© Dr. John D. Kasarda, 2014, UNC Kenan Institute John D. Kasarda, Director Center for Air Commerce Kenan-Flagler Business School University of North Carolina

© Dr. John D. Kasarda, 2014, UNC Kenan Institute

John D. Kasarda, DirectorCenter for Air Commerce

Kenan-Flagler Business SchoolUniversity of North Carolina – Chapel Hill

www.aerotropolis.com

The Aerotropolis Development Strategy

Global Airport Leaders Forum

Dubai, UAE

May 12, 2014


What is an Aerotropolis?

An aerotropolis can be defined as a …

“a multimodal freight and passenger transportation complex which supports efficient, cost-effective, sustainable development in a defined region of economic significance centered around a major airport.” United States Congress H.R.658: Aerotropolis Act of 2011

But it is more than a transport complex: It is a strategy...

That is, an aerotropolis is a constellation of physical, institutional, economic and policy interventions which upgrade airport infrastructure and facilities, reduce connecting ground-based transport times and costs, and expand air route connectivity to (1) improve operational efficiencies of the airport and metropolitan region and (2) leverage aviation-enabled trade in goods and services.


The Aerotropolis Model

• Primary objective: Enhancing airport, business, and regional competitiveness through improved multi-modal airport surface transportation access and planned, coordinated aviation-linked commercial development, making the airport and its surrounding areas more economically efficient, attractive, and sustainable.

• Key value proposition: Offers businesses located near or with good transport access to the airport with speedy connectivity to their suppliers, customers, and enterprise partners, nationally and worldwide.

• Contains the full set of cargo, logistics, and commercial facilities that support airlines and aviation-linked businesses as well as air travelers.

• An Airport City developed on and immediately around the airport serves as the multimodal, multi-functional commercial core of the Aerotropolis anchoring aviation-enabled trade in goods and services, driving them throughout the broader airport region.

• Represents the Fifth Wave


Airports: Creating The Fifth Wave of Transit-Oriented Development

First Wave: Seaports

Second Wave: River & Canal-Based Development

Third Wave: Railroads

Fourth Wave: Highways

Fifth Wave: Airports

Transportation Infrastructure Has Always Shaped Business Location, Commercial Activity, and Urban Development

Century

21st

20th

19th

18th

17th


Basic Drivers of the FIFTH WAVE

• Large jet aircraft (along with IT advances)

• Globalization (producers & consumers)

• Speed (time-based competition)

• Agility (customization & flexible response)

• Connectivity (worldwide enterprise networks)

• Perishability (pharma, fish, flowers, fashions)

• Tourism (especially international)See: John D. Kasarda and Greg Lindsay Aerotropolis: The Way We’ll Live Next (2011)


Tourist Arrivals by World Region

Source: Tourism 2020 Vision, World Tourism Organization, http://www.unwto.org/facts/eng/vision.htm

http://www.unwto.org/facts/eng/vision.htm


Global Air Transport, 1945-2013

Source: Airlines for America (A4A)

19451947

19491951

19531955

19571959

19611963

19651967

19691971

19731975

19771979

19811983

19851987

19891991

19931995

19971999

20012003

20052007

20092011

20130

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

4,000,000

4,500,000

5,000,000

5,500,000

6,000,000

0

15,000

30,000

45,000

60,000

75,000

90,000

105,000

120,000

135,000

150,000

165,000

180,000

195,000

210,000Revenue Cargo Ton Kilometers

Revenue Passenger Kilometers

(Mill

ions

)


The Coming Two Decades

• Between 2013 and 2032, world-wide commercial passenger traffic will likely increase from 5.4 billion to approximately 14 billion (nearly 40 million pax/day) Asia/Middle East fastest growing

• In the same period (2013 to 2032), world air cargo traffic is expected to nearly triple (Asia/Middle East also fastest growing)

• Between 2013 to 2032 commercial aircraft in service will rise from 20,310 to 41,240

• During this period (2013-2032) 35,280 new commercial aircraft will come into service with a new market value of US$4.8 trillion

Source: IATA & Airports Council International (2013, Boeing Current Market Outlook 2013-2032)


The 21st Century Economy is becoming an Aviation-Based Economy

• Air logistics and the new economy are inextricably interwoven

• Tuna, orchids, medications, iPhones, aerospace components all go by air

• Over one-third of the value of world trade already moves by air (versus just 1% by weight); even higher for business services exports and tourism

• Almost all high-tech global supply chains and business services exports are connected by aviation (the physical Internet)

Source: John D. Kasarda and Greg Lindsay, Aerotropolis: The Way We’ll Live Next (2011)

Proprietary and Confidential


Global Supply Chain – Apple iPhone 5


Source: Airline Route Mapper and UNC Kenan Institute

©2009 Jpatokal, Creative Commons, Wikimedia.org

Aviation’s Global Physical Internet(59,036 Routes in 2012)


Airport Roles in the Physical Internet

• Routers of aviation’s Physical Internet

• Interfaces of the global meeting the local in people, product, and advanced service movements

• Business magnets

• Regional economic catalysts


As the Routers of the Physical Internet, Airports Have Become Business Magnets and

Regional Economic Catalysts by

• Providing accessibility, speed and agility to global supply chains and perishables

• Connecting a region’s businesses to their customers and enterprise partners worldwide

• Attracting tourists and serving commercial needs of millions of air passengers and airport-area visitors annually

• Creating Airport Cities and the greater Aerotropolis

© Dr. John D. Kasarda, 2014, UNC Kenan Institute© Dr. John D. Kasarda, 2014 , UNC Kenan Institute

