AOT Sister Airport CEO Forum 2016

Novotel Suvarnabhumi Airport Hotel: July 7-8, 2016

The opening performance was followed by a brief overview of AOT Sister Airport

Forum 2016 speech of Ms. Sasisubha Sukontasap, AOT Senior Executive

Vice President:

Ms. Sasisubha welcomed and thanked the participants on behalf of AOT and gave

the summary background of Sister Airport Agreement between AOT and 11 leading

aviation organizations, namely,

- Flughafen Munchen GmbH or Munich International Airport Company - Germany

- Incheon International Airport Corporation - South Korea

- Narita International Airport Corporation - Japan

- Beijing Capital International Airport Company Limited - China

- City of Austin, Department of aviation - Austin Bergstrom International Airport

Texas - United States

- Lao Airports Authority – Laos

- Pioneer Aerodrome Services Company Limited– Myanmar

- Yangon Aerodrome Company Limited – Myanmar

- Kansai Airports- Japan

- Airport Cooperation of Vietnam - Vietnam

- Shanghai Airport Authority- China

She stated the main agreement of Sister Airports was to hold regular meetings, work

activities and to promote friendly relationship. In pursuance of such activities, Sister

Airport aimed to carry out joint marketing promotions and to support the establishment

and development of mutual collaboration.

She added that AOT took great pride in hosting AOT Sister Airport Forum 2016 under

the theme of “Collaboration Towards Successful Future” in Bangkok, Thailand. The major

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participants for this forum were top executives and representatives from AOT Sister

Airport, International Civil Aviation Organization (ICAO), Airports of Thailand PLC,

Thai Government Agencies, airlines, service partners and AOT Board of Directors,

Executives and staffs. She emphasized that the main objectives of this forum were to seek

common development, serve as a platform to encourage and strengthen the existing

collaboration, pulling of wisdom, sharing experiences and best practices.

The Opening Remarks on “Air Transportation Industry Outlook in the Next

5-10 Years” by H.E. Mr. Arkhom Termpittayapaisith,

Minister of Transport

H.E. Mr. Arkhom expressed his gratitude to be invited to preside over the opening of

the AOT Sister Airport CEO Forum 2016 in Thailand. His opening remarks emphasized

the importance of this forum as a platform for the world’s leading airport management

to discuss and share experiences, viewpoints, visions and ideas with regard to the

management of airport today and in the future when faced with challenges such as

the environment, the aging society, technology, globalization, tourism, economy and

terrorism. Together with the leading airport management belonging to the Sister Airport

Agreement network, top executives of the airports within the framework of ASEAN+6

would have the chance to join in the discussion on the trend and direction of the aviation

business regarding factors affecting the growth of the industry in the next 5 -10 years.

He touched upon the world population growth in the next 15 years which would increase

by 1 billion to 8.4 billion and more than half of those would reside in Asia while

the middle-class would grow rapidly to 5 billion people. In addition, the city population

would grow to 60% in 2030 and to 70% in 2050. At the same time, the average age of

the world population would increase to 35 years old in 2030 from 32 years at present.

This clearly signals the advent of the aging society.

He added that for the lifestyle of the modern generation, the majority of the people

in the world were children of the new millennia who were adept in using the social media

to exchange experience with friends and love to travel. This had resulted in the

exponential growth in the use of smart phones to transact businesses, and hence more

than 80% of the world population would own smart phones as compared to 40%

at present. Hence, technology would play an ever increasing role in daily life and how to

spend and shop.

He added that in the past 10 years, the aviation industry enjoyed a tremendous growth as

world tourism grew by about 4% for the sixth consecutive year to 2015 despite the slow

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growth of the world economy. People all over the world had turned their destination to

Asia in a record number. The air travel forecast of the world’s aviation industry made by

the International Air Transport Association (IATA) indicated the increasing number of air

passengers from 3.4 billion in 2014 to 7.7 billion in 2034 or a growth of 4.1% per annum. The figures were in line with the forecast of Airbus Company that expected the growth of

airline passengers between year 2013 and 2023 would be 4.7 % per annum, the highest

growth in the Asia-Pacific region. The growth of air travel in this region was manifested

in aircraft delivery by manufacturers to airlines in various countries, particularly India,

Indonesia and China.This in turn had increased the capacity of airlines in Asia-Pacific

region by 8.4%, reflecting the increasing demand by the growing members of the middle

class within the region for air travel.

The integration of the ASEAN Economic Community at the end of last year led to

an increasing number of passengers within the region which was one of the key policies

to establish the ASEAN Single Aviation Market (ASAM) under the Open Skies Policy. The expansion of the Freedoms of the Air had resulted in the changes in the framework

of the region’s air transport industry, providing the opportunity for member countries to

access larger-scale air transport businesses as well as the ability to grow both

domestically and regionally

The market access agreement, and the exchanges of rights among member countries

through the agreements on aviation services would result in airlines within the ASEAN

region and airlines of ASEAN’s signatory countries being able to launch new routes,

increase capacities and flight frequencies. At the same time, the aviation cooperation

among ASEAN countries would allow for the launches of new short routes within the

region and the proliferation of low-cost carriers, or LCCs, leading to healthy competition

that would serve to help improve the competence and quality of future services.

For AOT which owned six major airports with more than 80% of Thailand’s air traffic, the

expansion of Suvarnabhumi Airport, Don Mueang International Airport and Phuket

International Airport had been under preparation to serve the air passengers growth

within the year 2019 with an expected 7% growth. All six airports would have to service

150 million customers per year. The development of air transportation also covered

28 regional airports owned by the Ministry of Transport, 3 private-owned airports and

1 owned by the Navy.

The preparation for development also included up-stream industries, such as the

manufacturing of aircraft and aircraft parts as well as aircraft rental; mid-stream

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industries, such as airport services, other service businesses within the airport,

aeronautical services, maintenance services, cargo warehouse services; and down-stream

industries such as airline and air charter business, ticketing services, tour services and

cargo transport services. He emphasized the development of all facets in aviation industry

for a well-balanced and integrated promotion so as to become the factor to drive forward

country’s economic and social progress in a sustainable manner.

The AOT Sister Airport CEO Forum 2016 was officially opened. The AOT Board of

Directors, airport CEOs were invited to join in the group photo.

Keynote Speech “Airports as the Country’s Gateway and its Contribution to the

Growth of Tourism Industry” by Mrs. Kobkarn Wattanavrangkul, Minister of

Tourism and Sports

Mrs. Kobkarn shared the progress of development in tourism sector in Thailand

which aimed as a quality leisure destination. The development emphasized the balance

of economic, social and environment for sustainable growth. The key of economic

development was wealth distribution from major cities to smaller towns and

communities. Whereas, social development emphasized an increase of the quality of life

of citizens and strengthening the community. She added that, there were remaining

challenges in environmental management i.e., forests, wastewater, waste and garbage

management.

She stressed the importance of collaboration between local and government to enhance

and create tourism quality and to develop tourism product to satisfy today’s and future

market. The current focus of tourism target in Thailand was the quality of tourist in term

of revenue not the number of tourist. The segregated figures of international tourists had

indicated an evident growth of tourists from East Asia especially from China, Malaysia,

Japan, Korea and Laos, respectively.

She mentioned the project called “Two Countries, One Destination” of ASEAN Connect

which allowed multiple countries to visit through intra ASEAN connectivity. ASEAN

connectivity aimed to promote connectivity of capital cities to the second-tier and the

third-tier of neighboring countries especially in Cambodia, Laos, Myanmar, Vietnam and

Thailand (CLMVT).

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Three tourism strategies were implemented by the Ministry of Tourism and Sport in 2015 to promote tourism market that emphasized tourism quality; development of tourism

products and services and; area-based tourism management.

To ensure continuity and a long-term commitment of tourism promotion, the current

government had established the National Committee for Tourism or Tourism Board. The board comprised local people from different clusters and representatives from

10 Ministries of Thailand. The 8 clusters of major cities were responsible for wealth

distribution among neighboring provinces. She elaborated that this was the area where

tourism could help creating sustainable economy of the country.

She touched upon the presentation of tourism campaign called “Discover Thainess”, which

identified uniqueness and distinctive qualities of different regions of Thailand

as well as “The Hidden Gems”, which were tourist attractions located next to the main

cities. She introduced new tourism campaigns of “Sport Tourism”, “Maritime Tourism”,

“Lady Tourism” and “Luxury Tourism” to attract specific target groups of tourists. In addition to the campaign, Ministry of Tourism and Sport together with Tourism

Authority of Thailand would be launching the project on tourism gateway on social

media in December this year. The intelligence center would be implementing a centralize

data of tourists coming to Thailand as well as to ASEAN.

