Airline Fleet Management
Issue 71
January - February 2011
Airport&Routes: Airport Development
In the next two decades up to $1tn must be spent on airports worldwide to accommodate a two-fold increase in air traffic. But where that money comes from and how it is spent remains a complex matter, with conflicting priorities on land use, sustainability and security all requiring compromise. Alex Derber indentifies the major issues and takes a look at Istanbul’s second airport, Sabiha Gökçen, only a decade old but already a success.
Two days after he was expecting to be in Dallas holding his new granddaughter, Colin Turner found himself in the unusual position of being interviewed by the BBC on the relative merits of sleeping in Heathrow terminals three or five. Like thousands of other unfortunates, Turner was caught in the chaos caused by heavy snowfall in December, which led to the closure of Heathrow and days of cancellations and delays.
For the record, he declared the airport’s sparkling Terminal 5 the better choice for discerning airport lodgers, but what he probably did not realise was that his unwelcome sojourn might have been avoided had Heathrow’s prized new passenger gateway been matched with developments airside, namely a third runway.
Graham Bolton is a director at Arup, one of the world’s foremost airport consultancies. Reflecting on the disruption at Heathrow, the world’s second-busiest airport, he says: "If you have two runways, or for that matter any other assets that you have to use to its full capacity, then as soon as you have fog, or snow, or anything else, your flexibility to respond is very limited."
A third runway at Heathrow has been ruled out by the UK government due to environmental concerns and vociferous campaigning from local residents, but as passenger demand resumes its inexorable rise in Europe and around the world, this has come under review again. Worldwide, airport development is critical, raising issues and conflicts over land ownership, planning, noise and the environment.
Meeting demand in the 21st century
With air traffic set to double in the next 20 years, worldwide airport capacity will need to increase proportionally. Yet while regions like the Middle East have poured huge sums into their air infrastructure - investing, say some critics, even beyond their requirements - other future traffic hot-spots lag behind.
"We have countries like Brazil where growth is extraordinary and the infrastructure is not fit for that at all," says Andreas Schimm, director of economics at industry body Airports Council International (ACI). "Even if Brazil had average growth its infrastructure wouldn’t be up to date. But with growth of up to 40 per cent at some airports it’s obviously getting worse and with the World Cup in 2014 and Olympics in 2016 it’s a worry how they will cope. Traffic is already spilling over from the large hubs into secondary, peripheral airports. For domestic point-to-point traffic that might work temporarily, but for international traffic it poses a massive problem."
Far from singling Brazil out, Schimm is cautious about Europe’s prospects, too. "If we look five or 10 years ahead at the growth we are expecting, it’s a certainty that the situation is not going to improve; it’s going to get worse, meaning that the infrastructure on the ground will not be able to keep up with demand. Europe is a very sensitive system; it only takes a handful of congested hubs to cause severe knock-on effects." he says.
Of key importance, according to Schimm, is the development of airside infrastructure, such as new runways. Well-designed runways, taxiways, and ramps avoid aircraft holding in the air and idling on the ground, maximising throughput and lowering emissions and noise. In 2010, Tokyo Haneda opened its fourth runway and Shenzhen in China will invest $3.6bn in a second runway and third terminal. Of others, Brisbane, Australia, is pumping more than $1bn into doubling terminal capacity and a new runway.
However, airport design is always a compromise, requiring a balance of sometimes conflicting objectives, and it is rarely possible to simply lay down the ideal runway and taxiing network. For instance, a hub like Hong Kong uses its vast single terminal to speed passenger transfers, but that design does not allow for the most efficient airfield layout.
The global economic crisis has put a stop to private investment in airports pretty much. And so far I don’t see any case which would give that a new impetus. Many governments say they need to involve the private sector but I don’t yet see clear and tangible action for that.
Sabiha Gökçen
As a symbol of successful airport development in the 21st century, there are a few better examples than Istanbul’s Sabiha Gökçen airport.
