Programme
ACI 11TH ANNUAL AIRPORT ECONOMICS & FINANCE CONFERENCE PROGRAMME
Wednesday, 13 and Thursday, 14 March 2019 – 09.00–17.30
PARADIGM SHIFTS IN INFRASTRUCTURE DEVELOPMENT AND THE AIRPORT BUSINESS
Ever evolving aviation market dynamics, changing consumer habits, and digitalisation are increasing competitive pressures upon airports. At the same time, passenger traffic numbers are soaring year-after-year, and many airports find themselves in a quandary where existing infrastructure is insufficient to meet current and projected demand. In the past year, global markets have been unsettled, with a decade of easy monetary policy and low interest rates ending. Weakening confidence in emerging markets is leading investors to de-risk with asset flows back into safer markets.
Competitive pressures, huge investment requirements and changing economic conditions: these trends have far-reaching implications for economic regulation, airport slot allocation, commercial revenues generation, route development, concessions and infrastructure financing. This year’s conference will explore how to navigate these challenges under the theme “Paradigm shifts in infrastructure development and the airport business.”
Day 1
Wednesday 13 Mar 2019
Day 2
Thursday 14 Mar 2019
08:00 - 09:00
REFRESHMENTS ON ARRIVAL IN THE EXHIBITION
09:00 - 10:30
WELCOME AND KEYNOTE ADDRESSES
Chair: Kata Cserep, Vice President, Airports, ICF
Angela Gittens, Director General, ACI World
Olivier Jankovec, Director General, ACI EUROPE
Patti Chau, Regional Director, ACI Asia-Pacific
Angela Gittens, Director General, ACI World
Olivier Jankovec, Director General, ACI EUROPE
Patti Chau, Regional Director, ACI Asia-Pacific
10:30 - 11:00
NETWORKING REFRESHMENT BREAK IN THE EXHIBITION
11:00 - 12:15
SESSION ONE: ECONOMIC REGULATION IN THE ERA OF AIRLINE CONSOLIDATION AND AIRPORT COMPETITION (PANEL DISCUSSION)
Airport economic regulation around the world is under review. The European Union is assessing the Airport Charges Directive, and Australia’s Productivity Commission is conducting an inquiry of the economic regulation of airports, and both plan to issue reports later this year. These reviews are being pushed stakeholders, but they also come at a moment when it may be appropriate to look at the strategic shift of aviation and consider the relevance of historical reflexes for regulation.
Changing airline business models have induced new efficiencies and reduced transport costs for passengers, but continued airline consolidation may reverse this trend. Airline groups and global co-operation between airlines, in conjunction with a new generation aircraft, have opened up markets. Airports are competing in a much wider market for airlines, routes and passengers.
These trends and the development of aviation raise the question as to whether there is a need for heavy handed regulation on airport’s aeronautical services. Are market-based solutions such as long-term contracts and bilateral agreements between airports and airlines the most efficient and cost-effective apparatus for certain markets? How can airport operators break even on aeronautical revenues in an era of airline consolidation and airport competition?
Chair: John Strickland, Director, JLS Consulting
Panelists:
Rafael Scherre, Gerente Economic Regulation, ANAC Brazil
Thierry Ligonnière, Director, ANA Aeroportos de Portugal
Changing airline business models have induced new efficiencies and reduced transport costs for passengers, but continued airline consolidation may reverse this trend. Airline groups and global co-operation between airlines, in conjunction with a new generation aircraft, have opened up markets. Airports are competing in a much wider market for airlines, routes and passengers.
These trends and the development of aviation raise the question as to whether there is a need for heavy handed regulation on airport’s aeronautical services. Are market-based solutions such as long-term contracts and bilateral agreements between airports and airlines the most efficient and cost-effective apparatus for certain markets? How can airport operators break even on aeronautical revenues in an era of airline consolidation and airport competition?
