Category: Small Airports

What’s On Trend for 2019?

Posted on | by Scott Elmore

By Sandy Smith

As airports continue to focus on an improved customer experience, they are looking beyond and outside of the box to pinpoint areas that could use improvement – even though there might not be any obvious need for changes. Figuring out what travelers need – before they have figured it out themselves – is what sets airports apart and leads to an airport becoming an experience and adventure, not just a waypoint.

Getting travelers in and out smoothly and providing creature comforts can make or break a traveler’s perception of the airport, too. This important leg of the customer journey requires skilled service providers who bring unique services. These valuable partners can provide much needed services when there’s been a flight delay or a connection missed. And they might just employ the first human a traveler speaks to on their journey.

The coming year will see these service providers continue to grow in importance to the traveler experience. HMSHost and Uber – both Platinum Plus ACI-NA members – are more than ready for the task ahead and want to help you be ready as well.

Food & Beverage and Retail Morphing Into Immersive Experiences

HMSHost Shares Insights from the Front Lines

Recently Steve Johnson picked up the phone to hear a story from a happy customer.

It was her 10th wedding anniversary and her husband wanted to celebrate at his favorite restaurant. The restaurant, Wicker Park Seafood & Sushi, just happened to be one of HMSHost’s restaurants in Chicago’s O’Hare International Airport.

That story was just one more piece of evidence of the changing face of airport food. As President and CEO of HMSHost, Johnson has had a front row seat to see hot dogs and pizza give way to a true dining experience – if that’s what the traveler wants. As he looks at 2019, it is clear that the traveler is firmly in control and HMSHost and airports are there to ensure that they get what they want. Top of that list: feeling like they’re actually in the city in which the airport resides.

“If you’re looking at where we’re headed in restaurants and food and beverage, we’re focused on an immersive, cultural experience,” Johnson said. “Local brands were the beginning of this process, where you’re trying to create a sense of place, a local feel.”

Food is no longer about filling the tanks after a long day of traveling or grabbing a sandwich for the plane. It’s about creating a dining experience that is worth bragging about.

“If it’s not Instagrammable, it’s not important,” Johnson said. “If they can take a picture of a well-done particular plate, something that their friends would not be able to experience, then we’ve done something.”

The move toward local brands has brought an evolution in HMSHost, too. The company has gone from operating around 100 brands eight years ago to well over 320. Instead of having one restaurant and bar in every airport, it will bring in local name plates, local foods. But that has brought changes, too.

“It took a few years to figure out how to translate local brands to airports,” Johnson said. “It’s a completely different business. Your timeframes are really different. Menus and processes have to change. You go into a 400-square-foot kitchen compared to 2,000. We also found that some of the best local restaurants had no standards or recipes. We had to start from scratch.”

NEW MEANING OF LOCAL

Locally harvested has grown alongside the local branding, and that trend will continue to expand into the coming year. Johnson attributes that to millennials, who want to know where their food comes from. It is an aspect of the overall evolution to more healthy options in the airport.

“Millennials look at things differently and they’re driving some of these changes toward a clean diet with less processed food,” Johnson said. “You make a pizza differently today. It used to be that every pizza made in an airport was from frozen dough. Today, it’s wheat flour, procured locally and made and cooked the same day. It’s made the process more complicated, but certainly more enjoyable.”

These days, most meats, dairies and proteins are procured less than 100 miles from each airport, Johnson said. “It’s changed our supply chain, but for the better.”

TECHNOLOGY DEMANDS

While the move toward local has created opportunities for memorable dining experiences, it has presented HMSHost with a dilemma: integrating technology into its operations. Since it operates restaurants under brand names, customers might be somewhat confused. Take Starbucks, for instance. Outside the airport, the customer can use the Starbucks app to preorder a drink. Not so inside the airport. But Johnson is determined to fix that in 2019.

“Mobile order and pay is probably the biggest gap in what we have today,” Johnson said. “You could be sitting in your office and pull out your phone and book a flight, call an Uber, go through TSA and board with your phone. When you land, you book your hotel and call another Uber. You can check into your hotel room with your phone. In that traveler journey, the only thing you can’t do is order a meal.”

It is a huge hurdle with 2,000 restaurants and 320 brands. “We need to be able to connect to their app through our system,” he said. “That digital journey and handshake is quite complicated.”

The company pilot tested 10 Starbucks with mobile order and pay in 2018 and expects to expand that more fully in 2019.

“You can order your Frappuccino as you come through security. It will tell you your drink will be ready in 12 minutes. You’ll be able to walk up, grab your drink and go. That’s the piece that we want to replicate to as many of our locations throughout the airport as possible.”

It is just one more way that HMSHost is attempting to meet the needs of the traveling customer. It is a juggling act, to be sure. For every person who wants to eat healthy, there is one who wants a treat while traveling. For every person wanting to take a respite and linger over a meal, there is another who needs to grab something in those few minutes on a layover. For every person who wants to be left alone to work (and recharge their phones and spirits) at a restaurant, there is another who enjoys the community table where they can meet fellow travelers. Community tables, by the way, are proving popular. “We don’t build a restaurant without them anymore,” Johnson said. So too are electrical plugs and WiFi; both are essential in every new construction, Johnson said.

Ultimately, it is about giving “customers the choice to decide what’s important,” he said.

He anticipates that choice may be available within the restaurant, too. “I envision the future where you ask, ‘Would you like full service or self service?’ The customers will be in full control of their dining experiences and can leave at their leisure. They won’t be dependent upon anyone to bring the check or return the credit card.”

Smoothing out any bumps throughout the traveler’s day is one of the most important roles that HMSHost plays for its airport and airline partners, Johnson said.

“If you think of a customer’s journey, they have shown up an hour and a half ahead of time, stood in line for 15 minutes to check their bag, gone through TSA and stood another 10-15 minutes. They’re pretty frustrated by the time they get to us. We get the brunt of it sometimes. It’s our job to understand that we can make or break the airport experience.”

