AVIATION SECTOR INSIGHT

AIRPORT TERMINALS – PLANNING FOR LONG TERM GROWTH

Australian airport operators need
ongoing investment plans to prepare
for long term demand for international
and domestic flights as well as to meet
increasing passenger expectations.
future expansion and operational efficiency,
together with the imperative to maximise
revenues from all available income streams.
A Note on Markets
Australia has weathered the GFC
considerably better than many other
the aeronautical side of the airport is
regulated – is also considered favourable
for increased, unregulated investment
in the non-aeronautical (retail) revenue
streams. The forecast demand will
necessitate progressive upgrades to
existing airport terminals to manage the

Introduction
Passenger numbers have increased over the
past decade with an annual rate of growth
exceeding 5% per year. Passenger numbers
through Australian capital city airports totalled
98.3 million in 2008-2009 and are forecast to
”
developed nations. increasing passenger movements which
are expected to escalate by 4% to 6%
annually over the next 10 years.
High levels of currency fluctuation have
Davis Langdon ranks 23rd resulted in an unexpected source of
globally in the Infrastructure cost inflation as airport projects are
Journal Consultants' league characterised by a relatively high level
of internationally procured specialist
tables, increasing 11 places in

increase to 235 million by 2030.
In response to this forecast growth,
Airport Operators are planning and
implementing substantial investment in
additional airport capacity. In addition
to expansion, existing services such as
security need to be upgraded to meet new
and more stringent requirements and the
increasing importance of retail outlets at
both international and domestic terminals
require some terminals to be redeveloped.
However, the combination of the Global
Financial Crisis (GFC), high oil prices
and the onset of global pandemics such
as SARS and H1N1 has undoubtedly
challenged the business model of many
airlines and the airports they serve. For
Airport Operators, there has been greater
financial pressure on landing charges
and operating costs. In providing a high-
quality service for passengers, any new
terminal investment must balance the scale
of initial capital investment, provision for
”
2010.
Although many projects were placed on
hold or cancelled during late 2008 and
2009, we are seeing signs of recovery in
the broader construction industry across
most sectors – albeit at a slow pace. The
downturn in construction activity has allowed
for momentary corrections in inflated tender
prices that were previously spurred on by the
resources boom of the past decade. There
are signs that the market has reached the
bottom with profit margins recovering slightly
during mid-2010.
In spite of reduced passenger air travel
during the GFC, Australia’s economic
outlook and regulatory price monitoring
makes it one of the world’s most attractive
airport investment environments in the
world. The dual-till approach – where only
National Tender Price Index - Weighted Average
(Yearly Change)
equipment such as baggage handling.
Whilst clients can ‘buy out’ currency risk
at the point of agreeing to a contract,
currency fluctuations during the re-
contract period can have a significant
impact on budgets. The devaluation of
AUD during 2008 resulted in falls of 32%
relative to the USD and 22% relative to
the Euro.
Pre-GFC the AUD was on track to reach
parity with the USD for the first time
since the currency was floated in 1983.
Although this had the obvious impact
of reducing import costs on overseas
components specifically required for
airport construction, conversely the boom
in domestic demand for construction
accelerated tender prices above historical
trends.
AUD

