April 30, 2015    6 minute read

Aerotropolis: Airport City

   April 30, 2015    6 minute read

Aerotropolis: Airport City

“The Stone Age didn’t end because we run out of stones”

This quote from the former Saudi Arabian Oil Minister, Sheik Ahmed Zaki Yamani, could be continued with the obvious;

“Similarly, the oil age will not end because we will run out of oil”

Indeed, the actions by Saudi Arabia, United Arab Emirates and Qatar all show a similar pattern of behaviour: focusing on creating and developing alternatives to the current main source of income for those countries. And one of such focuses is on airports. This is not only an example of superb long-term planning, as in 15 years airplanes will annually transport 15 billion people and almost half of all the goods in the world.

It is also an example of ruthless execution – Dubai International just topped Heathrow by the number of international passengers serviced annually. Last year over 70 million people used Dubai International, but this is less than half of what is expected by Al Maktoum currently being built South of Dubai, which is scheduled to be finished by 2027. With an impressive 160 million passengers annually, Al Maktoum Airport will be one of the biggest hubs of trade and transport in the world. But Al Maktoum will be a part of World Central Dubai, an immense project, involving industrial and logistical centers, office spaces and various service providers. It is safe to say this will be a prime example of an Aerotropolis – a city built around an airport. In stark contrast with current airports, in an Aerotropolis it is the city that is an organic and natural continuation of the airport.

Dubai International already contributes 27% of GDP to Dubai’s economy, and it is easy to see how simple economics work in favor of those solutions. Dubai is a concrete, physical representation of the way cities can adapt to the globalisation, where connectivity, mobility and competitiveness of businesses rest on the fast-cycle logistics. Local businesses rely on distant suppliers and customers, who want predictable and safe delivery of goods and services.

As John D. Kasandra, creator of the term “Aerotropolis” noticed, the “Fast Century” is increasingly becoming an “Aviation Century”, as companies use the incredible amounts of information available to them to acquire competitive advantage over rivals. For this, they need swift transfers all over the world. KPMG already, for example, set up offices next to the Frankfurt airport, to decrease time needed to reach the plane for its employees. The way Aerotropolises, and in this particular case Dubai reacted, adapting to this change, is a larger trend which becomes more and more visible today.

Dubai also possesses a wider geopolitical advantage: its position in the world allows to reach two thirds of the world’s population in up to 5 hours of flying time. Of course, for now not all of those people have demands in line with the businesses that use Dubai as a transportation hub, but as international institutions continue to succeed in lifting Africa from poverty, increased investments there can already be seen. Those foreign investments will generate growth, and with it demand for products and services, which will be delivered through Dubai and other Aerotropolises in the area. This vision encompassing detailed market analysis, long-term planning and efficient execution is perhaps something European politicians can learn from their Middle-Eastern counterparts.

“diversify or die”

The future holds uncertainty, as new competition enters the scene, and incumbents develop. Al Maktoum will compete with China’s Daxing Airport (located 50 km from Beijing), scheduled to be finished in 3 years, which will be able to host a staggering 200 million of passengers per year, and will be a record setter in the number of airstrips (9 in total). Europe plans building 5 new airports until 2030, and India just finished modifying its terminals in Bombay, Calcutta and Delhi. Qatar’s Doha also seems to be most important rival in the Middle East. But it is South Korea’s Incheon Airport and Singapore’s Changi Airport that take the top. Incheon garnishes over 2 billion USD in retail sales, and both airports are constantly ranked in the top 5 in the world. Changi is the winner for now, also as an airport that is so well organically built into the country.

However, newly built Aerotropolises have an advantage existing ones can’t easily counter – it is the extraordinary infrastructure available to them to quickly deliver passengers to the city. The highways, trains and other transportation links can be planned out and built without major delays, which seems harder to achieve for cities where the airport was incorporated organically, without major planning.

As to every idea, there is opposition. Skeptics underline that with the recent rise of terrorism and outbreaks of highly contagious diseases, air commerce and air passenger travel will take a hit in demand. But the speed and quality with which international organisations answered the recent Ebola outbreak, especially World Health Organisation, shows that it is in the interest of the international community and international business to halt the spread of this type of threat.

Secondly, it is widely argued that terrorism originates from economic downturn and dissatisfaction (the author is aware that this belief is criticised in academic literature, as is the inability to distinguish causation from correlation). At the same time while inter-state war has mostly ceased in our times (at least for now), the security agenda shifted to focusing on weak and failed states, such as Iraq and Afghanistan. The reach of terrorist organisations that can operate from there is limited, and their impact on the international world mostly depends on the emotions they evoke in people. If rationalism and economic progress can triumph the fear those terrorist organisations try to cause in people, their influence can be diminished. While those groups try to achieve their political goals, business, to put it simply, has to be made.

Global air travel has also increasingly been criticised as something that is volatile to economic booms and busts. But as the jet fuel in recent years rose, so did the demand for aviation services. With the recent crash in the price of oil, this belief becomes increasingly obsolete, as air carriers charge customers pre-oil crisis prices, while their costs have significantly decreased. At the same time, the aviation business and Aerotropolises, despite a popular belief, provide job creation and income generation for the poorest. The people needed for operations of an Aerotropolis span out to from truck drivers, to hotel maidens.

All this sets out a new frontier for today’s ever evolving business. The way cities adapt to this evolution underscores a pattern, best named as Aerotropolis, the new version of a city.

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