Growth Markets

Beirut-Rafic Hariri Airport: What You Need to Know

As the Phoenix dies and rises from its ashes, so have the beautiful and vibrant city of Beirut and its airport: Beirut-Rafic Hariri International Airport.  

Beirut, the Lebanese capital, one of the oldest cities in the world, lies on the eastern shore of the Mediterranean Sea, at the crossroad between the Occident and the Levant. Despite being destroyed and rebuilt 7 times over its lifetime of 5000 years, it remains a vibrant, multicultural, flamboyant city that has defied earthquakes, invasions and wars, and rebuilt itself again from its ashes.

Australia Airports Build: The Other End of the Line

  The focus of post 2 of this series was the pressure currently being placed on the Brisbane Airport in Australia, in part, from a type of mining operation known as FIFO. Obviously, for the FIFO concept to work there need to be airports at the other end of the sector and that is the topic of this post.

As introduced, FIFO (Fly-In-Fly-Out) is a resourcing tool for remote and regional mine sites to staff their operations from larger population bases and locations offering a better lifestyle.

As Australia's resource sector took off in the mid-2000s, companies had to compete on more than wages to attract enough personnel to make their operations viable. By flying in staff from cities, companies had access to a large pool of recruits and workers had the ability to earn attractive incomes while their families maintained a comfortable lifestyle at home.

In order to facilitate this system, mines and other resource company locations needed an airstrip, aerodrome or airport, depending on the size of the operation.

Industry-wide Growth

A comparison of certified aerodrome numbers from 2004 to 2010 showed that the overall numbers of such aerodromes increased by 30%.

Comparison of Certified Aerodrome Numbers 2004-2010 Grouped by Operator Type

A deeper dive into the numbers shows that the relative percentage of aerodromes owned by resource companies grew in excess of the overall increase. Over this period, 19 aerodromes operated by resource companies entered the certified airport business, so to speak, and this presented challenges both in the ramp up and the ongoing operation of these facilities.

The Need to Build

While the economics of mine development are beyond the scope of this article, to a casual observer, the case for having an aerodrome on one's mine site must have been strong. In areas with dense mining activity, it became normal to have upwards of five aerodromes/airports located within a 30 nautical mile radius.

In the image of the Leinster Area, Western Australia, below, the large red aircraft are certified aerodromes (not current) and the smaller aircraft are uncertified landing sites in support of other mines and remote farming stations.

Close Aerodromes

The proximity of the airport to the site or village would have an impact not only on the work periods and fatigue considerations of the company but also the amenity and comfort factors for the worker. At the height of the mining boom, worker attitude to a site's facilities became an important factor for some as they had the pick of work sites and were happy to move sites at a whim.

In addition to the basic number of new certified aerodromes at mine sites, the size of some of these facilities became significant as the boom progressed. While many aerodromes grew from humble beginnings as emergency airstrips and may have only required some paperwork and no physical works to accommodate a Dash-8-200 (the general trigger for certification, i.e. an aircraft with more than 30 seats), other sites required something bigger straight away. Some of these facilities went from nothing to jet in no time at all.

Fortescue Dave Forrest airport in Western Australia is one such airport. The Fortescue Metals Group operation near Nullagine was a significant development in its own right and needed an airport to suit. From a greenfield site, the company constructed a 2300 meter long runway with supporting infrastructure capable of supporting regular A320 aircraft, initially, and F100 aircraft, currently, from Perth.

In addition to dealing with the remoteness of the site and the scarcity of expertise and labour at the time, the project also involved cutting through a hill and diverting a creek to find that balance between cost and efficiency.

Building was just the First Obstacle

Once the airport was built, a whole new set of challenges for the mining company began. Running an airport, especially a certified aerodrome, comes with a bunch of regulatory and safety requirements. As mining companies focussed on doing what they do best, non-core activities such as running the airport either fell to mine workers as secondary duties or became outsourced to the village operator or another sub-contractor on site.

The results tended to vary.

Workers on these airport, invariably, had other jobs on site. Be they cleaners, cooks, safety officers, paramedics, they all needed training and few came with aviation experience. Luckily for the industry, competency-based training had been developed some years prior and tailored courses for mine sites were easily developed and deployed.

But it wasn't as simple as that. With staff turnover high, it was not unheard of for training organisations to be visiting sites on numerous occasions to train up new workers with the previous staff having left for other opportunities. Sometimes, it was a matter of weeks between visits.

