| by Dr. Ruwantissa Abeyratne
( February 18, 2013, Montreal, Sri Lanka Guardian) One of the business aims attributed to the new airport at Mattala, which serves the city of Hambantota, southeast of Sri Lanka, is the establishment of an aerotropolis. This makes sense, particularly for tourism purposes as well as for boosting the local economy and for creating jobs, which are also identified as business aims for the new airport. However, an aerotropolis is a vast project of its own and has to be carefully planned through a viable business case.
Hambantota is geographically located east to west of the shipping and air route. This location has the potential of being a busy and profitable international business hub.
The airline and airport business are interlinked and inter-connected and, since air transport is a growth industry, so is the airport industry. According to the global market forecast of Airbus Industrie forecasts that from 2009 to 2028, some 25,000 new passenger and freighter aircraft valued at US$3.1 trillion will be delivered. This rapidly evolving demand is driven by emerging economies, evolving airline networks, expansion of low cost carriers and the increasing number of mega-cities as well as traffic growth and the replacement of older less efficient aircraft with more eco-efficient airliners. These are factors driving demand for new aircraft.
The forecast also attributes the demand for larger aircraft to the compelling need to ease aircraft congestion and to accommodate growth on existing routes and to achieve more with less. Needless to say, this exponential growth in air traffic will place a burden on airport capacity and consequent demands upon the airport industry. The forecast states that the greatest demand for passenger aircraft will be from airlines in Asia-Pacific and emerging markets. The region that includes the People’s Republic of China and India accounts for 31 per cent of the total, followed by Europe (25 per cent) and North America (23 per cent). In terms of domestic passenger markets, India (10 per cent) and China (7.9 per cent) will have the fastest growth over the next 20 years. The largest by volume of traffic, will remain domestic US traffic.
The airport, like any other autonomous business enterprise, has to exploit inherent resources optionally; compete with other businesses of the area on quality of services offered; and reinvest funds in developing its business interests. The Council of the International Civil Aviation Organization recognizes the continuing importance to airports of income derived from such sources as concessions, rental of premises and “free zones”. The Council recommends that, with the exception of concessions that are directly associated with the operation of air transport services, such as fuel, in-flight catering and ground handling, the full development of revenues of this kind be encouraged having regard to the need for moderation in prices to the public, the requirements of passengers and the need for terminal efficiency. The fact that the general public are recognized as customers of airports by ICAO policy leaves room to attribute to the wisdom of the policy statement the acknowledgment that airports do not only cater to airline passengers and their visitors, but to shoppers who may wish to pick up a bargain at the airport.
Aerotropolis is a new urban economic phenomenon which is on the rise in the airport industry. It is an airport city which has a core and outlying area of aviation oriented businesses and associated residential developments. Being very similar to the traditional “metropolis” which is a contrived formation of a central city and commuter linked suburbs, the aerotropolis will respond to a society’s demands for communications through speed and agility of multi model transportation systems and sophisticated telecommunication systems. A functional aerotropolis will be optimized by corridor and cluster development of high volume commercial activity facilitated through aero-lanes such as expressway links and aero trains linking the airport city to the airport itself.
Infrastructure has also to be created for the smooth flow of buses, taxis and trucks between the two points.
In the past an airport was simply a terminus, much the same as a bus terminus of that time, assigning it as the focal geographical point at which people gathered to embark on a plane for a journey by air, or disembark after an air journey. However, the traditional definition of an airport is being reshaped and refined to accord with the fact that airports are now complex industrial enterprises.
Quite apart from the essential air side support given by airports to landing and departing aircraft, there are commercial facilities provided for both passengers and the public within the terminal building by concessionaires who are specialists in their own fields of business.
The airport authorities collect concession fees (non aeronautical revenues) from the concessionaires and in numerous airports around the world, the income derived from such resources are significant, often exceeding traditional income derived through the provision of landing fees and airport and air navigation services charges (aeronautical revenues) to incoming and outgoing aircraft.
More and more, airports are evolving from being basic aeronautical infrastructures into complex multi functional enterprises serving the travelling public while at the same time catering to their commercial needs and those of others who visit the airport. Such enterprises include duty free shops, specialty retail and brand name shops, restaurants, hotels and accommodation, banks, business and office complexes, leisure, recreation and fitness centres just to name a few.
In the present context, the major hubs are facing a non aeronautical boom in their commercial activities which are not directly related to air travel. For instance Chek Lap Kok, Hong Kong’s international airport, has more than 50 high end designer shops\Singapore’s Changi International pampers the human’s physical fitness cravings and the continuing need for entertainment by hosting cinemas, saunas and even a swimming pool in the airport itself. Frankfurt has the world’s largest airport clinic having the facilities to serve 36,000 patients annually while Detroit Metropolitan Wayne County has a 420 bedroom hotel in its main concourse. Munich airport has its own hospital while Amsterdam Schipol has a Dutch master’s gallery. Beijing has quite a few banks carrying on business within the terminal building while Stockholm’s Arlanda airport solemnized marriages and officiated over 450 weddings in 2005 in the vast chapel located within the terminal.
