Introduction
Sao Paulo is a state in Brazil. The city is the regarded as the business hub of Latin America since is the wealthiest state in the country (Sao Paulo Congaonhas Airport, 2011). Nonetheless, Brazil as a country has a federal state system of government where its administration is divided into three levels; federal, state and city but each has clear defined mandate as per the Brazilian constitution (Sao Paulo Congaonhas Airport). In respect to transport industry in Brazil, Sao Paulo Congaonhas Airport continue to affirm that 82 percent of the country’s accessibility is by road, 9.1 percent by railway transport, pipeline accounts for 2.1 percent, marine transport being at 6.5 percent while 0.1 percent accounting for air transport.
Sao Paulo Airports: Congonhas, Guarulhos and Viracopos
Sao Paulo city has three airports that serve both domestic and international clients. In relation to these airports, Congonhas handles domestic flights; Viracopos International airport handles mostly international airlines although it also serves some domestic flights. In addition, Viracopo is the second largest and busiest in Brazil airport in Brazil. Nonetheless, Viracopos also handles cargo transport. Furthermore, Guarulhos International Airport also serves both domestic and international airlines.
Therefore, it is relatively important to acknowledge that these three airports in Sao Paulo are the cornerstone for economic activities of the city and Brazil as a whole. This is due to the fact that they are strategically positioned as the gateway of South America. Consequently, the airports act as linkage corridors of Brazil (Sao Paulo) to the rest of the world through international airlines that operate in these airports.
Moreover, there has been increased demand of airport services since there has been tremendous increase in passenger inflow to these airports in the recent years. The table below provides statistical information of increase in passenger for three financial years of the three airports.
Physical Design Assessment and Capacity Limitation of San Paulo Congonhas
According to Kasarda (2010) the physical design and capacity requirement of any airport must be put into consideration during the initial phases of airport planning to meet standards and requirements of international air industry. Nonetheless, it relevant from the beginning to come up with physical design and capacity requirements that will accommodate regional or international demands as per the use of the airport in question.
However, to be able to do this, it is important to prioritize the needs of the market. Some of the important factors according to Kazda and Robert (2007) that should be put into consideration include economic factors, requirements of the airport capacity, statistics of the air traffic and the forecasted demand of the airport in future. Nonetheless Ashford, Martin and Clifton (2010) postulate that physical design and capacity requirement of the airport is primarily depended on whether the airport will be a domestic or international terminal or whether it will serve both purposes.
Congonhas is therefore one of the airports of the Sao Paulo city that has its special features that are related to their physical design and capacity requirements. The airport is south of Sao Paulo eight kilometers from its central business district. It is the second largest after Guarulhos which is also based in the same city. As result of the city of Sao Paulo being regarded as the economic hub in the Latin America, the airport remains to be economically important for the entire region hence it is served by major airlines operating in Brazil. However, there exists several physical design and capacity limitations for airport which have impacted negatively to the performance of the airport that has indeed led to its under-utilization.
The airport was designed to serve domestic flights. Therefore, it continues to serve some of air carriers of the Brazilian air industry such as Pantanal Linhas, OceanAir and Transportes Aereos (Sao Paulo Congaonhas Airport, 2011). Nevertheless, the airport meets some of the basic airport physical design requirement. For instance, it can be easily accessed from the neighboring locations of the city of Sao Paulo by bus services that serve it. In addition, the airport has supportive facilities around such as hotels and other catering facilities that provide services to clients. This facilitates airport operations. As a result, the airport is able to serve approximately 18 million travelers per a year (Sao Paulo Congaonhas Airport).
Nonetheless, there are several physical design and capacity limitation for a San Paulo Congonhas airport that acts as hindrances to full operation of the airport given its market demands. For instance, there has been increased passenger traffic which has led to greater demand in respect to the airport operational capacity. Consequently, this has jeopardized efficiency of airport operations. Therefore, according to Ashford and Wright (1992), the physical design and capacity limitation of the airport did not adhere to the design principles of the air industry where future projections of the market demands need to be put into consideration. This will help to overcome stretching its capacity in future operations as it is the case currently.
In addition, physical design limitations of Paulo Congonhas airport can be noted from its security inefficiencies. In respect to this, Demsey (2000) prioritize security to be a key component in airport operations. However, in relation to physical design of Congonhas airport security system, there are some crucial security mechanisms that were not considered in its design. For instance, Global Navigation Satellite and the Differential Global Navigation Satellite System technologies that are being used by the airport is quite different and backdated technology as compared to the current security systems that are in use in other airports of the developed world such as the United States and some of the European countries (Airport Cooperative Research Program, 2001). In this respect, this security gap normal keeps off other potential airlines and clients from using the airport since security issues are highly prioritized in the air industry.
