Financial Concerns Plague 50% of U.S. Airport Leaders

DALLAS — According to a recent report from AeroCloud, a platform that improves airport management, 48% of U.S. airport leaders are concerned about their financial stability despite the surge in air travel.

The report, titled "Getting on the Runway to Growth," surveyed 100 U.S. airport leaders as part of a global study involving 200 airport top brass. It found that 51% of U.S. airports have not yet seen their revenues recover to pre-pandemic levels.

To address this, the surveyed leaders plan to prioritize increasing growth margins (93%) and optimizing capacity for take-off and landing slots (95%) to take advantage of the current increase in air travel. However, there are some hurdles to this approach.

Challenges to Achieving Post-pandemic Growth

Firstly, 45% of U.S. airports are currently dealing with staffing shortages due to the increasing demands of flights and passengers. This staffing challenge is seen as a significant risk to airport operations in the next 12 months by 61% of airport leaders.

Secondly, insufficient terminal space, which hampers an airport's ability to add more airlines and expand, limits over one-quarter (26%) of U.S. airports.

Thirdly, U.S. airport leaders are concerned about the negative impact of the ongoing cost-of-living crisis on passenger spending, with 67% anticipating a decrease in spending with concession partners and essential ancillary revenues.

Lastly, 71% of airport leaders express fear over the repercussions of disruptive events beyond their control, such as delayed flights, air traffic faults, or extreme weather. Flight cancellations are also seen as a potential threat to their reputation with passengers by 75% of airport leaders.

George Richardson, CEO and co-founder of AeroCloud, notes that 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."

Richardson adds, “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.”

Unlocking Growth Potential for U.S. Airports

To address the aforementioned challenges and boost growth, the report lists what U.S. airport leaders have identified as four key areas of opportunity for them.

Firstly, U.S. airport leaders aim to attract new airlines by increasing flight numbers and optimizing take-off and landing slots. This involves enhancing gate management, providing airlines with access to operational data, and implementing common-use facilities.

Secondly, U.S. airport management prioritizes improving passenger experiences to increase the number of passengers. Efforts include reducing security wait times, ensuring a seamless journey throughout the airport, and introducing self-service tools for check-in and bag drop.

Thirdly, U.S. airports aspire to increase passenger spending on concessions and duty-free by transforming the airport into a shopping destination and offering a diverse range of retail outlets.

Lastly, U.S. airport leaders recognize the need to upgrade legacy technologies and systems to improve operational efficiency and better manage disruptive events. However, 60% of airport leaders see the avoidance of investments in new technologies as a significant risk to optimizing airport operations in the next 12 months.

Bottom Line

The report highlights the importance of U.S. airports securing federal funding, such as the Biden Infrastructure Bill, as a key commercial priority for long-term growth. However, immediate concerns remain regarding staff shortages and terminal capacity limitations. U.S. airport management is currently exploring strategies to optimize operations and maximize existing capacity to accommodate more airlines and passengers and enhance revenue.

As the U.S. commercial aviation industry prepares for the holiday travel season with a robust outlook, many airports are facing challenges to meet the increasing demand for air travel. By addressing staffing issues, limited capacity, sluggish passenger spending, and disruptions, U.S. airports can work towards achieving growth and begin to see pre-pandemic-level revenues.

Prioritizing initiatives such as attracting new airlines, improving passenger experiences, increasing passenger spending, and transforming airport operations will be crucial for their long-term success. 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.

Featured image: LAX from above. Photo: Luca Flores/Airways

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