Business Centre Development Model Airport Assessment Answer

Earlier, airports were perceived to be as monopolies and were subjected to price regulations to protect the consumers from higher prices due to the excessive market power. In the recent times, the role of airport is changing as technology and digitalization are becoming strategic imperatives.

Summary of the Report:

The report highlights the management of an international airport. In the light of the given international airport, Changi International airport the airport positioning concept is identified. In addition to this airport ownership model is also been evaluated. The report describes the structure and operations and ownership of the airport.

Airport has to deal with several stakeholders that have their own varied interests. Moreover, the revenue streams, costs and growth opportunities are not always aligned. Increased competition from the new airport hubs also makes its ineffective for the airports to maximize the profit off the company. Airport latest and innovative technology supports the end-to-end process management (Changiairport.com, 2018).

Content of Report

Airport is made for commercial air transport and often has facilities. Airport has facilities that maintain and store aircrafts with a control tower. Larger airports have fixed-base operator’s services, airport aprons. Changi airport is an international airport of Singapore that has additional facilities for passport control and customs. The airport ranks among the most complex as well as largest of all the established typologies with major airport terminals.  In Singapore, includes considerations for the safety margins during the flight landings and takeoff.

Singapore Changi Airport was incorporated in the year 2009. As the airport organization manages Changi Airport, CAG also undertakes major functions for focusing on the airport management, operations, commercial activities, airport emergency services and air hub development. Changi Airport Group (CAG) helped in building the awareness about the newer destinations and routes.

Changi Airport has helped in reducing the risks to external factors that establishes resilience in the business.  Changi airport has also actively developing the niche cargo sectors. This includes perishables, pharmaceuticals and cargo as its diversification strategy (Tang, Weaver & Lawton, 2017).  

Changi airports have immigration and custom facilities. The international facilities often need higher level of security.  This international airport also provides commercial outlets relating to product and services. Moreover, some airports that regulate costs to keep it compared to street prices for the fast food chains. The airport restaurants also offer regional cuisine specialties so that the people can try sample food without living the airport.

The airport also includes the VIP and premium services. The services include check-in and check-in counters. Airlines lounges also offers free and reduced cost food that includes both alcoholic and non-alcoholic beverages. The lounges in the airport also have internet and Wi-Fi accessibility as well as power outlets that the passenger uses for their electronic equipments. Airlines also operate multiples lounges within the airport terminals by allowing the premium customers like the first class customers that are also the additional services for the premium customers. The airport also has ground crew that handles the loading as well as unloading of the crew, passengers, baggage’s and other services (Lee, & Taezoon, 2014). Due to improvement in the latest technology, Changi airport has installed solar photovoltaic arrays to protect the environment from the operational activities of the airport.

Airport Positioning Concept:

Changi airport has been the primary hub that aims to focus on facilitating all the passengers and goods that travels on a transitional level. The goal is mainly achieved by attracting the various airlines that helps n developing the main base of the operational activities at the airport (Tang, Weaver & Lawton, 2017). The performance and strategies of the hub are vital in terms of long-economic viability and growth potential of the international airport.

Singapore’s Changi airport is a primary hub that is historically been developed at the major business and political location. In the given location, the hub carrier will easily be able to count on a crucial basis the Origin & Destination traffic. The primary hub positioning strategy of the airport targets both the business and leisure oriented customers (Yang & Santonino, 2016). The airport innovates and comes with new ideas to maintains it strategic positioning as the major competitive hub providing air transport. Changi millionaire is one such concept, where the one lucky shopper at The Changi Airport is awarded $1 million thus encouraging more customers.

Airport Ownership Model:

In Singapore, the airports are owned by the government (locally) but are effectively privately operated with a greater degree of contracting out. Changi airport is a public-private partnership model that is managed by the Changi airports group. The major responsibility for funding and delivering particular services is under the control of the private sectors. While the retention of responsibility is completely dependent on the government for providing such services (Setiawan et al., 2018). All the major risks are generally inherent with the Changi airport group.

The potential benefit of the Changi ownership models is its cost effectiveness. As the service provider and developer is competitively selec6ed. This leads to higher productivity as the payments are directly linked to the performance of the management (Bok, 2015). the ownership model has clear customer focus. This creates the scope for innovation in the delivery of the services and furthermore increases the satisfaction level of the customers. Innovative decisions taken by the management is taken with greater flexibility that is related to the decentralization. While on the other hand the public –private partnership model practiced by the Changi airport generally leads to the transfer of risks from the private to public sector and cam also leads to bankruptcy.

The major objective of the ownership model is to improve the level of services and economic performances by involving highly experienced airport operators. Therefore, it can be concluded that airport profitability is increased to a great extent as the airport project development risk is transferred to a private party. In addition to this, the airport ability also increases by raising additional capital and seeking revenues from private market. This further helps in reducing costs, improving efficiency. The airport becomes more customer service oriented. This allows increasing competition among various airlines and leads to cost reduction for passengers at an international level.

References:

Bok, R. (2015). Airports on the move? The policy mobilities of Singapore Changi Airport at home and abroad. Urban Studies, 52(14), 2724-2740.

Changiairport.com., (2018). EN. Retrieved from https://www.changiairport.com/corporate.html

Kaur, K. (2018). Questions on ownership, operating model for new T5. Retrieved from https://www.straitstimes.com/opinion/questions-on-ownership-operating-model-for-new-t5

Lee, C. K. M., Ng, Y., Lv, Y., & Taezoon, P. (2014). Empirical analysis of a self-service check-in implementation in Singapore Changi Airport. International Journal of Engineering Business Management, 6, 6.

Lu, J. L. (2014). Investigating factors that influence passengers' shopping intentions at airports–Evidence from Taiwan. Journal of Air Transport Management, 35, 72-77.

Setiawan, M. I., Surjokusumo, S., Ma’soem, D. M., Johan, J., Hasyim, C., Kurniasih, N., ... & Nasihien, R. D. (2018, January). Business Centre Development Model of Airport Area in Supporting Airport Sustainability in Indonesia. In Journal of Physics: Conference Series (Vol. 954, No. 1, p. 012024). IOP Publishing.

Tang, C., Weaver, D., & Lawton, L. (2017). Can stopovers be induced to revisit transit hubs as stayovers? A new perspective on the relationship between air transportation and tourism. Journal of Air Transport Management, 62, 54-64.

Yang, C., & Santonino III, M. D. (2016). A Kano analysis on the adoption of self-service bag drops at Singapore Changi Airport. International Journal of Aviation Management, 3(2-3), 150-171.