business opportunities for small airports · · 2016-10-31international and domestic...
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LOCAL AUTHORITY PROPERTY ASSOCIATION
CONFERENCE1
Business Opportunities for Small AirportsLocal Authority Property Association Conference
Peter Seed
5 November 2009
2LOCAL AUTHORITY PROPERTY
ASSOCIATION CONFERENCE
What are airports?
• Historically airports have been locations solely for aeronautical
activities
– Take-off and landings
– Loading and unloading of passengers, cargo and mail
– Flying training
– Recreational flying
– Military
• Airports are now a mix of aeronautical and commercial businesses
3LOCAL AUTHORITY PROPERTY
ASSOCIATION CONFERENCE
What are airport businesses?
• Aeronautical businesses:
– Airfield (runways, taxiways, NAVAIDS, aprons)
– Public and common areas of terminal
• Commercial businesses:
– Terminal Concessions and retail
– Car parking (often not charged for)
– Other commercial property development.
4LOCAL AUTHORITY PROPERTY
ASSOCIATION CONFERENCE
NZ cities
Note: Source 2006 Census of population and dwellings
City (including Districts) Population
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
Auck
land
Chr
istchu
rch
Wel
lingt
onHam
ilton
Taur
anga
Nap
ier/H
astin
gsDun
edin
Palm
erston
Nor
th
Nel
son
Sout
hlan
d/In
verc
argi
llW
hang
arei
New
Plym
outh
Rot
orua
Gisbo
rne
Tim
aru
Wai
rara
pa/M
aste
rton
Airport
Population
5LOCAL AUTHORITY PROPERTY
ASSOCIATION CONFERENCE
NZ airports
International and Domestic Passengers
-
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
7,000,000
Auck
land
Chr
istc
hurc
hW
ellin
gton
Que
enst
own
Dun
edin
Palm
erst
on N
orth
Nel
son
Ham
ilton
Haw
kes
Bay
Rot
orua
Inve
rcar
gill
New
Ply
mou
thBl
enhe
imTa
uran
gaW
hang
arei
Gis
born
e
Taup
o
Airport
Passengers
Int pax
Dom pax
Metro airportsStrong aeronautical business
Small airportsSmaller aeronautical business
6LOCAL AUTHORITY PROPERTY
ASSOCIATION CONFERENCE
Metro vs. Small airport characteristics
Metropolitan Airports
• Mix of private and government
ownership
• Region based
• Asset intensive
• High demand
• High visitors
• Regular scheduled passenger
services
• Little or no flying training and
general aviation activity
• Examples
– Auckland
– Christchurch
– Wellington
Small Airports
• Municipally owned (usually)
• Community based
• Asset poor
• Low demand
• Low visitors
• Less frequent or no scheduled
passenger services
• Intensive flying training and
general aviation activity
• Examples
– Hamilton
– Queenstown
– Rangiora
– Wanaka
7LOCAL AUTHORITY PROPERTY
ASSOCIATION CONFERENCE
Small airport role
• Fulfills air transport needs of local
business and community
• Point-to-point services, usually to
main centres
• Flying training
• Recreational flying
• Maintenance services
WELLINGTON
CHRISTCHURCH
STEWART ISLAND
e.g. Invercargille.g. Invercargill
8LOCAL AUTHORITY PROPERTY
ASSOCIATION CONFERENCE
Revenue diversity
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Essendon Bankstown Ardmore Camden Hoxton Park Paraparau Dunedin Auckland Christchurc Wellington Palmerston
Aeronautical Non-aeronautical
Small airport
Small non-aeronautical business
Metro airports
Strong aero and
balanced business
Small airport
Balanced business
Small airports
Small aero business
9LOCAL AUTHORITY PROPERTY
ASSOCIATION CONFERENCE
Canadian small airports
Underdeveloped non-aero businesses
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Regina Calgary Ottawa Saskatoon Winnipeg Hamilton Victoria
Aeronautical Non-aeronautical
10LOCAL AUTHORITY PROPERTY
ASSOCIATION CONFERENCE
Business opportunities spectrum
airside landside aviation support commercial/industrial hospitality retail institutional
aviation non-aviation
11LOCAL AUTHORITY PROPERTY
ASSOCIATION CONFERENCE
Business opportunities matrix
MuseumChildcareVisitor
centre
Light
industrial
Rental car
depot
Intermodal freight
hubStorage hangars
Research
centreSupermarketGolf course
Convention
centre
