Will passengers drive the next wave of revenue for Airports?

According to ACI airports economics report, global air traffic passenger increased by 6.6 percent in 2017 from the year before. Passenger air travel is expected to maintain positive growth rates up to 2030. Increase in passengers figure is indeed a positive sign for the industry considering sluggish economic growth due to high prices on jet fuel, tightening regulations and increasing costs.

According to JD Power’s North American Airport Satisfaction Survey, passengers that report high levels of satisfaction at an airport tend to spend up to 45 percent more in retail shops, on average. To do this, single most objective by airports is revolving around how to engage passengers and improve “Passenger Experience.” Airports see great potential in tapping non-aeronautical revenues (NAR) that plays a vital role in their bottom line, by serving growing and well-travelled passengers.

The enabler that is helping airports to innovate, reimagine & transform passenger experience is the advent of digital technologies (AI, AR, VR, Mobility, Analytics, etc.). For example, airport today are measuring passenger flows, queue management & dwell time at security checkpoints and border control, to react quickly and strategically by deploying staff, resources and equipment in real-time. This helps in cut down on lines and queues that stress travellers out. This in turn helps passengers to spend more time in shopping. This is further ascertained by SITA’s research that an extra 10 minutes in a security line reduces an average customers retail spend by 30 percent.

The area that is gaining traction among passengers is personalized travel information and it has given birth to an Airport Digital Assistant – a voice enabled AI platform that provides information about the airport from anything to everything – airport navigation, personalized offers, restaurants, Lounges, prayer room, forex, medical emergencies, boarding gates, etc. It indeed is a transformative solution that becomes a buddy to the passenger needs.

There is a strong belief that airports of tomorrow will not be a travel infrastructure but will be an experience hub for passengers. It will be a city in itself – Aero city – that will connect passengers for social interactions, business opportunities and leisure.

Airports are cognizant of the changing business model and distributing their efforts from earlier aeronautical standpoint to fulfilling an increasing demand of services contributing to NAR. Considering the massive opportunity that NAR brings in, it is not very far that the airports will see a paradigm shift where non-aeronautical revenue will overtake the aeronautical revenue on growing passenger needs.

About the Author

Sajal Karanwal - Managing Consultant - IoT & Digital Solutions, Engineering & Construction, Wipro Limited

Sajal is part of the core group of E&C vertical that caters to Engineering Construction sector, Airports and Smart Cities. He has more than 12 years of experience in consulting & solution sales of IoT & digital solutions. He is responsible to evangelizing & building solutions, create an ecosystem to deliver them to business to derive efficiency and agility in operations

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