Exacting change on a business can often be a time-consuming but painful necessity. Obtaining employee and investor buy-in for plans is often a huge challenge, with the trick to deliver on your promises. At Ras Al Khaimah International Airport, the turnaround in fortunes is already being felt, less than two years into a major overhaul.
Inaugurated in 1976 by His Highness Sheikh Saqr bin Mohammed AI Qasimi, the late Ruler of Ras Al Khaimah, the Ras Al Khaimah (RAK) International Airport celebrated thirty five years of its existence in 2011. Over the years the airport has been running secure, safe and efficient operations, and it has registered steady growth in passengers, cargo and aircraft movements.
However, 2011 saw a turning point in the airport’s focus, following a management change at the end of that year. Among the key personnel to join RAK International Airport at that time was Mohammed Qazi, Commercial and Financial Director:
“The UAE region is hugely competitive in the aviation sector and we are trying to develop strategies that will create niche markets for revenue streams. The airport had become neglected over the preceding decade and we have tried to breathe new life back into the business,” he states.
Already the first signs of financial and commercial improvement are showing through, although Qazi accepts there is a long haul ahead:
“RAK International Airport is a fully functional site with a 3.76 kilometre long runway capable of accommodating the biggest aircraft. We are fortunate to have an anchor carrier in RAK Airways and passengers figures are on the rise – in 2012 we had 406,000 passengers and we will exceed half a million this year, which is an increase in excess of 20 per cent.
“Of course aviation is booming across the whole Middle East region and seeing growth of 10 per cent annually, so at RAK International Airport we are more than doubling that figure.”
The airport is an important local employer for the Emirate, with 170 people working directly for the operation and a further 430 employed by the various other businesses scattered around the vast complex. Such numbers place an emphasis on securing the long-term sustainable growth of the airport – and at the same time helping to further boost the range of established businesses across Ras Al Khaimah.
“We have plenty of space for further development and since becoming involved in the airport, we have put together a number of interim strategies to help turn the business around,” Qazi states.
“Among these is a plan to look at developing a unique training facility that will provide aviation security training. We feel that this is a niche area that offers exciting growth potential and we are in the process of signing a joint venture with a UK company to deliver on this concept.
“We already have a good reputation for training and our purpose-built regional training centre includes classrooms, conferencing facilities, lecture rooms, a canteen and staff rooms located in a 2-storey building. We have identified a gap in the market and we are just finalising the contract for this now, with all courses ICAO-accredited.
“We are also looking to further grow our separate cargo terminal. Our existing storage and bonded warehousing caters for a variety of loads, but in the future, we want this to focus more closely on serving the industries in the area, which include: cement, construction materials, ceramics, pharmaceuticals and lots of strategic investment from India, as well as tourism. RAK also boasts more than 7,000 companies in RAK Trade Free Zone, which is one of the most efficient and cost-effective trade free zones in the whole region”
Indeed, the newly opened Cargo Terminal at RAK International Airport is equipped with state-of-the-art facilities providing a full range of services including export cargo, inter airport trucking, and customs clearance. The New Warehouse with an overall size of 2,000 square meters – including roughly 1,800 square meters for the storage of Cargo is equipped with Pallet Systems, Cargo Racks for safe storage of Cargo, Loading and Offloading Docks, intelligent CCTV Surveillance cameras and modern X-Ray Machines.
“The RAK area is a growing destination for tourists and we now boast 11 resorts and 5 city hotels, but the GDP of the Emirate is quite diversified and roughly 20 per cent of the Abu Dhabi Stock Exchange is comprised of companies from Ras Al Khaimah. With stern competition across the region from the likes of Dubai Ports, we want to be able to compete with the rest of the area when it comes to cargo handling.
“We are also in the process of establishing a new fuel farm area (which is due to go live in November of this year) and we have a further 2 fuel farms to develop, which will help to increase our revenue streams and provide competitive fuel prices to airlines”.