All this is of course due to the fact that the average air traveller is more affluent than the non traveller (they have higher incomers, typically three to five times the average) and a busy airport has scores of them continuously flowing through the airport. This has prompted airport managers to re-structure their operational management. For example, many airports have established separate real estate management and property units and divisions to capitalize on their landside commercial activities and enhance real estate values. One of the foremost in this area is Aeroports de Paris which established its real estate division in 2003 to manage landside commercial activities coming under the purview of the airport both in Paris and Orly.
Some others have aggressively put in place free trade zones, customs free zones, golf courses, child and day care centers, factory outlet stores and fitness centers. Amsterdam Schipol has also done the same and developed its real estate potential to build large office complexes, meeting and entertainment facilities logistics parks, shopping and other commercial activities. Beijing, which is one of the busiest airports, has gone ahead with building its Capital Airport City, which will provide shopping, entertainment, education, sports and leisure activities while accommodating activities related to commerce, finance trade and housing. Dallas Fort Worth (US) has concentrated its activities in the field of real estate development as a profitable adjunct to its traditional airport activities. Hong Kong airport’s SkyCity is a colourful and fabulous project, which will contain a million square metres of retail, exhibition, business, office and hotel complex very near to the terminal. This complex will also accommodate cinemas and mini theme parks.
Yet another spectacular development is the new airport city of Kuala Lumpur International Airport which is commercially held together by its large Gateway Park. This Park hosts office complexes retail stores, an automotive hypermarket and leisure venues which will cater to the aviation and non aviation market in the city. In Seoul, Incheon International Airport has its own mega complex in its “Winged City” which provides for large business areas, shopping and tourism districts, housing and medical services for airport workers and residents.
While still in Asia, Suvarnabhumi, the Bangkok International Airport has an entire airport city within the boundaries of the airport that houses an international business centre, international conference and exhibition complex, shopping malls, car parks, hospitals, restaurants and a large entertainment centre. It is clear that what these airports are doing is merely anchoring their strategically placed airport resources and potential on a metropolitan Commercial Business District (CBD) formula to create employment and generate revenue.
This is a highly lucrative and eminently strategic commercial practice among the major airports of the world who are aware of the trends with regard to passenger movements in their terminals. The aerotropolis is a natural corollary of the upturn of the economy in major cities as well as the contemporaneous advantages provided by airports in providing and promoting business in a fast moving globally networked economy. Advanced technology and high speed communication are essential for today’s businesses and these are provided by these modern airport complexes and systems.
The success of an aerotropolis is smoothness and fluidity that would ensure a combination of high speed business, convenience and high quality products to the customer. Although this concept has attained fruition as a successful business model mostly in the Western world, Asia is not far behind and is gaining rapidly on a competitive level as the examples already given indicate.
Mattala would have many advantages. Its unexploited land in and around the airport as well as land in Hambantota, the pristine beaches and vast business potential for high end as well as modest hotels, could help expand the aerotropolis experience beyond the airport. Theme parks, water parks and other entertainment could be built around the area taking advantage of the available land. This would enable tourist to enjoy their vacation without leaving the southeast of the country.
ICAO has introduced a whole new area of thought into airport development. What was once a concern to merely provide easy facilities for the fluid movement of air traffic has now become in addition an ecological concern. By this process, airport development now falls into three main areas which are: the development of airport capacity and facilities; the balancing of airport development with necessary security measures; and,the balancing of airport development with ecology i.e. city planning, noise pollution avoidance etc. The ICAO Airport Planning Manual ensures a balance between airport development and ecological considerations.
Cooperation in technical and economic areas would have to be further expanded to include safety and ecological factors in the technical field and all economic research in city planning and infrastructural development in the economic field. These studies would have to be done in the form of committed and in depth country studies by individual States taking into consideration futuristic studies of a country's outlook and the financial outlay that the country would be prepared to make for an airport expansion programme. The outcome of these studies could then form legislation for the planning of airports in a State. Such legislation would present, for the first time, a cohesive and enforceable set of laws in that State that would meet the airport congestion problem.
Although the concept of airport planning laws can be summed up easily as above, the three broad areas of ecology, safety and infrastructural planning need a sustained approach of study before such are incorporated into laws. For a start, ICAO's Airport Planning Manual is geared to provide information and guidance to those responsible for airport planning, where information on a comprehensive list of planning subjects such as sizes and types of projects task identification, preparation of manpower and cost budgets, selection of consultants and standard contract provisions are given. With these guidelines each State can start its planning process.
 One of the business aims attributed to the new airp...){kind=link}