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Creating smarter airports
An opportunity to transform travel and trade
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1 Creating smarter airports
Executive summary
Airports ace multiple challenges, including meeting capacity demands, providing enhanced
public service and increasing revenueall while battling rising costs, increasingly dissatis-
fed customers and rigid inormation inrastructures. These challenges and pressures are
evidence that their current business processes need revitalization.
Even with their challenges, airports have the potential to become multi-modal transporta-
tion hubs and centers o economic vitality. To do so requires greater collaboration between
airport stakeholders and a more integrated approach to managing and sharing inormation.
Society has presented airport executives with a mandate to create airports that are smarter,
just as airport inrastructures, systems and processes are becoming digitally aware, inter-
connected and inused with intelligence. By embracing new and existing technologies to ac-
quire, associate and analyze inormation in the airport inrastructure and using that inorma-
tion to become more efcient and eective, airport operators can create a more responsive
and agile operating and commercial environment. In addition, they can be recognized as
leaders who harness shared inormation to:
Provide enhanced service to passengers, airlines and other customers.
Achieve real-time operational awareness, adaptability and readiness.
Decrease the cost o delivering services.
Generate business insights that beneft the airport, airlines and business partners.
The smarter airport is a dynamic hub that connects a multi-modal transport network with
people, inormation and trade; it serves the needs o the larger community and generates
economic value or the region. It is a new rame o reerence with enormous potential or
growth and progress and or opportunities to think and act in new ways.
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2 Creating smarter airports
IntroductionThe demands being placed on all modes of
transportation are growing, driven by expand-
ing populations, rapid urbanization, business
globalization and the rapid adoption of new
technologies. These and other factors have
created four imperatives for all operators in thetransportation ecosystem:
Predict demand and optimize capacity and
assets accordingly.
Improve the end-to-end customer experience.
Improve operational efciency while reducing
environmental impact.
Continue to assure safety and security, with
less cost and impact on customers.
Airports play an increasingly important role in
addressing these imperatives because they are
a nexus for multi-modal transportation.
Airport operators are responsible for planning,
designing, building and operating their capital-
intensive infrastructure assets over long plan-
ning horizons to meet commitments to the local
communities and metropolitan areas they serve.
They have a long-term nancial obligation to de-
liver sustainable return on these assets. Current
airport business models are often not yielding
the desired nancial results, however.
Based on the Global Airport Revenue statistics
of the Airports Council International (ACI), aero-
nautical revenue does not cover all airport op-
erations costs. Instead, net airport prot growth
is now derived from non-aeronautical revenue
because of higher margins and lower operating
costs.1 Both airport revenue streams (aeronauti-
cal and non-aeronautical) are under pressure
caused by reduced passenger numbers, cargo
volumes and aircraft movements in the current
economic environment.
The reason that current business models are no
longer as effective as they once were is that the
air travel environment is changing faster than
organizations can adapt. Periods of economic
growth and decline, airline trafc volatility, short-
term route network changes, evolving security
rules and other governmental regulations allcharacterize the current air travel environment.
In this changing environment, airports and their
business partners are struggling. It is clear that
a business model transformation is necessary.
Airport-initiated stakeholder collaboration and
information technology are key enablers in the
transformation of the airport business model to
one that uses airport infrastructures better and
supports new commercially attractive offerings.
This transformation requires big ideas from all
participants in the global airport industry
from small operators to large airport authori-ties in both high-growth and mature markets.
Global multi-modal transportation needs more
dynamic, economically viable airports that serve
as central hubs in networks of passenger, cargo
and information movements. Now that so many
technology avenues are open, its time to make
the change.
This paper provides a brief overview of the
challenges that have mandated a change in the
airport business model and then explains how
airports can use new strategies, current and
emerging technology and paradigm shifts tobecome smarter airports.
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3 Creating smarter airports
Mandate for changeGlobally, airport authorities, owners and their
business partners face a number of business
challenges:
Capacity shortalls
Demand for air travel worldwide continuesto expand, stretching capacity beyond the
breaking point. Currently about 2.2 billion
passengers per year are using commercial
aviation services. It is possible that, as the
world population increases and air travel
becomes even more available, by 2020, there
will be demand for 7 billion passenger trips. If
current conditions persist, airline and airport
passenger capacity will only be able to handle
6 billion travelers, creating a shortfall of critical
infrastructure of 15 percent.2
Dissatisfed passengers
A 2008 IBM survey of 1,000 passengers
across the U.S. revealed a growing lack of
tolerance for poor agent interactions, bag-
gage fees, lost luggage and ight delays.
