ACI ASIA-PACIFIC
framework was often not clear for airport private investors. This regulation will apply ‘hybrid till’ [a model that considers a combination of non- aeronautical and aeronautical revenues to fix airport charges] across the board, so this will certainly provide the much-needed regulatory certainty in the market and attract private participation in airport projects. In terms of infrastructure, India will
need more airports to accommodate the double-digit growth they are seeing right now, so the government is looking to build more regional airports to fuel domestic traffic.
What is your assessment of the current Chinese sanctions on South Korea due to the US Terminal High Altitude Area Defense (THAAD) missile system and the potential ramifications on traffic? It’s a geopolitical risk, but largely localised in South Korea. Right now, we have not seen any impact per se and in fact Incheon and other Korean airports posted very positive gains in January. According to a recent retail
report, there are about eight million passengers from China that go to South Korea on an annual basis and that number is increasing. The duty free companies focus greatly on the Chinese market, so if tour groups are not going, traffic and retail sales will be greatly affected. This is a big concern for the
[airport] players there and that is obviously going to affect revenues for duty free companies like Lotte and Shilla. Overall, this will hurt the travel industry in South Korea. The current Chinese sanctions on
South Korea, on the other hand, may benefit other airports in Asia-Pacific as Chinese tour companies seek new destinations. It’s still a ‘wait and see’ situation and something we will be closely monitoring.
Asia Pacific posted growth of +11.5% in duty free sales in the nine months of 2016, according to provisional figures from Generation Research, with important developments at Chinese airports including Shanghai Pudong, Beijing Daxing
MAY 2017
and Guanghzhou Baiyun. How beneficial do you view these locations for intra-Asia Pacific hub growth? I think the growth in non-aeronautical revenues will support the expansions of many of the capacity-constrained air hubs and help with traffic levels, which is a healthy development. Traffic growth and increasing duty
free sales means improved customer satisfaction. Recently, ACI put out a survey on ASQ numbers. An increase of 1% in global
passenger satisfaction generates an average increase of almost 1.5% in terms of revenue. Satisfaction and increasing revenues go hand in hand. Our recent ASQ scores show
Chinese airports scored very highly and continue to thrive in duty free and providing better services to the travel public.
Is there anything that Europe can learn from the way Asia Pacific airports operate in terms of leveraging what are clearly very healthy commercial returns from non-aeronautical streams? In travel retail, you need to ‘know your customers’ and have the right product mix that appeals to your target customers. In the case of China, there is the
space to expand, whereas Europe is using new technology to enhance their services. When you look at developments
in Zhengzhou and Chengdu, where there are airport cities, they are less dependent on airport charges and developing their non-aeronautical revenues. But I think China’s airports have a lot to learn from Europe too. In terms of customer service, the European airports offers very high service standards as well, so it’s shared experience.
What about developments at Japan’s airports? The Japanese government recognises that private sector participation can play an important role in developing and upgrading strategic airport infrastructure. With private investors they will start to look at adding new route capacity and creating more opportunity for Japan and its airlines. Last year, privatised airports
ACI ASQ award winners 2016
“There is still huge potential for India with the growing middle class and one of the goals is to be in the top 10 countries in terms of airport passenger volume.”
Patti Chau, ACI Asia-Pacific
included Kansai and Sendai, and a few others are coming up for privatisation. In preparation for the Tokyo Olympic Games in 2020, Japanese airports need to expand to accommodate the expected growth. Kansai Airport opened Terminal
2 in January and opened the first walkthrough duty free shop concept in Japan. Tokyo Haneda is also doing major expansion work and Narita is discussing with government the construction of a third runway. Passenger traffic growth is
healthy, in particular LCC traffic between Japan and Korea. This is all very positive for the travel and retail markets. In travel retail, Japan has a very
different model compared to say Hong Kong or Singapore Changi, the duty free is operated by subsidiaries of the airports i.e. at Haneda, which is very common in Japan. «
Kansai Airport claims to have opened the first walkthrough duty free store at a Japanese Airport at its Terminal 2.
TRBUSINESS 41
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