Written by Francesco Ciarmatori, Managing Partner, Aragon Partners
The COVID-19 pandemic has created a period of uncertainty and sudden, dramatic changes for airports worldwide. It will be of vital importance for the industry to prepare to perform fast and quantitative business simulations in evaluating future scenarios to organize strategic business recovery phases.
After the dramatic falls in traffic that followed the COVID-19 pandemic and the consequent airport shutdowns, shareholders and management are pondering future business scenarios.
At the beginning of these events, the immediate and correct reaction of airport management were focused on budget review, the introduction of personnel layoffs, the renegotiations of service contracts, the postponement of some investment (those not related to security and concession obligation) with the intention of minimizing the short term impact on cash flow and financials.
Today, traffic is slowly recovering and the question begins to be what will happen when the traffic recovery will reach 40% or 60% of prior daily “business as usual figures”.
When this occurs the possible scenarios will vary and even when things seem to become clearer there will be new scenarios to be evaluated every week or, in some cases, every day.
When the demand of business simulations grows to address uncertainty, job cuts will still be prominent for many professionals. During this time two important points should be kept in mind:
In this type of environment it will be really complex to answer quantitatively to questions like:
Airports that take this approach and pre-emptively prepare will be in the best position in taking the most effective and quantitatively based decisions to determine their future and success.
This could be proven vital in the coming months, right after the first emergency decisions were taken in the first weeks of the pandemic.
Francesco holds an Engineering degree in robotics from the Rome La Sapienza University and an MBA from MIP – Polytechnic in Milan. For a decade Francesco has been working internationally with high tech companies dealing with strategy and planning activities and managerial roles.
He’s been consulting since 2000. During this time he has actively assisted top Italian and multinational companies with strategy, organization, and operations in industries like transport and energy utilities, industrial and distribution.