ON a flight path towards Montego Bay, minutes from landing, the Caribbean Sea that dominated the visual span of the aircraft passengers gradually begins to yield to the breathtaking white sand beaches that hug the island’s northern shoreline.

The vantage point of the Airbus A320 induces a heightened sense of expectation as Jamaica’s tourism mecca beckons from a distance.

As the aircraft manoeuvres into its final approach, safely touching down, the pristine view from high above also gives way, but this time, the vista is far less inviting.

The housing stock — a contiguous mixture of blighted community and expensive mansions — is on display along the hillside overlooking the run way. It serves as a compelling reminder of the extremities that make up the complex social and economic structure of this western city, and indeed all of Jamaica.

The aircraft makes a sharp 180-degree turn and heads for its preassigned loading bridge, so the imagery, though hard on the brain, is fleeting.

For the visitors, Montego Bay’s Sangster International Airport will be the first point of sustained contact with Jamaica, its people and institutions. This experience will be responsible for their initial impression of the country that has spent millions of dollars to woo them to its shores for vacation.

Thankfully, there is nothing about this facility and the services that the tourists are about to encounter that will scream “Third World!” even through the eyes of the most fastidious within the group.

On the contrary, this airport, having since 2003, undergone a US$200-million expansion and modernisation, will simply not call attention to itself. Americans, Europeans, Japanese — generally, visitors from industrialised countries — will deplane via one of 18 air-conditioned jet ways, which will provide the same ease and convenience of movement to which they have grown accustomed in their home cities.

From hygienic washrooms, wellmaintained Customs and Immigration hall, to efficient carousels with electronic displays, all the way to wellappointed VIP lounges, where tourists can await their hotel pickup, there is, up to this point, no indication that they are on vacation in the heart of the developing world.

The fact is though, the overwhelming majority of the roughly 3.4 million passengers who will pass through Sangster International Airport in 2010, don’t know, or even care, who is behind the transformation that has taken place over the past several years. Those who have actually thought about it, probably assume it’s the Jamaican government.

However, for the Spaniards who own and operate the Abertis Airports Group, Sangster International represents a big investment, and a bold, long-term gamble and commitment to their conviction that Jamaica’s tourism industry has a vibrant and viable future.

“We viewed Jamaica as a developing country with a great future for growth particularly in the tourism sector,” says Carlos Francisco del Rio Carcano, the president of Abertis Airports Group, and the chairman of MBJ Airports Ltd, the company that directly manages Sangster International.

del Rio is the Abertis executive who has been nominated for this year’s Business Leader Award.

Abertis Airports is part of a publicly listed Spain-based conglomerate that operates toll roads, airports, car parks, logistics parks, telecommunication, and construction services across the globe. The subsidiary manages 30 airports in nine countries, handling roughly 87-million passenger traffic each year. It owns 74.5 per cent of MBJ Airports Ltd, the vehicle through which it holds a 35-year lease for the development, maintenance and operation of Sangster International.

This company was not part of the original team that won the 2003 contract to expand and bring Sangster into the 21st century. The Spaniards came aboard in 2007 when they acquired the interests of three of the four partners that had secured the lease agreement. A Canadian outfit called Vancouver Airport Services is the only of the four from the initial group that still maintains an interest in MBJ Airports, and is the 24.5 per cent minority partner with Abertis.

The US$200 million that has been spent to transform Sangster increased its annual handling capacity to nine million passengers, nearly three times the pre-expansion limit, and well above current load, but according to an Abertis executive, the investment reflects the inextricable link between the airport and Jamaica’s stated ambition to put its tourism growth on fast-track.

“The airport is critical to Jamaica’s tourism and vice versa,” says Fernando Bosque, the chief executive officer of MBJ Airports Ltd. “We cannot have rapid growth in the industry without proper facilities.”

In a demonstration of their farsightedness, the Spanish investors have put in place loading docks that can accommodate even the giant Airbus A340, the world’s biggest aircraft that is yet to make a single touch down on Jamaican soil. Having in place 18 gates, all equipped with jet ways, ensures very efficient movement of passengers in and out of the aircraft and that there is no time delays in the docking or exiting of planes even during the busiest periods.

Those within the industry, who are directly impacted by the new facility and how it is being run, have given high marks to the MBJ Airports management team.

“The airport is one of the finest in the Caribbean,” notes Montego Bay businessman Lee Bailey. “I must compliment them for having the foresight to put this structure in Montego Bay. It took confidence in MoBay and the travel industry.”

Bailey, who operates a tour company that handles the transfer of cruise ship passengers from planes to ships and vice versa, says Sangster’s operation is generally efficient and smooth, and that Customs and Immigration should take a leaf from the book of the airport’s management team.

Even as much as businessmen like Bailey and other tour operators are able to discern and appreciate the improvement in the speed of processing their clients, it is the outbound passengers and the operations developed to serve them that have been the primary target of the efficiency enhancement.

