airport terminal paper-final29septv5

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Introduction

Passenger numbers have increased over the

past decade with an annual rate of growth

exceeding 5% per year. Passenger numbers

through Australian capital city airports totalled

98.3 million in 2008-2009 and are forecast to

increase to 235 million by 2030.

In response to this forecast growth,

Airport Operators are planning and

implementing substantial investment in

additional airport capacity. In addition

to expansion, existing services such as

security need to be upgraded to meet newand more stringent requirements and the

increasing importance of retail outlets at

both international and domestic terminals

require some terminals to be redeveloped.

However, the combination of the Global

Financial Crisis (GFC), high oil prices

and the onset of global pandemics such

as SARS and H1N1 has undoubtedly

challenged the business model of many

airlines and the airports they serve. For

Airport Operators, there has been greater

financial pressure on landing charges

and operating costs. In providing a high-quality service for passengers, any new

terminal investment must balance the scale

of initial capital investment, provision for

future expansion and operational efficiency,

together with the imperative to maximise

revenues from all available income streams.

A Note on Markets

Australia has weathered the GFC

considerably better than many other

developed nations.

Although many projects were placed onhold or cancelled during late 2008 and2009, we are seeing signs of recovery inthe broader construction industry acrossmost sectors albeit at a slow pace. Thedownturn in construction activity has allowedfor momentary corrections in inflated tenderprices that were previously spurred on by theresources boom of the past decade. Thereare signs that the market has reached thebottom with profit margins recovering slightlyduring mid-2010.

In spite of reduced passenger air travelduring the GFC, Australias economicoutlook and regulatory price monitoringmakes it one of the worlds most attractiveairport investment environments in the

world. The dual-till approach where only

the aeronautical side of the airport is

regulated is also considered favourable

for increased, unregulated investment

in the non-aeronautical (retail) revenue

streams. The forecast demand willnecessitate progressive upgrades to

existing airport terminals tomanage the

increasing passenger movements which

are expected to escalate by 4% to 6%annually over the next 10 years.

High levels of currency fluctuation have

resulted in an unexpected source ofcost inflation as airport projects are

characterised by a relatively high level

of internationally procured specialist

equipment such as baggage handling.

Whilst clients can buy out currency riskat the point of agreeing to a contract,

currency fluctuations during the re-

contract period can have a significant

impact on budgets. The devaluation of

AUD during 2008 resulted in falls of 32%relative to the USD and 22% relative tothe Euro.

Pre-GFC the AUD was on track to reach

parity with the USD for the first time

since the currency was floated in 1983.

Although this had the obvious impact

of reducing import costs on overseas

components specifically required for

airport construction, conversely the boom

in domestic demand for construction

accelerated tender prices above historical

trends.

Australian airport operators need

ongoing investment plans to prepare

for long term demand for international

and domestic flights as well as to meet

increasing passenger expectations.

Davis Langdon ranks 23rd

globally in the Infrastructure

Journal Consultants' league

tables, increasing 11 places in

2010.

Project Management | Cost Management | Building Surveying | Urban Planning | Specification Consulting | Infrastructure Verification Services | TechnicalDue Diligence | Property Performance Assessments | Make Good Assessments | Certification Services | Sustainability Services | Access Consulting

AVIATION SECTOR INSIGHT

AIRPORT TERMINALS PLANNING FOR LONG TERM GROWTH

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2002

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2004

2007

2006

2005

2008

2010f

2009

6%

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0.40

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0.60

0.70

0.80

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

0.90

1.00

USDEuro

National Tender Price Index - Weighted Average

(Yearly Change)

AUD

Beijing International Airport, Beijing


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AVIATION SECTOR INSIGHTAIRPORT TERMINALSPLANNING FOR LONG TERM GROWTH

www.davislangdon.com

size elements linked with passengerprocessing such as security, check-in and

baggage handling.

The terminals capacity and designmust considerfuture needs such as

the wider use and acceptance of online

check-in, self service bag drops and

mobile boarding passes.

Some terminals are currently experiencingpassenger bottlenecks at security points as

the original architectural design of terminals

had not allowed for increased security

measures. Passengers are also now

arriving and going through security well

in advance of their flights which has hadan enormous effect on the facility as more

passengers are checking in their bags and

waiting for a longer period of time. Moreluggage storage, more seating, better food,

better entertainment and increased retailoutlets are required.

In addition, airport operators and designersshould also consider the current and

future area efficiencies when expanding

the capacity. Globally there is no standard

industry benchmark of area efficiency as

can be seen below.

Level of service international bodies

including the International Civil Aviation

Organisation and the International Air

Transport Association assess performance

for check-in, security, queuing times and

so on. These are used to justify landing

charges, and are a key element of

competition between airports.

Passenger experience Ease of car

parking and use of drop off and pick up

points is required.

Rapid completion of check-in and securityis needed clearing security is a major

source of stress, so an efficient process

will make a major contribution to the

passengers experience.

Clear uncluttered sightlines, way-finding

and orientation is essential. Repetitive

design may be utilised so that locations are

intuitive to passengers. Ease of navigation,

through direct routes to gates and

information on travel times to gates also

reduce stress. It also produces more time

for passengers to use airside facilities.

