IATA chief warns about increasing costs of airport expansion

Amidst India’s push to expand saturated airports and build new greenfield ones, the International Air Transport Association’s chief has warned that the costs of expanding airport infrastructure must be controlled, to keep flight tickets affordable

The ‘skyrocketing’ costs of expanding airport infrastructure must be controlled, to keep flight tickets affordable, the boss of airline industry group International Air Transport Association (IATA) warned, on February 5, 2018. Alexandre de Juniac called for more modest developments, to keep construction costs down and avoid landing customers with higher prices, which would hit demand.

See also: Budget 2018: Aviation sector welcomes emphasis on airport infrastructure

De Juniac cited the proposed 14 billion pound (USD 19.8 billion) cost of a third runway at London’s Heathrow Airport and the construction of a fifth terminal at Changi Airport in Singapore, as prime examples of vastly expensive projects. “The cost of infrastructure is skyrocketing,” he told reporters, ahead of the Singapore Airshow this week. “When we look at the numbers of Heathrow for the third runway, we are very, very, very worried. Even the numbers for T5 in Singapore are very high,” he added, without disclosing a figure for Changi Airport’s expansion.

The city-state’s plans for its hub airport, include a new development due to open next year, featuring a 40-metre-high indoor waterfall and a fifth terminal, slated for 2030. “We would like, for instance, to avoid big projects in which we see overruns, because the architecture is fantastic, wonderful but it’s very costly. We have to be more modest,” De Juniac said without naming any airport. Airport construction costs are rising to levels, which are too much for airlines to bear, he added. “Someone will have to pay for that. They will have to put that on the tickets and then, if it is too high it could harm the level of demand,” he said.

IATA is working with authorities at Heathrow and Changi, to manage costs and called on governments to involve airlines from the beginning of projects. Heathrow has proposed trimming expansion costs by 2.5 billion pounds, with measures such as building a sloping runway and staging construction. De Juniac said 7.8 billion people are forecast to fly worldwide by 2036 – with nearly half of the passengers flying to, from, or within Asia Pacific – up from an expected four billion in 2018.

Passenger growth will far outpace development of infrastructure, like airports and air traffic control systems, he said. “I believe that we are headed for a crisis. Infrastructure in general is not being built fast enough, to meet growing demand,” he said. “All the great plane deals that will be done will mean nothing, if we do not have the capacity to manage the traffic in the air and the airports at each end of the journey,” he said.

(This story has been used as part of the PTI news feed)

 

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