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Assessing the benefits of ‘end-to-end’ thinking at airports

Home / News & Insights / Assessing the benefits of ‘end-to-end’ thinking at airports

Although airports and airlines are struggling, the need for mobility will outpace current problems in the long run. Aviation will survive, but when we think about its revival, what will be the business models of the future?

Author

Ad Rutten

Airport Industry Expert

After COVID-19, we don’t want to return to the same old capacity issues. We must consider ways to take the pressure off the baggage systems of the future, and this will only be possible by rethinking the entire process.

New entrants

I believe that ‘end-to-end thinking’ has a significant role to play in the future of the aviation industry. I refer here to a bag process that starts at the first point of departure (typically a person’s home) and ends at the final destination (for example, a hotel).

Before COVID-19, my estimation was that – due to capacity issues – there might be a radical change in baggage logistics, that new entrants could enter the market and create disruption.

This is comparable to companies such as Uber – that provides taxi services without owning cars – or Airbnb – which offers overnight stays without owning accommodation. Why then couldn’t a third-party company offer a bag service without owning an aircraft?

A product, not a commodity

In the airports market, the conditions already exist for disruptors to enter. There are inefficiencies across the baggage process, there’s no pricing transparency, and passengers don’t have much of a choice. End-to-end thinking will unlock opportunities for all parties.

Firstly, if passengers do not need to travel with their hold baggage, their experience will be enhanced. And if the end-to-end process can be packaged as a product rather than a commodity, companies can continually add better services and put the passenger in control.

Airports and airlines will benefit, because less bags will be lost and capacity can be used more effectively. Bags won’t necessarily have to travel with their owners, and logistically, an aircraft will still be required to transport bags across the world.

Taking the lead

Airlines are in the best position to take the lead on end-to-end thinking, because they have the initial contact with the passenger and can offer value propositions based on individual needs. However, there first needs to be a better exchange of data.

The aviation industry needs to adopt the approach of the parcel market, in which companies have a comprehensive view of goods in transit, and an integrated approach to data.

End-to-end thinking can be supported by another approach, which I call ‘baggage as a service’. Over the past few years, I’ve been conducting interviews and workshops with airports, to learn about their future requirements for the baggage process.

Based on this information, a vision for 2040 has been created based around four pillars: the passenger experience; hold baggage; carry-on items; and changes to tax-free shopping.

A better all-round experience

In 2040, the passenger will be in full control and able to select the best experience (based on personalised systems and real-time information). Hold baggage can also travel on its own – separate to the passenger – creating a different landscape for baggage handling systems.

Carry-on baggage will only comprise essential items. This can easily be achieved if a baggage system is reliable, and a passenger doesn’t feel compelled to take all their belongings on board. Finally, tax-free shopping in airports will be replaced by online shopping, and new revenue streams will open up.

New strategies for the industry should be built on these four pillars, and we’ve validated our findings with industry partners to set the wheels in motion. Some stakeholders have already begun to exchange data and put this approach higher on their agendas.

In another survey I conducted, 50% of airports anticipated capacity problems over the next five years. The lessons are that the industry must think more innovatively, improve its ability to share data, and factor in the involvement of third-party companies.

Time for change

Baggage as a service and end-to-end thinking are two sides of the same coin. One of the aims of baggage as a service is to develop new systems with end-to-end opportunities in mind, and provide a product to passengers.

Although there has been a recent market collapse, the positive news is that we have more time to play with new technologies, and build up a learning curve as we work towards an end-to-end process. As an industry, it’s vital that we understand what opportunities are available, and look forward to unlocking them together.

 

Check-in Podcast

I have discussed this topic in Vanderlande’s Check-in podcast as well. Listen to the episode here:

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