Airports are at a tipping point. Digital transformation offers a solution

Russell Pell

Managing Partner, Arthur D. Little

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There's hyper competition throughout the travel industry. And airports of all sizes are not immune to this phenomenon. But they’re at a tipping point. Airports need to re-evaluate traditional approaches to technology and embrace digital transformation.

Arthur D. Little has conducted a research study to examine the potential for digital technology to reduce airport operating costs. The report, Airport digital transformation: From operational performance to strategic opportunity, highlights that the benefits of effective digital transformation go far beyond cost reduction.

Based on interviews with over 15 major airports and the views of selected industry experts, this paper demonstrates that the path toward airport digital transformation is not an easy one. Airport executives must consider key factors as they shape their strategies. These include the need for clarity of purpose and effective collaboration within the airport ecosystem.

Airports must optimize facilities and find new revenue streams to manage passenger growth and pressure on their revenues. Digital transformation offers a way forward in this respect. The promise of greater cost efficiency resonates with all airports. And with this comes enhanced capacity, operational resilience, and passenger experience. But, to achieve effective digital transformation, airports must confront and overcome a number of challenges. At the most fundamental level the issue is how to first understand the different technologies available, and second, identify the practical applications that can deliver tangible benefits.

There is a fundamental need for airports to not only focus on making their own operations efficient and effective, but to deliver benefits for their stakeholders. Many initiatives in this area do not consider both aspects.

Furthermore, an ability to shape the required internal culture and sustained commitment needed to make effective decisions on technology selection and implementation are essential for success. For those airports that recognize and address these imperatives, digital transformation efforts can yield true step-change potential.

Given the sector’s capital expenditure intensive nature, the importance of strong cost discipline will not go away. Nevertheless, for those airports at the digital frontline, it is not complete cost reduction but broader benefits in the areas of revenue generation, operational performance, and customer experience that are likely to provide the strongest rationale for the digital transformation agenda.

We hope you find the report useful. Download a copy of Airport digital transformation: From operational performance to strategic opportunity here.

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