As innovative technologies and solutions continue to be developed and procured to solve for the future problems of the aviation industry, no one knows of the challenges and opportunities better than the airports and airlines themselves. Many of these technologies that will support tomorrow’s airports are either newly developed solutions or are still under development. This leaves an opportunity for airports and airlines to stake their claim in the creation of these solutions by participating in the development process.
Engaging with technology providers on innovation solutions creates a win-win-win solution. The first being that they are in a better position to develop products responsive to the needs of aviation stakeholders. The second being the airport or airline receives a product that addresses all their needs for a particular problem, rather than some of their needs. Finally, collaboration between the contracting company (airport or airline) and the contactor (solution provider) creates an opportunity for joint revenue generation.
A wise approach when entering into an agreement with a technology provider is to include revenue generating components in contractual provisions. This can be accomplished by collaborating with them to either enhance their existing solutions or developing new ones. Through these agreements, the financial portfolio of the contracting company can be diversified by bringing in more streams of revenue. A more diversified portfolio can ensure increased levels of financial stability when the company is challenged, whether that challenge is industry-wide (e.g. a pandemic affecting all air travel) or is unique to your company (e.g. airline services reducing at an airport). Furthermore, a revenue generating initiative can support developments of innovative technologies and solutions.
To co-develop a solution that could be marketed to other airports, airlines, or even other industries, stakeholders must think of “we” instead of “me”. While it is natural to focus on your company and solutions to solve for your problem, the product must appeal to the audience at large to enable a more successful revenue generation endeavour. Instead of making the company’s processes work for the solution, consider if the solution could be developed better to address the company’s needs. It is not uncommon that the issues found within a chosen solution might be the same issues that other companies are experiencing as well. Maintaining a critical eye on the needs of the company, the industry, and the existing solutions is key to finding opportunities for cooperative product development and revenue generation.
A hurdle for success when developing revenue generating agreements can sometimes be the company’s own processes. It is critical to ensure internal alignment of all parties including legal, finance, contracts, and procurement when considering revenue generating approaches with technology providers prior to engaging with third-party providers. Keeping contractual provisions on revenue generation relatively simple should enable the implementation of revenue-sharing schemes easily should a viable product be developed. An approach to test the waters of the potential success of the product or contracted company is to enter into a pilot project to develop a proof of concept. Keeping the timeframe and cost low while still working toward important deliverables for the overall goal can help lay the groundwork for a larger revenue share project endeavour.
The entrepreneurial spirit is not limited to the likes of those gracing the cover of Forbes magazine. Finding revenue generating opportunities with technology providers is a task that every member of the air transport ecosystem can contribute to. The first step is to identify opportunities and priorities for improvement in airport and aircraft operations, passenger experience, and sustainable development. Additionally, not restricting the solution provider to established big companies and their tried-and-true solution can be an opportunity to jointly develop a solution that is more tailored to the needs of the industry, and often at a lower cost. Engaging in revenue generating agreements with technology providers is a strategic objective that should be encouraged by airport and airline leadership teams to create a top-down incentive to pursue opportunities. Just as important as identifying the future airport experience is finding innovative ways to fund that future.