Airport aviation revenues are primarily based on passenger fees (PFC) and/or aircraft landing charges. Some airports are almost totally dependent upon these fees. This means that the only way these airports can realistically increase their revenues is to increase the aviation fees – not a sustainable strategy in the current economic climate.
It is customer spend in the airport that drives non-aeronautical revenues. The customer has the money and is only at an airport to travel not to shop. Many airports report that between 30-50% of all travellers do not buy anything in their airports shops. The problem, as always, is identifying which travelers do not buy!
Our global aviation experience helps our client airports to create strategic advantage – keeping the consumer at the heart of their strategy.
|Increasing Airport Retail Customer Spend||According to Airport Council International figures, “non-aeronautical” revenues derived from sources other than aircraft operation have almost doubled in the last 10 years. Today, many airports consider new products and services as a major opportunity to generate future airport revenue streams. To date, the effort to increase retail revenues has depended solely on traditional marketing techniques, which have been decreasingly effective and not produced expected results. Unfortunately, their efforts are hampered by a lack of customer knowledge. The challenge for airports is to develop insight and knowledge of their customer’s airport retail experience, with the objective to increase the customer’s airport retail spend.|
|Customer Mobile Engagement||Consumers, who are increasingly mobile and always connected, behave in a much different manner when it comes to engaging with airports. Today, the apparent failure of in-airport promotions and ‘specials’ stems from a lack of focus on consumer outcomes and attention to the needs of the mobile consumer. It’s been long known that long-term consumer trust and loyalty only comes by building an emotional value exchange with the consumer at all touchpoints in their purchase decision. Mobile technology has enabled more interactive and engaging relationships to be developed. It’s time for airports to adapt to the new consumer. Airports can embrace the mobile consumer and the omni-channel complexity and diversity offered via mobile connectivity.|
|Airport Loyalty Programs||The era and impact of the ‘Frequent Flyer Program’ model and the inexorable shift of the majority of consumers to more personalised, location based and real time marketing will leave little revenue opportunities for airports not in tune with shift in the new consumer demands. The vast majority of consumers now demand a more transparent business environment, in order to justify their spending in airports, now perceived as over-priced and captive environments. It’s been well established that there is a strong link between the way consumers describe their loyalty habits and the way they subsequently buy. It’s time for airports to adapt to the new consumer. Airports can continue with “more of the same” tactics or they make the most of the new opportunities inherent in well-designed and implemented customer programs.|
|Proximity Marketing||Proximity Marketing is the new ‘push and pull’ marketing channel for the delivery of personalized and targeted sales offers directly to an airport’s customer (the passenger); in so far as the consumer is in close proximity to the transmitting device. The obvious benefits are greater retail or F&B sales using ‘eVouchers’ and shop promotions. The not so obvious benefit is the ability to improve airport efficiency using ‘Passenger Track & Trace’. The challenge will be to ensure that the airport implements ‘Proximity Marketing’ as a key element of their marketing strategy mix.|
|Airport Infrastructure Management||Airports have one of the most complex and demanding IT, telecom and video infrastructures. In many cases, it has overwhelmed even the most adept of airports. There is the ever-changing array of new technologies that promise increased cost reduction; the ever-present airline legacy systems that challenge cost containment and of course, the changing demands of the security regimes. In addition, airport marketing departments are becoming more customer-aware, requiring new marketing tools, which make it even more complex. The challenge for airports is to manage this change for new skills and technologies.|
|Transforming Airports: Changing Airport IT&T to a Business Services Unit||The challenge for an airport’s IT&T department has been always been one of delivering the expected high service level to their clients. Effective airport business services comprise all activities necessary to develop and market the airport’s IT&T services to airport tenants and manage the on-going client relationships. Most importantly, business services manages the financial relationship between the airport and its tenants by providing a billing service for the usage of infrastructure, computing, telecomm, security and other services at the airport. And all this must be done at a competitive cost for the tenants. In effect, the challenge for the airport is to create and operate effectively as a Business Services Delivery Agent.|
|In-Building Wireless Design & Management||Airports are increasingly designing and implementing new wireless technologies for their in-building needs. Airports traditionally have relied on wireless operators, equipment manufacturers and infrastructure integrators to provide the necessary design and implementation data, requiring a broad understanding of the frequency management issues required at airports. What tools can airports utilize to facilitate and control the process? By using an industry-specific planning and design software tool, airport engineering can take in-building network design beyond prediction to improve accuracy and standardize designs that are shared across the in-building airport community.|
|Effective Passenger Movement||Airlines, airports and security regulators are often accused of a piecemeal, reactionary approach to the flow of passengers. The current regime focuses on each traveler as a potential threat, essentially using detection-based systems rather than a deterrent-based approach. Airports are mandated to secure their airside and landside facilities. Yet these very same security implementations have impacted passenger facilitation to the point that the ‘hassle factor’ is deterring many passengers from traveling. What is needed is to address the issues of risk management, harmonization and information exchange to support both airport security and passenger facilitation.|
|Digital Display Management||70% of a buying decision is made in the retail shop as the customer is about to buy. P&G calls this the ‘Moment of Truth’ and we call it the best chance to sell your products. Forbes magazine calls Digital Signage the new POP (point of purchase). It’s proven cost effective and it’s infinitely changeable. Digital Signage gives airport retail shops proven sales lift and a new channel for sales. The challenge for airports is to integrate with this with existing infrastructure and current marketing strategies, and yet make a positive return on their investment. How do the airport retailers fit into the proposition?|
|Common Use Strategies||As passenger growth continues, airports face the critical issue of ever decreasing capacity in their terminals. Building a consensus within the airport community is critical, as customers expect a better travel experience. How does the airport engage in an objective analysis of all airport constituents’ technical and commercial interests? In other words, how is it fully integrated with airport’s master plan? What methodologies should airports take to facilitate the reduction of this liability, while at the same time enhancing their customer’s travel experience and retaining their business?|
|Social Media Platforms: Increased Retail Spend||As airports develop a dialogue with their travelling customers, they need to implement systems to capable of communicating directly with the customer’s chosen channel, often social media platforms. Airports need to integrate their all communication channels, including social media platforms, to enable on-going customer dialogue. What is needed are systems to capable of communicating directly with the customer’s chosen channel, often through platforms such as blogs and social communities (Facebook), traveler-centric social networks (TripIT) or other business communities (LinkedIn). This provides the airlines with the ability to engage with their customers in order to increase the customer’s airport retail spending.|