UAE airport leaders committed to meeting customer needs

UAE airport leaders committed to meeting customer needs

Has the airport industry remained‭ ‬on the expected track‭?‬

Preliminary figures indicate that passenger traffic‭ ‬finished the year 2018‭ ‬with stable growth‭. ‬Despite minor monthly‭ ‬fluctuations‭, ‬the general passenger traffic growth trend was quite stable‭.  ‬On the other hand‭, ‬the global air freight market experienced‭ ‬significant volatility as 2018‭ ‬drew to a close‭. ‬Preliminary data‭ ‬indicates that the industry should record robust but moderating results‭ ‬in 2018‭.‬

Isn’t the growth in passenger numbers and‭ ‬technology too fast for airports to catch up‭?‬

Aviation is‭ ‬one of the fastest-growing and most technologically advanced sectors‭ ‬in the transportation industry and this has far-reaching implications‭ ‬for airport operations‭. ‬Technology can offer opportunities to maximize efficiency‭ ‬as it has a direct impact on the facilitation of‭ ‬traffic‭, ‬passenger processing and security‭. ‬As passenger traffic continues to‭ ‬grow and technology continues to accelerate‭, ‬one of the factors‭ ‬determining the future of the airport industry is the level‭ ‬of investment to upgrade the infrastructure and increase the use‭ ‬of adequate technology‭. ‬

Global traffic surpassed the 8.2‭ ‬billion passenger‭ ‬mark in 2017‭ ‬and the ACI World Airport Traffic Forecast‭ ‬2018-2040‭ ‬projects that it is expected to double by 2034‭ ‬based on a projected growth rate of 4.3%‭ ‬per annum‭. ‬

Existing airport infrastructure in many mature markets worldwide will not‭ ‬be able to handle the expected growth so substantial investment‭ ‬in infrastructure and technology is required to allow the aviation‭ ‬industry to meet growing demand‭. ‬

Now is the time for‭ ‬airport leaders throughout the globe to embrace the digital transformation‭. ‬At ACI‭, ‬we support the development of quality airport infrastructure‭ ‬commensurate with the level of projected growth‭. ‬Moreover‭, ‬we encourage‭ ‬airports to use this common understanding as a platform to‭ ‬present the economic and social benefits of aviation to their‭ ‬regulators‭, ‬to investment banks and to aid agencies as they‭ ‬seek to invest in economic development projects that are sustainable‭.‬

Stakeholders across the aviation industry are in broad agreement that‭ ‬investment in airport infrastructure is critical to the global economy‭ ‬and global and national connectivity especially in achieving the United‭ ‬Nations‭ (‬UN‭) ‬Sustainable Development Goals‭. ‬

Towards this end‭, ‬the ACI‭ ‬World Airport Information Technology Standing Committee and the Economics Standing‭ ‬Committee will continue to work in close collaboration with our‭ ‬members to provide guidance and council and help shape current‭ ‬policy and operational issues‭.‬

Are UAE airports good learning places‭ ‬for the global aviation industry‭?‬

The UAE stands out as‭ ‬a market that has embraced aviation as a sunrise industry‭ ‬on all fronts‭. ‬According to our latest traffic report‭, ‬from‭ ‬a historical perspective‭, ‬it is among the world’s fastest‭-‬growing nations in terms of air transport demand thanks to‭ ‬its ideal geographic location for connecting intercontinental traffic flows‭. ‬Airport‭ ‬leaders in the UAE are clearly committed to meeting customer‭ ‬needs‭. ‬In 2018‭, ‬both Abu Dhabi International Airport and Dubai‭ ‬International were rated among the best in the world and‭ ‬have been recognized by our ACI Airport Service Quality‭ (‬ASQ‭) ‬awards programme for their on-going commitment to continuously improve‭ ‬the passenger experience‭.‬

We also consistently see UAE airports leading‭ ‬the way in technology enhancements‭, ‬trialling new processes and implementing‭ ‬leading edge systems‭. ‬

With modern airports‭, ‬forward thinking management and‭ ‬close relationships between regulators‭, ‬airlines and airports‭, ‬the UAE is‭ ‬the perfect testing ground for innovation‭. ‬This helps all airports‭ ‬globally to draw from other’s experiences‭, ‬and helps to‭ ‬support projects like ACI’s New Experience in Travel and‭ ‬Technologies‭ (‬NEXTT‭) ‬initiative which articulates a vision for the future‭ ‬of air transport‭.‬

