Inside Track – The Olympic Games Arrive at China’s Airports

12 August 2008 (Last Updated August 12th, 2008 18:30)

China's Olympic Games have attracted worldwide attention, but how do they influence the country's airport market? Alex Hawkes reports.

Inside Track – The Olympic Games Arrive at China’s Airports

All eyes across the world were fixed on China when the Olympic Games kicked off on 8 August 2008. Anticipation had been mounting since the country was voted host nation in 2001, with the Chinese government seemingly determined to mark the games as China's emergence on the global stage.

Preparation for the event proved to be fierce. It is estimated that the total costs of the games will eventually reach a staggering $43bn, which includes $1.8bn on the construction of new venues and $16bn on reducing smog in the past decade.

With over 110,000 security personnel employed for the occasion and dog meat officially banned from restaurants so as not to offend western diners, it is safe to say China adopted one of the most thorough preparation plans in the games history.

The economic impact of such plans has far broader consequences for China than simply catering to the surge created from a single event, a fact much exemplified in the country's aviation sector. In February 2008, trial operations began at Beijing Capital International Airport's terminal 3, which alone stands larger than London Heathrow Airport's five terminals combined. Spanning 986,000m², the terminal, which was officially opened on 26 March, will be able to handle 80 million passengers a year by 2040 and looks set to propel Beijing airport's current ranking of ninth busiest in the world to loftier heights.

DESIGN FOR LIFE

The British architecture firm Fosters + Partners, which initially won the contract to design the new terminal in November 2003, believes the project will become a symbol of the future of China's airport sector. "We are very proud of the project. It is the world's largest building and offers an unparalleled travelling experience – not only technologically, but also in terms of operational efficiency, passenger comfort, sustainability and access to natural light," says Brian Timmoney, partner at Foster + Partners.

"Rather than the sprawl of many separate buildings, this is essentially a compact terminal, using less land and bringing everything closer together for ease of communication in one efficient structure. This move to a more sustainable model is a vital trend for future airport design, as the aircraft they serve eventually become cleaner, safer and use less energy," he adds.

"The Olympic Games have been a major driver of new technologies and processes throughout China's airports."

The terminal was completed in the space of four years and the building itself cost nearly $3bn, with associated infrastructure adding a further $4.6bn to the development costs. With its soaring aerodynamic roof and walls draped in traditional Chinese colours, the terminal is designed to evoke the character and spirit of Beijing.

In July, a high-speed rail link began services to the new complex, marking a successful first five months of operations for the terminal. "We found the processes faster and smoother in China than we have done elsewhere. The terminal was designed and completed in just four years – that is something that could not be contemplated in the west," says Timmoney.

"It was a unique challenge to design a terminal on this scale, but I would say that flexibility is a key driver for all our airport projects. The terminal at Beijing International is designed for maximum flexibility to cope with the unpredictable nature of the aviation industry," he adds.

TECHNOLOGY TALKS

The global aviation IT solutions specialist SITA shares this notion, having been closely involved in the infrastructure development at the new terminal. Recently, SITA completed successful trials of its disaster recovery platform in terminal 3, which operates using SITA communication processes and procedures. The complex is also implemented with SITA self-check-in queuing systems.

Entering the Chinese market almost 27 years ago, SITA has witnessed first-hand the extraordinary growth of the sector. Its China country director Tan Chee Beng believes the country is currently preparing for the next stage of its growth. "Certainly the forthcoming games have been a major driver in introducing new technologies and processes in China's airports, but they are also looking at growth in the post-Olympics period.

"Learning from the previous hosts of the Olympic Games, China understands that traffic will continue to grow at the expanded airports following the event. For example, in Atlanta, airport traffic grew by around four times following the 1996 Olympic Games," says Beng.

"China also has several other major events lined up in the coming years – the World Expo 2010 in Shanghai and the Asian Games 2010 in Guangzhou. With direct flights starting again between Taiwan and mainland China, the government has been able to plan the growth of the country's aviation sector for the next ten years."

