Investing for the future of China
Hangzhou International Airport
Francesco Violante, CEO, SITA
6 May 2010
Welcome - Huan Ying.
First of all, I would like to thank Mr Wang Jianman, Vice-Governor of Zhejiang Provincial Government, Mr Sheng Jifang, Chairman of Hangzhou International Airport and Mr Eric Wong, CEO of Hangzhou International Airport for honouring us with their presence today.
We are also privileged to have with us so many other distinguished guests from the Chinese and international air transport community.
It gives me great pleasure to welcome you all, on behalf of SITA, to this ceremony that marks another chapter in our partnership with Chinese aviation. A partnership that started over 30 years ago.
During that time we have witnessed at first hand the remarkable changes taking place within your industry and in particular how the use of information technology is making a powerful impact on aviation.
Remarkable progress of Chinese aviation
By any measure the statistics make impressive reading.
- China has become the second largest air travel market, behind only the United States in terms of passengers passing through airports.
- China's airports handled 486 million passengers in 2009, a near 50% increase over 2006 levels.
- The fleet size has grown nearly 200% in the last decade to stand at 1,400 aircraft, today.
- Over 40 new airports have been built in the last 4 years.
But while this represents a stellar rise up world aviation rankings, it is a journey that has only just begun.
- China's population is served by only 0.3 seats per person, compared to 3 seats per person for the United States.
- It has just 1.54 civil airports per 100 thousand square kilometres - the United States has 57.
- Forecasts indicate passenger numbers today will triple to 700 million by the end of this decade.
These numbers add up to a major capacity challenge.
That challenge is being met with significant investment. By 2020, 64 billion US dollars - 432 billion Renminbi - will have been spent erecting 97 new airports. This provides you with a great opportunity to integrate international best practices into air travel.
But the challenge goes beyond bricks and mortar. Both new and existing airports need to embrace advanced information and communication technology, as Hangzhou is doing here today, with the deployment of new check-in and passenger processing technology. It will enable the airport to efficiently handle 25 million passengers per year compared to 15 million today.
How can we further help you manage the development of your industry?
SITA - A trusted partner
First, I believe Chinese aviation has reached a point where it can play a much more influential role on the world aviation stage. To use the words of Director General Li of the Civil Aviation Administration, China will move from a "BIG aviation country" to a "strong aviation country".
SITA with its unique neutral structure and governance is an appropriate organization with which you can develop and share ideas that will shape the future, not only of your own industry, but also of air travel worldwide.
We have a global membership base from all sectors of air transport, including over 400 airlines and more than 30 airports. China is well represented with 19 members, 13 from the airline sector. The vice-chair of our Board is from Cathay Pacific, while Liu Dong from Air China, sits on the main Board representing the interests of 20 Asian carrier members.
This provides us with invaluable insights into the needs not only of Chinese carriers and regional players, but also the other international airlines operating here. As a community structure, it also gives our members a mechanism to influence technology decisions impacting the wider air transport industry.
Second, SITA can help regional airports attract foreign airlines. They need modern IT infrastructure and services that are interoperable with the rest of their route network. That means industry technology based on international standards. Our honoured speaker Mr. Pieter Elbers from KLM, and those of you who manage China operations on behalf of international airlines, would probably agree on this point.
For example, as many of you may know, IATA and ACI have for the first time worked jointly to create a new passenger processing standard called CUPPS - Common Use Passenger Processing System. SITA played a major role in its development and has taken the technical lead in deploying it by being the first provider to make its passenger processing system CUPPS-compliant.
In fact, SITA's AirportConnect system here at Hangzhou was deployed with CUPPS in mind to ensure it was future-proofed.
Another good example is the 2D bar-coded boarding pass. Industry-wide adoption of a single standard is planned for the end of this year. It will act as a catalyst for much greater automation throughout the passenger's journey by facilitating the use of self bag-tagging and self boarding of aircraft.
IATA figures indicate that adoption of 2D bar-coded boarding passes in China is around the 50% level, far short of the 84% global average. We can certainly work with you to accelerate this.
To this end I can confirm that we are already in discussions with Hangzhou Airport and China's telecom operators to provide airline check-in via the passenger's mobile phone using the mobile version of the 2D bar-coded boarding pass.
