What needs to be considered in the airport master plan is rapidly changing
CAPA ANALYST PERSPECTIVE - a new series where CAPA - Centre for Aviation's analyst team provide their personal views on a hot topic facing aviation around the world.
David Bentley, Chief Airports Analyst at CAPA - Centre for Aviation shares his view on the many issues that must be juggled by airport management as the COVID era fades into history but equally portentous events hang like the Sword of Damocles over it, and about how their resolution should be incorporated in the airport's master plan.
The Five Horsemen of the Apocalypse are still in full rein
Those events might include any of those identified by former IATA Director General Giovanni Bisignani almost 20 years ago, but still pertinent today: air transport’s ‘Five Horsemen of the Apocalypse’ as he called them – disease; conflict; terrorism; the economy; and the price of oil, or others yet to raise their ugly head.
You cannot develop in the absence of a master plan
In a telling comment, Nigeria's Minister of Aviation and Aerospace Festus Keyamo stated recently that he had requested a master plan for the development of Nigerian airports.
Mr Keyamo said he was seeking "world class consultants to develop clear master plans for us", adding, "You cannot develop in the absence of a master plan".
Irrespective of the somewhat complex issues at play in Nigeria (with the government there pitched against opposition politicians, trades unions and pressure groups over the stop-start privatisation of its airports), Mr Keyamo inadvertently identified the main one facing airport management everywhere: what are the ingredients of a master plan in the 2020s? What should we be taking into account, and how are those factors changing?
Historically an airport master plan concerned construction activities for new terminals, runways, taxiways, aprons and supporting infrastructure, how much it would cost, and occasionally a cost-benefit analysis thrown in to placate the shareholders, local politicians and other ‘stakeholders’.
Today’s master plan must include a cornucopia of subjects
Today it has expanded to include a cornucopia of subjects, embracing all the above plus the environment in all its manifestations, and in the human resource domain ESG (Environment, Social and Governance) and DEI (Diversity, Equity and Inclusion). In many cases institutional investors will not back a master plan without ‘satisfactory’ ESG and DEI commitments, which tend to feature at the head of board meetings, coming even before the profit and loss presentation.
It is a complex scenario facing the CEO and board of an airport in 2023.
Airport construction activities are in freefall
Let’s begin with the traditional infrastructure angle.
CAPA - Centre for Aviation has a comprehensive database of airport construction activities globally. Presently it shows 514 known construction projects at airports worldwide, at a combined cost of USD489 billion, and 187 new airport projects at a cost of USD164 billion.
Impressive numbers, but Airport construction expenditure is lagging: CAPA report, a CAPA report from Dec-2019 (immediately before the COVID-19 pandemic) had the number of existing projects at 1089, valued at USD634 billion and new airport projects at 288, valued at USD616 billion, taking the total to well over USD1 trillion.
You don’t have to ‘do the maths’ to see there is a huge divergence in those figures between then and now.
To put it bluntly – airport construction investment is somnambulating as a direct result of the pandemic, inflation, and global tensions; as is investment in most other industries, together with stultified attempts at privatising assets, and there is no sign that any of these pressures will subside in the immediate future.
Then there is the question of what to build and how to build it, if the money can be found in the first place.
The environment will be the #1 factor in every decision made in the future planning of an airport
London City Airport, a business-oriented facility primarily serving the City of London financial districts, is a case in point.
In 2020 it promised to expand carefully to meet both business and leisure demand, not for the sake of it, and without any new infrastructure. In its most recent proposal it merely requested a little tinkering with opening times and a minor expansion of morning operating hours – in return for enforcing the use of cleaner ‘new generation’ aircraft.
But the local Borough Council saw fit to reject the proposal outright, which prompts the question – what future is there for the airport while these political battalions are lined up against it, as they have been for many years?
It is inevitable that other municipal and national authorities will increasingly bring to bear the weight of their power of veto over airport expansion proposals, most frequently in the name of ‘saving the planet’.
It had been happening in Amsterdam, where the number of annual flights was to be cut viciously at Schiphol Airport, a move that prompted an international incident involving some countries, including the United States, which are home to airlines which recently began flying there. Just this week, the Dutch Government shelved the idea, calling the reversal "a bitter pill".
Meanwhile, France will not permit flights to operate to Paris from domestic airports where a rail journey can be made as quickly. Apart from restricting choice in the land of 'Liberté, égalité, et fraternité', that decision assumes that the trains are always going to run.
Crackpot ideas from think tanks would cripple the industry…
But the biggest threat comes from national and international NGOs (non-government organisations), which are often government sponsored ‘think tanks’ that come up with outlandish ideas.