Chair: John Strickland, Director, JLS Consulting
Panelists:
Rafael Scherre, Gerente Economic Regulation, ANAC Brazil
Thierry Ligonnière, Director, ANA Aeroportos de Portugal
12:15 - 12:30
POLLING SESSION
Chair: Charles Schlumberger, Lead Air Transport Specialist, The World Bank
12:30 - 12:45
LIVE INTERVIEW: EXPORTING EXPERTISE – PUBLIC AIRPORT OPERATORS ACTING AS PRIVATE AGENTS
Interviewer: Wareed Youssef, Director, Strategy and Privatization, KPI AMS
Raja Azmi Raja Nazuddin, Chief Executive Officer, Malaysia Airports
Raja Azmi Raja Nazuddin, Chief Executive Officer, Malaysia Airports
12:45 - 13:45
NETWORKING LUNCH IN THE EXHIBITION
13:45 - 15:00
SESSION TWO: THE CHANGING DYNAMICS OF AIRPORT COMMERCIAL REVENUES (PANEL DISCUSSION)
As air travel continues to extend its reach to the world’s populations through affordable choices and variety in destinations, the demographic composition of the world is changing. Whereas many advanced economies continue to experience an ageing population, major emerging markets have also observed an expansion in their working age populations which has contributed to a burgeoning middle class. The demographic shift occurring in many countries coupled with the exponential rise in mobile telephony penetration rates has huge implications on airports’ commercial activities and the bottom line. There is no doubt that, along with disruptive technologies such as easy and ubiquitous access to online retail and e-commerce platforms, increased retail competition outside the purview of the airport has limited the growth prospects for airports’ non-aeronautical revenues. The traditional brick and mortar retail and duty-free stores have lost some of their exclusivity in certain markets.
In an effort to better understand the traveling passenger at the world’s airports, how can we capture and model their tastes and preferences across these changing markets? What are some of the opportunities or challenges that lay ahead for the commercial business and duty free as a result of these changes?
Chair: Elias Liolios, Senior Manager Commercial & Business Development, Hermes Airports
Panelists:
Eugenio Andrades, CEO for Operations and Strategy, Dufry
Andrew Perrier, Managing Director, Magwif
Kian Gould, Founder and Chief Executive, AOE
In an effort to better understand the traveling passenger at the world’s airports, how can we capture and model their tastes and preferences across these changing markets? What are some of the opportunities or challenges that lay ahead for the commercial business and duty free as a result of these changes?
Chair: Elias Liolios, Senior Manager Commercial & Business Development, Hermes Airports
Panelists:
Eugenio Andrades, CEO for Operations and Strategy, Dufry
Andrew Perrier, Managing Director, Magwif
Kian Gould, Founder and Chief Executive, AOE
15:30 - 16:00
NETWORKING REFRESHMENT BREAK IN THE EXHIBITION
16:00 - 17:15
SESSION THREE: ROADMAPS TO MANAGE SCARCE CAPACITY – THE ECONOMICS AND POLITICS OF SLOTS (PANEL DISCUSSION)
Many airports find themselves in a predicament where a surge in air transport demand is outstripping the infrastructure available to accommodate growing markets. However, when existing airport infrastructure is not used to its optimal capacity, the resultant allocation of resources will be inefficient, generating delays, weakening connectivity and reducing the quality of service for aviation stakeholders. However, many airport operators have very little say in how slots are allocated.
What are the challenges and pitfalls of the current global slot allocation regimes and guidelines, on both a regional and global level? How can aviation stakeholders work together to overcome some of these capacity challenges in the interest of the traveling public? From a pure economic perspective, what is the best approach to allocating slots over the short and long term?
Chair: Mattias Finger, Swiss Port Chair in Management of Network Industries, EPFL
Panelists:
Eric Herbane, Managing Director, COHOR
Gunter Heinrich, Head of Flight Schedule Management, Traffic & Terminal Management, Fraport Andrew Charlton, Managing Director, Aviation Advocacy
What are the challenges and pitfalls of the current global slot allocation regimes and guidelines, on both a regional and global level? How can aviation stakeholders work together to overcome some of these capacity challenges in the interest of the traveling public? From a pure economic perspective, what is the best approach to allocating slots over the short and long term?
