Protecting the Aviation Ecosystem
Shifting to a more service-focused business model can help airports increase revenue
- By David Lenot
- Feb 01, 2020
Today’s airports are bigger
and more inviting than ever
before. With so many people
moving through them
as well as an increasingly
wide array of services on offer, they can
start to feel like miniature cities. It would
be easy to think of these complex ecosystems
as having multiple ways to make
money. However, the reality is that, for
airports, there are only two sources of revenue:
aviation and non-aviation revenue.
Aviation revenues mean airports make
money when aircraft take off and land.
Airlines pay airports to use their infrastructure,
including runways and buildings.
Aviation-related activities represent
half the revenue generated by an airport.
The other half is generated by non-aviation
activity, including retail, parking and
any other services that an airport can provide
to a passenger or an airline.
Essentially, airports have an infrastructure
that is used by airlines, ground
handlers, retailers and passengers every
day. But, in order to improve operations
and increase revenue, airports are going to
have to think about more than just infrastructure.
Instead of simply being a place where
aircraft land and where people complain
about wait times, airports need to start seeing
themselves as service providers for these
various groups. By adopting this mindset,
they will be able to increase their ability
to deliver better services while helping to
make the entire ecosystem run smoothly.
Most airports struggle with capacity. It takes
time for an aircraft to land, get to a gate,
offload passengers, board passengers and
then take off again. This process is the turnaround
time. When an airport can reduce
the turnaround time, everyone benefits.
First, airports benefit because they
can schedule more flights to access their
infrastructure. This leads to an increase
in revenue because they collect fees from
more airlines. At the same time, individual
airlines save money because they actually
access the infrastructure for a shorter
amount of time.
If an airport wants to increase aviation
revenue, they need to increase the
number of aircraft landing and taking
off. But there are some fundamental problems
here. From the outside, it might seem
that the easiest solution would be to add
more runways and terminals to their infrastructure.
Unfortunately, given the limited
space in and around airports, this is all but
impossible for most of them.
That said, in the traditional way of
thinking, even if they could add more infrastructure,
airports do not actually control
turnaround time. They simply provide the
infrastructure for the airlines to use. This
means to increase aviation revenue, airports
are going to have to expand their offering
to include infrastructure and services.
By providing services that help airlines
and ground handlers perform their tasks
more efficiently, airports can support them
in their efforts to reduce turnaround times.
This will result in a greater number of aircraft
using the airport, which is positive
One of the challenges associated with decreasing
turnaround time has been security.
Security is a standalone process that
exists within the airport but is driven by
third parties, namely governments through
police and customs.
From the airport’s perspective, one of
the main impacts of security is the imposition
of hard stops between passengers and
aircraft. This can draw out turnaround
time and exists outside of the airport’s
control. As a result, security can be seen as
a significant pain point for both airports
and airlines because it keeps everyone
from doing things faster.
From our perspective, the top priority is always to make sure that things are done in a secure fashion.
Previously, this has meant that airport security was conducted by
people through processes that were not interested in operations.
Rather than being concerned with aircraft taking off and landing,
the sole focus of airport security is on whether or not it is
safe to do so.
Just because security has functioned separately from airport
operations in the past does not mean that it has to continue. In
fact, some vendors are now working toward developing partnerships
with airports to support them in their business.
A Unified Platform Can
Bringing stakeholders together is an important step in creating
successful business strategies. When vendors help connect airport
security staff with the departments that are concerned with revenue
generation, operations, passenger experience and wait times,
they can improve both operations and revenue generation.
The challenge here is to bring different groups with different
roles, responsibilities and objectives together in such a way that
they can communicate and share information. The solution is to
enable them to use the same infrastructure by supporting their
cooperation at the system level.
But how does this happen? When it comes to airports, security
staff focus on areas that are at higher risk. Locations that have
a higher risk of theft, for example, are often those areas where
people come together or a lot of activity takes place. In an ideal
situation, security staff will move toward high-risk areas in order
to prevent theft or mitigate risk.
So, for example, security does not need to focus on areas
around closed gates because it is unlikely that anything will transpire
there. However, if an aircraft arrives from a country that
has demonstrated security risks, then security should be looking
at the gate where that specific aircraft from that specific country
of origin is landing.
In order to inform security staff, an airport needs to use a
platform that makes sharing this information possible. They
need a platform that can ingest data from other systems and
make it easily accessible to security staff. It requires a solution
that receives operational data and then automates processes to
allow for faster reactions.
Linking security systems with operational systems allows everyone
to deliver better service. By shifting their focus toward
providing services in this way, an airport enables security, airlines,
and ground-handlers to receive actionable information.
Working with a unified platform can help make security operators
more efficient because they are able to focus on places
that present the greatest risk. At the same time, it can facilitate
operational efficiency by automating the process of dispatching
people to locations where they are needed. The result is faster,
more efficient service, which has a positive impact on passenger
experience as well as aviation revenue.
The Impact of Ride-sharing
on Airport Revenue
The non-aviation side makes up the other half of an airport’s
revenue. It is comprised of different streams, including parking
and retail. Of these, parking is the most significant although it
has been on the decline in recent years.
Traditionally, people had three ways to come into an airport:
driving and parking, public transportation and taxis. The first
was the most lucrative for the airport.
Passengers would drive into one of many lots and pay to leave
their vehicles for the duration of their trip. Of the other two
methods, public transportation generates no income for airports,
but taxis do in the form of contracts and licenses issued to taxi
companies and drivers.
The arrival of ride sharing on the market has had a dramatic
impact on airport revenue. Because ride-share cars are essentially
private cars, they cut down on the number of contracts and licenses
being issued. At the same time, they also significantly
reduce the number of cars parked at the airport as ride shares
simply drop passengers off.
Ride-sharing companies are clearly making money taking passengers
to and from the airport. For their part, airports are providing
these companies with the service and infrastructure, including
road access, necessary to generate that revenue. The question
is, how can they recoup their investment from these companies?
Increased Revenue with Automatic
License Plate Recognition
As a service provider who is losing parking revenue and who has
had to increase investment in roads, because ride-sharing companies
use them so much, airports want these newly-established
companies to contribute.
To do this, airports need to be able to differentiate between
ride-share and private vehicles in order to recoup their investment.
The best way to achieve this is by capturing the license plate
of every car that drives into an airport’s environment. With this
information, airports can then track vehicles that frequently
drive through their jurisdiction and can also cross reference
them against the list that ride-sharing companies are having
Some airports already have contracts with ride-sharing companies.
Until now, the terms of the contracts have meant that the
ride-sharing company would inform the airport about how many
of their vehicles had accessed the airport and then pay the airport
With an automatic license plate recognition system, the airports
have greater visibility into which cars are accessing their
infrastructure and how often.
By shifting to a more service-focused business model, airports
can improve their offering and increase their revenue. When they
unify their operational systems with their security platform, they
can improve service through the sharing of
important information. This can help them increase
revenue generation on both sides of their
This article originally appeared in the January / February 2020 issue of Security Today.