Airport Industry Research Articles

Sustainability reporting, materiality, and accountability assessment in the airport industry

AbstractAir travel is, nowadays, recognized as being one of the most popular modes of transport. Air transport is among the most significant contributors to the world gross domestic product and is accountable for a great environmental and social impact. Driven by the well‐established sustainability discourse and the vital role businesses can play in disseminating the sustainable development concept, this paper attempted to map airport industry's most material operational aspects and assess airport operators' accountability level on disclosing corporate information regarding airports' economic, environmental, and social performance. In this context, 33 reports and 903 material issues representing 193 international airports were reviewed and assessed, and a methodology for benchmarking the accountability level of best reporting airport operators was developed, showcasing materiality assessment as a useful management tool for strengthening airport operators' business strategy and enhancing their corporate performance. The paper indicated that (a) customer focus (i.e., health, safety and satisfaction), economic viability, and business continuity and preparedness are operational aspects of high materiality and (b) the disclosure level, especially concerning specific performance indicators, is still moderate. In conclusion, this study has shown that materiality assessment gains ground as a management tool among airports' management teams and the completeness of Sustainability reports is positively correlated with the “level” of adherence as described by the Global Reporting Initiative.

Corporate Governance Mechanisms and Performance in Air Management Companies: A fsQCA Approach

This article examines the role of governance mechanisms and economic variables in financial performance of air management companies in Italy. The research draws on corporate governance theory, stakeholder theory, and performance analysis in the airport industry. Fuzzy-set qualitative comparative analysis (QCA) was used to analyze a sample of Italian air management companies. Data were extracted from AIDA database, public reports, and corporate governance documents. Results confirm that different combinations of governance mechanisms, number of passengers, and number of employees can yield similar financial performance. This research also identifies the most significant items that can impact the financial performance, and the relationships among governance mechanisms, and financial performance of those companies.

Scale and (quasi) scope economies in airport technology. An application to UK airports

In this study we consider a sample of the largest UK airports in order to estimate, for the first time for this sector, a multiproduct cost function using a flexible technology that nests most of the specifications commonly employed in the empirical literature. Another novelty of this work is that we provide estimates of quasi- scope economies for the airport industry, defined as the cost advantage for a diversified firm of jointly providing a set of outputs/services with respect to the costs of their provision through a set of firms quasi-specialized in a single production. Our main results suggest the existence of quasi-scope economies that tend to decline with the size of the airport. This finding, coupled with the results of a set of cost complementarity tests, suggest that cost savings mainly arise from the joint provision of services for national and international passengers and, to a lesser extent, to the addition of cargo transport activities. In turn, pairs of outputs that include (a proxy of) commercial revenues seem to be characterized by anti-cost complementarities. Finally, global economies of scale seem to be exhausted at about five million passengers.

Pure versus hybrid competitive strategies in the airport industry

The advent of low-cost carriers has dramatically changed the competitive landscape of the airport industry and diminished the monopoly power that airports once enjoyed. Today, major airports compete directly with periphery airports, which are becoming the apparent choice of low-cost carriers. In fact, contracting with low-cost airlines has become a determinant factor in airport strategies, and airports now face a strategic decision to position themselves towards either low-cost or full-service (legacy) airline, or both. This paper examines the impact of these competitive strategies on airport financial performance. Building on the strategic purity premise, we hypothesise that being either a low-cost-oriented or legacy-oriented airport (pursuing a pure strategy) is associated with superior financial performance, in comparison with combining the two (a hybrid strategy). Moreover, the benefit of pure strategies increases with the intensity of competition among nearby airports. The paper supports these hypotheses with findings drawn from the U.S. airport industry.

The Future Airport – Experiments and Innovative Technologies

Zooming in on the micro-processes involved in developing and user testing new technologies for airports, this article works with the notion of experiments as a way to understand iterative practices and future (re)orientations. In doing so, I aim to think through experiences and experiments with applied anthropology and corporate ethnography within a dialogic framework of 1) current airport industry efforts of re-visioning stakeholder collaboration and airport re-branding and 2) the attempts of a Danish start-up company to create market disruption through innovative technology development. Although the experiments take place at different scales and are performed in different ways, I contend that they must be considered within a common frame in order to tease out their interconnectedness, particularly with regards to experimental confines and motivations. Based on some relatively raw case material, this article unfolds the different layers of experiments and the underlying assumptions that they make apparent.