Keynote Speech “ICAO’s new campaign ‘No Country Left Behind (NCLB)’” by

Mr. Arun Mishra, Regional Director of ICAO (Asia and Pacific Office, Bangkok)

Mr. Mishra expressed his thanks to AOT for organizing and inviting him to this forum. He shared a brief background of relationships between Thai government and ICAO

over the past 60 years. He gave an insight on the initiatives taken by ICAO to meet with

“No Country Left Behind” challenge.

He emphasized the growth of commercial aviation in Asia which was fueled by first-time

flyers from expanding middle class of emerging economies. The blooming of Asia

economy to global trade massively stimulated the movements of both goods and people

in the region. Subsequently, the development of Free Trade Agreement (FTA), ASEAN

air service legalization, Asian Economic Community blueprint and signing of the

Trans-Pacific Partnership Agreement were added as the main drive force to increase

connectivity of capital cities and establishment of many secondary airports for Intra Asian

flights.

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He elaborated on the three main factors of airport infrastructure demand which were; the

liberalization of Asian market; growth in wealth and size of middle-class and; lack of

alternative mode of transport.

One of the major challenges discussed by Mr. Mishra was the constant air traffic growth,

where the operation efficiency would be more complex. It became imperative for airport

operators and air navigation service providers to manage demand, capacity and ATM

system of the airport, especially in hub airports i.e., runways, aircraft parking stands,

baggage sorting, transport facilities, aprons and passenger security screening points.

He added that the second challenge was safety operation, which aerodrome brought

together a volatile mixture of activities with high risk accident potential. Safety of aerodrome required much of the same approach for safety management required in flight

operation. Runway incursion sometimes led to disastrous consequences. ICAO audits in

Asia revealed that many stages did not fully comply with the basic standard of aerodrome

safety prescribed by ICAO.

The third challenge was capacity enhancement. The development of mega airports to

accommodate high capacity would exponentially increase in complexities. He suggested

that there was a risk of airport suffering from significant diseconomy of scale, not only

for airport operator’s the return on investment but also for airlines, service providers and

passengers. The Asian airport planners and operators would need to acquire capability in

multi-airport systems and change the way each airport operated to overcome the inherent

skills requirement of mega hubs. The investments in infrastructure and human capital

at airports were not keeping pace with the growth of Asian aviation across ASEAN

nation. Many countries had plans and programs but struggled in effective and timely

rollout and implementation of these plans.

He emphasized the fourth challenge of uncertainty in regulatory regimes as a challenge

on the long-term investment of airport development. The problem faced by investors from

developing economy was the frequent shifting of regulatory goal post, especially the economic regulation, which could have the major adverse impact on the financial model

of the project. In promotion of a steady flow of investment, the government had to

guarantee the stable regulatory framework which was essential to boost the confidence of

foreign investors.

Lastly, inadequate qualified aviation professional personnel was one of the most essential

challenges to meet with the demand of regional traffic growth in the next few decades. The challenge would put a speed block in the vicious growth expansion plan of the

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aviation companies. He added that reliance on the open market for recruitment would lead

to escalation of wages and operation cost in addition to the unhealthy instances of

a large scale coaching. Governments together with industry partners, academic

institutions and organizations like ICAO or IATA and ACI council urgently need to join

a concerted effort to promote the next generation of aviation professional to sustain this

growth.

He stressed that all states should grow within the similar pace for the sustainable growth

of aviation industry. This was the rational for ICAO’s new campaign called “No Country

Left Behind”, which was built upon the basic collaboration of operation and technical of

developing countries. The initiative would enable them to keep pace with the rapid

changes in the regulatory and technology development. ICAO office started 2 programs

called ‘Mentoring Scheme’ for the developing states and ‘Combined Action Team’ (CAT)

for states and mentors by lead expert for major improvement in regulatory compliance. The CAT program consisted of expert team who coordinate and work with the

counterparts to improve the ICAO audit scores. ICAO has been planning to cover at least

12 countries within the region for the CAT mission. The objective was to bring the

compliance to the global average level of 60% within the next 2 years.

At the end of his speech, Mr. Mishra made an appeal to AOT and led airports in this

Forum to take leadership and coordinate for mentoring scheme of smaller airports to help

them improve their capacity and provide training for their staffs. ICAO was ready to help

and assist in this endeavor.

Keynote Speech “AOT in the near future: Vision and Action and AOT’s

preparedness for AEC” by Dr. Nitinai Sirismatthakarn, President of AOT

Dr. Nitinai welcomed all the participants to the “AOT Sister Airport CEO Forum 2016” on behalf of the Airports of Thailand Public Company Limited. He sincerely hoped that

this forum would be a meaningful stage to exchange ideas, knowledge and experiences. The aviation industry had the significant role in connecting all the regions of the world. The industry had been operated under several factors which would impact the business

in both negative and positive ways such as economic factor and service capabilities

to respond to the expectations while adhering to the service quality of higher standard. Dr. Nitinai expressed his concern over the impact of “Brexit” of Great Britain’s

referendum resulting in the aviation industry. He added that another factor was the

advancement in aviation and service technologies that necessitated the airport

administrations, airlines and all stakeholders in aviation industry, to cooperate and build

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strong business coalition to foster sustainable growth through all the challenges and the

industry trends that continued to rapidly evolve.

He showed the 3 year forecast of global airport industry which would increase to 157

billion US dollars while airport industry revenue got from non-aviation businesses. The emphasis should be put on peripheral businesses at the airport to fulfill the needs of

the increasing number of travelers with full-range shopping and lodging services under

different concepts.

The data of the Center for Asia Pacific Aviation (CAPA) showed that in 2013 the number

passenger traffic of the airports in this region grew by 8.7% and in 2016 the growth rate

expected to be 6.5%. This signaled the importance of the region in terms of economic,

trade, services and tourism. This made the regional aviation industry a key economic

driver for at least the next 5-10 years. Airbus company forecasted that the middle class

in the region would increase 4 folds in 20 years from 2012 to 2032, which was a major

implication for economic potentiality of this region.

Boeing company’s prediction of air traffic in the next 20 years showed the passenger

traffic growth of 4.9% per annum and the cargo traffic growth of 4.7% per annum. The number of the world’s aircraft fleet would increase 2 folds from 21,600 aircraft

in 2014. Meanwhile, the UN World Tourism Organization was expecting the number

of world tourist to grow at 3.3% per year which would reach the total of 1.8 billon

in year 2030.

Dr. Nitinai touched on the subject of power shift to Asia where the region would be

accounted for nearly half (48%) of the world’s population from the consolidation of

ASEAN Economic Community in 2015, ASEAN+3 (China, Japan and South Korea) and ASEAN+6 (India, Australia and New Zealand).

ASEAN’s Open Sky Policy had reduced the limitations on the inter-related aviation

industry and the other associated industries. In addition, the transportation network in

the region would increase. This created more and faster connections for economy, culture

and society. Each airport would adjust and increase its service capacity, while some

airports would develop themselves into “airport cities”.

He stressed the investment of AOT to become the operator and manager of “the world’s

smartest airports” by promoting capability of personnel, stressing the importance of

service under strict safety measures and strong cooperation within the team while

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adhering to the principle of good corporate governance for the sustainable growth in term

of corporate development. He added that such preparation to support economic growth of

the country and the region necessitated the urgent improvement in every aspect. On the 2-3 years strategy, AOT stressed the development of competitive advantage in

infrastructure and amenities, or the “airport service capacity”, which should be linked to

the “strategic positioning” of each airport.

He touched upon the growth of tourism in the region and the expansion of Thailand’s

tourism market in the past 5 years. The passenger traffic at the airports under the

management of AOT grew at an average of 14% or over 110 million of Thai and foreign

passengers. There were also factors of the proliferation of the low-cost carriers, the huge

increase in the number of Chinese tourists, as well as ASEAN’s Open Sky policy that

helped to promote free trade, services and regional investment.

