Demand for air travel is increasing. IATA expects more than seven billion passengers in 2035, an average growth rate of 4.1% per annum and more than double 2014’s 3.5 billion passengers. With that growth comes the promise of aviation having an even greater economic impact. “It is an exciting prospect to think that in the next 20 years more than twice as many passengers as today will have the chance to fly,” says Tony Tyler, IATA’s Director General and CEO.
“Air connectivity on this scale will help transform economic opportunities for millions of people. At present, aviation helps sustain 58 million jobs and $2.4 trillion in economic activity. By 2035, we can expect aviation to be supporting 105 million jobs and $6 trillion in gross domestic product (GDP).”
In such a dynamic industry, there is little doubt that aviation will encounter any number of headwinds in the next two decades as it strives to fulfil its economic potential. Some will be anticipated, many will not.
One that is already certain to blow hard against aviation’s advances is airport capacity. In short, capacity on the ground isn’t matching demand in the sky.
Bottlenecks are appearing and their stranglehold will tighten as demand for air services grows. London Heathrow, for example, operates at 99% capacity and has done so for more than 10 years. There is precious little room to breathe or recover from irregular operations—and no room at all for extra flights until infrastructure is improved or operational innovations implemented.
Nor is Heathrow in any way unique. Some 160 airports worldwide use slot coordination, indicating a need to manage capacity. A EUROCONTROL report from 2014 further supports the argument, noting a shortfall in Europe’s ability to meet demand. The report says the most likely scenario is that 1.9 million flights will go unaccommodated by 2035, the equivalent of 120 million people being unable to take a return trip. And each trip that cannot be accommodated has an economic cost.
Cause for optimism
Aviation needs to be supported with the correct infrastructure so that, in turn, the industry can drive economic benefits both locally and globally. Only if the needs of airlines are met can connectivity—and the subsequent economic and social benefits—be fully realized.
Numerous other examples of constructive engagement give cause for optimism. Airports Company South Africa (ACSA), specifically its new Durban airport, was once cited as an example of over-building, but it has since revised its approach and short- and medium-term goals have been identified within masterplans for all ACSA facilities. These plans have been developed in conjunction with airline users while a Regulating Committee provides valuable oversight.
Similar transparent consultation has also been implemented successfully at Schiphol Amsterdam. In Asia, Singapore Changi’s new terminals and the expansion at Incheon have been lauded as good illustrations of intelligent expansion.
The problem, says David Stewart, IATA’s Head of Airport Development, is that such cases are far from universal. Worldwide challenges remain with providing air transport the facilities that demand for its services dictate. The two main issues squeeze efficient airline operations from both sides; not building anything and building without regard for user requirements.
In terms of a lack of a construction, there is one overarching, global obstacle to developing infrastructure on the ground: political will. Aware this is rarely a vote-winning issue—and often an environmentally-motivated vote-losing one—politicians tend to view aviation as a political hot potato, failing to understand the benefits it can bring and the infrastructure that needs to be in place to secure these benefits. The result is a lack of coherent aviation strategies and stagnating infrastructure. IATA’s Director General Tony Tyler sums it up, “Everybody wants to to fly, but it seems that nobody wants an airport. It’s a conundrum that we need to overcome.”
Stewart adds: “Building infrastructure must be viewed as a business decision and not a political issue. Otherwise, the debate gets lost in endless bureaucracy. Because politicians have a four- or five-year time horizon before the next election, new airport projects never progress as they should. The decision, often a difficult one, is almost always passed on. Or, if a decision has been made, it can be reversed or significantly changed by the following government.”
Adding capacity at existing major hubs seems an especially troublesome issue for politicians. In the Philippines, the debate over Ninoy Aquino International Airport (NAIA) in Manila has simmered for years and yet a firm decision has still to be reached. It may be further developed, it may move to a new site, it may cede operations to nearby Clark.
The only short-term solution given this lack of political will is to maximize NAIA’s capability. But even that is easier said than done, according to Tony Houston, Assistant Director for Safety, Operations and Infrastructure at IATA.
“We’ve recommended that they should seek assistance from a more advanced airport operator, such as Changi, which could provide a lot of guidance on industry best practice,” he says.
Manila stands alongside many other world hubs that have suffered from prolonged periods in the political wilderness. The decision on Sydney’s new airport took years, as did agreeing the site for Navi Mumbai International Airport, while the planned expansion at Jakarta Soekarno-Hatta International Airport will still not fully resolve the capacity problem at Indonesia’s main hub.
