Why defining secondary airports is so difficult.

 

As I developed and defined my research question and proposal for my thesis, I found myself increasingly flummoxed in trying to define what determines an airport to be secondary.

A substantial part of this problem lies in the fact that there is currently no formal definition of a secondary airport. Generally speaking, a secondary airport is an under-utilised airport that complements a primary airport or airport system in a metropolitan region. Airports can be close Sydney International (Kingsford Smith) to Sydney city, or separated from the city centre by quite a distance, Girona to Barcelona (94km) or Skavsta to Stockholm (106km).

Herein lies the first challenge with defining secondary airports. What determines primary and secondary status?

Shanghai’s Hongqiao Airport is considered by many to be the city’s ‘secondary airport’, however the airport is Shanghai’s primary domestic airport. Pudong is Shanghai’s primary international gateway and serves seven million more passengers a year than Hongqiao, but Hongqiao is also significantly closer to Shanghai than Pudong – 13km compared to 30km.

Beijing is another excellent case in point. The city is serviced by two main airports, Beijing Capital and Nanyuan, Beijing’s ‘second’ airport in the south of the city, as well as several military facilities. Nanyuan is technically a military airport, however it supports limited commercial operations by a single airline, China United. The airport does not operate to relieve capacity, supports no LCC operations, and the same military operations also operate into Beijing’s government airport in the west of the city as well as Capital Airport. Nanyuan certainly isn’t a primary airport, but it doesn’t fulfill the characteristics of a secondary airport either.

Nanyuan Airport still exudes old world Soviet charm.

Taking a regional view of primary and secondary status clouds the definition even further. Nadi International Airport in Fiji, is most definitely the primary international airport for Fiji, but could be considered a secondary airport for the Oceania region, serving substantially less traffic than other regional ‘gateways’.

Hamilton in New Zealand could be considered a secondary airport to Auckland, which lies 126km away. It could also be considered the primary airport for the city of Hamilton, offering significant air services to support the city and capable of relieving 2 other airports within a 60 kilometre proximity.

Hamilton’s runway will be extended to 3000m, putting it in line with primary airports in the region.

The on again, off again public discussion disaster that surrounds Sydney’s second airport is, unsurprisingly on again, and more frenetic than ever. Surrounded on 3 sides by housing, the airport and the housing next to it lies within the bounds of the electorate of Grayndler – a seat held by the current Federal Minister for Infrastructure, Anthony Albanese. Sydney’s movements are capped at movements 80 per hour, a limit being dubiously enforced by said minister. Situationally speaking, Sydney Airport is stuck, unable to expand, and predicted to reach its ultimate capacity sometime between 2025 and 2030.

Sydney is desperate for a secondary airport to prevent the city falling by the wayside. There is a bunch of options available, some close, others such as Canberra, a tad far, but not inconceivable 300km away.

Supporting infrastructure concerns aside, Canberra Airport is entirely capable of acting as a secondary airport, but Anthony insists Canberra cannot be Sydney’s secondary airport because “there’s nowhere in the world where an airport is used as a secondary airport more than 100km from the city”. Clearly Albanese has never flown low-cost in Europe before.

As the Airline Business Blog helpfully points out “Billund in Demark is a secondary airport to both Copenhagen and Hamburg even though they are separated by a distance of some 300km. Billund, could also be considered the primary airport for the city of Billund itself, as it does provide secondary, relief service for another airport nearby”.

According to Anthony that can’t be possible, ‘there’s nowhere in the world where you fly into a major global city and have to travel 300km to get to that city”. Anthony seems as confused by primary and secondary airport status as I found myself.

Brand spaces in Airports: IKEA’s Paris CDG summer lounge.

 

Airports seem a logical location for Brand Spaces – large volumes of tired, stressed passengers confined in controlled area looking for something to do, presents easy revenue opportunities for airport operators.

Breakdown of non-aeronautical revenue sources in airports. In Australia airports rely heavily on parking, which accounts for up to 20 per cent of all non-aeronautical revenue (Source: Venturini A, Jacobs Consultancy).

Why is it then that brand space concepts haven’t had a bigger take up in airports around the world? Perhaps airports have been solely focused on building revenue by developing traditional expensive retail concessions and gouging passengers for parking, which accounts for 20 per cent of airport revenues in Australia, as opposed to three per cent elsewhere in world (see Figure 1). As airport experiences go, you would struggle to find one to write home about in Australia, Adelaide Airport aside, but I digress…

Contrary to popular belief passengers do tire of shopping, and the frequency at which we travel today, means we are always looking for something new to engage us within airport spaces.

This is where brand spaces have an advantage. What is a Brand Space? Rather than selling products, trendwatching.com suggests ‘brand spaces’ are about accommodating consumers. They are a free space that offers passengers surprise, discovery and empathy while they relax before their next flight.

Brand spaces are not a new idea. Indeed many Chinese domestic airports have incorporated them for some years now. Both China Mobile and China Unicom were some of the first companies in China to offer dedicated airport lounges for their VIP customers. This subsequently expanded into lounges for passengers holding certain premium credit cards. In Amsterdam, ABN AMRO operates a dedicated lounge for its banking clients.

Aéroports de Paris, the operator of Paris Charles de Gaulle and Paris Orly airports, is a leader in developing airport brand spaces and is currently partnering with the Swedish company IKEA through the installation of a 220sqm‘democratic lounge’ in CDG Terminal 3. IKEA is no stranger to brand spaces, having employed the concept in bus stops and metro stations around Paris.