He shared the expansion plan of the flagship airport or Suvarnabhumi Airport, which

aimed to accommodate and support the growth of passengers in the next 20 years,

from now in 2035, to serve 120 million passengers per year with almost 600,000 flights

annually. Currently, Suvarnabhumi Airport was being expanded to support as many as

90 million passengers per year in 2019. As for Don Mueang International Airport,

the passenger growth was excess 40% while the number of flights increased by 30%.

In 2015, Don Mueang was named as the world’s Number 1 airport serving low-cost

carriers. Recently, Terminal 2 was re-furbished and opened exclusively for domestic

traffic which helped to tremendously increase the airport’s capacity. The third phase of

expansion of Don Mueang would increase the passenger traffic capacity from 30 million

to 40 million per annum.

AOT’s operation strategy was developed on the awareness of the mega trends and

the increased global influences of Asian region such as aging society, international

terrorism and environmental issue. Intelligent service and application of the latest

technology would be implemented to improve the quality of services, the enhancement

of safety and security, as well as support in terms of Information Technology.

The application of technology was not limited to the development of service quality,

i.e., Advanced Passenger Processing System or APPS, service kiosks for Self-Check-in,

Information, Taxi, and others. AOT was under the process of developing the “Airport

Collaborative Decision Making” (A-CDM) to support airport operations through

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the integration of information technology, thus enabling the customers to have more

convenience while maximizing the effective use of organizational resources. AOT used the user profiles of both passengers and airlines, with passengers grouped

by age, nationality, purpose of travel and others, while the airlines were classified into

full service, low cost, charter, and cargo. These were crucial in designing the services,

the provision of conveniences, security and safety of each of the specific airports by

taking into consideration the lifestyle needs, expectations, as well as the customers’ satisfaction or otherwise.

He shared the success of AOT to become an international organization with sustainable

growth that collaborated with Robeco SAM, the financial institution with expertise in

the field of sustainable investment. AOT was invited by Rebeco SAM to join the Dow

Jones Sustainability Indices (DJSI) assessment that regularly choose listed companies

from around the world that had potential and the qualification to provide good return of

investment and sustainability to join the assessment process. Significantly, AOT was

included in the category “DJSI Emerging Countries” in the group “Transportation and

Transportation Infrastructure” along with other airport organizations deemed to have

grown their businesses on a sustainable manner.

At the end of his speech, he wished to see further cooperation in other aspects such as

aircraft service, passenger service and cargo service. He stressed on the necessity to

quickly adapt to global challenges and exchange of knowledge, especially on how the

globalization, the aging society, the new technology, the environment, terrorism, power

shift Eastward, and most importantly, the airport personnel which would affect the airport

operations. He hoped that this stage would help supporting and promoting the cooperation

among the sister airports as well as the airport executives from ASEAN+6, ICAO,

airlines, private organizations, and the government civil aviation regulators. This meeting would be the start of more future successes in joint cooperation under the

slogan of this event “Collaboration Towards Successful Future”.

The keynote speech was followed by a VDO overview presentation of AOT.

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Session I: CEO Panel Discussion on “The Current Challenges and Future Trends in

Airport Business” (Aging, Power Shift, Globalization, Technologies, Terrorism and

Environment)

Main Question: What will likely be the key impacts of megatrends on air transport

by 2030, more specifically: Globalization, Power Shift to the East, Aging Population,

Technology, Environment and Terrorism?

The session was moderated by Dr. Pierre Coutu, President of Aviation Strategies

International (ASI).

Prior to the session, the meeting was informed that Mr. Indana Prabhakara Rao, CEO of

Delhi International Airport (P)Ltd. (DIAL) (Asean+6) was unable to attend the conference

on a short notice.

Dr. Pierre, as the moderator of the morning session, welcomed the panelists and

participants. He encouraged a creative and active discussion on current challenges that led

to the future trend. He emphasized the megatrends, which were global sustained macro

forces of development that impact business, economy, society, culture and personal life. The panelists were invited to elaborate on what would be the likely key impacts of

megatrends on air transport by 2030. He added that recently a similar exercise was

implemented by ICAO on a different scale. He commented that aviation experiences and

expertise of the panelists would provide the conference with diverse, interesting and

fruitful insights.

The morning session involved the discussion of global megatrend and its impact on air

transportation. The guideline of the impact was introduced by the moderator included

the roles of ICAO, regulators, private sectors, alliances, cause of travels, propensity

to travel, multi-modality, terrorism, human capital, aircraft point of service and etc.

He gave a run through introduction of the megatrends as the following:

Globalization: Globalization was the process of integration, sharing and increasing trade

which was happening rapidly. The globalization was driven by technology, trade blocs, interconnected economy, relationships between poor and rich counties, mobility of

workforce, and etc. There were number of features associated with globalization such as

global rules, responsibility of decision making, shifting source of products and services,

pro and anti-globalization issues.

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Aging: Aging affected a number of countries quicker than others but it affected everyone. The moderator emphasized the rapid increase of aging population which had an impact on

workforce and how it would change the balance of retired and active population. He added that in the next 15 years, life expectancy in the world would be higher but

not necessary in good health. The aging trend was something to be taken into account on

the issue of healthcare.

Power Shift to the East: The East had been a manufacturing center of goods sold to the

West for the longest time. However, the emerging countries became more important and

the emerging economy surpassed the economy of those in developed countries. There was

a tremendous investment trend from China and India outside their territory. The growth of

intra-regional trade has increased rapidly, whereas, the share in intra emerging market

would be increased to one third (1/3) of the local trade by 2020.

Environment: There were definite evidences of increasing occurrences of natural and

manmade disasters in many parts of the world. The moderator gave a shocking statement

of over consumption of human population where 2.3 planet earths would be needed to

meet with global consumption rate by 2050.

Terrorism: Air transportation was one of the prime target for terrorists as several tragedies

of recent events can be witnessed. The moderator showed the Risk Map of 2016 and

concluded that no part of the world was immune to these kind of situations. Cyber

terrorism was the area of IT-related in aviation industry. SATA took noticed the threat

and tried to work on preventive measures.

Technology: There were several strategic impacts from technologies, such as robots,

drones as well as artificial intelligence (AI) decision making support of computer. He touched on the issue of increasing trend of internet, social media, solicited information

such as e-mail and, advertising on mobile phone. Intelligence cities, airports and transport

system were also evolving rapidly. On the topic of big data, he stated that 90% of the data

in the world were created in the past 2 years. The evolution of big data and associated

support systems such as internet and cloud became an essential part of life.

Transportation: Advanced technology design such as Hyperloop would shorten the travel

time from San Francisco to Los Angeles to 35 minutes, instead of 7.5 hours by train

today.

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Human Resource: The essential impact on human capital and jobs could be very difficult

to speculate. One of the study indicated that, 70% of children in primary school today

would work in the job that do not exist today.

The moderator made a formal introduction of all panelists who would share their thoughts

in chronological order of sister airport agreement/ strategic cooperation agreement signing

date.

1. Dr. Michael Kerkloh, President & CEO of Flughafen Munchen GmbH(FMG)

Dr. Kerkloh expressed his opinion of the European point of view. He stated that there will

be prominent power shift to the East in next 5-10 years due to the rapid growth of

emerging countries and powerful countries i.e., China and India. The African trend was

not so visible now but in the next 5-10 years, the substantial growth could be expected

through better governance together with improvement in security and safety. There was

an imbalance of traffic flow situation, where Europe had to keep a close eye on Russia

development. The balance of traffic pattern and traffic flow among regions was also

essential. He touched upon the topic of terrorism where safety and security standards

would be essential in the future.

The airport’s capability in handling all regulatory and politic issues would be the major

challenge for the capacity management. Quality and capacity improvement of the airports

were keys to success. How much of the traffic to be expected depend on the agreement

between countries and whether or not they had a single market. ASEAN agreement was

still on bilateral basis but the trend would need to be addressed. Single market not only

help standardizing the market but it could improve economic performance of the airlines

and airports. Consolidation of airlines and major globalization of airline industry could be

expected in the next 5 – 10 years. A big growth of low cost carrier could be found in

Europe as well. In Europe, the low cost concepts and legacy concept tend to merge and

low cost airlines became a little bit more sophisticated and price became a little bit

higher. Legacy carriers were trying to learn from low cost model to improve their

competitive situation. Airports had to cope with the trend of Europe carrier founded low

cost subsidiaries. They should choose partner in aviation which would grant them

the access to capital. Airport privatization and airport models with better access to capital

were also the key. He added that the growth in the industry was tremendous and traffic

growth was very much related to disposable income. The emerging middle class in Asia was a huge trend and for some part of the region, the traffic growth became a threat,

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but maybe not in Asia. In some part of Europe, growth was considered as a threat and

should be slow down or should be quality in the growth. Aviation industry was asked to explain its growth to the nation and their contribution to the wealth of the nation and

the region. The aviation industry should be in the forefront for cleaner sky and carbon

neutral growth according to Paris Accord which was decided in last December.

