Centreline

A new airport is to be planned on the basis that Kai Tak cannot accept a second runway. The location and size of the new airport is the subject of a separate study which is expected to take approximately ten years to build. A little longer, and certainly more realistic, than the Australian Government’s planned development of Badgerys Creek.

Singapore

Changes in ownership are being considered for Singapore’s Changi Airport. With the Singapore Government having sold shares in more than 20 State owned or controlled companies the situation at Changi is being monitored by the Public Sector Divestment Committee. This development at Changi yet once again suggests that airports are better managed on a commercial basis – as a business charged with providing an economic return on assets to the shareholders. The simplistic and long held view that airports are public utilities or a social service, except in rural areas, is increasingly becoming unpopular.

Thailand

The Airport Authority of Thailand, another progressive and innovative organisation, has announced plans to invest 1 billion THB on the domestic terminal at Bangkok and on the improvement of regional airports. Construction at Don Muang is to start in 1989 and will triple the hourly handling capacity.

Additionally, U- Tapao, the former US military air base, is to be expanded into a joint user facility by providing a 130 billion THB terminal for the handling of charter flights.

Australian News

Melbourne

The General Manager of Melbourne Airport, John Taylor, recently announced plans for the expansion of the International Terminal at Tullamarine. The development plans which includes revamping and expansion of commercial and catering areas, additional aircraft stands (including 747-400) and improved passenger and baggage handling facilities, will place Melbourne quite clearly ahead of any other Australian airport. Work has already started on a $1. 1m refurbishment plan to enhance both the arrivals and departures levels of the terminal. The next phase is aimed at alleviating the congestion that exists during peak periods in the immigration processing area. Target passenger processing capacity is 1800 pax/hr, a substantial increase on the present 800 pax/hr. The additional commercial space to be provided will ensure that passengers are offered service levels comparable to other major international airports.

The parlous state of Sydney Airport, and the ill-conceived plans to resolve the capacity and access problems at the principal gateway to Australia, will further contribute to the establishment of Tullamarine as the premier airport for international carriers.

Brisbane

Expressions of interest have been called for by the FAC, Bris-Bane Airport for the development of the new International Terminal. There has been increasing political pressure to provide Brisbane with a new facility close to the new domestic terminal. A number of major consortia are expected to offer to provide the facilities which are to include a hotel.

Cairns Cairns International Airport which is currently experiencing a massive growth in international passenger traffic is also in the middle of a A$50m expansion of its facilities. A runway extension and a new international terminal will carry it through to the year 2000. At the same time the Cairns Port Authority has withdrawn from its agreement with the Federal Government to operate the airport under the Aerodrome Local Ownership Scheme.

Management by Contract?

There is an increasing trend, particularly in Europe, for airports to be managed by an airport management company. This concept has evolved as local authorities realise that airport management requires specialist skills and business acumen not usually available within the confines of the public service.

Airports which had previously been run at a loss by local authorities, on the basis that the regional economy needed an airport regardless of the financial impact on the ratepayers, are now run as profitable enterprises. This has been achieved by allowing professional airport managers to reshape and redirect the day-to-day management of the airport. The change to profitability has generally been achieved by a rationalisation in staff numbers to reflect the operational requirement, especially in the ATC and technical functions and the application of greater commercial thrust.

The airport management company brings to the airport not only business skills and experience in the management of airports but also marketing and commercial expertise. They are invariably better equipped to deal with airlines and government bodies than local politicians or non specialist engineers who have other important, but less central, roles to play in the commercial management of airports.

Most European and North American airports moved into a commercial regime during the late 1970’s. The recent introduction of the FAC in Australia may, therefore, be seen as an evolutionary step towards full commercialisation of airports.

Given the success of the airport management contract in other parts of the world it is not unreasonable, or indeed impractical, to suggest that this may ultimately take place in Australia and for the FAC to consider it a viable option for some of the smaller airports they control.

The concept may also be of interest to a number of Shire and City Councils who are concerned about the future development and management of their aerodromes. The European experience strongly indicates that these often under-utilised and unprofitable facilities can be turned into regional assets, instead of liabilities. The management contract does not imply loss of ownership or control – merely the more efficient utilisation of public resources.