In this interview with The Worldfolio, Mr. Mohamed Yousif Al-Binfalah, CEO of Bahrain Airport Company (BAC) discusses how BAC fits into the long-term development goals of the kingdom and the details of their $1.1bn project which aims to increase its capacity to 14 million passengers a year, positioning Bahrain as a major aviation hub
The Gulf region has enjoyed tremendous air traffic growth over the last several years and it is home to some of the world’s fastest growing airlines. How do you assess the performance of the aviation sector in the region and how is Bahrain maximizing this growth?
The aviation industry as a whole is enjoying strong growth across the world and is one of the most resilient industries to bounce back from economic slumps and reach new heights time and time again. This region has acted over time as a crossroad between cultures, connecting people from the West to the East and vice versa. That role will continue to be crucial to aviation connectivity. The region is witnessing – as part of a concerted effort to diversify economic activities – heavy investment in the aviation sector. There are investments in airports across the region, from Kuwait all the way to Oman and everywhere in between, and Bahrain is no exception. Besides that, we see a lot of regeneration and investment in carrier infrastructure, so we are fortunate in this region to have one of the fastest growing airlines in the world. Gulf Air is going through a restructuring phase that will very soon result in the introduction of new aircraft. Hopefully, by the beginning of next year, this will further boost traffic growth at Bahrain International Airport.
Having witnessed a 14% compounded growth rate in the last decade (according to International Air Transport Association (IATA) estimates), I believe that this region will continue to be a leader in traffic growth. I also believe that our airport – which was the first international hub in the region – will play a key role through the modernization and regeneration program that we are currently undertaking.
What competitive advantages would you identify when looking at Bahrain’s aviation industry compared to other countries in the region?
We have a unique geographical position in the region, being a crossroad between different cultures. Historically artefacts have been found in Bahrain that belonged to different societies and cultures. All you have to do is visit one of the Kingdom’s museums and you will wonder what brought these artefacts so many thousands of kilometres away from their origins.
Geographically, we are just 25 kilometres away from one of the biggest economies in the region, the Kingdom of Saudi Arabia. If you are a cargo operator you will find it more economical to transfer articles from Bahrain to Saudi Arabia than from the southern Gulf. That's another differentiator that is highly attractive to investors. We are doing a lot of things at the airport that will make this a real value proposition to investors.
When we met with the Minister of Works, Municipalities affairs and Urban Planning, H.E. Essam Bin Abdulla Khalaf he mentioned that "logistics plays a key role in driving economic growth and attracting international investment into the country”. In this context how is Bahrain International Airport aligning with the long-term logistics focus of the Kingdom?
I believe that nowadays more than ever, we have a clearly defined high level strategy on what we want to achieve with regard to logistics and cargo that reaches all the way to the Office of His Royal Highness the Crown Prince and First Deputy Prime Minister. HRH's Office is leading very serious efforts to bring together all of the stakeholders to explore growth possibilities. The Bahrain Logistics Board, which reports directly to the Government Executive Committee chaired by His Royal Highness, has been set up and brings together all the relevant stakeholders from the Ministry of Industry and Commerce, the Ministry of Transportation and Telecommunications, Ministry of Interior-Customs, Bahrain Airport Company, Bahrain Economic Development and Khalifa bin Salman Port . These stakeholders look at all the opportunities and constraints and come up with solutions to meet certain targets. In 2014, during the Bahrain International Air Show, we appointed airport consultants to carry out a land use and master plan study of the airport. The objective was to investigate the best available areas for development and we identified huge potential for the logistics and cargo sector.
We are currently very active on the marketing and promotional side, participating in major cargo and logistics events. We also work very closely with the EDB, through which we have managed to create a lot of synergies, not only on the cargo and logistics side, but also with airline rout development initiatives.
Last year, at one of the major cargo events held in Berlin, we had an active role in reaching out to a number of operators on the market. Some of those introductions resulted in serious interest in exploring opportunities to set up businesses in Bahrain.
We are going to invest in the airport, as well in cargo and logistics. We have already started building the infrastructure. The airport is a platform for development. It is an enabler, but not necessarily the entity that must do all of the heavy lifting. It needs partners to be in a position to attract direct foreign investment. These investments will leverage many of the advantages the country offers, including a liberal economic environment, an advanced telecoms infrastructure, transparent regulations, ease of setting up business, and efficiency. All of these are advantages that we would like serious investors in aviation to consider and use us as a platform to reach markets beyond Bahrain. We realize that we are a small market but we want to be an efficient one. We want to be a market that, though small compared to others, is taken seriously by investors. To do that, we need to allow the airport to be an enabler. It must have the right infrastructure to allow investors to benefit easily from it. Through our collaborative relationship with the EDB, I think we have a valuable proposition that is quite competitive.
