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Dr Zhiyi Dong, Chairman of the Board - BCIA

Dr Zhiyi Dong, Chairman of the Board - BCIA

» Interview | Wednesday, August 17, 2011 • Air News Times
Traffic at Beijing Capital International Airport grew by 13 per cent last year reaching almost 74 million passengers what placed you at the second place worldwide in terms of passenger traffic. Do you have the ambition to become first in the next years?

ZD: Passenger throughput of BCIA has been kept on the track of rapid growth, and we have realized leap-forward development for many times in only ten years. During the 11th Five-year period, the average annual growth rate of BCIA regarding passenger traffic is as high as 13%, while USA’s Atlanta Airport,  whose passenger traffic ranked the first in the world in 2009, has an average annual growth rate of 1.3% in recent five years. Viewed from our current development trend, BCIA’s passenger throughput will hit 81 million in 2011, and even break through 100 million in 2015. Therefore, it’s our optimistic and confident expectation to rank the first place in the world in terms of passenger traffic in three years.   

Seems that the Chinese sector shrugged off the gloom of 2008, do you think the year-on-year growth will be still solid during the next years despite oil prices and struggling economies?

ZD: In 2008, the international financial crisis swept across the globe, dealing a heavy blow to the global civil aviation industry. According to IATA estimation, the losses of global civil aviation reached over 20 billion US dollars. As an emerging economy, China has made it to keep a relatively high growth rate, although it also experienced a certain shock. Since 2008, China’s GDP has grown by a rate of more than 8%. Driven by such a rapid economic growth, China’s civil aviation quickly recovered itself from the financial crisis, with its profits reaching 12.2 billion Yuan in 2009 and 43.7 billion Yuan in 2010, a highest record in China’s civil aviation. In 2010, total air passenger traffic reached 267 million, making China only after USA in global air transportation market.     

In future years, although the oil will still linger at high price level and the prospect for global economic recovery is still unclear, China’s economic growth will still remain stable and rapid, its economic structure will realize strategic adjustment, revenues of urban and rural residents will extensively see a rapid growth, and its reform and open-up policy will be deepened, all of which will lay a solid foundation for China’s civil aviation and make it grow in a sound and rapid way.  

According to the 12th Five-year Strategic Plan issued by the Administration of Civil Aviation of China, air passenger traffic for all Chinese airports will break through 450 million by 2015 and rank China the largest air passenger transportation  market in the world.

The BCIA's total capacity after expansion is approximately 78 million passengers a year. Do you have a plan how to handle the further growth?

ZD: To handle the increasing passenger traffic, we put in use Terminal 3 in 2008 and expanded our total capacity to 78 million. We also successfully handled the Beijing Olympics and Paralympic Games, as well as the 60th Anniversary ceremony for Founding of P.R.China. Our efficient and qualified management has made BCIA a benchmark for global airport industry. However, with the increasing of our business, BCIA has seen more difficulties in its capacity. To further satisfy the demand for the increasing passenger traffic, we have tried many means to resolve this problem, such as constantly adding capacity and actively seeking favorable policies.  

Regarding the capacity adding, we have revised the overall development plan of BCIA, specifying the future plans for expansion, including building new runways, expanding Terminal 2 and etc. All these efforts are directed towards expanding BCIA’s capacity to 100 million in the future. Additionally, construction of a new airport has been put on the agenda, which will fundamentally resolve BCIA’s capacity deficiency and pave the way for the future development of BCIA.  

Regarding the favorable policies, we have jointly conducted evaluation on airspace capacity together with CAAC North China Regional Administration and air traffic control bodies, in order to have more SLOT, especially for rush hours, to increase from the current 83 to 92.  

How the Beijing traffic will be split in between BCIA and the new Beijing Airport?

ZD: The positioning of both BCIA and the new airport is crucial to the development of both airports. Experiences show that a clear functional localization can be helpful in the coordination and interaction of the two airports’ operation, and make full use of their resources; otherwise, the whole efficiency of the two airports will be impaired. Therefore, we are conducting in-depth researches in cooperation with many domestic and international organizations and hope to determine their individual functional localization based on both customer’s demand and general rules governing development of the aviation market. But we don’t have a final conclusion now. We will establish a closer cooperation relationship with airlines to jointly study and discuss a more reasonable allocation scheme and find an operation mode suitable for us. 

