Going further than ever before to raise aviation standards · • Excludes revenue funded projects...

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Going further than ever before to raise aviation standards worldwide The CAA International Group www.caa.co.uk/international

Transcript of Going further than ever before to raise aviation standards · • Excludes revenue funded projects...

Page 1: Going further than ever before to raise aviation standards · • Excludes revenue funded projects e.g. airline lounges. • Excludes commercial developments. • Excludes RepEx.

Going further than ever before to raise aviation standards

worldwideThe CAA International Group

www.caa.co.uk/international

Page 2: Going further than ever before to raise aviation standards · • Excludes revenue funded projects e.g. airline lounges. • Excludes commercial developments. • Excludes RepEx.

www.caainternational.comPart of the UK CAA International Group

Scaled AmbitionBusiness Cases Grounded in Reality www.caainternational.com

Part of the UK CAA International Group

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TOPICS

• Aerodrome Development – Different Levels of Strategy

• Airport Business Drivers

• The Concentric Model

• Customer Demand

• Summary of Basic Principles

• CapEx Profile Features

• IATA Levels of Service

• Project Examples

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Aerodrome Development -Different Levels of Strategy

• International Aviation Strategy

• National Aviation Strategy: Airport

system/s

• Corporate Strategy: Airport

• Business Strategy: Commercial

Strategy (example)

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International Level

• International Context

• Geographical Positioning

• Economic Situation

• Demographics

• Cultural Aspects Country “X”

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National Level - Airport System/s

• National aviation strategy

• Create strongest system to support

growth of total aviation industry and

national economic development

• Airport system within countries

• Inter(national) airports

• National carriers

• Different strategies for different

airports

• Based on internal & external factors

Country “ X”

Hub & Spoke Point to Point

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Corporate Airport Strategy

• Within national aviation landscape

the airport has a specific role

• International/Regional/Domestic

• Market demand is the driver of the

airport

• Network

• Infrastructure

• Processes

• Commercial business

• Wider airport area

Country “ X”

Airlinenetwork

Infrastructure

Processes

Terminal related

Airport Area related

Commercial activities

Commercial activities

Off site

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Airport Business Drivers

• Airport demand is determined by economic activity

• Local – Regional – Global

• Leisure – Business – Industry

• National demographics: GDP, age etc

• And geographical or cultural attractiveness

• An airport is not a destination

• Entry, exit, transfer point to go somewhere else

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The Concentric Model

Airlinenetwork

Infrastructure

Processes

Consumer related

Business related

Commercial activities

Commercial activities

Off site

Country/Region/City

MACRO Enivironment MICRO Enivironment

Market DemandMarket Demand

Airport

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Customer Demand Is The Core

Network/traffic

Infrastructure

Processes

Business

Com. services

Consumers

Com. services

Economic activity and demographics determine traffic to/from the airport

(type of PAX/Cargo, type of airlines, aircraft types, frequency etc)

Traffic determines type/capacity of infrastructure needed to attract and

facilitate customer demand of specific segments

Attractiveness (airlines & passengers) of the airport product (incl. price) is

strongly determined by efficient processes following customer demand

Additionally B2B commercial activities can be implemented (Commercial

Real Estate, Hotels, Logistic Parks, Distribution Centres etc)

Once the core aviation business is in place we can add commercial value

and deliver commercial services to PAX

Wider airport areaIn cooperation with the local government and business community the wider

airport area can be developed into a strong economic area

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Hierarchy of Needs

INFRASTRUCTURE

PROCESSES

RETAIL &

SERVICES

REAL ESTATE

EXPERIENCE

Be happy

Don’t worry

Geographical and macro & micro economic environment

Market demand: type and volume of traffic potential

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Summary of Basic Principles

• Infrastructure delivery must be demand driven

• Master Plan must cater for the long term and ultimate capacity

• Initial phase of delivery should have capacity proportionate to demand

• Future developments should be capable of being delivered in a phased

manner with clearly defined triggers

• Developments should adhere to the principles of sustainability

• It is important to retain flexibility

• Capital Investment Programme (CIP) should be underpinned by a solid

business case

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A Typical CapEx Profile

• CapEx and PPA in millions.

• CAGR over 40 years 2.63%.

• No allowance for inflation.

• Excludes revenue funded projects e.g. airline

lounges.

• Excludes commercial developments.

• Excludes RepEx.