Agentisation of airports and the pursuit of regional development in Poland

The paper adopts the economic-geographical ideas of strategic coupling, path-dependence and path-creation to analyse the role of local/regional institutions in shaping the impacts of airports on regional development. By means of focusing on the airport industry (i.e. an integral component of the wider air transport system), the paper aims to help bridge the gap between economic geography, where air transport has received little attention, and transport geography, which so far has made little use of the theoretical advancements made in economic geography. The paper discusses the example of Poland where, further to the fall of communism, regional development became a key ambition for local and regional governments and where the importance of passenger aviation is rapidly increasing. Drawing from 16 interviews with airlines, Polish airports and Polish local authorities, and from documentary analysis, the paper explores the ways in which local/regional governments charge their airports with the path-shaping tasks of fostering strategic couplings with airlines and catalysing new forms of growth. This includes financial and political support, joint marketing and imposing challenging targets. The paper also shows that the transformation of Polish airports from passive assets into active agents of regional development (a process that is referred to as the ‘agentisation of airports’) is inherently path-dependent. The peculiar structure of ownership in the Polish airport industry (a partial legacy of the previous system) and the tensions between various actors that it spawns entangle Polish airports in the multi-scalar patterns of politics, which determine the effectiveness of their path-shaping roles.

Innovative airport 4.0 condition-based maintenance system for baggage handling DCV systems

PurposeThe purpose of this paper is to present the findings of a recent study conducted with the objective of addressing the problem of failure of baggage carts in the high-speed baggage tunnel at Heathrow Terminal 5 by the development of an innovative condition-based maintenance (CBM) system designed to meet the requirements of 21st century airport systems and Industry 4.0.Design/methodology/approachAn empirical experimental approach to this action research was taken to install a vibration condition monitoring pilot test in the north tunnel at Terminal 5. Vibration data were collected over a 6-month period and analysed to find the threshold of good quality tyres and those with worn bearings that needed replacement. The results were compared with existing measures to demonstrate that vibration monitoring could be used as a predictive model for CBM.FindingsThe findings demonstrated a clear trend of increasing vibration velocity with age and use of the baggage cart wheels caused by wheel mass unbalanced inertia that was transmitted to the tracks as vibration. As a result, preventative maintenance is essential to ensure the smooth running of airport baggage. This research demonstrates that a healthy wheel produces vibration of under 60 mm/s whereas a damaged wheel measures up to 100 mm/s peak to peak velocity and this can be used in real-time condition monitoring to prevent baggage cart failure. It can also run as an autonomous system linked to AI and Industry 4.0 airport logic.Originality/valueWhilst vibration monitoring has been used to measure movement in static structures such as bridges and used in rotating machinery such as railway wheels (Tondon and Choudhury, 1999); this is unique as it is the first time it has been applied on a stationary structure (tracks) carrying high-speed rotating machinery (baggage cart wheels). This technique has been patented and proven in the pilot study and is in the process of being rolled out to all Heathrow terminal connection tunnels. It has implications for all other airports worldwide and, with new economic sensors, to other applications that rely on moving conveyor belts.

Keeping financialisation under the radar: Brussels Airport, Macquarie Bank and the Belgian politics of privatised infrastructure

This article explores the financialisation of Brussels Airport following the acquisition in 2004 of a majority stake by the Australian Macquarie Bank. Adopting a variegated capitalism perspective, we argue for a greater sensitivity to the mutually constitutive relation between durable institutional governance structures and financialised practices injected by global investors. The case of Brussels Airport presents an informative case to examine this relation, as Macquarie has had to continuously interact with the Belgian federal state in its different guises of contractor, co-owner and regulator to implement financialisation. While Macquarie indeed brought in risks that are structurally associated with profit making through financial means, the governance of these practices is shaped by the Belgian state’s distinctive and pragmatic approach to infrastructure privatisation: the state enables these practices, but also contests them in case of a direct clash with its interests. Meanwhile, the regulatory environment marks the contradictory meeting point of two varieties of capitalism: while the light-handed regulatory framework is inspired by the UK’s airport industry, the Belgian regulator does not possess similar abilities as a UK regulator, and resultantly, informal negotiations between the stakeholders are more influential in the airport’s governance. The case of Brussels Airport shows that the state plays an active role in constituting global capitalism, yet also shapes how financialisation works out on the ground. To understand the tensions that mark the governance of financialised infrastructure, it is therefore imperative to be sensitive to the local, historical and political trajectories that underwrite the variegated outcomes of financialisation.

