Let’s see, we have millions of people travelling by air, shopping, dining and using variety of services in the terminal, all for inordinate price rates. The airport management is busy pulling up its tuxedo to appear corporate yet the airport is failing to generate greater revenue on its own. What this has done is hampered the flow: the management can‘t afford to adequately pay its entire staff apart from those at the top of the management’s pecking order, while the fact remains that the employees working in the lower tier are just as important as higher level personnel. Many larger airports have access to detailed commercial data by scanning boarding cards, at least in duty-free shops if not in all other commercial outlets. Smaller airports too should request this information from duty-free operators since it is extremely valuable in understanding the total value of a passenger to the airport. From such data, the differentials between destinations can be compared. A study conducted in the UK at Heathrow and Gatewick revealed that Chinese passengers were responsible for around 25% of luxurious expenditure at the airport despite representing only 0.7% of the total passenger volume. International gateways such as Heathrow or Charles De Gaulle are able to offer high end luxury products, which most regional airports cannot. Smaller airports lack direct connections to most of these niche long-haul routes. Nepal’s Tribhuvan International Airport has the potential to fare much better and rise from the status quo. They can work out on the ambience, which is currently in a state where travelers prefer not to waste their time or money on the meager services available. What it needs is a certain oomph factor – extra facilities which could add value alongside nominal cost and appeal to the throngs of travelers passing through. There is much we can learn from the world’s top-rated airports, and this is one very important facet. Passengers are naturally drawn to places where they can go about their business with comfort, somewhere they can feel at ease and pampered or indulged, even. An airport where customers experience distress or wish to spend as less time as possible generate less proceeds, as is the case here.
The major airport revenues areas are:
- Fuel Sales
- Commercial Lease
- Hangars
- Landing and ramp fee
Whilst the smaller airports will not be able to access aforementioned lucrative long-haul markets, they still experience clusters of higher spending customers. For example, long-haul charter passengers – despite only making seasonal appearances – will cash out more on car parking and duty-free stores than regular domestic business passengers. Segmentation can go beyond destination into the purpose of journey, time of day, size of group or similar passenger characteristics, all of which can influence the time spent at the airport and the likelihood of commercial participation.
For instance, if the management would focus on doing some research and finding out consumers’ spending pattern in the airport, those options could perhaps be increased which would in turn elevate the spending and ultimately result in higher revenue.
By considering or adopting some of the following strategies, the financial earnings through the airport could expand significantly:
➢ Securing live expenditure data by passenger segment from each commercial operator
➢ Applying the understanding of average passenger by flight to feed into route development and operational strategy
➢ Optimizing the commercial offer to target the most lucrative passenger segments, working closely with retailers and other partners
➢ Using customer data from pre-booked car parking or setting up a loyalty programme to cross-sell other services and develop a direct communication channel between the airport and the passengers.
Business decisions are made with careful research and planning. If the strategy is planned and backed with strong research, the chances are maximum that the result will show and that too the result that actually matters.