In the next 50 -80 years, Europe aviation industry had to be technological ready for zero

carbon growth. He stated that these issues were the big challenge for all processes and

airports, and aircraft technologies. He added the green issue was the license to growth

required for public support.

Digitalization trend in aviation industry would affect the business model. The key focus

of the aviation industry would be how to cope with digitalization and speed up the

learning curve in the industry.

Lastly, good governance was essential for the stability and sustainability development. The industry required influence on politician to issue better regulations to fight corruption

and for societal and political morale in sustainable development of society and economy.

2. Mr. Makoto Natsume, President & CEO of Narita International Airport

Corporation (NAA)

Mr. Natsume expressed his thoughts on globalization megatrend as the source of goods,

services, money and people from all over the world. Interaction with airline was one of

the most important pillar of the business. In the next 30 years, Asia would become the

center of industries, Japan would adopt Open Skies Policy and deregulate to stimulate the

growth. He touched upon the topic of power shift from West to East, as 60% of the world

population was in Asia and the GDP was accounted for 32% of global GDP and Asian

economy would become enormous. The forecast traffic in Japan was expected to grow 5%

annually in the next 20 years. The traffic growth forecasted in Asia alone was 6.5%. The

growth of LCC was not only the driving force of economic development. The existence of

LCC was bringing more economic development in every country in Asia. The information

from Narita airport indicated the growth of LCC from 7% in FY2012 to 25% in FY2015

and growth of 7% to 25% or ¼ of air traffic in Narita airport.

Mr. Natsume stressed the aging megatrend as UN forecast indicated the trend of 10% of

the population would be over 65 years old across Asia by 2030. He pointed out that

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Japan was the country with fastest aging society in Asia. Three years ago, 26% of

Japanese population was over 65 years old and by 2060 - 40% of Japanese population

would to be 65 years old and ¼ would be 75 years old. The aging society of Japan had

some negative impacts but how the seniors spent their money domestically. However,

how to attract people from oversea to come to spend money in Japan would be one of the

most important aspects in the future.

He added that innovation was considered as daily progress in Japan as it was very hard

to visualize the innovation in 2030 and what would happen in the future. Innovation and

information technology were closely related. To enhance infrastructure, IT intelligence

conducted the study on how people could use the service on their own devices and use it

to receive necessary travel data via SNS (Social Networking Service) for smooth and

pleasant experience. One of the most important points was to make use of digital and

technological innovation. The sustainability of the industry in the near future, human

capital and environment issue would be very important for the business.

ICAO aimed to cut down world’s greenhouse emissions 2% annually leading up to 2050

and no increases after 2020. IATA’s targets call for a 50% reduction of CO2 emissions on

the 2005 benchmark year by 2050. Alternative energy was one of the directions being

implemented by Narita International Airport. The objective was to reduce CO2 emission

from the airport ground. He commented that green approach was going to be very

important for the business in the next generation.

He expressed his concern over the safety and security issues and referred to the recent

events in Brussels and Turkey airport where terrorist attack took place at landside

departure lobbies. He added that it would be very difficult to prevent terrorist attacks and

hijack of carrier. Integration with authorities and cross border agencies and polices were

required to heighten security and create new preventive measures to prevent reoccurrence

of terrorist attacks as well as cyber terrorist.

3. Mr. Han Zhiliang, President & CEO of Beijing Capital International Airport

Company Limited (BCIA)

Mr. Zhiliang emphasized the information technology in aviation industry which had

developed rapidly on a very large scale. He mentioned the example of major businesses

i.e., Uber, Alibaba and Airbnb and highlighted the similarities of value creation process,

which developed through linkage of data and information technology. In order to promote

linkage of IT infrastructure in aviation industry, a large investment of 78 billion USD was

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spent in 2015. Mr. Zhiliang provided the statistical data of mobile usage pattern of tourists

where; 57% of tourists used their smartphones for check-in; 38% of tourists printed

boarding passes by themselves; 40% of tourists used different IPP to check aviation,

airport and map information and; 90% of travelers would like to use more IT services at

the airport. IT infrastructure enhanced the service and quality of airport significantly. However, the aviation industry had been facing complex challenges and environments which were the diversity of travelers in term of culture, economy and demography.

According to the statistic, by 2030, the number of global travelers would reach 70 billion. The airport had to cope with significant changes of migrant workers and aging

population. The second challenge was airport utilization of data. He added that the 21st

century was the era of data. Whereas, the big data could be used to improve airport

operation system for transportation and traveler security. Utilization of these data to

improve the airport service quality was significant for aviation business. The third

challenge was Internet + and how to cope with the change. In China, the change in internet

occurred in 2015 with the emergence of internet+, represented by Baidu, Taisen and

Alibaba. Internet were used to improve businesses and it imposed great changes in the

communication industry.

He commented that another airport challenge was the operational pressure from

increasing number of travelers. In recent years, natural disaster and terrorism issues added

more pressure to the airport operation. Consequently, strict security inspection caused

long queues and increased operational cost. This was the area where the airport must

explore in order to resolve the problem.

The initiative taken by Beijing and its sister airport was Airport Intelligence Network. As a smart airport, Beijing airport was highlighted by IT service with cloud, big data

technology and improved internet services. IT technology was implemented to create

a brand where each airport had its own brand with standard service as well as tailored

services for travelers. Beijing airport had constructed IT platform that coordinated

different kinds of data and managed data flow, including internet data to provide security

data to support management decision-making. Beijing airport used social media to utilize

resources and provide services for travelers. The airport also encouraged mobile payment

for quick and easy payment service. In the future, the airport would provide airport-link to

offer additional services and establish ecological business circle. Beijing airport would

implement CDM system for a smooth airport operation management together with

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integrated platform with different units to offer ecological circle and data connectivity

with Shanghai and Guangzhou airport and in the future, Kunming airport.

4. Mr. Somboon Daosavanh, Director General of Lao Airport Authority (LAA)

As the youngest airport, Mr. Somboon was delighted to share the progress of LAA.

He reported that aero business in Laos was the most essential mode of transportation.

The expansion required improvement in security and safety services. In order to cope with

megatrend and future challenges, collaboration was very much needed. The challenges

included: terrorism, environment and growth rate of aero transportation industry. He

stressed the importance of technology integration for the management of airport. LAA has

strictly followed the regulatory set by ICAO in the succession of improvement in

compliance with ICAO safety and services. He acknowledged the necessity of this

conference and extended his thanks to AOT President. Lastly, he hoped that LAA could

contribute and share more information in the future.

5. Mr. Sulaiman Zainul Abidin, COO of Pioneer Aerodrome Services Company

Limited (PAS)

Mr. Abidin expressed his thanks to the organizer of this conference and extended his

views on power shift to the East and economic power houses of China, India, Japan,

Hong Kong, Singapore and the existence of ASEAN.

He emphasized ASEAN which has been developing substantially along with the growing

region. The aviation industry in Asia was the most popular mode of travel as the region

was starting to develop, compared to US or Europe where transport infrastructure was

more complex and more developed. The aviation industry had to compete with several

alternative mode of transports in those developed countries. On the other hand, Asia did

not have such infrastructure, and aviation had no competition. The aviation development

gaps among countries within the region was quite huge. Hence, the potential for growth

of aviation industry in Asia was very high. Under the topic of aviation development in

Myanmar, private sector played the role in developing aviation industry, especially in

term of airport infrastructure. The aviation development projects in Myanmar was still

underway along with the opening of the country. With the opening of new terminal

building, the airport capacity would increase to 12 million passengers per annum. His

company has spent a tremendous investment of 200 million USD for the development in

short span of 2 years and additional of 400 million in the next 4 years.

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There was a common trend of growing economy in Asia with huge middle class

population. LCC emergence was utilizing the middle class as driving factor of demands. Airport must anticipate the growth and provide infrastructures needed to accommodate

such growth.