Ultimately, the world of airport food has changed dramatically and Johnson finds himself hearing more stories like the anniversary trip for airport sushi.

“When I got into this business 20 years ago, if I told someone I worked in the food business in airports, they would make a face and say, ‘Did you lose a bet?’ When I say that today, they get a gleam in their eye and tell me about a great restaurant in a certain city. It’s no longer a punishment to eat at the airport. It can be a great thrill.”

And it is one that HMSHost is pushing to continue into 2019.

 

Ground and Air Transportation Goals Coming Together

Alignment Is in Commitment to the Customer, Says Uber

While airports focus on creating a happy customer experience onsite, Uber is focused on getting travelers out of the airport. Those goals aren’t as opposing as it might seem.

“Uber and airports are aligned around our commitment to the customer,” said Marcus Womack, Uber’s Director of Product Management. “We believe Uber, airports and airlines can and should be working together to solve the points of friction throughout the passenger journey.”

And for good reason. “Simply, customers have come to expect to have the option to take an Uber or other app-based rides to and from the airport,” he said.

Airports, with their dependable passenger load, are equally as important to Uber drivers. That’s why Uber has focused on expanding its partnerships around the globe. Currently, the company is in 500 airports around the world.

Solving issues for passengers, drivers and airports is a significant goal for Uber in 2019.

IMPROVING THE CUSTOMER EXPERIENCE

Airports haven’t always kept up with this rapidly evolving transition to ridesharing. The result has brought frustration for travelers, especially as they arrive at their destination airport. “We know that a big pain point for passengers is they don’t know where to find the pickup point. Further, they might not know when to request their ride if they don’t trust the driver’s ETA. This is often a function of staging lot location, congestion on the roadways, or confusing decision points for drivers in getting to the correct pickup location. Partnering together, Uber and airports can address this challenge to elevate the customer experience.”

Uber will focus on three areas to improve the experience for travelers in the coming year, Womack said. “First, we want to make it easier to find the pickup point through better wayfinding and signage. Once at the pickup point we want to make finding your driver fast and efficient. And most importantly, we want to reduce customer waiting times throughout the process and make it a stress-free experience.”

There are benefits to airports as well, such as improved efficiency and a reduction in environmental footprint.

Recently, Uber partnered with several ACI-NA members to define standards for a TNC wayfinding icon and nomenclature at airports. The result of extensive survey data, the consortium distilled a clear, uncluttered icon showing a car and a map pin situated on smartphone screen, and identified “Ride App Pickup” as descriptive, simple, and neutral nomenclature. “We are actively working with airports now to implement this new standard,” Womack said.

Uber tools could help with airport traffic congestion, as well. The company has developed multiple programs that could speed passengers’ trips in and out of the airport. UberPOOL pairs travelers with others while Uber’s Rematch allows drivers who drop off a departing passenger to immediately find a passenger who just landed.

Driver satisfaction and ease is equally important to Uber, which has been working with airports to improve staging areas for its drivers, Womack said. “We want to make sure staging lots have appropriate facilities for drivers to rest, use the washroom, and even get a snack. Partnering with airports to provide these essentials is key.”

PARTNERSHIP POTENTIAL

Uber’s relationship with airports has had some bumps along the way, especially early in its disruptive launch. But the new Uber brings with it a “change in tone and culture” Womack said. Increasing partnership opportunities with airports is a goal. The company has organized a team focused solely on building those partnerships and creating new products to create that experience. It means more frequent conversations about how Uber can help “reduce congestion, participate in landside redevelopment projects to improve efficiency, and plan for the way our customers will want to travel in the future. We know airports plan in five- to 30-year cycles, and we’re eager to join the discussion on the evolution.”

Those are not just words. Already, Uber has named Toronto Pearson International Airport as its first Innovation Hub.

“Uber’s commitment is to configure the airport with the best and most appropriate technology available, utilizing YYZ – an airport where we recently launched peer-to-peer ridesharing – as a pilot for new products we’re building that decrease congestion, drive down wait times, and increase throughput,” Womack said.

Consider Uber just another form of transportation, a relationship not unlike that of the airline to the airport. “Think about how an airline operates with respect to branding, dedicated parts of the terminal to serve its customers, and its preferential or exclusive use gates,” Womack said. “In many cases what we seek isn’t all that different. Our ideal operating environment would include some level of (a) dedicated pickup zones, (b) elevated passenger experiences, (c) amenities for drivers, (d) active traffic management for pickup zones, and (e) reasonable pick up/drop off fees that reflect the cost of our operation to the airport and the value provided to customers.”

It is a two-way street, too. “We are thinking deeply about tomorrow’s travel experience and partnering with select airports throughout the world where we will invest significantly in operational excellence, best-in-class product technology, and an elevated passenger experience where you may find Uber lounges or other amenities to improve or at least de-stress the travel day.”

Uber’s new e-bike Jump showcases how much the company is expanding into all facets of transportation. “For riders, imagine a one-stop shop where you can figure out the best, most affordable transit option for you – whether that’s a car, public transportation, a bike, or some combination.”

SOLVING BIGGER CHALLENGES

Together, Uber and airports can solve bigger issues that extend well beyond the passenger pick-up and drop-off. Uber recently launched a pilot EV Champions Initiative program in seven cities – Austin, Los Angeles, Montreal, Sacramento, San Diego, San Francisco, and Seattle – to help drivers understand more about electronic vehicles. It includes new in-app features built specifically for EV drivers. “We hope to work with airports to help us scale our efforts in the EV space, particularly as it relates to fast-charging infrastructure,” Womack said.

Ultimately, Womack believes that some of the greatest challenges facing airports are shared by Uber. “We recognize how the major shifts in transportation are having an impact on airports and cities across the globe. We share the goal of creating a great customer experience while working through the challenges of congestion and operational efficiency, all while balancing cost. These are similar challenges Uber faces. We’re committed to working together to deliver products and services optimized for today’s infrastructure while partnering together for a future with transportation options optimized for the future airport.”