Do you believe in airports alliances? What is the idea behind it?

ZD: The objective of airline alliance is to share rare resources, improve service quality, enhance profit-earning abilities and strengthen market competitiveness. Through more than two decades’ development, large airlines have taken the initiatives to organize and form their own global strategic alliance, while small airlines have begun to actively select powerful alliance as their cooperation partner. Currently, three global airline alliances have been formed and the international air transport industry has ushered in new times of alliance.

Now, airports are on the trend towards regional development. China’s airports have initially formed three regional airport groups: northern airport group centered around Beijing, eastern airport group centered around Shanghai, central and southern airport group centered around Guangzhou. Southwestern airport group centered around Chengdu, Chongqing and Kunming as well as northwestern airport group centered around Xi’an and Urumqi have begun to take shape. Meanwhile, with constant development of future economy and society, inter-city connections within big administrative regions will become closer. Regional airport group can maximally win over and integrate regional resources and give full play to scale effect. Therefore, it is expected that airport group will become the mainstream in further airports’ development, and competition between airports will then shift from individual airport to airport group.  

So far, Capital Airports Holding Company has 38 airports in China and expects to have scale merit through cluster development. These 38 airports have formed a pattern of 1-2-6-6, that is, 1 large international hub airport---BCIA, 2 national regional hub airports---Wuhan and Chongqing Airport,6 national important regional hub airports---Tianjin, Nanchang, Guiyang, Changchun, Huhehaote and Harbin Airport, and 6 regional  airport groups---Hubei, Jiangxi, Guizhou, Inner Mongolia, Jilin and Heilongjiang. In this way, we will gradually improve and form a network and maximize the regional airports’ function in feeding customer resources to regional hub, thus forming a multi-airport collaborative development pattern centered on provincial airports and supported by regional airports.   

Which airports you cooperate with and how the cooperation looks like?

ZD: BCIA has always attached great importance to external cooperation and constantly promote internationalization of “standards, talents and management” by conducing external exchange and introducing international leading management. With gradual enhancement of our influence in the international market during recent years, our external exchange and cooperation have become more diversified in forms: 

Firstly, extensively establish Sister Airport relationships with other airports. Currently, we have singed sister airport agreement with more than 10 foreign advanced airports. We have taken our sister airports as a platform for knowledge sharing, employee training and marketing .

Secondly, actively participate in international activities organized by global airport industry. For years, BCIA has consecutively attended such international conferences as ACI General Assembly, World Route Development Forum and WTTC conference. Through the “going global” strategy, we have actively showcased “image of China gateway”, gained international recognition and promoted “China service” to the world.

Thirdly, develop in-depth project cooperation. For each important project of BCIA, like research on functional orientation of the new airport and expansion commercial area in Terminal 2, we would draw on advanced international experience and invite foreign leading airports for joint participation in the project development.

Big hubs are no longer monopolistic entities, they compete between themselves. Aren’t you afraid of the Asian competitors?

ZD: In recent years, competition between Asian air hubs has become increasingly fiercer. Countries like Japan and South Korea have elevated construction of international hub airport to the level of national strategy, while airports in Singapore and Hong Kong have kept high quality services and high profit-earning abilities. We are committed to developing BCIA into an important international hub and have made some progress and achievements in this area, with our international status and influence being enhanced day by day. However, there is still a gap between BCIA and other leading Asian airports. For example, our air route network, especially the Beijing--American routes is incomplete compared to that of Incheon and Narita Airport in terms of weekly frequency. We are also less competitive than other airports in transit time, our MCT is still relatively long and transit efficiency needs to be further enhanced,

In the years to come, new air hubs are to be formed in East Asia. BCIA will face fiercer competition and if we fail to catch the strategic opportunity  of the  rapid recovery of the international aviation industry ,as well as the rapid development of China’s civil aviation, it will be impossible for us to achieve the strategic objective of building a large international air hub. Therefore, we will turn the pressures into a driving power for promoting all-round shift of our corporate strategy to synergy strategy, industry strategy, regional strategy and finally to national strategy. Meanwhile, we will focus on the objective of “Promoting China service and building an international hub” and specify concrete goals and action plans for further accelerating our pace in building a hub airport. 