Furthermore, physical design and capacity of the airport must provide enough landside facilities for example access roads and enough car park that should be in a capacity to serve peak demands. Moreover, these facilities must be able to lessen delays and congestion to the departing and arriving passengers. In respect to Congonhas, these facilities are currently strained since congestions and delays are experienced during peak seasons of the airport operations. These are limitations that hinder effectiveness of this airport since its physical design and capacity did not put into consideration its future demands. Consequently, it is relative that these facilities be re-planned by putting in place new physical designs that are able to withstand present and future market demands especially during peak demands.
Therefore, as a result of these limitations, the airport is not meeting its actual market demands. Sao Paulo offers good economic activities which need to be served by Congonhas airport and therefore it needs to be in its full operational capacity to serve economic needs of the region. For instance, the region boosts of tourism activities which range from traditional architecture, museums, beaches which form the bulk of its economy (Airport Cooperative Research Program, 2001). It is therefore imperative for Congonhas airport to be in full operational capacity to be able to serve peak seasons Sao Paulo and its environs.
Strategy Assessment of Sao Paulo Airports: Congonhas, Guarulhos and Viracopos
Growth in airport transport usually comes as a result of improvement of economic activities in the region since transport is a function of economy. Therefore, for any country to successfully steer its economic activities, it is imperative to have good transport strategies to be able to steer economic activities in the region. However, in respect to air transport, the industry has experienced numerous evolutions that have entirely transformed it. Sao Paulo in this respect has strategy in place that seeks to transform its airports of Congonhas, Guarulhos and Viracopos so as to be able to handle passenger traffic that is doubling every ten (Airport Cooperative Research Program, 2001).
Therefore, strategy in place of Sao Paulo airports includes investment that seeks to increase airport capacity for the period spanning 2010 to 2014 for the tune of 2.6 billion U.S. dollars (Sao Paulo Congaonhas Airport, 2011). As a result, the forecasted investment needs to improve physical designs and capacity to meet market demands during peak seasons in future and to be in pace with the demand growth rate. As a result, several facilities have been identified to be improved while other new ones to be put up.
Nonetheless, given the fact that Congonhas airport is the second busiest airport in Brazil and the third busiest in the world in its freight and cargo handling, it is expected to be expanded from its current carrying capacity of six million to 18 million as its carrying capacity in future (Sao Paulo Congaonhas Airport, 2011). This will improve its services efficiency and be able to meet market demands.
In addition, in the efforts of improving service delivery and efficiency of these airports, there is strategy in place to put up new boarding lounges to cater for the increasing number of passengers. This is expected to lessen congestion to the few available boarding facilities and to improve their facilities to meet international standards. Moreover, there are other facilities that are in the strategic plans of the Sao Paulo airports. For example, there are plans to increase departure gates of the airports. Increase of additional gates is desired to lessen departure dilemma that currently govern these airports since there is a substantial time being lost in the queuing process during departure (Sao Paulo Congaonhas Airport, 2011).
Furthermore, there is a strategic plan of expanding car parking lot that currently holds approximately 3,400 cars. The expansion plans is intended to increase capacity to be in conformity with the anticipated growth of passengers in these airport. Just as there is increase in passenger traffic, is the same way that car traffic is experienced at the airports. Therefore, the Sao Paulo airports are in strategic plans of increasing parking lots for its passengers to facilitate parking of taxis and personal cars that serve the airports fraternity.
Furthermore, Sao Paulo airports have a strategic plan of putting up a tunnel that connects these airports (Congonhas, Guarulhos and Viracopos). In addition, a light rail line that integrates the Sao Paulo airports is in plans to improve its transport system. This plan seeks to lessen transport system between these airports since they symbiotically co-exist. In addition, the airport terminals is among the strategic plans and they are expected to be increased and be linked with railway line which is expected to connected to these airports and other related facilities such as booking areas, baggage carousels and several counters for check ins (Airport Cooperative Research Program, 2010). This is intended to revolutionize airport operations by bringing forth effectiveness in the airport services.