8% 1.00

6% 0.90

4% 0.80

2% 0.70

0 0.60

-2% 0.50

Beijing International Airport, Beijing -4% 0.40

2010f
2004

2008
2002
2003

2005
2006
2007

2009

2007
2008
2009
2010
2000
2001

2003
2004
2005
2006
2002
1999

Euro USD

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AVIATION SECTOR INSIGHT
AIRPORT TERMINALS – PLANNING FOR LONG TERM GROWTH
Air Passenger Movements - All Capital City Airports
Million
250
Forecast
200
150
100
50
0
2010-11
2008-09
2006-07
2004-05
2012-13
Total
Types of Airport Terminals
The airline industry has become
increasingly segmented between the
'Full-Service Airlines' and the 'Low Cost
Carriers' (LCC). LLC introduced a
new set of requirements for airport
terminals, requiring fast turnarounds
and minimal service. Hence many of the
principal design features of a terminal will
be determined by the type of airline using
the airport terminal. Common features
include check-in, security, baggage
handling, apron (area designed for loading
and unloading passengers and cargo),
gate design and retail outlets but each
could be dramatically different.
The main requirements of the different
sectors are as follows:
Full-service airlines – these typically
require pier/gate service and dedicated
facilities for premium passengers.
Full-service flights have longer turn around
times reducing the need for holding space at
the gate. The quantity and size of baggage
is likely to be high and the security profile of
some destinations may result in more bags
progressing to higher levels of screening.
Stansted Airport, London
• capacity to respond to changing flight
schedules and fleet
• well-organised apron services to
minimise turnaround time
• services available to passengers
• failsafe operation of systems
• flexibility to respond to changing
business needs
• cost-effective design solutions to
reduce future capital expenditure to
minimise landing charges
• clear process routes through departure
and arrivals to prevent departure delays
• presence of competing airports and
airlines
Airport Operator – the Airport Operator
will also have its own development
2020-21
2016-17
2026-27
2014-15
2018-19
2022-23
2024-25
2028-29
priorities. These include: the optimisation
of revenue generators such as retail,
Regional
security provisions, and value-for-money
Intercapital International
investment through phasing the delivery of
capacity in fixed assets such as security
and baggage systems.
LCC – these work on a model of maximum
throughput and minimal operating cost. Third-party requirements associated
with security, airport services, passenger
Minimising turnaround time is vital.
Discouraging hold baggage simplifies
apron operations but places more pressure
on passenger and hand-luggage screening.
”
services and back-of-house provisions
must also be accommodated.
To simplify landside operations, LCC
encourage e-ticketing and remote check-in. The airline industry
Development Requirements has become increasingly
segmented between 'Full-
Terminals are developed in response to
levels of demand and future growth in Service Airlines' and the
”
passenger numbers. Investment plans are 'Low Cost Carriers' (LCC).
targeted at attracting two key clients: the
passengers and the airlines that serve them.
Passenger requirements – Design Issues
• stress-free experience, including Capacity – terminals should be designed
to accommodate sustained expansion.
avoidance of queues
• ease of access to terminals with good This may involve a phased development of
parking, public transport and hotel baggage handling, gates and stands areas,
infrastructure which may require temporary facilities.
• quick processing times for security and Capacity is determined by two main
baggage collection variables: total annual passenger flow and
• short travel distances and direct,
peak passenger flow. Total flow is used
single-level access to departure gates to calculate departure and airside space
• up-to-date flight information and clear allowances, while peak flow is used to
way-finding
• targeted retail and catering that meet
the needs of different groups
• facilities and information for meeters
and greeters
Airline requirements –
• levels of landing charges
• accessibility
• availability of runway capacity
Heathrow Airport, London
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AVIATION SECTOR INSIGHT
AIRPORT TERMINALS – PLANNING FOR LONG TERM GROWTH
size elements linked with passenger
processing such as security, check-in and
baggage handling.
The terminal’s capacity and design
must consider future needs such as
the wider use and acceptance of online
check-in, self service bag drops and
mobile boarding passes.
Some terminals are currently experiencing
passenger bottlenecks at security points as
the original architectural design of terminals
had not allowed for increased security
measures. Passengers are also now
arriving and going through security well
in advance of their flights which has had
an enormous effect on the facility as more
passengers are checking in their bags and
waiting for a longer period of time. More
luggage storage, more seating, better food,
better entertainment and increased retail
outlets are required.
In addition, airport operators and designers
should also consider the current and
future area efficiencies when expanding
the capacity. Globally there is no standard
industry benchmark of area efficiency as
can be seen below.
Airport Efficiency in terms of Passenger
Numbers and Floor Area
‘000
700
600
Gross Floor Area (m²)
500
400
300
200
100
0 requirements on the footprint of the building
10
15
5
Million Passengers Per Annum (MPPA)
Global Airport Benchmarks
Level of service – international bodies
including the International Civil Aviation
Organisation and the International Air
Transport Association assess performance
for check-in, security, queuing times and
so on. These are used to justify landing
charges, and are a key element of
competition between airports.
Passenger experience – Ease of car
parking and use of drop off and pick up
points is required.
Rapid completion of check-in and security
is needed – clearing security is a major
source of stress, so an efficient process
will make a major contribution to the
passenger’s experience.
Clear uncluttered sightlines, way-finding
and orientation is essential. Repetitive
design may be utilised so that locations are
intuitive to passengers. Ease of navigation,
through direct routes to gates and
information on travel times to gates also
reduce stress. It also produces more time
for passengers to use airside facilities.
Research shows that relaxed passengers
spend more money, so it’s imperative to
reduce stress and increase passenger
satisfaction ratings.
Humanising the scale – terminal buildings
are necessarily large, but a clear layout,
well-signalled navigation features and
high-quality signage all help to mitigate
the scale. Repeated elements of structure
or colour break up very large spaces into
smaller, more easily understood units, as
do repeated design features.
Security – baggage handling and hold
baggage screening are the principal
elements of the security system. Other
elements include personnel screening and
physical security elements. Rationalisation
of circulation routes, the provision of clear
lines of sight and the consideration of blast
resistance in the structural design need to
be considered.
Transit systems – for larger terminals
and piers, transit systems become
necessary when distances exceed 300m.
In addition to the cost of the transit system
itself, the impact of increased circulation
also need to be taken into account.
20
25
30
35
Trend line
(Global Airport Benchmarks)
Perth Domestic Terminal, Perth
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Launceston Airport, Launceston
Retail offer – terminals can be designed to