Customers have good reason to be dissatis-
ed. In 2008, almost one-quarter of sched-
uled U.S. ights were delayed. Frustrated
U.S. air travelers avoided 41 million ights
over a period of 12 months ending in 2008,
which cost the U.S. economy over $26 bil-
lion.3
Declining revenue
The International Air Transport Association
(IATA) estimates that airlines will lose $11
billion in 2009, after shedding $16.8 billion in
2008.4 These airline revenue losses have a
signicant impact on the airport industry. In
total, the fees that airports charge the global
airlines to use their facilities account for 21
percent of overall airport income; the other 79
percent is from commercial airport activities
and passenger service charges.5 With fewer
passengers and the commercial sales per
passenger down between 10 and 20 per-
cent,6 airports face a dramatic decline in both
aviation and non-aviation income.
Increased regulations
New requirements from a large variety of
regulatory bodies, including aviation authori-
ties and national and local governments, put
pressures on airport operations. For example
new security requirements for the passenger
and cargo handling processes are caus-ing disruptions and are increasing airport
costs. Safety and security costs have risen to
almost 60 to 70 percent of airport operating
costs.7 In addition, environmental regulations
affect all airports, regardless of size or loca-
tion. Some new regulations are likely to cause
signicant changes to airport operations,
such as those applicable to oil spill preven-
tion planning and directives to monitor and
control noise pollution, toxic air pollutants and
carbon emissions.
Increased competition
Strong airline alliances dominate the market.
As a result, airports compete with each other
for airline and passenger trafc, while their
local communities expect all attractive routes
to be available. However, the larger share of
competition is from other forms of transpor-
tation. High speed rail has had a signicant
impact on air travel in continental Europe.8
Airport operators and their infrastructure as-
sets cannot easily move to a better market,
so they must make their market more attrac-
tive to airlines, passengers and the larger air
travel stakeholder community.
These challenges have created an almost
overwhelming mandate for change. Airports
must transform themselves and their business
models to overcome the current challenges they
face and thrive in the 21st century. They must
become smarter airports. To do so requires a
different mindset and a new level of collabora-
tion between all the major stakeholders in the
air travel chain.
For airport operators, the top
industry challenges are: capacity
shortfalls, dissatisfied passengers,
declining revenue, increased regu-
lations and increased competition.
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4 Creating smarter airports
Smarter airports are connected networks that
make it easy for passengers, cargo, informa-
tion and services to get where they need to
be. Such connectivity creates a new, positive
experience for travelers from pre-ight to post-
ight. The seamless integration of information
from various processesfrom check-in, tosecurity, to ight information displays, to bag-
gage, to boardingstreamlines airport opera-
tions. A single instrumented, interconnected
and intelligent information architecture provides
the exibility to adapt to the changing needs
of airlines, airports and their customers. The
result is a positive effect on airport revenue and
growth. For example:
Technology connects the objects, people,
processes and systems in the air travel
process and helps operators and service
providers track their movements. With thisinformation, airport operators and other avia-
tion service providers can allocate support
resources just when theyre needed through-
out the process.
Air and multi-modal network alignment en-
ables efciencies, incentives and multi-brand-
ing opportunities. Competitive pricing and
schedules enhance door to door connectivity
for passengers and cargo.
New travel services can create consumer
revenue growth because passengers can
move through the airport with few hasslesand enjoy their experiences at the airport.
Regional logistics and trade based on related
business activities in the airports region or
country stimulate growth of the air travel
network and land side connectivity.
Technology can enable airports to transform the
entire air travel process. However, technology
is only an enabler. For airports to truly make the
leap to new, sustainable and protable busi-
ness models, airport operators, airlines, ground
handlers, security operators, customs, retailers,
concession owners and public transport opera-tors all must alter their mindsets from propri-
etary to collaborative. Collaboration is the key to
planning and managing multi-modal operations
and commercial services effectively in every
aspect of the airport ecosystem.
