Airport Technology Reports – High Performance Global Airport Competence Solutions

SPECIAL REPORT

High Performance Global Airport Competence Solutions

Small and Medium Sized Airports’ Opportunities in the Face of Today’s Global Challenges New Trends and How They Affect Airports Why Satisfied Passengers are Crucial for Airports Safety First: Maintaining the Security of Airports How Technology Can Revolutionise Performance Management

Published by Global Business Media

SPECIAL REPORT: HIGH PERFORMANCE GLOBAL AIRPORT COMPETENCE SOLUTIONS

SPECIAL REPORT

High Performance Global Airport Competence Solutions

Small and Medium Sized Airports’ Opportunities in the Face of Today’s Global Challenges

Contents

New Trends and How They Affect Airports Why Satisfied Passengers are Crucial for Airports Safety First: Maintaining the Security of Airports How Technology Can Revolutionise Performance Management

Foreword

2

Tom Cropper, Editor

Small and Medium Sized Airports’ Opportunities in the Face of Today’s Global Challenges

3

Markus Frank, Managing Director, Airport Consulting Vienna and Marie Krpata, Airport Consultant, Airport Consulting Vienna

Published by Global Business Media

Published by Global Business Media Global Business Media Limited 62 The Street Ashtead Surrey KT21 1AT United Kingdom Switchboard: +44 (0)1737 850 939 Fax: +44 (0)1737 851 952 Email: info@globalbusinessmedia.org Website: www.globalbusinessmedia.org Publisher Kevin Bell Business Development Director Marie-Anne Brooks Editor Tom Cropper Senior Project Manager Steve Banks Advertising Executives Michael McCarthy Abigail Coombes Production Manager Paul Davies For further information visit: www.globalbusinessmedia.org The opinions and views expressed in the editorial content in this publication are those of the authors alone and do not necessarily represent the views of any organisation with which they may be associated.

Material in advertisements and promotional features may be considered to represent the views of the advertisers and promoters. The views and opinions expressed in this publication do not necessarily express the views of the Publishers or the Editor. While every care has been taken in the preparation of this publication, neither the Publishers nor the Editor are responsible for such opinions and views or for any inaccuracies in the articles.

© 2014. The entire contents of this publication are protected by copyright. Full details are available from the Publishers. All rights reserved.

No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical photocopying, recording or otherwise, without the prior permission of the copyright owner.

Introduction Illustration: ACV’s Integrated Planning Conclusion The Added Value of Airport Consulting Vienna (ACV)’s Model

New Trends and How They Affect Airports

8

Tom Cropper, Editor

Passenger Expectation The Importance of the Connecting Passenger Airports’ Customers Are Changing Business Pressures New Technologies

Why Satisfied Passengers are Crucial for Airports

10

Jo Roth, Staff Writer

The Consequences of a Bad Review At the Airport Measuring at Times of Stress Training for Success

Safety First: Maintaining the Security of Airports

12

James Butler, Staff Writer

Evolving Security Regulations Superior Training Conclusion

How Technology Can Revolutionise Performance Management

14

Tom Cropper, Editor

Measuring Non-Aviation Revenue Buying Behaviour Environmental Performance Carbon Emissions

References 16

WWW.AIRPORTTECHNOLOGYREPORTS.COM | 1

SPECIAL REPORT: HIGH PERFORMANCE GLOBAL AIRPORT COMPETENCE SOLUTIONS

Foreword T

HE ROLE of the airport has changed

they fly from, airports are having to do more to make

remarkably over the past couple of decades.

a good impression. He’ll look at how airports are

Once they were purely functional – dour buildings

measuring customer satisfaction and identifying areas

with the sole purpose of loading passengers onto

of improvements.

aircraft and sending them into the blue. Now, all

James Butler, meanwhile, looks at one of the core

that has changed. They are high performance

competencies – security. In the wake of 9/11, security

money making machines, acting as gateways

has become the number one priority for airports.

to their respective countries. As such, ensuring

However, as well as ensuring the safety of each

that everything they do reaches the very highest

departing flight, they must try to minimise the impact

standards has never been more important.

on the passenger experience.

In the first article in this report Markus Frank and

Finally, we look at the role technology is playing in

Marie Krpata of Airport Consulting Vienna examine the

managing the performance in two other crucial areas:

rise of smaller and more independent airports and the

non-aviation revenue and environmental performance.

impact this is having on the wider market. Moreover,

Though unrelated, both are rapidly becoming major

these new players face a range of challenges which

considerations for airports, and both have been

many are finding it difficult to overcome. They list some

under-reported in the past. We’ll look at the high tech

of the key challenges they are going to be facing.

solutions which are helping airports to continuously

We’ll then look at how the demands are changing

assess their performance and how they can get better.

for airports. They now have to satisfy a broader range of customers, from passengers to aircraft operators, tenants, staff and development partners. Ensuring that they keep all sides happy is no easy task.

Jo Roth then looks at the issue of customer service.

With passengers having more choice over where

Tom Cropper Editor

Tom Cropper has produced articles and reports on various aspects of global business over the past 15 years. He has also worked as a copywriter for some of the largest corporations in the world, including ING, KPMG and the World Wildlife Fund.

