Airports tell economy’s story
If you want to understand how an economy is going, a good place to start is the airport. They are a good metaphor for an economy because, like the country or city they operate in, they are large, complex and expensive. There are economic lessons in airports.
Take Auckland and Honolulu airports. Both handle about 20 million passengers a year. Both have a mix of international and domestic travel, and both rely heavily on tourism.
But a trip through Auckland Airport conveys a different message about the state of our economy than what a visit to Honolulu Airport says about the United States.
Auckland Airport has been spending about $1 million a day on expansion for a long time, and it is evident in the cranes and construction sites. It is annoying at times but progress has a price.
Auckland Airport can easily raise the money required because it is listed and profitable. Almost
3 million Kiwis own some shares in the airport via their KiwiSaver funds.
And their desire to make money for shareholders is obvious, in big and small ways like digital signs, extensive shopping, free and easy wifi, plenty of good quality food outlets, modern toilets, and processes designed to move as many people as comfortably as possible.
The flock of glass birds that ‘‘flies’’ above you on the walk to the departure gates is a classic sign of a management that cares about the overall customer experience. They didn’t have to do it but they did.
Thomas Friedman, a famous economist, said one of the things that left a strong impression on him during a visit to New Zealand was a sign in the airport saying exactly when the toilets would next be serviced. Strange as it may seem, that actually says a lot.
The reason Auckland Airport runs well is because management have the confidence in demand, and that profits and access to capital markets can fund long-term expansion.
Honolulu Airport is a different story. It is expanding too but the airport is spending much less and it shows. That airport is owned by the state of Hawaii. It is a cash-strapped government, unable to access the sharemarket for funding.
Money for expansion is subject to the whims of politicians.
Little has been done in Honolulu Airport for 25 years and it shows.
There is little digital signage (and poor signage overall), old-fashioned departure and arrival screens, poor restaurants, clunky wi-fi, fewer shops, shabby toilets and fewer airport staff on hand (with no volunteer help desks).
Some improvements have been announced, and construction is under way on a new concourse, but it feels more like reaction to absolute necessity than embracing an optimistic future.
A look at airport security systems is also revealing. Auckland has essentially the same security requirements as Honolulu but is much more efficient. It recently invested in the latest scanning and bag handling facilities, with relatively fewer staff required. This requires plenty of money and a good dialogue between Government and airport management. That is typical of a smaller economy, with fewer layers of bureaucracy, and a fundamental trust in each other. Honolulu has old technology and higher numbers of security staff.
The federal government agency responsible clearly prefers a force of numbers approach than a technology based one. While airport staff are few and far between, security staff are everywhere. And the processing of passengers is poor – long, slow lines and impolite passenger handling.
The irony is that, while Honolulu Airport is cash strapped and inefficient, just down the road is Pearl Harbour-Hickam, a major air base, with the newest equipment and facilities. Ample money for military facilities over similar civilian ones says a lot about the current state of the US. It feels like an empire in decline, not an America that is going to be great again.
Even though both the US and New Zealand are capitalist democracies, a look at Auckland Airport says New Zealand is the country on the rise.
We have access to money, a desire for profit, good customer service, and trust. By contrast, Honolulu Airport is a metaphor for a US in relative decline. It is short of cash for the important stuff and does not seem to care any more. And it is owned by a government that cares more about weapons than wi-fi, which sort of says it all.
Sam Stubbs is founder of not-for-profit KiwiSaver fund Simplicity