Guest Post: Airports - Physical expansion isn’t the only route to greater passenger numbers

Guest Post: Airports - Physical expansion isn’t the only route to greater passenger numbers

George Richardson, CEO and co-founder of AeroCloud, reveals there's another way

The aviation industry is showing signs of a rebound in 2024. After years of disruption and reduced passenger numbers, recent earnings announcements from airports and airlines alike point to a bumper summer holiday ahead for air travel.

Airport leaders know better, however, than to rest on their laurels. Focus is rightly placed on strategies to consistently grow revenue over the long term. The return to pre-pandemic passenger numbers also isn’t the case for every UK airport. Regional airports that have steadily seen their passenger numbers dwindle over several years are in dire need of turning this around.

For many UK airports, the natural ways to keep on a growth trajectory are to increase passenger numbers and introduce new airlines. Our recent research revealed that these were the two key commercial priorities for UK airport leaders.

For many, the logic may follow that expanding terminals and runways are the best ways to facilitate these commercial aspirations. Heathrow’s planned third runway is an example that’s generated lots of headlines but multiple other UK airports, of all sizes, also have physical expansion pencilled into their long-term business strategy. 

However, physical expansion is incredibly difficult for airports. Besides the cost, planning and construction periods stretch on for a long time and there’s a complex web of stakeholders that can potentially disrupt or even veto expansion plans. Airport leaders are of course aware of these risks when they embark on projects. But fewer are conscious of how such projects risk distracting teams from nearer-term opportunities to increase airport capacity and drive much-needed monetary growth.

Getting much more from existing space

Regardless of size, our research found that almost all UK airport leaders plan to introduce more airlines by optimising and increasing capacity for take-off and landing slots. However, this can be achieved in the short term by airport leaders maximising the space they have available to them now and improving how they work with airlines. 

Many UK airports are still plagued by ineffective communication, a lack of real-time operational information and restricted common-use sharing of airport infrastructure, which all lead to operational inefficiencies. The silver lining is that there’s lots of room for leaders to change this by optimising processes that enable them to increase their capacity for introducing new airlines.

The answer lies in technology. We can look stateside for a strong case study that many UK airport leaders will identify with. Norfolk International Airport (ORF), which serves over four million passengers, needed to accelerate aircraft throughput after adding 20 new destinations through two new airline relationships. Norfolk operates in a delicate ecological sanctuary, which limits its ability to physically expand its footprint. Unable to pursue physical development, the airport invested in a cloud-based gate management and flight management system that applies AI and machine learning to real-time flight data to optimise gate availability and the allocation of aircraft parking positions. As a result, the airport was able to add capacity for more arriving and departing aircraft daily, and therefore more passengers, without growing physically.

Such real-life examples of airport operational success should be taken notice of by UK airport leaders who see physical expansion as their main runway to growth. Better insights inform flight management to improve daily operations and boost airport capacity. However, this only scratches the surface of what can be achieved with technology solutions.

Broader operational gains unlock airport revenue

Increased capacity doesn't just hinge on gate and flight management. How passengers are processed in the terminal also influences capacity. Common-use equipment that enables airlines to share resources is an important technology solution for airports to maximise their physical spaces so that they can introduce new destinations and airlines without new dedicated space. 

In fairness, UK airports have been ahead of the curve in adopting common-use equipment compared to other global airports. So, the focus for almost all UK airports will be on expanding, rather than introducing, common-use to stretch across resources used by airline personnel, such as check-in desks, as well as passenger self-service kiosks including bag tag printers, bag drop and check-in. In doing so, airports can also improve the passenger experience which is another key route to boost overall revenues.

Going ‘all-in’ on technology investment 

Boosting an airport’s capacity is multifaceted. Physical expansion is a blunt tool to get to this end and shouldn’t blinker airport leaders from the nearer-term improvements that can be made to optimise existing airport capacity and ultimately increase revenues. 

Airports must go ‘all-in’ on technology investment in 2024. All the opportunities are there for the taking for airports that ditch manual, legacy processes, and systems in favour of real-time data that benefits all airport stakeholders – from operations teams to airlines and FBOs.