2 | WWW.AIRPORTTECHNOLOGYREPORTS.COM

SPECIAL REPORT: HIGH PERFORMANCE GLOBAL AIRPORT COMPETENCE SOLUTIONS

Small and Medium Sized Airports’ Opportunities in the Face of Today’s Global Challenges Markus Frank, Managing Director, Airport Consulting Vienna and Marie Krpata, Airport Consultant, Airport Consulting Vienna Small and medium sized airports are mushrooming as the air traffic market share of their bigger counterparts decreases. Even so they need to adopt a well thought out strategy in order to avoid being swallowed by their peers in what is becoming an incredibly competitive market.

Growing air traffic is straining against capacity limits and many countries are facing congestion problems in their main airports – many of which are operating way beyond their limits PASSAGEWAY IN SÃO PAULO’S GUARULHOS AIRPORT

Introduction Over the past few decades, societal changes around the world have seen the emergence of a new and more prosperous group of people wanting to fly – the middle classes. As their incomes increase, so too does their eagerness to fly. In Brazil, for instance, more than half of the country’s population can now be categorised as being middle class and they are eager to fly.

Approximately 8.7 million first time flyers identified themselves as being middle class in 2011 against 2 million from the richer social classes. Additional flights are required to meet this surge in demand, but to do so they will need to adapt.

Growing air traffic is straining against capacity limits and many countries are facing congestion problems in their main airports – many of which are operating way beyond their limits. In Brazil for

instance, a country with around 5,565 cities, only 126 are serviced by commercial airlines among which only 14 have home based carriers. They decided to address this in the following way.

1. Privatise the country’s main airports benefiting from international airport operators’ experience.

2. Regionalise Brazilian aviation so that air operations are not concentrated only in the country’s major airports.

Brazil’s policy is a good example of a government which is analysing existing problems and thinking ahead to those which could arise in the future.

Given the complicated world in which they operate airports cannot afford to think only in the short term or let things happen without paying attention to developments. They need to adopt a holistic approach and be mindful of multiple considerations in their airport planning.

WWW.AIRPORTTECHNOLOGYREPORTS.COM | 3

SPECIAL REPORT: HIGH PERFORMANCE GLOBAL AIRPORT COMPETENCE SOLUTIONS

AIRCRAFT CONNECTED TO A BOARDING BRIDGE

Given the complicated world in which they operate airports cannot afford to think only in the short term or let things happen without paying attention to developments

Far too often small and medium sized airports are trapped in sclerotic mindsets which do not adapt to the past evolutions of the past decades and are not proactive enough to seize unfolding opportunities (I) however with the right experts’ advice they can unlock their potential for development thanks to the wide range of tools for success they have at hand (II).

I. Small and medium sized airports’ failure to recognise opportunities and address their problems the right way As society has changed so too has the landscape of airports around the world. Congestion at major hubs and in airspace is forcing many governments to rethink their approach, but before we look at the solutions let’s examine some of the problems in which small and medium airports are trapped.

Adapt to the market – As with large counterparts, small and medium sized airports must adapt to market conditions. Retail and non aeronautical activities are becoming more important in determining overall revenue. These can have a transformative impact on overall revenues if implemented in the right way. Local market surveys and benchmark studies can find out what kind of products and commercial strategies can unlock this potential goldmine.

Lack of communication – A lack of communication and inter departmental dialogue is a major problem for small and medium sized airports.

Managers of various business units become obsessed with their own concerns, challenges and projects which prevent them from developing a clear overview of the overall needs of an airport.

These problems indicate a lack of holistic and

4 | WWW.AIRPORTTECHNOLOGYREPORTS.COM

cross-segment thinking which makes it difficult to generate synergies from the bottom-up.

No clear strategy – Because of this lack of communication and segmentation many airports lack clear, tailor-made strategies which can help an airport achieve its goals. Commercial organisations often bring in external experts and consultants, but airport managers often neglect and ridicule this idea. Their instinctive reaction can be to transpose solutions used in other airports, but this fails to acknowledge the fact that there is no one-size-fits all solution.

Different airports have different challenges, drivers and preconditions. What may have worked for a major international hub may not work for a regional airport.

It is a shame that small and medium sized airports reject these strategies because it is they which have the biggest potential. Their larger counterparts are doomed to face slot, air and space congestion problems, which opens up a valuable opportunity for smaller operators.

However, adopting a clear, inclusive, and overarching strategy is important as they need to stand out from the crowd of other regional airports also looking to take over from bigger ones.

Lack of human resources – One of the biggest challenges facing small and medium sized airports is to attract airlines to their airport and thereby generate traffic. Airlines consider flying to small airports a major risk as they fear a lack of flying demand and thus a non-profitable business. Moreover, it may be necessary to adapt their aircraft types to the regional airport’s infrastructure, which may increase the airline’s investment, which in turn will increase ticket prices which could result in lower demand.

