3 Best Overseas Projects by Incheon Airport, a Mentor for International Airports

What meaning does “overseas business of Incheon Airport” carry?

While overseas business serves as an opportunity to demonstrate Incheon Airport’s outstanding competitiveness to the world, it is also gaining attention as one of the businesses that can produce a huge synergistic effect on the country’s economy. Once a project is successfully awarded, we can export packages of construction companies, quality assurance inspectors, telecommunications and electronic equipment, baggage handling, and operational staff for airport construction.

Incheon Airport has performed 29 overseas projects in 14 countries around the world. This post introduces 3 of these major projects!

1) First Step in Overseas Business: Consulting for Erbil International Airport, Iraq (2009)

It was in February 2009 that Incheon Airport’s 20 years of “knowhow” related to construction and 10 years of “knowhow” related to operation was exported for the first time to Erbil, a city in North Iraq. Erbil is also the region where the Republic of Korea Army’s Zaytun Division was stationed.

The Kurdistan Regional Government (KRG) constructed Erbil International Airport to respond to increasing demand for flights after the Iraq War, promote reconstruction projects in Iraq, and nurture it as a hub airport in the Middle East. With its opening in May 2009 approaching, Iraq requested consulting on airport operation from Incheon International Airport Corporation.

Incheon International Airport Corporation sent 31 experts from 6 fields, such as information and communications, mechanical equipment, air navigation facilities, and operation and management, over the course of 5 years to pass down Incheon Airport’s unique operation expertise, helping Erbil International Airport open successfully and operate stably.

The experience with Erbil International Airport, for which Incheon Airport generated USD 31.59 million (44 billion won) through consulting alone, was valuable as it informed the Middle East and the rest of the world of Incheon Airport’s extraordinary technology and operation expertise and served as a steppingstone to later receiving the second project in the Middle East, Duhok International Airport in Iraq.

2) The World’s Largest Airport Development Project: Consulting for the Operation of Istanbul Airport (2015)

The “Operation Consulting for Istanbul Airport” project that we received in 2015 was the world’s largest airport development project, which involved constructing a new airport near the Black Sea north of Istanbul to replace fully saturated Istanbul Ataturk Airport, cost KRW 28 trillion, and created an annual passenger capacity of 200 million people. Operation consulting alone reached KRW 129 million.

It grabbed everyone’s attention as it involved participation by many global airports such as Singapore Changi Airport and Munich International Airport. After a fierce competition, Incheon Airport, which earned many points for its experience relocating an international airport (Gimpo → Incheon), was selected as the final consulting firm!

Incheon International Airport Corporation, which received the project in June 2015, has been passing down the advanced operation techniques of Incheon Airport to Istanbul Airport over the course of 65 months. The project is still ongoing and will continue until October 2020. Incheon International Airport Corporation is serving as a “mentor” for Istanbul Airport for the whole process, from operation strategies before opening, organization and training plans, as well as airport operation and development of commercial facilities after opening!

3) Operate a Non-Korean Airport! Commissioned Operation of Kuwait International Airport T4 (2018)

While most of the above overseas business came from consulting, April 2018 marked a turning point. Incheon International Airport Corporation received a project for Kuwait International Airport T4 Commissioned Operation worth USD 127.6 million (KRW 136.5 billion).

Kuwait International Airport is a leading airport in the Middle East, owned 100% by the Kuwait government and capable of handling 12 million passengers annually. Incheon International Airport Corporation performed the pilot operation of Kuwait International Airport’s Terminal 4 for 3 months, and then was put in charge of operation and maintenance until 2023.

For this project, Incheon International Airport Corporation beat France’s ADP, which operates Paris Charles de Gaulle Airport; Germany’s Fraport, which operates Frankfurt Airport; Turkey’s TAV, which operates Istanbul Airport; and Ireland’s DAA to be selected as the final operator of the project. Incheon International Airport Corporation was the first foreign operator to operate any airport in Kuwait. Incheon Airport was highly evaluated for opening Terminal 2 successfully in 2018!

There were some difficulties when Incheon International Airport Corporation sent 30 experts from different fields to the country to prepare for the project. Just one month before the terminal’s opening, it rained 100 mm for 24 hours. Roads connected to the terminal were lost, and major facilities such as the apron, taxiway, and jet bridge were flooded, causing a halt in the operation of Kuwait International Airport. In just 1 week, however, we were able to successfully normalize the airport’s operation, proving Incheon Airport’s outstanding operation capabilities.