Chair: Mattias Finger, Swiss Port Chair in Management of Network Industries, EPFL
Panelists:
Eric Herbane, Managing Director, COHOR
Gunter Heinrich, Head of Flight Schedule Management, Traffic & Terminal Management, Fraport Andrew Charlton, Managing Director, Aviation Advocacy
19:30 - 22:30
08:30 - 09:00
REFRESHMENTS ON ARRIVAL IN THE EXHIBITION
09:00 - 09:15
WELCOME FROM THE CHAIR
Chair: Kata Cserep, Vice President Airport, ICF
09:15 - 10:30
SESSION FOUR: COMPETING FOR PASSENGERS – ROUTE DEVELOPMENT AND INCENTIVES (PANEL DISCUSSION)
Over the last 20 years, Air Service Development has become an integral module of every airport’s business development strategy. At the same time, it has evolved from a simple sales pitch to a dynamic and complex process with airports going beyond just attracting airlines or adding new destinations. Airports have crafted a great array of support programmes aiming at persuading airlines to select them and gain a competitive advantage over their peers. Incentive packages have become widely used throughout the industry as part of air service development strategy to share with airlines part of the risk of a new route or an additional frequency.
What should therefore a successful Air Service Development include? What are some of the tools, incentive schemes and marketing activities in place that allow airports ‘win’ new routes and increase passenger traffic? Besides the upside gains, what are some of the risks and unforeseen pitfalls that could occur when instituting an incentives or a marketing support programme? How should airport operators position themselves vis-à-vis tourism authorities.
Chair: George Karamanos, Managing Director, KPI Aviation Marketing Solutions
Panelists:
Marina Papatsoni, Marketing Director, TEMES
What should therefore a successful Air Service Development include? What are some of the tools, incentive schemes and marketing activities in place that allow airports ‘win’ new routes and increase passenger traffic? Besides the upside gains, what are some of the risks and unforeseen pitfalls that could occur when instituting an incentives or a marketing support programme? How should airport operators position themselves vis-à-vis tourism authorities.
Chair: George Karamanos, Managing Director, KPI Aviation Marketing Solutions
Panelists:
Marina Papatsoni, Marketing Director, TEMES
10:30 - 10:45
LIVE INTERVIEW – ZURICH AIRPORT STRATEGY OF INVESTING ABROAD
Daniel Bircher, Chief Executive Officer, Zurich Airport Asia
10:45 - 11:15
NETWORKING REFRESHMENT BREAK IN THE EXHIBITION
11:15 - 12:30
SESSION FIVE: RISKY BUSINESS – CRAFTING THE CONCESSION AGREEMENT IN FOREIGN LANDS
Approaches to Public-Private-Partnerships and privatization models used depends both on government objectives and the requirements of the private operator/investor(s) the government hopes to attract. A balance needs to exist between transferring the risk of financing large capital expenditures from governments and taxpayers to private sector investors, on one hand; and private sector requirements to recover the costs of operating airports and generate risk proportionate returns on investment, on the other. An inherent traffic risk exists in the airport business. This must be factored in when considering and designing privatization and regulatory frameworks. In some cases, the airport economic regulatory framework is unclear, or is amended unexpectedly after privatization occurs. This creates uncertainty for investors and is an additional barrier to financing infrastructure sustainably.
How are risks assessed when investing in the airport sector? As many airport infrastructure investments are over long-time horizons with huge immediate outlays, have airport projects adequately captured and priced the risk accordingly? What incentives should governments ensure are in place to adequately strike a balance between national objectives and investor requirements?
Gonzalo Velasco, Portfolio Management Director, Ferrovial
Simon Morris, Vice President, Airport Advisory, ICF
Sidharath Kapur, Executive Director and Member of the Board, GMR Airports
How are risks assessed when investing in the airport sector? As many airport infrastructure investments are over long-time horizons with huge immediate outlays, have airport projects adequately captured and priced the risk accordingly? What incentives should governments ensure are in place to adequately strike a balance between national objectives and investor requirements?
Gonzalo Velasco, Portfolio Management Director, Ferrovial
Simon Morris, Vice President, Airport Advisory, ICF
Sidharath Kapur, Executive Director and Member of the Board, GMR Airports
12:30 - 12:45
CLOSING REMARKS
Chair: Kata Cserep, Principal Airports Practice, ICF
12:45 - 13:45