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.

Yeongjong Island, Incheon Airport’s Island

Location is highly important for a industry. As a commercial area booms in a good location and a booming commercial area attracts people, a location can determine the past, present, and even the future.

In this sense, are you not curious about Incheon Airport’s location? Judging by its name, it is clear that the airport is located in a city called Incheon. In that case, where is Incheon? It is near an island called Yeongjong Island. Today, we would like to introduce the story of Yeongjong Island.

The Past of Yeongjong Island: Destined to Become an Airport?

“Island with many purple swallows”

This is the meaning of Yeongjong Island’s former name, “Jayeon Island” It was later renamed Yeongjong Island, meaning “an island with a long floor.” Therefore, some interpret that the purple swallows represent airplanes while the long floor represents the runways!

To the west of Yeongjong Island is Yongyu Island, “the island where dragons roam,” to its south is Muui Island, “the island of dancing clothes,” and to its north is Si Island, “the island of fast arrows.” As such, interpreting the names of Yeongjong Island and its adjacent islands is quite amazing and fun as it seems to suggest that our ancestors named them as if they had predicted a long time ago that Yeongjong Island would become Korea’s largest gateway.

What is it that makes Yeongjong Island a place destined to be the location for an airport? Yeongjong Island is Korea’s 6th largest island. Its original area was smaller, but a large-scale reclamation project connecting 4 islands was performed to construct Incheon Airport, which made the large island we know today. Half of this large island is used by Incheon Airport.

▲ Satellite photo in 1985 / Source: Google Earth      

▲ Satellite photo in 2020 / Source: Google

The Present and Future of Yeongjong Island: Unleashing its Potential as Airport Economic Zone!

Yeongjong Island, which is one island made of 4 different islands housing Incheon Airport, is now transforming again into not just an air travel gateway but also an economic and tourism zone! Currently, Yeongjong International City is being constructed on Yeongjong Island, which is designated as one of the Incheon Free Economic Zones. Once developed, it will become a new city of more than 200,000 people! It is being promoted to become a city of housing, industry, tourism, and leisure based on Incheon Airport and its marine resources. If developed according to the blueprints, the Airport Economic Zone will be established, creating a broad economic ecosystem around Incheon Airport.

There are largely two directions in which to move to help Incheon Airport develop into a hub in Northeast Asia. The first is an Airport Industrial Park in which educational institutions and manufacturing/research facilities are gathered, and the second is Tourism Park where families can enjoy everything, from resorts to leisure facilities, based on the marine environment.

(1) Distribution centers & educational institutions

A large distribution center will be built in Yeongjong International City. This center, which is scheduled to be complete in 2021, is expected to play a big role in promoting air logistics and its associated industries. If Yeongjong Island develops into a city of state-of-the-art logistics, Incheon Airport’s role as a logistical hub will be strengthened even further.

In addition, it is solidifying its footing as an airport industrial park as it is home to educational institutions like Boeing Operations Center which trains pilots and P&W Aircraft Engine Maintenance Center which repairs aircraft parts and tests their performance.

(2) Resorts

Meanwhile, the Airport Industrial Park is being developed as a leisure tourism city with resort complexes combined with foreigner casinos, hotels, convention centers, and shopping malls as well as marinas.

The most famous and largest resort complex is Paradise City. It opened in April 2017 and serves customers with its 5-star hotel and Korea’s largest casino (8726 m2). As the first resort complex in Northeast Asia where visitors can enjoy tourism, cultural experiences, relaxation, shopping, and entertainment all in one place, guests can also enjoy various services of the hotels, restaurants, clubs, and spas!

Five-star hotels, casinos, and Paramount Theme Park will be established in the Inspire Integrated Resort, which is scheduled to open in 2022. The Paramount Theme Park will feature various attractions based on the theme of Paramount Pictures’ blockbuster hits such as Mission Impossible, Transformers, and Star Trek. It will have a different appeal from Paradise City, which is focused on shopping, tourism, and cultural experience.

(3) Marine leisure facilities

Not only resorts but also leisure facilities based on the marine environment are being developed. Yongyu Ocean View Project is being carried out, constructing cable cars connecting Eurwangni Beach with Yongyu Wangsan Marina, which was used for a yacht competition during the 2014 Incheon Asian Games. Muui Solaire Resort, where visitors can enjoy a hotel, water park, and marine theme park, is also under way.

Today, we have looked at Yeongjong Island, the island that is home to Incheon Airport. How was it? Aren’t you curious about what the future holds for the island which boasts Incheon Airport, one of the greatest airports in the world, while constantly developing as a promising city? We hope Incheon Airport will also unleash its potential on Yeongjong Island, an island of various appeals. J

Incheon Airport’s Air Travel Industry Support Measures

Many related industries have been hit hard by the rapid decline in demand for air travel due to COVID-19. While international flights are gradually re-opening before the vacation season, it will take more time for passenger demand to fully recover.