We can take pride in the fact that Incheon Airport, which opened in 2001 and started as a late-bloomer, has stood tall as “a mentor for international airports” beyond Korea’s gateway. Though Incheon Airport has systematically accumulated knowledge on everything from A to Z to provide the best airport service, this is all possible thanks to the people who have supported Incheon Airport.

We can look forward to Incheon Airport’s remarkable progress as it plans to expand its overseas business across the world including Eastern Europe, Southeast Asia, and Central Asia based on a variety of experiences performing projects in airport construction, operation, and investments.

Incheon Airport’s Know-how for Sale Around the World!

Did you know that Incheon Airport is being exported to different parts of the world?

Incheon Airport is turning its know-how in airport construction and operation that has been accumulated since its opening in 2001 into its unique competitiveness. As the airport is praised as one of the world’s best in operation efficiency and service, many airports around the world are trying to learn from Incheon Airport!

This post will briefly introduce Incheon Airport’s new standing and the fields of our overseas projects, which have been unbeknownst to ordinary citizens until now. 😊

Latin America, Europe, the Middle East, and Asia… Spreading Airport’s Know-how Across the World!

Incheon International Airport Corporation created the Overseas Business Group in 2007 and has since been targeting the international market. The outcome has been amazing.

The airport has won 29 projects totaling USD 220 million in 14 countries from Erbil International Airport, Iraq in 2009 to Russia, Nepal, Bangladesh, Cambodia, India, and Indonesia (as of July 2020).

Why Focus on Overseas Business?

Though airports are struggling a bit due to COVID-19, air travel demand around the world has been on the rise, and so has the demand for airport development including modernizing existing airports and constructing new ones.

In line with this market trend, Incheon International Airport Corporation has participated in various international projects by exporting its accumulated know-how in airport construction and operation to create new growth engines and become a specialized global airport enterprise. More specifically, the operation right of overseas airports is a business that helps to diversify the corporation’s profit structure and serves as an opportunity to export its advanced technologies and know-how, which can enhance its status.

Along with the successful operation of Terminals 1 and 2, Incheon International Airport Corporation has successfully performed airport consulting and operation projects across regions, such as Latin America, Europe, the Middle East, and Asia, and continued to make conditions favorable to win awards for projects down the road.

What Fields are Included in Overseas Business?

Incheon International Airport Corporation’s overseas business is divided into 3 fields: (1) airport planning and construction consulting, (2) airport operation support consulting, and (3) investment projects. Based on our know-how in airport construction and operation, we have continued to expand our overseas business across various fields. By doing so, it helps to make other Incheon Airports in other parts of the world.

(1) Airport Planning/Construction Consulting

Solid, basic design, including operation strategies and action plans in line with the direction of future developments, is very important for any airport as it will be a national infrastructural industry that has a huge economic impact on a country in terms of its scale or impact.

Incheon International Airport Corporation has provided consulting across various fields such as airport construction feasibility studies, master plans, design advice, Value Engineering (VE), Construction Management (CM), and Operational Readiness and Airport Transfer (ORAT) based on its capabilities which have been pilled up over the years.

Most notably, the corporation established the 2013 Philippines National Airport Master Plan. Incheon International Airport Corporation formulated the development strategy and stage-specific development plans of all airports across the Philippines, an island and country of tourism. The project lasted for 18 months from 2014 to June 2015 and cost USD 25.8 million (KRW 2.7 billion). While Korea previously provided consulting to many individual airports abroad, this was the first time that the corporation was in charge of establishing a national-level plan.

(2) Airport Operation Consulting

While it is important to build the airport physically well, it is just as important to obtain continuous content to attract many passengers. To do so, it is essential to establish a vision and business strategy that embodies an airport’s direction. Furthermore, know-how is necessary across an airport’s operations such as passenger service management, marketing to attract airlines, commercial facility concept design, airport security and secured area control, and airside operation.

Incheon Airport is recognized for its international competitiveness in passenger service as it has ranked #1 in Airport Service Quality (ASQ) for 12 years in a row. This competitiveness in operation helped Incheon Airport win an award for the Kuwait Terminal 4 project back in 2019.

(3) Investment Projects

While Incheon International Airport Corporation has performed many different overseas projects, most of them focused on consulting. To improve added value, the corporation will diversify its portfolio through various methods such as highly profitable share investing in addition to consulting.

