Maximising and Monetising the Digital Opportunities at Airport Using IT to Increase Added Value in an Airport

Transcription

1 Maximising and Monetising the Digital Opportunities at Airport Using IT to Increase Added Value in an Airport December 5, 2014 Yukiko KOMETANI KIA Information & Telecommunications Network Co., Ltd (A member of the New Kansai International Airport Company Group) ACI Asia-Pacific Young Executive of the Year Award 2015

2 Contents Summary... 3 Introduction... 3 IT at Airports... 4 What sort of automation is desirable for airports?... 6 i) Check-ins... 7 ii) Bag drops... 8 iii) Boarding... 9 Do comfortable airports encourage shopping? Conclusions Reference Materials... 15

3 Summary As transit points for passengers, airports need to enhance added value for both airlines and passengers or, more specifically, improve satisfaction levels among business operators and passengers. Where business operator satisfaction is concerned, airport operators can improve the IT aspects of their facilities and infrastructure as a means of enhancing business operators' operational efficiency and supporting their cost-cutting efforts. Airlines will also likely welcome IT improvements aimed at upgrading the self-service aspects of passenger procedures. Already, airports around the world are gradually starting to introduce self-service mechanisms such as automated check-in kiosks, bag drops, and self boarding gates. In terms of passenger satisfaction, airport operators can raise their levels, in IT-related areas, by making their infrastructure more convenient and their information access more comfortable. Measures to improve convenience include providing free Wi-Fi and other means of communication. Measures to improve comfort include providing information starting with digital signage and electronic terminals. On the commercial side, adopting an "information push-based" approach that communicates to both large numbers of passengers and individuals can be expected to result in higher sales. One point of concern for airport operators from the perspective of raising satisfaction levels is that there are cases where mutually contradictory results occur, such as when satisfaction increases for business operators but falls for passengers. Another problem is that a success at one airport may not necessarily apply to another. Simply introducing IT alone will not resolve the problems of airport operators or bring about higher satisfaction levels. For this reason, airport operators must determine what to target after identifying for themselves trends among passengers and airlines using the airport, and understanding the airport's characteristics. When making improvements on the IT side, airport operators determine policies based on the key advantages that will generate profits for the airport while considering the ideal shape of the airport in the future. Introduction For the majority of users, an airport is not the destination but a transit point en route to the destination. Unlike a railway station, the scope of operations is not regulated by tracks, but changes variously according to the start and end points of the air routes. In functional terms, however, an airport is just like a railway station. As a result of progress in aviation-related technologies and the emergence of LCCs, airports face a rapidly changing environment as, among other things, flying has become part of everyday life rather than something unusual. Now that the Internet is established and smartphones and other terminals are in common use, it has become easy to compare and select airlines and airports using portable terminals that fit in the hand. As IT has advanced, it has become important for airport management to find ways to offer more added value in the airport's function as a transit point. Two types of added value can be envisaged: added value for airlines, etc.; and added value for passengers visiting the airport. These can be described as

4 satisfaction levels for business operators and passengers. Airport operators must raise satisfaction levels among business operators because it is the airlines that must decide which routes to operate from countless airports around the world. Each airport must provide added value to persuade airlines that it is suitable for their services and ensure they select it over its many rivals around the world. Assuming a certain number of passengers can be expected, the more operational efficiency and cost reduction an airline achieves, the more it is considered desirable. For example, satisfaction levels among operators will likely increase if an airport operator helps the airlines increase efficiency and reduce costs through improvements in its facilities and infrastructure. Enhancing satisfaction levels among passengers is also very worthwhile. The immediate target is passengers who are currently visiting the airport, and if they get a more favorable impression of the comfortable environment the airport offers, the impact is conveyed throughout the world faster than aircraft can fly through media such as SNS. In recent years, the number of opportunities to obtain more detailed information from personal blogs has increased. For this reason, impressions from collections of individual passenger assessments must be noted, not just private sector evaluation standards from companies like SKYTRAX. It is also highly likely that locations offering greater comfort will heighten the tendency to consume. Proactively stimulating potential consumption possibilities is really worthwhile because consumer spending by passengers at the airport contributes (or adds) to the airport's revenues. IT is very helpful in enhancing satisfaction at various levels. IT introduced at airports is no exception to the rule that IT in general is progressing daily. Aircraft are blocks of electronics, so it is natural that they are controlled and operated by electronic equipment, while everything that derives therefrom is also electronic in nature. The electronic connection points at airports and their interrelated world are expanding, from the portable terminals that fit in the hands of passengers to the connections with the terminals that airlines control. Combining approaches that use new IT with those that already exist should further enhance the value of airports and increase their profits. This report examines the IT currently linking airports, airlines and passengers together with a view to raising the satisfaction levels that constitute airport added value, and analyzes what improvements should be made in the future from the perspective of airlines and passengers. IT at Airports IT and airports are very closely interrelated. For example, the ACI's "Airport Automation and E-business" report talks about IT used in airports today and how it should evolve going forward, including security systems to ensure passenger and airport safety, control systems for flights, and flight information systems to enable passengers to confirm their flights. Technology and applications cover a wide range of topics, but in line with the title, they can be broadly categorized into "automation" and "e-business uses". More specifically, two types of IT are essential for profits: IT aimed at reducing the costs involved in operating the airport; and IT to expand its profits. ACI advocates that airports should aim to create common-use infrastructural environments and says it