He emphasized the topic of terrorism as another megatrend and mentioned the series

of events of terrorism at airports in the past months. This added to a larger cost of security

operation and mechanism enhancement to combat against terrorism such as trusted

traveler program and biometric digital method. As the trend was moving toward

technological digitalization, cyber security would be one of the forefront of the airport

industry in the future.

Another megatrend involved was the need of human capital for growing of aviation

industry. Airlines offered certified courses for its personnel i.e., pilots and cabin crews. There were several agency standards of ACI and ICAO in place, nevertheless, the amount

of skill labor and training standard course for qualified professional in airport industry

were lacking too far behind from its counterparts. Adequate number of skilled labor was

one of the key challenge of airport industry that needed to be addressed.

6. Mr. Yoshiyuki Yamaya, CEO of Kansai Airports

Mr. Yamaya emphasized the topic of substantial development in aviation industry and

agreed that it was important for airport businesses. Globalization has started since 1990

where Japan and ASEAN has the advantage in aviation transportation. Aging was

the major megatrend in Japan which required products and services for aging population

between 40-60 years old. Year 1990 was the peak productivity of Japan with over 70%

working age but the trend headed downward. The major challenge Japan faced in the past

20 years included shrinking number of workforce, globalization of the economy, natural

disaster, manmade natural disaster and next generation economy. The retirement age

in Japan would increase to 70 years old in year 2020. To cope with the aging population,

Japan has accepted more immigrant workers to keep the economic growth stable. Technological initiative in IT and AI was important equally to human resource on

the ground. Mr.Yamaya added that time was needed for Japan to cope with aging

workforce issue. He highlighted on the importance of risk management and privatization

for investment in form of concession in future airport business. He added that sustainable

growth of aviation industry needed confidence to manage and address future obstacles. He

mentioned the example of ORIX business model which focused on reducing investment

to maximize profit as well as increase the number of foreign visitors and spending.

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7. Mr. Wang Jijie, Vice President of Shanghai Airport Authority (SAA)

Mr. Jijie gave the insight of triangular dimension cooperation implementation of Shanghai

airport to integrate economy promotion and improve aviation service which included

promotion of consumption of Chinese citizen and international and domestic travel. In the

future, Shanghai will be developed into a global city with intensified anti-terrorist system

and smoother customer service operation. He insisted that security and comfort should be

balanced. The forecasted growth of more than 1-1.2 billion passengers at Shanghai airport

will affect management direction and daily operation significantly. He introduced the

development of Pudong and Hangzhou Airport Transportation Technology as well as

physical development of satellite terminals, infrastructure renovation and fast-lane

transportation between the airports. He suggested that Shanghai needed to analyze airports

services such as aviation, high speed train and public transportation. He added that more

researches were needed to analyze how to expand mass transportation to accommodate

increasing passenger flows in the airport.

He emphasized promoting and strengthening smart airport by the use of Cloud

Computing, internet usage and Aerial Control Study and improvement of internet

connection services. He hoped to strengthen management and collaboration among

sister airports in order to create great development environment in the future.

8. Dr. Nitinai Sirismatthakarn, President of Airport of Thailand Public Company

Limited (AOT)

Dr. Nitinai discussed the understanding of global landscape change that became closer to

our daily life. He stated Europeans understand more of Asian countries so they became

one of the world’s best airport service providers. That was the result of understanding of

global landscape, not only aviation industry but it also affected peripheral services

i.e., airlines and retail sellers. He commented that airport business was facing forward

a big expansion. Hence, understanding of global landscape change was not enough but

it should be accompanied by foreseeing the future trend. In the past, Westerners looked

for where to go but nowadays, Asians look for what to do and also where to go. The old

fashion aviation service used to serve the long haul travelers who preferred a full service,

whereas the new era travelers has less expectation. He gave an insight from Chairman of

the Board of Director: “money and wealth is the fruit of the tree but friend and family is

the real root of the tree.” and adds that despite all the expansion of a new home, it could

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not be without sustainability. At the end of his discussion, he extended his thanks and

welcomed all the participants to Thailand.

Q&A Session

The moderator commented on the speech of Dr. Nitinai about where to go but what to do

as a good example of collaboration between tourism and aviation industry. The essence

was changing between the East and the West. He stressed the importance of private sector

involvement as alternate source of funds from government. The discussion also touched

on the airport system and the challenge of running airport system as well as technological

aspect.

The moderator invited the panelists to elaborate more on passenger profile in 2030 and

the evolution of cargo business.

Dr. Kerkloh answered that passenger profile would be changing with more diversity. Due

to the fact that society got older, the airports should anticipate such changes and become

customer-oriented.

Dr. Nitinai shared his idea that as globalization was getting stronger with non-tariff

barrier, the obligation in cargo business became higher. He said that he was looking

forward for Thailand to be the certifying hub and perishable certified agriculture product

center as a gate way to Europe. In regard to passenger profile, he clearly identified

different lifestyles of 2 segments of passengers: travelers from developed countries and

travelers from emerging countries. Bangkok airports had been divided as a dual airport

with Suvarnabhumi Airport as the proxy growth from developed countries. Whereas,

Don Mueang International Airport had reopened to serve emerging countries, with over

800% growth in the past 5 years. The airport serving long haul travelers was focusing

more on safety, security, quality than the airport serving short haul travelers. These two

passenger segments need to be considered as the heart of the development.

Session II: CEO Roundtable Discussion “Airport Business in 2030”

Main question: What will the future of the airport business be like in terms of

Governance Models and Leadership? Interface with Communities? Relationship

with Airlines? Relationship with Passengers? Evolution of Competencies Required

for Airport Employees? Development Funding? Infrastructure Design?

Competition?

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Moderator Dr. Pierre made a brief introduction of the megatrends as the main topic to be

discussed in this session. He stated the objective of the afternoon session was to gather

collective visions on what might happen to the airport business and business models by

year 2030.

1. Dr. Michael Kerkloh, President & CEO of Flughafen Munchen GmbH (FMG)

Dr. Kerkloh stated that in the European view, the climate change would change the

political view of airport. Airport business needed to verify if the growth of air travel was a

good thing for the climate. Commitment in efficient management of resources with

the green focus became essential in Europe. This implied that management of airport had

to participate in ACI carbon accreditation scheme to earn the status of a 5-star airport. This endeavor required a clear target from top management and got the communication

across all management levels in order to achieve carbon footprint reduction. The process

required time and collaboration with entire aviation systems. He added, how to convince

the investor with certain payback period was also crucial for the growth.

Digitalization led to growth in convergence between former independent agencies to

develop new product and service and personalized customer interaction. The change in

revenue contribution from non-aviation business has increased to 50% through F&B, retail,

security, ground handling, car parking, consulting and etc. However, there were threats in

these business segments from digital service providers. He added that Munich

International Airport had formed a team to study on the potential impact, how to

safeguard the business portion and identify partnership potential.

He mentioned the issue of airport’s capability to adapt to innovation, digital learning

curve of fast-paced digitalization and how airport management could keep up with

the pace. Airports had to make sure that the current business model was safe enough

to operate in market instability i.e., external threat, natural catastrophe and terrorism. Airports had to determine the development of new airline models, new partnership

models and terminal infrastructure. The assessment should had carried out on the

awareness that certain need and mix of airlines today might not be needed in the future. The business plan had to be flexible and fast enough to cope with these issues and rising

expectations as well as diverse expectations of travelers in all kind of services.

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2. Mr. Makoto Natsume, President & CEO of Narita International Airport

Corporation (NAA)

He gave the insight of globalization which brought about economy and revenue. He suggested the utilization of latest ICT technology and promotion of tourism in the

region for business and economy sustainability. He emphasized that tourism was the most

important business in Japan, with the target of 40 million foreign visitors by 2020, and 60

million by 2030. Japan had forecasted a total of 60 million in year 2020. The government

aimed for spending by foreign visitors to Japan at 8 trillion Japanese-Yen in 2020, and

15 trillion Japanese-Yen in 2030 to promote tourism industry. Airport business could help

promoting tourism in Japan in 3 pillars; functional improvement of physical facilities,

such as expansion of runways and terminals and; upgrading the service quality to support

the promotion of tourism demand like improve check-in and immigration processes to

reduce stress, waiting time, and provision of comfort through attractive airport facilities.

Deploying Leading-Edge ICT technology was vital for LCC and mobile devices. He

added that relationships between airlines and travel agencies were essential

as business partner in the future. The airport aimed to become a technological friendly

airport with introduction of robots to cope with shortage of workforce for servicing

passengers.