A great example of the airport’s share investing is the project under which Incheon International Airport Corporation invested KRW 7.6 billion in the Khabarovsk Novy Airport in Russia from 2011 to 2017. This airport is the 9th largest out of the 351 airports in Russia and promoted by the Russian federal government as a Far-East hub airport. Incheon International Airport Corporation sold 10% of the shares it invested in Khabarovsk Novy Airport for KRW 11.1 billion in 2018, raking in a 46％ return on investment.

Today, we looked at Incheon International Airport Corporation’s overseas business status and project fields. Isn’t it great that Incheon Airport promotes its competitiveness to the world and contributes to improving Korea’s national standing? The next post will introduce some major projects in more detail out of the various projects being carried out by Incheon International Airport Corporation!

Four Industry Hub of the Airport Economic Zone

Incheon Airport, evolving into a third-generation airport and changing the paradigm of airports!

In the previous post, we talked about the basic concept of the Airport Economic Zone, and where Incheon Airport stands within the zone.

Before reading this post, it is important understand the big picture in which Incheon Airport is moving beyond a traditional airport that simply transports passengers and cargo while creating new economic value by combining many airport-related businesses. This post takes it one step further and introduces specific action strategies to implement the Airport Economic Zone.

To develop the Airport Economic Zone, Incheon Airport has selected and seeks four industry hub: aircraft support, tourism/MICE, global logistics hub, and creation of air transport demand. Let’s take a look at what is going on in each of the themes!

Four Industry Hub of the Airport Economic Zone: ① Aircraft Support

“Making aircraft maintenance a one-stop service at Incheon Airport”

Aircraft support refers to various support businesses related to the operation of aircrafts. More specifically, aircraft maintenance, repair, and operation (MRO) refers to inspecting, maintaining, and repairing aircrafts so that they can operate safely.

Incheon Airport supports MRO so that it functions properly while preparing it to become a new business foundation for the future.

It is a plan to lay the solid groundwork for the aircraft maintenance ecosystem by preemptively developing MRO infrastructure, such as hangars, maintenance training centers, MRO part facilities, and administrative support centers to create a large MRO cluster around the airport while attracting professional training institutions to nurture skilled human resources for aircraft maintenance.

In addition, to respond to recently rising demand for leisure/business aircrafts, the airport will establish separate fixed-base operator (FBO) facilities to attract more VIP customers. It is fun looking forward to more development in Incheon Airport!

Four Industry Hub of the Airport Economic Zone: ② Tourism/MICE

“Making coming to Incheon Airport itself a reason”

Tourism/MICE is a business that makes Incheon Airport an attractive destination beyond just being a place for a layover. To do so, it is necessary to develop surrounding facilities such as accommodations, culture and art, commercial stores, and exhibition halls to make Incheon Airport itself a tourist attraction.

It is important to develop its landmarks, in particular. The airport’s strategy is to develop complex facilities, combining commerce, hotel, culture and art, and business, satisfying various passenger needs, and maximizing its effect of attracting customers.

Landmarks developed like this can create even more economic value in connection with tourism resources in the hinterland. Incheon Airport is painting a picture to establish a recreation/tourism belt to connect adjacent cities, such as Yeongjong, Ganghwa, and Songdo, and build an airport-centered tourism industry belt.

 

 

Four Industry Hub of the Airport Economic Zone: ③ Global Logistics Hub

“Making Incheon Airport a global logistics hub”

Incheon Airport is geographically well-positioned as it is close to the world’s factory China and other countries in Asia, just 30 minutes away from Incheon Port by car, and capable of various logistics transport connecting maritime and air transport. Based on this geographical advantage and potential as a logistics hub, Incheon Airport has been able to grow rapidly in just a short period of time.

In the last post, do you remember we told you that Incheon Airport ranks 3rd in the world in handling international cargo, following Hong Kong and Shanghai/Pudong? Incheon Airport does not stop there and instead, continues to expand its logistics infrastructure to handle a larger volumes of cargo more accurately and quickly.

It is worth noting that the airport rapidly responds to the expanding e-commerce sector and subsequently changing distribution processes. Incheon Airport is planning to lay steppingstones to continue to grow as one of the finest cargo airports by establishing optimal operation systems and models for logistics facilities, including a *global distribution center, *fulfillment center, and *cold chain.

