The Impact Of The Airport City
February 11, 2010
Airports across the Gulf are currently in the process of adding airport infrastructure capacity aiming to handle 300 million more passengers by 2015, almost doubling their current airport capacities, e.g. Qatar’s Doha and the UAE which is growing airports’ capacities, in Dubai, Abu Dhabi, Ras Al Khaimah and Sharjah. True that the current economic crisis has caused closer scrutiny of those projects, yet the underlying question that is the elephant in the room is; where will all this traffic come from?
Most airports around the world have at least one major airline and there is a correlation between the base carrier’s network and the airport’s passenger traffic, for example, Heathrow’s symbiotic reliance on British Airways, or Fraports’ lifelong partner: Lufthansa.
For emerging and growing ‘mega’ airports to fill the capacity that they are creating, they will need to grow at a much faster rate than the current predicted growth rates. Developing further direct traffic will be successful up to a point, which leaves transfers and aggressively seeking to develop new, yet untapped markets such as Asia, the Indian Sub-continent and China, where the real growth is expected; possibly exploring the use of low cost carriers models and low cost airport models.
Whilst the Gulf countries stand to benefit from the aggressive growth strategies of their home-based carriers, there may still be a risk for the region in terms of overcapacity creation. With all the growth projected or anticipated around the Middle East mega airports, then commercial development in the vicinity of those airports should be seen as a great opportunity, but airport cities don’t just happen. They are the result of careful thought and business planning, in addition to linking a transport hub to boost local/regional economy.
Airport City is a term that is used to describe the evolution of airports, from mere infrastructure and facility providers/operators to a hybrid and complex service provider that develops and caters to community needs for business, shopping and leisure, whilst contributing to the overall economic well-being of the airport. It also supports the local / regional economy, as well as supporting further job creation both directly and indirectly, more akin to a national business hub, as opposed to ‘solely a transport hub’.
The ethos behind airport cities is to develop plots and spaces based on specific investors/developers or end-users’ needs such as retail or exhibitions & conferences with an aim of attracting the right businesses that will add value to the community and the airport’s business model.
Airport cities are a natural evolution for airports, who continue to play a key role in the economic development of cities and countries, from simple infrastructure providers dependent on public finances to today’s diversified and complex businesses, increasingly privately owned and independent. This is achieved by seeking and exploiting existing business opportunities of non-aeronautical activities, therefore redesigning commercial space within the terminals, while actively pursuing the exploitation of its real estate assets. In turbulent times, with airlines decreasing capacity and cutting routes, this strategy can go a long way in cushioning airport operators from variations in aeronautical-related revenues, therefore offering a more sustainable approach to business that supports the community more effectively and for longer term.
There are existing major hubs like Amsterdam Schiphol, Frankfurt and Hong Kong, among others, who have been leading the way in developing airport cities and supplementing the aeronautical income with non-aeronautical revenues and development programs. It goes without saying that airports are already responsible for the creation of thousands and thousands of jobs around the world, both directly and indirectly. This can only improve significantly with the creation of strategic airport cities. E.g. Frances’ Charles de Gaulle Airport recruiting approximately 95,000 direct jobs and 260,000 indirectly.
Airports of the future can become more and more self-supporting, standalone communities in their own right, acting as social and economic catalysts for long-term business growth, by providing a business enabling platform and infrastructure that enables the right transport connectivity and freight flow. Thus can airports become even more critical assets for their countries’ and region’s economic well-being.