SPECIAL REPORT: HIGH PERFORMANCE GLOBAL AIRPORT COMPETENCE SOLUTIONS

Innovative thinking can help to significantly

INTEGRATED MODEL

reduce the CAPEX Many small and medium sized airports rely only on few airlines, which in turn creates a dependency; the withdrawal of one would lead to substantial upheaval at the airport. This places the airport in a weak bargaining position. There is a tendency for airports to offer operators a sizable discount without fully realising any benefits. Those airports might also lack the internal skills and manpower to conduct effective airline marketing and negotiations. This is why it can be helpful to bring in experienced experts.

Small and medium sized airports have to adopt a holistic approach that takes account of the multiple parameters involved in planning. This is no easy task but often it is the airports themselves which form the biggest obstacle because they have been insufficiently proactive. The question is how can this be remedied?

II. The right use of available tools as a “guarantee” for small and medium sized airports’ success First of all, a market assessment needs to be carried out taking into account aspects such as the macroeconomics, where the soundness of the economy will be assessed. This first step is completed by an airport market related analysis.

The incoming and outgoing tourism compared with the number of passengers in the whole country and by airport and the characteristics of traffic, destinations and airlines, are analysed.

Also, the competition and/or complementarity with other nearby airports will be carefully tackled,

which helps airports define a catchment area with potential traffic demand. Analysing data in this way enables airports to carry out a SWOT analysis addressing future drivers of the airport, its position and vision which, taken together, can create an overall strategy.

Airports can then create a traffic forecast based not only on GD but, more importantly, taking into consideration this new strategy. This tailormade phase is crucial for the Capacity Planning, the required Investment Program, the capital expenditure forecast (CAPEX) as well as for the Business and Financial Planning of the airport because the planned frequency of flights, types of aircraft and peak hour passengers have to fit the airport infrastructure in terms of space capacity.

The resulting Capacity Planning will ensure prescribed service levels are met. Bottlenecks caused by congestion are problems which many major airports are currently addressing, and which, when badly or belatedly managed, can open doors to potential competitors. These are issues that even smaller and medium sized airports encounter, and unlike their larger counterparts, they may not have the resources to address them. The solution in many cases can be a simpler, and less expensive, replanning process, which can work until cash flow allows more investment or until more funds can be obtained. To avoid capacity constraints, a phasing consisting of the current infrastructure adaptation planning according to the projected passenger development is crucial. The elaboration of a

requirement. This depends on a great deal of experience as well as the drawing up of a tailormade integrated plan

WWW.AIRPORTTECHNOLOGYREPORTS.COM | 5

SPECIAL REPORT: HIGH PERFORMANCE GLOBAL AIRPORT COMPETENCE SOLUTIONS

A Business Plan is indispensable for an airport development project. This will encompass a balance sheet, a profit and loss statement and the cash flow projection

capacity planning is the cornerstone for the formulation of a Technical Concept i.e. a Master Plan including the Terminal Layout, the Functional Design and the Landside Development.

Capital Expenditure (CAPEX) is also important in airport planning. Depending on the type of project – small airport or big hub – and given the geological conditions of an area, the related CAPEX costs will be higher or lower. CAPEX is a major concern for big and smaller airports alike. While larger hubs tend to have easier access to investment, smaller ones need to make much more effort to obtain even more modest sums.

While larger airports naturally require greater sums of investment, smaller operations will struggle with the ability to raise such sums.

Reasons for this include a lack of human resources available for such a task and their relatively disadvantageous position compared to their bigger counterparts. The greater the uncertainty about positive returns on investment, the more cautious investors will be. At first sight, then, the chances of smaller hubs convincing investors of their potential may not be promising.

However, innovative thinking can help to significantly reduce the CAPEX requirement.

This depends on a great deal of experience as well as the drawing up of a tailor-made integrated plan. The first step towards this is a comprehensive Revenue Plan including nonaeronautical and aeronautical revenues. From this, a decision will need to be made about which retail units fit best into the terminal area by observing the type of passengers which will have access there. The Operational Concept is also an important aspect in the management of an airport as it encompasses staff planning, asset

6 | WWW.AIRPORTTECHNOLOGYREPORTS.COM

related costs, cost of material and services and an in-house or outsourcing strategy.

Finally, a Business Plan is indispensable for an airport development project. This will encompass a balance sheet, a profit and loss statement and the cash flow projection. These financial tools will help in deciding the extent of the equity and debt financing required to make the project happen.

Conclusion Airport planning is not as straightforward as most airport managers would like it to be. What needs to be taken into account from the very beginning is that there are interactions between different fields of business which sometimes bring together parties with very different interests.

The complex and interwoven connections and relationships within an airport’s structure mean they create a range of intricate and sometimes conflicting issues.

• They are the symbols of a competitive, liberalised world yet they are recognised job creators and generate important turnover.

• They are responsible for many types of pollution yet, at the same time, they are the breeding ground for innovative energy generation solutions involving renewable energy.

• They stand for cultural exchange, openness and enrichment yet they can also be annoyingly and strictly scrutinized and monitored as far as security is concerned.

• They are at the confluence between functionality and aesthetics; they have not lost their primary goal to serve air traffic but are also recognized as status symbols for a city, a region or a country and are the first impression tourists get to see when landing.

