President Biden’s Bipartisan Infrastructure Bill has paved the way for a $1 billion allocation to America’s airports via the Federal Aviation Administration. With air travel demand continuing to grow, Biden’s pledge emphasizes the necessity of investment in the country’s infrastructure to help achieve a range of goals, from sustainability and clean water to rail and airport upgrades.
Essential upgrades to North America’s aviation industry are timely. As The White House notes, no U.S. airports currently rank in the top 25 airports worldwide according to some global rankings. Lagging far behind some nations when it comes to airport infrastructure, there are fundamental knock-on effects for wider supply chain operations and passenger travel experiences. That’s why to many, the Biden Infrastructure Bill is being hailed as a lifeline to America’s aviation industry, with our research revealing that 89% of U.S. airport leaders report securing grants and funding as an important commercial priority.
Indeed, it comes at a critical time for the North American aviation industry which is currently experiencing a boom in air traffic. A recent report by the Airports Council International into U.S. airports' infrastructure needs predicted that there would be a 150% uplift in air traffic - both passenger and cargo - by 2040. Yet, many American airports are not in a position to seize this opportunity due to a lack of capacity to bring on new airlines or introduce new routes.
Having the right infrastructure to support this demand growth, while maintaining smooth and seamless operations, has never been more important. But it’s critical airport operations leaders understand the full range of opportunities available to them to increase capacity – digital, as well as physical improvements – that grants from the Biden Infrastructure Bill can support and which could help them with both in the long and short term.
Expanding physical capacity, digitally
Much of the focus to date on the Biden Infrastructure Bill investments has been on the physical infrastructure improvements due to the country’s airports. This is understandable given over one-quarter of U.S. airport leaders reported having insufficient terminal space, preventing many from introducing new airlines and posing a threat to their expansion and growth.
Des Moines International Airport is one example of an airport which secured over $10 million to replace a terminal which is currently operating at overcapacity and no longer meets the airport’s requirements. With the airport expected to exceed its annual record for passengers processed in 2023 – at more than 3 million passengers – it is positive to see that work on the new terminal building is already underway.
However, updates to physical infrastructure can only improve the outlook for airports so far. Much of the change needed to increase capacity for airlines and maximize existing physical space available within airports can and should be unlocked with technology.
Why is this important? Airports that rely on physical infrastructure improvements alone will have to wait years to see the benefits translate into their day-to-day operations. Just think about the time it takes to plan, build and get a new terminal running. Furthermore, these airports risk missing opportunities to increase their capacity for managing take-off and landing slots, which our research found topped the commercial priority list of U.S. airports.
That is why Des Moines International Airport is a beacon of best practice in that it is coupling its physical infrastructure investments with digital transformation. The airport is taking the right steps to improve its allocation of aircraft to gates and stands through the deployment of a new cloud-native gate management platform. Leveraging AI and machine learning, the SaaS platform solution draws on diverse data sources to offer up-to-date and accurate flight information, which enables the airport operations team to dynamically plan and manage their gates, hard stands, and apron operation. This drives efficiencies for aircraft gate and stand allocation, simultaneously optimizing physical and technological investments to support Des Moines' growing number of passengers.
Such solutions also present an important opportunity to those airports which do not have the physical footprint to expand into or face restrictions on the type of expansion allowed due to ecological and environmental reasons.
Norfolk International Airport is a good example of this. Despite a great need to increase its capacity, the airport operates within an ecological sanctuary. This meant that the airport couldn’t rely on physical expansion to support the two new airlines and 20 new destinations it added in 2022. Instead, by investing in a cloud-based platform, it was able to optimize and automate its existing gate and flight management processes to increase passenger capacity. With tools to better allocate aircraft parking and capabilities to track both the aerial and ground locations of arriving and departing aircraft, greater passenger numbers can now be better managed. All of which has been achieved without expanding the airport’s physical footprint.
Maximizing shared resources with common-use solutions
Increasing the capacity to accommodate more airlines not only relates to gate and flight management, but also how passengers are processed in the terminal. Indeed, Ted Stevens Anchorage International Airport secured a $4.4 million grant as part of the Biden Infrastructure Bill to increase the capacity of its North Terminal via the installation of common-use equipment and by implementing upgrades to its baggage handling system.
Common-use equipment enables airlines to share resources within the airport terminal, meaning additional airlines can be easily introduced without the need for a new dedicated space in the airport. Pooling these resources allows airports to optimize the use of existing terminal space based on flight schedules, whereas airline-dedicated resources often sit vacant for long periods when a specific airline doesn’t have any flights departing.
It’s perhaps little surprise therefore that U.S. airport leaders cited common-use tools as the top technologies that would significantly improve their airport operations, allowing airlines to share both those resources used by airline personnel, including check-in desks, as well as passenger self-service kiosks, such as for bag tag printers, self-service check-in, and payment devices.
Optimizing passenger processing tools, in turn, allows airports to accommodate more airlines and ensure that resources in terminal are being efficiently deployed to improve the passenger experience. It also benefits airlines in helping them improve their own processes and reduce costs. Furthermore, 87% of American airport leaders recognize the potential for common-use facilities in lowering the upfront investment required by airlines as an important factor in attracting new players to their airport.
The use of common-use facilities can already be seen in many airports around the world, but particularly those in Europe which is currently leading the charge in their deployment. London’s Heathrow Airport is just one example. Here, common-use self-service equipment enables passengers travelling with a range of airlines to check in, print bag tags and make payments for additional luggage costs all via shared terminals. This approach has seen both airports and airlines optimize their processes and reduce overall costs.
Overcoming the barriers of legacy technology
It is clear that to optimize operations and improve capacity in both the short and long term that airport leaders must look at both physical and digital infrastructure investments. However, one of the persistent challenges that many operations leaders face in making digital improvements is the reliance on legacy technologies within many airports. Due to a relative lack of innovation in the airport technology sector by some players, many airports are plagued by outdated systems that struggle to fulfil their intended purpose. Few, for example, offer cloud-based solutions, which in turn means that their systems demand ongoing on-site maintenance. This is not only time-consuming and costly for airports to manage, but it slows down their rate of innovation because new features cannot be iteratively rolled out.
Relying on manual processes and legacy systems poses massive hurdles to not only the growth of American airports, but their ability to operate effectively and offer a positive experience to airlines and passengers alike. It is a widespread issue. In a survey conducted as recently as autumn 2023, over one-in-five (43%) of U.S. airport leaders reported still using Excel and Word documents to store and manage operational information, such as for the RONs (Remain Overnights) and gate management.
With 60% of airport leaders stating that not investing in new technologies to optimize airport operations - such as cloud-based platforms, artificial intelligence and automation – presents a risk to their airport in the coming year, it’s clear that digital investments will be as critical as physical improvements to help U.S. airports seize the opportunities presented by the current boom in air travel. However, the outlook is positive; 92% of American airport leaders report that upgrading legacy technologies and systems is an important commercial priority.
A holistic solution
The increasing demand for air travel post-pandemic presents a good opportunity for the U.S. aviation industry, but the challenges brought by increased demands and capacity limitations need to be addressed to support the sector’s growth.
Biden’s Infrastructure Bill is a positive first step towards revolutionary change for U.S. airports, yet while physical improvements are important, technology must also be a focal point to future-proof airports too.
