At a time when the airport industry has never been so attractive, Arthur D. Little explores how airports must deal with fundamental disruptions in their business models. This calls for strong CxO focus and bolder and faster moves to guarantee value creation for all stakeholders in the ecosystem.

Three strategic battlefields in the airport industry and more competitive intensity than ever

Despite posting healthy profits and return on investment, as well as experiencing high traffic growth, the airport industry is at a key milestone in its history. Indeed, future development means committing to significant CAPEX, while many fundamental aspects of airports’ business models are being questioned. Airport managers and investors have to fight three battles at the same time.

• Competition and airline pressure on the core business are increasing, and this is crushing aeronautical revenues
• Digital is disrupting non-aeronautical revenues
• Fierce competition among bidders and more sophisticated PPP schemes are eroding profitability of international expansion

Airports’ future profits are thus under strong pressure. Airport business models must evolve and adapt to this new, lasting reality.

Figure 1: 3 strategic battlefields for airports

Figure 2: Benchmark of Airport OPEX