• CapEx spend and timing depends primarily on

traffic growth and construction outturn costs.

• No allowance for spend forced by regulatory or

legislative changes.

0

20

40

60

80

100

120

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160

1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39

40 Year Timeline

CapEx

PPA

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Features of A TypicalCapEx Profile

1. Period between major capacity enhancements

tries to balance airport spend, user charges

and acceptable service levels.

- Too long - service levels fall.

- Too short - unnecessary overprovision.

2. 5 year CIP typically with 2 years of enabling

works followed by 3 years of major works.

Highest spend usually in year 4.

3. As an airport nears its ultimate capacity the

final CIP generally has the lowest spend.0

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60

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1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39

40 Year Timeline

CapEx

PPA

1

2

3

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IATA Levels of Service

• Previous ADRM best practise was to provide a

minimum LoS of C.

• ADRM 10th Edition introduced the concept of an

Optimum LoS.

• Overdesigned sub-systems = overprovision of

resources and unnecessary costs.

• Some flexibility in best practice for high peak

flows.

Level of Service A - Excellent

Level of Service F - Unacceptable

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Scaled Ambition

• Business cases grounded in reality

• Achieving sustainable development

• Some of my project experience

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Ashgabat Airport - Turkmenistan

• Opened in September

2016 replacing the

existing airport.

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The Opening Ceremony

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• High specification fit out

and finishes.

• Striking architecture.

• Generous space provision.

Some of theFeatures

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Soft Opening

• To facilitate proper Operational Readiness trials

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Aerospace City - Qatar

• Opening day Master Plan layout.

• Clustering of GA, Gulf Helicopters, Aviation

Academy, maintenance facilities - etc.

• Project did not proceed.

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New Lisbon Airport Masterplan

• Proposed new airport at Alcochete.

• Delivery under PPP/PFI SPV.

• Traffic demand couldn’t justify the scale of

investment.

• Project did not proceed.

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Ciudad Real Airport - Spain

• Opened in 2008.

• Closed in 2012.

Spain's Ciudad Real airport sold at auction for €10,000.

BBC News 2015

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New Delhi – ATC & Area ControlCentre – Lean Delivery

Case Study

Original Project Cost 100

Deferred Investment 5

Modify Spatial Requirements 8

Reduce Architectural and

Engineering Complexity10

Design -to-Cost 5

Final Cost as a Share of

Original Cost72

Saving 28%

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Rio Branco Airport - Demand Forecasting

Rio Branco Airport: Indicative 5% growth + World Cup

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100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

900,000

2005 2010 2015 2020 2025 2030

Year

Pa

ss

en

ge

rs p

er

An

nu

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500

1,000

1,500

2,000

2,500

To

tal P

ea

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ou

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se

ng

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5% PPA

5% TPHP

World Cup

2014

LONG TERM GROWTH

• Multiple, complex and varied.

• Economic growth and tourism.

• Business development.

• Industry.

• Steady growth.

• FIFA WC 2014

• Surge of people.

• Fan movements.

• Press profile.

• Sequencing of matches important.

• The world cup has a greater influence on the immediate

requirements of the airport than future growth particularly for the

terminal hourly throughput.

• Airfield and land-side systems would also need to be upgraded to

suit the size and frequency of aircraft.

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Rio Branco Airport - Masterplanfor WC 2014 & Longer Term

Terminal capacity review and solutions

• Check-in

• Security

• Baggage, etc.

Landside facilities review and solutions

• Car parks

• Forecourt

• Drop off zones

Design aircraft review and solutions

Airfield review and solutions

• Runway length review and solutions

• Apron planning review and solutions

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Fast Track Low Cost Capacity Solutions

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Conclusions

• Sustainable development is achievable

• Master Planning needs a fully considered approach

• Benefits can be realised provided the fundamentals are adhered to

• Overambition should be discouraged

• Business cases should be grounded in reality

Page 29: Going further than ever before to raise aviation standards · • Excludes revenue funded projects e.g. airline lounges. • Excludes commercial developments. • Excludes RepEx.

Questions ?

Page 30: Going further than ever before to raise aviation standards · • Excludes revenue funded projects e.g. airline lounges. • Excludes commercial developments. • Excludes RepEx.

www.caainternational.comPart of the UK CAA International Group

UK Civil Aviation Authority International

Aviation HouseGatwick Airport SouthWest Sussex RH6 0YRUnited Kingdom

www.caainternational.com