5 is desirable that the airport operators should make the necessary improvements to allow sharing of information and foundations as well as common policies through the construction of cloud networks and common bases. One reason for advocating that airport operators make the improvements is to exploit the limited capabilities of airports in general, including infrastructure, to the maximum extent possible. To this end, automated facilities investment and deployment in line with the airport operator's intentions and controlled information for e-business are essential. Airports and airlines are mutually interdependent, but airport operators should always take the initiative in respect of facilities that are fundamental to the airports. Since improvements incur investment and maintenance costs, however, it is difficult for airports to achieve the ideal straight away through their own efforts. According to the "Airport IT Trends Survey" conducted by ACI, Airline Business, and SITA, IT investment's share of airport revenues increased from 4.19% in 2010 to 5.43% in However, as many as 90% of the survey targets among airport operators responded that they want to reduce their investments or maintain them at current levels. Thus, while airport operators recognize the importance of IT and have strong investment intentions, they are simultaneously very interested in reducing costs. Progress in IT is rapid, but so are obsolescence and technological changes, and this tendency will probably strengthen the more IT advances. However, it is also true that IT investment costs can be reduced through effort. For example, some airports are making enhancements through partial improvements, or through cooperation with national flag carriers with which they have strong codependent relationships. International airports serve as national gateways and have a strong relationship with the state and reflect its thinking. Implementation of national IT policies in areas such as investment therefore tends to go smoothly, especially if state backing is involved. As part of its "Smart Japan ICT" strategy, the Japanese government announced in June 2014 that it would aim to realize the most advanced ICT environment in the world by the time the Olympics are held in Tokyo in Under the impact of easier conditions on granting visas to passengers from Asia among other things, the number of inbound passengers is forecasted to continue rising constantly through the Olympic year of 2020, six years from now. The "Smart Japan ICT" strategy is designed to provide foreign visitors with IT support. For example, there are proposals that Japan adopt smart immigration procedures and domestic transfers as part of a national effort to improve its hospitality levels. Japan itself already issues the most advanced digital or e-passports which contain biometric information in a built-in IC chip. It is also moving ahead with initiatives to reduce the time needed to screen Japanese nationals passing through passport control using "autogates" to automatically read their passport data, while moving ahead with linked initiatives to facilitate the screening of foreign passengers. Given that a large increase in inbound passengers is expected, one of the key issues facing Japan is how to welcome passengers from all over the world smoothly. Airport operators are increasingly required to enhance airport capacity by further exploiting or expanding their existing airport facilities to accommodate more inbound passengers. Much of Japan is mountainous, which poses problems for lengthening runways and building new terminals. Airports like Kansai International Airport (KIX) also require extra effort from maintenance personnel because they are built offshore on man-made islands. From the perspective of accepting inbound passengers, therefore, the