A third way SITA can help you to manage the growth challenge is to improve the facilitation of passengers through the airports by reducing the number of human interactions passengers need to make.
We have established a long record of efficiently managing rapid passenger growth regardless of whether it is sustained, as in developing countries such as Russia and India, or just temporary, as with major events like World Cups or Olympic Games. Our work at Beijing Capital International Airport, where our systems handled 260,000 passengers during the 2008 Games - a daily record - is testament to this.
Closer to here, Shanghai Expo has just opened this week. It promises to be the most visited world Expo ever. Since last year, SITA has been working with both Pudong Airport and HongQiao Airport - China's first Air/Rail connected airport - to prepare for the substantial growth in passenger numbers expected over the next 6 months.
There are more facilitation improvements to come at airports.
IATA has identified 14 different steps in the end-to-end passenger journey. Twelve of those can happen within the airport environment. SITA is using technology to speed the flow of passengers securely through all twelve steps.
Biometrics, wireless technology, kiosks, scanners, and 2D bar-codes, are all playing a role. But there are very few companies that have access to expertise in all - and crucially - can integrate them together, end-to-end with other airline and airport systems to provide a streamlined process. SITA is one of those companies.
Fourth, airlines cannot always justify the cost of deploying their own IT systems. An airport providing IT infrastructure and services in a 'plug and play' manner can act as a powerful incentive for attracting new carriers.
SITA has had a lot of success helping airports deploy campus-wide networks that unify the communication needs of airlines and other tenants on a single managed platform. This type of shared-use model simplifies the IT infrastructure and generates cost-savings for tenants, making the airport more competitive. It also provides a platform to rapidly deploy common-use systems for kiosks, gate operations, baggage management and voice communications.
The shared IT model is not just restricted to single sites. It works equally well across multiple airports. For example, here in Je-Jiang province, the 7 provincial airports can all utilize Hangzhou Airport's IT infrastructure, providing consistent services, while avoiding duplicated IT investment. SITA has successfully operated the multi-airport shared services in Germany and other countries, and I believe this model could also significantly benefit China's airport operations.
Investing for the future
In these four ways, we can work together to build China a world class air transport network.
Our commitment to you is that we are here for the long term. We back up that commitment not just with words, but with resources and investment.
Our footprint now extends to 66 employees working throughout the country. In the coming months, we plan to establish a software development centre in China to support both Chinese and other Asian customers. It will provide solutions customized to your specific needs. It will also house our service management desk, staffed locally to provide Chinese language support. Our aim is to build-up a regional centre of excellence, based on globally-recognized best practices. To do that we will train and develop local management.
We will further strengthen our customer support and delivery in the region when we open one of two Command Centres in Singapore in January next year. The centres will for the first time in the air transport industry allow end-to-end monitoring of IT performance, so that incident response times can be accelerated and downtime minimized.
Clearly with airlines and airports now so dependent on technology, this is an area we will continue to invest in.
We are also currently rolling out a new relationships governance model across China to further deepen our knowledge and understanding of customers. This structured approach has already proved mutually beneficial with a number of large customers in Asia Pacific as a way of improving communication and sharing information and ideas.
Conclusion
Let me finish by re-emphasizing the vital role of an efficient air transport system. Investment in airport infrastructure is one of the most important that a country can undertake. It generates economic growth for both the country and its citizens by creating trading opportunities faster and facilitating tourism.
Managing the growth in air travel will depend on the efficient deployment of emerging technologies. Your airlines and airports should move ahead quickly to seize the benefits.
At SITA, we encourage the shared-use of these technologies. It is a model that underpins airport growth, while providing airlines and ground handlers with lower per passenger costs.
Shared community infrastructure also fits well with the Chinese philosophy of investing for the long term - a characteristic very much in line with SITA's own heritage and values. So based on this sense of shared purpose let us work together to provide world class facilities and services for the benefit of your own flying public and the millions of visitors that pass through China each year.
Once again, thank you for taking time off to be here and share this exciting development with us today. And particular thanks to Hangzhou Airport. We are proud to work with such an innovative regional airport.
I wish all of you good health and happiness.
Share or bookmark with:
Facebook
Twitter
Digg
Delicious
Technorati