This training also focussed on the frontline workers, such as aerodrome reporting officers and ground handlers. Support for aerodrome managers was required as, again, people with little aviation experience had to navigate aviation safety regulations including grappling with the implementation of Safety Management Systems like the rest of the industry. In response, a healthy consultancy industry grew in support.

That consultancy industry has, in some ways, morphed into a dedicated airport operations service industry with a number of companies offering airport labour and full service solutions to mining and resource companies.

What Does the Future Hold?

The heat is off the mining sector generally but there are plenty of FIFO operations still in business. In some other areas, the FIFO concept itself is under pressure. Regardless of the outcome of these political and economic arguments, the benefit of aviation and airport supported operations is now too well known to not be considered in any future development or expansion.

In these leaner times, innovation will become vital as both mining companies and service providers seek to distinguish themselves from their competitors. The skills and knowledge gained during the boom times might become a valuable commodity for those seeking employment or engagement in a tougher market.

The next few years will prove to be interesting in the remote and regional areas of Australia.

Australia airports

 

Do you want to contribute a guest post to New Airport Insider? Contact Dan Parsons, Kris de Bolle, Guillaume Dupont or Jinan Alrawi.

Beijing New Airports

  China is now renowned for building hundreds of airports throughout the country. Having 90% of the Chinese population living less than 100 km from an airport by 2020 is one of the many ambitious targets found in the government's five-year plan. We covered these in our first article China Airports Build. Also mentioned are China's three megalopolis of Shanghai, Guangzhou, and Beijing which account for one third of the country's air passenger traffic. These cities already have well-developed air transport systems serving roughly the three cities' 60 million inhabitants. Yet, Beijing’s Capital Airport (BCIA), the second busiest airport in the world, has exceeded its capacity while handling 83.7 million passengers in 2013.

Capital airport’s capacity was raised to 82 million passengers per year in 2008 with the opening of Terminal 3. It increased capacity by 50 million passengers after a 4-year extension. At this occasion, a new runway was built, as well as a shuttle train that makes the airport reachable from Beijing subway in 15 to 20 minutes.

The idea of a new airport for Beijing actually came up in early 2000, though an expansion of the current airport was preferred at the time. But aviation has been growing fast and 6 years later it is more than time to move forward.

2 Beijing International Airports to Meet Demand

Traffic at Beijing Capital is expected to reach 90 million passengers per year in 2015. And Beijing-based Air China will receive 113 airplanes during the next three years. All-in-all, Chinese airlines should operate 4200 aircrafts at the end of the decade, twice more than today. Back in 2011, the Civil Aviation Administration of China was already warning:

It is now impossible to add even one more flight to the tight daily schedule of the capital airport

Proposed in 2008 and approved in late 2012, Beijing Daxing airport work started this month and it should be four years before it opens. 14 years after the opening of Shanghai’s second airport in PuDong, Beijing will soon have its second international airport. Together, Shanghai airports handled 83 million passengers in 2013, approximately the same amount than Beijing Capital.

Beijing Daxing Airport: How Modern Is It?

Like Beijing Capital's airport express, a brand new 37km-rail link to the city will be built in order to move passengers from Beijing South Railway station (and then Beijing subway) to the airport. But Daxing airport could also feature quite unprecedented ideas in China. First, the airport will not only serve Beijing but also nearby’s Megalopolis of Tianjin or cities in Hebei. Meanwhile, Tianjin airport experienced a double-digit growth in 2013, then handling more than 10 million passengers. The provinces and cities are working together to coordinate the work, and the government is looking at building new highways or rail links in the area. That seems like a huge change in China’s policy - building new airports everywhere (again, see our China Airports Build: Too Many Too Fast?). This example brings the hope of having fewer airports but better integrated in the hole transport network. Beijing New International Airport will then incorporate a “Ground Transportation Center” to enhance air-ground public transport connectivity.

Secondly, with the creation of a low-cost terminal under consideration, Beijing’s new airport could be another significant step in favor of the development of low cost carriers in the country. The new airport will also have a dedicated runway for military use, and will replace Beijing Nanyuan, a semi-military base and hub of China United Airlines due to close once Daxing airport is completed, having its flights moved to the new airport

New Beijing Airports

Among the two major airports, traffic will be split by alliance. Air China will stay in Capital - remaining will be the base of Star Alliance, and Skyteam (thus including China EasternChina Southern and Xiamen airlines) and oneworld airlines will be moved to Daxing. Since 2013 Beijing allows a 72h visa-free transit that will help passengers needing to connect between the two airports.

