Passengers in the Sky, Customers on the Ground
The airport industry has made the leap from a fixed monopolistic outlook to a competitive approach that reads market trends. On the one hand, there is heightened competition between airports regarding traditional aviation activities, in order to attract flights and passengers away from nearby airports and hubs. Competition has been exacerbated both by low-cost carriers on regional flights, and by air companies based in emerging economies for long-distance travel.
But non-aviation activities are what are truly buzzing when it comes to retail travel: there is upstream competition coming from the shops located in the nearby city, direct competition from malls located near the airport, and downstream competition, from selling items onboard to luring travelers to shopping opportunities at other airports touched during the trip.
How to respond to this array of market stimuli, at a moment when the drive for profitability is acutely felt given the presence of new private shareholders in hitherto state-owned companies? The decisive move toward the airport-as-firm model is a credible answer, responding to the needs of market creation according to new business paradigms. In the case of aviation activities, a detailed cost-benefit analysis is required for any new carrier to be included in the flights offered by the airport, verifying whether the plan is profitable after the usual discounts and other incentives to start the new route are given.
On the travel retailing front, there needs to be a distinctive approach in making the airport a different shopping environment and experience with respect to other forms of shopping. It is necessary to adopt an active management of the flows of passengers, in order to maximize their average spending through walk-through points of sale, supported by adequate information designed for the passenger/customer. Signs that repeatedly inform passengers about their distance from the gate will diminish their anxiety and increase their propensity to shop (time to gate). Also, the time-lag with which US and UK airports let travelers know the number of their boarding gates means increasing wait-in-lounge time and thus augmenting the presence of passengers in shopping areas.
Summing up, the airport-as-firm must make the leap toward a B2B2C action format, in which both the relations with the airline-as-client and the individual passenger must be managed and optimized. Focusing only on carriers would mean to forget that the actual core business for aviation companies has become the direct relationship with the passenger/customer, which is being constantly improved by the availability of new digital technologies that enable proximity and direct dialogue with travelers.