Smarter airport enablersOperationally, an airport supports a complex
process that spans multiple organizations, cat-
egorized into three major components: passen-
ger, cargo and aircraft departure, transfer and
arrival. Each component consists of operational
processes that different organizations share, in-cluding air navigation services providers, ground
handling, catering, airlines, various supporting
units and the airport operator itself.
Decades of adding layer-upon-layer of informa-
tion technology have increased complexity,
resulting in cumbersome airport systems that
are expensive and inexible. Is it any wonder
thenas more people, equipment and systems
have been added to the logistics of sustaining
these complex and specialized systemsthat
current models have lost a great deal of the
exibility necessary to lower costs?
Smarter airports are connected
networks that make it easy for
passengers, cargo, information and
services to get where they need to
be. A single instrumented, intercon-
nected and intelligent information
architecture adapts to the chang-
ing needs of airlines, airports and
their customers.
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5 Creating smarter airports
Now, however, there is an opportunity for airports to think and act in new ways. The world is becoming
Instrumented
RFID tags, mobile phones and other connected devices are creating the ability to sense, measure
and track locations and conditions of objects, people and processes over door to-door multi-moda
transport networks.
Interconnected
Technology has evolved to the point that there are now large networks that connect all types of
objects, creating multitudes of interactions between people, places and things.
Intelligent
Instrumented and interconnected information infrastructures and other assets can now communicate
with sophisticated business systems so that we can mine more data, analyze relationships, identify
new patterns and make informed decisions in real time.
This instrumented, interconnected and intelligent world presents airport authorities, owners and othe
stakeholders with tools and strategies they can use to create smarter airports that better serve pas-
sengers and customers, connect with multi-modal transportation centers and smooth the air travel
process. The sections that follow dene how instrumentation, interconnectivity and intelligence are
being applied to airports.
Instrumented Interconnected Intelligent
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6 Creating smarter airports
Instrumented
Consider these predictions for 2010:
1 billion transistors per human on the planet
4 billion subscriptions to mobile telephones
and personal digital assistants
2 billion people with Web access
1 trillion connected objects such as cars, ap-
pliances, cameras, roadways, pipelines
Using these technologies and others, such as
wireless airport sensors, RFID tags and person-
alized cards based on biometrics, you can track
objects, people and airport processes through-
out the airport infrastructure and broader air
travel chain. In fact, instrumented objects, peo-
ple and processes are already providing masses
of new transportation data around the world.
For example, instrumented devices aid passen-
ger navigation at self-service check-in kiosks,
immigration, retail areas, security and gates
in combination with wireless sensors in the
airport area. Expect the presence of common-
use self-service technologies to become more
widespread as airports recognize their potential
for further empowering passengers.
The airports in Las Vegas, Amsterdam and Hong
Kong use RFID to sort and track baggage. Better
read rates over the bar coded tags have improvedbaggage sorting and reduced mishandled baggage,
while increasing the capacity of the existing bag-
gage system. The airports then can defer costly and
disruptive expansion work.
Instrumentation also supports obtaining more
airport operations information, such as utiliza-
tion of terminal processes, passenger ows
and maintenance of critical airport assets such
as runways, terminals and equipment. Exist-
ing airport hubs in Europe, Asia and North
America and new airports in emerging marketsare applying increased levels of instrumentation
to the travel process. With information about
passenger ows from mobile devices with GPS
and RFID tags, airport operators can locate
passengers, cargo and bags while interacting
with individual passengers at each step in their
travel process, reducing costs and helping meet
new security mandates. Airport staff can also be
better deployed in the airport to accommodate
these ows, which in turn improves capacity.
Using transistors, mobile phones,
personal digital assistants, GPS.
wireless airport sensors, RFID tags
and personalized cards based on
biometrics, it is possible to track ob-
jects, people and airport processes
throughout an airport.