Airport Cities andThe Aerotropolis

New Airport-Centered Urban Forms Are Evolving


Rise of the Airport City

• Airports today: much more than aviation infrastructures

• They are multimodal, multifunctional enterprises generating considerable commercial development within and well beyond their boundaries

• All commercial functions of a modern metropolitan center are locating on and immediately around major airport sites – transforming them from “city airports” to “airport cities”


The Airport City

• Airside

– Shopping mall concepts merged into passenger terminals

· Retail (including streetscapes & upscale boutiques)

· Restaurants (increasingly higher-end and themed)

· Leisure (spas, fitness, recreation, cinemas, etc…)

· Culture (museums, regional art, musicians, prayer)

– Logistics and Air Cargo

• Landside

– Hotels and entertainment

– Office & retail complexes

– Convention & exhibition centers

– Free trade zones & SEZ’s

– Time-sensitive goods processing


Airport City’s Business Impact

1• Daily consumer population at major airports is larger than

that of many mid-sized cities, and with higher incomes

2• Numerous airports achieve greater percentage of revenues

from non-aeronautical sources than aeronautical sources

3

• Rapid commercial development around many major airports makes them leading urban growth generators, as airport areas become significant employment, shopping, trading and business destinations in their own right

4

• Airport area develops a “brand image” attracting even non-aviation linked businesses such as factory outlets & big box retail


The Rise of the Aerotropolis

Spines, nodes, and clusters of aviation-linked business and residential complexes are forming along airport transportation corridors up to 30 km from some airports with significant economic impact measured up to 90 km.

• Office buildings and technology parks

• Logistics and distribution centers

• Industrial estates and light manufacturing

• Retail centers and wholesale merchandise marts

• Information and communications technology complexes

• Bioscience and medical facilities

• Higher education campuses

• Hotel, convention, tourism and entertainment complexes

• Large mixed-use residential developments

• Airport “Edge Cities” (e.g., Amsterdam, Zuidas; Las Colinas, Texas; New Songdo IBD)

Just as you have Central Cities and the greater Metropolis, you now have Airport Cities and the greater Aerotropolis.


Aerotropolis Schematic with Airport City Core(Compressed Version)


Airport City/Aerotropolis Spatial Development Paths

• From the airport out

• From the city out

• Along the main access corridor

Washington Dulles Airport

Washington DC


Illustrations of Airport City & Aerotropolis Commercial Components


Civic Plaza: Indianapolis Terminal(21st Century Central Square)


Hotel & Meeting: Dallas-Ft. Worth Grand Hyatt(21st Century Virtual Corporate Headquarters)


Frankfurt Airport’s “The Squaire”(21st Century Multimodal Office Hub)

Airrail Center is now “The Squaire” – photo courtesy of http://www.thesquaire.com/en/

http://www.thesquaire.com/en/


Helsinki Airport Technopolis


Paris Charles de Gaulle(Roissypole: CDG’s Airport City)


Amsterdam Schiphol Airport City


Taiwan Taoyuan Airport Farglory FTZ Complex


Non-Aviation Based Airport Retail(Factory Outlets and Big Boxes)

Athens International Airport

Brisbane Airport


Washington Dulles Aerotropolis Corridor(Strings & Clusters of ICT & Consulting Firms)


Dulles Access Highway CorridorLooking West from Fairfax County Parkway

(Washington Dulles International Airport in background at top)

© 2007 Metropolitan Washington Airports Authority, Photo by Eric Taylor

Photo courtesy of Metropolitan Washington Airports Authority

1962 2007


New Songdo, Airport Edge City Near Incheon International Airport


Dubai World Central (Major Planned Aerotropolis)


Airport City, in Brief Summary

• An Airport City is most intensively used portion of an Aerotropolis, heavily leveraged by the passenger and cargo terminals of an airport

• A physical manifestation of the “airport economy” including:

– Real estate development for travelers (Terminal retail inside and outside the security zone)

– Real estate development for those providing air transport services (Airlines, freight forwarders, …)

– Real estate development for those who are intensive users of air transport services (Hotels, offices, logistics parks, …)

– Real estate development for those not intensively involved in aviation (Big-box retail, factory outlets)

• Airport cities are increasingly planned– Are architecturally designed and themed

– Governed to maximize benefit to users, investors, and region

– Supported by an appropriate business model to be profitable


The Aerotropolis, in Brief Summary

• Spatial and Functional: An airport city core surrounded by an extended airport-integrated economic region made up of transportation and commercial infrastructure which facilitates aviation-enabled trade in goods and services, including:

– Goods shipped by air– Goods shipped by surface or sea but whose sale is facilitated by air travel– Services:

• Tourism• Business services which depend on air travel

• Connectivity = Competitiveness:

– The Aerotropolis efficiently connects its businesses to markets near and far

– Improved surface transportation connects firms more efficiently to airport area and broader regional markets

– Expanded air routes provide quick and efficient connectivity to international markets

• The fastest, best connected places will win in the 21st century.

• This is the Aerotropolis strategy.


The 21st Century Airport,

Airport City, and Aerotropolis

Planning for a Competitive Future

Leveraging Speed and Connectivity for Commercial Advantage

http://www.youtube.com/watch?v=Oy3OSm1w-jY&list=UUg8Z9jCCBIE2-EF80jeLC9A&index=7&feature=plcp

Documents

© Dr. John D. Kasarda, 2014, UNC Kenan Institute John D. Kasarda, Director Center for Air Commerce Kenan-Flagler Business School University of North Carolina