The Airport City
In the past airports were perceived simply as gateways for the transportation of goods and people from one region or country to another, but this historic perception is now giving way to a much broader, concept of the airport as a business destination in its own right and as an economic engine for its region and local communities.
The model recognises that apart from performing their its traditional aeronautical services, airports can evolve a range of new non-aeronautical functions and revenue drivers, from developing their real estate into commercial assets, transforming their terminals into fully functioning shopping malls and expanding their logistics and distribution chains.
With airports typically surrounded by hundreds or even thousands of hectares of undeveloped land for environmental buffer for environmental reasons, it has been recognised that airports are sitting on a potential goldmine of real estate opportunities.
Office blocks, hotels, convention centres, medical facilities, casinos, free trade zones and even entertainment and theme parks can be built within or just beyond the airport fence to generate new sources of revenue for the airport operator and encourage the perception of the airport as a business or tourism destination in its own right.
The spatial and functional core of the airport city is the passenger terminal, which has been likened to an urban central square. It operates as its multimodal commercial nexus offering a variety of specialised goods and services.
John D Kasarda, director of strategy and entrepreneurship at the Kenan Institute of Private Enterprise, explains thus:
‘No longer restricted to offering magazines and fast food outlets, airport terminals have become sophisticated revenue engines featuring brand name boutiques, speciality retail and upscale restaurants along with entertainment and cultural attractions.’
Hong Kong International Airport for instance, hosts more than 30 high-end designer clothing shops. Singapore Changi offers cinemas, saunas and a tropical butterfly forest, while Las Vegas McCarran has a museum and Amsterdam Airport Schiphol a Dutch Master’s art gallery.
A number of airports have pioneered the airport city concept including Frankfurt Airport, which is developing 2,100 hectares of office space at the Gateway Gardens and the Mönchhof Logistics Park, Incheon International Airport’s International Business Centre (IBC I) and Amsterdam Airport Schiphol’s AirportCity and ‘Amsterdam Connecting Trade’ (ACT) logistics hub.
The upshot is that airports are undergoing a metamorphisis as they increasingly take on the functions of the metropolitan Central Business District (CBD) and are now being recognised as corporate entities in their own right.
As an airport city develops outwards from the fence line the boundaries between airport and its surrounding urban centre or city become blurred, it becomes an integral business and residential district in its own right termed the aerotropolis.
With the immediate airport area serving as a region-wide multimodal transportation and commercial hub, a string of airport-linked business parks, information and communications technology complexes, retail and hotel centres and industrial parks can spring up along airport arteries.
Similar in shape to the traditional metropolis and made up of a central city and its commuter-linked suburbs, the aerotropolis consists of an airport city and extensive outlying areas of aviation-orientated businesses and their associated residential developments.
Even greater aviation-orientated commercial development is occurring well beyond airport boundaries. As airport-related developments spread so intermodal connections such as rail links, highways and waterways to nearby urban centres become increasingly important.
Among the first airports to make the aerotropolis concept a reality are Memphis International Airport, Chicago O’Hare International Airport, Dallas/Fort Worth International Airport and Atlanta Hartsfield-Jackson International Airport.
As the areotropolis develops, it often becomes the centre of a complex distribution and shipping network or a destination for niche industries, such as high-tech, time sensitive and freight forwarding companies. This in turn leads to impressive economic growth and job creation.
Atlanta Hartsfield-Jackson International Airport’s aerotropolis generated an estimated 434,000 jobs in 2009 and contributed $58.2 billion in direct and indirect revenue in 2009, according to a recent economic impact study commissioned by city officials.
Such job creation stimulates residential projects – further fuelling aerotropolis development. And airports regions are even developing their own brand image to promote themselves, examples of which include the ‘DFW Area’ and ‘the O’Hare Area.’
As multimodal transportation and advanced communication infrastructure develops at and near airports, businesses will have even more reason to move to an aerotropolis. The principal determinant of land value, lease rates and the type of commercial use on any given property will be the cost of moving people and products to distant markets.