APA Issue 1, 2022
SMART SOLUTION Getting smart about rate-making and the management of existing infrastructure and resources can help airports recover from the global pandemic, writes Veovo’s marketing manager, Siobhan Boyle.
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s the aviation market moves into recovery, many airport operators are re-evaluating the value of long-term exclusive gate and terminal lease models.
Common use terminals, where airports manage gates and carriers share fixed resources, are proving a better return on infrastructure investment, as well as a more efficient way to manage operations – essential for an industry still suffering from a pandemic hangover. With low-cost carriers willing to try new routes, common use also offers growth opportunities. Shared resources can handle new carriers much more flexibly and rapidly than dedicated resources. But sharing terminals or gates can raise new challenges for commercial, operational and financial teams – like how to set rates, best allocate resources to flights, and accurately bill for their use. It’s evident there’s no cookie-cutter approach to common use. Different airports require different rate structures and operating models.
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Regardless, leading operators have a growing desire to capitalise on the opportunity of common use and reset their rate-making and airport gate management processes, leaning on automation, AI and smarter decision making to deliver the best outcomes for themselves and their airline customers. Working with airports around the world, we’ve landed on these three key recommendations to help maximise resource and infrastructure usage: 1. CREATE BEST-FIT RATES FOR INFRASTRUCTURE, GROWTH AND CUSTOMER NEEDS A new market requires new rates. Airports are pushing for fair, flexible, yet creative tariffs that support the needs of all carriers (new and old) and help maximise the use of slots. In North America, priority access is gaining ground as an efficient rate-making methodology for airports with high volume carriers. Although gates are now managed by the airport, airlines who are prepared to commit to a minimum traffic threshold can retain the benefits of location certainty.