Condition monitoring for airport baggage handling in the era of industry 4.0

PurposeThe purpose of this paper is to present the findings of a recent study conducted with the objective of addressing the problem of failure of baggage carts in the high-speed baggage tunnel at Heathrow Terminal 5 by the development of an innovative condition-based maintenance system designed to meet the requirements of twenty-first century airport systems and Industry 4.0.Design/methodology/approachAn empirical experimental approach to this action research was taken to install a vibration condition monitoring pilot test in the north tunnel at Terminal 5. Vibration data were collected over a 6-month period and analysed to find the threshold of good quality tires and those with worn bearings that needed replacement. The results were compared with existing measures to demonstrate that vibration monitoring could be used as a predictive model for condition-based maintenance.FindingsThe findings demonstrated a clear trend of increasing vibration velocity with age and use of the baggage cart wheels caused by wheel mass unbalanced inertia that was transmitted to the tracks as vibration. As a result, preventative maintenance is essential to ensure the smooth running of airport baggage. This research demonstrates that a healthy wheel produces vibration of under 60 mm/s whereas a damaged wheel measures up to 100 mm/s peak-to-peak velocity and this can be used in real-time condition monitoring to prevent baggage cart failure. It can also run as an autonomous system linked to AI and Industry 4.0 airport logic.Originality/valueWhilst vibration monitoring has been used to measure movement in static structures such as bridges and used in rotating machinery such as railway wheels (Tondon and Choudhury, 1999) this is unique as it is the first time it has been applied on a stationary structure (tracks) carrying high-speed rotating machinery (baggage cart wheels). This technique has been patented and proven in the pilot study and is in the process of being rolled out to all Heathrow terminal connection tunnels. It has implications for all other airports world-wide and, with new economic sensors, to other applications that rely on moving conveyor belts.

Brand perceptions of airports using social networks

The management of social media activities by airports is an emerging issue, and existing empirical literature on the measurement of brand perception in the airport industry is lacking. Usually, the measurement of brand perception is carried out by surveys, which are costly and rapidly become outdated. This study employs a newly developed algorithm to infer brand perceptions by mining the social connections of airports. Twitter accounts of 118 airports in the world are analysed by considering three emerging attributes in the airport industry: environment, disability and luxury. The paper shows how it is possible to identify the current positions of airports in the perception of the customers.

Research on Carbon Emission Management System Deployed in Civil Airport

Along with the increasingly prosperous airport industry, energy consumption and carbon emission at airport rocket, rendering the building of eco-friendly airports becoming the common trend and objective of global airport development. Digging into airport carbon emission management is of relevance for reducing airport carbon emission and improving the quality of airports and surrounding environment. The article analyzes the needs of airport carbon emission management given the current situation, proposes to achieve airport carbon emission management and monitoring by using information technology, develops a carbon management system software for civil aviation airports, and provides smart strategies for airport carbon emission management.

Part I. General Characteristics of the Airport Industry

Part I. General Characteristics of the Airport Industry

Determinants of Customer Satisfaction at the San Francisco International Airport

This study attempts to determine the overall satisfaction factors from airline passengers at the San Francisco International Airport (SFO), using the classification method of random forest. The analysis is based on the 2014 annual survey conducted by SFO that collects data on passenger demographics and satisfaction with airport facilities and services. Results of this study indicate that some service attributes are more important than others for passengers’ overall satisfaction at SFO. Study results are expected to provide practical insights to the airport industry. This study, in addition, introduces the machine learning method of random forest to tourism research.

A network DEA aeronautical and non-aeronautical production model: an application to South Korea airports

This study evaluates the overall efficiency of aeronautical and non-aeronautical production process. Moreover, it investigates the each stage efficiency using network data envelopment analysis and compares the results with tradition DEA to find out the causes of inefficiency and analyze its stage in detail. The framework for assessing the airports’ performance was devised to capture the trend of airport industry and provide the multiple perspectives to decision makers. It results in the fruition that the aeronautical efficiency does not always guarantee the non-aeronautical efficiency. High air traffic was highly related to the aeronautical efficiency but non-aeronautical side of business could be the driving factors for the whole efficiency. Moreover, looking at sub-processes efficiency, the source of inefficiency could be found. Considering the combined and sub-process efficiency, it can be inferred that inefficiency in certain sub-process could be detrimental for the whole process or could be offset by other efficiency.

Role of shopping quality, hedonic/utilitarian shopping experiences, trust, satisfaction and perceived barriers in triggering customer post-purchase intentions at airports

PurposeThis paper aims to extend the knowledge of travelers’ shopping behaviors at airport duty-free stores by investigating the role of multiple quality factors, value dimensions, trust and satisfaction. Moreover, the influence of possible barriers to airport shopping is examined.Design/methodology/approachQuantitative data collection including a survey was used. A structural equation modeling was used for data analysis.FindingsThe results showed that the proposed conceptual framework provided sufficiently explained travelers’ post-purchase intentions for airport duty-free shopping. Hedonic value and trust in airport duty-free shopping were of greatest importance in determining intentions. The quality of products and physical environment also showed relative importance among cognitive drivers. The findings from the metric invariance test indicated the significant moderating impact of travelers’ perceived barriers to airport shopping. The mediating impact of study variables was also identified.Practical implicationsFindings help airport practitioners improve their knowledge of travelers’ shopping behaviors at airport duty-free stores and help them to develop efficient methods to facilitate air travelers’ commercial activities at an airport.Originality/valueNon-aeronautical business is emerging as a means of revenue maximization in the airport industry, yet there is a lack of understanding about air travelers’ commercial activities at airports. This study filled this void through the development of sturdy framework for air travelers’ non-aeronautical commercial activities at an airport.

