Ben Hargreaves, National Manager - Aviation, REHBEIN Airport Consulting delivered this presentation at Airport Development 2010 a conference hosted by Asia Pacific Aviation Business Magazine and Informa.

1. Under Promise and Over Deliver 1
PuttingThird-TierAirportstoWork
Putting Third-tier
Airports to Work
Ben Hargreaves
2 June 2010
PuttingThird-TierAirportstoWork
Introduction
The nature of lower-volume traffic
‘Airport City’ concepts
External resources & relationships
Viability & sustainability
Conclusions: Critical success factors
Topics

2. Under Promise and Over Deliver 2
PuttingThird-TierAirportstoWork Introduction
What is a 3rd-tier airport?
0
5,000,000
10,000,000
15,000,000
20,000,000
25,000,000
30,000,000
35,000,000
SYD
MEL
BNE
PER
ADL
OOL
CNS
CBR
HBA
DRW
TSV
NTL
LST
MKY
MCY
ROK
ASP
1st-Tier
Source: BITRE
PuttingThird-TierAirportstoWork
Introduction
What is a 3rd-tier airport?
0
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
7,000,000
8,000,000
9,000,000
10,000,000
ADL
OOL
CNS
CBR
HBA
DRW
TSV
NTL
LST
MKY
MCY
ROK
ASP
KTA
1st-Tier
2nd-Tier
Source: BITRE

3. Under Promise and Over Deliver 3
PuttingThird-TierAirportstoWork
0
100,000
200,000
300,000
400,000
500,000
600,000 ASP
HTI
BNK
AYQ
KGI
WGA
HVB
PQQ
ZNE
DBO
PBO
EMD
BDB
GET
ARM
OLP
WAY
TIS
WEI
GFF
MIM
ALH
LEA
RVT
LDH
PKE
MRZ
DRB
CVQ
TRO
GFN
FLS
BRT
MEB
NRA
MNG
PTJ
CPD
BLT
MOV
Introduction
What is a 3rd-tier airport?
2nd -Tier
3rd-Tier
Source: BITRE
PuttingThird-TierAirportstoWork
Analysing the Nature of
Lower Volume Traffic

4. Under Promise and Over Deliver 4
PuttingThird-TierAirportstoWork
0
100,000
200,000
300,000
400,000
500,000
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14
Average Daily Return Services
AnnualPax('000s)
Lower Volume Traffic
Volume vs Frequency
36-seat
19-seat
50-seat
74-seat
78-seat
104-seat
180-seat
144-seat
PuttingThird-TierAirportstoWork
Lower Volume Traffic
To minimise unit costs, keep flow constant
High business travel demand
Multiple routes
Minimum competition
Airline schedules dictate unit cost
Pax characteristics only minor influence
Costs

5. Under Promise and Over Deliver 5
PuttingThird-TierAirportstoWork Lower Volume Traffic
Yield
COSTSREVENUE
YIELD
-
PuttingThird-TierAirportstoWork
Lower Volume Traffic
Yield
The fundamental measure of viability
Key question: Is it acceptable?
To maximise yield, understand
drivers of cost and revenues

6. Under Promise and Over Deliver 6
PuttingThird-TierAirportstoWork Lower Volume Traffic
Pax characteristics dictate potential
Commercial offer dictates realisation
Understand your passengers!
‘Speak’ to them
Speak to people who know them
Airlines
Concession operators
Revenue
PuttingThird-TierAirportstoWork
Adapting Airport City Concepts
to the ‘Village’ Airport

7. Under Promise and Over Deliver 7
PuttingThird-TierAirportstoWork Airport City Concepts
What is an Airport City?
PuttingThird-TierAirportstoWork
Airport City Concepts
Mix of aviation and non-aviation activity
Activities derive value from airport location
Non-aviation uses do not compromise
future aviation growth
Links with & enhances regional economy
Planned & coordinated to leverage synergies
What is an Airport City?

8. Under Promise and Over Deliver 8
PuttingThird-TierAirportstoWork Airport City Concepts
Planning your Airport City
Consider Regional Economic Drivers
Consider Stakeholders
Inventory Existing Activities
Identify Opportunities
Map Relationships
PuttingThird-TierAirportstoWork
Airport City Concepts
Planning your Airport City
Aircraft
Maintenance
E.M.S. / Disability
Bachelor
Aviation Studies
Waste
Management
Alternative
Energy
Food & Beverage
Manufacture
Catering
Auto
Maintenance
L.A.M.E.
Training/
Apprenticeships
Educational
Campus
TAFE/CSU
Packaging
Manufacture
Careers Advice/
Showcase
Logistics &
Distribution
Supply
Chain
Car Rental
Detailing
Wash
Facilities
Biofuels
Light
Engineering
Electro-
Technology
Simulator
Manufacture &
Mtce
Serviced
Offices
Parking
Service
Retail
Residential
Suburb
ICT ‘Virtual
Business’
Regional
Showcase /
Interpretive
Centre
Convention/
Meeting Facilties
Airline Pax
Regional
Transport Hub
Airport
Operations
Training
Rail
Training
Commercial
Flying Training
Military Flying
Training
Training for
Trainers

9. Under Promise and Over Deliver 9
PuttingThird-TierAirportstoWork Airport City Concepts
Planning your Airport City
Consider Regional Economic Drivers
Consider Stakeholders
Inventory Existing Activities
Identify Opportunities
Map Relationships
Allocate Precincts
VISIONING
PuttingThird-TierAirportstoWork
Airport City Concepts
Be flexible
Things may not turn out as planned
Opportunities will evolve
Have a master plan
Consider holistically to maximise synergies
Fundamental to strategic objectives
Other Considerations

10. Under Promise and Over Deliver 10
PuttingThird-TierAirportstoWork
Putting External Resources &
Relationships into Place
PuttingThird-TierAirportstoWork
Relationships
Integrated planning
Council-run airports have unique advantage
Work hard to develop relationship
Strategic Plan
Key tool for discussion and alignment
Essentials

11. Under Promise and Over Deliver 11
PuttingThird-TierAirportstoWork Relationships
Start with existing relationships
Develop a marketing strategy
Consider partnering
Don’t lose sight of the big picture
Review overall plan frequently
Implementation
PuttingThird-TierAirportstoWork
Viability and Sustainability:
Servicing the Community

12. Under Promise and Over Deliver 12
PuttingThird-TierAirportstoWork Viability
Yes:
Terminal concessions
Other dependent external activities
Connectivity
No:
Neither sufficient nor essential for success
Other factors are equally critical
Does pax traffic matter?
PuttingThird-TierAirportstoWork
A
Viability
Case Studies
B
Existing on-airport businesses
Adjacent development
Clear regional economic plan
Available land
Integrated strategic planning
Pre-existing linkages
X
X
X
X
X
X

13. Under Promise and Over Deliver 13
PuttingThird-TierAirportstoWork Conclusion
Understanding of:
Traffic Characteristics
Cost and Revenue Drivers
Pay Attention to Yield
Thorough Visioning
Strategic Master Plan
Solid Stakeholder Relationships
Critical Success Factors
PuttingThird-TierAirportstoWork
Thank you
T: 07 3250 9000
E: ben.h@lar.net.au
M: 0413 316908