"Beijing Capital International Airport's terminal 3 is the world's largest building."

LONG-DISTANCE RUN

By 2020, the Chinese government hopes to have constructed 97 new airports across the country. Fighting regional disparity, four major airports will cover the four corners of the world's fourth-largest country. Beijing airport in the north, Shanghai airport in the east and Guangzhou airport in the south will be joined by Kunming airport in the west.

The new $2.5bn airport is expected to be completed by 2009 and will act as a gateway to the Middle East.

"We are currently in collaboration with China's major airports. With the forthcoming Kunming airport for example, we are working with the airport authorities to make them understand what the future of airports will be. We are looking at introducing different types of technology across China," says Beng.

"In terms of technology, China's airports are equal to global standards. At the moment, however, the focus is on reliability. The instructions from the Chinese government are to introduce new technologies but place paramount importance on reliable solutions – they do not want any failures during this critical period."

With a workforce of 60 people spread across Beijing, Shanghai and Guangzhou, SITA is similarly keeping a close eye on the future growth of China. The company plans to expand its number of third-party service providers in the region, alongside partnering with airport authorities within the next five years.

"The aviation sector in China is undergoing significant changes. There is a lot of encouragement from the Chinese government to commercialise the sector and key to this is the domestic aircraft manufacturing industry, which will help drive growth further," says Beng.

TACTICAL THINKING

According to the global business research and consulting firm Frost & Sullivan, investment in China's airports must be complemented by effective management structures.

"The Chinese government aims to mark the Olympics as China's emergence on the global stage."

"The major stakeholders in domestic airport market are mainly local organisations and the federal government plays an important role in driving the overall developments in airports investments along with assistance from the provincial Governments, Civil Aviation Authority of China (CAAC) and Air Traffic Management Bureau (ATMB)," says Haris Izmee, senior consultant at Frost & Sullivan.

"These players have progressed significantly over the years as secondary airports to become prominent gateways to share aircraft movements with larger primary airports especially along the coastal provinces of China.

"There has been a growing awareness, amongst airports in China, of the need to improve brand equity through providing higher quality services and focusing on non-aeronautical revenues – therefore improving passenger experiences."

Rapidly increasing fleet sizes of major airlines in China look set to play a key role in the development of 'brand equity' at airports. US aviation giant Boeing has predicted a demand for 2,900 new aircraft in China by 2020, with the aviation sector expected to grow by 14% in this period.

"Establishing strong brand equity is important in order to leverage on potentially high non-aeronautical revenues during the Olympics. Tourism revenue will become higher along with the increasing fleet size of major airlines in China. Furthermore the major government initiatives into aerospace manufacturing place the aviation sector into a new level not just within the country but at the international arena as well," Izmee says.

SCALING NEW HEIGHTS

The magnitude of China's aviation growth in itself poses a significant challenge. Frost & Sullivan has identified managing the enormous amount of project management complexities at the airports as one of the domestic market's most significant restraints. Likewise, the sheer volumes of air traffic management (ATM) equipment required to sustain high aircraft movements means strong control from the traffic control segment and air navigation services is a necessity.

"Additionally converting from analogue to digital-based electronic suites in the ATM sector could prove a challenge in some parts of the country. In other instances the government has to refine their ATM policies to include standards and quality control of such new and advanced equipment," adds Izmee.

"China also has several other major events lined up in the coming years."

"However, the Chinese government proved that building better brand equity is not a restraint. They have done wonders through their obvious advertising and promotional activities, enhancing the quality of services and attracting more foreign direct investments into the airport market. They have a lot to prove and they have done it well so far."

A NEW DAWN

Although the media spotlight falls on China during the Olympic Games, it is likely that the scale of investment and expansion at the country's airports will continue to generate much interest for many more years to come.

"China is poised to be amongst the major league players in the aerospace industry globally and their ambitious efforts have no doubt have made their presence felt," concludes Izmee.