How digital can drive cost and efficiency benefits for airports

Iyad Hindiyeh

Global Head of Strategy, Airport IT, Amadeus

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What is the role that digital can play to help airports reduce their total cost of operations and improve the efficiency of core processes?

To address this question, the study Airport digital transformation: From operational performance to strategic opportunity, first considered the relative IT cost and efficiency of eight core airport business processes. These ranged from resource management and baggage reconciliation to business systems. Following this, airports and other industry experts were consulted to provide specific insights into how they expect digital solutions be applied to reduce the cost and enhance the efficiency of these processes in the future. Here are some key points to highlight:

High cost processes not necessarily targeted by airport digital strategy

In discussions with leading airports, they were quick to differentiate between mission critical ‘must have’ expenditure, and other expenditure. In the case of flight and resource management, airport executives consistently saw these costs as an unavoidable part of day-to-day airport operations, and therefore not a major focus of the airport’s digital strategy. In our experience, digital applications to date have tended to focus on process automation and passenger flow enhancement, not reduction of headline IT costs. This is consistent with airports that are on the journey from Airport 2.0 to Airport 3.0.

Common Use Terminal Equipment (CUTE) & Common Use Passenger Processing Systems (CUPPS) inefficiencies consistently highlighted 

Airports see significant scope to reduce the cost of existing check-in systems and processes. A common challenge facing many airports is the need to cater to a variety of different airline needs with regard to check-in facilities and solutions. This means that, while the airport may see value in transitioning to common use platforms and interfaces, in reality the benefits of common use cannot be realized in full as long as some airlines are not ready to migrate and continue to insist on airline specific platforms.

Airport Collaborative Decision Making (ACDM) regarded as major opportunity for digital transformation

Although ACDM spend is not the biggest IT cost item today, most of the airports interviewed expected expenditure on ACDM to increase in the future because of the broad benefits that improved coordination can bring for the wider airport ecosystem. For example, one major German airport highlighted its implementation of an ACDM solution to optimize aircraft movements, thereby reducing average taxi distance, on-ground congestion, and resulting delays.

Passenger flows remain a key focus area for all airports

Even though passenger flows are not the biggest cost line item in airport IT budgets, as borne out by the feedback from the airports surveyed, optimization of passenger flows is essential for operational and commercial reasons. It should also be noted that a key part of passenger flow optimization is associated spend on security systems. This spend is not included in the passenger-flow data, however was highlighted as a major cost item by nearly all of the airports that took part in the study.

The result of this cost-efficiency analysis provides an indication of where the greatest opportunities for digitally driven airport business process optimization could lie in the future. Following this, a next step was to establish the relative priority of a range of digital technologies in helping airports address these opportunities. You can read more about these technologies in the report, Airport digital transformation.

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