Nonetheless, there is also a strategy to increase airlines that operates from the three airports. However, this is designed to be implemented along with the expansion of process of these airports. Currently, there are several airlines that serve the three airports which can be categorized into two major groups of domestic and international airlines. In addition, there are those that are regarded as Brazilian national carriers. These national carriers are Tam airlines and Gol airlines. Nonetheless, there are other domestic airline operators which include TAF airlines, OceanAir airlines and WebJet airlines that serve the three airports of Sao Paulo and other regional airports (Sao Paulo Congaonhas Airport, 2011).
In addition to domestic airlines operating in Sao Paulo airports, there are several international airlines that have their presence in the city. These include Swiss International Airlines that has its operation in Guarulhos International airport and operates in other international airports of other countries hence connecting Sao Paulo with the rest of the world. In addition other giant international airlines such as British Airways, Air France, Aerolineas Argentinas, American Airlines, Air Canada and United Airlines are some of the international airlines that have their operations present in the Sao Paulo Airports (Sao Paulo Congaonhas Airport, 2011).
However, in the effort to strengthen economic performance of the region and the country as a whole, there are strategic plans to increase the number of both domestic and international airlines that are serving Sao Paulo city. This so since air industry plays a central role in commercial activities and therefore to be able to enhance these activities, it is necessary to increase operational capacity of airports in the region.
Furthermore, in relation to the destinations served from the three airports, there are strategic plans of increasing them from their standing point. However, the strategy recognizes the need to first increase the carrying capacity and the physical design of these airports before expansion of their destinations is done since this translates to increase in airline operations in airports.
Nonetheless, current destinations are determined by airlines serving these airports since each and every airline has its own destinations that relates to their central countries of operations. For instance, Air Canada which has its base in Canada has its destination to Toronto which is a Canadian capital, Air China serves Beijing which is a Chinese capital and Madrid, Air France has its destination to Paris, American Airlines serves several American cities which include Dallas, New York and Miami, British Airways serves London, Emirates serves Dubai. On the other hand, domestic airline operators serve most of the Brazilian cities (). For instance, Gol Airlines serves approximately 26 destinations in Brazil while TAM Airlines serves approximately 34 destinations include both domestic and international airports.
Access from catchment area is also under strategic plans of Sao Paulo airports. Given its strong catchment area of over 20 million people with strong and ever busy economic activities, the region provides beehive of activities to airport operations. For instance, the state is the industrial and cultural center of the country and it also serves as the transportation hub of other states. For example there are several foreign companies that are located in city which undertake international business that require airport services. These commercial activities provide a rich catchment area that provides business to these airports. In this respect, Sao Paulo airports have crafted strategies to meet service demands of its catchment area in future through expansion of their terminal, improvement of the carrying capacity, addition of airline operators and expansion of their destinations in effort of opening the state to the global market.
Connectivity to the airports is also a key area where Sao Paulo’s airports have strategized to undertake their development. Currently, these airports are accessed through use of cars and buses. However, there are few rail connections that can be used to access these airports but there are strategic plans to put up both rail and road connections to make them more accessible. In doing so, passenger traffic that is usually witnessed during peak seasons will be reduced and it will also help these airports to reach their full operational capacity.
Nonetheless, there are several strengths and weaknesses of operating three or more airports in one city as is the case of Sao Paulo. To begin with, strengths are usually motivating factors that inspire governments and other stakeholders to have several airports in the same city. One of the most adored reasons include business environment that airports attracts in the city. This is as a result of increase in network both domestic and international for goods and services produced or offered by the airport city to the rest of the world. Entrepreneurs usually like positioning their business to airport environs for proximity.
Moreover, Sao Paulo is a cosmopolitan city with huge population of people. This population always is in dire need of job opportunities to be able to certain its basic needs. In relations to this, presence of three airports in the city provides employment opportunities which may be directly or indirectly from airport related activities. For instance, employment opportunities may be indirect from other supporting activities such as hotel and catering industry which flourish in airport environs hence providing employment opportunities. On the other hand, employment opportunities may also be created directly from direct airports operations. For instance, air crew, aeronautical engineers and other professionals are employed by airports management and airlines to help provide their professional services in airport operations.
Furthermore, the three airports in the same city provide an integrated economic hub which turns the city as a major preferred business destination (Kaps, 2000). For example, apart from Sao Paulo city, other city with numerous airports is Amsterdam which has also emerged a major destination for business and commercial activities. Therefore, economic impact to the city with several airports is huge compared to disadvantages that may result from their multiple presences in the city.
