Digital transformation generates efficiency and reduces costs for airports

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Digital transformation generates efficiency and reduces costs for airports
Tue March 26, 2019

Amadeus published the report "Airport digital transformation: From operational performance to strategic opportunity", there reviews the present and future of air terminals


By Iyad Hindiyeh - Global Head of Strategy, Airport IT, Amadeus

How can digital transformation help airports to reduce their total operational costs and improve the efficiency of their main processes?
To address this question, the study Airport digital transformation: From operational performance to strategic opportunity, first considered the relative costs of IT and the efficiency of eight essential business processes of an airport. These range from resource management and baggage reconciliation to sales systems. From there, experts from airports and other industries were consulted to provide specific points of view about how they expect digital solutions to be applied to reduce costs and improve the efficiency of such processes in the future. Some key points to keep in mind:

High cost processes not necessarily sought by the airport's digital strategy
In conversations with leading airports, they quickly differentiated between "what needs to be done" and other expenses. In the case of flight and resource management, airport executives have considered these costs an inevitable part of the day-to-day operations of an airport, and therefore, aspects that are not part of the main focus of the strategy. digital. In our experience, digital applications, until now, tend to focus on process automation and improving the flow of passengers, not reducing global IT costs. This is consistent with airports that are transitioning from Airports 2.0 to Airports 3.0.

Inefficiencies of Common Use Terminal Equipment (CUTE) and Common Use Passenger Processing Systems (CUPPS) highlighted consistently
Airports see an important margin to reduce the cost of existing check-in processes and systems. A common challenge for many airports is the need to meet a variety of airline needs related to the facilities and check-in solutions. This means that the airport can recognize the value of making the transition to commonly used platforms and interfaces, but, in reality, the benefits of common use will not be seen in its proper dimension while some airlines are not ready to migrate and continue to insist on specific platforms.

Airport Collaborative Decision Making (ACDM), considered as an important opportunity for digital transformation.
Although ACDM does not represent the highest IT spending today, most of the airports interviewed predict that spending on ACDM will increase in the future, due to the broad benefits that superior coordination can bring to the airport ecosystem in general. For example, a major German airport highlighted its implementation of an ACDM solution to optimize the movements of aircraft, which manages to reduce the average distance of air taxi, congestion on land and the resulting delays.

Passenger flows remain a key area for all airports
Although passenger flows are not the most expensive concept in the IT budgets of airports, as evidenced by the responses of airports surveyed, the optimization of passenger flows is essential for operational and commercial reasons. It is also good to note that a key part of optimizing passenger flow is the expense associated with security systems. This expense is not included in the passenger flow data, however, it was indicated as a primary expense by almost all the airports that participated in the study.

The result of this cost-efficiency analysis provides a signal of the direction that the best opportunities for the digital optimization of commercial processes in airports will take. In this sense, the next step is to establish the relative priority of various digital technologies to help airports take advantage of these opportunities. For more information on these technologies, visit the report, Airport digital transformation.

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