As airports become more digitally connected, the Internet of Things (IoT) can open up a world of opportunities. Much more than merely improving efficiency, IoT can transform the traveller experience and generate new income.

DIGITAL technology seems to connect everything today. So it is perhaps no surprise that airports—the infrastructure that helps billions of travellers connect across the globe each year—are themselves becoming more digitally connected. The connected, or smart, airport brings together a variety of technologies through the Internet of Things (IoT), with the goal of strategically differentiating an airport, including via improved traveller experience and tapping into monetary benefits through greater efficiencies and new income streams. Achieving this end goal requires significant collaboration between stakeholders and airports should carefully craft implementation strategies that aim for incremental quick wins over “big bang” transformations.

While awareness of IoT across the aviation ecosystem is high, its knowledge of how to harness and maximise IoT’s capabilities within an organisation is much lower. In our survey of the industry, only 12 per cent of airport representatives reported that their organisations are very prepared to benefit from IoT applications and another 10 per cent felt that they were not even exploring IoT yet. So if they want to create the connected, smart airport, the logical starting point is by beginning with the basics of what IoT is.

IoT as a technology architecture

IoT is not a technology itself but rather a technology architecture—that is, IoT is more than the sum of its component parts. IoT is a way of bringing together different enabling technologies in a specific way to do something new. But how exactly do enabling technologies come together to form an architecture? IoT’s architecture is explained conceptually using the information value loop (figure 1). However, perhaps the best way to understand how these technologies come together to create value is through an example from an airport:

1. The airport needs to locate its nonmotorized ground service equipment to maintain it more regularly. GPS tags affixed to the equipment function as sensors to create a thread of digital information about the location of a specific piece of the equipment.
2. A network of radios communicates that information back to a central server.
3. The server aggregates the location of one trolley with the location, type and maintenance time-table for all of the other carts.
4. All this data is analysed together to create a plan for which carts need to be retrieved today and undergo maintenance.
5. With that information in hand, workers act, bringing in the right pieces of equipment for maintenance on time.²

When workers use the information created by IoT to take a new action, the digital information has created value in the real world—in this case, allowing for proper maintenance and greater uptime for ground service equipment. Because IoT is an architecture, what is important is not the specific technologies involved but rather the flow of information through the steps of the information value loop. Since that information can be about anything, the exact amount and type of value created by IoT are limited only by the business problems airports need to solve.

Potential benefits of IoT applications

We see three principal classes of benefits from IoT and, in selecting the IoT capability or set of capabilities that are “right” for them, airports should consider their goal(s) for IoT implementation:

1. Operational efficiency;
2. Strategic differentiation; and
3. New income.

IoT is already in use in airports in many different ways, such as in traveller information systems, traveller traffic monitoring, luggage systems and facilities management. Most of these uses focus on increasing efficiency. Other uses of IoT, such as enhancing security effectiveness, can improve both efficiency (maintaining throughput with fewer machines or staff) and differentiation (shorter and faster lines for a better traveller experience). Finally, still other use cases can directly generate new income such as the use of geofencing to gather fees from rideshares. As a result, these three categories help us understand what IoT can achieve at an airport.

Operational efficiency

The majority of current airport uses of IoT focus on operational efficiency. For example, an airport representative shared that one airport has “a new online inspection system that uses a tool provided to maintenance grounds crew and connected to the Internet with GPS functionality. The purpose of this tool is to digitally connect maintenance crew inspection findings to a map of the airport grounds.”³

Another airport is planning a clever bathroom pilot test. The airport will instal IoT sensors on various bathroom assets, including faucets, toilets, lighting, soap dispensers, air fresheners, toilet paper dispensers and other equipment, in one of its busiest bathrooms. These sensors will transmit data to facilities management to alert it in real time of various shortages and breakdowns. As part of this pilot, the bathroom will have a people counter and a customer input button to capture perceptions of bathroom cleanliness, which will enable facilities management to gauge perceptions of cleanliness against actual use. This may enable greater efficiency for maintenance staff while also providing a better travelling experience.

The long-term horizon for IoT applications supporting efficiency at airports may include autonomous vehicles, tenders and luggage carts. If integrated with other data sources such as schedules, push-back times and gate numbers, this data could fully automate a tarmac where robots and autonomous vehicles deliver luggage, fuel planes, clear debris and perform other tasks—all faster and to closer tolerances than human workers. The result would be that airports could conduct surface operations more efficiently, allowing more flights in and out of the same physical ramps and taxiways. While something like the fully automated tarmac is still years away, the technology needed for such uses is already in action on roadways today.⁴

Strategic differentiation

While gains in efficiency can be significant, airports that use IoT can also provide a more differentiated product or better customer experience than nonsmart airports. However, differentiation can be much broader, especially for airports where the greatest competition comes not from other airports but from other modes of travel. For example, limiting greenhouse emissions, reducing noise levels over neighbouring areas, or even responsibly maintaining an airport’s open space can all be differentiators that make the airport an attractive brand as well as an integral part of the community. In fact, smart products used as part of IoT can even gather information about customer preferences, providing a deeper understanding of what does and does not differentiate travel options.

