Research Projects

Guidance on Developing an Airport Service Operator Business Model

Assigned to Heidi Benaman
Last Edited by Heidi Benaman

A Service Operator Model (SOM) is a business model for airports to consider adopting which is a change for most U.S. airports from a landlord management approach to a more collaborative business approach by managing all of the functional areas of the passenger journey. The Guidance will describe initial steps such as developing the business model that fits your airport.

Background (Describe the current situation or problem in the industry, and how your idea would address it.)

There are several reasons airports should start considering a collaborative and comprehensive service operator management model to have better control of facility use, costs, tenant and the customer experience. Historically airports have played the role of landlord providing facilities and infrastructure for airlines to operate. Overtime some airports have evolved introducing common use systems, which is a part of a SOM but not usually encompassing the complete passenger journey. Common use programs were usually adopted due to space constraints and to save construction expansion costs. Some models also include hybrid privatized and/or third party management models. Airports have trended in the past decade with a greater focus on the customer experience especially for airports that leak traffic to another airport near enough to be a competitive option for travelers. Airports have also realized that adding elevated services, food and beverage not only improved customer experience but also is a good revenue source. Each of these business models are often separate silos of management whereby the airport has some oversight of bits and pieces but not cohesively to understand and manage the entire passenger journey. For example, while trying to recover air service and passengers during the pandemic if multiple tenants lease various areas it is difficult for the airport to consolidate services to reduce costs or improve the experience. It was difficult for the airports to predict what the needs were week by week. Many travelers back in the sky during the pandemic complained about inconsistencies within an airport for managing distancing, visual cleaning and mask enforcement from public areas to security checkpoints and gate hold areas. Often each of these areas are managed/leased by various tenants including some by airport operators. The other major complaint was a lack of food and beverage options throughout the airport campus. In a Service Operator Model (SOM) the airport leads the business operation and all significant stakeholders are working collaboratively with the airport and sharing data in order to anticipate service needs and ensure consistency in the customer experience.

Objective (What is the desired product or result that will help the airport industry?)

A SOM is the collaborative management of the entire passenger journey starting from roadways to parking to curb, ticket counter, security checkpoints, food, and beverage services, to the gate hold, boarding, departure, arrival, baggage claim and leaving the airport campus. This Guidance would provide information for airports to understand the various components associated with adopting a SOM which will likely take a period of time (years) as it involves developing a new business plan, getting buy-in from governance oversight as well as staff at all levels. This is also a considerable cultural shift and will include plans for change management, staffing augmentations including changing/adding roles and responsibilities and tenant/stakeholder coordination. Buy-in from all areas of the organization are vital for a SOM to be successful. Concepts for the transformation of tenant/airline lease agreements in support of a SOM as well as data and technology improvement recommendations to enhance predictive management are all important elements of a SOM. This Guidance is intended to introduce the SOM to airport operators and help them begin the journey to a new approach to doing business. It will provide a roadmap template(s) for all size and complexity of airports. This first Guidance tool is expected to be followed by another document in the future that will focus on the operational and implementation of a SOM.

Approach (Describe in general terms the steps you think are needed to achieve the objective.)

Research will be gathered to understand which airports (U.S and international) have begun adopting common use and/or SOM models which usually includes ticket counters, gate boarding areas, gates/ramp parking, baggage handling services and food/beverage/personal services. This research will also include a best practices and lessons learned while adopting these changes. Business modeling best practices will be documented for airport operators of various size and complexity so they can begin developing what type of model might work best for them. This Guidance will include a process flow for decision-making concerning which model is best as well as a cost benefit analysis process. The Guidance will contain an overview on change management, what it is and how to bring it in to the organization. This will also include communication planning. The Guidebook will include best practices to adopt a SOM business model which should be overseen in a collaboration center/Airport Operations Center that would include key functional units such as airside and landside operations, facilities/maintenance, security, IT, customer service/social media, airlines, and TSA to name a few where they can work together and share data. The Guidebook will document the need for developing a staffing plan to determine what resources would be needed. Staffing plans will also include benefits of succession planning for working in a collaborative environment often knowledge transfer and the ability to experience other operational areas of the airport allow for staff development and growth is also a best practice the Guidebook will document. The Guidebook will also discuss technology and data, the importance of it as related to a SOM, the importance of developing objectives and then corresponding Key Performance Indicators (KPIs) which eventually leads the use of data to help airports move from reactionary management to predictive where possible. The Guidebook will include the concept of a roadmap template that airports could use to begin to customize their future business model.

Cost Estimate and Backup (Provide a cost estimate and support for how you arrived at the estimate.)

$300,000

There are a number of various subject matter experts that would need to contribute to the development of this Guidebook.

SOM models are accepted more at international airports such as Frankfurt, Vancouver and Schiphol than U.S. and research should include at least two models for the best practices and lessons learned content.

The Guidance as an introduction to the SOM entails a fair amount of content on the various business areas.

Related Research - List related ACRP and other industry research; describe gaps (see link to Research Roadmaps above), and describe how your idea would address these gaps. This is a critical element of a synthesis topic submission.

Many of the linked research shows silos related to a SOM. The research for this project would address many of the previous ideas together cohesively or addresses the issue as inclusion into the concept.

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Idea No. 685