Sydney Airport wants to slow passengers down

Airport aims to become more than just the place you go to catch a flight

Mike King

Mike King is a Fool.com.au Investment Analyst and Writer. He caught the investing bug more than a decade ago, at a time when the U.S. had invaded Iraq and fear reigned in the markets. His initial success as the markets took off encouraged his passion and thirst for knowledge. With 13 years behind him at one of Australia's largest domestic banks, Mike's passion for stocks led him to join a boutique funds management firm, where he stayed for four years. A seven-year stint in equity research at one of the largest investment banks in the world followed that, giving Mike a thirst to pursue his passion further. Mike holds a Diploma in Applied Finance and Investment and a Graduate Certificate in Financial Planning. His passion is to help retail investors invest better, and that passion was one of his primary reasons for joining The Motley Fool Australia in late 2011. Mike has written thousands of articles since joining, including for Fairfax Media, Yahoo!7, Ninemsn and has also appeared on ABC's The Business. You can see all of Mikes' holdings here

Published August 26, 2013 3:14 pm AEST

But not the way you think.

Rather, Sydney Airport (ASX:SYD) is aiming to expand its retail offerings by opening up new stores and getting commuters to spend more time at the airport, so they spend more.

So-called "dwell time", is the time passengers spend before catching their flights. And Sydney airport wants to increase that by making time spent in the airport more attractive. Retail is currently the second-largest revenue earner, behind normal airport revenues such as take-off and landing fees.

According to the Australian Financial Review (AFR), Sydney Airport has added retailers Mimco, Country Road and a dutry pay store, Studio T2, which will offer products such as Napoleon cosmetics and Apple and Samsung electronics for domestic passengers. Spanish tapas bar Movida is opening a branch, while Australian brewery Coopers Alehouse also has plans to open.

And it seems that Sydney Airport will need to morph into something akin to one of Westfield Holdings (ASX:WDC) shopping malls to increase passengers "dwell time". Technological advances mean traditional airport services such as checking in and dropping off your bags will likely be fully automated within a few years. An international self-service bag-drop trial is currently being trialled for Air New Zealand (ASX:AIZ), operating similar to domestic self-service.

The upside of the advances in technology mean more space becomes available for other uses, such as retail stores.

Sydney Airport is also keen to develop more of its spare land, with chief executive Kerrie Maher telling the AFR that, "At only eight kilometres from the city, our land is valuable and in high demand. We aim to continue to provide superior on-airport facilities for passengers, while maximising the productivity of our commercial land."

The airport may also have its eyes on hosting events and conferences, similar to Germany's Munich Airport.

Foolish takeaway

Expect airports to become much more than just the place you go to catch a flight. They are likely to become destinations for local communities and businesses, and potentially an attraction for tourists and travellers alike.

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Motley Fool writer/analyst Mike King owns shares in Sydney Airport.

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