Airport development once centered largely on a relatively straightforward question: How much capacity will be needed in the years ahead?

Today, the calculation is considerably more complicated.

Passenger expectations are changing. Airlines are adjusting their business models and networks. Premium travel has surged while ultra-low-cost carriers have struggled. Technology is giving airports more information about how passengers move through their facilities. And disruptions ranging from the COVID-19 pandemic to changing international travel patterns have made long-term forecasting less predictable.

Meanwhile, airport infrastructure still takes years to plan, fund and build.

Dave Dague, principal with Arthur D. Little's Travel & Transportation practice, works with airports on issues including air service, economic impact, public-private partnerships and long-range forecasting. Airport Business spoke with Dague about how airports are approaching expansion and modernization when the future they're planning for is increasingly difficult to predict.

Airport Business: What are the biggest differences you've observed between airports in the United States and those in Europe and Asia?

Dave Dague: Most airports here are run by municipalities or government agencies. They run the airport and terminal, but at some European airports they're also running ground operations and other components.

I flew through Edinburgh recently and looked around and thought, "Man, this is efficient." I think there are efficiencies within some European and Asian airports because they control so much of the operation.

I look at U.S. airports as two experiences. You have the airport experience and you have the airline experience. One you can control and the other you can't. In some ways, European and Asian airports can control more of that, including ground support and baggage.

A lot of U.S. airports look at European airports in terms of how they want to operate. It even comes down to things like signage.

AB: What major trends are you seeing in airport expansion and development right now?

Dague: The industry has completely changed since COVID. We basically went to zero passengers for a couple of months, then passengers started trickling back and then we had revenge travel. We had a pilot shortage and other issues. Ultra-low-cost carriers had been a big part of the industry, and now we're in this premium passenger realm. That changes everything.

If you go back 20 years, airport development was more about, "We've got to build gates. We've got to build capacity."

Now it's about making sure we're building an airport that fits the operation. How does the airport function in terms of access, processing time, security, concessions, dwell time and resilience? What happens when airline operations are disrupted because of weather? Is the airport ready for that?

It's much more focused on the customer experience.

AB: Does that change the physical structure of airports as well?

Dague: There have been roughly 20 major expansion programs worth about $75 billion over the last 10 years. Airports are economic engines for a lot of cities, and I think builders, managers and the cities that run airports have realized how critical they are.

As the customer changes, airports are trying to build terminals in ways that produce a better, less stressful experience.

Kansas City is a good example. I flew through Kansas City over the last decade, and it had three round terminals built in the 1960s that weren't connected. They demolished those and built one central facility that processes people through.

The goal is to get you in and out as efficiently as possible, but it's also to get you to buy that Cinnabon with extra icing and do the other things that generate revenue for the airport.

Looking toward the future, it isn't necessarily about square footage. It's about creating functional space that can remain resilient through different periods and make the journey as smooth as possible from end to end.

AB: How much does an airport's particular passenger mix influence those decisions?

Dague: A lot depends on the airlines you have.

If you're Atlanta, only a portion of your traffic is local. Much of it is connecting through. Then you have airports in markets like New York, Philadelphia, Boston and Los Angeles, where much more of the traffic is coming to or leaving that city.

Those airports have done a good job of making sure people realize, "I'm walking through Boston," or "I'm walking through New York," or "I'm walking through L.A." That might be through local restaurants and concessions or other aspects of the experience.

Your first view of a city is often the airport when you're coming in. Even at smaller airports, you want people to come back.

But we also have to be mindful that airlines have their own plans, and they're going to do what they're going to do. That's where some of the volatility comes in. We're trying to plan for the future using forecasts that now have to be revisited regularly because the dynamics are changing.

AB: How do airlines influence airport expansion plans?

Dague: Airlines have their own plans, competition and fleet orders, and that helps drive growth. But they're also replacing aircraft.

The airlines ultimately pay for airport expansion through their use fees, so they have significant leverage. They're trying to cut costs. They don't want the Taj Mahal. They don't want a facility with 12 unused gates. The facility needs to be used.