Airports Seek New Efficiencies to Go with the Flow

Posted on | by Scott Elmore

By Sandra Arnoult

Anyone who frequents an airport doesn’t need to be told they are usually a work in progress. Airports, their airline and tenant partners, and their terminal designers and architects are constantly on the hunt for new and better ways ways to serve customers and streamline the passenger processing experience.

A tall order, indeed, as any and all of these changes must be carried out at the same time thousands of passengers and employees use these busy terminals. Nonetheless, airports have shown they are up to that and more as they continue to pursue better, more creative ways of conducting business.

“To play on the world stage and continue to accelerate the growth we are experiencing, it’s critical that we work with agencies and business partners to ensure our processes are competitive on a worldwide scale,” said Howard Eng, President and CEO of the Greater Toronto Airports Authority. Toronto Pearson, which served 47 million passengers in 2017, estimates that by the mid-2030s, the airport may serve as many as 85 million passengers.

Eng has a straightforward approach to customer satisfaction: Remove factors that make the experience stressful and provide the help and information they need to enable them to enjoy the airport amenities.

As with all airports, safety and security are top priorities. Eng said the airport is working with the Canadian Air Transport Security Agency (CATSA) to roll out the latest CATSA Plus technology.

“These modern new security screening lines feature parallel divest stations, a bin tracking system, continuous X-ray belts, remote X-ray image review, motorized and improved repack areas,” Eng explained. “These improvements can as much as double passenger throughput, enhance security and contribute to a more relaxed passenger experience through this critical process.”

Over the past five years, Pearson’s redevelopment program spanned two terminals. New restaurants were integrated into gate lounges, branches of well-known Toronto brands have been added and outdated waiting and concessions spaces have been “reconceived” to make them more passenger friendly, he pointed out.

“We know the airport is never the final destination,” Eng said. “We need to connect people on the ground with the same success we’ve had at connecting them in the air.”

A proposed Regional Transit and Passenger Processing Centre would serve to connect passengers to a variety of ground transportation options. GTAA announced it is working with Metrolinx, the agency that oversees public transit, to study ways to integrate the airport with existing transit operations. This would include connections with local high speed rail, Toronto light rail transit (LRT) and various local bus services.

Toronto Pearson is on the right path, Eng believes, supported by their recent recognition by the Airport Service Quality program as the best large airport (over 40 million passengers) in North America. “Passenger feedback tells us that people like the feeling they get when they’re at the airport,” he said. “We’re hearing that passengers understand that the temporary pain of construction has led to a real benefit in the ambiance in areas where redevelopment has taken place.”

MAKING THE CONNECTION AT LAX

Los Angeles International Airport is on the threshold of a multi-billion dollar Landside Access Modernization Program (LAMP) that will include upgraded and expanded facilities, a new automated people mover (APM) and the construction of three terminal cores with staircases, escalators, elevators and walkways.

“LAX has been researching ways to improve access to and from the terminals for many years. We looked at the evolution of transportation and travel and how it continues to affect the airport and its neighbors,” said Mark Waier, Director of Communications for LAMP. “We have visited numerous airports to learn about the various systems in use and looked closely at our imprint and what was possible in our available space.”

Project components include a consolidated rental car facility, public parking and the Metro regional rail system as well as planned roadway improvements at multiple locations.

On the new APM, guests will be carried to and from the terminals every two minutes, with a total ride time end-to-end of 10 minutes, Waier pointed out. At peak times, it can take a car 30-45 minutes to drive through the terminal loop area. The APM will be capable of handling up to 87.7 million passengers per year.

“Mitigation of traffic is a key component of the LAMP project and a key focus of LAX as we move through our modernization efforts,” said Waier. “We work closely with the contractors and builders on a daily basis to ensure coordination of construction efforts and create targeted messages to communicate the scope of work and its impacts.”

In April, the Los Angeles World Airports (LAWA) Board of Commissioners approved a $4.9 billion, 30-year contract with LINX, an integrated team able to provide design, engineering, construction, maintenance and operating systems for the APM.

Key to the project is the ability to keep everyone informed, including airport workers, police and security personnel as well as passengers, Waier said. “As guests arrive at LAX they will find clear signage to help them get to where they need to be quickly and efficiently.”

In 2017, LAX served more than 84.6 million passengers, a 4.6 percent increase over the previous year. It is the fourth busiest airport in the world, second in the United States. LAX offers 737 daily nonstop flights to 100 cities in the U.S. and 1,386 weekly nonstop flights to 88 cities in 44 countries on 73 commercial air carriers.

IMPROVING THE PATHWAY

Memphis International Airport is in the midst of a renaissance of sorts with an ambitious modernization project of its Terminal B, which will feature moving sidewalks, wider corridors, larger boarding areas, higher ceilings and natural lighting. The project will also include a children’s play area, a stage for live music in the rotunda area, additional lounge areas with charging stations and more retail and restaurant options. All four baggage carousels at the airport will be replaced.

While the work is being done, two of the carousels at a time will remain open. The airport was able to shift traffic to gates in terminals A and C to accommodate the renovation work.

“Having gates available on A and C enabled us to close B for construction rather than keep part of it operational while it’s actively under construction,” said MEM President and CEO Scott Brockman. “We estimate that will save a year in construction time.”

Five years ago, Delta Airlines shut down its hub operation at MEM, dropping about three dozen flights and 230 airline jobs. MEM is just 370 miles east of Delta’s main hub in Atlanta.

“Our modernization project reflects our airport’s reinvention from hub operations to origin and destination,” said Brockman. “It’s been nearly five years since Delta removed the hub, and we have already transitioned to nearly 100 percent O&D passenger traffic. We need an airport that, from an operations standpoint, serves the O&D base.”  <

BUILDING FLEXIBILITY INTO YOUR FUTURE

Any airport improvement project faces high hurdles. There’s the multi-million dollar cost, the requisite regulatory approval process and the ability to balance the needs of the passengers, the airport and the airlines all at the same time. That’s the challenge that airports face as they seek a pathfinder, a master planning organization – a wizard of sorts – who can bring all the elements of design, technology, construction and IT planning together.

