Airport Reimagined

The Ongoing Airport Evolution

The airport of the future is being imagined and designed from different approaches and perspectives — both visibly, as well as behind-the-scenes.

Many of the technological, social, cultural and economic foundations and emerging trends that will coalesce into the airport of the future are already in place.

Today, an amazing 150,000 tons of cargo is shipped and more than 8 million people fly, on average, every 24 hours from airports worldwide. And the vast economic engine that is the global travel and tourism industry will continue to grow, innovate and adapt to address the burgeoning human thirst to connect with others, explore new horizons and bask in new experiences.

A recent 20-year outlook from the International Air Transport Association (IATA) has projected that by 2034, passenger numbers will reach 7.3 billion annually.

This figure would more than double the approximately 3.3 billion travelers boarding aircraft in 2014 and represents 4.1 percent average annual demand growth.

In addition, the United Nations World Tourism Organization forecasts close to 2 billion international tourist arrivals (excluding business travelers) worldwide by 2030.

Such sustained long-term growth will continue to pressure all providers within the transportation value chain to deliver new solutions to improve efficiency, eliminate stresses and challenges for customers, and significantly revamp the customer experience.

A key element will be seamless coordination among players in the transportation web: airlines, airports, ground-service providers and retailers.

Airports, airlines and other service providers have, until recently, acted somewhat independently, usually to the detriment of the traveler.

During the air-travel purchasing process, for example, the traveler may be considered a loyal customer of the airline. But in transit to the airport, the traveler becomes just another customer of the ground-service provider (i.e., a taxi service or regional rail-transit system).

Upon arrival at the airport, the traveler becomes its customer, albeit he or she is ultimately the airline’s customer. And typically, only when the traveler boards the aircraft does he or she resume the full role of airline customer.

While all the members of the transportation value chain have critical roles to play, the airport plays a central and key role to the traveler, airline and other service providers.

Drive-Through Check-In

New boarding procedures at airports will speed aircraft loading and eliminate long passenger lines. For the airport of the future, self-boarding using passenger-token-enabled gates will become the norm, eliminating separate check-in and additional airport security. Vienna International Airport is leading the effort by installing self-boarding gates.

Airport Analysis

Sabre Airline Solutions® undertook a broad review of the airport services sector to understand the business challenges, customer issues, operational models, and ongoing and emerging trends, as well as opportunities for airport operators, ground handlers and airline ground services.

The analysis explores the central role played by airports, examining their evolution from an operationally efficient transit point serving airlines to a complex economic engine catering to the local community and, increasingly, to the traveler.

Stemming from this analysis is a fresh attempt at reimagining the airport experience (from the traveler’s perspective) that aims to rekindle the anticipation and enjoyment of travel, especially by air.

The analysis focuses on three primary areas: airport, traveler and technology. Resultant findings address five critical objectives:

  • Identify service challenges — Map the touchpoints of a traveler’s journey and identify pain points.
  • Describe macro-level shifts — Review foundational trends, enablers and disruptors that will affect the travel sector at the business and passenger levels over the coming decades.
  • Examine technology trends and solutions — Identify current and emerging technologies, best practices and trends that offer immediate and long-term solutions centered on a traveler’s airport experience.
  • Characterize potential airport-specific scenarios — Describe and contrast possible airport operating models that may emerge.
  • Define new approaches — Highlight new and emerging approaches to enrich the traveler’s experience and benefit primary players in the transportation value chain.
Evolution Of The Airport

The airline and airport sectors are closely intertwined. Success for one usually contributes to the success of the other.

In some cases, both have followed a similar strategy in seeking revenue growth. The pursuit of discretionary ancillary sales by airlines is similar to the revenue diversification seen at airports from retailing and other non-traditional services.

But on the cost side, the two sectors have taken notably differing strategic paths.

During the last 30 years, many airlines have merged and emerged as global entities, while others have served specific market segments or regional niches. This consolidation has led to reduction in costs for carriers and a homogenization and standardization of the customer experience.

Airports, on the other hand, have remained, for the most part, independently operated local businesses. For instance, the five airports serving London are operated by three independent entities, and separate airport authorities operate each of the three airports serving the San Francisco area.

Airport operators have not thoroughly exploited the economic advantages inherent in scale. Instead, they have developed and maintained fragmented approaches to the customer experience.

