Of Airports, Business Models

One on one with ACI’s Angela Gittens

BOSTON — During this fall’s meeting of airports at the ACI World/North America joint conference, the director general of Airports Council International, Angela Gittens, sat with AIRPORT BUSINESS to discuss the business of airports as the industry looks to the future — at a time when the present is challenging enough. The business model of airports around the world is evolving — rapidly, she says. The important thing is to let market forces work, and for airports to be facilitators. For the passenger, the evolving business model is one in which the airport takes the lead in the customer experience.

Gittens took over ACI’s director general position in April, succeeding Robert J. Aaronson. She has held senior positions at airports in Miami, Atlanta, and San Francisco, as well as with TBI Airport Management and HNTB Corporation.

Following are edited excerpts of our discussion with Gittens ...

AIRPORT BUSINESS: Looking ahead at the future of airports, what stands out for you?

Gittens: The nature of the business and the nature of airport management’s role in their airport has evolved over time. It is now characterized by a more or less full responsibility for the processes at the airport and the outputs.

Once upon a time, airports were generally run directly by governments as part of an overall governmental function. They essentially acted as landlords [and] the provider of infrastructure, as government does with streets. The government built the roads for the vehicles and for the airplanes, and sometimes built buildings in between; sometimes they didn’t. Sometimes the airlines built it. Even when the airport did, most of the process going on inside of those buildings was undertaken on behalf of others, primarily the airlines.

Over time, the airlines started to outsource some of those processes; and over time, the airport took over some of those processes.

What’s been happening in [the U.S.], because of the volatility of the airline business where airlines come and go … it started to fall more and more to airports to at least manage the base, and then more and more to manage some of the processes.

In other countries, governments started to corporatize or privatize their airports, which meant they brought in either pure investment by parties who then had some levels of control, like shares of airport stock, or they might have brought in a concessionaire to operate and manage the airport in return for potential revenue or a fixed fee. They may have set up the airport as a self-sustaining enterprise, like what was done in Canada, where these are non-profit entities but they pay rent to the government and taxes to their localities, just as though they were a private business.

A later evolution is when companies run more than one airport in different countries. You have a corporation that owns an airport in Australia; owns an airport in Europe, or Africa — or anyplace but North America.

AB: It appears that the business model of airports is changing on a global basis.

Gittens: There’s this range of business models that’s moving this segment of the industry to control more of the process — the property and the process — because they have to have the vision and the authority to carry out that vision, since the other thing that’s going on in the world is liberalisation. What we call deregulation is now happening on the international side where increasingly, instead of bilaterals, there’s Open Skies or liberalisation, so that instead of the various countries getting together and deciding where airplanes will fly, airlines decide where airplanes will fly. So it’s up to the airports, or somebody, to try and attract and retain air service for their community. There’s not a governmental entity doing it for you anymore. Now the market is doing it.

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