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7 Creating smarter airports
Interconnected
An airport operation has, on average, at least
30 disparate systems running concurrently. For
many years, airport operators focused their
technology purchases on separate solutions
that responded to a single or unique opera-
tional need. For example, they invested in onesolution for baggage handling, another for ight
information display systems and yet another
for check-in. The result is an infrastructure with
original and older applications that are highly in-
exible, complex and difcult to integrate. Each
system holds information that could improve
airport service if shared with other systems;
however, most are simply silos that provide
information only to a select group or enterprise.
Connecting the different airport systems, with-
out replacing the original infrastructure, makes it
possible for airport operators and their businesspartners to share important information, such
as that provided by instrumentation. They can
develop business models for a consistent travel
experience and optimal airport processes. Inter-
connectivity can be accomplished in a number
of ways, such as with:
Standardized, global airport connectivity
Industry associations such as ICAO, IATA,
ACI and the American Association of Airport
Executives (AAAE) have begun working on
a framework that promotes global airport
interconnectivity with global informationstandards. The goal is a more transparent
air travel chain, one that can better match
supply and demand for terminal capacity
and other airport process bottlenecks. The
framework would support the technologies
that can transform processes in areas such
as aircraft handling, security, baggage and
check-in. Examples include new tools such
as airport-wide performance dashboards that
make it easy to view real-time information to
improve travel ows.
Shared services
Shared services can include reusing data,
networks, software and computing resources
to create interconnected information pro-
cesses between departments and partners.
Using information technology, airports and
airlines can work together to develop ashared services model that meets the in-
creasing demand for streamlined operations.
A shared services model supports growth
and organizational collaboration to meet
evolving challenges while reducing the effect
of information silos that result in redundant
costs and inefciency.
Airport Operations Control Centers
The purpose of an Airport Operations Contro
Center (AOCC) is to oversee and align all air-
port processes from a single, trusted source,
creating a common focus on punctuality,process quality and continuous improve-
ment. AOCCs feature modular, exible
airport operating systems and an information
architecture that can receive information from
anywhere in the airport and route it to where
it needs to be to support all airport opera-
tions processes. For example, airport staff
and enterprise resource planning systems
can receive predicted passenger departure
trafc volume so they can match resource
levels with demand. Such alignment can help
reduce the high cost of overstafng and cor-
rect poor service levels. The AOCC can alsouse communication channels such as secure
Web portals to share information that can
help integrate nancial processes by creating
a unied situational and analytical view for
airport management.
Airports can accomplish intercon-
nectivity with global informa-
tion and connectivity standards,
shared services, airport operations
control centers, shared services
and IT optimization.
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8 Creating smarter airports
Optimization of IT infrastructure
The cost and complexity of IT systems can
be reduced using a technique known as
virtualization. Shared servers and storage,
which can be in-house or offsite, can run
multiple applications so that a server for each
application is no longer necessary. The resultis the exibility to adapt system capacity to
changing needs and streamline IT operations.
Virtualization also yields lower costs for en-
ergy and space, while helping convert capital
expense to operational expense.
Frankfurt Airport Fraport and Hong Kong Chek Lap
Kok International Airport have achieved improved
safety, security and operations efciency by
integrating the real-time management of multiple
airport systems and operations into a new AOCC.
These systems automate and remotely captureperformance measurement, which in turn facilitates
improvements in operational planning for the airports.
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9 Creating smarter airports
Intelligent
When the systems of airports, airlines and
service providers are instrumented and inter-
connected, operators acquire a wealth of new
passenger-based information. Intelligent busi-
ness applications help airport operators deci-
pher this information to answer questions suchas: Are we managing our airport operations ef-
ciently based on actual trafc patterns? Also,
with such intelligence, airport operators, airlines
and service providers can develop new areas
of air travel process integration that change the
dynamics of passenger ows and facilitate bet-
ter airport and aircraft capacity utilization. For
example, intelligent systems can monitor gate
usage to determine the availability of space for
aircraft. Boarding and baggage procedures that
use technology to help locate travelers and their
baggage for quicker boarding can also improve
turnaround time.
In addition to more efcient airport operations
and better utilization of the airport facilities,
intelligent information infrastructures make itpossible to introduce new services for passen-
gers. Such services include virtualized passen-
ger procedures that provide service beyond the
boundaries of the physical airport, spreading
peak congestion over locations and broader
time intervals. For example, smart phone appli-
cations and kiosks located outside of the airport
can enable remote check-in and deliver person-
alized information about schedule changes to
travelers, streamlining the time and resources
needed to support passenger peak demand
periods while improving customer service.
