Airports face up to new demands

PUBLISHED : Tuesday, 09 May, 2006, 12:00am
UPDATED : Tuesday, 09 May, 2006, 12:00am

World's top executives meet in Hong Kong as the industry's capital expenditure soars along with traffic and fuel prices

MORE THAN 250 senior airport executives from 35 countries have converged on Hong Kong for the 16th ACI Pacific Regional Assembly, Conference & Exhibition at AsiaWorld-Expo.

They will tackle various aviation issues, including air traffic liberalisation, privatisation, maximising non-aeronautical revenues and enhancing value-added services.

The ACI, or Airports Council International, is a global organisation that brings together airports from around the world to enhance co-operation and safeguard their interests.

ACI's Geneva-based director general, Robert Aaronson, said airports were facing the challenges of steady traffic growth, fast-growing low-cost carrier traffic, steep rises in fuel prices and its impact on airline route decisions, pressure to meet environmental protection goals and health concerns about avian flu.

David Pang, ACI-Pacific's president and chief executive of the Airport Authority Hong Kong, said one of the challenges for world airports was how to prevent the spread of disease while continuing to enhance the efficient flow of people and goods. 'Another challenge is speed. When we continue to enhance the speed (of services), how do we continue the relaxed feelings.'

Other challenges include how to deploy advanced technology without losing the human touch and how to use the most limited resources to create the maximum value for the society.

'All airports in the world face these challenges,' Dr Pang said.

To meet the challenges, airports have had to make substantial investments to expand their capacity and upgrade their technology to deal with people and freight flow.

'Capital expenditure worldwide rose to a record US$36billion last year from US$31 billion in 2004,' Mr Aaronson said.

Last year, airports around the world handled a record 4 billion passengers, up 6 per cent from 2004. And air cargo grew 3 per cent in tonnage from 2004.

Growth in the Asia-Pacific region has been even more phenomenal.

'Beijing [passenger] traffic rose from 34 million in 2004 to almost 41 million in 2005 [a 40 per cent increase]. New airports such as KLIA [Kuala Lumpur International Airport], Nagoya, Centrair, Pudong and Incheon have been constructed to satisfy new markets, and India is racing to renovate existing airports and build new ones to satisfy burgeoning demand. At the same time, Dubai and other Middle East cities have become strong competitors for transit traffic between Europe and Oceania,' Mr Aaronson said.

Worldwide passenger and air freight traffic flow are expected to increase by 4per cent and 5.4 per cent respectively by the year 2020, and by 6 per cent and 7 per cent in Asia-Pacific.

'Clearly demand is shaping infrastructure projects, financial investments, liberalisation of investment from new sources

and the levels of public and private ownership,' Mr Aaronson said. 'A liberalised aviation policy can be an important

factor for sustaining growth at airports.'

Airport executives attending the assembly will discuss best practices and global management issues in panel discussions.

Mr Aaronson said the discussions would help airports formulate strategies to sustain the traffic and revenue growth while operating in a competitive environment.