With high fixed costs, airports are susceptible to cyclical macro-economic, political and regulatory fluctuations. As global air travel has increased, fueled in part by accelerating globalization, airports have faced an array of new challenges requiring flexibility and adaptability.

Over the last several decades, airports have tailored their operational models and sought to adapt their business strategies to the needs of a changing market.

Therefore, it’s useful to examine how airports have evolved from basic operational-focused entities serving airlines to complex horizontal businesses offering broad capabilities and customer experiences for a wide range of constituents — airports, ground service providers, airlines and related transportation services businesses. This evolution can be categorized in three general phases: from efficient airport, to extended airport, to experiential airport.

The Efficient Airport: Airlines As Customers

Historically, airports have focused on providing the capabilities needed to ensure a safe and efficient operation for their principal tenants — airlines.

Airports offer infrastructure (runways, taxiways, gates, jet bridges and passenger concourses) and services (ground control, baggage processing and security screening) to airlines to support aircraft takeoff, landing and other related ground operations.

Typically, an airport leases its space and infrastructure to airline tenants (and others), which operate independently, manage customer information separately and offer their own distinct services to travelers.

Over time, airports grew to provide a base level of common services to these tenants, such as check-in processing, baggage handling and security management. Airports gradually expanded their offerings through the addition of third-party retailing and food services. But for the most part, they remained focused on a reliable and efficient operation.

Key performance indicators track airport operations, such as aircraft movements and passenger-processing throughput, rather than traveler experience and satisfaction.

The Extended Airport: Business Tenants As Customers

The modern extended airport is generally quite large and sophisticated. In fact, some large airport hubs have an employee population and geographic footprint comparable in size to that of a small town.

In complexity, the modern airport comprises a wide range of related business systems and processes.

The extended airport offers common infrastructure, managed services and, increasingly, information services shared across its multiple and varied tenants: airlines, retailers, government agencies and concessions. These tenants also represent expanding sources of airport revenue.

The primary objective of the extended airport remains to facilitate the safe and efficient movement of people and goods. However, the increased use of centralized services and collaborative IT infrastructure and solutions affords the airport and its tenants significant benefits, including:

  • Improved operational efficiency,
  • Improved adaptability to market conditions,
  • Enhanced common business processes,
  • Quicker responsiveness to varied tenants’ changing needs.
Expediting Customs And Border Processing

Australian Customs and Border Protection Service launched SmartGate, giving eligible travelers the option to self-process through passport control. This advancement uses data in a traveler’s passport, as well as face recognition technology, to perform the customs and immigration checks typically conducted by a Customs and Border Protection officer. In addition, easyJet has launched a mobile app to scan passports, which also expedites customs and border processing for its customers.

The Experiential Airport: Travelers As Customers

Since the turn of the millennium, airports have adapted to accommodate growth and globalization of the industry. These drivers have exposed airports to new traveler segments diverse in nationality, demographics, social norms and cultural experiences.

As airlines have adapted their business models to better serve the needs of these burgeoning segments, airports have followed suit, while keeping an eye on efficiency and the bottom line.

Airlines have diversified to focus on sprawling domestic and/or international networks, point-to-point markets or low-cost operations, and airports have mirrored these immense structural changes.

Airport operators have built new runways to cope with growth; constructed new terminals for airline hubs; redesigned existing concourses for low-cost carriers; and improved gates, jet bridges and airside operations for high-frequency origin-and-destination services, as well as for rapid passenger transfer.

Despite these business pressures, airports have generally maintained an efficient and effective air-transportation system. Yet, the growth and democratization of air travel means airports now serve a much broader and more complex array of constituents.

Whereas once an airport’s key customers might have been a handful of airlines, today an airport may have tens or hundreds of additional stakeholders: scores of diverse caterers, ground handlers, retail tenants, parking operators, ground-transportation companies, local and regional feeder businesses, private and governmental security services and, of course, millions of travelers.

Airports now recognize that these travelers constitute a critical constituency not just for the airline, but likewise for the airport.

And today’s air travelers — while sharing a common need to transit an airport — have extremely diverse wants and increasingly high expectations. In response, airports are redefining and broadening their mission to include an environment for new and enhanced customer services for their principal users: airline passengers.