Instrumented, interconnected and intelligent
airport systems are the backbones of a smarter
airport and are key enablers of smarter airport
strategies.
The Manchester and Copenhagen airports are
capturing real-time passenger ow data by pas-
sively tracking the Bluetooth phones carried by
passengers. This information ultimately helps the
airports eliminate bottlenecks, improve operations
and optimize stafng levels.
Intelligent business applications
help airport operators answer ques-
tions such as: Are we managing our
airport operations efciently based
on actual trafc patterns?
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10 Creating smarter airports
Experiencing a smarter airport
Picture this: Youve nally chosen your destination for your next vacation: Peru. You use a secure airport Web portal
to book your ight and get a tour of what to expect at the new airport terminal in your city, along with hints and tips
related to the Peruvian culture and history. Forty-eight hours before your ight, you get a message on your phone
with your ight details along with a 2D bar-coded boarding pass. On the way to the airport, you receive a scheduled
departure conrmation and learn that there are no delays. When you get to the airport, a text message greets you
with your gate numbers and boarding time. You tag your luggage yourself and drop it off at a check-in kiosk.
Theres a line to check in, so a roving check-in agent uses a mobile device to check your passport and completes
the check-in process, so that you can proceed directly to your gate. On your way to the gate, you decide that a
Spanish-English dictionary would be helpful. You pick one out and pay for it using Near Field Communication on your
mobile phone. Your personalized shopper prole has sent you locations of items of interest available at shops in the
airport and you remember to buy motion sickness medication for your ferry ride from Callao to see sea lions on the
Isle of Palominos. You receive an alert that your ight is boarding, nd your gate using the interactive airport PDA
map and use the 2D bar-coded boarding pass to get on the plane. When you arrive in Lima, you already know what
carousel your bags are on, thanks to another text message on your mobile phone. Because you had the foresight to
register with the relevant authorities, you proceed through immigration quickly using a biometric scanner. After you
retrieve your bags and go through customs, you will be able to pick up the guidebooks that you pre-ordered during
the reservation. You also receive information about train schedules and other modes of transport on your mobilephone based on the postal code of your nal destination.
Throughout all these activities, airport security at each airport can identify selected travelers or suspicious objects
with video surveillance throughout the terminal in the central airport operations control center. Meanwhile, airport
staff receives real-time information about arriving and departing ights and irregular operations messages on their
mobile devices. Your impression is of a well-run airport with all operations functioning properly without delays.
This is not a scene from the latest science ction lm or video game. This is a picture of an integrated travel process
in an airport that uses the latest technology and collaboration to:
Add real-time information to the pre- and post-ight air travel process.
Collect more information for analysis and airport optimizations.
Eliminate unnecessary costs in air travel operations and improve decision making.
Improve baggage handling speed and accuracy
Facilitate core airport processes and minimize the hassle factor.
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11 Creating smarter airports
Strategies for a smarter airportSmarter airports connect air transportation with
sea and land travel, people, information and
trade to serve the needs of the larger commu-
nity and drive economic growth. To anticipate
existing and future challenges, they collaborate
to benet from intelligent airport optimizationand to provide more value for the connected
traveler, shippers and the full stakeholder
ecosystem. The strategies necessary for this
connection and collaboration include:
Connect multi-modal transport networks to
improve competitive position.
Innovate to upgrade operations and commer-
cial services for a consistent travel experience.
Promote sustainable development of the
larger logistics and trade area community.
Connect multi-modal transport networks
To meet the increasing demand for transpor-
tation, government ofcials are working with
airport planners and embracing new concepts
for mixed-use transportation facilities as part
of a larger economic model for growth. Global
airports have a unique position in these projects
because they are concentration points for multi-
modal connectivity that facilitates movement
between a city or region and the surrounding
world. Currently, however, there is little coordi-
nation between the different types of transpor-
tation found at airports and their environs. In
fact, different transportation systems compete
with one another, often causing delays, confu-
sion and passenger dissatisfaction.
