Felix Salmon

How important are gleaming airports?

By Felix Salmon
October 1, 2010

Greg Lindsay knows a lot about airports: in fact he’s just written a whole book about them, called Aerotropolis. So I thought I’d ask him whether my uninformed ramblings about airports and infrastructure made any sense.

Specifically, I asked him about freight, which is where a huge amount of the real value in airports lies. How do freight airports compare to what we air passengers are used to? What’s their architecture like? Are the most modern and efficient freight airports just as beautiful, or even more so, than passenger airports, or are they just big ugly concrete sheds? How do they compare to the great resorts of America? (That one for Larry Summers.) And how important are they, from an infrastructure perspective?

He replied:

In many cases (especially overseas), the busiest cargo airports are also some of the busiest passenger hubs. Maybe the best example is Hong Kong, which cost $20 billion to build (still the most expensive ever) and boasts a passenger terminal which is both one of the nicest shopping malls and biggest buildings in the world. That’s what Larry Summers probably has in mind. But maybe more important is the airport’s cargo terminal, which is the second busiest in the world (after the FedEx hub in Memphis) and has all the ambience of the Port Authority Bus Terminal — it’s basically a giant loading dock hundred of feet tall. But you can’t have one without the other. The gleaming terminal isn’t a loss leader — it rakes in millions from duty free and other sources — and it attracts the passenger traffic which makes being a cargo hub possible. Eighty percent of the Apple iPods in the U.S. were made at the giant Foxconn plant in Shenzhen and flown to LAX in the bellies of Cathay Pacific passenger flights. Hong Kong’s airport is what makes it possible for Apple to manufacture nearly all of its products in a single factory on the other side of the world. So yes, sometimes it pays to have a gleaming airport.

I had one follow-up: How important is the “gleaming” bit? If Hong Kong’s new airport had all the atmosphere of Newark International, but still had the same capacity, what difference would that make? Here’s what I got back:

Bling doesn’t matter. Size matters. Speed and efficiency matter. Being able to move 50 million people a year in and out quickly and painlessly is the point. America’s airports can barely do that. Summers was wrong to compare airports and resorts; what makes Hong Kong’s or Beijing’s or Dubai’s super-sized terminals important is the fact that they’re super-efficient and haven’t outlived their lifespans by a good 20 years — not because they resemble a dragon or are filled with palm trees. Newark is a perfectly fine airport (the Continental piece of it, anyway), but an even better example is JetBlue’s Terminal 5 at JFK. It’s a big, cheap steel box with some nice restaurants and free WiFi inside, which distracts you from the fact that it was engineered to turn planes around in record time, which directly affects the airline’s bottom line. If all of our airports were that good, we’d be fine. And it cost a fraction of the airport resorts in Asia.

So I’m still not convinced that a major investment in airports is the best — or even a modestly good — use of federal infrastructure-investment funds. Yes, America’s airports are miserable places to travel through. But if what we want to do is boost long-term GDP, then there are better places for the government to spend its money. As and when airports get replaced and upgraded, they will naturally become more modern and efficient. Sadly, however, that’ll take time — and it might not make the passenger experience much better.

12 comments so far | RSS Comments RSS

this is a specious argument. sure, airports aren’t the best target for infrastructure upgrade-but that’s because air travel in a regime of $200 a barrel oil is twilight industry. where is the investment in plain old rail in the upper midwest? NONE of these smaller cities and towns will have any airline connectivity in this harsh oil price regime…..Not to mention the cost virtues of rail for freight (vs trucks. Let’s get stuck into it!

Posted by crocodilechuck | Report as abusive

“Eighty percent of the Apple iPods in the U.S. were made at the giant Foxconn plant in Shenzhen and flown to LAX in the bellies of Cathay Pacific passenger flights”.

What? Surely this is impossible. There is not enough luggage room on passenger flights.

Posted by Developer | Report as abusive

Shiny, new, traveller-friendly airports are definitely a waste, not unlike shiny, new luxurious cars. That’s why the US car industry is on life support, while Audi can’t keep up with demand from China.

Posted by Petervdb | Report as abusive

crocodilechuck is right about rail. Railroads are the hot new thing. Long haul trucking is in big trouble.

That said, the per-passenger gas mileage for long haul flights averages 70 miles per gallon at 80% capacity. Not terrible. That makes the current fuel component of a 2500 mile flight about $75, or only $60 if the flight is full.

http://marketing.spiritair.com/howmuchis myfuel.html

That means that even if fuel prices quadrupled, we are looking at $240-$300 of fuel cost for a cross-country flight. Tolerable. Airline flight is alive and kicking! Plus if luggage surcharges are higher, folks will stop carrying their own body weight in luggage!