Beijing Daxing is expected to handle 45 million passengers per year on its four runways when it opens. More unaligned carriers will move when the latter expands, the second traffic target being 72 million passengers in 2025. According to its designer NACO, Beijing Daxing could handle up to 130 million passengers with its eight plus one runways. Yet, the current Beijing Capital Airport will stay the biggest one for at least some years after the opening.

Looking Forward

The location selected will leave room for numerous expansions. 11 villages must be relocated to clear up to 3000 hectares of land. Undoubtedly such a large project will completely transform the region, and accelerate the development of the area. 500 000 jobs could be involved with Beijing's new airport.

Beijing is a major city where having 2 airports makes sense. The government understands the benefits of an integrated transport network, and selected a strategic area that has room for growth. Assuming an 8% yearly growth, Beijing Daxing would be fully used when it opens in 2018, having to cope with about 50 million passengers. Yet, the growth has been slowing down over the past years in several major Chinese airports, and is expected to be slightly slower, though liberalization measures could change the story.

 

Want to get updates? Subscribe to New Airport Insider

Indonesia Airports Build: Overcrowding

Indonesia’s 230 airports are as active as the ones serving its capital, and sadly busy in the same proportions. The 25 Indonesian airports managed by state-owned company PT Angkasa Pur (which includes the country’s busiest such as Surabaya, JakartaMakassar and Bali Denpasar) handled 111 million passengers in 2010, although their combined capacity barely reached 58 million. Bali airport is running at twice its capacity but the in progress-expansion will make it ready to handle 20 million passengers in 2017 – versus 14 in 2012. That would make it ready to cope with the growing traffic until 2017, officials said. The capital of Sumatra North Medan also saw its situation changing for the best in 2013 when its new Kuala Nanu International Airport finally opened. The former Polonia airport closed last July while it was handling 8 million passengers for a capacity limited to 1. Indonesian airlines did not wait long before jumping on it, mainly for its most valuable asset: room.

Yet, despite having a brand new and roomy airport, a key item has been forgotten. The airport’s only road connection to the city is tortuous and tiny, because no road extension have been included to the project. Medan though is the first airport of the country to have rail transport integrated, even though the capacity is low. “Kuala Namu was meant to be a showcase, reassuring foreign investors and Indonesians frustrated by decades of under-investment in roads, airports and power plants” The Financial Times reports (Infrastructure failings clip the wings of Indonesian airport - FT.com ), “But instead, it has become a potent symbol for the poor planning, land acquisition problems and lack of co-ordination that have undermined the drive for progress with many other crucial infrastructure developments across Indonesia”.

Expansion Plans

In the coming year, 45 airports are to be built or relocated, including 24 airports by 2017. 14 airport extensions and several involving the country’s busiest will be completed by 2015. Yet, the figures given for Bali Ngurah Rai’s expansion point to other hidden issues. Indeed, with a 15% growth, Bali is expecting to handle more than 24 million passengers in 2016. One could wonder why an airport that has just been expanded would still lack capacity even before it is completed. A possible explanation that as a matter of fact stands for many airports in the country is the lack of available land to expand. For instance, Lion group had to set up maintenance facilities in nearby Singapore because “there is no space in Jakarta”.

Too Late

The current expansion plans look like an emergency response to the overcrowding situation. But nevertheless, it will be hard to get out of years of under investment, lack of leadership and delays. Jakarta’s first extension, which should be completed next year, would raise its capacity to 62 million in 2015. Assuming a 15% growth, Soekarno would see its traffic rising from 58 million in 2012 to 88 million in 2015. In other words, even if the expansion is completed on time, Soekarno would struggle to handle 40% more passengers than it should when 2015 is here.

Contrarily to other countries, such as China which plans infrastructure investments far ahead, Indonesia has not succeeded to update its aviation infrastructure and is now doomed  for overcrowding. The demand is simply growing too fast for infrastructure to keep up.

What Next? 