And when it comes to revenue diversification‭, ‬UAE airports understood the importance of developing the commercial side‭ ‬of their business‭. ‬Airports in this region continue to have‭ ‬the highest proportion of non-aeronautical revenue attributed to retail‭ ‬concessions‭. ‬Because airports have limited opportunities to raise aeronautical revenues‭, ‬a focus on non-aeronautical revenues has become an imperative‭ ‬to maintain operations and accommodate growth in air service demand‭. ‬We encourage other airports to follow the lead‭.‬

How much‭ ‬investments are currently in airports developments worldwide‭?‬

The G20’s‭ ‬Global Infrastructure Outlook reports that‭, ‬to meet the global traffic‭ ‬demand that ACI World estimates at 10.7‭ ‬billion passengers by‭ ‬2022‭, ‬a sample of the airport investment plans of 50‭ ‬countries totals US$355‭ ‬billion in the 2018–2022‭ ‬period—but‭ ‬their actual investment needs are more than US$433‭ ‬billion‭. ‬Airports need to invest in infrastructure to meet future demand‭.‬

Year after year‭, ‬ACI estimates that airports in the world‭ ‬invest‭, ‬on average‭, ‬in the realm of US$5‭ ‬per‭ ‬traffic unit in capital expenditure‭ (‬CAPEX‭). ‬Therefore‭, ‬the estimations point‭ ‬to US$40‭ ‬billion in yearly CAPEX‭. ‬This is a‭ ‬reasonable figure given US$170+‭ ‬billion size of the industry‭. ‬

ACI data reveal that 60%‭ ‬of all investment is concentrated‭ ‬in two major domains‭: ‬aircraft movement areas‭, ‬comprised of runways‭, ‬taxiways‭, ‬aprons and other major airside infrastructure‭, ‬and terminal buildings‭. ‬The rest goes to car parking facilities‭, ‬roadways‭, ‬renewing equipment‭ ‬and vehicles and other areas and facilities‭.‬

Construction expenses represent‭ ‬a significant chunk of all airport CAPEX‭, ‬some 60%‭. ‬This‭ ‬often comes in a bundle with technological improvements‭: ‬energy saving‭ ‬materials and equipment‭, ‬more efficient baggage handling systems and so‭ ‬on‭. ‬Capital expenditure is essential for the sustainability of the‭ ‬airport sector‭. ‬All around the world we see terminal structures‭ ‬inaugurated in 1940s‭, ‬1950s and 1960s while they receive state‭-‬of-art latest generation aircraft‭. ‬Of course‭, ‬this testifies to‭ ‬the fixed nature of infrastructure‭, ‬but certainly many airports need‭ ‬to bridge the gap‭, ‬and better sooner than later‭.‬

What‭ ‬innovation and technology is going to change the airport experience‭ ‬by 2020/2030‭?‬

Technology has advanced significantly in the last few‭ ‬decades‭. ‬There have been numerous ground-breaking advancements that have‭ ‬revolutionized the way things are done within our industry‭. ‬Today‭, ‬airport competition is a fixed feature of the industry‭, ‬and‭ ‬the market power of airports has decreased as increasingly airlines‭ ‬pick and choose between various airports and destinations‭, ‬moving aircraft‭, ‬routes and bases‭. ‬Airports compete with other airports for freight‭, ‬connecting passengers‭, ‬aircraft technical stops and for the services of‭ ‬low-cost carriers‭. ‬This competition has forced airports to put‭ ‬a particular focus on the customer experience as the relationship‭ ‬between customer satisfaction and revenue is crucial‭.‬

Airports‭, ‬airlines‭, ‬control‭ ‬authorities and system suppliers all have a role to play‭ ‬in making the airport experience more pleasant‭, ‬efficient and effective‭. ‬ACI is working closely with the industry and partners on‭ ‬several initiatives such as NEXTT and Smart Security‭. ‬NEXTT is‭ ‬a joint initiative between ACI and IATA‭.  ‬It identifies three‭ ‬emerging themes‭; ‬off-airport processing‭, ‬interactive decision making and advanced‭ ‬processing‭. ‬Each of these emerging themes involve several new and‭ ‬emerging technologies‭. ‬Many aviation stakeholders have trialed or implemented technologies‭ ‬that are in line with the NEXTT vision such as‭ ‬biometric identity management‭, ‬robotics and autonomous vehicles‭, ‬IoT‭, ‬AR/VR‭, ‬blockchain‭, ‬automation and many others which have great potential to‭ ‬positively change our industry‭.‬