6 first option is to make effective use of existing facilities which, in turn, means adding support from IT and automation as advocated by ACI. IATA's response to ACI's approach to automation is known as the "Fast Travel Program." The program's aim is to use automation or mechanization to shorten procedures by dividing departure flow from check-in to boarding for outgoing passengers, and arrival flow for incoming passengers into 14 segments. Airports that are able to fulfill these objectives will offer airlines more added value. What sort of automation is desirable for airports? Operating costs, especially labor costs, account for many of the expenditures that airlines can cut at airports. Since manpower is still involved in many operational areas, including check-ins, document checks, and pre-boarding checks, anything that reduces the related labor cost is significant for airlines because it helps raise their profits. This is clear from the results of "The Airline IT Trends Survey" conducted by SITA, which reveal that the use of mobile terminals to provide customer services such as online check-ins is the top initiative. Although it is arguable that moving ahead with automation to help in cutting costs leads to higher satisfaction levels among business operators, it does not necessarily follow that it is desirable for airport operators to introduce all the "Fast Travel" mechanisms that IATA desires. This is because it consistently adopts the perspective of the airlines, even though it conforms with the ultimate objective -- to enable passengers to transfer to their destinations easily by airplane, since "Fast Travel" incorporates the concepts included in "Simplifying Passenger Travel," which was put together by a working group of ICAO and ACI. Thus, when we check the 14 segments advocated for "Fast Travel," we find the only areas where the airport operator can take steps easily are limited to check-ins, baggage processing and boarding (Figure 1). In other words, even if airport operators attempt to take initiatives to enhance satisfaction levels among businesses, they will not achieve results because the areas where their efforts overlap those of the airlines are very narrowly defined. Source: Fast Travel Program Strategy V6, IATA 2013 Figure 1. Overlap between the corresponding tasks of airports and airlines The "Airport IT Trends Survey" (ACI, Airline Business & SITA, 2013) also implies that airport

7 operators adopt a different stance even towards the three overlapping items, check-ins, baggage processing and boarding. Airport operators around the world are only proactively installing, or thinking of installing just the first two of the related facilities -- automated check-in kiosks, baggage drop facilities and self boarding gates. Why is this? As Figure 2 shows, one possibility is that they may be in line with the airlines' cost reduction policies or estimated cost savings. Let us examine the IT facilities used in each and the impact of installing them. PROJECTS Check-in Bags Ready to Go Document Scanning Flight Re-Booking Self-Boarding Bags recovery SAVINGS $2,436 Millions $666 Million $228 Million $455 Million $213 Million $574 Million Source: Fast Travel Program Strategy V6, IATA 2013 Figure 2. Cost reductions envisaged by IATA i) Check-ins As their name implies, check-in terminals are kiosk terminals where passengers complete check-in procedures. Counter operations are mechanized so that passengers can carry out the procedures in their own time in accordance with the guidance provided by LCDs. Many airports around the world are already introducing kiosk terminals for self check-ins. Kansai International Airport has already finished installing common-use facilities for its check-in system. As an airport operator, therefore, its objective is to integrate this into the common-use mechanisms advocated by the ACI. Replacing the terminals installed by individual airlines with common-use terminals will enable passengers to complete their check-in procedures at any terminal. This will eliminate the need for passengers to queue up at counters, and enhance convenience by removing restrictions on their choice of transaction terminal. It will also enable passengers to use the time they formerly spent queuing, to acquire different experiences. At the same time, airline operating costs will fall in proportion to the reduction in counter check-in operations. (However, it is unlikely that the need for occasional human interaction will be completely eliminated.) Some of the latest terminals incorporate document checking functions for passports and visas, as well as check-in functions. Another major advantage is that airlines should be able to assign existing counter staff to providing even greater hospitality to the carriage trade. Airport operators should also be able to make more efficient use of limited airport space by concentrating terminals together or deploying them more effectively. And since adjustments relating to terminal-related placements will be unnecessary when new airlines launch their services, this and the above-mentioned cost-reductions should prove helpful when it comes to attracting airlines to the airport. In other words, airport operators can expect results from their investments, leading to likely profits in the future. We believe installation of check-in terminals is making

