IBS Software’s Kanu Aravindakshan argues that greater collaboration between airports and airlines will be key in the post COVID aviation landscape.
On paper, the relationship between airports and airlines has always been symbiotic in nature. Neither can operate without the other and they both share a clear set of common goals, namely transporting passengers and cargo around the globe as efficiently as possible.
In reality, most airports and airlines tend to be driven by their own individual metrics, interests and objectives, meaning they don’t work together as effectively as they could or should do.
While the case for better collaboration has always been there, particularly in key areas such as improving services and achieving better cost savings, continued growth within the sector during pre-COVID times meant it wasn’t viewed as something critical to success. However, times have changed, and in the post-COVID landscape, it has now become absolutely essential.
With the sector now fighting to recover from a bruising 18 months, rapid digitalisation has taken hold. Both airlines and airports are expected to allocate up to 6% of their revenue on IT spend between 2021 and 2024, for transformation projects and infrastructure upgrades that will improve their operational efficiency and better equip them for the future.
As such, there’s never been a better time for airports to take their collaboration with airlines to the next level, making joint investments that will not only see them safely through the pandemic, but set them up to thrive during better times, which we all hope are just over the horizon.
The aviation sector remains in the eye of the storm
Simply put, the aviation sector needs to entice travellers back as soon as possible. Prior to the pandemic, one of the biggest challenges airports faced was crowd control, and how to manage huge passenger/cargo flows during peak times of the day, week or month.
Now, they have the exact opposite problem. While cargo volumes have proved relatively resilient throughout the pandemic, the brutal combination of national lockdowns, strict travel restrictions and consumer uncertainty has seen passenger air travel fall off a cliff.
Official figures from the Civil Aviation Authority suggest that in the UK alone, passenger numbers fell by 223 million last year, an annual decline of 75% on 2019. Heathrow, the UK’s largest airport, recorded a 72.7% decline from 80.9 million passengers in 2019 to 22.1 million in 2020.
Despite this unprecedented drop in passengers – and therefore revenues – both airlines and airports still have significant costs to cover.
Airports must continue to fund ongoing maintenance, security and staffing requirements for remaining passenger and cargo operations, as do airlines. To do this, they must find new ways to increase their revenues and cut their overheads, while waiting for traveller confidence and numbers to slowly return to pre-pandemic levels, which could take years.
With both parties vying to entice the same set of passengers back, working together is undoubtedly the best way to move forward.
Barriers to co-operation must be overcome on both sides
In most cases, there are two main barriers to better collaboration between airports and airlines – structures and systems. Of the two, systems are by far the easiest to change.
Structure relates to the way airports operate their flight schedule and processes. Ultimately, airlines are all customers of the airports and issues relating to arrival and departure schedules are common. For example, if a new airport opens in the UK, it is likely that British-based airlines will want preference when it comes to the best time slots. However, the airport needs to tread carefully because other airlines will also want access to these slots, so a fine balance must be struck that’s hard to deviate too far from.
However, when it comes to systems, there tends to be much more room for improvement. A lack of cloud-based infrastructure means many airports and airlines still operate on their own separate IT systems with little integration between the two. This results in major limitations when it comes to data sharing.
Even passenger and cargo operations are run separately in many instances. While some data sharing does take place, the processes aren’t seamless or available in real-time, leading to higher costs and a loss of operational efficiency on both sides.
For instance, without better access to airline data such as cargo or passenger manifests, airports often need to base their resource planning on predicted airline requirements rather than what’s actually needed. Such guesswork rarely aligns with reality, resulting in either overcharging for unneeded resources or under staffing that causes delays at the embarking/disembarking or loading/unloading stage.
For airlines, this means high costs, slower turnaround times and planes on the ground instead of in the air, none of which is desirable in the current landscape (or any landscape for that matter).
Such misalignment also wastes time and money for airports that would be far better spent exploring new revenue opportunities and partnerships in and around the airport itself.
Better collaboration boosts future prospects
The good news is that there’s a growing recognition from both parties about the benefits that closer collaboration can bring. Despite this, issues remain around sensitive data sharing and the old favourite of ‘who owns the passenger’, which can lead to airlines being reluctant
to share specific passenger data, particularly relating to things like premium customers and frequent flyers.
However, this level of detail isn’t needed to achieve significant service improvements. In fact, at the most basic level, all airports really need to know is booked load information per class of service and any special requests in real time.
Similarly, with airline cargo, if airports know just a few key facts about incoming arrivals – such as volume, cargo type, specialist requirements like dangerous goods, live stock or cold chain requirement – they can plan loading/unloading operations much more effectively.
Of course, data sharing is a two-way street and the more information airports can provide airlines, the more efficient they can also be once their aircraft wheels touch down on the apron. Such collaboration will ultimately lead to better customer experiences, increasing loyalty and the chance of repeat customers over time.
There is also the opportunity to boost ancillary sales by unifying sales channels to allow in-flight sales to be fulfilled at the airport. In turn, this allows airports to interact more with the customer directly, and upsell airport amenities.
With the advantages of better data sharing becoming increasingly clear, the big question is how can it be achieved? For many, the answer lies in the cloud and fortunately there’s a growing number of cloud-based platforms and solutions now available that have been custom built around the unique challenges the aviation industry faces.
From data-driven cargo platforms that aid collaboration and drive efficiency across the value chain, to real-time passenger management solutions that use dynamic situational awareness to offer unmatched customer experiences, there is something for every need and use case.
With the latest reports suggesting air travel won’t return to pre-pandemic levels until 2024, the aviation industry is facing a great deal of uncertainty over the coming months and years.
Survival ultimately depends on how effectively airports and airlines can adapt, cut costs, and optimise their operational efficiency. Doing so will require teamwork and a level of collaboration far higher than was ever required before.
However, ongoing advances in cloud-based technology offer a wealth of new ways to share data quickly and efficiently, offering significant hope at such a challenging time and helping to drive digital transformation of the sector as a whole, which many would argue is long overdue.
About the author
Kanu Aravindakshan is associate vice president of IBS Software, an on demand software solutions provider to the global travel industry.