SPECIAL REPORT: HIGH PERFORMANCE GLOBAL AIRPORT COMPETENCE SOLUTIONS

AIRCRAFT STANDING ON AN AIRPORT APRON

In other words, airports have astutely demonstrated their capability to adapt to problems; they have shown that there is not necessarily a question of “either/or”, but that, sometimes, it is possible to have both; they have shown that negative factors can be turned into positive ones. It is thanks to a proactive approach that airports have been able in the past years to transform challenges into opportunities. This is precisely what small and medium sized airports have to bear in mind to achieve success.

The Added Value of Airport Consulting Vienna (ACV)’s Model Our experience has shown us that many small and medium sized airports do not have a clear strategy, business plan or even a master plan, let alone an integrated system.

Many airports are just “muddling through” and hoping to deal only with short to mid-term problems. However, they have no idea where they are going in the longer term – nor do they have a comprehensive technical or financial concept.

With more than 20 years of experience in the airport business, ACV has been able to develop a proven model which takes account of all the

different drivers and factors at stake. It helps to understand the repercussions of various factors affecting the entire airport as a whole. Through our comprehensive view on all the phases involved in airport development planning, ACV has also been able to deliver turnkey solutions to its clients from market assessment to financial planning acting as a one stop shop for everything our clients need. Our complete panel of services is less costly and time consuming, while the ability to deal with a single advisor is simpler and more efficient than communicating with many different consultancies.

The complex and interwoven connections and relationships within an airport’s structure mean they create a range of intricate and sometimes conflicting issues

Contact AIRPORT CONSULTING VIENNA GmbH Atelier Belvedere Top 8 Landstrasser Guertel 3 A-1030 Vienna, Austria Tel: +43 1 236-7007 Fax: +43 1 253-3033-7399 office@a-c-v.aero www.a-c-v.aero

WWW.AIRPORTTECHNOLOGYREPORTS.COM | 7

SPECIAL REPORT: HIGH PERFORMANCE GLOBAL AIRPORT COMPETENCE SOLUTIONS

New Trends and How They Affect Airports Tom Cropper, Editor Airports are changing which means the way they measure performance also has to evolve. Here are some of the key trends they are facing.

Airports have always been good on the core competency measurements such as punctuality and safety

W

HILE AIRPORTS might once have been a purely functional operation, now they must do much more to satisfy a wider range of stakeholders. The way in which they measure performance and maintain competencies is becoming more complex and nuanced. This article will look at some of the key trends which are governing the way in which airports must shape their strategies.

Airports have always been good on the core competency measurements such as punctuality and safety. However, a key issue for them is rising competition. The majority of people in the UK now have at least two major international airports to choose from when planning their journey and they have showed a real willingness to exercise that choice. As such, it means airports have to become better at everything – that means a lot more than just transferring passengers from the terminal to the aircraft – it means ensuring they do so quickly and efficiently and have everything they need during their time in the airport.

Passenger Expectation These days, as you enter the arrivals lounge you will often be greeted with an eager attendant 8 | WWW.AIRPORTTECHNOLOGYREPORTS.COM

asking you about your experience on the flight.

Although this might be seen as an additional layer of frustration for many passengers, it illustrates the growing importance airports place on happiness and wellbeing. Customer satisfaction has become a major KPI for almost every airport.

Dips in their performance are scrutinised in the press and can have a devastating impact on an airport’s reputation. Measures such as surveys, consultancy, meetings and other forms of analysis are crucial in building up a comprehensive image of how content customers are with their experience.

The Importance of the Connecting Passenger Deregulation and the growth of the hub and spoke model have seen transfer passengers become an increasingly important group for airports. Competition for connecting travellers is fierce all over the world, but particularly in the Middle East where many use it as the basis for their entire business model.

No customer wants to take a connecting flight if they can get a direct one, but expense often necessitates a stopover. Airports are keen

SPECIAL REPORT: HIGH PERFORMANCE GLOBAL AIRPORT COMPETENCE SOLUTIONS

to ensure this group has the best experience possible. At the very least it should be comfortable and inflict minimum interruption to their trip, but at best it can be used as an opportunity for an enjoyable and relaxing interlude to their trip.

Airside retail outlets also see these passengers as a revenue generating opportunity, so work is under way to increase the offering these passengers have. As such, specific performance monitoring of this area of the business is crucial.

Airports’ Customers Are Changing Measurement policies are also governed to a certain extent by the changing nature of who an airport’s customer actually is. Traditionally, this has been entirely aviation related with aircrafts and passengers considered the only two ‘customers’ of note. The KPIs that airports took note of more than any others were Skytrax and ASQ from ACI. These days, though this is changing.

Airports are increasingly gaining revenue from non-aviation related activities such as retail, which means they must consider different groups to be their ‘customers’. These include current and potential development partners, retail tenants and their own employees. They must find ways to measure how retailers feel about the service they receive and what they believe can be improved; what development partners want from them and how their own employees feel about the working environment.