It is now more than ever urgent to change. ASEAN is poised for open-skies in late 2015, and the number of flights in Indonesia is very likely to increase by then. On the other hand, infrastructure is not only crowded but experience safety issues, as shown last August when a cow was hit by a Boeing 737 on a runway in Gorontalo airport. The aircraft consequently skid off the runway. And with most of Indonesia's airlines blacklisted in the European Union, Indonesia has been criticized for the poor efficiency of its civil aviation authority when it comes to safety checks, partly due to its lack of resources. “You can imagine that with traffic increasing by 20 percent a year for the last five years and you have less than 200 safety inspectors? What do you expect?”, president of the Indonesian transportation society said. And Lion 904’s crash in Bali last year was Lionair’s 6th landing accident of the decade, mostly blamed on poorly trained pilots. And with air traffic radar systems also running at twice their capacity, in a country where weather is strong and fast changing, who knows what could happen next.

“The importance of the airline industry to Indonesia’s economy is massive”, analysts say. While the government attempts to create an environment to democratize air transport through liberalization and increased competition, these efforts are meaningless if there is not enough room for flights to land safely.

This is part 2 of 2 in a series written by Generation Y and  focused on airports in Indonesia. In part 1, we looked at Jakarta airports.

References This Is Why They Tell You Not To Fly On Airlines From Indonesia

Enter your email address to get New Airport Insider:

Delivered by FeedBurner

Indonesia Airports Build: Jakarta Airport Failure

In Indonesia, it’s too late. After years of governmental inaction, the country’s airports are heavily saturated, and expansion plans will not be enough. Airlines are still growing fast, trapping Indonesia in a vicious circle. The economy is booming on this tiny archipelago of 17000 islands. Air transport is nothing less than the only solution, and fast-competing airlines brought domestic air traffic's growth to a whopping 20% in 2012. While some emerging countries manage growth well, others don’t.

Behind the amazing success of booming airlines, another reality comes up: Jakarta's Soekarno-Hatta International Airport. It handled 58 million passengers in 2012, but it was only designed for 22 million passengers. This represents a 163% overcapacity that as you will see, sums up pretty well the situation of airports in Indonesia.

Failure to Improve Airport Infrastructure

Indonesia is one of the four Tiger Cub booming economies and the 4th most populous country in the world. Although more than half of its inhabitants are still living on less than 2 US Dollars a day and less than 15% of them have already boarded an airplane, 141 million of the 250 million inhabitants will belong to the middle class by 2020.

With economic growth rates never lower than 6% since 2004, a rough land made of mountains and islands that make “land travel not an option in most cases” according to the state-owned airport operator, aviation has been ineluctably surging over the past decade. Indonesia growth rates are among the world's highest which led infrastructure projects to be overtaken too quickly even though the government increased their transport infrastructure budget to 53 billion US Dollars.

Huge Airline Growth, Orders and Deliveries

Indonesia’s biggest carrier Lion Air Group is the most visible sign of the extreme and unstoppable growth of the Indonesian aviation market. It will add 48 airplanes to its 94 plane-fleet this year, allocating 28 brand-new Boeing, Airbus and ATR aircrafts to the Indonesian market. The airline’s backlog says it all: after ordering in 2011 230 single-aisle jets with 150 options in what was Boeing’s biggest order at that time, 234 Airbus jets were piled up last year, bringing the total to a huge 550. Lion Air Group takes delivery of 40 to 60 jets per year, and should keep doing so for at least the coming decade. Its main low cost subsidiary Lion Air is the most aggressive but Lion Air also owns Lion Wings and Batik Air in Indonesia.

Its main competitor, state-owned national airline Garuda competes as a full service carrier and with its low cost subsidiary Citilink. It has even grown faster than the low cost carrier Lion over the past three years, reaching an amazing 36% passenger growth in 2011. Garuda has a 110-airplane backlog but is likely to order up to 250 jets this year. Other competitors include Indonesia Air Asia, subsidiary of the renowned Malaysian low cost carrier, and Sriwijaya Air.

Such growth rates have thrilled the airlines and the manufacturers, although they completely changed the airports' landscape: they are not able to grow that fast.

Soekarno-Hatta Expansion Plans

Soekarno-Hatta Airport is the main hub of the 28 million-inhabitants capital, and ranks 10 among the world’s busiest airports. The busiest airport in South-East Asia and third Asian Airport was handling 38 million in passengers in 2008 – when it took over Singapore airport. In other words, it doubled in 5 years, but it did not double its capacity. The airport has never really been extended, and projects to do so always got delayed or cancelled.