3. Mr. Han Zhiliang, President & CEO of Beijing Capital International Airport

Company Limited (BCIA)

Mr. Zhiliang had a positive view of airport business in 2030. The growth potential

indicated by number of operating airports in China, increasing Chinese travelers and

growing number of middle class population. He stated that the challenge would be

how new business model could address terrorism and cyber terrorist. Airports had faced

internal conflict as the local government wanted to expand aviation business and at

the same time, complied with regulations i.e., noise level, traffic and pollution control. Airports were required to utilize the technology to compromise the issues with the locals and promote local economy at the same time. Another issue mentioned was the change

in passenger profile i.e., diversified passengers, tourists, business travelers, senior group,

millennia group, students, business travelers. In term of security issue, Asia and SEA

were no longer safe from terrorism. He added that China had been facing with internal

instability and domestic unrest. Consequently, new requirement had emerged for human

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resource and funding for the stricter anti-terrorism inspection and frequency of security

check-points prior to boarding.

He added that there was the potential of competition from high speed railway.

Mr. Zhiliang has hoped for China to establish Air-Bus between major cities to increase

transit power by high-speed bus. The idea was studied from Frankfurt airport.

Beijing airport had chosen Frankfurt as a gate way to connect between China and Europe. He stated that the success agreement with Frankfurt airport could be expected in the

future along with the success in expansion plan agreement with Munich International

Airport.

4. Mr. Somboon Daosavanh, Director General of Lao Airport Authority (LAA)

Mr. Daosavanh commented that aviation business in Laos was the youngest among sister

airports. He stated that Laos was still a developing country, hence, the aviation services

provided were very limited and focused mainly on service and security. However,

the coverage of services provided by airport-related businesses or company in Laos

were aligned with those of ASEAN region. The new Laos government had an airport

expansion plan with cooperation from private sectors from foreign countries.

Mr. Daosavanh added that he would like to hear more from airport specialists and their

experiences in this forum.

5. Mr. Sulaiman Zainul Abidin, COO of Pioneer Aerodrome Services Company

Limited (PAS)

Mr. Abidin stated that most of the megatrends had a common denominator. He commented that as the airport businesses had been trying to mitigate the effect of these

megatrends, the problem should be tackled through a better understanding of basics and

expectations of stakeholders i.e., passengers, tenants, regulators, employees and

communities.

Firstly, the role of airports should be redefined. Airports was becoming more of the

facilitator that brought components within the aviation industry together. Secondly, the

need to understand the change in stream of revenues. He explained that there were 2

streams of revenue; aeronautical revenue and non-aeronautical revenue. The impact of

global occurrences, such as security, terrorism and natural disaster had resulted in the

change of revenue structure. Evidently, airports diversified their revenue from traditional

aeronautical revenue to bring more revenues from commercial sector, shopping center

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and airport city concept. The last megatrend was IT integration in business process,

commercial, communication and security i.e., high-tech algorithm explosive detector

and biometric.

6. Mr. Yoshiyuki Yamaya, CEO of Kansai Airports

Mr. Yamaya highlighted on IT integration which would simplify airport businesses in

2030. He added that the change in business view of tourism in Japan was imminent. With the tourist target of 60 million, airports had to focus more on interaction with people

as well as the community, even with the innovation and development of AI. However, the

cause of innovation came from human interaction. In the future, airports would be closely

related to human communication and people would be motivated by more interactions. He

had a positive perspective on airport business in the future, especially in year 2030 as the

context of laws of the airport would be more attractive and appealing to stakeholders. He added that qualified IT human resource would become an asset for the business in

the future and also in the view of investors.

7. Mr. Wang Jijie, Vice President of Shanghai Airport Authority (SAA)

Mr. Wang shared his vision on information technology and terrorism. He emphasized

the diverse knowledge background of management team and knowledge structure of

airport employees. In the future, routine jobs could be substituted by IT. Therefore,

management should consider and anticipate skills needed for airport employees to handle

new technologies. He touched upon three of the effects from megatrends which were; self-

service; improved facilities for specific needs of aging passengers and; security facilities.

8. Dr. Nitinai Sirismatthakarn, President of Airport of Thailand Public Company

Limited (AOT)

Dr. Nitinai commented that AOT operated as a state enterprise and listed under the Stock

Exchange of Thailand(SET). He stressed on the difficulty in balancing the operation under

state laws and SET regulations. Nevertheless, he added that the hardest thing was the

balance of international laws on safety and security. He stated that most of the airport

business shared the same problem in balancing profit and security. He made a comment

on megatrends of innovation and aging society and stated that businesses now should

proactive with preventive anti-terrorist innovation. In the perspective of business

operation, AOT viewed the aging society trend as the inter-generation management. He stressed the importance of knowledge transfer and experiences of management and

25

senior executives in airport business. Aging society problem should not be solved by simply customer characterization on a short term basis, but it should be addressed as

a long term issue.

Q&A Session

The moderator commented that it was a good way to end the discussion with the topic

of human capital and each airport touched upon issue of training, capability building

and transfer of knowledge. To create a discussion, the moderator urged the panelists

to elaborate on the role of airport CEO in the past and how it might be different in the

future, in year 2030. He suggested that, as an CEO of an airport business, more time

usually spent on managing relationship with stakeholder.

Dr. Kerkloh answered that one of the requirements of future CEO was the ability to

manage capital resources and human resources. He emphasized internal communication,

unity, involvement and commitment. The management team had to be able to

communicate internally and externally out of their field of expertise. The future CEO

should be a good ambassador to carry brand identity and leadership to communicate their

agendas with regional neighborhood. He concluded that the human capital was equal

importance to the financial capital.

The moderator asked the panelists to comment on the issue of airport employment, human

resource related technology and how it would affect careers at the airport.

Mr. Wang suggested that IT affected employment, especially on the departure section.

Airports should focus on passenger airport security and safety. He gave the example of

the trend of robot substitution for human labor in luggage loading. He added that the

common problem with every airport was how to handle luggage and missing luggage. The responsibility to passenger was more important and technological assisted equipment

would affect employment. Implementation of IT could save traveler’s money, time and

improve luggage check convenience.

The moderator asked the panelists to comment on the perspective of the future airport

cities.

Dr. Nitinai, commented on limitation of land utilization of AOT due to the land

requisition law. He added that interpretation of law in aerial related business had a major

impact on revenue sharing rate and other business development to meet demand of

people who work in the airport area. Hence, AOT had to clarify the add-on businesses

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required by the airport with government agent for better regulation of land bank. AOT has been looking for PPP private partnership and add in the process of laws and

regulations before initiating the business plan. He made a comparison of how commercial

area at Suvarnabhumi International Airport were smaller than other airports in Asia. Consequently, Suvarnabhumi Airport had a limitation in diversification of revenue

stream from non-aeronautical business. He shared the expansion plan of commercial areas

in AOT airports and the renovation of Don Mueang International Airport to increase

commercial revenue.

The moderator thanked all the panelists for their participation in the 2nd session. Afterward, he asked the panelists to share ideas on the future workshop of the sister

airports.

Dr. Kerkloh stated that future workshop should deepen the relationship among sister

airports. He added that regardless of gaps and diversity in the nature, background and

development issues of each airport, common project should be considered to tackle

common challenges i.e., how to cope with digital challenges, how to professionalize

airport staff and how to train service-minded staffs. Technology or service would play

more important role in the future. He added that this forum did not touched on the

challenge of relationships between airlines and airports and its effects on revenue stream.

There should be a discussion on a good cooperation model between airports and airlines.

Mr. Yamaya from Kansai International Airport made a comment on IT substitute for job

opportunity. He elaborated that IT utilization was very significant but in the essence,

service in the airports had to be very humanistic. He believed that people should be the

fundamental of business, especially, to serve increasing number of diversified travelers.

Dr. Nitinai extended his thanks to all participants and hoped for everyone to enjoy their

dinner and shows in the evening.

The meeting was adjourned at 16:00

Session III Sharing Best Practices “Enhancing Passenger Experience for Airport

Service Excellence”

The 3rd session was moderated by Ms. Theresa Feidl, Vice President, Human Resources

Marketing and Head of Sister Airport Office, Munich International Airport.