The second initiative‭, ‬Smart Security‭, ‬brings‭ ‬together industry partners to seek innovative solutions that improve security‭ ‬effectiveness‭, ‬efficiency and the passenger experience‭. ‬Smart Security has made‭ ‬tremendous progress and is now able to help all airports‭ ‬through the delivery of regional workshops‭, ‬comprehensive guidance materials and‭ ‬information sharing sessions‭. ‬In fact‭, ‬we have just launched the‭ ‬ACI Certificate in Smart Security to assist airports and screening‭ ‬authorities to adopt innovative screening solutions that strengthen security‭, ‬increase‭ ‬operational efficiency and improve the passenger experience‭.‬

Is customer service‭ ‬going to be key in the drive to better airports‭?‬

Absolutely‭. ‬With stronger competition‭, ‬the notion of excellence in customer‭ ‬experience at airports has become even more important in recent‭ ‬years‭. ‬Recognizing that passengers are demanding more customized services based‭ ‬on their specific needs‭, ‬requirements and tastes‭, ‬and the importance‭ ‬of having an airport culture of service quality‭, ‬which requires‭ ‬involving and including all various airport stakeholders to truly be‭ ‬effective‭, ‬we urge States to take‭, ‬in many respects‭, ‬appropriate‭ ‬measures aimed at facilitating and boosting the sector‭.‬

ACI is‭ ‬committed to helping airports remain competitive by improving the passenger‭ ‬journey‭. ‬The Airport Service Quality‭ (‬ASQ‭) ‬programme‭, ‬the world-renowned‭ ‬and globally established global benchmarking programme measuring passengers’‭ ‬satisfaction while‭ ‬they are travelling through an airport‭, ‬offers a range of‭ ‬products and services‭. ‬They include‭: ‬the customer experience‭, ‬through the‭ ‬ASQ Departure Survey‭, ‬the ASQ Arrivals Survey‭, ‬the Commercial Survey‭ ‬and the Employee Surveys for Customer Experience‭.‬

However‭, ‬in an‭ ‬increasingly competitive market‭, ‬ACI does not advocate that the quality‭ ‬of service provided to passengers and airlines should be regulated‭ ‬through service-level agreements‭. ‬Rather‭, ‬it should be recommended and‭ ‬carefully monitored‭. ‬We are convinced that ACI’s ASQ programme‭ ‬can continue to support this objective rather than impose a‭ ‬system that only focuses on penalizing the airport without an‭ ‬incentive to continuously improve service quality‭.‬

Does the Middle East‭ ‬need more airports‭?‬

The Middle East does not necessarily need‭ ‬more airports but might require more airport infrastructure in the‭ ‬long-run‭, ‬subject to traffic growth‭. ‬The post–World War‭ ‬II economic expansion was a period of strong economic growth‭, ‬when many governments invested in developing infrastructure‭, ‬including airports‭. ‬The‭ ‬immense number of airports all over the world are a‭ ‬good testament to this period and that economic policy in‭ ‬particular‭. ‬This means that in most cases airports already exist‭ ‬where they should be‭. ‬However‭, ‬not all airports are capable‭ ‬of handling traffic growth and not all of them meet‭ ‬today’s standards‭.‬

Of course‭, ‬like in any other domain‭, ‬there might be exceptions‭. ‬For example‭, ‬it might be cheaper‭ ‬or more efficient to build a Greenfield airport rather than‭ ‬working on a brownfield one‭, ‬and there are few cases‭ ‬like this‭. ‬But in general‭, ‬the Middle East does not‭ ‬require more airports in numerical terms‭. ‬The Middle East has‭ ‬the second highest urbanization rate after North America‭, ‬where all‭ ‬major cities have at least one airport‭. ‬At this stage‭, ‬it is more a question of quality rather than quantity‭, ‬especially considering the disparity in quality of infrastructure at small airports in comparison to the large-size super hubs‭.‬




Angela Gittens   Director General, ACI World

Angela Gittens

Director General, ACI World

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