The expansion process has only been started in 2012, and should be completed in 2015, raising capacity to 62 million passengers per year via the expansion of the three terminals. Other plans including a third runway and a fourth terminal that could allow Soekarno-Hatta to handle 87 million passengers are also in the pipeline.

Jakarta’s 2nd Airport: Halim Perdanakusuma 

Jakarta is as it has been for years: crowded. Its very limited capacity of 22 million passengers (the number of travelers it handled in 2007, seven years ago!) had to be overcome urgently. Earlier last year, authorities allowed Jakarta’s 2nd airport Halim Perdanakusuma Airport to be reopened to civil flights. Halim Perdanakusuma Airport would be able to handle roughly 5% of Soekarno-Hatta Airport in terms of air movements, or in other words, 4 months of Soekarno's growth!

Insufficient Expansion for Jakarta

Let’s face it, one single airport in Jakarta will not solve everything, and the capital of the 5th largest aviation market in the world must be provided with another airport.

“We realize that this expansion is not enough, because the number of passengers keeps increasing every year" admitted the vice president of the state-owned company ruling most Indonesians airports.

The busiest airport in the southern hemisphere has been growing fast for years, overtaking Dubai but being overtaken by Istanbul with a 15% year-to-year traffic growth in 2012, and taking into consideration that the population is getting richer, the economy is improving and airlines have hundreds of airplanes to be delivered, it should keep doing so at least for the coming decade.

Jakarta, despite hosting the busiest airport in South-Eastern Asia, is not really a hub, since 3/4 of its traffic comes from domestic flights, and more than 90% of the flights are operated by unaligned carriers. That all changed last March 2014 when Garuda joined Skyteam, which accounts for roughly 30% of Jakarta Soekarno’s traffic. Therefore, having 2 airports in Jakarta would perfectly make sense. Furthermore, airlines are actively developing point to point flights, which help in avoiding the most crowded airports.

Conclusion

The situation in Jakarta is terrible but seems to be evolving since the expansion process is progressing. Nevertheless, this may be too late. The expansions planned will not bring enough room, and if the growth stays as high as it is, the enlarged buildings will be as crowded when the renovation is completed, as they are now, even if they are delivered on time.

This post is part of a new series called Generation Y, where we invite aspiring aviation professionals to contribute. This is part 1 of 2.

References Southeast Asia low-cost airline fleet to expand by almost 20% in 2014 Indonesia's Lion Air Orders 234 Jets From European Plane Maker (you need to be registered to access) Garuda Indonesia aims to order 200-250 aircraft from 2014 -CEO Soekarno-Hatta Airport Expansion Kicks Off Indonesia poised for more rapid domestic growth in 2013, driven by low-cost carriers

Enjoyed this post? Subscribe to New Airport Insider by Email

Turkey Airports Build: Tackling Demand

Turkish Airport BuildThis is part 2 in a 2-part series on Turkey airports build. In part 1, we looked at the current state of airports in Turkey. Istanbul's new airport is without any doubt more than a plan to solve Ataturk’s current saturation. The mega project ”won't only meet Turkey's needs, but also be a hub for all the traffic from west to east, east to west, from Africa to Europe”, Turkey’s transport minister said. Validated in 2013, the construction of the first phase should start this year and be achieved in 2016, to be able to handle 100 million passengers per year at that time.

Betting on Constant Growth

Is this figure huge? Maybe not. Ataturk is currently processing around 45 million passengers per year, and shows a growth that increased from 4% in 2007 - 2008 to 20% in 2011 - 2012. Doubling in size from 2012 to 2017 implies an annual growth of around 15% during the next five years. This doesn't seem unrealistic.

But still, can Turkey’s capital really manage to become the host of the busiest airport in the world, even before US aviation’s cornerstone Atlanta (90 million passengers in 2012), or the capital of the biggest country in the world (Beijing, 82 million passengers in 2012)? Why not, if large domestic demand is added to a Dubai-like model.

Turkey Competitors

Becoming a global hub are also Dubai and Doha’s ambitions. And even though Istanbul claims it has an advantage over those two, is such a fast growth rate possible to maintain for each competitor? Time will tell how the Istanbul-Doha-Dubai war - which actually looks like a Turkish Airlines - Qatar Airways - Emirates fight will turn. Those three profitable and very-well managed airlines are undoubtdly provided by their respective countries with very efficient infrastructures.