One of them is C40, a group of over 100 mayors of large city-regions globally. Its harebrained scheme of the week is to limit any individual, anywhere, to a private, leisure air journey once every three years.
Even more bizarre is the proposal by UK FIRES, a consortium of leading academics at top British universities. Together with a cohort of 'Captains of Industry' it demands, inter alia, that aviation must quickly achieve ‘absolute zero’.
That makes ‘net zero’ look like a walk in the park. Further, that only electric aircraft should fly after 2030, and that there should only be three airports in the whole of the UK within the next three years – in London, Glasgow and Belfast.
…and it is only a matter of time before they become political policies
The problem with these head-in-the-clouds pressure groups is that (a) they multiply quickly until every country has one, each copying the others, and, more seriously still, (b) their philosophy can easily attract the attention of a major political party, which endorses it and makes it party policy, promoting it in their election manifesto.
The day that happens will signify the beginning of the end for the airports business as we know it, and the aviation industry as a whole.
Even assuming that none of this comes to pass in the immediate future, airports will need to think very carefully about how they integrate the demands of ESG and DEI in their own manifesto, the master plan.
While Climate Change is in many ways a contentious issue, airports have to incorporate planning for it in their mission statement, to ‘future-proof’ the facility against the risks. It is at their peril if they do not.
For example, recent summers have seen very high temperatures recorded across the world, and manifestly so at cities and popular vacation resorts across southern Europe. It may be that it gets to be too hot to consider a vacation there in the summer, and airports have no control over that.
But they can control the environment within them, which will at least help originating passengers from their own region, as well as transfer passengers.
LEEDing by example
LEED (Leadership in Energy and Environmental Design), the world's most widely used green building rating system, and others like it, will become the benchmark for airport building standards, not an option.
Terminal design will be measured in terms of energy requirements (the need to chill the air, or warm it up – rapidly).
Climate-related disruption can come in many forms
Outside the terminal there will likely be a need for much improved de-icing facilities, as any climate change proposition means that it can get dramatically colder as well as hotter. And that means the right type of runway tarmac as well.
You can’t take off or land an aircraft in a quagmire.
Cross-wind disruptions as weather patterns change will have to be taken in consideration, for both existing and new runways, even the adequacy of drainage. There have been several incidents of flooding at airports recently, although so far mainly limited to terminals rather than runways.
As long ago as 2010 one of the leading lights in air transport environmentalism, Professor Callum Thomas of the Centre for Air Transport and the Environment, was preaching that airports had to design their terminals for “what the weather will be like in 25 years' time, not now”.
There hasn’t been a massive degree of change since then, apart from the past two or three years, and there may be other factors behind weather changes anyway – such as a series of El Niño episodes and an unprecedented round of underwater volcanic eruptions throwing vast amounts of warm moisture into the atmosphere.
Another one may be about to take place in Iceland right now, and one that would eject huge amounts of carbon as well.
But conjecture over the cause is not the issue here. The simple fact remains that all airports have to start building such practical measures into their planning immediately if they have not already done so.
DEI has been a useful mantra in the business, but ought to be kept under review
In the DEI domain US airports are at the forefront of the integration of racial minorities and disadvantaged groups into the airports, most often by offering them precedence in the provision of non-aeronautical activities (such as retail shops and Food & Beverage services), and it is especially notable at the New York airports.
That is unsurprising, as the present US government clearly equates ‘people’ and ‘infrastructure’ when it allocates billions of dollars to ‘recovery’ programmes, but it may not always be the case.
But there are caveats here. Today’s disadvantaged group may be tomorrow’s advantaged one, and airports should execute caution if they are considering building such DEI-related measures into long term and binding master plans.
What sort of aircraft will airports host in the future – aviation fuel, synthetic fuel, electric, hydrogen, or hybrid power driven, or all of them?
Then there is the question of what sort of aircraft airports will need to cater for in the future.
The environment evidently plays a role here, too. Historically all they had to do was ensure a supply of Jet A and Jet-A1, or Jet B where it is very cold.
As things stand, no one can say for sure what type of aircraft propulsion system will predominate by 2030, or if they will all play a part.
The candidates include sustainable aviation fuels (SAFs), which are typically one third more expensive than traditional fuels, although that can vary with the oil price of course. If the cost of producing SAFs does not fall and demand for their use increases along with enhanced supply levels, then commercial aviation is at risk of pricing itself out of business.
The other alternatives include electric and hybrid electric aircraft.
