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What should be keeping airport executives up at night?

Jim Cherry, Arup’s strategic aviation advisor and former chair of ACI World, ACI North America, and former CEO of Aéroports de Montréal, shares his thoughts on the main issues facing the aviation industry now and into the future


Any senior executive of an airport is used to not sleeping well. They have grown all too accustomed to worrying about the next security threat, navigating challenging government agencies or managing citizens’ groups’ issues about aircraft noise.

New and more complex challenges are emerging all the time. So, at the start of a new year, which of these should be at the forefront of airport executives’ minds? Where do the greatest threats and opportunities lie?


Disruptive technologies as opportunities

Today, airport executives should familiarize themselves with the wide range of emerging technologies that are going to play a significant role in their future. Like it or not, their resilience and ability to adapt is going to be tested by innovation.

Technologies being developed are already leading us to the elusive objective of a ‘touchless airport experience’ – a rapid walk through a security corridor for passenger and hand baggage screening.

Mobile passport applications, meanwhile, allow registered users to pass the immigration formalities with the push of a button on a smartphone. Coupled with the roll-out of electronically enabled passports, smart airports are seizing the opportunity to reduce immigration and customs processing times.

For departing passengers, the logical extension of self-check-in, self-check baggage and mobile boarding cards would be the full automation of the boarding process itself. We are likely not far from the point where the first employee you encounter is on the aircraft itself.

The treatment of inbound and outbound hold baggage has been virtually untouched by technological innovation. These activities are still labor intensive but robotics and autonomous vehicles could well be used to move baggage to and from aircraft. Already, some pioneering airports like Schiphol in Amsterdam have begun to trial the use of robotic baggage handling.

Fuel consumption and noise generation by taxiing aircraft is another natural opportunity for technology. Autonomous vehicles to tow aircraft to and from gates and along taxiways are already under test. The highly controlled airside space at airports is a fitting environment for autonomous vehicles to carry out all sorts of tasks.


Disruptive technologies as threats

To keep passenger and airline rates and charges as low as possible, airports rely on the generation of non-aeronautical revenues.

Airports are already seeing their revenue streams becoming vulnerable to the emergence of online retail. Airport retailers have responded with ‘airport only’ collections but the threat of ‘Amazonation’, particularly to the conventional, non-duty-free segment, is clear.

Rather than fighting the trend, perhaps airports should embrace the opportunity. Airports could act as natural distribution centers or controlled launchpoints for delivery drones.

For many airports one of the most significant sources of non-aeronautical revenue is vehicle parking. Increasingly, that important revenue driver is being targeted by an expanding number of threats. Urban congestion and the removal of polluting vehicles from our cities has led to communities investing in efficient and clean public transit.

This is clearly a desirable trend and smart airports are embracing this movement to reduce their environmental impact. While there will be an inevitable reduction in parking revenues, intelligent airport managers’ view these as investments in improving services to their community.

Ridesharing services are taking a larger bite out of conventional taxi services but are also beginning to eat into parking revenues. Personal car ownership, particularly across the young urban segment, is rapidly declining and an increasing number of people will rely on some form of ridesharing.

Furthermore, an autonomous car capable of dropping passengers at the airport, and then simply returning home or elsewhere to park and wait, is likely not far away.

Airport managers faced with this have two important considerations to address: a substantial reduction in non-aeronautical revenues, and excess real estate assets dedicated to declining activity.

In the near term, it would be important to maximize the use of any existing capacity dedicated to conventional vehicles and, if it became absolutely necessary to build more, ensure that new structures could be easily adapted for other uses.

In the longer term, airports should seriously evaluate the possibility of converting their conventional parking structures into service and storage facilities for fleets of autonomous cars.

The ultimate threat to airlines and airports may be the emergence of alternatives to flight. Tests of passenger drones are already underway but they are more likely to operate very short-range flights that will further complicate the airport access situation addressed above.

However, longer range, high-speed alternatives like a hyperloop may well develop into a significant threat. Smaller, regional airports would be vulnerable and even the largest airports would likely have their air networks transformed.
 

Looking ahead
The airports that appreciate and embrace the emerging ‘intermodal’ nature of their sites are the ones who will thrive.

Smart airports should be thinking about less investment in car parks, and focus on creating buildings and other structures that might be adapted as requirements change, ensuring integration with commuter and intercity rail networks, and embracing the possibility of other revolutionary modes of transport.

The successful airport of the future will have to change its business model to take advantage of these emerging technologies and adapt to the rapidly changing landscape of transportation.

January 25, 2018

 





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