The competition could also come from the West, with major European airlines currently cutting costs. Turkish Airlines’ CEO is optimistic and stated that “these cities are not competitors and can work together to benefit the entire region”. His company had the fastest growth on international markets last year, before Emirates.

Four Phases Planned

Istanbul’s new airport is due to be fully completed in 2019, after four successive phases. At that time, it will be a 6-runway airport capable of handling 150 million passengers per year. Officials make a  strong bet on continuous growth: hosting 150 million passengers in 7 years means a year-to-year growth of around 19%!

Turkey Airports BuildRest of Turkey Gets Attention Also

Several airports are being built or extended in Turkey. OrduHakkari Yüksekova and Cukurova Regional Airport are three that are currently being built or extended. The former should serve 15 million passengers per year when it opens. But this capacity will quickly double, officials said. A couple of other projects are still to launch in other cities. Existing airports received improvements recently, 6 of them being provided with new terminals in 2013.

It is still important to see that Turkey already has a lot of -active- airports. Turkish airlines serves 41 distinct domestic airports. For comparison sake, Lufthansa serves 25 destinations in Germany, and Turkey’s main airlines serve around 55 different Turkish airports. Suprisingly, most routes are served with single-aisle jets, Boeings 737 or Airbuses A-320. Indeed, most carriers operate this type of jets, and only Borajet has regional jets in its fleet.

Air Traffic Management Not a Problem

Here is one more point where Turkey makes the exception. Despite a huge growth, in terms of passengers carried, but also in terms of number of flights, delays due to air traffic management are cut off. At Istanbul Ataturk, delays has been reduced by 80% between 2012 and 2013, and they are almost non existent today. Turkey is a member of Eurocontrol, and is actively cooperating with its European neighbors.

Turkey AirportsOpen Skies

Turkey has not yet reached an agreement with the European Commission about an open sky deal with the European Union. And even if it has, other open skies deals (with the US, etc), there are no forei gn airlines operating domestic flights in Turkey. Still, Turley could be part of the European open skies soon - probably in 2015. Many consequences are naturally expected - and figures could keep surging: competition and number of air transporters in the country will increase, and Turkish airlines will have opportunities abroad. Turkey is currently the highest generator of flights in the European airspace.

A Final Thought

Turkey is an emerging country, and consequently shares one common point with its fellows: it enjoys a growth of its air transport. But contrarily to many of those countries, where aviation is a mess, it seems that it is perfectly managed. From airlines, which are making profit and expanding quickly, to airports that are able to handle the growth pretty well, the performance is undeniably outstanding.

With such assets, Istanbul is on track to become a global hub and Turkish Airlines a global player, and this very soon.

References Air traffic rises in September Traffic continues to surge in Turkey CAPA analysis - Turkish Airlines: narrowing the Strategic Gulf CAPA analysis - Inside the world's biggest airport construction projects in 2013/14

Photos: Izmir, Istanbul and Ankara, courtesy of TAV Airports

Turkey Airports Build: Demand Surge

Turkey Airports Build

This is part 1 of 2 articles exploring the growth of airports in Turkey.  

We hear a lot less about the aviation in Turkey  than in many other countries and even though Turkish Airlines ordered several hundred Boeing and Airbus jets last year, the huge orders of the gulf carriers quickly took the headlines, again. And when it comes to growth figures, we hear a lot more about Asian countries.

Istanbul is planning to build the biggest airport in the world, but most keep in mind Dubai or Beijing airport development plans. Now, what if the aviation market in Turkey was even more impressive than that?

Turkish Airport Growth

There are 3 reasons for the growth:

  1. Turkey is located between the European and Asian continents with a population of 74 millions inhabitants.
  2.  It is the 18th power in the world in terms of GDP, currently enjoying a  very strong economic growth (9% in 2010), possibly making Turkey Europe’s 2nd to 5th economic power by 2050.
  3. Turkey is also a popular tourist destination, with 30 million  yearly visitors making it the 4th most popular destination in Europe and 6th in the World. Istanbul is also the 3rd most-visited city in Europe, and increasingly attracts more and more tourists.

Those 3 key points: a large population, a strong economy, and a strong tourism explain how fast air transport expands in this country. The income elasticity of  aviation being close to 2, air transport is naturally growing at a huge rate, and figures are impressive.

Some numbers released last August showed a 17%-increase in the number of passengers carried on domestic flights compared to last year’s August, 9% on international flights, and an amazing 19% growth of the domestic cargo volume.

