There is a saying that time flies when you’re having fun, and it certainly does seem to go faster at weekends or on those long awaited holidays, but the truth is that time just whizzes past anyway and before you know it a couple of decades have gone and you’re celebrating your 20th anniversary!
Well, in case you hadn’t guessed by now, we are celebrating just that at Airport World, so we thought it would be interesting to catch up with some old friends and ask them for their thoughts on aviation’s evolution over the last 20 years.
The big picture
Aéroports de Paris (ADP) CEO, Augustin de Romanet, believes that airports and the aviation industry has undergone huge change in the last two decades.
He says: “Today, the global airline industry consists of over 2,000 airlines operating more than 23,000 aircraft, serving over 3,700 airports. Air traffic worldwide has grown by an average of 4.6% per year between 1992-2007 and by 6% from 2008-2014. As a result, there were around 3.6 billion passengers worldwide in 2014, compared to 1.5 billion in 2000.
“This increase has been driven by two major changes: the growth of low-cost carriers operating medium-haul flights that now control nearly 40% of the intra-European market; and the sharp increase in long-haul flights operated by Gulf and Asian airlines that have taken a large slice of the previously profitable Europe–Asia traffic from those continents’ legacy airlines.
“In Europe, the first cross-border airline merger/takeover, between Air France and KLM, took place in 2003. For big airport operators like ADP, the competition has heated up among major airports, while the way of designing facilities has changed to cope with the need for more flexibility.
“Another great change is the increased use of super-widebody aircraft. When the first A380 arrived in Paris in 2009, ADP had to put in place new facilities such as double or triple boarding bridges and upgrade our runways and taxiways as well as buy new de-icing equipment just to be able to accommodate the aircraft. A total of €100 million was invested to adapt all the airport’s facilities, working upstream with airlines.”
Sydney Airport’s managing director and CEO, Kerrie Mather, calls aviation a “dynamic and exciting industry that’s constantly changing”, and believes it has got a lot greener and more efficient since 1995.
She says: “Over the past 20 years, larger, quieter and cleaner new generation aircraft have fundamentally changed the economics of aviation by opening up new markets, driving new airline business models, lowering operating costs and improving the productivity of aviation infrastructure.
“This has been a positive change for airports, airlines and passengers alike, as lower fares have made air travel more affordable and accessible than ever before, which is stimulating new demand to travel from large and fast growing markets such as China.
“Over the past decade, we’ve seen a fundamental shift in the markets we serve – given our proximity to Asia, the growth in Middle Eastern carriers, and the significant growth in leisure travel driven by low cost carriers.
“Passenger numbers at Sydney Airport have grown by around 50%, and we’ve invested in enhancing our efficiency and productivity to accommodate this growth. Indeed, since 2002, we’ve invested around A$2.7 billion in airport services and facility improvements, and we plan to invest a further A$1.2 billion over the next five years.”
The Schiphol Group’s president and CEO, Jos Nijhuis, is a little more succinct in his response to the question about how Amsterdam Schiphol has fared over the last 20 years.
“Moderate growth after strong growth in the 80s and 90s, relatively little new infrastructure and an emphasis on better utilisation of our existing assets,” he says.
He is also as equally concise in summing up what he believes to be the biggest changes to the aviation industry/market since Airport Word first appeared 20 years ago, simply noting: “Digitisation, the rise of the LCCs and Middle East carriers and commoditisation.”
Wan-su Park, president and CEO of Incheon International Airport, points out that his gateway didn’t exist 20 years ago and has been on something akin to a rollercoaster ride of success since opening in March 2001.
“Passenger traffic at Incheon has grown by an average of 6.7% annually since opening and the airport has become one of the key players in the airport industry, ranked second in the world for international cargo and eighth for international passengers,” enthuses Park.
“During this time the airport has won an unprecedented number of Airport Service Quality (ASQ) awards and made continuous developments in advanced ubiquitous technology – to ensure fast and convenient passenger processing – and on unique cultural attractions and facilities that differentiate us from other airports.”
Reflecting on the construction and development of his airport, Fred Lam, CEO of Airport Authority Hong Kong, enthuses: “Three years after Airport World first appeared 20 years ago, the new Hong Kong International Airport (HKIA) commenced operation at Chek Lap Kok – ushering in a new era for Hong Kong’s aviation industry and economic development.
“Over the past 20 years, Airport World and HKIA have grown together and witnessed many changes throughout the industry. Thanks to the popularity of air travel, the world has never been smaller; and the rapid development of the aviation industry has spurred global trading and facilitated cross-cultural exchange.
“HKIA has also changed significantly during this time – moving from the urban jungle of Kai Tak to the island oasis of Lantau and growing from a single runway facility into a modern, world-class airport.