Business Pressures Airports are coming under pressure from various quarters to change the way they operate to a more private sector style business orientated approach. A combination of increased operating costs, growing customer expectation and demands from investors for superior returns see them run, not as public utilities, but as profit making enterprises. Because of this they are increasingly adopting commercial practices such as enhancing revenue-making opportunities and introducing a range of assessments to generate usable KPIs highlighting factors such as return on investment for any new developments and general customer satisfaction.

What this means is that airports are increasingly relying on financial indicators such as these to guide strategy. Any new innovations will ultimately

be assessed on how they affect the bottom line performance of the airport. One area where it is possible to see the results in full practice is in the improvement of baggage handling times. Previously, this was not seen as a major priority because it was not a revenue generating practice. However, as some airlines began charging passengers for their bags, expectations began to rise. KPIs on how long it takes to collect baggage and the number of items misplaced therefore became key factors for the airport. The result – increased investment into staffing, business practices and technology which could improve matters. Over the past ten years or so KPIs in all these areas have generally been improving.

New Technologies We live in a high tech world in which new innovations play an important role in every aspect of our lives. Airports are no different and a range of new technologies sit at the heart of every aspect of the operation from automated check in kiosks or bag drops, to estimated waiting times, people tracking systems, mobile phone technology and even, in some cases, holographic customer service assistance designed to help passengers on their way.

In all these instances, the business case will be crucial in assessing whether or not a new innovation has been a success. For example, if an airport has invested money on a highly technological innovation, but seemingly non-vital service such as customer service holograms, they will have to assess whether this has contributed to customer satisfaction, the airport’s reputation or bottom line performance.

As the demands placed on airports become more complex and varied, so too are their competency measurements. They need to harvest a much wider range of data sets, take account of different customers and the changing needs of their passengers. It is a multi-layered process with many different needs and aspects of their airport’s overall performance constantly being assessed. To do this, they are bringing in additional consultancies, with a wider range of skills and experience. They are becoming more focused and cost driven – in short airports, like many other things in life are becoming just a little more corporate than they used to be.

Airports are coming under pressure from various quarters to change the way they operate to a more private sector style business orientated approach

WWW.AIRPORTTECHNOLOGYREPORTS.COM | 9

SPECIAL REPORT: HIGH PERFORMANCE GLOBAL AIRPORT COMPETENCE SOLUTIONS

Why Satisfied Passengers are Crucial for Airports Jo Roth, Staff Writer Customer satisfaction is a major priority for airports. Here’s how some of the biggest hubs in the world are gathering reliable metrics.

While once we might have had to endure poor service, we now have the microphone of social media through which to voice our displeasure

A

IRPORTS ARE the gateway to any nation, which means the experience passengers have at an airport can colour their perception of that entire country. If they’re arriving, then this will form their first impression of the country and if they are transit passengers it will be their only impression. Because of this, the attitude of passengers to airports is highly important not only to the operators themselves, but to the countries in which they are based. On a more simplistic and commercially minded level, people have much more power now and can choose other airports if they wish.

They have access to the internet and other forms of media and are not shy in voicing their opinions – whatever they may be. Therefore, It has never been more important to keep the passenger happy.

10 | WWW.AIRPORTTECHNOLOGYREPORTS.COM

The Consequences of a Bad Review The internet has placed a considerable amount of power in the hands of people. While once we might have had to endure poor service, we now have the microphone of social media through which to voice our displeasure. This in itself can have a devastating impact on a business’s future, which is why one hotel in Cumbria was caught fining residents who posted negative reviews online1. Every slip up has the potential to generate bad media, and if potential passengers read negative comments online, their attitude towards an airport will be coloured before they even get there. Because of this, many view the web as a potential area of reputational damage, but it can also be used as a vital source of performance monitoring.

SPECIAL REPORT: HIGH PERFORMANCE GLOBAL AIRPORT COMPETENCE SOLUTIONS

Checking mentions on Twitter and Facebook can play an important role in identifying the attitudes of customers. Airport operators can view comments online and react to address problems.

They can also demonstrate a willingness to change and address problems by being seen to interact with customers to bring about a resolution. This is about more than offering a disaffected passenger a discount – it’s about illustrating to other people that action is being taken to bring about the required change.

The importance of the online world is now recognised by one of the more commonly used performance indicators. SKYTRAX monitors six dimensions in its analysis including the web.

This represents the virtual shop floor of any organisation and assessing how customers use it can be important in driving real change. Issues such as navigability, accessibility and the overall aesthetics of the site design can effectively form a very early impression in passengers’ minds about the type of experience they can expect when they actually arrive.

At the Airport In the airport itself, measuring performance is also becoming more complicated. Previously operators would have already assessed basic key performance indicators. These could be categories by the SERQUAL measurement criteria. It focuses on five key areas: • Tangibles:

Visible items such as the quality of equipment and whether the airport is in a neat and tidy condition.

•R eliability: The reliability of service •R esponsiveness: How swiftly staff respond to events •A ssurance: How professional and knowledgeable staff are •E mpathy: Ability of staff to pay attention to the needs of individual customers However, the environment in which airports operate is now more complicated and customer expectations are higher. When it comes to customer satisfaction, less tangible factors are important such as how they feel about the experience, whether they liked the building and their encounters with staff. These are more difficult to measure in a quantitative way.