Turkey airports build Izmir

Healthy Airlines

This growth is actively supported by Turkey’s main airlines. Turkey has many airlines, and the competition is intense especially from Istanbul. Istanbul’s main airport, Ataturk, is the hub of Turkish Airlines, as well as Atlasjet (15 jets and 11 domestic destinations) and Onurair (23 jets and 17 domestic destinations).

But Istanbul’s Sabiha airport, which also grew 10% last year, is the hub of two other airlines, including Turkey’s main low cost carrier Pegasus, the second largest airline in the country, and famous for its order of 100 Airbus A320neo in 2012. Turkish Airlines, the biggest in Turkey by far, has also flights out of Istanbul Sabiha, Izmir, and Ankara. The group also owns two airlines in Turkey: Anadolujet, a 27-jet subsidiary operating in Ankara, and SunExpress, a joint venture between Turkish Airlines and Germany’s Lufthansa exploiting 64 jets in Antalya.

Airlines Enhance Growth

Turkish Airlines and Pegasus are showing an impressive growth – which will of course be gained on the domestic as well as on the international market, especially for Turkish Airlines. It opened 32 new destinations in 2012, and is planning to double both its fleet and its number of flights in the coming years. A plan that seems realistic considering its huge order log.

And it already reached huge milestones, becoming the 5th European carrier by seat capacity, and being awarded Europe’s best airline by Skytrax in 2013.

According to its CEO, by 2021, Turkish Airlines will have increased its revenue to $18bn (from $8bn in 2012) and carry 90 million passengers in 2020 (versus 46 in 2013), as well as operate twice more flights (to 2000 daily).

Its ambitious plans to become a global player make it look very similar to the 3 Gulf carriers (Emirates, Qatar Airways and Etihad) – and the company has sometimes more advantages than them: - Istanbul is even better located between Europe and Asia with 40% of the worldwide traffic, and most of Turkish Airlines’ destination can be reached using narrow body jets. - Turkish Airlines claims that its localisation allows it to have 30% lower costs than its European counterparts. - Istanbul and Turkey in general are a much stronger market - The company is privately-owned, and actively seeks new investors - It is extremely efficiently managed, having costs per average seat kilometers (ASK) that are comparable to European low cost carriers!

The plans are with any doubt expected to do more than satisfy the needs of the domestic traffic’s growth.

Turkey airports build Istanbul Airport

Double Digit Growth for Istanbul Airports

The growth impacts Istanbul Ataturk airport, Turkish Airlines’ main hub, the second busiest airport in the Middle East after Dubai, and 5th busiest airport in Europe. Istanbul is already regarded as a global hub, which handled around 60 million passengers in 2012, scoring a 20% year-to-year growth. Despite being heavily congested, passengers and airlines will have to wait at least two or three years before its successor is ready. Turkish Airlines stated that it is expecting the new airport to be ready on time (2016) but has plans in case the project is delayed.

Currently having 16 million inhabitants - one of the biggest urban areas in Europe, Istanbul is among the world’s 20 most populated cities, and should rank 15th in 2015. It has around 16000 long haul passengers per day, and this figure will double to 33 in 2022, and 45 in 2032 - triple in twenty years.

Ataturk airport handled 45 million passengers in 2012, while East-sided Sabiha Airport handled 15 million. The Istanbul Area Control Center hosted 7% more flights in 2013 than it did in 2012, and Ataturk handled 12.5% more flights, according to Eurocontrol.

Airports Growth in Main Cities

And with the exception of Antalya’s airport, the five busiest airports in Turkey reached a growth close or higher than 10%, each one of them handling between 9 and 45 million passengers in 2012.

And the previous year’s growth figures are even more impressive, being closer to 14%, while Istanbul’s second airport Sabiha grew by 70% between 2009 and 2010! Sabiha Airport is expecting to handle 25 million passengers in 2025, versus 15 million in 2012, and is the 14th busiest airport in Europe. Meanwhile, it is a huge business jet platform.

Among all the Turkish airports, only a few show decreasing figures, and most enjoy a comfortable growth. Countrywide, the average growth in passengers handled was 10.5% between 2011 and 2012 (with opening airports having doubling or quadrupling scores though).