For more than 50 years, Arup has partnered with airports and airlines to help with their projects – from the planning process and design through engineering to the operations phase. “We come from different places but are all seeking similar objectives – creating an experience that makes customers want to come back and use that airport over and over,” said Regine Weston, Airport Planning Leader at Arup. “One size doesn’t fit all in a single airport. It is important to understand that airports consist of different kinds of passengers. You have to think of it as various market segments.” Passengers have different needs and expectations, said Weston. “Some of it is demographics and some of it is econometrics.

Arup worked with JetBlue to map out the carrier’s Terminal 5 project at New York’s JFK International Airport. They needed to accommodate the existing passenger base but be flexible enough to accommodate future growth.

The initial Terminal 5 opened in 2008, but since that time Arup continued to work with JetBlue and the airport to upgrade the space. The design successfully melded the old with the new to accommodate international existing flights and JetBlue partners. A new U.S. Customs and Border Protection inspection facility, 40 automated passport control kiosks along with 10 Global Entry kiosks were added, as well.

Arup also worked with Toronto Pearson International Airport to provide master planning for a $4.4 billion airport development project. It provided consultation for engineering services for a new Terminal 1, which consolidated two older and dated existing terminals. Arup continues to work with the airport on planning for future expansion.

“There’s no question that there’s a healthy tension between airports and airlines around some issues,” said Weston. “Those tend to be about money. But customer experience is something they all stand behind.”

FINDING THE RIGHT FIT

There’s good news and bad news for airports. The strength of the global economy has bolstered an increase in the demand for more air travel. The challenge for airports is to find a way to keep up with that growth.

“In many cases, this growth is happening far more rapidly than facilities can be expanded, when there is room and the financial resources to do so,” said Jim Jarvis, a Senior Vice President at Ricondo, an aviation consulting firm that provides airport master planning, as well as airfield and airspace analyses.

Extensive reconstruction or redevelopment is not always feasible in terms of time and money, so it may be more effective to consider the augmentation of existing systems and less extensive physical improvements.

Ricondo uses micro simulation modeling to test how potential changes or modifications in one area could impact flow and congestion in another area.

“Micro simulation modeling is, however, only a tool and cannot supplant effective planning,” said Doug Trezise, PE, a Senior Vice President at Ricondo. There must be a “holistic approach to planning” that recognizes the interconnection of the airport to planes to terminals to curbs and roads.

He admitted that it can be a challenge to reach consensus given the different interests of the various stakeholders in an airport. Early agreement on constraint and goals and relying on data and analysis to drive decision-making are key to the planning process, said Trezise.

The road to reconciliation is not always easy. Currently, Ricondo is working on a terminal and landside project that is not balanced with airfield capacity.

“To make matters worse, the airport is landlocked with no ability to expand,” said Jarvis, who is familiar with the project. He explained that everything must fit within the existing footprint and supporting landside facilities. “In this case we are developing capacity enhancement alternatives that rely solely on operations, technological and demand management solutions.”

This may mean repurposing certain facilities such as parking garages to serve as auxiliary terminal hubs, developing strategies to influence passenger arrivals and departures from the airport and reallocating underutilized space to another use that is space constrained.

“There is no silver bullet, rather a series of programmatic and small capacity and efficiency improvements that will culminate in improved airport operations and customer service,” said Jarvis. “The reward for a project like this is satisfaction of being engaged by a client willing to work collaboratively between departments to develop solutions. It takes strong leadership and willingness to compromise to find the best solution – not just the solution that best meets the objective of a single operating unit.”

Crowd listening to a speaker at ACI-NA’s 2017 Annual Conference

Cheers to 70 Years: The Best Is Yet to Come

Posted on | by Scott Elmore

By: Kevin M. Burke, President and CEO, ACI-NA

2018 represents a great milestone for Airports Council International-North America as we celebrate our seventieth anniversary as the Voice of Airports in North America. Anniversaries like this provide a great opportunity to reflect on our past, celebrate our present and look ahead to the future.

As you know, air travel – and the world – has transformed immensely over the last seventy years. And our industry’s evolution along with it hasn’t always been easy or certain. That’s one of the chief reasons ACI-NA exists.

Then in a post-war world with a growing economy, air travel was increasingly accessible to the masses. As we entered the golden age of travel, airports faced many of the same challenges we see today, including burdensome government regulation, infrastructure and investment needs, and airline decision making.

Realizing that there was power in the collective, nineteen founding members convened in New York in 1948 to establish a body that would bring airports together in addressing the challenges and issues of an evolving aviation industry.  From there, our journey took off as the Airport Operators Council.

Looking back, this industry has overcome significant hardships and setbacks. From economic ebbs and flows to airline industry deregulation and airline consolidation to the September 11, 2001 attacks, this industry has always had to be nimble and responsive to the challenge of the day.

Your association has had to be nimble too. In the past seventy years, our name has changed from Airport Operators Council to Airport Operators Council International, and now to Airports Council International-North America in an effort to make room for our ever growing U.S. and Canadian membership and global connections.

While the issues of the past may sound familiar today, so much has changed. Today, airports operate more as businesses than they ever have before.  They are becoming cities unto themselves.

The current landscape presents many unique challenges that require solutions. Today’s airports are not your father or grandfather’s airport. We are seeing a change in the way technology affects air transportation across the world.

Meeting the demands of passenger and cargo growth has never been more important. Our airports must have the ability to modernize as they seek to accommodate rapid growth in passenger and cargo traffic. In the United States alone, airports need nearly $100 billion in infrastructure upgrades and maintenance in order to remain competitive with airports across the globe.