direct passenger flow through the retail offer.
Additional baggage drops for duty free
purchases are now being utilised to
maximise retail spending, thus increasing
turnover and rental values.
Baggage Handling
The key elements of a baggage handling
system are:
• a 100% secure environment –
baggage flow from check-in to aircraft
loading has to be completely secure
• capacity and flow rates – the typical
time for a bag to pass directly through
screening and straight onto the
aircraft is about 12 minutes (the latest
machines typically have a capacity of
1,800 bags per hour)
• the adopted baggage screening
protocol – this varies between countries
and may consist of a sequence of
increasingly sophisticated scanning
techniques, including X-ray and CT
scanning processes
The main drivers for sizing a baggage
system are:
• the peak hour passenger flow
• aircraft size
• flight type – different types of flight
have different load characteristics
• bag profile – based on destination,
flight type and other factors, the risk
profile of baggage and the profile
of scanning operations can be
determined
Other cost drivers for baggage systems
include:
• redundancy and failsafe provision –
particularly for explosives detection
systems and baggage sorting
machines, which have high costs
• load-sharing systems – these enable
baggage to be directed evenly
AVIATION SECTOR INSIGHT
AIRPORT TERMINALS – PLANNING FOR LONG TERM GROWTH
across all scanning lines so that all
elements of the system are utilised,
maintenance can be carried out
without disruption, and mechanical
systems wear at the same rate
• management information systems
covering bag tracking, processing
times and other operational key
performance indicators
Building Services Installations
The large scale of terminals means
that in public areas there are few
significant sources of heat load other
than the building occupants. This source
fluctuates considerably in response to
peak travel hours, so a responsive air
conditioning system is essential. Low-level
displacement air conditioning has become
common. Comfort conditions need to be
maintained only in the passenger zone,
and systems can take advantage of large
building volumes for high-level extraction of
exhaust air.
System capacity has to be designed
to cope not only with anticipated peak
passenger levels but also with the
consequences of flight disruption. Design
of air movement in public areas also needs
to take account of smoke extraction and
control.
Shared airport systems such as Common
User Terminal Equipment and flight
information are increasingly run across
a common fibre-optic IT backbone using
internet protocols. While the distribution
installation is simplified and more scalable,
the actual on-site addressing of systems
is highly complex and needs an extended
installation and commissioning programme.
Use of the common backbone also permits
easier integration and reconfiguration as
the building adapts to new requirements.
Midfield Terminal, Abu Dhabi
Project Management and
Procurement
The complex operations found particularly
when working in restricted airside zones
create a wide range of additional cost drivers.
Security clearance is a key issue,
particularly with airside working, which
makes the processing of personnel and
deliveries potentially subject to long delays.
Contractors tend to use established
supply chains, which already have security
clearance and trained operatives. This
”
may reduce competitive pressure in
procurement.
...costs for airport
terminals are heavily reliant
on whether the facility is an
international or domestic
terminal and the extent of
existing infrastructure and
”
facilities.
As airside working adds significantly to
project costs, sites should be configured
wherever possible so that they can
be managed as landside projects with
conventional procedures.
Requirements and restrictions associated
with airside working include:
• higher costs of third-party legal liability
insurance
• cost of training associated with driving
and work permits
• maintenance of restricted zone
boundaries
• control of airborne dust and debris to
avoid ingestion by aircraft engines
• vibration limits when working in
proximity to sensitive buildings
• remote facilities, including welfare,
administration, storage and parking,
owing to pressure on airside space
Other airport specific constraints that can
affect terminal design and construction
include:
• requirement of stakeholders including
the Australian Quarantine and
Inspection Service, Australian Customs
and Border Protection Service, the
Australian Federal Police etc.
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• Civil Aviation Safety Authority (CASA)
restrictions on permanent building
heights within safety glide slopes
• enhanced acoustic control and
monitoring measures
• prevention of electromagnetic
interference and the minimisation of
radar signatures
• CASA restrictions on crane heights
within safety glide slopes and
restrictions on the use of radios
• out-of-hours working and phased
development to minimise disruption to
•
passengers and aircraft
controls on delivery and construction
traffic to prevent airport road
congestion
Procurement of specialist equipment
is another key consideration. Airport
Operators are adopting a range of
alternative procurement routes in a
continuous search for the optimum
balance of risk and competitive pricing.
Baggage handling, air bridges and shared
information systems require specialist
design to be completed alongside the initial
design development. Two-stage approaches
to the agreement of package contract sums
enable design input and co-ordination to
be secured during the early stages of the
project.
There are a large number of stakeholders
involved in a terminal project, with interests
ranging from security, passport and
customs control, to the operational and
commercial interests of multiple airlines. In
a global industry, the security requirements
of destinations such as the US may also
need to be taken into account.
With so many interests to be reconciled,
finalising and adhering to project briefs
and securing strong decision making is a
challenge. Stakeholder management should
be a key client responsibility but also needs
to be facilitated by the project team.
Beijing International Airport, Beijing
AVIATION SECTOR INSIGHT
AIRPORT TERMINALS – PLANNING FOR LONG TERM GROWTH
”
Construction Costs Recently there have been great of defence aviation projects. Globally we
changes in aviation design concepts, have experience ranging from Heathrow’s
Davis Langdon’s global airport experience Terminal 5C building (36,000m²) to Seoul’s
reflecting new technologies and changing
has created a wealth of knowledge in terms Incheon International Airport which is a
passenger experience. New check-in
of cost benchmarking. massive 491,000m² catering for 30 million
procedures which save time, give the
Construction costs for airport terminals passenger more control and reduce passengers per year.
are heavily reliant on whether the facility operating costs are influencing the way It is our innovative approach based
is an international or domestic terminal, we design check-in halls. Airports are also on a detailed understanding of this
the extent of existing infrastructure and recognising that landside precincts and sector, coupled with our proactive and
facilities, the airlines it serves and the the journey to and from the airport are part collaborative approach to problem solving,
physical restriction of the site. These of the passenger experience and need to that gives our clients best value solutions.
multiple drivers have a huge impact on cost be addressed as part of integrated design A wealth of global expertise and local
so it would be inappropriate to state a ‘one solutions, including landside transport

