How Design can Positively Impact an Airport’s Financial Trajectory

“Good design is good business”. Those words from Thomas J. Watson, Jr., former CEO of IBM still ring true today. In aviation, good design has the potential to go beyond the traveler experience and impact an airport’s non-aeronautical revenue and total cost of ownership.

As a member of ACI World’s Facilitation & Services Standing Committee, I was honored to present on this topic at the ACI World Committee meeting in Muscat, Oman.

These days, airport commercial revenue is closely tied to the traveler experience. A 2016 ACI report found that for every 1% increase in passenger satisfaction, airports saw a 1.5% growth in non-aeronautical revenue. Similarly, a slow and inefficient travel experience can negatively impact airport revenue. Business strategy consulting firm ICF found that every 10 minutes a passenger spends in the security line, reduces their spending in the terminal by 30%. Conversely, data from Milan Malpensa airports found that spending increases 3-5% for each additional minute of dwell time a passenger spends in the terminal post-security.

So, how can airports capitalize on available data and improve ROI? Here are some great places to start:

Minimizing Total Cost of Ownership

Airports can minimize their total cost of ownership (TCO) when planning and designing terminal improvement projects. It’s important to consider the initial costs or capital expenditure of the terminal as well as the long-term operational and maintenance costs. By considering these costs during the planning process and managing the assets effectively over their lifetime, airports can potentially save up to 40% of their TCO in the long term.

Depending on the climate, outdoor space can support both minimizing TCO as well as a unique passenger experience that increases dwell time and commercial revenues.

Maximizing the “Golden Hour”

The golden hour is the 60 minutes passenger spend on average post-security and prior to boarding. This is the time in their airport journey when they are most relaxed and more likely to take advantage of shopping and dining options. The ACI Airport Service Quality’s annual survey measures the traveler experience in multiple categories, from security processing wait times and airport staff efficiency to wayfinding ease, retail, cleanliness, comfort and ambience. Design can focus on these categories to provide calming environments that increase the passenger spend during the golden hour. Technological advancements that increase throughput at security screening and simplify boarding can potentially extend the dwell time, thereby increasing commercial revenues.

Designing for Sustainability and Flexibility

Airports should also consider environmental responsibility during the planning and design process. Energy efficient materials and a right-sized terminal help conserve resources and reduce carbon emissions.

As the aviation industry and the travel experience continue to evolve, airport owners are also more aware of expansion costs to accommodate operational changes or additional capacity in constrained conditions. It’s no wonder that design for flexibility is considered an important contributor to long-term ROI.

When considering these three factors during the planning and design process, airports can create high-performance facilities that facilitate elevated travel experiences and maximize their ROI in the long term.

If you have more information or would like to share your ideas about aviation design and ROI, let’s connect on LinkedIn or by email at keith.hui@hok.com.