One of the main manufacturers of the latter, Ampaire, is convinced that the era of electric flight is almost upon us, but investors aren’t exactly piling in yet, and Ampaire's largest aircraft seats six people. Pure electric aircraft are still plagued by range limitations and battery weight. Battery technology still moves forward at a snail’s pace.
Hydrogen-powered aircraft look a safer bet – but the timescale for product introduction is longer, at 2035.
So the dilemma facing airports is what sort of fuels they will need to provide and how to ensure that they provide it. If it is all of them – JET A, SAFs, electricity, hydrogen, possibly others yet to be developed – at each terminal, then that could become a nightmare.
Aircraft size has shrunk, but could grow again
Moreover, what will be the size of the aircraft they have to cater to, which inevitably impacts on terminal design?
During the latter part of the past century aircraft got bigger, culminating initially in the Boeing 747 and then the A380. More recently the average size has shrunk, partly because the costs of operating four-engined aircraft was too high and partly because demand shifted from big hub airports towards smaller ones servicing thinner point-to-point routes.
The A380 was written off even before the pandemic but it has made a comeback, at least in the short term, along with the hub airports, which are now recovering faster than the sub-primary level ones.
Supersonic could make a return, along with the advent of space flights out of airports
What will the picture be in 2030? Can anyone know for sure?
If not, that means airport management must anticipate all possibilities in their master plan, including the re-emergence of supersonic aircraft, which create their own specific demands.
The only certainty about them is that they won’t be running off batteries.
Other possibilities include the location of privately operated space flights out of terminals at major airports. Presently their location tends to be at remote facilities because operations can still be extremely dangerous, but it is not beyond the imagination that they could one day be situated at major hub airports, with connecting regular local services.
eVTOL services and parcel-carrying drone flights will need to find their space on the airport estate
At the other end of the scale is the burgeoning eVTOL business: tiny electric aircraft, or 'air taxis' as they are still known, capable of taking four passengers less than 100 miles (160 km). Battery performance is again the issue here, along with the huge amount of energy needed for vertical flight.
But recent technological advances in hybrid design (using batteries for take off, but cruising using a conventional turbine engine that recharges the batteries in flight) is more promising, and has already secured large orders for the half dozen or so manufacturers while it is still at the testing stage.
A US company, Joby Aviation, just completed an exhibition flight in New York City marking "the first ever electric air taxi flight in the city and the first time Joby has flown in an urban setting". The flight was conducted at the Downtown Heliport in Manhattan, which the City of New York intends to develop for electric aircraft operations.
These aircraft could be employed in various ways, but they are certainly going to be attached to airports to provide feed to and from normal commercial services.
Where exactly will they go on the airport estate that isn’t going to come into conflict with other operations? Ditto drones, which will increasingly be employed out of logistics facilities at or close to airports to deliver parcels. Their accommodation into the master plan will be of great significance.
Moving away from ESG and DEI, there are more practical and mundane matters to consider, such as whether to plan for more point-to-point flights or for more transfer activity. The increase in collaboration between low cost carriers alone suggests the latter.
Ancillary revenue streams should be reviewed for the long term
One question that cannot be ignored is: at what time does a focus on contemporary ancillary revenue streams become counterproductive?
Airports long since have become retail venues, but either or both of a return to the High Street by stores supported by tax incentives from government and a further increase in online buying could have a profound impact on airport retail sales.
Airports benefitted from the extended check-in and waiting times during the COVID pandemic, but the public will not endure that position forever.
Where financing is concerned, governments will continue to place emphasis on critical infrastructure, and airports do not fall into that category. And as mentioned previously, private sector alternatives are limited.
Airports have no influence over international conflicts, but they do have over how they handle the challenges posed by disease
There are many concerns over which airports have no influence: such as the continuing impact of the war in Ukraine, and the Israel-Hamas conflict (which has already caused a global slowdown in the air transport industry, and not just in the Middle East). Global air travel was expected to reach 95% of the 2019 level in 4Q2023, but as late as Oct-2023 the outlook fell to 88%.
There are 'Black Swans' waiting around every corner.
One thing airports can do is to put into place effective measures to combat the next pandemic. Then again, one may never come; the COVID-19 pandemic is now being identified as a ‘once in a century event’. But if one does, the public will not forgive airports that have not prepared for it on the experience of the previous one.
CAPA has previously identified airports which have built anti-pandemic measures into the design of new terminals or the refurbishment of existing ones, and they include Clark International in the Philippines, and Pittsburgh in the US.
At the very least, airports should be looking to incorporate those experiences in their own master plan.