*Global Distribution Center (GDC)

Center for global logistics that receives and stores products from global e-commerce companies, classifies and repackages them by item, and delivers them according to individual orders

 

*Fulfillment

Logistics fulfilled by professional logistic firms for sellers, including storage, sorting, packaging, delivery, and handling

 

*Cold Chain

System that keeps temperature low enough to maintain freshness and quality during storage and transport from the harvest to the final destination of fresh foods

Four Industry Hub of the Airport Economic Zone: ④ Creation of Air Transport Demand

“Making Incheon Airport a giant business platform”

Finally, creation of air transport demand refers to creating passenger and cargo demand by attracting cutting-edge manufacturing firms near the airport. A place near Incheon Airport is definitely attractive to companies whose manufactured goods are mostly exported and whose employees travel abroad often.

In a nutshell, it aims to build a convergent cutting-edge industry hub for light, thin, short, and small assembly and processing as well as biotech, advanced materials, and energy in accordance with the 4th Industrial Revolution in which the industrial structure will turn into that which is convergent and cutting-edge.

It includes Global Aviation Town, which establishes an airport industry network cluster by integrating airline headquarters and operation support centers; Global Trade Market, which creates various exchanges such as aircraft product displays, aircraft human resource exchanges, and artwork trade; R&D and Training Park, which establishes business-friendly conditions; and Aircraft Financing Park, which supports aircraft leases. Integrating such industries can create enormous added value.

Today, we looked at the Airport Economic Zone’s four industry hub: aircraft support, tourism/MICE, global logistics hub, and creation of air transport demand. Incheon Airport dreams of developing itself and its surrounding areas into an Airport Economic Zone based on these four industry hub.

We are still in the early stages, but if everything goes as planned, it will have a huge economic ripple effect! We ask for your continued interest and support for Incheon Airport so that these efforts can translate into momentum for the country’s economic growth!

Introducing the “Airport Economic Zone”

“What is the Airport Economic Zone?”

This is a question you may have if you have never heard of this term. It includes the word “economic,” which makes it sound difficult to understand. However, it is actually not difficult to understand at all!

This term captures Incheon Airport’s great potential and possibility. It is a fact that understanding this term will broaden your insight into the airport industry.

In this post, we will take a look at what the Airport Economic Zone is and how Airport Economic Zone is related to Incheon Airport!

What is the Airport Economic Zone?

Numerous things are needed to run an airport well, and these things should all interact with each other and be constantly moving.

To begin with, we need airlines to transport passengers and cargo. But what about the airplanes that are owned by airlines? They require strict maintenance to ensure safety for every flight. We also need a variety of commercial stores that passengers can enjoy while waiting for their flight, and employees to run these stores. As many as 70,000 people work in Incheon Airport. To transport cargo well, we need a logistics park in which hundreds of companies are located.

Everything we mentioned above is only what is required for an airport – not to mention needs for various means of transportation to allow people visiting the airport to travel around the country easily. We need accommodations like hotels where visitors can stay and relax and infrastructure for meetings, incentives, conferencing, exhibitions (MICE). Tourist attractions that visitors can check out during their spare time would be icing on the cake.

Now, can you see the necessary facilities, services, and businesses expanding one by one from the airport like an ecosystem? This economic ecosystem surrounding the airport with the addition of infrastructure, related economic activities, and global business environments is referred to as the “Airport Economic Zone.”

You can understand it as the “economic zone around the airport.” It refers to a very large economic zone in which various industries related to the airport are integrated and combined such as aviation, logistics, and maintenance, repair, and overhaul (MRO), tourism.

It is an economic zone with synergy, which includes hinterland in which an ecosystem of complementary industries is established and related economic activities are conducted, through the establishment of an ecosystem for various economic activities with network connections and accessibility to the airport.

Scene in the Airport Economic Zone

For those of you who still can’t fully wrap your head around it, let us show you a scene to demonstrate how the Airport Economic Zone works in practice. This is the schedule of Tom, an American who comes to Korea for business.

[DAY 1]

Tom unpacks in a five-star hotel that is located 10 minutes from Incheon Airport and heads out to a meeting place. He goes to a MRO company in Global Airport Town north of Terminal 1 to sign a contract for the purchase of aircraft maintenance parts. After successfully signing the contract, he comes back to his room and buys gifts for his family in a shopping mall located 5 minutes away by foot.