Crucially, customer experience is also linked closely to expectation – namely the gap between expectation and realised performance.

For example, an airport could take measures to reduce the waiting times at check-ins by introducing new technologies and adding more staff – and it could work. Let’s imagine they bring down waiting times by 50%. However, complaints about delays may not go down.

That’s because, although the actual waiting times decline, the gap between expectation and reality is still high. This is why some airports have acted to address expectation by using technology which can display expected waiting times at the front of queues.

This is the focus of the Importance Performance Analysis (IPA). These were developed initially to measure performance in the automotive dealership industry but were adapted for use in airports. In particular, these can measure the performance of operations in line with passenger expectations.

Measuring at Times of Stress It is also important to measure the performance of airports at times of stress as it is these times which generate the maximum number of complaints, such as when an unexpected rush of passengers leads to delays.

This research enables airports to identify how satisfied customers are at the worst possible times. It allows them to bring in experiential learnings which, in turn, enable them to be better prepared for the future.

Crucially, customer experience is also linked closely to expectation –

Training for Success Because much of customer satisfaction comes through intangibles, airports have tremendous difficulty in establishing quantitative metrics that have real value. However, training programs are working to bring this into general practice, such as having staff wish customers a good journey at security check-ins. As well as creating a more pleasant and less intimidating atmosphere, it has also been shown to make the entire process more orderly, and, as a result, faster.

ACI’s training program, for example, teaches techniques and practices that can improve the experience of passengers while in the terminal, and of course improve their attitude towards the airport as a whole. It also provides guidance on producing more accurate customer satisfaction research and analysing the results in a way which drives real benefits for the airport.

Truly measuring performance in terms of customer satisfaction, therefore, is far from an easy process. It is about much more than the tangibles such as flight delays, queuing times or the cleanliness of the airport – it’s about perception. This is why modern airports focus on an aesthetic rather than purely functional design and why the more sophisticated KPIs take account of customers’ expectations.

These enable airports to produce a much more accurate view of what their passengers expect from them.

namely the gap between expectation and realised performance

WWW.AIRPORTTECHNOLOGYREPORTS.COM | 11

SPECIAL REPORT: HIGH PERFORMANCE GLOBAL AIRPORT COMPETENCE SOLUTIONS

Safety First: Maintaining the Security of Airports James Butler, Staff Writer To the dismay of passengers, airport security continues to become tighter and more complex. How do airports ensure compliance while minimising the impact on the passenger experience?

Add to that the increasingly complex technology on offer, and ensuring staff competency in all areas becomes a major challenge

H

AD IT not been for the attacks on the World Trade Centre and the perceived increased threat of terrorism, security might today be a relatively minor consideration for most airports. However, as regulations continually evolve and become more complex airports are having to adjust their approach to ensure their security processes are effective. However, they have another consideration; passengers state that an airport’s security represents the single biggest negative about their experience. Ensuring the right processes are adhered to while minimising the pain caused to passengers represents a major priority. Add to that the increasingly complex technology on offer, and ensuring staff competency in all areas becomes a major challenge.

Evolving Security Regulations Over the summer of 2014, airports around the world embarked on a new round of tightened security measures in response to new threat warnings about terrorists targeting flights2.

Officials in the US issued warnings that terrorists 12 | WWW.AIRPORTTECHNOLOGYREPORTS.COM

in Yemen were becoming more adept at producing explosives which could be smuggled on international flights. This expertise, they said, was proliferating around the Middle East with fears that Europeans who had travelled to fight in Syria were being trained to return home and target flights. An example of the technology was reported by BBC News which spoke of attempts to smuggle explosive inside printers. These, they reported, had been discovered before they had a chance to detonate, but they illustrate both the determination and the evolution of the threat posed by Jihadists.3 The threat, then, is escalating both in the numbers of terrorists targeting Western flights but also in the sophistication of the means to do so. Security procedures therefore have had to evolve to match them. We’ve already witnessed the rise of body scanners, sniffer detectors, body searches and computer based scanners all of which can detect potential threats more quickly and with a much higher degree of accuracy.

Various fluids and other substances have been banned from flights, while security staff are receiving additional training to enhance their skills.

SPECIAL REPORT: HIGH PERFORMANCE GLOBAL AIRPORT COMPETENCE SOLUTIONS

However, a major concern for airports is how these changes will be received by passengers.

Although surveys suggest they generally acknowledge the need for security, there is doubt that all processes are required and uncertainty about what is required.

In part, this is caused by a lack of consistency.

For example, some airports will require passengers to remove shoes while others will not. New rules also place a requirement for all electronic devices to be charged up before boarding a flight. Security officers will scan all electrical equipment and in some cases will require passengers to turn them on. If they cannot do this they will not be allowed on the flight. As Future Travel Experience.com reports, the problem is that not all passengers are aware of this. Airlines can communicate these new measures to passengers in any way they wish – and some do so in a more effective manner than others. The article argues for a greater consistency in what security requirements mean for passengers, to avoid confusion at security check in4.

