IoT Helping Shape Airport Digital Transformation

March 5, 2020
To keep pace with the growing number of travelers and increasing flight volumes, airports are turning to technology like IoT to deliver better consumer experiences and improve operational efficiencies.

U.S. airports accommodate 2.7 million airline passengers and 44,000 flights each day according the FAA. The nation’s airports and airports across the globe are expected to become even busier. The International Air Transport Association (IATA) is projecting global passenger numbers to reach 4.72 billion in 2020 up 4.0% from 4.54 billion in 2019. To keep pace with the growing number of travelers and increasing flight volumes, airports are turning to technology like IoT to deliver better consumer experiences and improve operational efficiencies.

The Internet of Things (IoT), a network of connected smart devices that communicate and collect and share data seamlessly over the Internet, is transforming industries across all sectors. From manufacturing, to retail, to transportation and much more, the adoption of IoT technology in these and other sectors shows no signs of slowing down. In fact, Gartner forecasts that the enterprise and automotive IoT market will grow to 5.8 billion endpoints in 2020, a 21% increase from 2019 and Business Insider projects that there will be more than 64 billion IoT devices by 2025, up from about 10 billion in 2018.

A 2019 Microsoft survey illustrates how these IoT technology adoption numbers are translating to business and industry. The company’s survey of 3,000 IoT decision-makers in enterprise organizations found that 85% of respondents are in IoT adoption, and three-fourths of these have IoT projects in planning. Among these IoT adopters, 88% believe IoT is critical to business success. The survey also found that IoT adopters believe 30% of their company’s revenue in 2021 will be due to IoT.

Like other enterprises, airports are increasingly embracing IoT technology. A MarketsAndMarkets report found that IoT in the aviation market reached $593 million in 2019 and is expected to grow at a Compound Annual Growth Rate (CAGR) of 21.9% through 2025. 

The aviation industry is leveraging IoT solutions to help manage a highly complex business operating environment which involves the logistics of moving billions of people and goods across the globe. To help better manage this environment, more and more airports are implementing IoT solutions to gain operational efficiencies and deliver better consumer experiences. In fact, a survey on airport IoT adoption trends cited in a July 2019 Deloitte Insights post found that 76% of airport respondents using IoT indicated they used it for efficiency/optimization and 58% indicated they are using IoT for customer experience/differentiation.

This same Deloitte Insights article noted that “… while past IoT developments may have focused on efficiency, as airports develop future IoT solutions, they may tend to skew more toward differentiating the airport by improving traveler experience. These sentiments were echoed by other interviewees from airlines and airports, who indicated that future IoT plans were largely focused on improving customer experience.”

One of the customer experience areas airports are focusing on improving is the baggage handling process. Delivering bags to the right place and on time is a key driver of airport customer satisfaction. The U.S. Department of Transportation (DOT) Air Travel Consumer Report ranked mishandled baggage as one of the top air travel consumer complaints second only to complaints about flight problems and delays.

Every year, airports and airlines handle billions of pieces of luggage. According to the IATA, more than 4 billion bags are carried each year by airlines globally and less than 0.43% do not arrive with their owners. However, every piece of lost, damaged or delayed baggage impacts airports in terms of financial losses, a lack of operational efficiency, and traveler dissatisfaction.

In an effort to improve baggage handling processes, the IATA introduced Resolution 753 on luggage tracking which imposes stricter tracking and increased visibility requirements to reduce luggage loss rates. The resolution requires its members to “maintain an accurate inventory of baggage by monitoring the acquisition and delivery of baggage.”

To reduce the incidence of mishandled baggage, airports and airlines are turning to IoT technology. Strategic partnerships are now lending themselves to improving assest tracking in the airline industry through end-to-end tracking solutions. These solutions leverage cost and energy-efficient, and globally connected trackers that provide access to real-time information about the location of luggage and high value assets. Reusable tags placed on luggage coupled with proximity sensors installed across airports allow airlines to monitor luggage, accurately tracking its location and detecting anomalies.

This application of IoT technology can help airports in their drive to enhance customer satisfaction as well as provide additional benefits of reducing costs associated with baggage claims and increasing luggage handling efficiency.

Airports are also looking to IoT solutions to help reduce costs through operational efficiencies. Asset tracking, a critical operational function in airports, is an area where IoT technology can provide gains in efficiency and reduce the financial impact of lost assets. Airports and airlines can use this technology for real-time visibility and control of all key terminal assets including items such as spare parts, landing gear, and Unit Load Devices (ULD). For high-value assets such as ULDs, airlines can use this technology to collect data on ULD location and movement to optimize ULD management and significantly reduce the risk of loss. Asset tracking IoT technology can even help reduce departure delays by making sure equipment like ground service vehicles, portable water trucks, de-icing vehicles, and catering vehicles are at the right gate at the right time.

Airlines have already started adopting IoT solutions to improve operational efficiencies. Qantas Airways recently rolled-out Blackhawk IoT at its major airports across Australia, implementing a large-scale deployment of asset tracking devices for managing Ground Support Equipment (GSE). Thousands of assets including buses, belt loaders, baggage tugs and barrows, and vans are tracked and connected via 4G and the Sigfox 0G networks. This tracking data provides airlines with insights that are critical to improving operational efficiencies, maintaining airport security and safety, reducing costs, optimizing maintenance plans and meeting performance standards.

Asset tracking is just one of the ways airports can use IoT technology to increase operational efficiencies. Facilities management is another functional area where IoT solutions can reduce operational challenges and costs for airports and airlines. For example, IoT technology can be used to monitor and control systems such as heating, lighting, air-conditioning, and security.

Waste collection processes can also be improved with “smart” trash cans that trigger a refuse collection request when they are full.

Deloitte noted that, “regardless of the technology or application involved, IoT can have the biggest impact on airports when the technology is incorporated into the core business model. For example, IoT might be used to facilitate a seamless door-to-door experience for air travelers: A single platform that can order and pay for rides on rail or taxi, handle travel documents, and order additional services could open up entirely new business opportunities for airport operators currently dependent on retail sales and parking receipts and greater customer interaction for airlines and other stakeholders. This mobility-as-a-service approach is exactly the type of IoT-based new business model that could deliver a new future to airports.”

IoT is helping shape the digital transformation of airports. Fully digital airports, referred to as Airports 4.0, will not only help improve the travel experience for consumers, but will be a game changer for airports in saving costs, improving efficiency and enhancing the quality of services.

Kent Rawlings is the President of Sigfox Canada. Rawlings is a driven Senior Executive with over 25 years of progressive experience in sales and business development, operations management, business strategy and partnership development in both large and start-up organizations. Kent has a history of success identifying underlying problems and implementing value-added solutions to optimize operations and ensure achievement of P&L targets. Driven by challenge, he thrives on building businesses from the ground up or taking existing businesses into unchartered territories.