Tom Scarlett, the president of BARJ, the umbrella group that represents the interest of 15 airliners that fly into Montego Bay, has given the airport thumbs up. “It really has made a tremendous difference,” says Scarlett, whose substantive job is that of general manager for Continental Airlines in Jamaica. “I can safely say that it is among the top three airports in the Caribbean.”

Continental flies daily into Montego Bay during the winter season, but scales back during the off-peak months like October and November.

There are many reasons why airline managers like Scarlett rate the new operation so highly. Among them is the fact that MBJ Airports has in place 100 computer terminal stations to ensure the speedy check-in of passengers. Importantly, the terminals are all common-use facilities: they are assigned to each airline daily or hourly, based on their individual traffic load. This approach to managing the airport facilities ensures that there is no artificial shortage of terminals at any time during the day.

“I remember in the old days, Air Jamaica would have 30 terminals assigned to it and not in use, when at the same time, there were other airlines that needed terminals for check-in, and had a shortage,” says Scarlett, a former director of marketing at the national carrier.

On a walk-through of the airport with Bosque, a team from the Jamaica Observer newspaper was able to observe the operation of the commonuse terminals with overhead monitors as well as electronic signs at each counter constantly indicating to passengers which airline is checking in and where.

Abertis also introduced at Sangster an innovation that has been taking hold particularly at First-World airports over the past two

years: self-check-in kiosks.

Those passengers who want to avoid the customer service lines are free to walk over to one of the forty computer screens in the check-in hall at Sangster, place their passports under the scanner and follow the instructions. At the end of the process, a boarding pass is automatically printed with their seat assignment.

“If you have no bags to check in you can proceed straight to Immigration,” says Scarlett. “In addition, you can check in online. Between both there has been a tremendous impact on waiting time.”

There are also tangible economic benefits for the investors.

“It has made a big difference in terms of reducing checkingin time to an average of 15 to 20 minutes per passenger,” Bosque points out. “It means that passengers now have more time to relax and to shop and spend more money at the shops and restaurants at the airport.”

He estimates that currently about 30 per cent of the Sangster International passengers use the self-checkin facility, with the two-year trajectory for usage placed at 66 per cent.

It is not clear if this new trend will ultimately influence airliners both here and globally to adjust the two to three-hour check-in time that they now require for passengers. In Montego Bay, the service is particularly popular among vacationers.

Tourism interests are brimming with pride over the industry’s new showpiece.

“We welcome and are very pleased with what has happened at Sangster,” beams Camille Needham, the executive director of JHTA, the umbrella lobby group for hotels and other tourism interests in Jamaica. “For the past 20 to 30 years,” she continues, “we have been lobbying for the expansion and improvement. We no longer feel inferior to the competitors. It also means that we can accommodate expansion within the tourism industry, and this growth cannot take place without airlift.”

Needham stresses that in addition to running an efficient operation, MBJ Airports has been “a very good party to work with within the tourism industry”.

She adds: “They are a member of the JHTA; we do lots of things together and they always go the extra mile. We are very pleased with the partnership.”

To appreciate the aesthetic appeal of the modernised Sangster International Airport, one only has to walk through the section of the building where the retail shops line the hallway like an upscale, Hollywood mini mall. The decor is nothing short of stunning.

It is not clear to what extent this visual feast is driving traffic through the shops, though one retailer, Things Jamaican, says that all things considered, the business is holding its own. For one, the revenue generated at this outlet outpaces the performance at the branch it operates at the Norman Manley International Airport in Kingston.

“Sangster is our flagship,” notes Harold Davis, the executive director of Jamaica Business Development Corporation, the government entity that owns Things Jamaican.

“MoBay far outpaces Kingston, perhaps because of the traffic difference,” Davis offers. “What we have found is that in MoBay, we no longer have the wild variation in sales between seasons; the income is relatively even throughout the season except for the months of September and October when we see a dip.”

According to Davis, as a landlord, MBJ Airports Ltd “has been transparent in the way they do business, from even the bidding process for the shops. They are very receptive to our needs except when we want a reduction in the rent. They do a very professional job in the way they run the airport.”

The Sangster International operating structure is fairly complex, involving three distinct entities, all of which have an impact on passenger experience.

MBJ Airports, as the leaseholder, is the entity that carries the ultimate financial risk.

But it has to function within rules and guidelines established by the Civil Aviation Authority whose primary responsibility, is first and foremost, to ensure airline and passenger safety, and that the equipment and procedures at the facility are in line with this overarching objective.

For example, there are Civil Aviation rules related to the fire stations that are under the control of MBJ Airports. The government agency wants to be sure that they have the capacity, suitability and permanent state of readiness to effectively respond to emergencies.

The Airports Authority of Jamaica, another statecontrolled entity, owns Sangster and negotiates and manages the lease arrangement. Its main mission is to make sure that the airport continues to be internationally competitive, and is able to meet the changing developmental needs of the tourism industry, and those of the general travelling public.

