ABSTRACT
Just as airlines need to change their value propositions with agility and flexibility to adapt to the changing marketplace dynamics, airports also need to rethink their conventional value propositions. As with airlines, airports also need to find new ways to deal with the two sets of opposing forces. For example, airports are looking at new ways to expand their capacity while airlines are looking at ways not only to expand their operations at airports but to expand at lower airport charges and better customer experience. Moreover, just as airlines work with a large number of internal and external complexities, airports face an even more multifaceted challenge. Airports have to deal with even more constraints to expand capacities. Moreover, value propositions of airports are more complex, as they relate not only to their customers (airlines with different business models, a broad spectrum of retailers, and so forth) but also to the ultimate customers (passengers) as well as their neighborhoods, for which they are both a blessing providing convenient long-distance mobility and a curse, creating environmental problems. This chapter discusses four major challenges facing airports, followed by a discussion of some potential strategies for the transformation of their business models – a challenge in itself, given the symbiotic relationship between airlines and airports. The final section presents two scenarios of future developments that could bring about revolutionary changes in the business models of airports, the development of new strategically located technology-enabled secondary hub-and-spoke systems, and the emergence of platform-enabled intermodal hubs that address efficiency aspects for airports and experiential-based end-to-end journeys for travelers.