Superior Training Modern day training has to ensure staff reach the required level of competencies in several areas including general security awareness, X-ray simulations and IT training. The rise of second and third generation technologies such as body scanners and computer scanners means that staff need to be capable of working devices and identifying potential threats. With innovations being introduced to speed the process, training is effectively an ongoing process.

An example can be found with Domodedovo Airport’s aviation training centre which provides onsite and offsite training, including a model of the terminal, which allows them to plan for any eventuality.

Customer service is also increasingly important.

According to a survey by SITA and ACI, it has become the number one investment priority for airports with 47% of respondents ranking it as their top priority. Speaking at the Smart Airports Conference in Munich in 2013, Copenhagen Airport’s Security Director Johnnie Muller

explained that he saw customer service as being central to any security strategies.

“We always look at things from a passenger perspective and then focus on customer service, and security is no exception,” he explained.

“Our goal is simple, to provide the world’s best and fastest airport security check. A truly world class service is crucial. It is ambitious, but we believe you have to aim for the stars if you wish to constantly improve your processes and procedures5.”

Simple additions such as making eye contact, and wishing passengers a nice trip, he adds, can create a much more relaxed atmosphere. Not only does it reduce stress and thereby improve the passenger experience, but it also makes it easier to identify threats.

On top of this some airports are bringing in computerised simulation software. Using either video cameras or thermal imaging, they can capture the movement of passengers as they pass through the security check points. The more airports do this the more they can build up an accurate view of how aircraft traffic can affect crowding at security. It enables them to run simulations predicting when peak times will occur and also to provide real time data management, which enables staff on the ground to be quickly deployed in emergencies.

Customer service is also increasingly important.

According to a survey

by SITA and ACI, it has become the number

Conclusion Overall, the importance of maintaining good practices in this area cannot be overstated.

Alongside increased regulation, airports are having to cope with more auditing and checks of procedures. This means real time and continuous analysis of operations is, and will be, crucial to their overall success.

Security will be a core priority for airports.

It is one areas where corners cannot be cut.

However, monitoring performance is a two stage process. On the one hand they must ensure that their processes are entirely watertight and that nothing gets beyond security checkpoints, but at the same time they must do everything in their power to ensure their obligations to provide security are not at the expense of the customer experience. It is a fine line to tread.

one investment priority for airports with 47% of respondents ranking it as their top priority

WWW.AIRPORTTECHNOLOGYREPORTS.COM | 13

SPECIAL REPORT: HIGH PERFORMANCE GLOBAL AIRPORT COMPETENCE SOLUTIONS

How Technology Can Revolutionise Performance Management Tom Cropper, Editor How major airports are using the latest technology to monitor and improve their performance.

Sophisticated tools can be used to monitor everything from traffic flow, retail performance, flight movements and noise pollution

T

ECHNOLOGY LIES at the heart of almost every operation in the modern day airport, so it’s no surprise that it plays a major role in performance management. Sophisticated tools can be used to monitor everything from traffic flow, retail performance, flight movements and noise pollution. By doing so, airports are capable of creating a huge amount of data about their current performance levels and identifying key areas in which improvements can be made. This article will show how the airport of the future is making itself slicker, more efficient and kinder to its surrounding environment.

Measuring NonAviation Revenue When India embarked on a modernisation of its airports through a Public Private Partnership scheme in 2005, the impact on non-aviation revenue was astounding. By 2012 it had grown 14 | WWW.AIRPORTTECHNOLOGYREPORTS.COM

by 340% from INR4.9bn to INR21.6bn6. It was a demonstration of the impact private capital and, in particular, an increased focus on profits could have – as well as the immensely unrealised potential of non-aviation related revenue.

Elsewhere, the rest of the world has long looked beyond aviation for its revenue with retail now accounting for as much as 50% and more of revenue in most major international hubs. The territory beyond the security gate has become prime real estate for retailers as cash rich, time poor consumers in a holiday mood and a desire to spend, wait for their flights. It’s like a busy high street Saturday every day of the week.

Even so, analysis of performance has historically been lacking. Data acquired is often too simplistic. For example, a key metric has often been ‘spend per passenger’. However, this neglects the fact that many sources of revenue come from non-passengers: people arriving to pick up friends, rents from traders, spend from

SPECIAL REPORT: HIGH PERFORMANCE GLOBAL AIRPORT COMPETENCE SOLUTIONS

staff and parking charges. In other words, the first thing that needed to change was the type of questions people were asking.

A report in 20077 into performance management outlines the solution many have taken: to segment revenue streams into passenger related and non-passenger related areas. For example, in the non-passenger related segment you have: visitors, meeters and greeters , local residents and staff. Alongside this you can have B2B revenue which includes aeronautical, non-aeronautical, subsidiaries and external. The greater the level of segmentation that can be achieved, the more valuable the data set.

Buying Behaviour While greater sophistication in the factors monitored can indeed be important, further strides are being made in the tracking of buying habits. Because passengers have to present their boarding passes when shopping in the duty free areas, airports already have a high degree of information on buying habits. For example, they can track what a customer buys, where they come from and where they are going to.

