The changing airport business model: Covid-19 triggers quick developments

The airport industry has been steadily changing. Covid-19 has reinforced some changes and slowed down others. Long term, the major trends of growth in airports is expected to continue, but in the short term the airports are facing one of the biggest crises in history, with passenger traffic decreased by roughly 75% over the past year. Recently, we coordinated a successful international peer roundtable of leaders from major global airports. The moderated discussion covered topics of current challenges, governmental regulations, adapted strategies and new business models and opportunities.

Leaders agree that postponed infrastructure projects have been a major casualty of the pandemic. As leisure travel has nearly evaporated and business travel is diminished to a minimum, there is little need to increase infrastructure capacities right now. Airport representatives remain confident that long-term industry growth will necessitate new infrastructure to meet future demand. Here are some other top themes that emerged from our discussion:

Sustainability and Alternative Fuels

Some governments have released regulations on Short Haul Flight (SHF) trips that can be taken by train in less than 2.5 hours. France has restricted SHF to improve their ecological footprint. Similarly, Sweden has announced that by 2025 any airplane departing a Swedish airport must be 5% bio fueled. Hydrogen and other alternative fuels are on the rise, as are electric domestic flights. These new innovations will transform airports and the aviation industry- with an eye on sustainability.

Customer Service + New Business Models

The contactless customer connection is another emerging airport trend. The touchless journey, with pre-booked and pre-paid meals and shopping leads to efficiency and safety when planning a trip. The introduction of more pre-paid products and more leisurely dwell times seems to be generating a revenue lift for airports. Leaders aim to tailor the travel experience through use of digital tools, luxury retail and customized hospitality, generating more opportunity for income.

New Strategies for Non-aviation Revenue

As the pandemic accelerates the need for innovation and transformation, new CX strategies are vital. Due to trends in ecofriendly travel, industry leaders recognize the need to reimagine and transform the airport experience. Once a major source of income, airport parking will gradually lessen as ride sharing continues to rise in popularity. This will result in new opportunities for innovation. An unanticipated victor in the pandemic has been the cargo industry. Cargo Volume in Frankfurt has significantly increased in comparison to last year, generating new prospects of energized revenue and transport.

Government Driven Processes

The trend of digitization and touchless journeys is transforming travel. As airports are little frequented right now, the possibility to test and promote customer experience is ever-expanding. By contrast, government and security institutions at airports use different systems and lack direction towards the tech-centric customer experience.

Future Safety and Strategy

As each airport works to navigate a global pandemic, all are looking forward to an international health pass and a common strategy to Covid testing, at a minimum within the EU. Leaders agree customers and airports need common rules to ensure safety and efficiency and preserve summer traffic through airports.

This roundtable between international industry leaders (CXOs) shows that airports are facing similar challenges globally. Leaders continue to improve the readiness of airports and elevate the customer travel experience. Strategies around sustainability, innovation, data management and customer experience are crucial to industry success. We look forward to contributing our expertise in achieving these goals and defining new coherent strategies around transport, airports, and the aviation industry as a whole.

Get in touch if you would like to join in the conversation and learn more.