8 progress because the three parties involved can see these advantages. However, one concern that we cannot ignore is that the airlines are also promoting the use of mobile services. From the perspective of reducing the costs incurred by counter operations, the airlines have no problems whether procedures are carried out at kiosk terminals or mobile terminals. Since the number of terminals required will shrink the more the shift to mobile terminals progresses, airport operators that are making improvements will probably need to consider adding various other functions to their common-use terminals. ii) Bag drops Self bag drop facilities are designed to allow passengers to check in their baggage themselves, and their main function is to transport the tagged baggage placed on the conveyor belt for loading on the plane. Scanners that can read the tags from any direction are installed above the conveyor belt and, based on the data, the baggage is taken to the collection center for the relevant flight. Various kinds of data are verified using today's sophisticated IT systems and steps have been taken to prevent the loading of nonstandard baggage. However, the passengers simply perform operations that the airlines used to handle, while the technologies themselves remain largely unchanged. For passengers, the advantage of introducing self baggage drop functions will probably go no further than shortening the time they might have spent queuing at counters. Once common-use facilities are more widely introduced, the time spent carrying heavy baggage around when traveling will be reduced no matter which drop facilities are used. On the other hand, there will also be some disadvantages. A majority of airport users are not familiar with baggage drop procedures because such facilities and how to use them are not yet widely understood. National attitudes towards self-service may also matter. The Japanese people in particular value hospitality and tend to consider service levels important, so they strongly value the treatment they get from counter personnel. Since passengers tend to associate airline staff with the airport, passenger satisfaction levels may well decline because they tend to see self-service as representing a decline in the quality of the services offered by the airport. There are some expectations that the negative aspects of the extra trouble imposed on passengers through self-service could be offset if, for example, airline ticket prices were to be lowered in proportion to cost reductions, but this is up to the airlines. More self-service may increase the freedom and free time enjoyed by passengers, but it may also be difficult to win their acceptance because they may feel it increases their workload. Support schemes will probably become necessary, too. The major advantage for the airlines is that they can reduce their costs by eliminating the need to process huge amounts of baggage at their counters. In extreme cases, some airlines might decide they need to station almost no staff at their own counters once self-service check-in and bag drop systems are in place. However, it is arguable that self bag drop facilities have almost no direct advantages for the airport operators. Baggage drop facilities are already installed in terminals as essential facilities, so making them self-service involves little more than changing the way baggage is handled, and remodeling the access points where baggage is placed in the system. Several indirect benefits can be envisaged, however. For

9 example, cutting the number of manned counters will reduce the airlines' operating costs which, in turn, could create a ripple effect that leads to the launch of services on new routes. As with check-ins, moreover, reducing the time passengers spend waiting in lines enables them to use their spare time experiencing other things. This could lead to the creation of new revenue opportunities, too. ACI also advocates that airport operators reduce the number of manned counters to allow relocation of bag drop points and more effective use of counter areas. However, this is all hypothetical; the airlines are likely to gain the most from improvements. Airport operators therefore have very weak grounds for going so far as to introduce self bag drop equipment extensively. This is probably one reason why bag drops have not made as much progress as self check-in facilities. Some of the world's major airports have introduced them at some counters on a trial basis, while quite a few airlines -- not airport operators -- have responded by taking the lead in installing and using them for a certain flights only. It could be that in order to introduce bag drops, it is first necessary to lay some foundations by experiencing the post-installation investment effect for themselves. iii) Boarding Self-boarding gates are unmanned. They adopt mechanisms similar to those used for automatic ticket gates at railway stations. The gate opens when the boarding pass is held against the specified location at the gate, allowing the passenger to progress to the next stage. Boarding gates read bar codes printed on the boarding pass instead of the non-contact IC cards used with automatic ticket gates at stations. Depending on the machine, it is also possible to read passport information, enabling the gate to check both the personal information stored in the passport's IC chip and the boarding pass information. Since the latter handles personal information separately from passport control, powerful security measures are required for information management. Another limitation on operations is that not all of the countries in the world issue passports incorporating IC chips. From the passenger's perspective, the advantage of introducing self-boarding gates is that they can be expected to shorten the time it takes to pass through the gates. That said, they are not likely to deliver many benefits in terms of time savings because manned gates equipped with boarding pass readers are already in use. Since passport checks are obligatory on international services, moreover, manned procedures remain unless electronic passport checks are implemented at boarding gates. As with check-ins and bag drops, the advantages for airlines lie in the ability to cut costs for gate management. It is also likely that they help prevent human error during pre-boarding checks. On the other hand, installing them brings very few advantages for airport operators. This is because it is not possible to make dramatic changes in boarding gate locations. Even if they are concentrated or expanded, the results are limited, while it may be hard to switch them to commercial areas of the airport. Installing them would strengthen security, but countries around the world would absolutely have to adopt biometric passports as national strategies. As we have seen from the above three items, airport operators may find it possible to raise business operator satisfaction levels by moving ahead with the introduction of automated, self-service facilities