Posted by DanHess | Report as abusive

Felix, you’re comparing apples to oranges. I think what you should find out is if HKIA’s cargo terminal is gleaming and nice in comparison with other airport cargo terminals. For a cargo terminal, having the ambiance of Port Authority in NYC might be considered luxurious.

I think of airport’s “gleaming” quality as a sign and symptom of whether or not the place is willing to invest in its infrastructure. Of course there will be waste, but behind every new and shiny airport is going to be a new infrastructure network that supports its operation that is state-of-the-art. Most airports, even if they look like some soaring dragon, are just giant boxes with or without windows. Having been through JetBlue’s terminal in JFK, it’s quite a pleasant place and not a terrible spot to be stuck in, unlike, say, Logan or LAX. Not that Larry Summers will ever fly JetBlue, but I’m pretty sure he’d be less miffed having to go through that than one of those other elderly JFK terminals.

At the end of the day, passengers are the ultimate customer of an airport, even if it’s the airlines that are paying to use the facilities — the cost just gets passed on to the passengers. Given two airports that are identical in every way except that one is new and gleaming, and one is creaky and gloomy, I’m pretty sure most passengers would prefer to fly out of the newer one, and airlines will accordingly schedule more flights out of that one. Presumably, the increased congestion will then start evening the playing field for the older airport, but even then I suspect passengers would prefer the more comfortable choice. A fancy airport is not exactly a zero value investment.

Developer: The 747 has a lot of cargo room. 777 is not too bad either, and that’s what Cathay uses.

Posted by MarshalN | Report as abusive

I think nice airports make a lot of sense. Why? Future fuel prices will necessitate very crowded planes with little personal space. This era is already here.

In this era of higher ticket prices and passenger dissatisfaction, something’s gotta give and its not gonna be the crowded planes.

Posted by DanHess | Report as abusive

You are all confusing terminals with airport infrastructure, which also (and more critically) includes runways, taxiways, instrument landing systems, radar, approach procedures, etc. You are thinking from the point of view of the passenger, as opposed to the efficient operation of the aircraft.

Posted by Lastone | Report as abusive

As DanHess points out, air travel will still make sense even with $200/barrel oil. But long before we reach that point you’ll see people cutting back on OTHER uses of petroleum. More efficient cars, electric cars, CNG buses and trucking, and more.

Also, the “technical reserves” calculated in oil deposits depend on both technology and price. At $200/barrel you’ll see many more reserves come on line, including oil shales in the US and Canada that are presently only marginally profitable to exploit.

I seriously doubt that air travel will die. When we visit family cross-country, I want to leave in the morning and get there in the evening. I’ll pay a substantial premium to avoid spending two full days traveling in a train (with kids).

Posted by TFF | Report as abusive

Lastone: Since the original discussion started with the Summers comment on nice looking airports, yes, we’re talking about the passenger facing side of the airport. By your logic all buildings are no more than just walkways, spaces, plumbing, HVAC, etc. True, but not quite the point.

Posted by MarshalN | Report as abusive

MarshlN – My previous post was too brief to make my point. Lindsay says “Size matters. Speed and efficiency matter.” Salmon then says “So I’m still not convinced that a major investment in airports is the best — or even a modestly good — use of federal infrastructure-investment funds.” But Salmon and other commenters appear to be confusing “gleaming airports” (i.e., terminal buildings, since what else could possibly gleam at an airport?) with airport infrastructure that would actually increase speed and efficiency. An improvement in capacity (speed, efficiency) will take longer runways, more runways, more taxiways, more gates, NextGen, and changes in airspace (the highways in the sky). Note I have not even mentioned building new airports, which is extraordinarily difficult in the U.S. It is actually often easier (but not cheaper) to build new ‘gleaming’ terminals than airside improvements, since the latter typically result in additional real or percieved noise impacts on surrounding communities. Municipalities have done a terrible job in this country controlling land use around airports, which makes every major runway project hugely controversial. All that a gleaming new terminal building really achieves is to slightly ameliorate the unpleasantness of waiting for your inevitably delayed connecting flight…Also, it is the very rare person that makes a decision about which airport to fly out of based on the quality of the terminal building.

Posted by Lastone | Report as abusive

Lastone: Point well taken. Gleaming terminals are, I think, a signal that the region is willing to spend money on the infrastructure, and the assumption here is that there’s a correlation between a nice building and good infrastructure behind the facade. They don’t always go hand in hand together, but it’s usually a good start.

Posted by MarshalN | Report as abusive

I completely agree that a gleaming airport for passengers is an attraction that brings in traffic, and therefore allows the airport to function as a money-making venture. My problem is that the government should have little or no part in funding said airports and I’m shocked that they actually do. If an airport can’t afford to cover it’s operating and construction costs why is it being built in the first place?


Posted by MathieuBCN | Report as abusive

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