Compared to twenty years ago, the global aviation industry has grown by over 35% in terms of passenger numbers. Industry experts are clear that this trend is set to continue, with the expected number of global passengers to reach 8.2 billion people per annum by 2036, an increase of almost 50%. This rise in passenger numbers will drive an increase in aircraft and routes. Yet in spite of a greater market size, airlines and airports will have to work harder than before to ensure the routes which are offered to global travellers fit their needs.
Route planning is a vast sector of the aviation industry, as decisions made by airlines when selecting destinations can make or cost them significant amounts of money. For airports, ensuring that they have an airport which offers a great passenger experience, coupled with excellent operational efficiency, and a fantastic destination for travellers to visit, is critical to attract airlines and establish long-term operational partnerships.
Abu Dhabi is already an incredible destination for travellers, with its wealth of cultural, historical, culinary and entertainment attractions welcoming countless visitors every year. The Sheikh Zayed Grand Mosque, Louvre Abu Dhabi, Qasr Al Hosan, Yas Island parks and the capital’s numerous resorts and hotels are just a few of its major draws. However, the attractiveness of Abu Dhabi or any location as a destination is merely one factor in the much larger airline development equation.
When I started my career in the airports industry, airline development used to centre around offering financial incentives to attract airlines to open new routes, this is no longer the case. Should a route not be able to attract sufficient passenger numbers, airlines are now exposed to much more significant financial risks. Today, airline development has become an area for careful, consistent business planning.
It is in this context that airports need to invest and innovate more in big data, a significant aspect of our ongoing strategy at Abu Dhabi Airports. There are several advantages to investments in big data for airports: an improved efficiency at every stage of the customer journey; an ability to plan for heightened traffic on an hourly basis; and a greater operational efficiency across the airport, from car parking and baggage handling to scheduling aircraft departures.
However, airports are also becoming key sources of anonymised data about passenger behaviour: where people are flying from, to, how long they are spending in the air, how much they are spending on tickets, whether they travel alone or as a group, how much they spend at the duty free – the list is endless. Using statistical analysis, airport executives can easily begin to establish a business case for prospective new routes for airlines.
For example, it would be possible to determine that 400,000 travellers fly between Airport A to Airport B, typically spending around AED 2,200 per trip. We could further estimate that these travellers are on average between thirty to fifty years old, that they spend around five days at Airport B – and so-on. An airline executive would be able to make use of these figures, calculating that the market size would be around AED 880 million, or around US$239 million, and establish route frequency, aircraft capacity and so-on.
By increasing their understanding of passengers’ behaviour, airports can further understand the connections which passengers are making to get to their destination of choice. For instance, passengers seeking to arrive at Airport A from Airport B may have to take a two-hour connecting flight through Airport C. Through using statistical analysis, Airport A could make a strong business case to an airline that encourages it to establish a direct route. Using anonymised data, airports can make increasingly sophisticated and substantiated business pitches to airlines for their business.
Our experience at Abu Dhabi Airports indicates that big data, beyond being able to enhance airport services, enables airport executives to present a strong business case to airlines. In spite of this, the industry is still relatively slow adopting new technologies: under a third of airport executives have begun to use advanced analytics. Yet in a context of continually growing passenger numbers, larger numbers of aircraft, and longer haul routes, airports, particularly in the Gulf region, need to make sure their business strategies are sufficiently data-driven to satisfy the needs of the global aviation industry.