Airport s Perspective of Traffic Growth and Demand Management CANSO APAC Conference 5-7 May 2014, Colombo, Sri Lanka

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1 Airport s Perspective of Traffic Growth and Demand Management CANSO APAC Conference 5-7 May 2014, Colombo, Sri Lanka SL Wong Senior Manager - Technical & Industry Affairs

2 The Question I Try to Answer How Do Airports Promote Growth While Maximizing Capacity Utilization Under Constraints to Create an All-Win Solution for Users and Service Providers?

3 Presentation Outline Challenges Traffic Growth Strategy Demand Management Capacity Planning Environmental Constraints

4 The Challenge That Airports Face Airports no longer simply infrastructure operators Privatization/Corporatization a trend in Asia-Pacific: need to return on investments (private/public) Competition between airports a reality Market driven facility managers Demand/capacity mgt all the more important One result of competition: airports keen on benchmarking, e.g. service quality

5 The Challenge That Airports Face (cont ) Airports add capacity in big steps (runways) High fixed costs Capacity management a challenge Maximization of utilization of expensive infrastructure a key to success for all stakeholders

6 Traffic Growth Strategy Expand air network Catch more point-to-point traffic Attract transfer passengers

7 Air Route Network Development Airports becoming active in marketing Stimulate demand (especially during off peak times) Fill in gaps in the existing network Incentive to airlines for new routes

8 Surface Transport Improvement Competition between airports for originating pax Enlarge of catchment area Intermodal transfer (sea, land), e.g. HKG, CDG Cross border bonded ferry/bus, e.g. HKG Code share with land/sea transfer, e.g. train (AF/SNCF, LH/Deutsch Bahn)

9 Growing Transfer Traffic Transfer pax a significant market for hub airports Not only for aeronautical but for commercial revenues Improve transfer capacity and efficiency Baggage transfer capacity (technology, e.g. RFID) Parking stand reassignment to facilitate transfers, e.g. for airline alliances Security screening can be a choke point One-stop security a long-term goal for APAC

10 Demand Management The function of recognizing all demands for goods and services to support the market place. It involves prioritizing demand when supply is lacking. Proper demand management facilitates the planning and use of resources for profitable business results. Source: APICS

11 Demand Management Uneven demand a challenge Users pay for unused capacity Airports have few tools for demand management Hourly runway capacity the main tool Proactive marketing to increase utilization at quiet hours Diversification of facility types, e.g. LCC, widens airport s portfolio

12 Capacity Planning Closely related to demand management Start with traffic forecast Calculate capacity requirements

13 Capacity Planning (cont ) Traffic forecast Annual (pax, cargo, acft movements) Hourly Capacity planning Runway Aircraft Parking Passenger Terminal

14 Traffic Forecast Annual traffic forecast Essential for master/long term planning Often based on GDP growth By market segment (APAC, Europe, USA) Government policy difficult to forecast Hourly forecast Used for calculating capacity requirements Derived from annual forecast 95 percentile hour Standard busy hour (30 th busiest hour) Important: ANSP/Airports use the same forecast

15 95 Percentile Hour vs. Standard Busy Hour

16 Runway Capacity Determination of runway capacity traditionally a role for ANSP but airports can contribute Optimal runway design enhances capacity Computer model for location of Rapid Exit Taxiways to minimize runway occupancy time Fleet mix forecast important Computer simulation Flight delay/movement rate curve

17 Key Factors of Runway Capacity Fleet mix (aircraft separation) Runway occupancy time Runway mode (segregated, mixed) Variance of arrival and departure times Random perturbations due to weather, delays etc. CDM may help reduce variance

18 CDM may help increase capacity by reducing variance of flight arrival times

19 Aircraft Parking Capacity Seemingly easy to plan but not the case Location restrictions increase stand requirements Unpredictability Aircraft turnaround time Need to factor in flight delays and weather A-CDM/ CDM help optimize tactical stand allocation on the day (eliminate wasted time slots)

20 Passenger Terminal Capacity Essential but often ignored Passengers per hour at a defined service level e.g. 12 minutes waiting time for economy class check-in for 95% of passengers in year 2030 Service levels Queuing time Space per pax Availability of trolleys, seats

21 Typical bottlenecks Check-in Border control Security screening Baggage sorting Departure kerb Passenger Terminal Capacity (cont ) Airports built before 911 having to cope with post-911 planning parameters Automation and self-service reduce terminal footprint requirement

22 Environmental Constraints Environmental constraint becoming a reality LHR 3 rd runway FRA night curfew Airports need to obtain license to grow Environmental Impacts Noise Carbon Emissions Other engine emissions (NOx, CO, PM, VOC) Airport s Carbon Reduction Initiatives

23 Airport Carbon Management Initiatives

24 Conclusion Good demand/capacity management creates all-win solutions to users and service provider CDM/A-CDM might help squeeze more capacity out of existing infrastructure by reducing flight time variance Industry need to work together to ensure license to grow

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