Top Management Skills

Four of the five busiest airports in Turkey (Istanbul Sabiha being owned by a consortium of a Malaysian, an Indian, and a Turkish firms) are managed by TAV. TAV’s 12 airports enjoyed a 36%-traffic growth in 2012. And even though TAV will not be involved in Istanbul's new aiport construction - and that Ataturk will be shut down when it opens - the firm is on a very dynamic growth slope, and several contracts have been won: in Saudi Arabia, Macedonia, Georgia, for Doha’s Hamad airport and Abu Dhabi’s new terminal (in consortium).

The company is the second largest airport-building firm in the world. That’s not everything. Turkish’s construction company Limak, a key member of the project of Istanbul’s third airport, also worked abroad in the construction of a terminal in Pristina, Kosovo, while Polimeks builds an airport in Turkmenistan, and that Turkish officials reported that Turkey will build an airport in Ghana, and manage airports in Somalia. Turkey definitely demonstrates a pretty solid expertise in this field.

In part 2, we will explore how Turkey copes with the growing traffic through continued investment, as well as its ambitious plans to continually improve infrastructure to become an aviation superpower. Why not leave any comments you have below?

Photo credit: Izmir Airport (1 and 2) and Istanbul Airport (3), all courtesy of TAV Airports.

China Airports Build: Too Many Too Fast?

Editor's Note - This is a new series by Generation Y, we want to give them a voice too. The first post is written by Guillaume Dupont, a French aviation engineering student in his third year at ENAC (the French national school of aviation in Toulouse, France). He just wrapped up a semester at Beihang University of Aeronautics and Astronautics (BUAA) in Beijing, China. We hope you enjoy it. If you have a comment, we encourage you to leave one (or two) at the end of the article. You will need to register before you can leave a comment. 

Overview

As part of the Chinese government 5-year plan, China is building many airports. A plan that includes the construction of 82 new civil airports and the expansion of 101 existing Chinese airports, totaling more than 230 airports by the end of 2015 with an estimated 80% of China’s population living at less than 100 km of an airport.

Undeniable Need for Airports

As China’s population becomes wealthier and tourism quickly expands, China will certainly need more airports.  Moreover, due to its large territory, relying on air transport is a necessity; however, if we compare China to the U.S where there are 57 airports per million square meters, China has 19 only.  According to the Chinese Civil Aviation Authority, released figures show a strong continuous growth in 2013, reaching 11% to 354 million passengers.

That's all very nice, but this current situation must be contrasted. China's three airport hubs: Beijing, Shanghai and Guangzhou account for one third of the passenger traffic in China (209 million in 2012), and one half of the country's cargo.

Airport Delays, Losses and Subsidies

Poor organization of the Chinese airspace lead passenger flights to suffer long delays. And they are getting worse with the traffic growth.  Furthermore, Chinese airports are widely unprofitable, even though officials claim the contrary, that they turned a profit of $750 million in 2011.

Recently, it was announced that the Chinese Civil Aviation Authority will grant a subsidy of $180 million to 137 airports in 2014, each receiving between $650.000 and $2.7 million.  That is all nice, but why not improve the current situation first before building more new airports?

Unquenchable Appetite for Airports

Presently, there is a huge investment in high-speed trains which creates competition for aviation so I question the usefulness of new airports in cities already reachable easily by train. But for local administrations, building an airport creates confidence which in turn attracts international companies and high-added value industries and services.

Air Transport’s Network Expansion

When skeptics question the risk of overcapacity, officials raise the argument of a network effect: more flights will come from a larger network, and then more airports will naturally bring more flights. And a possible apparition of more low cost carriers in the country in the near future could completely change aviation’s face.

The least active airports in China are served by 3 to 5 airlines, and generally linked to China’s main airport hubs.  43 airports already have more than 2 million passengers per year -compared to 62 airports in the US- and 24 airports have more than 10 million passengers per year.

Large Spend, Large Projects

To conclude, the number of airport-related projects in China is huge, as the projects themselves can be artificial islands, mountains flattening etc. The investment of the aviation authority in 2013 is expected to be $24.2 billion.  As a result, the environmental damage will also be immense. Nonetheless, since only 193 airports could be counted in China at the end of last year, it seems that numerous projects will face delays. The demand increase will not.

References China’s Airport Building Boom Will China Build 82 Unneeded Airports by 2015 China Air Transport Business US China Economy Airports Center for Aviation World Civil Aviation Resource Net

Update 11 Oct 2017: Guillaume Dupont is no longer a student