25 May 2023
Airports often have a unique opportunity to position themselves as centres of economic growth due to the quality of their transport (both air and ground) connections, proximity to metropolitan areas, and the existing commercial relationships they have with a range of industries and sectors.
This, according to Arup, the global engineering consultancy, has given rise to airports as ‘regional economic accelerators’ and them putting the establishment of airport economic ‘hubs’ at the heart of commercial development plans, working collaboratively with local stakeholders to become drivers of social and economic benefit.17
Through the development of commercial facilities – such as office space, warehousing, and specialised logistics facilities – in and around airfields, airports have become more strategic about the role they can play in facilitating economic development and as long-term enablers of local employment.
At the regional level, airports can play an important role as engines of socio-economic development,” says Amanda McMillan, Senior Managing Director at Macquarie Asset Management. “By improving connectivity and facilitating the inflow of goods, commerce, and tourism from both domestic and international locations, they can stimulate economic growth and deliver commercial potential and additional employment at the local level.
“Working with experienced private sector partners enables airports to access funding that can be used to invest in new facilities and diversify revenue - such as through expanded retail, new commercial space and additional ancillaries – which were previously untapped under public management,” she adds.
Together with our partners and Gold Coast Airport, we have supported management to make more efficient and effective use of their airport infrastructure, address capacity issues and improve the customer experience with new and expanded facilities, and to prepare for future passenger growth with additional capacity that allows them to attract new carriers and routes.”
Senior Managing Director
Macquarie Asset Management
Decarbonising air travel presents a unique and significant set of challenges and airports have a leading role to play in reducing the industry’s carbon emissions. Alongside commitments to become net zero for those under their direct control (Scope 1 and Scope 2), they can help facilitate – through investment in new technology and infrastructure – a reduction in the indirect carbon emissions (Scope 3) from aircraft and ground transportation, for example.19
In the short- to medium-term, this will include initiatives to enable aircraft fleet efficiencies and investment in sustainable aviation fuels (SAF), before supporting longer-term solutions that replace the use of jet kerosene entirely become commercially viable – be that electric aircraft charging or hydrogen refuelling facilities.20 Both phases will require significant financial investment – estimates are that an annual average investment of $US175 billion will be needed from now until 2050 to decarbonise the sector – and fundamentally change airport infrastructure.21
Simon Geere, Chief Executive Officer of Farnborough Airport, believes early adoption of SAF within the business aviation segment could offer an early roadmap for the broader aviation industry to follow.
“The cost of fuel is generally a relatively small part of the overall investment decision when choosing to take a business aviation flight,” Geere explains. “Subsequently, business aviation passengers are more likely to pay a premium to use SAF to reduce their overall flight emissions when compared with the commercial aviation segment.”
To accelerate the uptake of SAF the whole industry needs to come together, and airports certainly have an important role to play. By making SAF more readily available, whether through investment in related infrastructure or incentivising its use, airports can help to create the demand conditions needed to increase supply and reduce the costs of SAF further.”
Chief Executive Officer
As current trends indicate will happen once again, over the long term, air traffic recovers from shock events and returns to its previous growth level.
Over the medium to long term, continued global interconnectivity and increasing economic expansion will lead to further air traffic demand, especially in emerging economies.
The ability of airports to adapt to this long-term trend, remain resilient in the face of future shocks, and play a central role in economic development will require them to enhance their capacity and become diversified businesses with sources of income that extend beyond the charges levied on the airlines and passengers.