Therefore they can profile different types of passengers, age groups and nationalities based on what they like to buy.

Now some airports are going further by employing high tech people movement systems to track traffic through the retail outlets. This can show airports what areas of the retail segment attract the highest footfall, allowing them to plan the layout in such a way that it will encourage greater levels of spend.

Environmental Performance Technology can also play a key role in improving an airport’s performance regarding its environmental obligations. At Heathrow, their Airport Noise and Operations Management System (ANOMS) uses data from NATS radars which provides information about the height of an aircraft above airport elevation, the track it has flown, its ground speed and the call sign8.

This can be cross-referenced with the traffic logs which tells them who the operator is, aircraft type, destination or origin. Monitors around the airport also record noise levels and feed this all back into the system. The intention is to help the airport adhere to government noise management

guidelines and ensure aircraft are sticking to minimum height requirements.

Noise tracking management extends into the local community where noise pollution is a serious issue. Monitors stationed around key points can help the airport to track noise levels in different areas, which can, in turn, be fed back into their overall KPIs. Further community engagement comes through a feature called WebTrak9 which allows local residents to check data for aircraft movements in and around the airport.

This enables people to identify the flight which has caused them disturbance and raise a complaint, which is fed directly into the main ANOMS data set.

Carbon Emissions The other major issue for airports is carbon emissions. Heathrow is currently in the process of implementing AirTrak, a system which monitors the carbon output from all aviation activities. This allows airports to see where they stand at present and to evaluate the effectiveness of any carbon reduction strategies. It can measure outputs including CO2 NOX and H2O and provide continuous analysis of complete carbon output for all operations in clear and easy to read graphical form.

With governments around the world bringing in new regulations on greenhouse gas emissions, having effective monitoring in place is important when demonstrating how an airport is working to meet its obligations. Moreover, such statistics can be crucial when planning expansions as they can provide clear quantitative data on the likely impact of any such operations. Furthermore, lower carbon reductions is indicative of an airport which is becoming more efficient, which in turn means cost savings and revenue boosts elsewhere in the operations.

Airports, therefore, are becoming much more adept at analysing their own performance.

They are beginning to ask different and more complex questions and they are using the latest IT developments to boost their retail, to improve the customer experience and to adhere to their environmental obligations. In doing so they are rapidly expanding the amount of data at their disposal, which in turn translates into real cost and performance benefits elsewhere across the operation.

With governments around the world bringing in new regulations on greenhouse gas emissions, having effective monitoring in place is important when demonstrating how an airport is working to meet its obligations

WWW.AIRPORTTECHNOLOGYREPORTS.COM | 15

SPECIAL REPORT: HIGH PERFORMANCE GLOBAL AIRPORT COMPETENCE SOLUTIONS

References: 1

2

A Hotel Guests ‘fined’ for leaving bad review online: http://www.cumbriacrack.com/2014/11/18/hotel-guests-fined-leaving-bad-online-review/ David Cameron: Heightened airport security puts passenger safety first:

http://www.theguardian.com/politics/2014/jul/03/david-cameron-passenger-planes-airports-safety-terror-bombs 3

Airport Security: http://www.bbc.co.uk/news/uk-28139985

4

Consistency needed on charged device regulations:

http://www.futuretravelexperience.com/2014/07/consistency-needed-charged-devices-regulations-ensure-passengers-prepared-new-airport-security-rules/

5

Good Customer Service Aids Airport Security: http://www.airport-world.com/item/3202-good-customer-service-aids-airport-security

6

Indian PPP Airports drive 340% growth in retail:

http://centreforaviation.com/analysis/indian-ppp-airports-drive-340-growth-in-retail-and-other-non-aero-revenues-over-5-years-67675 7

Non aviation revenue in the Airport business:

http://userpage.fu-berlin.de/~jmueller/gapprojekt/downloads/gap_papers/Performance_Measurement_02_11_07.pdf 8

Heathrow Flight Performance Annual Report 2013:

http://www.heathrowairport.com/static/Heathrow_Noise/Downloads/PDF/Flight-Performance-Report-2013.pdf 9

Heathrow Airport Noise Tracker: http://www.heathrowairport.com/noise/what-you-can-do/track-flights-on-maps

16 | WWW.AIRPORTTECHNOLOGYREPORTS.COM

Airport And Airline Professionals Find Solutions To Their Business Challenges With Airport Technology Reports

For the past decade, Airport Technology Reports has been helping airports, airlines, and their service providers to find new solutions to their technical, commercial, and operational challenges.

Our Special Reports provide readers with an unparalleled depth of information on specialist subjects, which receive limited coverage in the mainstream airport and airline media.

Each report is designed to facilitate more informed purchasing decisions, with a unique mix of: • Subject specific technical information • Insight and knowledge from internationally recognised key opinion leaders • Independent data and analysis • Unbiased editorial content

subscriptions@globalbusinessmedia.org www.globalbusinessmedia.org

Visit: www.primarycarereports.co.uk