To realize their full potential as multi-modal
hubs, airports must lead the creation of a
transportation system of systems. They must
move beyond physical infrastructure to help
integrate operational processes and supporting
technologies between transportation operators,
the community and their customers. The reasonfor this is that smarter airports do not recognize
traditional boundaries between air and other
forms of transportation. Instead of competing
with rail, road and water, a smarter airport is a
multi-modal hub with a large catchment area
that offers regional and global air route connec-
tions and helps reduce overall transportation
times and costs. At these hubs, more passen-
gers and cargo can move more efciently, serv-
ing more destinations, with increased on-time
performance.
To improve the traveler and customer experi-ence, airports can start by aligning air route
networks and schedules with those of other
kinds of land transportation. Passengers and
cargo shippers can then make informed plan-
ning and purchasing decisions about each type
of transportation they use. Airports should also
adopt the actions of current world-class airports
by expanding land and sea travel networks to
offer new destinations. Frankfurt and Paris are
examples of airports that are connected with
high speed train networks. Amsterdam and
Hong Kong benet from the existence of large
seaports that strengthen the airports and viceversa with additional trafc volumes and devel-
opment of logistics and trade areas.
The strategies for a smarter
airport include connecting trans-
portation networks to improve
competitive position, innovating
for a consistent travel experience
and promoting sustainable devel-
opment of the larger logistics and
trade area community.
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12 Creating smarter airports
Innovate to upgrade operations and
commercial services
A smarter airport dramatically improves the
travel experience by optimizing the role of
airports in the surrounding world. Using existing
information to recognize opportunities, innova-
tive partnerships with investors can create newaviation and non-aviation services and facilities.
Examples of the new services include:
Web portals that provide greater levels of
interaction with customer target groups
New airport loyalty concepts, such as airport
member cards for fast tracking and customer
intimacy
New retail, food and beverage services, ho-
tels and parking
New media, entertainment, personal services
and information services at the airport
This broad consumer business portfolio creates
a city-like airport that caters to the needs of all
passenger segmentsfrom the budget leisure
passenger to the premium rst-class business
travelerby channeling stagnant travel time into
positive experiences.
Airports that provide innovative services outside
those related to aviation benet because they
develop new revenue sources. For example,think of the benets of retail brands advertis-
ing in active displays that change their ads in
real time based on the demographics of the
passengers at the airport. Passengers feel
catered to and retailers see increased sales.
Also, consider the possibilities of having items
passengers have ordered waiting for them at a
pick-up center at their arrival destination so that
they dont have to stop on their way to their ho-
tels or homes. Retailers, passengers, customer
service and delivery agencies all benet from
the strength of the airport brand in the com-
mercial area.
Promote sustainable development o the
logistics and trade area community
Airports today are multifunctional trade areas.
Arterial spines and trade clusters of aviation-
linked businesses radiate outward for up to
approximately 12 miles (or 20 kilometers) from
the airport. Such aerotropolises can includecorporate headquarters, aircraft maintenance
facilities, business parks, logistics centers,
industrial parks, hospitality and entertainment
establishments, large retail centers and mixed-
use residential developments.9
Operators of smarter airports recognize the
power of these aerotropolises and work to
ensure their sustainability. Using the intelligence
created by greater visibility of transportation
ows and direct access to travel and trade
information, they work with all the parties in
these communities to create new avenues foreconomic growth. They also connect with other
infrastructures in their trade zones, such as
security, energy and communication, to obtain
more information for analysis with the aim of
further optimizing business.
In addition, airport operators are seeking col-
laboration initiatives with other international
airports to extend their global economic reach.
These are like the alliance developments in the
airline industry over the past 20 years and even
include collaboration with them. For example,
in late 2008, Amsterdam Airport Schiphol andAeroports de Paris signed a 12-year alliance
agreement of for a dual-hub concept. Two of
the objectives of the alliance are to strengthen
the relationship and collaboration with their
largest airline clients, Air France-KLM and the
SkyTeam Alliance, and to grow commercial
and trade services together. Alliances between
airports and airlines are also likely to increase,
creating healthy competition for new travel
volumes and trade activities.
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13 Creating smarter airports
Promoting sustainable development of the larg-
er trade community, improving competitive posi-
tion with multi-modal transport networks and in-
novating to upgrade operations and commercial
services all represent the process of creating
a smarter airport from a strategic perspective.