Solving today’s challenges are essential in order to lay the foundation for the future. As such, airports around the world are actively working to enhance competition, create efficiencies through technology, and improve the passenger experience.

There used to be more than thirty airlines that no longer exist because of airline consolidation. The future of the airport industry is at stake without an economic climate that fosters airline competition and choice.

Competition has many benefits in our industry, which can be enhanced through more air service routes and more airline choices. In order to ensure communities in North America remain connected to the global marketplace, we are actively working to make certain our industry – airports and airlines – are as competitive as they can be. Our work in this important area will only grow in the years ahead.

Technology will also be a large part of an overall improved and seamless passenger experience. Today, easiness is synonymous with technology. What new technologies can we use to our benefit? Biometrics is speeding up the boarding process for certain flights, and in a just a few years, all flights may be boarded with the scan of a face.

It’s clear that we must focus on enhancing the passenger experience for a successful future. But these challenges are too big for anyone to handle alone. And that’s where your association comes in.

Members always tell me the real value of ACI-NA comes through our ability to advance airport priorities in Washington and Ottawa, provide essential industry intelligence by keeping the pulse of the issues impacting airport operations, and foster industry collaboration by creating a forum to develop and exchange best practices.  The rich history of advocating for policies and services that strengthen airports will continue as we reflect on our accomplishments and look beyond the horizon.

ACI-NA is only as strong as its members and their active engagement. Our team is proud of the members we serve because of the profound and positive impact they have on local communities across North America. Thank you for your leadership.

Today, as we celebrate our seventieth year with a strong membership and transnational – even global with the establishment of ACI World in 1992 – reach, we recognize that there are obstacles still to overcome. We’re not done yet. We’re just getting started.

Here’s to the next seventy years.

Meet the Member: Rep. Jeff Denham

Posted on | by Scott Elmore

ACI-NA President and CEO Kevin M. Burke recently caught up with Rep. Jeff Denham, a member of the House Transportation and Infrastructure Committee, to talk about prospects for an infrastructure bill in Congress.

ACI-NA Celebrates 2018 Infrastructure Week at TPA

Posted on | by Scott Elmore

Infrastructure Week, a week-long celebration of the vast network that supports – and moves – the U.S. economy, is taking place this week. ACI-NA’s Airport Infrastructure Needs Study details that U.S. airports have nearly $100 billion in infrastructure needs through 2021 to accommodate growth in passenger and cargo activity, rehabilitate existing facilities and support aircraft innovation.

For Infrastructure Week 2018, Tampa International Airport hosted ACI-NA and Building America’s Future (BAF) along with members of the Tampa Congressional delegation for an event focused on the need for airport infrastructure investment. This video highlights the lawmakers and industry leaders who called for robust infrastructure investment during the event.

Inspiring “Island” Travel

Posted on | by Scott Elmore

By Doug Newson, CEO, Charlottetown Airport Authority

Operated by the Charlottetown Airport Authority Inc. (CAA), the Charlottetown Airport (YYG) is located in Canada’s smallest province, Prince Edward Island (PEI), or as the locals like to call it, “The Island.” Although small in size – with a population of about 150,000 residents – thanks to the beautiful beaches, world-class golf and delicious culinary products, we are one of Canada’s most popular tourism destinations, attracting more than 1 million visitors each year. Being one of three entry points on to the Island, the airport’s importance to the province, and especially the tourism industry, is significant. So, by connecting Islanders to the world and the world to our Island, YYG is inspiring Island travel – at record levels.

PEI has seen four consecutive years of record tourism growth, which has resulted in record traffic levels for the Charlottetown Airport. In 2017, passenger traffic surpassed the 370,000 mark for the first time. This outdid our previous high by more than 15,000 passengers. In the past 10 years, passenger movements at our airport have increased by 57 percent. Our recent growth has been driven by significant capacity increases from our main airline partner, Air Canada.

In 2016, Air Canada introduced their leisure airline subsidiary, Air Canada Rouge, to our market, bringing Airbus 319 and 321 from Montreal and Toronto for the first time – a great product for our busy summer season as well as the meetings and conventions sector that thrives in the shoulder seasons on PEI. The Air Canada service is complemented by our other main airline partner, WestJet, that operates two 737 aircraft per day to Toronto in the peak summer season.

Over the past two years, CAA has been investing heavily in its airside infrastructure. In 2017, we completed our second year of a three-year, $25 million Runway Improvement Program – the largest infrastructure investment in CAA’s history. Already providing a $115 million economic impact to our province, this investment will drive further economic growth from YYG by creating jobs for Islanders while also improving our infrastructure and operational effectiveness.

The first phase of the program, which took place from 2016-2017, saw the addition of 2,000 feet to our 5,000-foot crosswind runway, 10-28.

The project consisted of earthwork, installation of a drainage culvert, gravel, asphalt, electrical upgrades, and the construction of two RESAs (runway end safety areas). This project progressed very well and produced some impressive numbers: 50,000 truckloads of earth were moved, 50,000 tonnes of gravel was spread, and 8,000 tonnes of asphalt laid. Expanding runway 10-28 gives us two 7,000-foot runways to significantly improve airport operations, flexibility and safety in different wind and weather conditions. It also means there will be no negative impact to Islanders and tourists in summer 2018, when major rehabilitation work is required on our main runway, forcing the closure of this runway for the entire peak tourism season.

As 2018 progresses, we are now into this final phase of the Runway Improvement Program, which consists of the rehabilitation of Runway 03-21 and connecting taxiways Alpha, Bravo and Charlie. Major components of the work are grading and drainage improvements, storm water replacement, electrical replacement and rehabilitation, and reconstruction of the pavement structure. The primary objective of this project is to ensure the continued safe operation of the Charlottetown Airport so that it can continue to capitalize on recent growth trends and drive economic value for our community.

