhabi, Beijing, Shanghai, and Incheon.

“These airports are among the world’s busiest in international passenger and cargo operations, and we believe there is much to be gained by working together,” said Andolino.

Joint working groups have been set up to co-operate on airport management, customer service, construction, planning, operations and information technology.

In the case of Abu Dhabi, the agreement was signed in October 2009 during a visit to Chicago to discuss business and economic opportunities, and marked the introduction of non-stop services by Etihad Airways, the Abu Dhabi-based national carrier.

It outlined a process for the airports to share technical, commercial and environmental best practices, and set up joint groups to work co-operatively. The two airports also discussed airport sustainability, the promotion of green airports and the impact of green initiatives on the environment.

“The launch of Etihad Airways services between Abu Dhabi and Chicago offers great opportunities for our cities to work together, sharing our cultures and our experiences in many different sectors,” notes His Excellency Khalifa Al Mazrouei, chairman of the Abu Dhabi Airports Company.

Another new Etihad Airways service connecting Abu Dhabi to Tokyo spawned a similar agreement with Narita International Airport.

Hong Kong signed a sister agreement with Beijing in October, although the two airports have been closely linked since 2002, when they entered into joint staff training.

AAHK also acted as a consultant to Beijing in the run-up to the opening of Terminal 3 and the 2008 Olympics.

Sister cities and twin towns have been around for many years – indeed, US President, Dwight Eisenhower, proposed a ‘People-to-People’ programme back in 1956 as a means of rebuilding international relations after the Second World War.

Tulsa was one of many US cities involved, establising sister city relationships in Mexico, Taiwan, China, Israel, Japan, Russia, Germany and France between 1980 and 2005.

The emergence of sister airports, therefore, can be viewed as a natural progression.

Today, the whole concept of airport ‘twinning’ has evolved into a global network of sister airports. Macau has signed contracts with airports on Australia’s Gold Coast, Farnborough in the UK and Hainan, China, while Bangkok’s Suvarnabhumi has five ‘sisters’ – Abu Dhabi, Munich, Beijing, Incheon and Tokyo Narita.

Narita is one of the leading players in the network of sisterships. The Tokyo gateway has seven siblings spread all over the world – the Korea Airport Corporation (KAC), the Port Authority of New York and New Jersey (PANYNJ), Frankfurt, St Petersburg–Pulkovo, Incheon, Beijing Capital and Bangkok Suvarnabhumi.

Sister airports look for mutually beneficial opportunities across all areas of their operations. In the case of Halifax Stanfield International Airport, the advantages of linking up across the Pacific with Incheon in South Korea are to be found in the cargo market, an integral part of the continuing development of the air transport network between northeast Asia and North America.

Incheon is the world’s fourth busiest air cargo airport after Hong Kong, Memphis and Shanghai Pudong, handling more than 2.68 million tonnes of freight annually.

Nova Scotia premier, Darrell Dexter, on a trade mission to Asia last year, is in no doubt that the Halifax-Incheon agreement will reap rich rewards.

“This historic agreement will help advance Nova Scotia’s gateway initiatives and grow the economy,” he enthused.

Sister airports working together to improve the overall customer experience means that passengers can expect an identical, but enhanced level of service at both ends of their journey.

Joint airport management seminars, staff training and exchange, and project co-operation were certainly all pinpointed as key initiatives to develop when Sydney Airport signed a formal MoU with Beijing Capital last year.

Speaking at the time, then Sydney Airport CEO, Russell Balding, commented that he ultimately hoped the outcome would be better airports for the travellers of both cities.

“It is about building a win-win relationship through collaboration and knowledge sharing,” he said. “More than anything else, innovation comes from sharing knowledge, learning from the experience of others, and building on the wisdom of your peers.”

Dr Dong Zhiyi, chairman of Beijing Capital, said the two airports would share knowledge of airport operations and management. “It is in our mutual interest to establish a beneficial co-operative relationship, and face challenges and opportunities together,” he said.

When another Chinese airport, Guangzhou, announced a sister airport pact with Los Angeles International Airport (LAX) back in 2005, the US gateway claimed that the move was designed to deliver “the best possible commercial passenger and air cargo service” between the two destinations.

But there was an additional economic consideration for LAX, operator Los Angeles World Airports (LAWA) admitted, as China was poised to become the leading source of tourists to southern California during the next decade.

The most recent agreement – signed in July this year – saw Delhi’s Indira Gandhi International Airport joining forces with Incheon.

PS Nair, chief executive of GMR Airports, which operates Indira Gandhi, said that sister agreements helped build “mutually co-operative and rewarding relationships among progressive airports.”

“We see it as a stepping stone for the development of airports like Indira Gandhi as international air transport hubs,” he said. “It also helps to expand air transport networks worldwide.”

Airports may still have a long way to go before they catch up with the airlines in terms of alliances, but it seems that they are learning fast and the landscape may look very different in another 10 years.

I look forward to writing the update!

Airport World 2011 - Issue 4

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