“Air traffic performance has more than doubled, registering 63.3 million passengers and 391,000 flight movements in 2014. Cargo volume increased even more, by 170% to 4.38 million tonnes. With 100 airlines serving about 180 destinations worldwide, HKIA is now one of the world’s busiest aviation centres.”
Talking about key industry changes since 1995, TAV Airports CEO, Sani Şener, believes that two of the biggest developments have been the privatisation of airports and airline liberalisation.
“Both have effectively amounted to commercialisation and freedom, which in turn have led to increased efficiencies in the market, allowed low-cost airlines to emerge and grow and acted as a catalyst for aircraft manufacturers to provide smart solutions to keep aircraft operation costs low,” says Şener.
It is easy to forget that TAV only started operations at Istanbul Atatürk Airport in 2000 and has since acquired the operating rights of 13 other airports in the region that handle 40 million passengers.
Edmonton International Airport’s president and CEO, Tom Ruth, says that the last decade has been kind to his gateway, which has been the fastest growing major Canadian airport for passenger traffic and one of the most successful for route development, adding 35 new non-stop services.
He notes that a major expansion programme in 2012 doubled the size of the gateway’s passenger complex and in 2014 it opened the world’s first Renaissance Hotel attached to a terminal. A new 500,000sqft outlet mall is currently under construction.
Julian Jäger, member of the managing board at Vienna Airport, also feels that his gateway is in a much stronger market position today than 20 years ago, in part due to the opening up of markets in Eastern Europe that have provided additional impetus to the Austrian economy.
He says: “Vienna Airport has more than quadrupled its passenger volume in this period, from about five million passengers in 1989 to the new record of more than 22.5 million passengers in 2014.”
Simply the best
So the million dollar question then, how do they feel Airport World has done in terms of telling the stories of ACI and the world’s gateways over the last 20 years?
Amsterdam Schiphol’s Nijhuis says: “You have done an excellent job. Airport World is a leading magazine that cannot be missed by anyone in our industry!”
Vienna’s Jäger comments: “Airport World has been providing information on the topic of aviation for 20 years. This impressive success story is only possible because it has provided comprehensive and highly professional reporting from the very beginning featuring a high information value for all aviation enthusiasts. Vienna Airport congratulates Airport World on its anniversary and wishes it a good, exciting and informative future.”
ADP’s de Romanet comments: “I wish to congratulate Airport World on this 20th anniversary. Recognised for its top-quality content and its usefulness, this publication has created a strong link between the networks of airports worldwide and provides a forum to convey opinions, share experiences and best practices.
“The concerns within our community are the same – development and attractiveness of territories – and the information sharing that Airport World provides helps us to broaden our vision.”
Hong Kong’s Lam is just as charitable, enthusing: “During the last 20 years of rapid growth and dramatic changes, Airport World – an anchor publication of the Airports Council International – has played an important role in helping the industry keep abreast of new developments, understand new trends, and put issues into perspective. Its features are important sources of industry information, and its interviews are always insightful and inspiring.”
While Sydney Airport’s Mather remarks: “I’ve been working in the aviation industry for about as long as Airport World has been in print! I’m also on the World Governing Board of Airports Council International, for which it is the official publication.
“Airport World is a useful resource for the global aviation industry to keep on top of the latest news and trends. It’s great to see stories in the magazine on what airports around the world are doing to enhance the passenger experience.”
TAV’s Sani Şener points out: “I like checking out the Airport World website a few times a month. Not only do I learn about the news in the marketplace, but also the impact analysis of certain events is very helpful.
“I like reading about how other airports are dealing with the problems we face. I am also informed about what might happen in the market. It helps us become more aware and more ready for the future.
“Finally, I like the simplicity of the Airport World magazine. It is easy to navigate and its analyses are so easy to understand that even an outsider to the aviation industry can gain a lot of insight from it.”
Incheon’s Park says: “I am thankful that Airport World offers helpful and valuable information for airports through its in-depth and wide-ranging articles. Its special reports, in particular, provide plenty of up-to-date examples and explanations about the key issues in the airport industry.
“I hope that Airport World as a specialised magazine with a world authority, may continuously contribute to the mutual growth of every player in the world airport/aviation industry.”
And Edmonton’s Ruth kindly comments: “I’ve really seen the value of Airport World in broadening our horizons by looking at best practices of airports around the world. We always want to bring the best to our passengers and partner organisations, and the insights and inspiration we’ve been able to take from Airport World is invaluable.”
Future challenges and opportunities
And what do our airport leaders view as the greatest challenges and opportunities ahead for the world’s airports and, specifically gateways in their respective regions?
“We need to prepare for the rapid increase in air transport demand as the aviation industry in the Asia-Pacific region is anticipated to more than double in size over the next 20 years,” says Incheon’s Park.