Government
offices
Logistics,
warehousing and
distribution
Flight training
school
Community
centre
Retail
(Specialty)
Tourism
attraction
Restaurant/
caféAirline officesPostal centre
Aircraft
maintenance and
repair
UniversityRetail (large
format)HotelOffices
Remote/Long
term car
parking
Freight
forwardingAir cargo terminal
InstitutionalRetailHospitality/
Recreation
Commercial
/ Industrial
Aviation
Support
Aviation
Landside
Aviation
Airside
airside landside aviation support commercial/industrial hospitality retail institutional
aviation non-aviation
12LOCAL AUTHORITY PROPERTY
ASSOCIATION CONFERENCE
Screening criteria
Strategic alignment – with core airport business
Land requirement – area needed
Location – airside or landside
Market prospects – indication of market interest
Risks – financial or otherwise
Servicing availability – infrastructure requirements/ease of access
Capital expenditure – indication of capital required
Horizon – short, medium or long term
Planning hurdles – zoning, environmental and other issues
Community concerns – local issues
Regional economic impact – fit within city and region
Compatibility – with noise contours and aircraft operations
Derives shortlisted projectsDerives shortlisted projects
13LOCAL AUTHORITY PROPERTY
ASSOCIATION CONFERENCE
Shortlist – financial feasibility analysis
Key Elements
- Functional planning
- Stakeholder preferences
- Land use optimization
Financial Evaluation
process
Impacts on airport
- Charges - Profitability
- Bankability - Community impacts
Develop
Option
Recommendation
Acceptable?
Yes
No
Investment Criteria
- NPV
14LOCAL AUTHORITY PROPERTY
ASSOCIATION CONFERENCE
Changing role of airport businesses
• Building operations and management
• Retail development and planning
• Airport facility planning and financing
• Community planning
• Real estate development and financing
• Property and asset management
• Consulting and contract management
• Economic development.
New management skills neededNew management skills needed
19LOCAL AUTHORITY PROPERTY
ASSOCIATION CONFERENCE
Evolution of Airport Master Plans
Historically:
• Technical/engineering based plans
– Compliance
– Land Use
– Environmental (Noise)
Now:
• Strategic planning input into airport
business plan
20LOCAL AUTHORITY PROPERTY
ASSOCIATION CONFERENCE
Small airport strategic plan
• Aspirations and role for the airport
• Airport as a stimulant of regional economic development
• SWOT analysis
• Long term aviation needs and infrastructure requirements
• Possible closure of under-utilised runway(s)
• Confirm land core for aeronautical activities
• Recommend future major capital and maintenance works required
21LOCAL AUTHORITY PROPERTY
ASSOCIATION CONFERENCE
Aviation/commercial complement
• Commercial use of land
outside the aeronautical core
• Interim use of land not required
for aviation for say 20+ years
• Complement local planning
schemes
• Airline marketing and route
development proposals
• Commercial land development
proposals
22LOCAL AUTHORITY PROPERTY
ASSOCIATION CONFERENCE
Peter Seed
Airbiz
Unit Q 383 Khyber Pass Road Newmarket 1023
Auckland
T: + 64 9 529 0311
F: + 64 9 529 0313
www.airbiz.aero
23LOCAL AUTHORITY PROPERTY
ASSOCIATION CONFERENCE
Land use compatibility
• It is important that these uses are compatible with both neighbouring aeronautical activities, and neighbouring commercial/industrial activities.
• Land use activities sensitive to the following conditions are not permitted:
– Noise (in excess of the appropriate guidelines referred to in NZStandard 6805:1992 or any other levels deemed appropriate by theairport)
– Odour (fumes)
– Smoke
– Dust
– Light
– Aircraft and vehicular traffic
– Public thoroughfare and road traffic
– Security areas
– Clearance limitations (height restrictions on buildings, aerials, poles, flags, fences, etc.)
– Electrical or frequency interference
– Other conditions associated with aviation activities that may arise from time to time