As mentioned, tourism is a significant growth factor for our airport but with our growing numbers we also feel confident in saying we are proud to be the launch pad for Islanders’ adventures all over the world. This past year we thought we would celebrate that by asking Islanders to share their travel adventures and photos with us. The response was overwhelming. Hundreds of people submitted photos that capture the energy, inspiration, wonder and excitement of exploring a new destination. As an ode to our travelers, we’ve created a curated photo display in our departures lounge with a selection of 100 photos from nearly 30 countries that span every continent. We call it Just Go! The installation also features an interactive touch screen component that allows passengers to view more about the travelers and their stories. It’s a celebration of our customers, their travels and the adventures that inspire others to explore the world. They certainly inspire us in our work to help connect Islanders to the world. Our vision here at the Charlottetown Airport is simple.

We want to provide an exceptional passenger experience, with genuine Island hospitality. As we look to the future, we will never lose sight of this vision and continue to invest in our airport to meet the needs of our residents, visitors and those coming to our Island for business. New programs and services to enhance the passenger experience are on the horizon, as we understand the importance of maintaining and improving our services and facilities to inspire “Island” travel.

Global Trends in E-Commerce

Posted on | by Scott Elmore

By Ricondo & Associates Inc.

The increasing use of electronic commerce (e-commerce) has changed the landscape of global retailing and is affecting activity at airports. The development of e-commerce includes retailing in airport terminals, but is more significantly related to an airport’s interaction with the business, logistics, and cargo networks that can provide competitive advantages to companies in, for example, assembly, sortation, regulation, speed, assurance, and cost of delivery. The widely anticipated growth of e-commerce worldwide presents significant opportunities for airport owners to recognize trends, support the e-commerce business network to the benefit of their tenants and their own financial results, and contribute to regional economic development.

OVERLAYING DEVELOPMENTS

Several overlaying developments contribute to the growth of e-commerce:

  1. Increasing concentration of the world’s population in urban areas with global connectivity, which increases the importance of the world’s airports in moving passengers and goods around the world.
  2. Increasing self-owned, single-person businesses, also frequently referred to as the “gig economy” or “on demand economy.”
  3. Technological advancements to enable globalized commerce.

LEADING E-COMMERCE MARKETS

There are varying estimates of e-commerce sales by country, but, in most cases, China is shown as the leader because of its very large population base and rapid adoption of technology.

E-COMMERCE GROWTH IN UNITED STATES

The United States is the second largest online market in the world (following China). Many U.S. retailers are investing in international operations, and many international e-retailers are investing in the U.S. market.

Online sales still represent a relatively small share of total retail sales in the United States (about 8 percent in 2016), but the online share has been increasingly rapidly. This illustrates the potential for significant future growth in e-commerce in the context of the very large overall U.S. retail market.

LOGISTICS AND DELIVERY ARE KEY TO E-COMMERCE

E-commerce, in most cases, replaces the experience of shopping at a brick-and-mortar store, and requires the delivery of goods to the purchaser. According to the U.S. National Retail Federation, about 60 percent of online sales in 2015 included free shipping.

Free shipping is a competitive advantage, but also a cost. Combined with increased demand for speed of delivery (2-day, 1-day, or same-day), shipping to individuals is a major logistical challenge central to the business offering.

National postal services have become more relevant with the rise of e-commerce because of their networks of local couriers and ability to deliver to individual residences. Delivery is more complex with cross-border trade—myriad issues exist, such as multiple operators, customs clearance, customer payment, taxes, and currency exchange challenges.

One area of interest for e-commerce is the potential for drones to deliver packages, and thereby solve one of the more costly and complex elements of e-commerce fulfillment. The potential for drones is particularly important for airport owners to consider because, if there is an alternative delivery method, questions arise regarding investment in airport facilities for more traditional air cargo and the potential airport role in supporting the use of drones for e-commerce delivery.

OPPORTUNITIES FOR AIRPORTS

Airport owners have multiple opportunities to participate in the growing e-commerce business.

Strategies need to be developed in accordance with the local setting—geographic location, economic fundamentals, and airport infrastructure. With the continued globalization of economic activity, and the associated increase in cross-border e-commerce, airports with established international gateway operations and networks of logistics businesses familiar with the intricacies of international trade will be well-positioned.

The Miami-Dade Aviation Department, operator of a system of airports in Miami-Dade County, Florida, has invested in strategic planning to leverage the combined (1) rapid growth in e-commerce, and (2) Miami’s unique position as an international center of commerce and air cargo for Latin America. A multifaceted approach to analysis and planning includes evaluating cargo infrastructure needs and the potential use of various airports in the system, and coordinating with stakeholders on-airport and in the community.

Recently, the Miami-Dade Aviation Department conducted a workshop with airlines, integrators, logistics providers, community economic development leaders, and others to discuss challenges, opportunities, and collaboration strategies related to e-commerce.

Big Data: The Airport Cleaning Management Revolution

Posted on | by Scott Elmore

By Jimy Baynum

The idea of a “smart airport” may seem unobtainable. Occasionally, massive crowds, delays and various other touchpoints from check-in to the gate can affect airport visitors’ experiences and make it hard for them to imagine that they are in an intelligent environment. The problem lies in the fact that many airports, especially the nation’s largest airports, weren’t built to handle the current volume of traveler traffic, often exceeding their design limits by millions of travelers, according to Michael Taylor, director of J. D. Power’s airport practice.

Yet, airports have found ways to overcome infrastructure limits by working on the things they can influence. One way they have done so is by turning to a technology that is helping to create smarter, more efficient airports – the Internet of Things (IoT). But the value of IoT lies not in connectivity itself, but in the new information it can provide – and the actions you can take based on that information.

It’s no secret that data has the ability to transform a business and offer it greater opportunities for competitive advantage. It enables executives to measure results and performance and, therefore, manage more precisely than ever. It enables leaders to make better predictions and smarter decisions, as they can identify pain points and target more-effective interventions based on precise data, rather than gut and intuition. Companies that have transformed their business models to be data-driven have seen greater financial and operational success. In fact, companies in the top third of their industry that use data-driven decision-making were, on average, 5 percent more productive and 6 percent more profitable than their competitors. Airports have already applied IoT to improve check-in, security screening and the food, beverage and retail shopping experiences, so why not use it to improve cleaning operations?