“This means we will need to get better at communicating and co-operating with national and local governments, airlines and local communities in order to timely and successfully construct new airport infrastructure, train and develop human resources and ensure that regulation is in place that encourages growth.”
He also believes that more Open Skies agreements need to be introduced across Asia-Pacific so that the region’s airports can play key roles in the development of nations.
“Airports in the Asia-Pacific region should be unwearying in their efforts to remain competitive by being efficient, profitable and providing high quality services,” concludes Park.
Sydney’s Mather believes that new technology and the need for greater collaboration between different industry stakeholders and governments will become even more important in the years ahead.
“People in Australia and Asia are early adopters of technology, so we need to meet their expectations for greater choice, control, connectivity and convenience by utilising and investing in the latest technology, from airport apps to biometrics,” she says.
“It’s also essential that industry and government work together to ensure policy settings are appropriately calibrated to reflect investments in next generation aircraft and best support aviation, economic and tourism growth.”
ADP’s de Romanet sees three big challenges and opportunities ahead – the capacity crunch, the need to develop ‘smart airports’ and sustainability.
“The first challenge is the need for additional capacities to meet future demand. Airports will have to adapt and upgrade terminal facilities, provide cost reduction solutions and better operational efficiency because the competitiveness of airlines is based more and more on the assets of the airport,” he says.
“In this regards, we are lucky in Paris because the modular form of Paris-Charles de Gaulle Airport, its two sets of parallel runways and available land will enable us to support air traffic growth in the long-term.
“To optimise and improve all the fields of activity at our airports, we are investing a record amount of €4.6 billion over the next five years; including €3 billion on aviation and business related, with an emphasis on maintenance and renovation.
“The second main challenge is the ‘smartisation’ of the airport – with self-boarding, automated luggage drop and border crossing systems like PARAFE – to improve the passenger journey and experience, as well as address the new expectations linked to the digital boom. The emergence of Big Data and CRM [Customer Relationship Management] tools are significantly changing our relationships with our customers, which are becoming more simple and personalised.
“The third big challenge is sustainability. We need to reduce the overall carbon footprint of the air transport industry. As the first airport group to be included in the Global 100 index, ADP is committed to reducing its CO2 emissions by 50% between 2009
and 2020 and to achieving a 15% share of renewable energy in our end consumption”.
Vienna Airport’s managing board members Julian Jäger and Dr Günther Ofner believe that airports will face increasing pressure to develop as multi-functional locations over the next 20 years on top of the expectancy to provide quality services, low prices and a wide range of destinations and connections.
Jäger says: “I believe that our efficient processes and high quality services – recognised by Skytax which has given us a ‘4-Star Airport’ rating and the award for the Best Airport Staff in Europe in 2015, ensure that Vienna Airport is well positioned for future success.”
On the expected need of airports to develop as more that just transportation centres, Ofner says: “Airports will continue to develop as multi-functional locations, which offer many other services in addition to the core business of air travel.
“Accordingly, we want to attract more companies to the airport site and thus further enhance our role in the region. Recently a fitness studio opened at the airport and new companies setting up operations on site have included Makita and Cargo Partner.”
Amsterdam Schiphol’s Nijhuis tells Airport World: “Maintaining our competitive position versus our competitors in Turkey and the Middle-East is one challenge. Airports will also need to become more passenger and airline centric and diversify their portfolios away from regulated businesses to ensure their long-term sustainability.”
The need to be a key economic driver for Edmonton and the state of Alberta is on the mind of EIA’s Tom Ruth. “For us, and I think many other airports, a challenge we face is balancing being profitable with our overarching goal to be an economic driver for our region,” he says.
“We need to ensure diversity in our revenue streams. The days of airports simply being a place where you go to catch a flight are long behind us.”
Airport Authority Hong Kong’s Lam comments: “I am confident that the aviation industry will continue to prosper for the foreseeable future.
“Faced with the prospect of impressive business opportunities over the next 20 years, many major airports around the world are currently expanding their facilities and we are no exception,” says Lam.
“At HKIA we are planning to expand the airport into a three-runway system to capitalise on future growth and maintain our status as a regional and international aviation hub.”
The last word and a warning over the possible consequences of the industry failing to deliver the airport infrastructure needed to meet future demand, goes to TAV’s Sani Şener.
He says: “The emerging markets are expected to drive global growth in the next 20 years and eventually they will account for almost two-thirds of all air traffic.
“In fact the propensity to fly will triple in Asia-Pacific and the CIS countries in next the 20 years. That is two-and-a-half times higher than the Middle East and Latin America and double Africa and Europe.
“Therefore, I believe the biggest challenge for the world’s airports will be to provide capacity for such robust traffic growth. Airport capacity is critical in a lot of ways. If global airport capacity fails to meet demand, it will result in the loss of two million jobs, 225 million passengers and $110 billion in revenues by 2035.”