The aviation industry has experienced significant change over the last twenty years. The rise of low cost airlines, coupled with innovations in aircraft such as the Boeing A380 have required airports to constantly adapt and invest. Having invested more than A$4.3billion since 2002, how will Sydney Airport continue to adapt to new challenges, including anticipated growth in passengers and freight, enhanced sustainability obligations and new technologies?
As globalisation has enhanced the role of cities, airports have become critical to local and national economies. In 2017, Sydney Airport hosted more than 43.3 million passenger movements, which is around a quarter of the nation’s total.1 The quality and efficiency of Sydney Airport will help shape Sydney as a global city.
Planning for the future of such an important piece of Australia’s national economic infrastructure is critically important and Sydney Airport’s regulations require development of a 20-year Master Plan to establish the strategic direction for efficient and economic development at the airport over the period of the plan and to reduce potential conflicts between uses of the airport site.
Sydney Airport adopts a ‘total system’ approach Planning for a 20-year horizon requires extensive consultation and collaboration to understand the potential factors that might impact on the internal and external environment. This is made more challenging by the susceptibility of the aviation sector to global volatility including the security climate and economic factors such as exchange rates and oil prices.
An extensive and iterative stakeholder consultation process is undertaken with a range of parties including Government agencies, airlines and other industry stakeholders to carefully map out the ensuing 20-year period. Consultations with airlines are particularly important. The decisions that airlines make about their own aircraft investments and routes impact on the airport.
Consultations for Sydney Airport’s current Preliminary Draft Master Plan 2039 focused on forecasts of passenger demand, aircraft types, seating densities, load factors, frequencies, peak and off-peak operations, turnaround times and freight volumes. Reflecting airline focus on load factors and introduction of larger aircraft it is expected that passengers per aircraft will increase by approximately 24 percent over the next 22 years.
A key trend that emerged as a result of Sydney Airport’s consultation was that the most significant market for growth will be international travellers, with international passenger numbers likely to almost double from 15.9 million in 2017 to 31.5 million in 2039.2 This reflects the opening of a new airport in the Sydney basin during the planning period, which is expected to attract some domestic capacity. It is also a reflection of Sydney Airport’s proximity to Asia and increases in global tourism and travel are expected to drive international travel. In particular, growth is expected in major Asian markets, including China, India, South Korea and Vietnam. Total air passenger numbers are estimated to increase by 51 percent from 43.3 million in 2017 to 65.6 million in 2039.3
Delivering on the strategic direction having outlined its strategic direction, Sydney Airport must then develop a plan for how its proposals for growth and expansion will be delivered.
Core to this, is that Sydney Airport sees itself as essentially a service provider to the entire airport community. By taking a ‘total system’ approach there is an assurance that each interrelated system associated with airport infrastructure operates as cohesively and effectively as possible. Sydney Airport management understands that there are often conflicting demands and seeks to treat passengers of all airlines in all terminals as its customers, with the objective of ensuring the safest, most secure and positive passenger experience through every step of their journey.
Integral to this is how airports engage with their stakeholders. An example of this is the success of the Australian airport first, Aeronautical Services Agreement (ASA), negotiated between the airlines and Sydney Airport. This ASA committed to developing a service level framework that includes a set of customer-focused KPIs aimed at improving the quality and efficiency of operations to support the success of airline partners and the passenger experience.
Sydney Airport collaborates with the airlines to ensure their business needs are prioritised; measurement parameters are set up and reporting mechanisms are established. The key performance indicators (KPIs) track service outcomes related to enhancing passenger experience, improving operational outcomes and streamlining facilitation.
In addition, Sydney Airport publishes key service related metrics publicly. Doing so helps to ensure continued improvements and facilitates a relationship of trust between Sydney Airport, its business partners and passengers. By listening to what drives overall satisfaction for passengers and using these insights to inform and prioritise investment decisions, there has been a year on year improvement in not just overall satisfaction but they key drivers of overall satisfaction.
In planning for the next 20 years, Sydney Airport will work with its airline customers to agree its ‘next generation’ Aeronautical Services Agreement which is expected to refine and further embed an outcomes-focussed approach that will drive the best outcomes for passengers.
Sydney Airport is also building on the efficiency of the asset through investment in technological innovations, upgrading its digital infrastructure, including undertaking a pilot of a biometric passenger identification system. Sydney Airport identified an opportunity to increase the efficiency, convenience and security of passenger processing. In June 2017, Sydney Airport approved funding for a world-leading biometrics pilot to further streamline and enhance the passenger airport experience.
In partnership with Qantas, Sydney Airport is trialling the first stages of this ‘couch-to-gate’ biometric technology solution with Qantas passengers. The process being tested enables passengers to complete automated check-in, bag drop, lounge access and boarding using biometric access identification. Following the initial test phase, Sydney Airport plans to expand the trial to include mobile check-in and is in consultation with the Federal Government to introduce automated border processing.
This investment in technology results in efficiency outcomes for Sydney Airport, its airline customers and other stakeholders, reducing costs and improving the overall passenger experience.
Monitoring Sydney Airport’s performance against metrics agreed with stakeholders has provided significant insight into its business. Armed with evidence of improving satisfaction scores across key measures of service quality, as well as improving outcomes in areas such as the check-in experience, new technology is helping to keep airport customers informed and in more control of their journey. Delivering road network improvements in partnership with the government and working with government to address a variety of the regulatory constraints will ensure Sydney can have a highly functional and coherent two airport system. This working partnership will increase in importance if stewardship standards are to be improved.
Armed with the knowledge that customer stewardship done well, is good for business and all stakeholders, Sydney Airport is focused on bringing a customer led approach to its business as it plans for its next 20 years of operations.