”
knowledge underpins every project we
size fits all’ estimated cost rate. However, connections. deliver.
the cost split of our recent projects has
demonstrated a trend in the distribution of Quote supplied by HASSELL If you are considering undertaking an
costs across the elements of the building aviation development or would like to
as can be seen in the chart below. Why Davis Langdon discuss this paper further feel free to
Whether developing a terminal, baggage contact Damien Hirst.
handling facility or any other aviation
project, the success of your project
will be strengthened by the knowledge Damien Hirst
and experience of a consultancy team. T: +61 7 3221 1788
Davis Langdon's specialist construction E: dhirst@davislangdon.
and property consultants have been com.au
instrumental in the delivery of aviation
projects within Australia. We are currently
working on projects at Sydney, Brisbane,
Perth, Launceston, Ayers Rock and Damien Hirst
Johannesburg International Airport, Johannesburg Rockhampton airports including a number Associate Principal – Aviation Sector Leader

Percentage of Building Cost by Element of Airport Terminals

25% 25%

20% 20%
% of Total Building Cost

15% 15%

10% 10%

5% 5%

0% 0%
Electrical

Mechanical
Security, IT, CCTV, FIDS

Preliminaries & OH+P

Wall Finishes

Floor Finishes
Substructure

Stairs

Air Bridges
Internal Walls, Partitions & Doors

Protective Installations
Ceiling Finishes

Fixtures & Fittings

Lifts and Escalators

Façade
Frame/Upper Floors/Roof

Baggage Handling
Travelators

Building Element

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