The impact of digital transformation on airport processes, business models and passenger experience
Connected traveller; smart airport; self-service airport; in-terminal location-based services; management process visualisation; and collaborative decision making have all become commonplace terms in the aviation industry. They all relate to the ongoing digital transformation of airports which, overall, is considered to deliver positive support for
- process optimisation
- enhancement of non-aeronautical revenue streams, which are now becoming commercially significant for airports
- introduction of new business models (e.g. Hamad International Airport offers location-based promotions to passengers walking through the terminal)
- overall improvement in the passenger experience
It is widely accepted as a disruptive force which changes management mind sets, business processes and business models, but what do we mean by digital transformation? The concept is defined by three separate, but intertwined, drivers: Digitisation, Connectivity and Data.
Part 1 of this series covers Digitisation of Airport Processes, with this second Part focusing on Connectivity.
Connectivity of systems, people and things
The enhanced connectivity of systems, people and things is described by the concept of Internet of Things (IoT) – a digital map of a physical region which relies on the capacity of the infrastructure of that region to gather data. IoT requires an IT capability to aggregate and analyse data gathered via the installation of sensors in buildings and infrastructure. Similar to every other industry, airports are impacted by the IoT in three different areas:
System connectivity is manifested through the evolution of the Airport Collaborative Decision Making (A-CDM) concept. Airports implementing A-CDM act as data intermediaries and a single source of truth for stakeholders as diverse as airlines, ground handlers and even passengers.
Going forward it will generate the introduction of innovative products and services. For example, community applications providing full and real-time visibility across all possible parameters and processes to an expanding list of relevant stakeholders. It will also gradually move towards intercommunity CDM to allow shared projects across multiple airports located in different regions and countries.
Connectivity of people differentiates between employees and passengers. The first is driven by airport Resource Management Systems (RMS) and the need to improve productivity and processes. Employees are now being issued with portable devices, such as iPads and smart watches, tracking their movements through the airport and providing real-time information on the go.
However, it tends to be passenger connectivity which features prominently in media reports and management workshops. It is seen as an enabler of new and enhanced non-aeronautical revenue streams (i.e. the Connected Traveller). Passenger connectivity is particularly valuable to airports as, for the first time, it offers two-way direct exchanges without an airline acting as the communication gatekeeper.
Two-way communication sits at the core of Location-based Services (LBS) and is the single biggest driver of airport innovation. Airports are expected to develop new business models to provide, for example, real-time, contextual promotions to passengers passing by or browsing in Terminal retail stores. Making a success of these models may not be straightforward and will certainly require extensive trial and error before the right approach is established.
Monitoring passenger flow also supports process improvement. It can be enabled by capturing signals from smartphone-hosted technologies (e.g. Bluetooth, WiFi, NFC); installing sensors in the terminal building (e.g. Infrared); or using algorithms to analyse data from older technologies (e.g. CCTV-based analytics).
There is an interesting parallel with the online browsing experience. Similar to online marketers, airports are now equipped with the equivalent of cookies (i.e data recorded through beacons or other sensor technologies) to track the passenger journey and transactions from kerb to gate.
Digital transformation of airports is intensifying and manifested by digitisation, connectivity and big data trends. The first two have been covered in Parts 1 and 2 with big data trends to follow in Part 3 – this third and final part of the series will also take a more detailed look at the key benefits of process optimisation, business model innovation and a better passenger experience.