In today’s dynamic aviation landscape, non-aero revenue has become crucial for airport growth. As passenger numbers increase, airports are not just focusing on operational performance and airline partnerships; they are exploring direct e-commerce offerings to enhance the passenger experience and boost revenue.

 

The rise of non-aero revenue streams

Non-aero revenue streams are gaining importance as airlines negotiate on aero fees paid to airports. Airports are diversifying their offerings, including duty-free shopping, order-ahead food services, parking reservations, and fast-track options.

This evolution continues as technology advances, providing airports with a broader array of services. Non-aeronautical revenues have grown significantly, reaching over 40 per cent today, according to ACI statistics.

 

Addressing the challenges

While introducing new services is essential, the challenge lies in ensuring passengers are aware of and utilize these offerings. Limited user engagement and a one-size-fits-all approach create hurdles for airports:

  1. Limited User Engagement: A study by TNMT / Lufthansa Innovation Hub research reveals that only 7 per cent of passengers regularly engage with airport apps or websites, leading to missed upselling and cross-selling opportunities.
  2. One Size Doesn’t Fit All: Passengers have diverse needs based on their journey type, making personalized services crucial.

 

Personalization challenges

Effective growth in airport e-commerce hinges on a solid understanding of personalization and its wider effect on passengers. For airports, this involves addressing pain points, ensuring broad-based platform accessibility, and implementing journey-based personalization.

Despite growth in non-aeronautical revenues, low digital engagement rates remain a challenge. Personalizing the passenger experience through an integrated travel planning platform can help maximize online business success.

Current digital touchpoints struggle to reach more than 7 per cent of passengers. Even for those who interact, offers often lack personalization, missing the mark for relevance.

 

Airports leading in e-commerce personalization

Several airports have successfully leveraged e-commerce personalization:

  1. Incheon Airport (ICN): The “My Airport” platform tailors shopping and dining recommendations, boosting concessions 3-5% yearly.
  2. Amsterdam Airport Schiphol (AMS): Linking frequent flyer data allows personalized digital ads, increasing retail repeat sales by 10%.
  3. Dubai International (DXB): Rich profiles from passenger bookings enable personalized push notifications, increasing non-flight bookings by 15%.
  4. Munich Airport (MUC): A “plan-your-trip” site uses cookie data to present relevant deals, increasing associated revenues by 7% annually.
  5. Hong Kong International (HKG): Linking a frequent flyer app to on-site beacons delivers geo-targeted offers, improving targeted communications and crossover loyalty programs.
  6. Vancouver International Airport’s “YVR Experience” travel assistant allows passengers to enter trip details, receiving a customized journey overview with maps, amenities, and promotions.

 

A shared travel planning platform: The Airport WebApp

The proposed “Airport WebApp” is a revolutionary solution to bridge gaps in digital engagement. Passengers input flight details, receiving a preview of their airport experience with real-time updates and recommended offers. Airports maintain control over promotions for different passenger segments, refining targeting over time.

 

The Bottom Line

As aviation and e-commerce intertwine, airports face a choice: evolve, personalize, and grow, or remain static and miss opportunities.

The Airport WebApp, with its intuitive design and personalization focus, represents a beacon for the future—a testament to technology transforming challenges into opportunities.

 

Article by Airsiders