On the other hand, there are several weaknesses accrued from the fact of one city having three airports. These include several restrictions to other economical activities in favour of airports operations. For example, processing industry which include factory activities, trucking and warehousing are completely segregated from airports environs since industrial emissions are highly discouraged to facilitate smooth airports operations. Therefore, despite airport activities encouraging other economic activities, it also hinders other commercial activities that can impact positively to the economy of the region.
In addition, it is also imperative to note that airport environs are devoid of residential settlements for intensive flight paths. This implies that bigger fallow areas of land must be spared for flight paths. As a result, settlement pressure is put to other parts of the city which results to overcrowding that strains other social amenities in these areas.
Proposal of the Strategy for Sao Paulo Airports
For Sao Paulo airports to have effective services and to achieve their operational capacity, it is imperative that airports craft sound, proactive and reactive strategies. However, these strategies need to be implemented intelligently by guarding against negative change effects that may result from the change of strategy. After a careful analysis of the three airport of Sao Paulo, the paper proposes following strategies to be implemented in order to attain effectiveness in their operations.
To begin with, airport management should embrace information communication technologies (ICT) in all its operational activities. ICT should be incorporated in all airport activities to help connect airport stakeholders which include airline operators, customers and other business providers. Excellent adoption of ICT services by stakeholders is likely to promote effectiveness and efficiency in service delivery of these airports.
In addition, airports growth are normally determined by airline firms that provides airways services, business entities that regularly use air transport and businesses that provides ancillary services to air passengers. Therefore, it is crucial for the all these stakeholders to have specific strategies that are aimed at achieving efficiency and effectiveness while meeting market demands in all seasons including peak periods. For this reason, it is important for airport management to enter into collaborations with other airlines that operate in other destinations in order to open Sao Paulo to more regions of the world.
In terms of increasing revenue for these airports, the airports management needs to craft good marketing strategies that should use modern ICT services to be able to target both corporate and individual clients in order to guarantee its revenue inflow. In respect to businesses that provides ancillary services to customers, plans should be in place to improve and increase their services in order to cater for the increasing number of passengers.
Moreover, it is relatively important for the airports management to engage in commercial developments that seek to support airports operations. For instance, ventures into catering and accommodation facilities will likely to make airports management to be self reliant. This will help reduce dependency on private players since they may hold airports operations hostage at some point due to uncertainties in their management.
Nevertheless, business process re-engineering of the airport needs to take place to overhaul airports operations that are currently characterized with inefficiency (Ahern, Elisabeth, Ledus & Mary, 2009). However, this re-engineering should take place after physical re-designing of the airport that should take place first to meet the current and future operational capacity. The re-engineering process should be geared towards increasing revenue inflow so as these airports can be self reliant in addition of adding value to its business value.
However, it is important to acknowledge that implementation of these strategies will experience several challenges that may be detrimental in their initial phases. For instance, in its initial stages, it will be difficult to meet optimum possible value derived from strategies such as business process re-engineering since their positive effects might take some while before they are reflected. It is therefore relevant that implementation efforts be emphasized throughout this phase to guarantee better results afterwards.
In addition, due to business re-engineering and the desired increase in operational capacity, activities in these airports will tremendously increase and so variety of skills will be required. It therefore implies that there will be a challenge in skills development hence human resource developments of these airports need to be proactive in providing necessary skills needed in expansion and advancement process.
Conclusion
To wind up, it is evident that Sao Paulo airports; Congonhas, Guarulhos and Viracopos have some physical design and capacity issues that need to be addressed for them to achieve their operational capacity. Nonetheless, it is also important to note that these airports are not able to meet market demands during peak seasons and it is imperative that expansion process should be initiated that will enable them meet their market demands. Consequently, expansion and advancement of these airports will contribute to economic growth of Sao Paulo city and the entire Brazil. This is as a result of the region being open to more regions of the world hence acting as a recipe for commercial activities.
Nevertheless, despite having several strategies in place that seek to engineer expansion process, there are several challenges that are likely to hamper the process. Therefore, it is advisable for the airports management to be keen on these challenges so to guard against their adverse effects in the restructuring process. Successful implementation of restructuring strategies and physical redesigning will guarantee full operational capacity that is important in meeting market demands especially during peak seasons.
Therefore, it is imperative to implement these strategic plans with great care to avoid negative changes in the implementation process. However, skill development is also required to be prioritized in the restructuring processes since airports operations exists in dynamic environment and therefore skills also needs to be dynamic. However, implementation process need to be regularly reviewed to evaluate its performance and necessary correction measure made. This will ensure that implementation process achieve the desired results.
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