IKEA empathises with passengers, recognising that “holiday departures are often a source of stress and nervousness”. Consisting of 9 rooms, the lounge is all about passengers having the unusual experience of being at home in the airport. IKEA states “waiting time is on average 1 hour and 43 minutes and IKEA wanted its expertise in interior design to serve the economy class. The brand has thus installed a qualitative, well designed and comfortable area made for resting and relaxing, showing its commitment of improving the everyday life for the many”.

Airports are increasingly on the look out for new ancillary revenue streams, while developing creative solutions to reduce passenger stress and fatigue associated with the travel experience. The success of IKEA’s funky airport lounge remains to be seen (though it’s pretty much a given), but perhaps airports should be putting more time and capital into experimenting with brand spaces as a solution to both these problems.

Qantas and Emirates conjecture. Why has Qatar Airways slipped off the radar?

Everyone loves a little will they, won’t they situation, and a ripper is brewing in Australia right now with talk of a Qantas-Emirates partnership. But why has Qatar Airways slipped off the radar?

In Perth in early July, Qatar Airways CEO Akbar al-Baker confirmed the carrier was in talks with Qantas. Though as focus shifted to the fruits of an Emirates partnership, forgotten were the benefits a relationship with Qatar could bring.

Buoyed by the Emirates speculation Qantas’ dismally low share price gained 10%, and the rhetoric regarding all the potential benefits flowed.  But, as Ben Sandilands noted “Emirates doesn’t actually need Qantas for anything it can’t do in its own right, including set up its own domestic entity in Australia if it ever felt so inclined”.

Qantas operates 28 services to Europe, assuming the unlikely event they cut Frankfurt (or move it to Berlin), 48 to Singapore, and only 7 to Bangkok, and 3 to Jakarta.

By March next year, Emirates will operate 84 weekly services to 5 Australian cities, most direct, and 28 via Bangkok, Singapore or Kuala Lumpur, and onward connections to 32 cities in Europe and almost the same in Africa. Emirates has better connections, an arguably better on-board product, and excellent lounges in Australian cities they service, so why would a passenger choose Qantas product over Emirates internationally?

Qatar Airways currently operates a comparatively small number of services to Australia – 10 a week, increasing to 14 in March 2013, and likely to increase further. Qatar also offers services to 32 destinations in Europe, and more than Emirates in Africa. Qatar’s currently serves Melbourne and Perth, not Sydney – originally not being granted permission to fly there.

What could a Q-Q relationship deliver?

1 – Connections.
An alliance with Qatar would offer significant advantages in terms of code shared network connections.

Qatar offers 14 weekly services to both Singapore and Bangkok, 11 to Hong Kong, and 10 weekly services to both Jakarta and Denpasar, neither of which Emirates serves – but which Qantas does. Although the airline doesn’t service Kuala Lumpur with it’s own metal, Malaysia Airlines’s expected post-Oneworld entry code sharing with Qantas could cover that.

2 – A boutique airline.
A boutique product and brand positioning exudes glamour and sophistication, Qatar’s focus is on building a boutique airline, consistently number 1 in the world, rather than a capacity dumping conglomerate. It does not offer passengers multiple service options that detract from Qantas’ limited services.

Anyone that has flown Qatar, knows that even in economy class, service is exquisite, and a step above what Emirates now provides. The airline does not offer lounges in Australia, and could use Qantas lounges in all major cities – another way to keep passengers engaged with Qantas product.

3 – Avoiding Sydney-centric pain
Qatar services avoid Qantas’ Sydney-centric operation. Passengers hate it, but Qantas continues to consolidate on Sydney. People in the Qantas ivory tower seem unwilling to acknowledge that forcing passengers through an airport they do their best to avoid does not keep them coming back.

Qatar’s offer of services to non-curfew airport cities of Melbourne, Perth and potentially Brisbane, which Qantas has neglected for years, could deliver Qantas passengers connections they have been screaming out for, while providing the flexibility to schedule complementary connections.

Yes, Emirates also services these cities with multiple daily services, but with relatively few services a week, there is little chance of Qatar cannibalising the Qantas passenger base. Ideally, Qantas would complement these services with their own daily service from Sydney to Doha.

4 – Oneworld
Qatar already codeshares with Malaysian Airlines, which will join Oneworld in 2012, sponsored by Qantas. It is known Qatar is in discussions with British Airways and IAG about developing a comprehensive relationship; the carrier recently abruptly cancelled its code sharing arrangements with United, and it is strongly believed Qatar will choose to join Oneworld when it announces a choice of alliance grouping later in 2012.

Qatar potentially possesses relationships that Emirates can not offer, has shown no interest in developing, and which would avoid setting in motion a potentially destructive breakup of Oneworld, should Qantas partner with Emirates.

5 – Equity
Qatar has never directly stated it is against equity partnerships, similar to those in which Etihad has engaged. Qantas is known to be lukewarm on the equity partnership front, and Emirates has consistently stated publicly that it has no interest in equity.

Qantas is in desperate need of innovation, starting with a viable network strategy that complements its shrinking international operation. There is no guarantee that with Emirates’ already dominant presence, Qantas won’t continue to haemorrhage once-loyal passengers it could carry itself to Emirates. But in Qatar, Qantas could find a glamorous partner that might just keep the loyal passengers that remain interested for the few years it would take to innovate its own product.

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