Bahrain International Airport is undergoing a $1.1bn expansion, aiming to raise its capacity from 9 million to 14 million passengers by 2020. Can you share some of the details of this expansion plan?
Our airport, in its current configuration, dates back to the 1970s. The last investment or capacity expansion was done in 1994, to expand the terminal building throughput to 4 million passengers. Since then the airport has reached a capacity of almost 10 million passengers. You have a gap between design capacity and actual throughput that begs for an expansion and improvement in the level of service. Various options have been evaluated, including the latest in 2013, when there was a firm commitment to the Kingdom of Bahrain from the Gulf Cooperation Council Development Program, which listed the expansion of the airport as one of its top priorities.
The project started with a focus on the terminal building. It was designed to increase the capacity from 9 million passengers a year to 14 million passengers. However, since then, the scope of the development has increased beyond the terminal passenger building. In January of 2016, we concluded the appointment of the main contractor for the new terminal building and the contract was awarded through an international competitive tender to a joint venture between Arabtec of Abu Dhabi and TAV of Turkey. Their scope includes the development of the terminal building with a built-up area four times the size of the existing terminal, a multi-storey car park, a central utilities complex and all associated auxiliary facilities.
We also appointed a contractor to build a new fuel farm at the airport and upgrade the hydrant system. We were instructed by the government to look into the relocation of the existing fuel farm and decided to form a joint venture with the Oil and Gas Holding Company (NOGA Holding) to own the development of the aviation fuelling asset and we expect the contractor to break ground in Q2 of this year. We are also in the process of developing a major maintenance, repair and overhaul hanger. The consultant is onboard and we are currently in the process of qualifying local and international contractors.
We also have another consultant working on the development of a concept for a general aviation terminal as a response to the fact that Bahrain is a financial hub and that we need to provide the financial sector and the wider business community with a product that meets their expectations – a product that will allow them to conduct business and to attend to their customers and that can compete with the rest of the aviation terminals in the region. We've completed the concept design and should be due to present the findings to our stakeholders very soon.
And as part on the airport’s investment in infrastructure, we have built a new fire station. This has been commissioned already and it is one of the most modern in the region in terms of size and capabilities. We have also developed a super gate to manage the access and traffic of staff and contractors to the airside area with a car park that can accommodate 1,300 spaces.
The program that we are managing today on behalf of the Ministry of Transportation and Telecommunications is probably one of the biggest construction programs on the island, and definitely the biggest in the history of Bahrain´s aviation. This is all being managed by Bahrain Airport Company (BAC), a company that is quite young compared to other airport operators in the region. BAC was created as one of the reform initiatives by His Royal Highness the Crown Prince in 2008. At that time, there was a realization that, for this sector to match up with industry best practices and requirements, a segregation or demarcation of the regulator from the operator had to be made. This is when a decision was made to split airport operations from airport regulations. Prior to that, the Bahrain Civil Aviation Authority operated the airport. Nowadays they regulate, oversee, inspect and enforce, while we carry out all of the operational activities and developments at the airport. We are privileged and lucky to be honoured with the task of delivering a massive development program that will elevate the status of the airport and make it on par with others in the region. By 2019, I can assure you that this will be one of the most efficient airports in the region. OAG (Air Travel Intelligence), based in the UK, has called BIA one of the most punctual airports in the world, and we have the potential to take this achievement to the next level.
Nowadays customer experience is one of the key factors in providing world-class service to passengers. How is Bahrain Airport Company enhancing its customer experience?
I joined in 2012 and was proud when, in the following year, the airport was recognized as the friendliest staffed airport in the Middle East by Skytrax. This was quite an achievement when you compare it to the developments that are taking place around the region. When it comes to passenger experience, it is one of the areas that we have focused on, and are investing in, through working with experts in the industry to redefine the passenger travel experience at BIA, with the main objective being to take passenger experience to the next level. It's not enough for an airport to invest only in technology and infrastructure, a shift in mindset is also needed. When you have an environment that is multi-stakeholder oriented, you don't have control over each and every service delivery. You have to rely on the delivery of others to culminate that experience.