There are also tactical considerationstheseform the route to a smarter airport.
Routes to the smarter airportThe appropriate route to a smarter airport
depends on the airport ownership model, cur-
rent and projected capacity and the ability to
accommodate future passenger growth, cargo
trafc and customer requirements. However,
there are certain actions that are recommended
regardless of the airport ownership model or
conguration.
Create strategic clarityWithout a clear understanding of an airports
strategic position and growth objectives,
stakeholders can operate at cross purposes.
Therefore, it is critical that all airport stakehold-
ers understand the airport business model and
the future strategic direction for growth based
on the major themes on the airport business
agenda. Some of the major considerations
include:
The competitive position of the airport in
relation to other airports and forms of travel
and transportation and how well the airport
can attract new airlines, travelers and related
business activities
Investment priorities and trade-offs between
core business dimensions such as aviation
operations, commercial services and logistics
and trade
Airport branding from low-cost leadership to
more customer intimacy
How and where to position new entrants
in the airport market such as banking and
investment groups and large engineering and
construction corporations
The role of the airport in the economic re-
gionas a public runway and terminal utility
service onlyor an engine for growing multi-modal transport, travel and trade interactions
Collaborate responsively
If they are to thrive, airports and their business
partners must collaborate to plan, manage
and operate the movement of passengers and
cargo in the entire travel process. They need to
develop a shared vision to resolve congestion,
customer dissatisfaction and other pressures
such as national security and the environment.
The key enablers of airport collaboration are:
The willingness of airport operators, their
business partners and service providers,
motivated by a better economic model, to
achieve process integration for improved air
travel services and lower overall airport costs
The alignment of modern airport procure-
ment, contracting and management pro-
cedures to recognize the value of a new
outsourcing business model with external
providers handling non-core processes.
The implementation of technology that pro-motes information-sharing between all airport
entities
Mitigate business risks
On the route to a smarter airport, operators,
airlines and other aviation stakeholders must
mitigate safety, security and nancial risks
while making sure that they are good corporate
citizens. For security and safety, airport stake-
holders should take advantage of emerging
technologies, including ngerprint recognition
systems, automated document identication
systems, iris scanning systems, facial-recogni-tion technologies and data analysis systems for
pre-screening passengers.
Creating strategic clarity, collabo-
rating responsively and mitigating
risks are part of the route to a
smarter airport.
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14 Creating smarter airports
In the nancial arena, there should be an
emphasis on transforming xed capital expen-
ditures into variable operating expenditures.
Variable operating expenditures are created by
focusing on core aviation activities and out-
sourcing non-core activities to specialty services
providers, such as handling, information, facilitymanagement, security and so forth, based on
pay-for-use models. At the same time, airport
operators must continue to maintain strong
relationships with the local community as part
of their corporate social responsibility policies,
which should include noise and CO2
emission reductions.
Plan your routeA smarter airport is not built overnight. It
requires bold steps, investment and the will to
create real transformation. Take a moment to
score your organizational actions (- or +) againstthis checklist of questions:
How are you driving strategic collaboration
with all airport business partners and opera-
tors of connecting modes of transportation?
Do you have senior level meetings with your
stakeholders to align shared vision, strategy
and business operating models, including
joint business planning and actions?
Have you considered enlisting a third party
with industry expertise, business transfor-
mation experience and technology insightto help facilitate collaboration and process
improvement? This approach has been used
by some airports to help align all stakeholders
with a common purpose.
What are you currently doing to provide your
passengers with a consistent and predictable
airport experience along all the links of the air
travel chain? What do you plan to do in the
future? How do you measure your progress?
To what degree are you beneting from the
full value of multi-modal transportation net-
works, travel and trade services concepts incombination with an overall airport-wide strat-
egy for total revenue and cost management?
Do you have a map of your enterprise infor-
mation infrastructure and applications that
shows which systems are integrated with
those of the airlines, ground handlers, secu-
rity operators, customs, retailers, concession
owners, public transportation operators and
so on to take advantage of your combinedassets, capacity and services? Is effective
governance in place?