Differentiation is often a watchword for advertising or customer experience, but it is actually much more. Differentiation is fundamentally about how an airport provides distinctive value to important stakeholders—stakeholders that include groups that range from airlines to travellers to retail tenants to local communities. Differentiation can underpin and support the brand of an airport. IoT applications that support differentiation can come in many different varieties, aimed at traveller satisfaction or even environmental causes. For example, Heathrow Airport set the goal of reducing nitrogen dioxide emissions to help improve local air quality. The airport realised that a major—and avoidable—source of ground-level nitrogen dioxide emissions is aircraft parked at the gate that use auxiliary power units (APUs) instead of plugging into the power grid. As a result, Heathrow Airport deployed an IoT solution to help improve air quality. Microphones positioned around the pinny pick up the telltale sound of APUs running. These data are cross-referenced against schedules and other data to determine whether an aircraft is running its APU instead of using the power grid. The airport can then share this data with airlines and remind aircraft to plug in and switch off the APU—not just saving money for the airline but also improving local air quality for all.⁵

New income

IoT can also create new sources of income. This can come from creating new products or services to attract new customers or by using IoT to sell more to existing customers. While IoT solutions aiming to generate new income are often the largest and most complex, they can also build upon existing solutions that generate efficiency gains to help ease implementation. Our interviews with subject matter experts indicate that airport stakeholders do see the value in such uses and may pursue them in the future. Use cases being investigated include variable rates for advertising and off-airport transit recommendations personalised to an individual traveller. However, because these income-generating use cases may involve the greatest number of stakeholders, they are often the hardest to pursue.

That said, just because use cases that create new income are hard to create does not mean that they have to be technologically advanced. One airport used Wi-Fi access points as sensors to measure the location and dwell time of people as they moved through the terminals. Armed with this data, the airport was able to put signs and advertising in places most likely to be seen by the right people. So while earlier, very few sales were made to landing travellers, this airport was able to place signs for the products those travellers may want to buy before departing the airport where they would be likely to see them. The result was increased sales to a previously untapped group for retailers and through them, increasing the airport operator’s landside income.⁶

Trends in IoT adoption

Industries generally have a typical development progression with IoT. The expected benefit of an IoT application varies with the scope and therefore difficulty, of the project. As a result, most industries begin by pursuing small-scope IoT projects aimed at efficiency since these can often be managed entirely within an organisation. Therefore, in most industries, IoT applications aimed at efficiency are the most common, followed by differentiation and then new income.

In one recent survey, 34 per cent of companies—the top response—said they anticipated gains in efficiency from IoT technology.⁷ On the other hand, only 6 per cent—by far the lowest response—anticipated realising new income thanks to IoT technology. Another survey of companies already using IoT found similar results: 52 per cent used IoT to improve efficiency versus 40 per cent that used customer-facing IoT applications for differentiation and generating new income.⁸

Overall, airports follow these trends in IoT adoption as well. In our survey, 76 per cent of respondents using IoT indicated they used it for efficiency/optimisation, compared with 58 per cent for customer experience/differentiation and only 35 per cent for new income.

However, while many airports may follow the typical IoT development trends (moving from efficiency to differentiation to new income), unique forces in the aviation industry also open other pathways to IoT adoption. The aviation industry has traditionally set a very high standard for traveller experience, with leading airports designing truly tailored experiences that reflect not only the bespoke expectations of their global travellers, but the uniqueness of the local region as well. Therefore, while IoT applications that improve traveller experience at an airport may be more difficult to implement than those dealing only with internal efficiency, airports may find it easier to begin with differentiation and move to internal efficiency. As aviation entrepreneur and indoor mapping expert Jack Loop puts it:

So while past IoT developments may have focussed on efficiency, as airports develop future IoT solutions, they may tend to skew more towards differentiating the airport by improving traveller experience. These sentiments were echoed by other interviewees from airlines and airports, who indicated that future IoT plans were largely focussed on improving customer experience.

How IoT creates value for airports

As we saw, airports can use IoT to improve efficiency, differentiate their strategy and generate new income. These benefits of IoT can be applied to any aspect of airport operations. Since airport operations are typically split into two, air side and land side, we will explore how IoT can impact both below.

The traveller experience

IoT can be applied at every stage of a traveller’s journey from arrival kerb to gate (figure 2). For example, IoT way-finding applications could be relevant at the parking and arrival stage and the cheque-in stage. Figure 3 maps common IoT solutions to each stage as well as the airport stakeholders involved in the implementation.

Airport operations experience

Much like a traveller’s journey, operations at an airport can also be seen through the lens of an aircraft’s journey from arrival to departure (figure 4) and IoT implementations can similarly be mapped across each stage and the stakeholders involved for each stage (figure 5).

Creating the smart airport

With so many technological options, IoT can quickly overwhelm even the most tech-savvy managers. However, a structured planning process can help airport leaders navigate all the options and gain confidence that the end result will support the airport’s business goals.

The process begins with selecting a potential IoT project. This can be done with either a top-down approach or a bottom-up approach.