Incheon Airport is stepping up for the air travel industry that is facing an unprecedented crisis. Currently, Incheon Airport is showcasing various shared growth models for overcoming the crisis together. Let’s take a look at Incheon Airport’s efforts to re-open the roads in the sky that have been closed due to COVID-19!

KRW 50 Billion Worth of Incentives for Airlines!

Catching the public’s attention, Incheon Airport promised to provide KRW 50 billion worth of passenger incentives to quickly restore demand for air travel, which has declined due to the spread of COVID-19, and recover the airport ecosystem. This new incentive program will be offered separately from the government’s support measures for the air travel industry.

The airport extends landing fee discounts for new airlines and flights for up to two years and up to 100% discount on landing fees for late night flights in an effort to encourage use of the nighttime. In addition, the airport is planning to introduce a new passenger incentive program that provides KRW 10,000 per passenger for recovering the number of passengers and discounts 100% of the increase in landing fees for recovering the number of flights.

The airport will also be launching a grand marketing campaign to produce synergistic effects together with airlines. Incheon Airport is planning various marketing activities such as overseas presentations, joint advertisements, and road shows, in addition to promotional events such as airline re-opening events, passenger prize events, and airline or stakeholder invitations, as well as promotional videos to maximize branding effects and quickly restore air travel demand.

A national support policy is in place, funding airport use fees and employment retention subsidies for aircraft handling occupations such as airlines and ground handling crews.

  1. Airport use fees

① Reduce or delay the payment of airport use fees (March to May → March to August)

* Applicable when the number of passengers reaches 60% of the number from the year before

* Airport use fees: Landing fees (if not yet exempted), apron fees (airlines), lighting fees, baggage handling fees, boarding stair fees

② Fueling facility rental fee (announced in a risk management meeting on April 1, 2020)

Delay payment for 6 months → 50% reduction (KRW 9.4 billion, March to August)

③ On-premise business fees (2% of sales)

Delay payment for 3 months starting in March (no interest, approx. KRW 2.51 billion)

  1. Employment retention subsidies

Designate aircraft handling occupations and duty-free store staff as special employment support occupations

 

Promise of Stable Employment…Joining Hands with Three Duty-free Stores

Back in June, Incheon Airport signed the Memorandum of Understanding (MOU) to Overcome the COVID-19 Crisis and Promote Mutual Cooperation with three large duty-free store companies (Shinsegae, Shilla, and Lotte) in order to overcome the crisis in the airport industry ecosystem caused by COVID-19.

The MOU includes:

△ Implementing support measures announced by the government (June 1) for airport commercial store rent;

△ Stabilizing employment of duty-free businesses; and

△ Working together to restore demand for air travel between Incheon International Airport Corporation and duty-free stores.

Based on the MOU, duty-free companies will also make efforts to retain employees and participate in overcoming the crisis caused by COVID-19. In addition, beginning with the MOU with the three duty-free store companies, Incheon International Airport Corporation promised that it will take the lead in promoting the airport industry ecosystem by signing another MOU with 48 commercial businesses in Incheon Airport such as other duty-free stores and restaurants.

Expand “Rent Reduction” to Commercial Industries in the Airport

Following the MOU with the duty-free stores, Incheon Airport also concluded another Memorandum of Understanding (MOU) to Overcome the COVID-19 Crisis and Promote Mutual Cooperation with 11 major food service businesses, as promised.

This MOU includes a plan to cooperate for shared growth with commercial stores in Incheon Airport. The rent reduction percentage has expanded from 50% to 75% for small- and medium-sized enterprises and business owners and from 20% to 50% for medium- and large-sized enterprises. Incheon Airport has prepared a stepping stone to support stores in need, help them retain their employees, and overcome COVID-19 together as one.

“Nurturing Airport Talent” for the Post-COVID-19 Era

As many already know, there are trends being brought on by COVID-19? One is the coming of a safe, untact era as represented by artificial intelligence (AI), big data, and VR in the 4th Industrial Revolution. In line with this trend, Incheon Airport will actively invest in nurturing talented individuals for the future based on the 4th Industrial Revolution.

Based on the Ministry of Land, Infrastructure and Transport’s 3rd Aviation Policy Master Plan and Incheon International Airport Corporation’s Vision for 2030, Incheon Airport established the Leading Airport Industry Future Expert Nurturing Plan. Starting in the second half of this year, the airport will provide job training in fields such as AI, big data, future air travel, and culture and art. During this process, it will collaborate with the country’s finest educational institutions such as KAIST and other aviation-specialized universities. We hope that Incheon Airport creates a virtuous cycle through which investing in technology and people will lead to overcoming COVID-19.

Today, we have looked at Incheon Airport’s support measures for the air travel industry to overcome COVID-19. Incheon Airport is the gateway to Korea and also the frontline for disease control and prevention. Incheon Airport will make various efforts to protect the air travel industry while furthering its reputation as a clean airport to stop the spread of COVID-19!

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!