business opportunities for small airports · · 2016-10-31international and domestic...

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



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.



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



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



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



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



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



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



Business opportunities spectrum

airside landside aviation support commercial/industrial hospitality retail institutional

aviation non-aviation



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



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



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



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



Regina (Canada)



Hamilton



Rangiora



Paraparaumu



Evolution of Airport Master Plans

Historically:

• Technical/engineering based plans

– Compliance

– Land Use

– Environmental (Noise)

Now:

• Strategic planning input into airport

business plan



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



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



Peter Seed

[email protected]

Airbiz

Unit Q 383 Khyber Pass Road Newmarket 1023

Auckland

T: + 64 9 529 0311

F: + 64 9 529 0313

www.airbiz.aero



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

business opportunities for small airports · · 2016-10-31international and domestic...

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