Though the industry urgently needs capacity, building heedlessly is not the way forward. This is not to say that more decisive action from politicians will always be preferable. But, as well as examples of the dangers of decision deferment, the industry also provides several case studies that demonstrate how detrimental a hasty decision can be on a certain strategy without due planning and consultation.
Africa contains several airport projects that could be called “trophy projects”. Countries that are building new or second international airports that seem unjustified given existing traffic levels, include Angola, Namibia, Senegal and Sudan. Air services must be viable and trophy projects can call that prospect into question.
The key is consultation. Where infrastructure is inadequate, it is critical that there is a dialogue with the users—who will eventually foot the bill. Understanding the need will help direct the solution in he most appropriate way. This is the case even in regions where capacity provision has been strong, such as in parts of the Middle East.
And it should be remembered that building extra capacity is not an answer to the inefficient use of existing capacity, whatever the reason for that inefficiency. In fact in many instances, the consultative process will uncover utilizing existing capacity more efficiently as the best approach. Not using this capacity to its full potential is particularly wrong-headed considering new passenger processing technologies, such as online check-in and bag self-tagging that allow better utilization of the airport footprint.
Governments need to work collaboratively with those who operate and use airports to predict how demand will evolve in future.
IATA argues that a few airports in Latin America, notably Quito, were already behind the times when they opened. When the original requirements for the expansion are penned they can seem appropriate. But new facilities take time to build and the situation can change significantly. The rigidity of many concession agreements excludes the opportunity for the operator to adapt to the changing aviation environment thus eroding the value of the concession as well as the new facility.
Stewart says the lesson learned is that the future cannot be predicted by looking in the mirror. Simply extrapolating from previous years may not necessarily provide the right answer. “What if an airline hasn’t been able to grow due the capacity constraints at the existing airport?” he asks. “That airline needs to be asked how it would like to grow, what aircraft it would be interested in acquiring.”
Mapping the future of such a dynamic, rapidly fluctuating sector is no mean feat. Airports take years to build and are subject to complex political environments. Airlines are faced with a dynamic, competitive environment and must retain the flexibility to adapt to market needs quickly and efficiently. In short, forecasting is extremely demanding. This is why new infrastructure must be planned with an element of flexibility built-in, says Angela Gittens, Airports Council International (ACI) Director General. “Very often, governments impose on airports specific designs or minimum service level standards, that are not flexible during the concession period, despite evolving business conditions,” she says. “A proper and honest exchange of views is vital for the successful and cost-effective development of airport infrastructure.”
In an era where resources are stretched, it is crucial to build wisely. Airports and authorities consulting with airlines should ensure the coordination needed for sound decision making and for capital spend to be directed where it is needed most.
Stewart reiterates that airport capacity must be viewed as a business issue and approached in the same vein. “There should be a cost-benefit analysis and clearly defined service level agreements,” he says. “This not only provides a stamp of quality but also enables all parties to measure the development against expectations and global best practice.”
Primarily, governments must inform themselves of what is needed, where and why. The clock is ticking. Action is required from governments to prevent their national economies falling behind those others that, through a carefully considered approach, are bolstered by the unwavering support of air transport.
Angela Gittens, ACI Director General, says funding new airport development will be a huge challenge in the years ahead. “Government budgets are under pressure and will most likely continue to be,” she says.
“At the same time, the pressure for airport development will continue to grow as an increasing number of citizens gain access to air travel as a result of the rise of the middle class in emerging economies,” she adds. “This means that the private sector will play an increasingly important role in airport development worldwide and we’ll continue to see a focus on the generation of non-aeronautical revenues to pay for much needed aeronautical infrastructure. However, for this to happen, governments must provide the right regulatory framework in order to attract private capital.”
Better by design
Getting permission to build may take longer than the actual building but once that stage is reached, architects are becoming better prepared to provide a design that suits airlines users and the passenger. Collaboration is fundamental.
“Passenger terminals absolutely need to be flexible, functional and able to adapt to technological trends and changes,” says Curtis Fentress, Founder of Fentress Architects, whose company has several major aviation projects under its belt. “Airports are also focusing more on sustainability and Leadership in Energy and Environmental Design standards to minimize environmental impacts and improve efficiency.
“From airport lounges to private offices to terminal projects, architects work with the airlines in a variety of ways,” he continues. “Lately, everyone is focused on the passenger experience and wants to bring a fresh new image to out-of-date areas.”