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1. Presentation of Ms. Theresa Feidl, Vice President, Human Resources Marketing

and Head of Sister Airport Office, Munich International Airport

At the beginning of the 3rd session, the moderator made a presentation of Munich

International Airport and best practices. Munich International Airport became the first

5-Star airport in Europe and outside Asia from its endeavor to create customer’s first class

experience. Munich International Airport had been focusing on seven fields of activities;

ambience and comfort, process, cleanliness, digital information, IT, signage, service and

hospitality.

Ms. Feidl gave the example of facilities at Munich International Airport which aimed

at increasing customer ambience and comfort i.e., VIP Wing, new satellite terminal with

aquarium and local goods stores. The services provided at the airport included; rotating

native speakers at duty free shops, innovative mobile cash desk, VIP shopping via tablet

and pre-reservation system for car parking. In order to improve the process, Munich

International Airport had implemented automated easy-pass for boarding pass control.

The airport’s implementation on cleanliness included: newly designed outdoor smoking

area, cleaning day arrangement, training days for supervisors and hiring of additional

quality management touch system in the toilet. The improved information service

at the airport, real time e-passenger guide system (Info Gate) kiosks were installed together

with provision of relaxation facility at Hilton Hotel nearby. Munich International Airport

offered local brewery at the airport with local beer garden to uplift its service and

hospitality. The airport had implemented service academy to educate partners and

administrative staff to get free training on high service quality, service excellent and to

give them a clear communication of service standard at all passenger touch points.

She concluded that Munich International Airport’s goal was to enhance customer

experience and to impress them with unexpected service and activities i.e., seasonal

festive events where local community could enjoy even when they were not flying.

2. Presentation of Mr. Sirote Duangratana, General Manager of Suvarnabhumi

Airport, Airport of Thailand

Mr. Sirote gave the presentation on 3 main topics: air traffic in Thailand under AOT

supervision; efforts to enhance customer experiences and; future development in the next

5 years.

He gave the statistical data of 6 airports under AOT supervision, out of 38 airports in

Thailand. These airports contributed to 80% of whole kingdom traffic. Suvarnabhumi

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airport was the biggest and the most prominent one in term of traffic, passenger and cargo

services. The growth of passenger and traffic between 2015-2030 was expected to grow

by fold.

The customer experience enhancement of the airports included cultural ambience of

Thainess, interior design and festive events which showcased local artists and exhibitions. The improved process and infrastructure development and facilities were implemented

through multi-languages customer service kiosks, taxi service, departure and arrival

process, information kiosks, free charger and Wi-Fi.

He touched upon the improvement project ‘We are Family’ which focused on customer

relationship management to improve airport customer process and service for staffs from

different agencies. In addition, the airport is also under the process of setting up Airport

Operation Control Center for all relate agencies to work closely together. Passenger

satisfaction evaluation machines were installed at information counters and washrooms. There were several undergoing construction projects to uplift customer experience, such

as airport lounge at Concourse D, renovation of restrooms, signage, Suvarnabhumi

Airport Museum and improvement of Sky Lane.

He gave the detailed report on the 2nd phase of Suvarnabhumi development project which

aimed to increase capacity of Bangkok airports to 90 million annual passengers by 2021

as the following:

The 1st project: Satellite building, Apron (sat -1), South terminal expansion, East terminal

expansion, airline offices and a parking lot.

The 2nd project: The 3rd runway to accommodate 94 aircraft movements per hour by 2020.

The 3rd project: Multipurpose terminal to accommodate additional 30 million annual

passengers together with a new parking lot and a monorail.

3. Presentation of Mr. Zhang Haiying, Deputy Director, Shanghai Airport Authority

(SAA)

Mr. Zhang presented a case study of Shanghai-Pudong International Airport’s best

Wi-Fi service and utilization of mobile technology to enhance customer experience.

The presentation focused on research analysis and the first approach.

He referred to the global technology development research which indicated

5 development areas to improve airport services; passenger-oriented, coordination,

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commercial, mobility and big data. In his presentation, he emphasized mobility as the

biggest trend for airport services enhancement.

Due to the growth of expectation in mobile technology, the airport had upgraded free

technology infrastructure of 4GLTE Wi-Fi, Bluetooth and NFC to improve airport

services and operations in all areas. The technological equipment had been invested to

increase bandwidth for high download speed Wi-Fi and the user authentication was

required via WeChat, ID scan and SMS. He added that customer experience satisfaction

would be improved through mobile content navigation, e-commerce,

e-payment methods, and location based service (LBS).

4. Presentation of Ms. Isumi Arita, Customer Service and Branding Manager,

Kansai Airports

Ms. Arita gave the overview of Kansai Airports background that supervised both KIX

(Kansai International Airport) and ITM (Osaka Itami Airport) airports. She added that ITM

airport served only domestic flights.

She presented the growing trend of foreign passengers which exceeded the number of

local passengers and its impact on changes in airport service requirements.

In term of customer experience, she stated that “Smile Airport” came from the vision of

ideal airport since the 20th anniversary of KIX and the 75th anniversary of ITM. Customer

Improvement council was established to ensure customer-first oriented models and

initiatives. The approach included organizing customer seminars, airport patrol units,

collection of ideas and invitation of guest speakers to lecture on customer satisfaction on

diverse culture backgrounds and needs.

The physical facility development to improve customer service included terminal

renovation, working space and relaxing functions and cultural events.

As the World’s Best Baggage Delivery Airport in 2015-2016, she introduced customer

-oriented baggage handling and the achievements in no loss baggage since 1994. She explained that the success was due to collaboration between staffs and BHS baggage

tracking system. She introduced the staff awarding system “CS Excellence” to encourage

airport staff to provide Japanese hospitality to improve customer satisfaction and

experience.

30

Q&A Session

The moderator asked how AOT managed its airport expansion while maintaining

customer excellence standard during the time of construction. She asked whether new

technology at the new terminal was to be implemented to improve passenger service

quality.

Mr. Sirote clarified that the expansion of satellite building was in a remote area and

the impact should be minimal. He stated that there were measures in place to oversee

the construction method to minimize impact in day-to-day operation for the expansion

of terminal. He mentioned the provision of sufficient substitute parking spots during

the construction of airline offices.

Mr. Sirote added that available space for passengers would be doubled and the new

terminal and monorail system would shorten walking distance between terminals. The

expansion would open gate for more common areas which allowed customer to have

more shopping time.

The moderator asked Mr. Zhang to elaborate on the unique service quality of Shanghai

Airport Authority.

Mr. Zhang responded that Shanghai IT services at both airports were considered as

special infrastructure. He stated that IT service would change the structure of service

to airport passengers. He added that both airports had already reached its passenger

capacity, therefore, IT service had been offered to reduce passenger congestion via

mobile application. In addition, there were several measures in place to ensure smooth

Wi-Fi usage capacity even during peak usage hours i.e., flight delays.

The moderator asked Ms. Arita to elaborate more on brand management and the

implementation at Kansai Airports.

Ms. Arita responded that branding was very important and had to be combined with

staff’s attitude for the best customer experience. She emphasized employee’s devotion

which should be acknowledged and publicized to motivate highest customer service

quality.

Question from Mr. Hiroki Kitabayashi, Director of the Office of Overseas Business

Development, Kansai Airports:

31

Mr. Kitabayashi asked Mr. Zhang, Shanghai Airport to clarify the subject of implementing

technology whilst balancing security and customer satisfaction.

Mr. Zhang responded that there were two conflicting points between IT implementation

to increase security versus customer’s convenience. However, these issues could be

harmonized by IT service. For example, IT could be implemented on the process of

pre-reservation for security checking point. The approach could be characterized by

different levels of security sensitivity of each passenger. IT technology could improve

the security system when passenger ID and luggage information were obtained prior to

the actual inspection. This approach had already been implemented at Pudong

International Airport on a trial run.

Question from Mrs. Monrudee Gettuphan, General manager of Phuket International

Airport:

She asked Ms. Arita whether additional campaigns at Kansai Airports would be

implemented in the near future to enhance customer satisfaction.

Ms. Arita responded that Kansai Airports had emphasized the reduction of passenger

waiting time and maintaining the standard of customer satisfaction. In addition,

the airport services had to be translated into different languages for 80% of passengers

from Asia.

Question from a representative from Thailand:

He asked whether Munich International Airport offered mobile application service.

Ms. Feidl responded that she would relay the question to IT experts and provided a direct

contact for him to get the answer for his question at the end of the session.

Session IV: Sharing Best Practices “Future Trends for Generating Airport

Revenues”

The moderator of the 4th session was Mr. Gordon Hamilton, Senior Vice President,

Airport Business Operations, Aviation Strategies International (ASI).