Originally opened in 2001 on the Asian side of Istanbul as an alternative to ‘European’ Ataturk Airport, Sabiha grew slowly until a boom in 2005 that saw it handle four million passengers. Spotting potential, the Turkish government opened a build-operate tender for a new terminal. This was won by a private consortium of India’s GMR, Turkey’s Limak and Malaysia Airport Holdings Berhad, which opened the new, 25 million passenger capacity terminal in 2009. Airside infrastructure is owned by the Turkish state, which is currently planning a second runway for the airport.
Arup is working on the new runway and was the engineer for the new terminal, which due to Turkey’s propensity for earthquakes, is the largest seismically-isolated building in the world. Another challenge for designers was the speed with which the Turkish government and operating consortium expected to close the project – only 18 months from planning to completion – about half the time usually taken for a project of a similar scale.
“Sabiha Gökçen is a great story”, comments Schimm. “They have grown leaps and bounds and not necessarily at the expense of Ataturk airport. It will probably reach its capacity sooner rather than later and planning for a third airport in Istanbul appears to be underway. The majority of Istanbul is on the Asian side and not on the European, so it probably has its own market which doesn’t have as much overlap with Ataturk as one might think. It is also a different business model of point-to-point traffic.”
Whether or not a third airport is built in Istanbul, Bolton believes further expansion of Sabiha will happen. “If you look at the scale of Istanbul, its airport capacity compared with a city like London is actually remarkably small, so there is a massive need for air terminal capacity in Istanbul. The Asian population of Istanbul is six or seven million people so even if there is a third airport on the European side, Sabiha still possesses a significant catchment area. Also looking at the Turkish transport strategy the expansion of Sabiha is independent of whether or not one builds a third airport,” he says.
Along with plans to link Sabiha to Istanbul’s metro network, the airport is designed for further expansion, through enlargement of the new terminal and development of the old terminals. Once that is complete, along with the airport’s second runway, Sabiha could match Ataturk’s present passenger volumes of 35 million per year. With current facilities, it is expected to reach its 25 million capacity by 2023. With Turkey boasting average flight traffic growth of 10 per cent annually over the past seven years, Sabiha’s expansion does appear to be a matter of when, not if.
But not only passengers are gravitating towards Sabiha. Turkish Technic is nearing completion of its $400m HABOM maintenance facility, which will eventually comprise hangar space for 12 narrowbody and three widebody aircraft. The first part of the project opened in November 2010, a joint venture between Turkish Technic and Pratt & Whitney, Turkish Engine Center offers complete MRO services for CFM56 and V2500 engines and has the capacity to overhaul 250 engines per year. Also already operating at the airport is MyTechnic, which focuses on A300, 737 and MD-80 maintenance, as well as on the CF6 engine.
Footing the bill
Returning to worldwide development, to increase capacity, most upcoming projects will be developments existing infrastructure rather than all-new airports. ACI estimates that capital expenditure by airports worldwide in 2010 was $38.5bn, but it forecasts that close to $1tn will be spent on airport infrastructure over the next two decades.
Often part of national infrastructure projects, airport development is overwhelmingly funded by governments. However, as austerity programmes begin to bite in certain parts of the world, the private sector will need to take part of the strain. Yet Schimm doubts that it will be able to: “The global economic crisis has put a stop to private investment in airports pretty much. And so far I don’t see any case which would give that a new impetus. Many governments say they need to involve the private sector but I don’t yet see clear and tangible action for that.”
Lack of access to credit, competition regulation and, in some cases, antagonistic government policy towards airports are all factors that deter private investment. Spain is attempting a €9bn ($ 12bn) privatisation of a 30 per cent stake in state-run AENA, the world’s largest airport operator, but has encountered little interest. Of concern to potential investors are losses totaling roughly €600m ($800m) in 2010, militant air traffic controllers, public sector opposition to the move and the fact that only nine of AENA’s 47 airports were profitable in 2009.
We shape a better world
Sabiha Gökçen International Airport. istanbul, Turkey
©Cemal Emden/Tekeli-Sisa Mimarlık
Arup has been involved in aviation development for more than 50 years, working on a wide range of assignments at more than 100 airports worldwide.
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