Research shows that relaxed passengersspend more money, so its imperative to

reduce stress and increase passenger

satisfaction ratings.

Humanising the scaleterminal buildings

are necessarily large, but a clear layout,

well-signalled navigation features and

high-quality signage all help to mitigate

the scale. Repeated elements of structure

or colour break up very large spaces into

smaller, more easily understood units, as

do repeated design features.

Securitybaggage handling and hold

baggage screening are the principalelements of the security system. Other

elements include personnel screening and

physical security elements. Rationalisation

of circulation routes, the provision of clear

lines of sight and the consideration of blast

resistance in the structural design need to

be considered.

Transit systems for larger terminals

and piers, transit systems become

necessary when distances exceed 300m.

In addition to the cost of the transit system

itself, the impact of increased circulation

requirements on the footprint of the buildingalso need to be taken into account.

Retail offer terminals can be designed to

direct passenger flow through the retail offer.

Additional baggage drops for duty free

purchases are now being utilised to

maximise retail spending, thus increasing

turnover and rental values.

Baggage Handling

The key elements of a baggage handling

system are:

a 100% secure environment

baggage flow from check-in to aircraft

loading has to be completely secure

capacity and flow rates the typical

time for a bag to pass directly through

screening and straight onto the

aircraft is about 12 minutes (the latest

machines typically have a capacity of

1,800 bags per hour) the adopted baggage screening

protocol this varies between countries

and may consist of a sequence of

increasingly sophisticated scanning

techniques, including X-ray and CT

scanning processes

The main drivers for sizing a baggage

system are:

the peak hour passenger flow

aircraft size

flight type different types of flight

have different load characteristics

bag profile based on destination,flight type and other factors, the risk

profile of baggage and the profile

of scanning operations can be

determined

Other cost drivers for baggage systems

include:

redundancy and failsafe provision

particularly for explosives detection

systems and baggage sorting

machines, which have high costs

load-sharing systems these enable

baggage to be directed evenly

AirportEfciencyintermsofPassenger

Numbers and Floor Area

GrossFloorArea(m)

0

100

200

300

400

510

15

20

25

30

35

Million Passengers Per Annum (MPPA)

500

600

700

000

Global Airport Benchmarks Trend line

(Global Airport Benchmarks)

Perth Domestic Terminal, Perth

Launceston Airport, Launceston


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AVIATION SECTOR INSIGHTAIRPORT TERMINALSPLANNING FOR LONG TERM GROWTH

www.davislangdon.com

Construction Costs

Davis Langdons global airport experience

has created a wealth of knowledge in terms

of cost benchmarking.Construction costs for airport terminals

are heavily reliant on whether the facility

is an international or domestic terminal,

the extent of existing infrastructure andfacilities, the airlines it serves and the

physical restriction of the site. These

multiple drivers have a huge impact on cost

so it would be inappropriate to state a one

size fits all estimated cost rate. However,the cost split of our recent projects has

demonstrated a trend in the distribution of

costs across the elements of the building

as can be seen in the chart below.

Recently there have been great

changes in aviation design concepts,

reflecting new technologies and changingpassenger experience. New check-in

procedures which save time, give thepassenger more control and reduce

operating costs are influencing the way

we design check-in halls. Airports are also

recognising that landside precincts andthe journey to and from the airport are part

of the passenger experience and need to

be addressed as part of integrated design

solutions, including landside transport

connections.

Damien Hirst

T: +61 7 3221 1788

E: dhirst@davislangdon.

com.au

Damien HirstAssociate Principal Aviation Sector Leader

0%

5%

10%

15%

20%

25%

Substructure

Australia Asia Middle East Europe AfricaUnited Kingdom

Building Element

%ofTotalBuildingCost

Protecti

ve

Installat i

ons

Secu

rity,IT,C

CTV,FIDS

Mec

han

ica

l

Liftsand

Escalators

Tra

velators

P

reliminaries&

OH+P

Baggage

Handling

AirBridges

Electrical

Fixture

s&Fittings

CeilingFinishes

FloorFinishes

WallFinishes

Internal

Walls,Partitions&Doors

Faade

Stairs

Fram

e/Upper

Floors/Roof

0%

5%

10%

15%

20%

25%

Percentage of Building Cost by Element ofAirport Terminals

Quote supplied by HASSELL

Why Davis Langdon

Whether developing a terminal, baggage

handling facility or any other aviation

project, the success of your project

will be strengthened by the knowledgeand experience of a consultancy team.

Davis Langdon's specialist construction

and property consultants have been

instrumental in the delivery of aviation

projects within Australia. We are currently

working on projects at Sydney, Brisbane,Perth, Launceston, Ayers Rock and

Rockhampton airports including a numberJohannesburg International Airport, Johannesburg

of defence aviation projects. Globally wehave experience ranging from Heathrows

Terminal 5C building (36,000m) to Seouls

Incheon International Airport which is a

massive 491,000m catering for 30 millionpassengers per year.

It is our innovative approach based

on a detailed understanding of thissector, coupled with our proactive and

collaborative approach to problem solving,

that gives our clients best value solutions.

A wealth of global expertise and local

knowledge underpins every project we

deliver.

If you are considering undertaking anaviation development or would like to

discuss this paper further feel free to

contact Damien Hirst.

airport terminal paper-final29septv5

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