We are a transfer hub at the end of the day, and a transfer hub has to deal with the reality that most of its passengers are not going to experience the country. They will come through a revolving door and connect to another aircraft and leave. One of the ideas that we are exploring is to bring the culture of Bahrain to the terminal building through its art, heritage and history, to give passengers a sense of the place. We want passengers landing at this airport to realize they are in Bahrain. It will be a unique building, representative of the rich and long history of this country. This is going to be one of our biggest challenges. It's not an easy thing to do, but we are keen to work with people who have done it before and who have done similar things at other airports. We are talking to various curators and designers on how we can achieve this vision.
Another key issue in Bahrain’s future plan is sustainability and becoming environmental friendly under Economic Vision 2030. We have seen BAC’s efforts to reduce greenhouse gas emissions and its achievement of the first level of the Airport Carbon Accreditation Program. What steps is BAC taking to ensure sustainability and environmentally friendly practices?
The Economic Vision 2030 framework gives us the necessary context in which to address the activities we are responsible for. One of those pillars is sustainability. We have made it a requirement for the terminal building to be designed in accordance with LEED Specifications (Leadership, Environment and Energy Design). This is a US certification which guarantees the efficient utilization of energy, management of waste and consumption of water. This building will be the largest in the country to meet top certifications (Gold) by 2019. I believe this is the least we can do for future generations. The world is challenged today with climate change and increases in temperature and sea levels, and if there is any positive contribution that we can make as an entity responsible to deliver a better environment, it is to increase sustainability when it comes to the development of infrastructure.
We are investing heavily in power supply technologies for aircrafts and the provision of precooled air solutions (PCA) in order to reduce fuel consumption during aircraft idle periods at stands. All of these are measures meant to reduce greenhouse gas emissions. In addition, two years ago we joined Airport Council International (ACI), an international industry body promoting the concept of airport carbon accreditation (ACA). We have completed Level 1 of the program and this year we will be embarking on Level 2. This program is quite ambitious because it drives airports to look into initiatives, ideas and concepts that make airports carbon neutral. This is another initiative we need to implement, not only within our operations but also within the operations of our partners at the airport. We have a duty to raise the awareness of all the operators at the airport to the same level in terms of vision and commitment in protecting the environment.
The 200th anniversary celebration of friendship between the UK and Bahrian and the recent visit of the His Royal Highness the Prince of Wales and Prime Minister Theresa May shed new light on strengthening bilateral ties and new opportunities to increase trade and cooperation. In fact, during Theresa May’s recent visit she explained the importance of cooperating in the area of security, stating that “now more than ever, Gulf security is our security”. With this is mind, an agreement was signed to promote a new package of joint measures to improve screening at the region’s airports. How can further cooperation between the UK and Bahrain help to improve security measures? What other areas in the sector would you like to see further cooperation in?
The relationship between the two countries is rooted in trust and mutual respect which has many facets, including politics, security, art, culture and social activities. Thousands of British citizens have made this country their home. As far as BAC is concerned, we have a duty to ensure the security of passengers and aircrafts. We have a clear commitment to ensure the operability and compliance of infrastructure. Two years ago, we upgraded all handheld luggage screening machines at the terminal building even though we knew that we were going to build a new terminal and all of this would most probably become obsolete. We've invested heavily in explosion detection equipment. The new terminal will see some of the most advanced screening technologies, including Level 3, which is a standard mandated by the European Civil Aviation Conference (ECAC) but not come into force yet. We work very closely with our partners at the police department. We have very transparent and frank relations with regulators and we are a certified airport under the Bahrain Civil Aviation Authority, where the security operations at the airport come under regular scrutiny by the UK’s Department for Transport (DfT) and the US Transportation Security Administration (TSA).
I think from an aviation security perspective, we are in line with the best practices in the industry. As far as the wider relationship between Bahrain and the UK goes, I would like to extend an invitation to UK-based investors to explore the airport´s opportunities seriously. One of those is aircrafts maintenance. Gulf Air, for example, is going to equip its new fleet with Rolls-Royce engines. Consider the opportunity of setting up an engine repair shop in the airport, a shop that can not only take care of the Gulf Air fleet, but also looks after Rolls-Royce engines across the region. That's an opportunity that will create jobs for Bahrainis whilst allowing us to work in partnership with Rolls-Royce. We are open to discussing any possibility with them. We are not as large as our regional competitors, but we are one of the most ambitious airports and one of the most open to discussions and negotiating partnerships. We welcome all opportunities and are willing to reach out. We have subject matter experts from UK airports, from Edinburgh, Gatwick and Dublin, who are supporting our operations at the airport. Their contributions to knowledge sharing, capacity building and training is something that we value very much.