But make no mistake about it, Abertis through MBJ Airports runs Sangster; of the three entities, it has, by far, the most active role and the only visible presence at the location.

“We coordinate the operations, set the rules and ensure that all the parties are in

compliance,” explains Bosque. “We also have to ensure that the Civil Aviation Authority rules and standards are met.”

MBJ Airports has 160 employees who manage all aspects of Sangster International operations. They keep a close watch over the facilities and services on which the 4,500 individuals who work at the airport depend to meet their own commitment to travellers.

Among the staff complement are 37 firefighters, customer service representatives, maintenance crew, accounting, IT, administration personnel and executives.

At practically any time of day, Sangster International is buzzing with private security personnel, police, Customs and Immigration agents, porters, and those employed to run the myriad of concessionaires that range from restaurants to gift shops and sport bars, not to mention taxi drivers and operators of tour buses.

There are some eye-popping numbers on the cost side of the ledger that the accountants of MBJ Airports prepare each month. Not unexpected, the figure related to the energy cost of keeping cool, hundreds of thousands of cubic feet of public space, in addition to private offices, sits on top of the list, at US$500,000 each month.

Then there is the interest cost to service the US$95 million that was secured from the International Finance Corporation for the airport reconstruction – around US$6 million per year. Staff, maintenance, utilities and a host of other mundane expenses also have to be taken care of.

On other side of the MBJ Airports ledger, revenue is generated by three principal sources.

• The operators collect just under US$12 per passenger from the airlines as a fee for the use of the terminals, landing bridges, security and other common equipment.

• An Airport Improvement Fund is negotiated with the Airports Authority of Jamaica (AAJ). This is a per passenger fee that is built into each airline ticket. Currently at U$5 per departing passenger, this revenue source was meant to be temporary and is set to expire in 2013.

• Rental income is earned from the commercial spaces. The numbers reflecting the underlying performance of their investment in Jamaica are not anywhere close to where the Abertis principals would like to see them, and they have been in discussions with the AAJ with a view to have adjustments made.

del Rio, who played a key role in the assumptions and analyses that formed the basis of the recommendation to the board for the investment, says that the fall-off in global traffic and higher-than-expected cost outlay at the airport have affected the ratios.

“Global passenger traffic which is the principal driver of the business is lower than we had hoped,” he notes. “However, Abertis is a longterm investor and we are certain that we will overcome the crisis and that we will see significant gains in the number of visitors.

“At the same time, the investment in the new terminal has been considerably greater than initially planned and the amount charged to passengers departing from the airport, the AIF does not cover the entire investment. We are in conversation with the authorities to correct this imbalance and to give us the same treatment as the airport in Kingston.”

Bosque has, at least for the past two years, been complaining to the AAJ that the Norman Manley International is granted US$10 for each outgoing international passenger, while MBJ Airports gets US$5, even though, as he points out, the investment outlay in MoBay is significantly more than the work that has taken place in Kingston.

“We do not have enough critical mass of passengers and the commercial activities (concessionaires) are not enough,” he argues.

The 3.38 million airline passengers who used the airport in 2008 when it was still under construction, represented a 2.3 per cent decline over 2007. But for the first quarter of 2010, passenger traffic climbed 3.6 per cent over the comparative quarter in 2009, to 959,962.

This is important, because as modest as the growth may appear to be, it bucked the negative trend that is being experienced at other airports globally as well as those managed by Abertis.

Bosque says he would like to see more of the cost burden of running Sangster shift from the airliners directly to passengers “in order to make the airport more competitive”, because, by his calculation, these costs represent an entry barrier for airliners. Currently, 16 of them fly into Sangster, from 40 destinations.

The AAJ is yet to embrace this argument.

There are other approaches that MBJ Jamaica is pursuing in its effort to minimise the cost to the airlines that fly into Montego Bay. For example, the operator has made available to them, three handling companies so that they are in a position to negotiate the best rates for the outbound services that they require once they land here — like refuelling.

“The cost of rotation is also a key factor to the airlines,” Bosque explains. “So when they have three companies that they can negotiate with, they will be able to secure a more competitive price.”

There is no doubt the MBJ Airports executives are working earnestly to make the investment in Jamaica a financial success.

“For us, Sangster International is a window into the Caribbean,” says Bosque. “It is our first experience here and is an opportunity to show to the rest of the region how we operate as managers.”

del Rio would also have the added motivation of knowing that his judgement is on the line, as one of the promoters of the investment to the board.

“There were no significant problems to convince them that Jamaica is a country of the future, which legal certainty in which investment is warranted,” del Rio stresses.

Translation? The investment decision was based in part on what the Spaniards saw as the determination of the Jamaican government to make tourism the centrepiece of the country’s growth strategy.

In their minds, this commitment makes for a powerful alignment of interests.

Moses Jackson is the co-founder of the Business Leader Award programme, the founding and former editor of the Business Observer, and a member of the Business Leader Award Selection Committee.He may be reached atmoseshbsjackson@yahoo.com.