A top-down approach to IoT selection

Based on the goals in their strategic plan, airports should select the right set of IoT capabilities. Different goals for an IoT solution can often call for radically different technology and organisation to support them. As a result, the overall strategic goal for IoT drives the infrastructure requirements needed for a successful IoT implementation.

A bottom-up approach to IoT selection

Airports can also identify promising IoT opportunities by examining the existing IoT solutions— or, if there are no true IoT solutions, the existing sources of data—currently operating in their airport and then identifying areas where these solutions can be extended across or beyond the airport to further meet the airport’s strategic goals. This exercise also shows where other stakeholders may have data or expertise that can help an airport achieve its goals.

The result should resemble a matrix of IoT applications, stakeholders and the impacted stages of traveller or operations journey, as depicted in Figures 2, 3, 4 and 5. As in the top-down approach, this assessment of the infrastructure requirements for an IoT solution can help the airport gauge the feasibility of a project. However, the map created by the bottom-up approach has an additional benefit: It can help identify other stakeholders who may be able to provide some of the capabilities needed—in effect accelerating an airport’s IoT project adoption by tapping into existing tools or infrastructure.

The capability gap assessment

Whether using the top-down or bottom-up approach, airports assess their overall digital maturity versus the desired end state of a successful IoT implementation.

This assessment should include at least the following criteria:

• The data (size and complexity), communications and infrastructure required for the potential solution(s) versus what the airport already possesses;
• The cost of the solution itself versus available funds; and
• Stakeholder groups that can achieve benefits from the potential solution versus the security/privacy procedures that must be in place to secure their cooperation or use.

Assessing potential IoT solutions against these qualifiers can confirm (or disprove) the overall fit of that solution for the defined needs of the airport before moving to implementation. More importantly, the gaps between required and current capabilities in each of these criteria can guide the first steps to developing an implementation road map as airports pursue digital maturity (figure 6).

Barriers to IoT implementation

Even with all the right tools and information, implementing IoT solutions can be a significant undertaking filled with new challenges for even the most digitally mature organisations. We look at some of the broad challenge areas below.

• Safety, security and privacy. In the aviation industry, safety is an inviolate standard. No new technology, no matter how efficient or cost-saving, can be introduced if it compromises safety. When physical objects are connected digitally, the compromise of digital data can have real-world consequences. Therefore, as IoT gains in adoption, safety, cybersecurity and data privacy are all increasingly linked.
• Technology and infrastructure. Large IoT implementations involve numerous, disparate systems and devices, which all need to connect and operate together. Very few out-of-the-box IoT solutions for airports are currently on the market. This can make it hard to figure out what is needed to support an IoT ecosystem.
• Talent. As IoT gains wider adoption, the roles and responsibilities of airport employees may change as they have more interaction with technology. To keep up with this trend, airports should prioritise addressing talent and skill gaps by implementing training programmes for existing employees, expanding hiring for new technical roles and changing the way leaders manage and organise work groups.
• A compelling business case. In every industry, concerns about return on investment (ROI) are among the top barriers to implementing IoT. Both upfront and continuing costs can vary widely, depending on the specific IoT application. Since IoT has few test cases, the ROI for any IoT investment is not fully certain, with the result that cost can quickly become a deterrent. However, careful consideration of the factors that drive costs and ROI in IoT can help leaders narrow down options and structure their decision-making.
• Funding and financing. Even with a solid business case that promises a clear and acceptable ROI, airports can struggle to find the upfront funding needed to begin a project. Given the thin margins of many airport operators, finding extra dollars to finance an IoT project can induce fear in any airport executive. Taking a structured approach to understanding funding and financing options by asking question about the goal, timeline and stakeholders involved in a project can help reduce uncertainty and encourage adoption of IoT.

Every IoT solution is unique and, therefore, the funding needs of each solution are likely to be unique as well. But there are a few variables common to every project that can help airports think through which types of funding or financing may be most applicable (see Figure 7 for one example):

• Goal. What is the goal of IoT solution? How will success towards that goal be measured?
• Size of investment. What is the upfront investment required for IoT? What are the recurring costs?
• Timing of return. When can an airport expect a return from an IoT solution?
• Where costs and benefits accrue. Do benefits from IoT help one segment of the organisation while the costs must be borne by another?

Overall, barriers to implementing IoT solutions can seem overwhelming. However, with the right team, a thoughtful plan and supportive buy-in, airports can use IoT to create a better, more profitable operation.

Flying into the future

Regardless of the technology or application involved, IoT can have the biggest impact on airports when the technology is incorporated into the core business model. For example, IoT might be used to facilitate a seamless door-to-door experience for air travellers: A single platform that can order and pay for rides on rail or taxi, handle travel documents and order additional services could open up entirely new business opportunities for airport operators currently dependent on retail sales and parking receipts and greater customer interaction for airlines and other stakeholders. This mobility-as-a-service approach is exactly the type of IoT-based new business model that could deliver a new future to airports. Other opportunities may include biometric cheque-in, variable services or prices based on wait times and individualised boarding processes.

However, only time—and the detailed picture that IoT data can create—will tell what the future holds.¹⁰

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