Report Reveals Financial Concerns Troubling Half of U.S. Airport Leaders Amidst Surging Air Travel Growth

A new report from AeroCloud, the intelligent airport management platform that improves collaboration and operational efficiencies, reveals that despite a  surge in air travel, 48% of U.S. airport leaders express apprehension about their financial stability. Post-pandemic recovery exhibits regional disparities, as 37% of airport leaders report lingering debt levels, reflecting an uneven economic rebound.  

Findings from the Getting on the Runway to Growth report, a comprehensive survey of 100 U.S. airport leaders conducted as part of a global study involving 200 airport leaders, show that 51% of U.S. airports haven’t seen their revenues recover to levels seen pre-pandemic. Recognizing the importance of growth, U.S. airport leaders plan to prioritize two key initiatives including increasing growth margins (93%) and optimizing and increasing capacity for take-off and landing slots (95%) to capitalize on the current surge in air travel.   

However, U.S. airports face several hurdles in achieving this growth: 

·       Staffing issues: As the boom in air travel continues, 45% of U.S airports are currently grappling with staffing shortages to cope with the increasing demands of flights and passengers. A concerning 61% of airport leaders identify this staffing challenge as a significant risk to their operations in the upcoming 12 months. 

·       Limited capacity: Over one-quarter (26%) of U.S. airports are hampered by insufficient terminal space, preventing the addition of more airlines and posing a threat to their expansion and growth. 

·       Sluggish passenger spending: While U.S. airport leaders prioritized consumer spending as their number one revenue driver, 67% anticipate negative impact on passenger spending with concession partners and essential ancillary revenues due to the ongoing cost-of-living crisis. 

·       Disruption and flight cancellations: A significant concern looms as 71% of airport leaders express fear over the repercussions of disruptive events beyond their control, including delayed flights, air traffic faults or extreme weather. Furthermore, 75% emphasize how flight cancellations can adversely affect their reputation with passengers.   

George Richardson, CEO and co-founder, AeroCloud, said: “The U.S. aviation outlook is robust, yet numerous airports are struggling with the challenge of meeting escalating  passenger demand. While 89% of U.S. airports underscore the importance of securing federal funding, such as the Biden Infrastructure Bill, as a key commercial priority for long-term growth, they still have immediate concerns surround staff shortages and terminal capacity limitations. Presently, airport leaders are prioritizing exploring strategies to optimize their operations and maximize existing capacity, aiming to accommodate more airlines and passengers and thereby enhance their revenue.” 

Getting on the runway to growth  

Airport leaders identified four areas where they see opportunities to boost their growth: 

·       Attract new airlines: Given 50% of U.S. airports state they have yet to fully restore all routes served before the pandemic, it’s not surprising almost all hope to increase flight numbers by attracting new airlines (93%) and optimizing take-off and landing slots to increase capacity (95%). To facilitate these goals, airports are planning to enhance gate management to accommodate new entrants, provide airlines with access to airport operational data for improved visibility, and reduce upfront investment and ongoing costs through the implementation of common-use facilities, such as shared check-in desks. 

·       Boost passenger experiences: U.S. airports acknowledge the significance of securing high rankings for passenger experiences – such as by Skytraxx – to increase the number of passengers (92%). Their commitment to improving the passenger journey includes efforts to reduce security wait times, ensure a seamless experience throughout the airport, and introduce additional common-use self-service tools for check-in and bag drop.  

·       Increase passenger spending: Aiming to enhance revenue, 90% of U.S. airports aspire to increase spending in concessions and Duty Free. Their strategy involves transforming the airport into a shopping destination for more pre-planned purchases, offering a diverse range of retail outlets, and reducing time spent in check-in and security processes to allow passengers more time in concessionary areas. 

·       Transform airport operations: The upgrade of legacy technologies and systems stands out as a top priority for 92% of U.S. airport leaders, paving the way for increased operational efficiency and better management of disruptive events. Notably, 60% recognize the avoidance of investments in new technologies, including SaaS platforms, automation and AI, as a significant risk to optimizing airport operations over the next 12 months. 

George Richardson continued, “Numerous airports in the U.S., mirroring the global trend, still depend on legacy systems and technologies. This diminishes their efficiency in managing existing assets and their ability to onboard new airlines, a crucial factor in capitalizing on the increase in passenger demand for air travel.  

“In fact, 43% of U.S. airport leaders revealed they still utilize Excel and Word documents for storing and managing operational information, such as for gate management and the RONs (Remain Overnights). Relying on manual processes and legacy systems poses massive hurdles to their revenue growth. Airports must look towards the future to secure the next stage of their growth by embracing the advantages of artificial intelligence, computer vision and the cloud.” 

For recommendations on where airport leaders should focus investments to drive the biggest impact on their operations, revenue and growth, download AeroCloud’s Getting on the Runway to Growth report here: https://aerocloudsystems.com/getting-on-the-runway-to-growth-report/

Methodology 

AeroCloud commissioned Censuswide to survey 200 senior leaders at airports in the U.S., United Kingdom and Italy between 27.09.23 - 02.10.23. These included COOs, CTOs, CIOs, CDOs, CEOs, Chief Purchasing Officers, Chief Finance Officers, Directors of Operations and Heads of Commercial.