10 that contribute to lower labor costs. Given the danger that improvements that raise satisfaction levels among business operators may conversely lower satisfaction levels among passengers, however, this does not mean that a single improvement will have equal, matching benefits for airlines, passengers and airport operators. In the world's airports, the concordance rate for the advantages for the three parties -- airlines, passengers and airport operators -- matches the extent to which self-service facilities are in place through to boarding. It can be argued that this shows how difficult it is to embark on improvements that have the primary purpose of heightening the attraction for airlines. Taking the opposite view, however, if airport operators improve their automated facilities despite the risks involved while surrounding entities remain cautious, this could turn out to be the first step to attracting new airlines or new routes. Airports that have established common-use facilities will not have wasted their investments because they will not need to make further improvements even if airlines keep launching or withdrawing services. It will be very important for airport operators to ascertain whether they should make investments to lay the foundations for a future expansion in earnings, or simply make improvements until they can see where any advantages may emerge. Do comfortable airports encourage shopping? Our discussion so far has focused on enhancing satisfaction among business operators, but we will now turn our attention to passengers. What sorts of things bring added value and customer satisfaction to passengers visiting airports? And what sort of IT exists to enhance satisfaction levels? Convenience is almost certainly the main reason why passengers are attracted to any particular airport. Convenience is strongly linked to facilities and infrastructure, including rapid, easy boarding procedures, easy to use terminals, easy access, and a well-equipped communications environment. Since airports have similar characteristics to railway stations, this is only natural. However, the scope of IT support that airport operators can offer to improve passenger convenience is limited to providing means of communications through free Wi-Fi and the systematization of certain physical facilities. Let us consider the situation where a passenger has the choice of several airports from which s/he can reach the specified destination. Assuming ticket prices and other conditions are more or less equal, there is a strong likelihood the passenger will select the most convenient airport. Overall convenience is therefore likely to be the added value for passengers before they come to the airport. But unfortunately, many passengers select the airport on the basis of routes and air ticket prices. For this reason, it can be argued that increasing the number of routes by enhancing business operator satisfaction vis-a-vis the airlines, or aiming to increase the choices available by indirectly supporting the provision of cheaper tickets, has more impact than the convenience of the airport itself. In other words, the passengers who visit the airport are really the main target when ways to increase passenger satisfaction are being considered. We consider comfort to be the second point of attraction. Airports tend to have many of the qualities of residential commercial facilities because they accommodate many tenants and waiting spaces. Among passengers who spend many hours at the airport waiting for connections, levels of satisfaction towards the