Which airport processes do you consider
core competencies performed by airport per-
sonnel versus business functions that could
be executed by specialist service providers?
What are you currently doing to measure and
sense the health of your airport operations?
What are your plans for incorporating such
information into near real-time collaborative
decision making to answer these questions:
How are we doing? Why? How canwe improve?
What are you currently using your best talent
for? What could be accomplished if they were
focused on helping the airport ecosystem
become instrumented, interconnected and
intelligent?
How did your organization score in the preced-
ing checklist? How many of those + signs are
your airport acting on right now? Would the per
son in the ofce next to yours score the airport
the same way? There might be an opportunityto transform travel and trade further. Let this
checklist be your impetus to get started.
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15 Creating smarter airports
ConclusionThe time for airports around the world to
change is now. Current business models are
not yielding the desired results. Today, airport
authorities, owners and their major business
partners are facing rising costs, declines in
revenue, growth constraints and an increasinglydissatised customer base. To prevent these
problems from worsening, airport operators
must move away from business as usual
models and transform their business processes.
They must become smarter airports.
Smarter airports are connected networks that
make it easy for passengers, cargo, informa-
tion and services to get where they need to be.
The seamless integration of information from all
airport processes streamlines airline operations.
A single instrumented, interconnected and intel-
ligent information architecture helps the airportadapt to the changing needs of airlines, aviation
service providers and customers. The result is a
positive effect on airport revenue and growth.
Technology can help transform the entire air
travel process, but it is only an enabler. For air-
ports to truly make the leap to new, sustainable
and protable business models, all stakehold-
ers involved must become collaborators rather
than competitors. With collaboration comes the
effective planning and management of multi-
modal operations and commercial services in
every aspect of the airport ecosystem.
Innovation partner or the changing
airports industry
At IBM Global Business Services, we collaborate
with our clients, bringing together business insights,
advanced research and technology to give them
a distinct advantage in todays rapidly changing
environment. With our integrated approach to busi-
ness design and execution, we help turn strategies
into action. And with expertise in 17 industries and
global capabilities that span 170 countries, we can
help clients anticipate change and prot from new
opportunities.
The time for airports around the
world to change is now. To thrive in
the years to come, airport operators
must transform their business pro-
cesses to create smarter airports.
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16 Creating smarter airports
About the authorsFrank Binnekade is currently Travel and Trans-
port Industry Solutions Leader for IBM India
and South Asia. In this capacity, he supports
airports, airlines and logistics clients with high
value business services, software and systems.
Frank has more than 15 years of experience inthe global travel and transport domain, holding
various commercial management, supply chain
and business consulting positions that include
completing a wide range of commercial, op-
erational and route development engagements
for international airport clients. Frank holds a
Masters Degree in Business and Transport
Economics from VU University Amsterdam. His
e-mail address is [email protected].
Robert Biciocchi is the Solutions Leader,
Americas, for the Customs, Ports and Border
Management global solutions group in IBM, re-sponsible for the U.S. Airports Program and has
also been involved with border management
and commerce issues with the U.S. Transporta-
tion Security Agency, U.S. Coast Guard and
U.S. Customs and Border Protection. An active
member in the ACI and IATA industry working
groups, he has helped to lead several large
airport modernization projects. He has also
served as an executive ofcer in a successful
international trade and logistics company and
held other senior management positions in rms
providing enterprise application solutions. His
e-mail address is [email protected].
Brian E. ORourke is the Global Airline Offering
Leader and Business Development Executive
in the IBM Global Travel and Transportation
unit and has been actively involved in numer-
ous consulting engagements and value added
initiatives for airlines and other clients. Using his
professional training and 23 years of airline in-dustry experience, he helps airlines and airports
use process optimization and technology to
become more efcient. He has worked directly
with the IATA to drive industry-leading solutions
and he has co-authored and published several
aviation industry articles, including The Innova-
tive Airline, Creating sustainable advantages in
competitive times, Service Oriented Archi-
tecture for the Airline Industry and more. His
e-mail address is [email protected].
Charles Vincent is a Partner who leads the Dis-
tribution and Travel and Transportation practicein IBM Global Business Services in Southwest
Europe. His e-mail address is charles.vincent@
nl.ibm.com.
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