PTE interview: How passenger migration will affect smaller airports

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Katherine Goudreau, managing director of corporate real estate and facilities at American Airlines, discusses current thinking around passenger migration and what it means for smaller airports, ahead of her panel appearance at Passenger Terminal Conference 2023.

What’s your panel about?
Passenger migration has caused, in some cases, explosive growth at smaller and mid-size airports as passengers abandon large cities in hopes of greater quality of life. With the panel, I will discuss the issues these small to medium airports face in quickly adjusting to rapid air service growth, parking demands that outstrip capacity and facilities not designed to accommodate rapid passenger growth. We’ll be looking into questions like: Can airports quickly provide amenities expected in today’s travel environment without breaking the bank? What about concessions? How do we prepare to be resilient for what is to come?

How should small airports prepare for increased passenger traffic?
All airports (small, medium or large) have an airport layout plan (ALP). This plan should be updated regularly and discussed with the airlines for input. For the short term, if growth occurs faster than projected, it is important for airports to work with their airline, concession and other business partners to implement creative ways to address the increases. These can be strategies like ensuring there are gate protocols in place, adequate amenities are available, restroom maintenance is done routinely so those facilities stay functional, etc. The airports also need to work with their Transportation Security Administration (TSA)/Customs and Border Protection (CBP) teams to ensure they can adequately staff and run security checkpoints. Also, assessing whether the increased passenger traffic is the result of sustained or temporary demand should be included in the development of the capital and operations and maintenance (O&M) plans. For example, during the Covid-19 pandemic, many US domestic airports experienced tremendous short-term growth, but have now stabilized back to pre-pandemic levels.

What facilities should airports prioritize when expanding passenger facilities?
Restrooms are very important when expanding facilities. Ensure they are sized correctly and design them for partial closures for repairs/maintenance in the future. Electrical and digital infrastructure should also be a key priority to support the increased use of electronic devices. Also, adequate concessions, baggage handling systems (BHS) and security screening checkpoints, if there has been a significant shift from connecting to origin and destination (O&D) passengers, along with potential remote curbs away from the control areas (e.g., LAX and PHX) and improved intermodal connections. Finally, potential vertical take-off and landing (VTOL) and air taxi facilities should be factored into future infrastructure discussions.

How can small airports futureproof this growth?
Nothing can really be futureproofed as none of us knows what the future will hold. Small airports should utilize terminal area forecast (TAF) information to project future growth needs and propose designs in a timeframe to support the projected growth. Drive down unit costs to ensure sufficient financial capacity to fund demand-driven projects. Highly leveraged airports lose the ability to address growth needs in a timely manner.

What role do concessions play in these plans?
Concessions are an important part of any airport. Besides providing the amenities for travelers, oftentimes, the concessions revenues help to offset airport costs. However, it is critical that concessions be thoughtfully located within terminal spaces and consider the demographics of the airline customers in order to maximize their viability. Airports need to work with their airline partners and master concessionaires to understand the appropriate mix of food and beverage to retail and then to understand what each needs to be successful. For example, retail concessions need store frontage in higher-traffic areas in order to attract passengers. Storage can be in a less busy area of the building. Research by Bain & Company in January 2022 noted that younger and less affluent travelers will comprise more than 50% of passengers by 2025. Another report in February 2022 (Virtuoso) found a 76% increase in ultra-luxe travel trends. These articles/research enforce that retailers and restaurants must monitor trends and adapt to changes in customer expectations.

To hear more valuable industry insights from top aviation executives, be sure to book a conference pass to Passenger Terminal Conference, which will be held on March 14, 15 and 16, in Amsterdam, Netherlands. 

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