11 airport depend on comfort. They also tend to have high expectations towards shopping, starting with tax-exempt items. According to a survey by DKMA introduced in the ASQ, higher levels of satisfaction towards the facilities are accompanied by higher consumption per passenger, resulting in higher earnings for the airport operator. The survey also reveals a tendency for consumption to be in direct proportion to the time spent waiting. In other words, since raising levels of satisfaction towards commercial facilities simultaneously stimulates the propensity to buy among passengers, airport operators should see such investments as promising profits. Commercial facilities have a strong affinity for IT, which is already put to use in various areas. Much of the technology is used to make profits. For example, advertising can be digitized and displayed on digital signage so that it can be changed easily, while signatures to settle transactions can be stored as electronic data. IT provides new openings for stimulating the propensity to buy. Not only does it allow purchase and sales information to be used when buying in products, but analyzing purchasing details also makes it possible to recommend closely-related products in a manner similar to the techniques used by virtual stores on the Internet. Similar technologies are beginning to be used in airports around the world. Among the information technologies that are coming into use, digital signage in particular is being widely introduced in airports. Digital signage comprises displays and content. One key reason for its extensive use is the fact that it can easily be adapted for multiple application levels depending on how it is installed. If it is used not only to carry commercial advertising but also to provide passengers with information and guidance in the case of emergencies such as disasters, airports can enhance comfort from the perspective of safety as well. Many initiatives have been adopted to enhance comfort via smartphones, and a number of airports have created apps so that smartphones can display the content provided via their websites, such as airport guides and flight information. Because the Internet overflows with all kinds of information, airport information cannot be displayed as top information without carrying out a search. However, creating an app enables the application side to provide information proactively. This kind of approach from the applications side is known as "push notification". As the number of smartphone users has increased, effectively displaying information on the screens that they access constantly prevents them from getting lost in the terminal, and helps them find their way to the appropriate boarding gate. As Figure 3 shows, many smartphone users search for coupons and the locations where to use them via their terminals, a trend that is now common around the world. Passengers at airports frequently consult their smartphones while they are waiting. For this reason, it should be possible to provide services that suit both passengers and the airport by proactively providing the former with information via their smartphone screens. Although it may not go so far as to have a subliminal effect, displaying information to people leaves them with a memory of the content. For this reason, the displayed information should be designed to attract people into airport stores or generate profit, as with coupons for airport food and beverage outlets, information on where they can be used, or discount services according to the purchasing amount. Moreover, in terms of generating eagerness to buy, coupons can be expected to have a greater impact on ordinary passengers than on business passengers, implying that the impact will be greater if information can be tailored to usage trends

12 gleaned from passenger information (%) purchase in real store using on-line coupon search the shop close to you by GPS of mobile phone Japan (n=509) USA(n=540) UK (n=533) France(n=468) Korea (n=654) Singapore(n=584) Source: Information and Communications in Japan Year 2013 (Ministry of Internal Affairs and Communications, Japan) Figure 3. Changes in consumption behavior among smartphone owners The issue of language must not be forgotten when considering comfort. Airport users can be classified into passengers from the country to which the airport belongs, and inbound passengers. Airport information signs and various explanations are principally written in the main language of the relevant country plus English. We believe comfort increases if signs are in the mother tongues of the passengers arriving from various countries. However, even airports are subject to limitations on the languages they can display, and cannot possibly handle all languages. In recent years, Japan has been focusing on technology for multi-language guides using two-dimensional (2D) bar codes with a view to enhancing comfort for inbound passengers from a language viewpoint. 2D, or matrix, bar codes are collections of dots that look like mosaics and can record far more information than conventional bar codes. The world's airlines have already introduced 2D bar codes on their tickets, and passengers using Internet or mobile check-in functions see them frequently. Combining existing signs and 2D bar codes that can handle multiple languages enables passengers to obtain information in their mother tongues whenever they need it. It is probably not necessary to revise similar displays that already exist at airports, such as "Immigration" or "Gate," or displays using commonly understood pictograms. It must be reassuring for passengers visiting unfamiliar countries if explanations on using the airport, in-store product explanations, restaurant menus and so on can be provided in multiple languages. Since the cost of switching to 2D bar codes can be kept down, the hurdles facing airport operators who are considering offering them are low. At the same time, it should be possible to enhance services because the display's message can be conveyed to passengers easily and accurately. Another advantage is that the passengers' propensity to consume will probably increase if providing information in their native languages enables them to understand products better. It should also be possible to respond adequately to the expectations of Japanese passengers, who have a distinctive preference for detailed information.