 

[DAY 2]

The next day, Tom has a meeting with a sales manager from a global firm based in the Global Shipment Center, Phase 3 Logis Park. After wrapping up his morning meeting, Tom wants to spend the afternoon a little differently. He visits the Water Leisure Park near Terminal 1 with the manager. He enjoys the beautiful waterside park and has a great time in the water leisure sports experience space. In the evening, he enjoys a traditional Korean course dinner at the Traditional Culture Park, relaxes at the spa, and calls it a day.

[DAY 3]

3 days have flown by. Tom has 5 hours left before boarding. It would be a shame to waste such time. Tom goes to the multipurpose performance theater Arena Hall in the Landmark Complex, which is located 10 minutes away from the terminal, because he heard that his favorite Korean and British bands would be performing together here. After doing everything with a minimal travel time during his stay in Korea, he boards the perfectly maintained aircraft.

Does Tom in this scene help you imagine the significance of the Airport Economic Zone? If the Airport Economic Zone is properly implemented around Incheon Airport, any activity or business can be fit into your itinerary. You can understand that as Airport Economic Zone has a greater impact as Tom’s schedule is more filled, satisfactory, and broader in scope!

Incheon Airport, Changing the Airport's Paradigm

Incheon Airport is expanding its presence in the center of the Airport Economic Zone. It is never fully satisfied with its global standing, constantly reinventing itself to make new history. The changes in Incheon Airport can be largely divided into 3 paradigms. Let’s take a look at how Incheon Airport has evolved from the 1st generation to the 3rd generation.

1st Generation Airport

Incheon Airport focuses on building infrastructure for aircraft takeoff and landing and establishes convenience and commercial facilities in the passenger terminal.

2nd Generation Airport

Incheon Airport develops into a cultural space with leisure and entertainment (Airport City) by combining shipping, shopping, and business.

3rd Generation Airport

Various economic activities occur centered around Incheon Airport, investment environments are established, and new value is created. The airport serves as an industrial hub based on global accessibility as well as a hub of economic activities that have expanded to hinterland.

Incheon Airport is evolving into a 3rd generation airport! Incheon Airport is currently trying to become the center of the airport industry ecosystem as a 3rd generation airport. What makes this possible? The Airport Economic Zone!

Incheon Airport’s Scale Compared to Other Airports Abroad

There are so many airports around the world. You may be wondering what other airports have been up to. Below are some recent trends in other airports in the Netherlands, the US, France, and China.

Amsterdam Airport Schiphol, the Netherlands

Amsterdam Airport Schiphol established an airport economic zone after the Municipality of Haarlemmermeer, the City of Amsterdam, the Province of Noord-Holland, and Schiphol Group contributed 25% of the funds each to establish Schiphol Area Development Company (SADC).

Memphis International Airport, the US

Memphis International Airport used FedEx World Hub as an anchor to establish FedEx Cold Chain Center, cargo processing facilities, and logistic park hinterland. 130 global companies from 22 countries are located here, creating jobs. This case is regarded as one of the most successful airport economic zones.

Paris-Charles De Gaulle, France & Zhengzhou Xinzheng International Airport, China

Paris-Charles De Gaulle in France and Zhengzhou Xinzheng International Airport in China also built industrial parks and complex facilities and produced significant results under the names of “Airport City Project” and “Airport Economic Zone,” respectively.

“How is Incheon Airport’s economic zone different from that of other foreign airports?”

Its scale!

“Incheon Airport is the world’s first airport to approach the concept as an economic zone.”

Many other airports developed logistics pubs, headquarters of global firms, R&D clusters related to aviation, and education and training parks in the areas surrounding airport functions.

What differentiates Incheon Airport from others is that it does not simply develop its surrounding areas, but aims for a larger economic project, which encompasses not just Yeongjongdo and Incheon as a hinterland economic zone spatially but also, ultimately, all of Korea. That is to say, its scale is different.

Its scale is massive, so it will have a huge impact on the country’s economy. Right? Collaboration between stakeholders such as the central government, local governments, businesses, and institutions will be more sophisticated and delicate for the project. As the airport is preparing for this huge project, we look forward to the future it will create!

Today, we have looked at the basic concept of the Airport Economic Zone, and Incheon Airport located in the center of this zone. In the next post, we will examine in more detail the specific vision that Incheon Airport is picturing and implementing for Airport Economic Zone!