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Airports have different needs when it comes to digital transformation
At their very heart, airports exist to efficiently and securely process passengers and goods. But they’re also integral to the business models of a number of partner entities. These range from airlines to baggage handlers and other third-party service providers.
Despite this common purpose, no single airport is the same and many have different needs and priorities when it comes to digital transformation. For example, while for some the allure of digital may be in providing new ‘point’ solutions to address short term operational issues, for others the ambition may be to transition to a fundamentally different business or operating model. There is also a more subtle point to make, in recognizing the role that digital has to play in reinforcing airport brands.
Airports have different levels of digital maturity
The majority of the airports interviewed for the report, Airport digital transformation: From operational performance to strategic opportunity, considered themselves to be transitioning away from the ‘new normal’ of self-service and process efficiency (Airport 2.0) toward the use of digital to optimize flow monitoring and passenger processing (Airport 3.0). I However there are some important differences between the airports that are on this journey, including differences in relative technological understanding, ability to act on resulting insights, and the overall cohesiveness and focus of the airport’s digital strategy. For example, some airports may be accustomed to extracting the insights from passenger flow monitoring so that they can be used to proactively manage the passenger experience. However, for others, the focus may still be on developing the fundamental monitoring capabilities (perhaps under a pilot) or developing a sufficient understanding of related technologies.
No single airport is the same
The different maturity levels in the digital airport landscape is reflected in the priority that airports attribute to the potential benefits of digital technology. It’s clear that operational efficiency, revenue generation, cost efficiency and a better passenger experience are common priorities for all airports to invest in. However, the weight attributed to each dimension varies depending on airport size, geographical location, ownership structure, regulations and commercial mindset. Airports towards 4.0 recognize the role that digital has to play in reinforcing airport brands. For example, the value that digital solutions bring to reduce airline set up costs, as part of an overall airport offering that is geared toward value for money, rather than strict cost optimization.
There’s risk in doing nothing for airports
It’s worth noting that, in addition to the achievement of positive benefits, airports’ digital investment decisions are also driven by the need to proactively mitigate the costs of non-adoption. Research conducted into the relative priority attributed to a range of so-called digital technology risks indicates that the risks of ‘doing nothing’ are widely acknowledged. Especially where airports see themselves in direct competition with other airports, they appear to be strongly motivated to use digital as a lever of long-term competitive advantage.
Often, these risks are not exclusive to airports, but also affect their airline customers. In some cases this can result in the establishment of airport-airline partnerships, notably between national flag carriers with dominant home hub positions, to advance a mutually beneficial digital transformation strategy.
Want to learn more about airport digital transformation? Download the report, Airport digital transformation: From operational performance to strategic opportunity .