Shanghai Airport Authority Chairman of the Board of Directors Qin Yun set the scene for the event by memorably outlining the scale of the airport company’s ambitions.

“Driven by China's booming economic development, Shanghai's airports have entered into a golden era of development.” So said Shanghai Airport Authority Chairman of the Board of Directors Qin Yun, in welcoming guests to Trinity 2018.

“Combined passenger throughput at the two airports in Shanghai exceeded 88 million passengers during the first three quarters of this year, up by +5.7%. The annual throughput is expected to exceed 116 million.”

He said that volume was being mirrored by rising standards for the consumer experience too.

“Shanghai Pudong International Airport ranked fourth in Q2 service quality survey by Airports Council International, marking the ninth consecutive year in which the airport has made the top ten list. Shanghai Hongqiao International Airport also jumped to number ten."

Now the challenge is to build capacity for the future while continuing to improve service standards.

Qin Yun said: “The demand for air travel in the Shanghai area is expected to reach more than 200 million passengers by 2035, far exceeding the capacity of existing airport facilities.

“The new Terminal 1 at Shanghai Hongqiao International was completed in October this year. The stage three construction project of Shanghai Pudong International, whose main structure is the south satellite terminal, will be completed and operational next year. We are currently building on that to look into accelerating the planning and construction of the stage four project of Pudong, in an effort to expand capacity for future developments.”

The airports will also benefit from a passenger base that consumes in new ways, to which the industry must adapt, he added.

“Airport passengers generally show characteristics such as conspicuous buying inclinations, strong purchasing power, with an emphasis on quality and a focus on the environment.”

On the new wave of travellers, Qin Yun added: “Among passengers travelling through Shanghai's airports, people aged 20 to 40 account for around 70%. They are currently the mainstay of consumption in our society. Their consumption behaviour encompasses characteristics such as individualism, mobile interconnectivity, excessive consumption, a wide variety of purchasing options and high entertainment values.”

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On behalf of co-host ACI World, Director General Angela Gittens joined in Martin Moodie’s warm welcome to the 500+ delegates.

In a strong address that highlighted the ever-increasing importance of commercial revenues to airports worldwide, ACI World Director General Angela Gittens highlighted the strong growth rates in passenger traffic (+7.5% in 2017), with the outlook for air travel generally bright.

“The ACI World Airport Traffic Forecast 2018– 2040 tells us that aviation’s gravitational centre will continue to shift eastward. It is the emerging markets which will fuel the growth in passenger traffic and many of those markets are in the Asia Pacific region.”

ACI’s latest forecast report shows that traffic will double by the 2030s. “We are already in a quandary about where the money is going to come from to develop the infrastructure needed to accommodate that kind of growth.

“Our findings suggest that revenues from airport charges are insufficient to cover the capital costs. Consequently, there is a need to develop the commercial side of the airport business and use non-aeronautical activities to close the gap. As has been the case for years, non-aeronautical revenue makes up about 40% of total airport revenue.

“Worldwide, retail concessions remained the leading source of non-aeronautical revenue for airports, representing 29% of non-aeronautical revenue.

“For most airports, prioritising customer service results in the greatest positive impact on non-aeronautical revenue – it can potentially deliver an even greater return on investment than can be achieved through traffic increases or expansion of commercial space.

“Airports are vital economic generators for the local, regional and national communities that they serve so it’s important to them for us to get it right.”

The Moodie Davitt e-Zine | Issue 252 | 16 November 2018