Real-time data is a powerful change driver that enables better-informed and faster decision-making. When airport facility managers and their cleaning staff are empowered with real-time data about cleaning needs, the very logic for how cleaning can be done changes and operations are dramatically improved. It becomes possible to be proactive and do exactly what is needed when and where, and handling a complex facility like an airport is transformed into a fact-based science.

This is data-driven cleaning.

By knowing what issues need attention and where, staff’s time is not wasted on unnecessary work checking for issues, thereby improving overall efficiency. This time means cleaners can go the extra mile to ensure travelers have the best experience in an airport, with managers resting assured that

nothing has been neglected. This real-time information also provides airport decision-makers the ability to analyze the data over time to improve planning, purchasing and logistics.

Data-driven cleaning also enables higher quality facilities with no more empty bathroom dispensers and untidy gate waiting areas. By keeping airport facility managers well-informed of restroom or gate traffic, and alerting them exactly when and where issues arise, staff can proactively address a refill need for each restroom and dispenser. This ultimately helps reduce the number of complaints and creates a well-cared for environment that increases visitor satisfaction and cleaning staff productivity.

Leveraging data also reaffirms cleaning staff’s sense of purpose, helping to improve their engagement and well-being. Your people are your most important resource. Work feels meaningful when they know every task matters, as they know now that each stop they make makes a difference, meaning better control, less stress and a more balanced working situation.

While the cleaning industry has already seen a boom in technology, such as automated cleaning robots, in recent years, the latest shift toward data-driven cleaning is not about replacing humans with machines. Cleaning and facility management operations – particularly in airport facilities – are too complex and unpredictable for an automated machine to handle. This is why data driven cleaning becomes so important.

As MIT and Duke University researcher Mary Cummings writes, “As a team, the human and computer are far more powerful than either alone, especially under uncertainty.” <

Jimy Baynum is Director of Market Development, North America, Essity Professional Hygiene Business.

Ground Transportation’s New Normal

Posted on | by Scott Elmore

Airports Navigate the (R)Evolutionary Shift oF TNCs

By Nicole Nelson

Just beyond the busy holiday season, Eva Cheong recounted San Francisco International Airport’s particularly “rough Thanksgiving” in terms of bottlenecks in roadway congestion.

“When you would walk outside, every other car you would see had an Uber or a Lyft sticker on it,” SFO’s Associate Deputy Airport Director of Airport Services shared of the challenging day-to-day clogged curbside experience in late November 2017. “There are different camps, and the Transportation Network Companies are going to run into those because they are the newest player. But everybody looks to them to say, ‘It is all because of the TNCs.’”

Cheong is not pointing fingers, but readily admits TNCs have largely sparked a broader conversation about just how to reduce the overly crowded curbsides at SFO.

“TNCs have challenged us in terms of us trying to promote high occupancy vehicles and transit first because they’ve made it convenient and affordable for people to take a single vehicle to the airport.”

InterVISTAS Executive Vice President Peter Mandle said the TNC customer base at airports has expanded tremendously, not only in volume, but also with demographics in terms of age range and travel habits.

“As TNCs become more and more popular, the impacts of curbside congestion have become pronounced,” Mandle said. “People who used to use HOVs such as shared-ride vans or transit are now finding TNCs very attractive, and are using those to travel to and from the airport. And because they are transitioning from high occupancy vehicles to single-occupancy vehicles, they are adding to curbside congestion. That is a challenge at SFO, and it’s becoming a challenge at other airports over time.”

At Denver International Airport, Chief Commercial Officer Patrick Heck reports that explosive growth led to the establishment of an initial holding lot within the geofence when TNCs entered the market as a very small piece of ground transportation in 2014.

“The evolution was quick into a very similar story to taxis where we actually have a location where they wait to pick up passengers,” Heck said, noting that TNCs began to eclipse taxi usage in December 2015. “(TNCs) are now operating here and are actually a fairly sizable portion of the ground transportation we receive at the airport.”

After that space was quickly outgrown, the TNCs were moved to a larger location – a very big overflow parking lot – about six minutes away from the terminal.

Cross-country at Boston Logan International, CEO Tom Glynn is experiencing similar curbside concerns with daily passenger car traffic jumping from 9,000 drop offs pre-TNC, to the current tally of nearly 15,000 drop offs with the permitting of services including Uber and Lyft. But unlike Denver, Logan has few options in the way of infrastructural changes due to both the land and water constraints of the New England airport’s topography.

“We are on a postage stamp compared to other airports,” Glynn said, noting the very small footprint of only 1,700 usable acres. “We intend to add some parking spaces over time after a 28-year parking freeze. But in terms of TNCs and taxis, it is really reusing what we have and being creative.”

THE NEW NORM

From coast to coast and in between, the issue of curbside congestion is among a host of new realities that airports face when challenged with revolutionized technologies.

“We’ve addressed everything from the initial wayfinding and signage to what do you call them and how can you help passengers find them,” InterVISTAS Manager Stephanie Box said, noting a whole host of phrases that companies such as Lyft, Uber and Wingz use to describe their services, including ride sharing, ride pooling, ride sourcing and ride hailing. “Should pick-up and drop-off, for example, be in the same location? Obviously, the curbside is the most convenient, but then if it causes really bad congestion, you are impacting all of your other customers who are also trying to access the airport. So there is a trade off between balancing the operations and the customer experience for all passengers. Operationally the TNCs may not like having to be in the garage, and the customer has to walk across the street, but if traffic flow is improved then the wait time for all passengers ends up being lower.”

Beyond customer-centric themes, perhaps the airports’ most glaring issue pertains to money. While this evolution is merely in its infancy, TNCs and airports have already chartered a storied financial history.

