Asia Pacific: Business as Usual

Randy Pizzi, Vice President and Managing Director of ARINC’s Asia Pacific Division, provides a commentary on Airport IT adoption during the economic downturn.
The aviation landscape continues to be gloomy with airlines set to lose approximately US$ 11 Billion by 2009 (according to IATA).  The impact of these losses has been felt with airlines reducing or terminating routes, and passengers opting to fly via budget carriers or worse, not at all.  However, the airport landscape, which works in tandem with the airline industry, has yet to experience such distressing circumstances.  Not, at least, significantly from an IT adoption standpoint.
The reasons differ from an engineering and commercial standpoint.  First, the economic crisis has not deterred Asian governments from building airports or new terminals to accommodate the large influx of passengers.  Dedicated LCC Terminals are also being built to cater for a new segment of air travellers.  While airlines have acted conservatively during this period, airport operators have been more upbeat.  In other words, they are still actively continuing in their pursuit to prepare for the economic upturn.
In terms of airport development, New Delhi’s ultra-modern Terminal 3 building is nearing completion, and will be ready for the 2010 Commonwealth Games.  Bali’s Ngurah Rai International Airport, which handles 60% of Indonesia’s tourist arrivals, will have a new international terminal.  The phenomenal success of the low-cost carrier model in Malaysia has prompted its operator to build a new Low Cost terminal by 2011 that will cater for a staggering 45 million budget passengers a year.  The list is seemingly endless, with regular news of airport and terminal construction occurring from around the region.
The consequence of this will be that airport operators will continue adopting the latest technologies to provide the best passenger processing and security services and this is surely a ‘win-win’ situation for operators, airlines and passengers alike.
Second, we note that the convergence of both the airlines and airports via IT will be the catalyst for cooperation.  If trends suggest that airlines are moving towards self-service passenger processing kiosks or mobile technologies, it would require airports and ground handlers to work together to complement the airlines’ requirements.  This would call for investment budgets by airport operators to proceed with this.
Third, the economic downturn has not stopped airport operators from corporatisation, strategic partnerships and possible public listings.  While airlines continue to report dismal numbers and forecasts, airports such as Changi Airport have upgraded and become a corporate entity to boost competitiveness.  It has also gone to seek alliances with the Beijing Capital International Airport, which successfully handled the 2008 Olympic Games.  Airports Authority of India will also be seeking an IPO soon.  It would be a natural conclusion that operators would need to ensure its airports are equipped with the best facilities such as IT infrastructure to make it more enticing to investors or partners.
Lastly, Asia is home to several major air hubs such as Beijing, Hong Kong, Singapore and Tokyo.  Successful levels of passenger connectivity can only be accomplished by regular adoption of new IT solutions.  It would be disadvantageous for them to fail on this count, given that other Asian airports are upgrading to compete for airline and passenger dollars.
In conclusion, Asia Pacific airports have adopted a “business as usual” stance on IT despite the current economic downturn.  This is a good sign that operators have taken a more futuristic view of the business, and are pursuing ahead to become more competitive and user friendly.  We can safely state that IT adoption will help them achieve both.