For the international airport system, the “non-aviation” revenues averagely represent more than 60% of the annual turnover (source CAPA 2016).
This is certainly an average figure and it is important to emphasize that the analysis includes a very large sample including a wide diverse mix of operational and social contexts. However, if we take as reference the trend as well as the average figure, it is not so difficult to imagine that airports have become, and will be more and more in the future Shopping Centers and Service Providers for business and social purpose: Retail, Parking areas, Advertising, Location rental, Passengers’
services and other Value-added services.
Said that the classic airport services to airlines will not be interrupted and the focus will be on improving the quality of these services and the airport security, the candidate to a General Director role within an airport will be much closer to that of the manager from the retail or the real estate sector, more than an aviation expert.
We are not arguing that classic airport processes are not important or require less supervision than the rest. Rather, we assume that classic airport services are already well-structured under the operational point of view, the approach is standardized and the rules and procedures are clearly defined and internationally accepted (as well as implemented). In this case, potential areas of improvement lay within the quality of existing services (boarding, internal transports, luggage management, ...) and to understand how the organization of spaces and technologies can help to increase the safety of public areas, with particular focus on the landside (before security checks).
Everything else, so what generates more than 60% of sales, has a great variability.
How can an airport maximize the benefit from all the available space? How to improve the infrastructure and support services? How to create a medium-term sustainability? How to assess the skills and organize staff in the most appropriate way? Are just some of the issues that airports managers face today when asked (often with some urgency) to handle the "non-aviation" business.
However, there is no single answer and one size does not fit all.
Unlike what happens for the classical airport business, in the case of the "non-aviation" there is no international regulatory and well-defined operating procedures. Instead, there is often confusion and many tactics, aimed at achieving immediate benefits, with a little focus on the requirements that should secure the sustainability over time.
Practically, airports need to better understand and contextualize this "commercial" phenomenon and define in a more structured way processes, organization and tools that support the daily operations.
It is not so much a question of which services are included in the “non-aviation offering: net of future developments driven by modern technologies, today it’s pretty clear what is the “non-aviation” scope. Its’ much more a matter of "how” to govern this business, which has completely different background from the classical Airport services, but, at the same time, represents the only way out for airports to increase revenues and maximize the profit.
More in detailed, some key areas for discussion are related to two main topics:
1) the management of the business "non-aviation" AS IS
2) the development of the TO BE operating environment
The first point refers to the structured definition of all core processes and their interaction. For example how to manage: each single line of revenue (royalties, fees, rentals, ...), the administrative and accounting activities, the planning and management control, the infrastructure maintenance. From the organizational point of view, there is the need to evaluate the mix and the structure of the organization I charge of the operations in order to avoid repetitions, waste and errors that are typical of contexts where a new line of business starts-up in parallel with a pre-existing one.
The second point refers to the “non-aviation” strategic development. Not exhaustive at all, we refer to investment in infrastructures, the digital transformation of the services and the introduction of new value-added services to complement the offer.
It 'easy to understand that strategic development decisions are not the same for all airports. It is not, as in the case of the classic airport services, to respond to a set of international procedures, but it’s much more a matter of analyze in detail the context of reference, passengers’ purchasing behaviors and needs, products and services available on site and their proper mix when creating the offer, etc ...
Always referring to the development of the TO BE operating environment, it’s strongly requested from the very beginning to keep focus on two main topics which have a significant impact when setting a medium-term strategy:
a) investments in technology
b) organizational changes
Update and improvements of the IT & Communication assets can provide a robust platform that will be able to support both the provision of value added services and the correct execution of administrative and back-office activities related on those services. Consider, for example, solutions for customers profiling and management, the digitalization of parking payments in case of direct service management or solutions for sales forecasting or profitability analysis and reporting by service line.
Similarly organizational and change management aspects cannot be underestimated. As the rapid change of the revenues composition for airports is on the way, within 3-5 years the airports’ personnel profile will change: different skills and capabilities, stronger managerial background, higher familiarity with technology, etc… Landing in such a “final destination” requires organizational changes to be planned well in advance, evaluating cost and effort impacts.
Cracking the whole puzzle is challenging. The conditions are different from the past, and only a structured and reliable approach will allow airports to manage the complexity of the “non-aviation” business and present to shareholders profitable income statements growth sustainability.