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