The economics of airports: Mastering the crystal ball in a VUCA world

Written by Pierre Daems, Aube Conseil, CEO

Not easy for an airport to practice the art of crystallomancy in a world with such Volatility – so many different reactions of customers during a particular situation depending on the country, the airport and the specific moment- uncertainty -availability or predictability of information in events is unknown, depending on physical, financial and regulatory environments as well as geopolitical tensions and trade wars-, complexity -interconnectivity and interdependence of multiple components in the airport ecosystem-, and ambiguity – links between Macro and Micro approach of airport economics  is often still unclear. This VUCA World -Volatility, Uncertainty, Complexity, Ambiguity- was one of the main underlying themes that resonated with the audience during the lively and interactive workshop on the Economics of Airports– Mastering the crystal ball with robust data and indicators at the ACI World/ACI Asia Pacific World Annual General Assembly, Conference & Exhibition.

Data driven airports

In order to “master the crystal ball”, airports must harness data from an array of sources. This requires data on the broader economic context and the drivers that affect the airport business. While a data-driven understanding of macroeconomic contexts gives airport operators tools in managing risks under uncertainty, a firm grasp of market segments based on evolving tastes and preferences of passengers is a vital component in capitalizing on the return to customer experience. That is why a mastery of both macroeconomic indicators and passenger survey data can provide airport operators a valuable toolkit to leverage positive outcomes in allocating scarce resources.

Both Patrick Lucas, Head Airport Business Analytics and Dimitri Coll, Director ASQ – Customer experience, shared key elements of ACI World major flagship publications to help participants master this crystal ball and take the right decisions to prepare the future of their airports. 

Based on the World Airport Traffic Report (WATR) and Forecasts (WATF), the average 5% to 6% annual growth in global passenger traffic will lead toa doubling of passenger traffic in 17 years (2017-2034). The question for airports is to focus on the right investments to handle this coming wave of passengers, who will be ever more expecting to have a delightful experience in airports. That’s precisely where the ACI Passenger Personas Report can help airports focus their investments on future personas, based on existing trends, like the “Airport Enthusiast” -35 years old, 3 to 5 flights per year, expecting comfortable ambiance, Wi-Fi availability and retail and F&B quality- who will be 50 years old in 2034 and surely will be one of the key customers for airports. The report can also help identify steps of the customer journey that are moments of truth for these “personas of the future” as well as the type of investment that should be made, by region (atmosphere, human factor, etc.). When you know that a 1% increase in customer satisfaction means a 1.5% increase in non-aeronautical revenues, airports should definitely make the right choices to satisfy this growing number of customers.

93% of airports with less than one million passengers, 80% of the world’s airports, have a loss and the urgency is clear – and for others – to master the crystal ball of airport economics.

Pierre Daems is the CEO of the French-Canadian strategy and management consultancy Aube Conseil, specialized in Customer Experience Management.  Pierre is a well known  expert on airport customer experience management matters. He is also a CCXP (Certified Customer Experience Professional).  Pierre is contributing, as an expert, to different services proposed by ACI World like the Employee Survey for Customer Experience (ECE) and Airport Customer Experience Accreditation.

The article was provided by a third party and, as such, the views expressed therein and/or presented are their own and may not represent or reflect the views of ACI, its management, Board, or members. Readers should not act on the basis of any information contained in the blog without referring to applicable laws and regulations and/or without appropriate professional advice.