13 As we have seen, added value for passengers comprises convenience and comfort, but the key to supporting them from an IT perspective lies in smartphones and other electronic equipment whose use is increasing exponentially. At the same time, this indicates there is a need to maintain a digital environment that allows electronic equipment to be used comfortably at all times. Until now, airport information was directed to many and unspecified people, but since electronic equipment provides links with individual passengers, it has become possible to approach individual terminal owners directly. Providing push-based information delivery to individuals allows tailor-made responses that raise passenger satisfaction levels, and sometimes has the potential to create purchasing opportunities. As both collectors and originators of information, airport operators should make proactive use of electronic terminals as tools to approach mass audiences and individuals simultaneously. From a commercial perspective, airports are in a position where they are compared with other commercial facilities, which means they are already embroiled in an information war with them. Conclusions Airports are transit points for passengers and in order to grow, they must offer greater added value for both airlines and passengers, which means raising satisfaction levels for business operators and passengers. As we have already seen, it is desirable for the airport operator to install IT to reduce costs for airlines and create an environment where it is easy for them to operate their services. As information technology spreads, airport facilities will become even more digitized, advancing the progress of automation and self-service that ACI and IATA are aiming for. At the same time, facility investment and the cost of upgrades are forecast to increase. That said, it is doubtful that all the efforts aimed at business operators will be advantageous for passengers and airport operators because of the danger that investing in the IT that the airlines want may result in lower passenger satisfaction levels. Moreover, it is possible that the national characteristics of the passengers using the airport, and the question of how familiar general passengers are with the technology that is to be installed, may turn out to be bottlenecks to investment. Full use of the facilities will become impossible if passengers are unable to use them comfortably, leading to a vicious spiral where airline costs fail to decrease. To avoid a vicious spiral and create a virtuous spiral which brings profits for the airport, the airport operator must carefully identify the type of IT to install amidst dramatic changes in the technologies. Airports will have to discover their own qualities and strengths based on the characteristics derived from the nationalities of the passengers using them, and trends among the airlines serving them. Then, with an eye on the airport's future, they must take steps to increase satisfaction levels among their business operators. It is desirable that airports deliver comfort to their passengers from the information perspective, too, providing push information via smartphones and other electronic terminals, and individual information. As globalization accelerates, there will be more events that airports will not be able to handle by providing one-to-many information alone. However, it should be possible to get closer to providing

14 information on a one-to-one basis via terminals. Progress in introducing self-service as a means of enhancing business operator satisfaction should be effective in increasing the free time available to passengers. The extent to which 10 extra minutes of free time translates into consumption activity will probably depend on the type of sophisticated signage installed by the airport operator, and the usage of handheld terminals. Looking ahead, airports should make effective use of the push approach towards passengers and tie it into raising profits on the commercial side. Airline services that generate profits for airports are born of passenger demand and the reputation of the airport that lies behind this demand. The initial launch of services may be the result of the efforts made by the region and the airport to attract the airline (one example being operating cost reductions) and potential passenger demand. However, it is the passengers that support ongoing services. Passengers are underpinned by aircraft but, in turn, it is these passengers that underpin the aircraft. From this perspective, improving services to passengers and raising passenger satisfaction levels will likely support long-term growth in the airport's profits. As transit points, airports were just another location until IT developed, but they gained a means for proactively originating their own message as a result of IT. It is necessary to use IT to deepen the relationship with passengers and airlines. But while IT contributes to an improvement in satisfaction towards an airport, however, it is no more than a tool to achieve this. It is essential to remain aware that IT itself does not directly generate profits for the airport.

15 Reference Materials ACI, Airline Business, SITA, Airport IT Trends Survey, 2013 DKMA, "Passenger Satisfaction The key to Growing non-aeronautical revenue, ey%20to%20growing%20non-aeronautical%20revenue.pdf (Retrieved on 20 OCT 2014) IATA, "Fast Travel Program Strategy V6, (Retrieved on 20 OCT 2014) IATA, "The Benefits of Mobile NFC for Air Travel, FEB 2011 ICAO, "ACI Recommended Practices and Policy Handbook (7th Edition): Section4 Airport automation and e-business, ended%20practices_seventh_edition_4.pdf (Retrieved on 20 OCT 2014) Ministry of Internal Affairs and Communications, "2014 WHITE PAPER Information and Communications in Japan" licensed under CC-BY 2.1 JP (Retrieved on 20 OCT 2014) Ministry of Internal Affairs and Communications, "2014 Smart Japan ICT Strategy" (Retrieved on 20 OCT 2014) Ministry of Justice, "Operation of Automated Gates (Notification)" (Retrieved on 20 OCT 2014) Ministry of Foreign Affairs of Japan, "Substantial Relaxation of Visa Requirements for Nationals of Indonesia, the Philippines and Viet Nam" (Retrieved on 20 OCT 2014) SITA, "The Airline IT Trends Survey, 2013