Kerrie Mather has a 20-year vision for Sydney Airport that focuses on embracing new technologies, creating flexible infrastructure and providing customers with a first-class experience.
Sydney Airport chief executive Kerrie Mather can often be found strolling through the terminals, observing how passengers use the facility, providing directions and making mental tweaks to her 20-year vision for Australia’s busiest airport. Mather likes to be across the detail; she is a highly numerate and consultative leader and is winning the trust of Sydney Airport’s varied stakeholders – all 800 of them. Her vision is to one day create a truly great airport.
Mather has an impressive airport pedigree and is one of the few women running an ASX 200-listed company. She started out as an infrastructure-focused merchant banker with Macquarie in Sydney before setting up Macquarie Airports, later known as MAp, which went on to operate airports in the UK, Italy and Denmark.
When Mather assumed the CEO’s chair in 2011, she brought with her a culture that puts the customer first, a value she learned when working at the family pharmacy during high school. At Sydney Airport, the customers are the airlines and the passengers they carry, and increasingly those customers are coming from Asia.
Rome Airport: a former Macquarie asset.
One of Mather’s biggest projects has been the A$500 million overhaul of the ground transport network surrounding the airport, working closely with the New South Wales Government to do so. She has spent the past year working with the federal government, nutting out the complexities of building Sydney’s long-awaited and much-debated second airport, one of the largest infrastructure investment projects to serve Australia’s future.
Now she is working on a 20-year plan for the airport, looking to futureproof it amid a notoriously turbulent aviation industry and lurching global economy. Her team is researching how technology can make use of every asset for a truly nimble operation.
During a interview with former CPA Australia chief executive Alex Malley, Mather discussed what she had learned about running airports across Europe. She says local communities there take pride in the airport, recognising their interdependence and what an engine of economic prosperity they can be for the region. It’s something she’s trying to foster in Sydney.
Alex Malley: Your father was a pharmacist and you worked in his pharmacy as a young person – what do you remember learning about humanity in those years?
Kerrie Mather: The importance of customer service and the difference you can make to people’s lives. It was a very busy pharmacy, sort of a production line, but customer service was always key, starting with “May I help you, please?”
Malley: Did the family business give you the essence and the framework to decide “business is what I want to do?”
Mather: Yes, I think having worked in the family business from a young age, I always had a strong business orientation. But I thought I was going to go down the science path – pharmacy – [however] in the end, it wasn’t for me. Once I finished my degree, the banking system had just been deregulated and there was an influx of overseas merchant banks.
There was a lot of interest in them and it seemed like a great opportunity, so I decided to go into merchant banking. Someone I met at the time said, “If you’re going to work for a merchant bank, it’s really important to work for the head office.” So I looked around to see who had a head office here and it was Macquarie.
Malley: What do you remember of Macquarie in those days?
Mather: It had a fantastic culture, and still does, but it was small – there were only 400 people in the bank and you knew everybody. In those days, you could be nimble and responsive to opportunities. There was a real entrepreneurial spirit. It was a fantastic environment: working with a lot of really talented people who I really enjoyed turning up to see every day.
Malley: I read a quote from [former Sydney Airport chairman] Max Moore-Wilton saying that he liked the training that people coming from Macquarie had received.
Mather: Yes, it definitely gave me rigour and numeracy. There are other things, too – strong client orientation and a really strong service mentality.
Malley: And a healthy competition between people trying to achieve goals ... there was no apology for trying to seek goals and achieve good things for clients.
Mather: We were competitive, so there was strong collaboration internally. It was a very flat structure working in Macquarie. Many of the elements that shaped my history are things that I’ve brought to the culture of the current organisation, including a real focus on quality.
What we can learn from Europe
Malley: From that earlier work, you moved into airports and you were overseeing European airports. As you looked around the world at the business of airports, what did you see
Mather: Before I set up what was called Macquarie Airports, my focus had largely been domestic, and so working at Macquarie Airports gave me that springboard onto the international aviation market and it provided a great opportunity to learn about all areas of airport operations across the world. We had a lot to offer in terms of opportunities that arose, because we had had great experience in Australia with infrastructure and privatisations.
