THE SUV ARNABHUMI AEROTROPOLIS:

Airport-Driven Development

Pruentod by

John D. Kasarda, DirectorThe Kenan Institute of Private Enterprise

The Kenan-Flagler Business SchoolUniversity of North Carolina -Chapel Hill

June 2002

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Transportation Accessibility& Commercial Development

Changes in Transportation Infrastructure Have AlwaysShaped Business Location & Urban Development

First Wave: Seaports

Second Wave: River and Canal-Based Development

Third Wave: Railroads

Fourth Wave: Highways

Fifth Wave: Airports

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.Large, High-Speed Jet Airplanes

.Advanced Telecommunications

.Globalization (Sourcing and Sales)

.New Supply-Chain Management Systems(Networks as Competitive Units)

.Time-Based Competition

.Production Flexibility & MassCustomization

.Perishability (Economic as well as Physical)

.Survival of the Fastest and Most Agile~:~~John D. Kasarda, Kenan Institute of Private Enterp~ ."o.O"": ..:"

.42% of the Value of World Trade Already Goes by Air (vs. Under

2% by Weight)

.65% of All Air Cargo in the U.S. is Express (Nearly 20%

Average Annual Growth, Past 20 Years)

.World Air Cargo Traffic is Expected to Triple Over the Next 18

years (International Air Express 3 Times Faster)

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United

States Total Exports,by Mode, 1990-2000

(in millions US$)

TOTAL VALUE

AIR VALUE

VESSEL VALUE

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.Higher value to weight product ratios

Just-in-time manufacturing and delivery

.Global sourcing and sales

.Customization (built to order)

Today's customers can't or won't wait

Time is money for business travelers

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John D. Kasarda, Kenan Institute of Private Ente~_~

Spatial Impacts of Air LogisticsAirport-Linked Business Clusters

.Freight Forwarding and Third-Party Logistics

.E-Commerce Fulfillment Centers

.Transformation (Kitting, Subassembly, Sequencing) and Flow-Through

Facilities

.Just-in- Time Manufacturing

.Perishables and Cold-Chain Centers

3 High-Technology Industries

3 Business Services and Regional Headquarters Offices

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The Aerotropolis: EmergingUrban Form

.Distinct Clusters and Spines of Aviation-Linked Business Radiating upto 20 Kilometers Outward from Airport

.Aerolanes (Dedicated Expressways), Aerotrains (Dedicated Fastrail),Intennodal Interfaces

.New Metric for Deternrining Land- Value is Time and Cost of MovingPeople and Goods to and from the Airport (not Distance)

.The Three" A's" (Accessibility, Accessibility, Accessibility) Replacethe Three "L ' s" (Location. Location. Location) as the Most Important

Commercial Real Estate Organizing Principle

.Cluster Development, Wide Lanes and Fast Movements are Optimal(Aerotropolis Form Follows Function)

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--.Dallas -Ft. Worth (Texas)

Amsterdam (Schiphol)

.Paris, Roissy (CDG)

.Campinas, Brazil (outer Sao Paulo)

.Hong Kong's Lantau Island

.Seoul, Korea

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Amsterdam, Netherlands.Airport City Forms at Schiphol (Airport as Destination).From City AiIpart to Airport City

.Shopping Arcades.Internet Cafes.Theme Restaurants.Office Buildings (Inside Fence)

.Emst& Young.RR Donnelly

.Solomon Brothers International

.Unilever

.Heineken Export Group.2 Five Star Hotels

.Cargo City.52,000 Wo~ers Inside the AiIpart Fence Daily

~~~.John D. Ka~~~ Kenan Institute of Private Enterp~

Amsterdam-Schiphol Airport City -

Aerotropolis SynergiesINSIDE FENCE OUTSIDE FENCE

Aiport City Broader Aerotropo/isI v_- >hIf~mSy-

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H...1sSb~p;..g Arcades

Office.. H , Cqo

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John D. Kasarda, Kenan Institute of Private Enterprise

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Aviation, Digitization, Globalization, and Time-Based Competition areConverging

Air Logistics is Creating New Aviation Linked Urban Fonns (Aerotropolis)

Aitports Will Drive 211t-CentUly Land Values as Much as-Highways in the 20th Century

-Railroads in the 19th Century

-Seaports in the 18th Century

.Remember the Three "A's"

.Look Outside the Fence for Greatest Opportunities

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John D. Kasard~ Kenan Institute of Private Enterprise

Email follow-up to:

john_kasarda@unc.edu

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John D. Kasarda, Kenan Institute of Priva~~