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Challenges and success strategies for Airports Presented by: Renganathan K Frost & Sullivan April 10, 2014 At: Emerging Airports, Abu Dhabi What makes.

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Presentation on theme: "Challenges and success strategies for Airports Presented by: Renganathan K Frost & Sullivan April 10, 2014 At: Emerging Airports, Abu Dhabi What makes."— Presentation transcript:

1 Challenges and success strategies for Airports Presented by: Renganathan K Frost & Sullivan April 10, 2014 At: Emerging Airports, Abu Dhabi What makes a resilient business

2 AGENDA 2 Introduction Managing Passenger Volume Driving Revenue Per Visitor Lifting Air cargo revenues About Frost & Sullivan 1 2 3 4 5

3 3 PASSENGER VOLUME REVENUE PER VISITOR AIR CARGO INFRASTRUCTUREHUMAN RESOURCES LAWS & REGULATIONS A successful business….. Strengthens its revenue streams …… …by minimising the impact of its key challenges REVENUE STREAMS KEY CHALLENGE AREAS INCREASED PROFITABILITY Introduction

4 Managing Passenger Volume 4 UNDERDEVELOPED AIRPORTS Lack of infrastructure Safety record Regulations such as fuel taxes DEVELOPING AIRPORTS Capacity congestion Lack of airline hubs DEVELOPED AIRPORTS Airspace congestion Runway capacity constraints Infrastructural challenges vary

5 5 UNDERDEVELOPED AIRPORTS Lack of infrastructure Safety record Regulations such as fuel taxes DEVELOPING AIRPORTS Capacity congestion Lack of airline hubs DEVELOPED AIRPORTS Airspace congestion Runway capacity constraints AFRICA Current challenges Strategies for success Pitfalls to look out for Lowest safety record State of infrastructure (runways) Perception vs reality EU list of banned carriers Align with organisations (IFC, IATA) Funding through PPP Removing misconceptions Align with other airports Expectations mismatch from PPP Project implementation delays Change in government regulations (for investors) Managing Passenger Volume

6 6 UNDERDEVELOPED AIRPORTS Lack of infrastructure Safety record Regulations such as fuel taxes DEVELOPING AIRPORTS Capacity congestion Lack of airline hubs DEVELOPED AIRPORTS Airspace congestion Runway capacity constraints Current challenges Delayed projects Competing airports FDI regulations Strategies for success Pitfalls to look out for Focus on low-cost carriers Collaboration vs competition Incentivise airline carriers Public sentiment Cost estimations Process inefficiencies INDIA Managing Passenger Volume

7 7 UNDERDEVELOPED AIRPORTS Lack of infrastructure Safety record Regulations such as fuel taxes DEVELOPING AIRPORTS Capacity congestion Lack of airline hubs DEVELOPED AIRPORTS Airspace congestion Runway capacity constraints Pitfalls to look out for Strategies for success Current challenges Fragmented use of airspace leading to inefficiencies. Lack of institutional arrangements between airports and countries for effective airspace utilisation Runway is a constrained resource. Merging civil and military airspace Agreements with neighbouring countries for effective usage of airspace Modeling techniques for efficient usage of runways Inordinate delays and negotiations Managing Passenger Volume DUBAI

8 8 Importance of Non-aeronautical revenues 46% of airport revenues from non-aeronautical sources Growth rate of non-aeronautical revenues exceeding growth rate in aeronautical revenues in certain airports. What needs to be done Diversifying revenue streams to reduce dependency on passenger volume Adoption of technology to deliver more value in limited space.. E.g Automated kiosks Aerotropolis Driving Revenue Per Visitor CHALLENGES HUMAN RESOURCES GOVERNMENT LAWS SUCCESS STRATEGIES Regulations impacting user fees, restrictions on usage of real estate and other assets Support needed for Aetropolis Lack of talented employees to provide experience to passenger Talent shortage prevents exploration of additional revenue streams Identify additional revenue streams Collaboration with other key stakeholders to build Aetropolis Recruitment and training Monetary incentives to retain talent

9 Lifting Air cargo revenues Challenges Weak overall growth Lack of ecosystem Bottlenecks in Air cargo transport 9 Strategies for success Focus on domestic cargo Pitfalls Lack of awareness (marketing) Cargo hubs and cargo village Adoption of technology Sea cargo to air cargo Recruitment & training Involvement of supply chain participants (freight forwarders and third party logistics)

10 10 Lifting Air cargo revenues 24X7 facilities not available Cargo infrastructures such as cooling equipment not available. Long waiting time for cargo loading and unloading Shortage of trained professionals 0.42 million tonnes of Cargo Traffic in 08-09 Delhi Airport Cargo-EarlierInitiatives undertaken Current status Subsidiary company of investing company offers training services. 24X7 facilities available Hard copy of bills not needed Cargo centres positioned closer to manufacturing centres 0.54 million tonnes of cargo traffic in 2012-13 despite a negative macro environment Cargo traffic shift from Mumbai airport to Delhi airport Aerocity being developed near Delhi covering 250 acres of land Another airport city planned near Hyderabad

11 The Frost & Sullivan Story

12 Who is Frost & Sullivan Frost & Sullivan, the Growth Partnership Company, enables clients to accelerate growth and achieve best-in-class positions in growth, innovation and leadership. The company's Growth Partnership Service provides the CEO and the CEO's Growth Team with disciplined research and best-practice models to drive the generation, evaluation, and implementation of powerful growth strategies. Frost & Sullivan leverages 50 years of experience in partnering with Global 1000 companies, emerging businesses and the investment community from more than 40 offices on six continents. To join our Growth Partnership, please visit http://www.frost.com.http://www.frost.com

13 What Makes Us Unique All services aligned on growth to help clients develop and implement innovative growth strategies Continuous monitoring of industries and their convergence, giving clients first mover advantage in emerging opportunities More than 40 global offices ensure that clients gain global perspective to mitigate risk and sustain long term growth Proprietary TEAM Methodology integrates 7 critical research perspectives to optimize growth investments Career research and case studies for the CEOs Growth Team to ensure growth strategy implementation at best practice levels Close collaboration with clients in developing their research-based visionary perspective to drive GIL Focused on Growth Focused on Growth Industry Coverage Global Footprint Career Best Practices 360 Degree Perspective Visionary Innovation Partner

14 TEAM Methodology Frost & Sullivans proprietary TEAM Methodology ensures that clients have a complete 360 Degree Perspective TM from which to drive decision making. Technical, Econometric, Application, and Market information ensures that clients have a comprehensive view of industries, markets, and technology. T echnical Real-time intelligence on technology, including emerging technologies, new R&D breakthroughs, technology forecasting, impact analysis, groundbreaking research, and licensing opportunities. E conometric In-depth qualitative and quantitative research focused on timely and critical global, regional, and country-specific trends, including the political, demographic, and socioeconomic landscapes. A pplication Insightful strategies, networking opportunities, and best practices that can be applied for enhanced market growth; interactions between the client, peers, and Frost & Sullivan representatives that result in added value and effectiveness. M arket Global and regional market analysis, including drivers and restraints, market trends, regulatory changes, competitive insights, growth forecasts, industry challenges, strategic recommendations, and end-user perspectives.

15 Our Global Footprint 40+ Offices Scanning the Globe for Opportunities and Innovation

16 16 THANK YOU


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