When an organisation transitions from government into the private sector, you’re much more focused on the customer, your competitiveness, efficiency, quality – all those good things that come with a commercial business. We came with that infrastructure development capability and a good story to tell. So then we became very successful in acquiring a number of UK, European and other airports around the world.
We looked at tens of opportunities, possibly even a hundred opportunities. Every airport is different and it reflects the jurisdiction in which it’s operating. It reflects the range of responsibilities you have as an airport in a particular jurisdiction. Some of that is regulation-based and some of that is based on how responsibilities on an airport are allocated between what the airlines do, what the airport does and what government does.
The types of airport are also different. Sydney, for example, is a destination airport. Some are low-cost airports, some are transfer hubs or they can be regional, secondary airports. Many of the airports we owned had strong brands and a real sense of place – we are now focusing on developing that strong brand and sense of place at Sydney Airport.
Akin to running a city
Malley: What’s interesting to watch is the manifestation of the global economy, and wherever you live in the world determines how you see “global”. So, here you are with an airport in a global society. Are we seeing a changing pattern of building an airport and then
build a city around it? Or are we not at that point yet?
Mather: I think you’ve got to have an airport that’s in the right location rather than the mentality of “build it and they will come”, because there are lots of examples where they have built it and they haven’t come. You’ve got to have an airport that’s proximate to
the city and the population that it’s serving. You’ve got to have a population catchment that the airlines want to serve and, equally, you need people who can work at the airport.
One thing you see when you look at airports around the world is that they are large economic engines for the areas they serve and they are big employers. In Sydney, we have 29,000 people on the site working for 800 companies. There’s a whole industry and precinct that depend on the airport – there are another 300,000 or so jobs that depend on the airport. The big difference I noticed when working with the European airports is they were much more engaged with their communities. There was a lot more community pride in the airport, in particular in places like Copenhagen, for example.
Malley: Why is that?
Mather: They understand the linkage between the aviation growth that’s driving tourism and trade and what that means for the economy and what it means for jobs. They understand that dependency. They see it as the more we can ensure the success of Copenhagen Airport, the more the region will be successful. It’s one of the things that I brought back here. We’re always looking at how we can be more engaged with our community and build more community pride in the airport.
Malley: In my eight years now as a CEO with different organisations, I’ve gone from thinking culture is important to culture is incredibly important. With the number of staff at Sydney Airport and so many stakeholders, what’s your frame for building this level of culture
that generates that pride? How do you go about it with so many people involved?
Mather: We have a complex network of stakeholders working at Sydney Airport, we have 800 businesses, and we need to balance the interests of those stakeholders, trying to get a balanced outcome for everybody. I look at it in concentric circles. You start with your own team and make sure that everybody embraces the vision of where we need to be – and the customer has got to be at the heart of everything that you do.
For us, that’s passengers and airlines, working with airline partners and our mutual customer. Then we work with our broader stakeholders from there to ensure we’re providing the best outcome for the customer.
One of the challenges is that there are 29,000 people who work at the airport, but only 400 of them work for us. So you do need to work closely with your business partners to make sure you’ve got aligned views of what you need to achieve and make sure that everybody works together to provide a seamless experience, because to customers, they just see it as Sydney Airport; they don’t see it as “Oh, this person is responsible for that and this for this…”.
The 20-year plan
Malley: You have a 20-year vision for Sydney Airport – what are the main features? I hasten to add that I think you’re game in such
a changing world and economy.
Mather: That’s one of the challenges! It’s such a dynamic and fast-changing aviation environment. It’s a vision that has to be futureproofed, so it’s all about making sure you’ve got flexibility to be able to respond to changes in aviation. Our new 20-year vision is about ensuring the infrastructure is completely flexible so that when it’s not being used domestically, you can use the same infrastructure for international.