Prior to his presentation, Mr. Hamilton gave a brief introduction and background of

the panelists.

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1. Presentation by Mr. Gordon Hamilton, Senior Vice President, Airport Business

Operations, Aviation Strategies International (ASI)

Mr. Hamilton offered a different perspective of megatrends, which aimed to be

provocative and to stimulate the mind of participants. He started with two dynamic

sources of airport revenue which were traffic and individual spending. He touched upon

the topic of substitute destination for travel and the change in luxury market.

Mr. Hamilton gave the example of growing trend in China luxury good manufacturers and

how China was becoming the dominant market of luxury goods. The trend was supported

by the emerging demand for unique luxury market in Asia.

He discussed on the topic of substitutional travel destinations, which derived from

the changes in tourist’s demand for less congested destinations. He added that demographic factors such as aging travelers would make it harder to predict the profile

of the future passengers.

2. Presentation of Mr. Wichai Bunyu, Senior Executive Vice President, (Business

Development and Marketing), Airports of Thailand (AOT)

Mr. Wichai gave the insights of 6 airports under AOT supervision where each airports

served as gateway to strategic tourism clusters. He described the growing trend of AOT

traffic in term of aircraft movements and passengers in the past years. He indicated

the significant growth at Don Mueang International Airport and Chiang Mai International

Airport as the result of emergence of LCC flights and increase number of Chinese

tourists.

He gave the presentation of AOT revenue portfolio of aeronautical revenue and

non-aeronautical revenue at a 60:40 ratio. The largest portion of aero revenue came from

passenger service charge by 45.28% and concession by 27.17%. Most of the non-aero

revenue came from duty free by 50.75%. From the financial perspective, AOT earned

a high profit margin of 54%. He added that, the past revenue of AOT was affected by

economic crises, natural disasters, and domestic unrests. Henceforth, AOT implemented

several strategies to cope with fluctuations of airline business circle to increase non-

aeronautical revenue and create a sustainable business growth.

Three strategies for maintaining non-aero revenue growth which was implemented were:

minimum guarantee policy; revenue sharing and; point of sales monitoring non-

aeronautical revenue. Five strategies for sustainability business growth were: organizing

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proactive marketing activity to increase number of flights, developing new routes and

route development events; increasing two non-aero vertical revenues by optimizing

existing terminal space for commercial activities; increasing both aero and non-aero

revenue from airport expansion; changing the concept of cost structure of administrative

budget to revenue model and; joint investment with private company under the concept of

‘airport city’ to utilize land use and increase non-aero revenue. He added that there were

several business strategic positions in non-aeronautical businesses for Hat Yai

International Airport and Mae Fah Luang-Chiang Rai International Airport. Several

feasibility studies were conducted for land development, such as serviced apartment,

premium outlets, service centers, hotels, solar farms and aircraft maintenance repair and

overhaul (MRO).

3. Presentation of Mr. Han Zhiliang, President & CEO, Beijing Capital

International Airport Company Limited (BCIA)

Mr. Zhiliang’s presentation focused on the current development situation of BCIA

in concession, dining and advertising. He stated that the revenue proportion of 2015

in aero revenue was 46% and 43% in non-aero revenue, respectively. Beijing airport had the

largest commercial area in Asia with the focus on attracting famous brands of restaurant

and implementing new marketing technologies to empower the development of Beijing

International Airport. He explained the business model transition of Beijing Airport

Cooperation Limited since 2005 when non aero businesses had been operated by the

company. Between 2005-2014, franchise model had been implemented to promote non-

aero business development. Since 2015, BCIA had adjusted its management model by

hiring professional company to manage non aero businesses. Through these models,

BCIA was able to enhance the management ability to expand the market for utilization of

resource, with reportedly 5.4 billion yuan in total revenue.

He indicated that physical shops were affected by emergence of e-commerce and several

measures were implemented to increase the sales revenue. He added that F&B revenue

was increased by 12% after the renovation of catering area with different types of cuisines

at the airport. The airport promoted e-commerce and online service payment by

cooperating with Alibaba. Since 2015, the marketing events and festivals were promoted

as a consolidated campaign.

He reported that, during the airport development, BCIA faced 2 obstacles which were the resources and traffic slowdown. Due to that reasons, BCIA had shifted its focus

toward big data business model. Since then, the airport had implemented internet to build

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new ecological business models for online interactive business and intelligence business

platform.

4. Presentation of Mr. Yoshiyuki Yamaya, Chief Executive Officer, Representative

Director – President of Kansai Airports

Mr. Yamaya emphasized the importance of branding and local community to business

development and profitability. He indicated that Kansai area was the national treasure

of Japan as well as home of several world heritage sites. Kansai was also well known for

its commercial area in the south. The wonderland “Minami” offered a great variety

of delicacies, various shopping and entertainment attractions along Shinsaibashi, Namba,

and Dotonburi arcade. He stated that the history of the area helped the promotion of

inbound visitors together with the evident growth of foreign visitors. He stated that relationship and cooperation between airports, local communities and businesses were

more significant than facilities or business entity of the airport. He concluded that

it was imperative that the approach implemented by Kansai Airports must be developed

together with the growth of local communities for the successful future of business.

5. Presentation of Mr. Futoshi Osada, Executive Vice President, Narita International

Airport Corporation (NAA)

Mr. Osada gave the presentation of revenue initiatives of Narita International Airport with

the background information of facilities, terminals together with the gradual increasing

trend of revenues, traffics, passengers, aircraft movements, international and domestic

flights network cities. After the relaxation of visa requirement, Narita International

Airport experienced a sharp rise of LCCs, increasing number of foreign visitors and

increasing trend of duty free merchandise food and beverage sales at the airport. He

presented the breakdown of airport operation revenues which indicated a significant shift

in revenue source in non-aero sector from 34% to 55% and 66% to 45% in aero sector since

2004 until 2015.

To accommodate the changing trend of foreign passengers and meet with the target of

40 million visitors by 2020 and 60 million visitors by 2050, Narita International Airport

had projected the increasing aircraft movements from 235,000 flights to 300,000 flights

in mid-2020 and 500,000 flights between the early 2030s and the late 2040s. The

forecasted demand required further functional improvement of physical facilities, such

as runway expansion.

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In term of customer satisfaction, Narita International Airport would implement Fast-

Travel initiative, especially during peak hours. The efficiency improvement facilities

mentioned were: automatic check-in kiosks with website and mobile application,

self-service baggage drop, smart security to streamline security procedure and automated

passport control. The aim of this initiative was to shorten the time from departure lounge

to duty-free shop area to 10 minutes and after arrival to reach to arrival lobby to

30 minutes. He elaborated that the smart airport initiative would be launching with

new technology for functionality improvement with a wide range of applications in

multiple languages. In the future, Narita International Airport would introduced WiGig,

which was the next generation internet connection that provided over 10 times the data

transfer rate of the existing wireless LANs and traditional Wi-Fi. He added that service

robots would be used to provide location guide services. He added that passenger would

have longer time to spend within the airport from Fast Travel approach at check-in and

security procedures. The airport would organize cultural experience events with

state-of-the art restrooms and comfortable sofas to enhance customer satisfaction during

their free time. He added that commercial area would be expanded with shopping malls

and brand boutique shops at both terminals.

To improve the security system, Narita International Airport would introduce AIT body

Scanners together with high resolution surveillance cameras for face recognition and car

number recognition, K9 explosives sniffer dogs and ETD explosive screening equipment

to ensure security and safety of passengers.

He concluded that security measure was the most important factor of the future growth

and the second factor would be airport facilities with multi lingual system.

Closing Remarks by Dr. Nitinai Sirismatthakarn, President of AOT

On behalf of AOT, he expressed his appreciation for friendship and goodwill of

all participants and for their contribution in this forum.

He emphasized cooperation and relationship level of international aviation network of

this forum. He gave a summary of the future aspects of opportunities and challenges

the forum has touched upon. He added that this forum had helped visualize airport

industry in the future, including airport management, security challenge of airport

operator, artificial intelligence in airport operation, aging society, knowledge

management, and airport cities concept. At the end of his speech, he thanked the

international civil organizations, Ministry of Tourism and Sports, Ministry of Transport,

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airlines and participants from private and government sector for the exchange of ideas

in regard to aviation business cooperation in management level to move toward the future

success.

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