At the same time, airlines can be very coy about their future plans.

Airports and airlines are in constant communication. There may be five- or 10-year growth plans that the airport has to consider. But from an airport perspective, if one carrier grows significantly and takes a larger share of the market, does that mean another carrier is going to decline or not grow as much?

The airlines don't want to give every secret away, but there is a significant amount of coordination between the two.

AB: With that much uncertainty, how can airports accurately forecast what they'll need?

Dague: You're having conversations with your airlines about their plans. If it's a forecast related to expansion, the FAA is also involved and will have to support and approve the forecast.

Usually you're looking at mid-range, low and high forecasts that can go out 20 years. That's all well and good until COVID hits or some other outside event occurs.

Forecasting has become an art in a lot of ways.

You have to scenario-plan for situations that will inevitably occur. You're looking at the airlines you're likely to have because different airlines carry different passengers, create different demands and operate different aircraft sizes.

The industry has changed dramatically over the last five years. It's difficult to predict.

AB: What goes into that kind of scenario planning?

Dague: These are economic models. They take into consideration the economy, the city we're talking about and whether we're dealing with connecting passengers. Economic demographics drive a lot of local traffic.

The advantage this industry has is a long history we can examine. We can go back to 9/11 and see what happened. Now we have COVID and other international events and can see how they affected different components of traffic.

You're building models based on income, economics, airline projections and capacity increases. Aircraft are getting bigger, so how does that affect things? Am I primarily domestic? Am I international? What are the components of that traffic?

Now we're generally building long-range forecasts with different components that allow us to test how things shake out under various scenarios.

AB: Do you see passenger expectations continuing to reshape the airport experience?

Dague: This industry goes in cycles, and right now we're in a period where premium travel and experiences seem to be the norm. Business travel has picked up.

Airlines have become successful at segmenting their cabins into different experiences. In the future, we may see even more segmentation, which lets airlines serve different parts of the population.

But could the premium market eventually become so saturated that people turn away from it? We may get closer to that. Not that long ago we had a significant ultra-low-cost industry that's now almost gone. Does that come back at some point?

We've also had Boeing and Airbus not delivering aircraft at the pace airlines would like. When deliveries pick up, that could increase competition again.

Airports are adapting to the customer journey and trying to make it as seamless as possible while maintaining a safe environment.

At the same time, many big-city airports don't have much space to grow. So how do you grow? Seattle, for instance, has talked about growing up rather than out. We're going to have to get creative with the space that's available because we all want better airports, but the people who live around them don't necessarily want bigger airports.

AB: What should airport leaders keep in mind as they plan for that future?

Dague: We're in an industry that's critical to the well-being of our economy and changing dramatically, while infrastructure is inherently slow.

AI and other technology can help us understand passenger behavior. It's not going to help us pour concrete any faster.

The question is how the airport industry continues to change and plan for a future we're uncertain about. We're positive about it, but we're uncertain about what direction it will take.

For years, industry growth was relatively straightforward. You could plan for it. Now we've been through shocks, and there will probably be more shocks.

We have to plan in a way that allows an existing facility to adapt to new realities and new passengers. That means looking at the entire journey. Before, maybe we looked primarily at concessions. Now we're looking at the curb, security processing and all the components that make up that journey. One little blip can ruin it pretty quickly.

We're better equipped to understand some of this in the information age, but we also have to recognize that the planning horizon for building infrastructure is longer than the time it takes for the industry around it to change.

AB: How will technology help airports understand and respond to those changes?

Dague: It's happening now. We can look at traffic and passenger journeys in ways we couldn't before.

But we have to be mindful that there's a lot of data out there, and there's a lot of bad data, too. You have to be able to synthesize what's good and what's not.

More airports realize they want to understand who their customer is so they can better serve them. That's something we didn't really think about before. It used to be, "Someone's coming in. We hope they buy something, we hope we get them through and we hope they get on their plane."

Now airports really want to understand the customer and develop the experience in a way that benefits everybody.