Long before Uber and Lyft became household names, TNCs were making a big first impression on North American airports as the ground transportation realm became peppered with ride-sharing vehicles. This elicited a less than favorable response from airports as lost opportunity costs derived from fee-based traditional taxi and limo services were sorely missed and the less costly TNC vehicles stealthily captured the fares.

“The economics have changed as a result of TNCs disrupting the airport market because they offer, in a lot of places, cheaper fares for passengers,” observed LeighFisher Managing Director Jason Snowden, “and sometimes more convenient options than traditional forms of ground transportation.”

Popularity and politics persisted and the confluence of ever-increasing customer demand and lengthy negotiations has brought generalized acceptance and initial solutions to the more than 130 North American airports now offering TNC service.

Widespread use of geo-fencing within defined perimeters has enabled the delegation of fee payment to airports based upon TNC pick-ups and drop-offs and, in many cases, zones have been established for TNCs to share holding areas with other transportation operators.

COMPETITIVE TENSION

While these initial issues have been largely hashed out, tension remains as airports poise to approach the next iterations in the evolution of TNCs.

“Airports obviously have a lot of local demands – and sometimes even political pressure – that is placed on them from policy makers,” Snowden said, noting that certain states have limited the rights of airports in terms of how they can separate charges for ground transportation including taxis, TNCs and other providers. “And TNCs have been pretty aggressive in terms of lobbying state and local politicians to, in their words, ‘protect the public interest’ by providing access to less costly and more convenient forms of ground transportation. And the public definitely does like the service.”

But airports, obviously, have a requirement to be as self-sustaining as possible to fund future capital.

“Traditional revenue centers such as parking and rental cars have been impacted dramatically,” Snowden continued. “If those areas aren’t profitable then obviously an airport can’t continue to invest in future infrastructure and make improvements for the general traveling public. So there is a little bit of tension in the industry right now as a result of the competing interests. Airport operators are doing what they can to try to increase fees, but in many cases they have been stepping them up rather gradually in comparison to the actual impact that TNCs have had in their market.”

THE ‘MILLION DOLLAR QUESTION’

SFO was among the first in North America to permit the locally based TNCs into their ground transportation marketplace where Cheong said Silicon Valley’s Uber, Lyft and Wingz have been experiencing explosive growth since Fall 2014.

“(TNCs) have pretty much taken over the bulk of our commercial ground transportation,” Cheong said, noting that the ride hailing services now constitute the largest group of commercial operators at SFO and are expected to soon take over private vehicles. “They have impacted just about everything. You can’t say they just took taxi customers or share-ride van customers. They took parking customers, too.”

Cheong explained that in some respects, revenues have increased when fares have been generated in lieu of a private transfer. Passengers who may have previously opted to take a private car to the airport, or had a family friend or someone drop them off are now generating a trip fee with TNCs. Alternatively, Cheong said SFO is starting to see the first signs of reduced parking entries and exits, too.

“I think there’s going to be a lot of talk,” Cheong said, calling this quandary the ‘million dollar question going forward’. “The new hubbub is how TNCs are impacting airport revenue streams, especially in the parking and rental car sections. Everybody is going to try to figure out ways to recover from that.”

Denver’s Heck said that despite passenger growth, parking revenues have stagnated around $170 million over the course of the past three years.

“Even after traffic has grown in high single digits, parking has remained flat,” Heck said, “So what that tells you is that the yield with the dollars per passenger are starting to come down from parking… You can’t 100 percent blame that on TNCs, but I think that is a big part of it.”

Cheong and Heck are among airport personnel working projections and starting to have conversations about how to offset such notable reductions. “Several airports are now looking at alternative fees, alternative business arrangements, and other methods or other revenue models in order to make sure they maintain their non-airline revenues,” InterVISTAS’ Mandle said, noting the importance of maintaining the airport infrastructure, supporting capital investments and providing an optimal customer experience. “I would say everything is on the table as we are at that infancy right at the initial stages in terms of what airports are doing.

They are exploring all sorts of options.”

According to LeighFisher’s Snowden, underlying business models and fee structures need to be revisited.

As he explains, a number of airports applied similar rates that taxis and limos had been assigned to the TNCs without considering the potential impact of TNCs.

“A couple of years ago, airports would have just used their normal ground transportation rates and fees and applied them to TNCs when TNCs entered the market,” Snowden explained of the reactionary measure to the initial disruption of the market.

“At the time, a lot of airports hadn’t really done a full cost recovery or ground transportation rate settings study to evaluate what the rates should be in light of TNC impacts.”

FUTURE IMPACTS

As airport rideshare usage continues its upward trajectory, the initial impacts of the TNC evolution are noticeable – by airports, by businesses and by individuals. “TNCs give passengers a lot of choices they didn’t have in the past,” explained Snowden.

For airports, more research is being done on the financial side, especially the rates for parking, rental cars and other forms of ground transportation that have been impacted by TNCs. “A few years ago, the median pick-up/drop-off fee for airport access would have been in the $2 to $3 range at large hub airports,” Snowden said. “Today, the median is in the $4 to $5 range and we expect it to continue increasing as airports reevaluate their business model and fee structures in light of TNC impacts.”

SFO’s Cheong said San Francisco has had a good track record in terms of rising concessions and ground transportation revenues while keeping the rate basis for the carriers down. But the airport is seeking innovative and fair ways to charge new entrants for access to the airport.

“I think we all just have to understand that this is more of a revolution,” SFO’s Cheong said, citing the constant need for airports to adapt and change. “With the TNCs themselves, it helped us to understand what their business model was and how they could fit in to how we do business here. But I think in the future, airports are going to have to look toward restructuring how we are doing our finances and our revenue generation if we expect to continue the way we have been.” “ACI-NA is helping to facilitate those conversations”, said Aneil Patel, ACI-NA’s Senior Director of Air Policy.

“Our Operations and Related Airport Revenues Working Group helps member airports exchange new information and ideas to address the evolving TNC challenge.”