Design of industrial clusters and optimization of land use in an airport economic zone

To increase the land utility and efficiency in an airport economic zone (AEZ) and to manage the corresponding transport demands, we propose a method to determine the structure and scale of the basic airport industry cluster based on the airport scale and its relationships to industries. The correlation coefficients between industries are calculated by the strengths of the logistical and non-logistical relationships. We use the system layout planning (SLP) approach to determine the location pattern of basic industries with the objective of maximizing the correlation coefficient of a unit distance. Finally, the employees’ housing locations and service industries in the AEZ are determined using the Lowry model based on employees’ choice behaviors regarding housing and consumer services. This study is helpful for planning the development of industrial clusters and optimizing the land use patterns in an AEZ.

Cooperation between airports: A focus on the financial intertwinement of European airport operators

Recent airport cooperation initiatives and the lack of detailed research on the cooperation between airports suggest a research gap on this topic. The present study therefore investigates cooperative arrangements between European airports by focusing on their financial intertwinement. Social network analysis tools are used to examine the structural patterns of financial relationships in the airport sector, while a multiple regression quadratic assignment procedure (MRQAP) is applied to measure the impact of financial path dependency and spatial patterns on the occurrence of investment ties. The findings indicate a high degree of stability in investment relations in the airport industry over time. Furthermore, it is suggested that the formation of interorganisational linkages is facilitated by spatial proximity.

Innovation in Hospital Revenues: Developing Retail Sales Channels.

Hospitals are facing increasing cost pressures due to cutbacks by Medicare, Medicaid, and managed-care organizations. There are also rising concerns that public policy may exacerbate the problem. In lieu of these concerns, nascent innovative ways of generating increased revenues are beginning to appear. In particular, a few hospitals have adopted retail sales practices to generate significant nonmedical services revenues. The hospital retail sales opportunity has been compared with that of the airport industry where nearly 50% of revenues are generated by sales of retail products as opposed to aeronautical-related transactions. This initial investigation included a qualitative interview of a health care retail sales expert and a pilot survey of 100 hospital senior executives to gauge the current state of this phenomenon. The industry expert suggested that only 2% of US hospitals have pursued this initiative in a meaningful way. Of the 44 survey responses, only 9 institutions were engaged in e-commerce or retail sales activities. Questions remain as to why this opportunity remains unrealized, and additional research is proposed.

Book Review: Airport Competition: The European Experience

The competitive business environment in aviation industry has changed since European Integration. Not only airlines become more competitive after s­uch integration, but also other main infrastructure of aviation, airports. At the first stage of regional development, competition in airport industry seems to be impossible since all countries in a region still have clear jurisdictional boundaries. The other side of the coin is that airport competition becomes an important issue in a more integrated region, such as European Union (EU). This occurs because an airport owner from another country can buy other airports outside its state jurisdiction, under the same region. Articles in this book prove the claim of the existence of airport competition. Under the introductory part, the editors outlined three cases from EU: UK Civil Aviation Authority action to Heathrow Airport in 2008, Blocked Takeover of Bratislava Airport 2006 and European Commission Prohibition on Subsidies to Ryanair by Brussels South Charleroi Airport 2004. All of the cases are inevitable proofs that airport competition undoubtedly exists in Europe. DOI: https://doi.org/10.22304/pjih.v4n1.a11

An Analysis of Service Rendered by the Malaysian Airport

The airport industry is currently changing rapidly. In the competitive market, airport service providers have to create themselves differently by meeting the needs of travelers better than the competitors. This is because travelers are an airport’s main customers and their first impression of airport facilities and services may influence their feelings towards the airport. Therefore, this study aims to investigate travelers’ perceived service quality of the Low-Cost Carrier Terminal (LCCT) as the overall quality would affect the decision of future travelers using the LCCT. A survey was carried out at the main exits of the LCCT after determining a list of factors affecting the airport service quality. Based on the analysis of literature, the authors proposed a system of criteria designed for measuring the quality of airport services according to five service quality dimensions. To test the relationships between the variables, the Statistical Package for Social Sciences (SPSS) is used to analyze survey data collected from 136 travelers at LCCT. The results show that travelers have various views on the service quality provided by the LCCT