How the airport boom is changing the way we travel`
Aviation IT company SITA have revealed that airlines and airports spent a cumulative $50 billion on improving traveler experiences last year, setting a new record for the industry. That outlay has been reflected in positive results, with 63% of airports recording up to a 20% improvement in passenger satisfaction and 44% reporting faster processing times through security, compared to 2017.
The statistics are a tangible representation of the fact that airports are no longer mere traffic hubs ferrying passengers from A to B. Instead, they have become national symbols and experiential playgrounds, where travelers are invited to enjoy vast shopping, dining and entertainment complexes. Driven by significant investment over the last decade, this boom in airport development is even changing the very way we travel.
Asia leading the way
That trend is nowhere more apparent than in Asia. According to a report from Airports Council International (ACI), the Asia-Pacific region is top of the leader board for airport projects in the pipeline, with $332.4 billion developments in preparation or underway.
One of the most headline-grabbing initiatives was the opening of the $1.25 billion Changi Airport in Singapore, which boasts the tallest indoor waterfall in the world and an accompanying forest of 1,400 trees. Indeed, the extravagant addition became even more newsworthy when the head of Qatar Airways – erroneously – accused Singapore of plagiarizing its own plans, underlining how such pieces of practical infrastructure have taken on national significance.
Other efforts to change perceptions of airports from a necessary evil to a consumer experience in its own right are widespread throughout Asia. Malaysia Airports recently launched a “Shop Like a Hero” campaign, encouraging visitors to partake of exclusive luxury brands and e-reward programs, while 2018 sales at Dubai Duty Free exceeded $2 billion, with most of that revenue coming from people who weren’t actually visiting the city but merely passing through.
Elsewhere, Asian airports have made such a concerted effort to smooth over the intermediary experience of flight layovers that popular culture site Mashable have deemed it necessary to compile a list of the best places to catch 40 winks while in transit.
Connecting Russia’s Siberian wilderness
With global air passenger traffic expected to double to 8.2 billion by 2037, it is not surprising that many other countries are following suit and are working on improving their overall air travel connectivity. A prime example is Russia, whose vastness in Siberia has been a challenge for both travel and transport for centuries.
To change this, Russia has begun to pour significant funds into upgrading its national infrastructure. Following on from his re-election last year, President Vladimir Putin is targeting a $96 billion overhaul of the country’s infrastructure, with as much as $4.19 billion earmarked for developing regional airports and plane routes. $56 million alone is being shoveled into Pevek airport, the country’s northernmost.
The growth potential of the Russian Far East has attracted international investment funds seeing an opportunity in Moscow’s airport development, such as Hong Kong-based Meridian Capital Limited, which owns a 50% stake in Novaport, one of the largest Russian airport operators. Novaport operate 16 airports across the country and is seeking to vastly expand its network, mostly funded by Meridian. As such, Novaport is currently building a new terminal at Baikal International Airport in Ulan-Ude to capitalize on growing tourism to Lake Baikal and better regional connections to Mongolia’s capital Ulaanbaatar.
According to the firm’s founding principal Yevgeniy Feld, Meridian has “been able to contribute to Russia’s ambitious regional connectivity plan and cater to the country’s boom in air passenger numbers” at a time when “improving standards and efficiency at our fast-developing network of regional airports are key drivers of Novaport’s impressive expansion.”
Private investment driving public infrastructure
Meridian is hardly the only investment fund pouring money into the sector. Recent analysis from the Center for Aviation (CAPA) identified the top 15 investors in airport infrastructure from around the world. CAPA have been creating such lists since 2011, when there were less than 250 players on their radar. Today, that figure has shot up to more than 800, demonstrating the surging growth of the industry. Interestingly, seven of the top 15 are not airport operators at all, but investment funds looking to capitalize on the boom.
The fact that an investment company like US-based Fidelity, traditionally involved in stocks, has turned to infrastructure investments including airports, looks like a consequential evolution in its approach at a time when many US airports are in need of overhauls. For example, New Orleans cut the ribbon on its new $1.3 billion terminal at Louis Armstrong International, revamping a 50-year old facility that was recently ranked among the ten worst in the country. Another entrant on that ignominious directory, LaGuardia Airport opened the doors on a shiny new $3.9 billion terminal last month as well, as part of an $8.6 billion plan to refurbish the entire complex by 2026.
As architects and designers are dreaming up ever more futuristic visions of the airport of tomorrow – and private funds providing the money to realize them – the travel experience prior to take-off is set to undergo a dramatic change in the coming years. But whether it be adding zeroes to the balance sheets of investment companies, enhancing the global reputation of countries in the eyes of their visitors or simply making the individual’s airport experience that little bit more pleasurable, it seems everyone is set to benefit from the present revolution in air travel.
This article does not necessarily reflect the opinions of the editors or management of EconoTimes.
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