Traveler Experience — Stress And Intrusion

During the last decade, most traditional measures of traveler satisfaction have remained relatively stable, including:

  • Courtesy of flight attendants,
  • Courtesy of check-in agents,
  • On-time performance,
  • Reliability of baggage services.

That said, a recent survey of air travelers by The Economist Intelligence Unit shows that two-thirds of travelers, or 66 percent, rate satisfaction with airlines the same or lower. Thus, a good portion of travelers are still not necessarily satisfied with the present-day travel experience. Rather, they are now more accepting of additional fees and limited legroom on flights, and they have grown accustomed to lengthy lines and multiple security checkpoints, as well as other challenges at airports.

While perception of air transport has become generally more favorable during the last decade, it still ranks substantially lower than in many other industries, such as home electronics, restaurant dining, package delivery and banking.

Results of a recent survey by the U.S. Travel Association (USTA) reveal that travelers still identify a number of key factors as stressful. The USTA estimates that due to various frustrations with the flying experience, U.S. travelers avoided about 38 million domestic air journeys in 2013, costing the country’s economy an estimated US$35.7 billion, or around 8 percent of current air-travel demand.

Lengthy lines for check-in, security and boarding and additional fees for items such as excess baggage, seat assignment and priority boarding rank among the most common traveler-complaint categories.

However, travelers’ primary concerns revolve around flight cancellations and delays.

About 90 percent of travelers said the cost of flying is either somewhat or very important to their purchase behavior. But somewhat surprisingly, just over half indicated they would willingly pay slightly more if the added cost reduced delays and cancellations and improved the overall airport passenger experience.

A number of studies highlight passenger dissatisfaction and frustration with airline and airport handling of delays and service interruptions, seemingly redundant and duplicate check-in and boarding control processes, and lengthy challenges during airport screening, local security and emigration/immigration.

Many people view airports among the most stressful places they visit. For example, research by British-based CPP Group Plc found that just over 40 percent of U.K. travelers stated that airports generally make them feel stressed, and nearly a quarter consider the process of getting on a flight as stressful.

Long-Term Foundational Shifts

Addressing and improving these challenges will center on business solutions enabled by technology.

In the coming years, processing power will continue to increase, automated data and user-generated content will continue to multiply exponentially, the speed and size of communications networks will continue to grow, and processing and storage costs, as well as processor size, will continue to decline.

At a macro level, these advances will ensure that newer, faster and more economically feasible technology solutions will become increasingly embedded in more systems, services and processes.

Near-Term Technology Trends

For airports and their customers — airlines, travelers, retailers and ground-service providers — a number of key technologies are likely to permeate infrastructure and become critical elements in the reinvention of existing customer experiences, as well as the development of entirely new business processes.

Many of the technologies are not new, but their adoption within the travel sector is only now reaching significant levels.

Technology-based solutions for airport operators and tenants are likely to include intelligent digital signage, digital wayfinding, biometric identity management, token-based authentication, mobile tracking and proximity sensing of travelers, RFID tracking of baggage, near field communications, geo-fencing, high-touch technology-enabled service, service robots, augmented-reality services, remote/virtual assistants, and predictive analysis.

Self-Boarding Gates

New boarding procedures at airports will speed aircraft loading and eliminate long passenger lines. For the airport of the future, self-boarding using passenger-token-enabled gates will become the norm, eliminating separate check-in and additional airport security. Vienna International Airport is leading the effort by installing self-boarding gates.

Perspective 2030

During the next couple of decades, the airport ecosystem will evolve significantly.

New operating models will be firmly in place. New technology-based solutions will redefine airport processes and the entire airport experience.

The airport of 2030 may resemble a thriving metropolis; or a low-frills high-frequency bus terminal; or even an engaging, sought-out regional destination. Airport reimagining is already happening, element by element, and the results may be quite astounding. For example, by 2030:

  • Check-in will become completely remote or will be eliminated entirely. In the short-term, home-based and remote check-in will become standard. In a sign of this accelerating trend, Palm Springs International Airport today is conducting customer trials of convenient drive-through check-in. Longer-term, airports will not have check-in desks or self-service kiosks, and the check-in process itself may disappear as airlines and airports work to reinvent the entire ground-based experience.
  • Travelers will not have to go through an emigration procedure at the airport. In the short-term, improved automation, remote and mobile services will improve the process. For instance, SmartGate now provides travelers an automated way to expedite customs and border processing between Australia and New Zealand. Also, easyJet has launched a mobile app to scan passports.
  • Trusted travelers will not undergo airport security. Again, in the short-term, airlines, airports and government agencies are working to improve the security process for travelers — making it less intrusive and less time consuming. For instance, today at Incheon International Airport, ePassport verification and biometric-based authentication solutions are used to expedite security.
  • Personal baggage will take a different route to the traveler’s journey. Hefty fees for checked bags are changing traveler behavior to the extent that checked baggage will become the exception rather than the rule. Carry-on bags are already replacing hold luggage, and third-party shippers are beginning to offer door-to-door concierge baggage services.
  • New boarding procedures will speed aircraft loading. Self-boarding via passenger-token-enabled gates will be the norm — no separate check-in, no additional airport security. Vienna International Airport is now installing self-boarding gates.
  • Drop-ship airport showrooms will replace most retail. Airports will become functional and experiential destinations. Showrooms will allow travelers (and non-travelers) to select from a wide range of products for subsequent shipping to a destination of their choice. The inexorable trend toward online shopping will extend quite naturally into the airport.
  • Traditional immigration processing will give way to seamless and remote immigration and border control procedures.
  • The airport will be functional and fun. Pre-clearance, remote processing and global trusted-traveler programs will eliminate crowding and free up space for revenue-enhancing opportunities for airports, as well as additional entertainment and destination experiences for travelers.
  • Travelers will be able to arrive just 45 minutes before departure and will not need to queue up for check-in, customs and boarding. Upon arrival at their destinations, they won’t stand in line for immigration checks or to claim their bags, which will already have been drop-shipped to their destinations.
  • Most security and “right-to-board” processing will take place remotely and well in advance of travel. Any remaining in-airport processing will utilize non-invasive, stand-off solutions (such as facial recognition at a distance, requiring nothing of the traveler) that don’t interfere with travelers’ discretionary time at the airport.
  • Airports will offer a wide variety of retail, dining and experiential services, tailored to appropriate market segments and traveler needs. The airport will reflect and showcase local tastes, customs and culture.
Future Developing Now

Global opportunities, demographic pressures, ubiquitous connectivity, enabling technologies (notably mobile), and increasingly demanding and savvy travelers are combining to drive airports (and airlines) to reinvent themselves.

Regardless of their business model or operational approach, airports also recognize the need to deliver an engaging and enjoyable travel experience.

The historical mission of the airport to simply provide an opportunity for safe and reliable air transport is now dated. While that mission is still relevant, many airports today are global gateways — enablers of the swift, efficient movement of people and products — to an ever-shrinking world.

Airports have evolved from simple transit points for travelers and goods into immense economic engines for entire regions and even nations, anchoring a broad fabric of transportation-dependent enterprises.

Over the coming decades, airport operators and their tenants will rise to the challenge by deploying customer-friendly tools and services at all points of the airport experience, and by redesigning airport architecture and infrastructure to make facilities less sterile and more enjoyable.

In the near term, airports will continue to leverage their existing business models to better serve all their constituents. Numerous regional and national airport authorities are examining, planning or already constructing passenger facilities to redefine the future travel experience.

In some cases, redefining the future travel experience may involve customizing the airport terminal or the entire facility to focus specifically on low-frills, low-cost travel offered by low-cost carriers. In other instances, airport operators are pursuing significant construction projects to realize their visions of the airport as a haven for travelers or as a broader destination for both travelers and non-traveling visitors.

Looking a bit further to the next 15 to 25 years, many airports will take broader and more aggressive steps to redefine their missions and refocus their business value propositions in concert with airlines, retail partners, local/regional/national authorities and other transportation-oriented enterprises.

Airports both nationally and globally must adapt to political, regulatory and financial conditions — to focus more clearly on their target markets.

For this reason, each airport must create and evolve its own vision. In all likelihood, various airport operating models will gain favor based on regional requirements, competitive pressures and customer needs.

As airports reengineer or eliminate entire processes, their original purpose for existence may practically disappear.

Beyond 2030, this newly reimagined airport will be both a destination showcase and a super-efficient ground-transportation interchange.

It will no longer simply be an airport.