“There is also space already allocated for a large MRO facility, capable of carrying out C and D checks. In total RAK Airport has over 1 million square metres of land adjacent to our aeronautical infrastructure which is perfect for the development of maintenance facilities for aircraft of any size and we can provide a host of options to facilitate MRO or similar ventures.
“We already have a couple of companies based at the airport, providing a range of light maintenance and private aviation services, including the UK company BCT Aviation Maintenance Limited UK, who provide a basic maintenance offering.
“But what BCT and RAK International Airport do not currently have is a specialist hangar. However, we are now talking about providing a large scale MRO hangar which will be able to cater for narrow bodies like the A320s and B737s.
“Our MRO development (which should be operational for Q4 this year) will include a dedicated area for scrapping and recycling aircraft and we are at a very advanced stage having just signed a Memorandum of Understanding to develop this area. MRO and aircraft recycling facilities are in short supply in the Middle East so there is a sound business case for RAK International Airport to develop these services.”
Qazi says that there are also plans afoot to increase the amount of food and beverage facilities available at the airport, with land already allocated for this expansion. Food and beverage forms a part of the airport’s highly lucrative and independently run retail side, as Qazi outlines:
“Retail is definitely one of the most exciting parts: it is cash, it is fluid and it is dynamic. We run the retail side ourselves and it accounts for roughly a third of our present revenues. Compared to the first half of 2012, we have seen a 181 per cent growth in sales this year, but it is a continuous exercise to explore and research what sells and what doesn’t and to keep our operations flexible enough to make changes as needed.
“Whilst we include a number of local vendors selling perfumes and jewellery, everything in our retail area falls under the RAK Duty Free brand, whilst the food and beverage outlets are run in collaboration with state-owned RAK Hospitality.”
In total, Qazi estimates that the total cost of the new-look RAK International Airport will come to between 300 million and 350 million dirham and is likely to take 3 years for completion.
The Airport is owned by the Department of Civil Aviation, with government investment likely to be allied with private sector financial support on the various stages of strategy. Qazi underlines that financial investment in the region is generally given a safe rating – meaning there is plenty of incentive for overseas companies to help develop the airport’s infrastructure.
Part of the Qazi’s budget has been devoted to recruiting, training and developing an Emirati workforce, something that can create a number of positives:
“It is an opportunity for us to give back to the Emirate and we have found that the local population here is very willing and intelligent.
“When we came here we had a fair idea of the challenges that lay ahead. I had come from the UK and was very used to change systems and creating efficiency in an aviation environment – but we all had to get used to the cultural differences and we are still learning about that. Certainly recruiting Emiratis helps us to better understand the culture too.
“Our main operational challenge is to improve communications – which have a ripple effect on other things. We have addressed this by introducing standard operating procedures and creating manuals (for induction programmes) which outline what is expected.
“It is also important for us to hire the right people to communicate better and where possible we look to bring in employees with multilingual skills.”
In the meantime, RAK International Airport offers up to 9 destinations and visitors from Europe and Russia continue to increase in numbers. At present Qazi says that business travel still accounts for almost 70 per cent of visitor turnover, although tourism is certainly increasing its share.
“We are operating in a highly competitive market and it is essential that we are sophisticated and advanced in our operations, which is the reason for so much change. The feedback we are receiving is hugely positive and airlines are saying that our approach is refreshing and innovative.
“In the next 18 months I hope that we will have added at least one more airline with scheduled flights and another 3 – 5 chartered operations, plus a low cost carrier. We currently have 19 aircraft stands and we have the scope to expand further.
“RAK Airways are already based here and have two wet and one dry lease and are in the process of acquiring more aircrafts. Eastern Sky Jets have 3 planes based here also.
“On the non-aeronautical side our focus is to establish our new training and MRO centres. Cargo is also going to be an important aspect for us – having received reports on the current status we now know the needs of local industries and need to develop the resources to better serve them through bespoke, tailored solutions – and we want to achieve this as soon as possible,” Qazi concludes.