(This is part 2 of a 2 part series. Part 1 can be found here) Health Obligations May Last, but Change in Airport Design is Inevitable The role of airports will be crucial to ensure a “health filter” before accessing aircraft. Today all airports are considering short-term measures to implement social distancing rules, seropositivity checks with quick tests, temperature checks with thermo cameras already used in the epidemics of SARS, MERS and even more recently Ebola. These measures can be envisaged when traffic remains limited, how will this happen in the future during peak operations?
Once the threat of a resurgence in the outbreak of the current pandemic has subsided – for instance through the introduction of a vaccine – the travel appetite will bounce back, but it is likely that the health measures will stay and become a new standard for airport organization and design. Pre-pandemic airport terminal were simply not designed to allow social distancing and provide fluid areas reducing physical contacts. Many airports are still characterized by endless queues at check-in counters, immigration controls, security checks and in boarding lounge areas. Though yet not known, what new standards for “health design” will ICAO and the FAA issue? We can expect that in the future airports will need to reinvent their design in order to perform health checks and to create new concepts to facilitate social distancing. Increasing spaces for check-in, boarding lounges, immigration is difficult and very expensive for airports which will have to face limited financial capacity to renovate existing facilities or build new ones. In short, this is why airports will need to look for alternative solutions and bet more than ever on wider use of new digital technologies such as facial recognition to smooth passenger flows. Automated immigration controls, electronic ticketing and baggage drop-off areas or even remote check-in, automated boarding, etc. technologies will become the standards for new facilities if airports are to comply with social distancing rules. Such design options will have an impact not only on existing facilities which will have to be adapted, but also on future projects which will obviously need to be re-engineered although standards are not yet defined. Passengers Behavior Changes Will Affect Airport Revenue Streams In past years international airports have benefited from significant increases of retail revenues which represent 20% to 30% of revenue in the average airport P&L. Airport Duty Free revenues have benefited, in particular, from the growing consumption of Asian and Latin American travelers positively encouraged by enlarged and more qualitative commercial areas. But no noticeable revolution in retail concepts and offers have emerged in the recent years despite expressed demand from the travelling public.
Passenger Demand for Experiential Retail
The universal lockdown imposed by the COVID19 outbreak has accelerated consumer awareness of the digital economy and e-commerce which is likely to further accelerate online shopping. Such a sudden increase in e-commerce will certainly result in the emergence of offers more attractive for the consumers than the current commercial offer of airport duty free. In this context, to fight against an inevitable gradual erosion of their sales per passenger, it will be up to airports to engage themselves more consistently and proactively to adapt to a different pattern of consumption which will be driven by digital. Potential ideas could be developing and improving concepts such as “shop and collect” and “show rooming” or even more cooperation with airlines which could be involved in remote shopping offers during flights. At the same time, the trend engaged by many suppliers, particularly in luxury goods, of increasing their visibility by looking for dedicated spaces for their brand, to the detriment of the current wide multi-brand spaces, could be amplified by a need to bounce back quickly from the COVID19 crisis. Such changes will undoubtedly affect the organization and the design of airport retail areas. A challenge that airports should not neglect if they want to keep the attractive margins generated by commercial activities. An Opportunity to Accelerate Environmental Transition Airports attempt to reflect a modern image of developed countries and regions. Showcasing green technology has become a key feature in today’s landscape. The need to respond to environmental concerns has been understood for quite some time. The Airport Carbon Accreditation program, launched over 10 years ago by ACI, has experienced constant acceleration during the last decade, especially after COP21 in 2015. But should we be satisfied with around 300 airports in almost of 2000 referenced by ACI, even if these airports handled nearly 45% of world passengers in 2019? The experience has shown that major crises have always been crucial opportunities to initiate and accelerate major environmental transformations. Western governments have understood the importance of environmental measures when exiting from COVID 19 outbreak and it is likely that financial support programs brought in by governments or international institutions, such as the European Union, might be linked to environmental compliance conditions. It is an inevitable trend which will be beneficial for the image and performance of the entire airport industry. Airports will undoubtedly face other challenges in ensuring that they continue to play their role as modern and well-performing infrastructure. The industry has shown remarkable resilience after previous crises, so it would be unreasonable to doubt the ability of the airport industry to bounce back in the medium term and to remain one of the most valued sectors for global infrastructure investors.