London Heathrow’s runway expansion has been blocked by neighboring societies and green parties. Does your airport get many complains in terms of noise, CO2 and NOx emissions? 

ZD: Aircraft noise and greenhouse gas emission are global problems. With rapid development of air transport, the number of aircraft has also seen a rapid increase. While people enjoy safety, comfort and convenience brought by air transport, they have to bear unfavorable influences caused by aircraft noise and exhaust emission. 

With the public paying more and more attention to their living quality, residents nearby the airport have become more and more sensitive to airport noises. Coupled with rapid development of China civil aviation, the problem of airport noise have become more serious and conspicuous. In some regions, complaints have been heard from time to time. By adopting the basic idea of “people first, coordinated development, highlighting priorities and making active response”, China government has done much work in controlling airport noises and achieved some positive effects in such effort.

BCIA has also taken many measures in controlling aircraft noises. For example, we have installed around-the-clock real-time monitoring system for aircraft noise, we have resettled some families, schools and hospitals in areas with serious noises, we have adjusted our flight process procedure and banned aircraft movements for some runways at night, and etc. In a word, we will take every feasible measure for comprehensive treatment to decrease influences of aircraft noises on residents nearby.  

Resolving the noise problem is directly linked with people’s living quality, airport’s safe operation and long-term development. However, airport noise is a very complicated problem and needs much effort. We also hope to continue with our efforts in intensifying cooperation and exchange with our international peers to work out effective resolutions.

What actions do you take in order to be environmentally sustainable?

ZD: Environment protection, safety and security are three important topics of the international civil aviation. BCIA have always placed stress on environmental protection by making great efforts in management mechanism, advocating green ideas, energy saving and emission reduction.

In terms of management mechanism, BICA was granted ISO14001 certificate by China Quality Certification Center in January, 2004, based on which formed its environment management system, laying down environment management policy and formulating procedures and rules regarding environment management.

In terms of advocating green ideas, requirements for green environmental protection were sufficiently considered in designing and building body each system of Terminal 3, and in which many new technologies and methods have been employed. For example, the designed whole-glass wall and skylight ceiling have good lighting effect during daytime; indoor intelligent lighting system can realize automatic control through many operation modes like setting time, sensor, flight information collecting and body inductive lighting.

In terms of energy saving and emission reduction, we launched a consultation project for carbon emission reduction and established a scientific energy management system based on state standards specified in Management system for energy—Requirements last year; this year, we have introduced a new energy saving mechanism---EMC (energy management contract). Meanwhile, we have equipped Fixed Ground Power supply and pre-conditioned air supply for all the 83 contact gates in Terminal3, and we will install the same  devices in T1 and T2 terminal this year. In the future, we will also encourage airlines to use these devices to reduce aircraft’s exhaust emission and noises.    

Environment protection is an important work that requires constant efforts. BCIA will as always strengthen its efforts in environment protection and fulfill its social responsibilities as an enterprise.

How do you keep the prices at Duty free shops so low?

ZD: BCIA has always insisted on providing joyful shopping experience for the passengers by constantly implementing the price policy of “same price for same quality, and good value for money”,  that is, the prices of commodities and foods in our airport, are the same price with those in Beijing’s downtown area; the prices of  duty-free perfumes and cosmetics in our airport are cheaper by more than 15% than the prices in downtown areas, which are also competitive compared with other international airports. We also applied price control for popular Foods and beverages at our airport, with special price set menu or cuisine being launched on a regular basis. Statistics show that the average consumption per person is less than 35 RMB in more 40% of all restaurants at our airport.

We make cheap price in the following ways:

Firstly, we carry out the price policy of “same price for same quality” when we first select tenant. This requires that airport commodity prices should keep the same level with those in the downtown area and that sale promotion activities should be launched synchronously with the downtown area. 

Secondly, we dynamically monitor price policy compliance by shops and restaurants at our airport and constantly enhance competitiveness of our airport’s commodity prices by comparing with downtown area and other large hub airports in Asia.

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