For example, it incorporates all the latest technology associated with swing gates, enabling you to use the same gates for domestic and international. That has the benefit of not only using your infrastructure more efficiently but also creating productivity improvements with the airlines and creating a better passenger experience.
Technology is playing a really big role in both improving the productivity of the airport and creating a better customer experience. We are working with the airlines on rolling out more automatic bag drops and self-service check-in; we are working with the Australian Government to be the first in Australia to roll out e-gates on departure, because they’ve been such a success on arrivals. People don’t expect to queue any more. They don’t queue at the ATM. They don’t queue when they shop. And it’s no different when they come to the airport.
“Technology is playing a really big role in both improving the productivity of the airport and creating a better customer experience.”
They also want to be able to do everything on their smartphone. We’re currently trialling the Apple Watch among Sydney Airport staff; all the technology team are wearing these watches, as we need to understand how our passengers are working and operating. We need to think like our future passengers.
Malley: How is the Asian century impacting your business?
Mather: There has been a fundamental shift in the markets that we serve towards Asia. It was largely an outbound product and now inbound is just as important. Sixty per cent of the world’s population is now in Asia. There is a strong focus on China, but we are looking across Asia at the rising urbanisation. You’ve got an increasing middle class for whom travel is more affordable.
The Chinese market is now our largest international market from Sydney. It’s just under 10 per cent of our passengers. Chinese passengers have increased by 70 per cent over the past five years, and in the first half of this year they have been growing by nearly 17 per cent.
You’ve got to think, does your product meet the needs of that market? So we’ve rolled out the welcome mat, including everything from Chinese signage at the airport to making sure that our website translates into Chinese; from having our iPhone and Android apps translated into Chinese to making sure you have the right retail and food and beverage offering and having UnionPay [a Chinese bank card], which is the card Chinese travellers use to make their purchases. It’s having more culturally sensitive initiatives and nuances in relation to serving that market.
We’ve got five airlines, soon to be six, serving the Chinese market, making us now the equal-second long-haul airport for Chinese airlines in the world, alongside Paris and Vancouver. At the moment, we are serving five cities; it will be seven by the end of this year. The big change is going to be serving the regional cities, so at the moment we have a strong penetration into the three major hubs. But many of the regional cities that currently don’t serve long haul are looking to establish services. That’s where we will see the big change.
Status Update: Sydney's Much-Delayed Second Airport
Malley: There has been a 20-year conversation about a second Sydney airport: what’s your understanding on where that is at?
Mather: The Western Sydney Airport is an exciting opportunity. We’ve just finished a formal consultation process with the Australian Government, which involved more than 70 meetings. These are long, detailed meetings involving review of every aspect of the airport, making sure the design process will provide the best possible airport in Australia when it opens in 2025.
The government said it would issue a notice of intention that will set out all the material terms for the development and operation of the airport by the end of this year. [Sydney Airport has the right of first refusal over the development and operation of an airport within 100km of the CBD. The site chosen is Badgerys Creek, which lies 51km west of the city. The site was set aside almost 30 years ago, but a decision on proceeding with the airport has been a drawn-out matter.
We are continuing to consult with the government to make sure that it meets our investment requirements and to ensure that we’re thinking about all aspects of the stakeholder requirements; ensuring we’ll be providing the right facilities and that the charges will be competitive. You’ve got to think about the outcomes that you actually need to deliver.
Malley: Notwithstanding all of the experiences you’ve had, that’s a relatively new experience, where you are starting from the ground up.
Mather: It’s a real opportunity, because most airports around the world were developed around the time of the Second World War, if not before. So most airports have had to be retrofitted to meet the dynamic changes in aviation, and that creates a clunky passenger experience. We’ve got a real opportunity to design an airport according to world’s best practice that can be as efficient as possible and provide a seamless passenger experience.
The number of people who work on site for 800 companies at Sydney Airport
The increase in the number of Chinese passengers travelling through Sydney Airport over the past five years
The number of passengers travelling through Sydney Airport each year
This article is from the November issue of INTHEBLACK