European Airports Will Evolve to Reach a New Business and Customer Service Model, According to New Accenture Research

FRANKFURT, GERMANY; Feb. 8, 2002 – Faced with increased competition and privatization, European airports will shift their business focus to new areas -- such as marketing infrastructure, facilities management and information technology services – over the next decade, according to Airport 2010, research just released by Accenture. The research also concludes that, by 2010, airports will place a greater emphasis on individual travelers as their customers.

However, while the vast majority of survey respondents (81 percent) agreed that individuals (passengers, meeters and greeters, and airport employees) will become one of the most important customer groups, almost all (98 percent) reported that airports will have to understand individual customer needs a lot better in order to maximize their revenues.

“Over the next decade, an airport’s success will depend on its ability to transform itself into a transportation hub with non-aviation relationships. ” said Guido Haarmann, Partner, Accenture Airline industry group. “The AirportCity formula of the Schiphol airport in Amsterdam shows how airports can change by using mass individualization.”

According to the research:

• More than half the respondents (61 percent) reported that airports will compete with airlines for a share of the individual customer’s wallet
• More than eight in ten respondents (85 percent) agreed that the privatization of airports will continue, due to the need for large airport investments and tight public budgets
• The vast majority (88 percent) agreed that retail will become an increasingly profitable business area, followed by facility management (71 percent), marketing airport infrastructure (63 percent) and IT and communications services, such as call centers (63 percent)
• Almost seven in ten (67 percent) said that, by 2010, airports will no longer operate freight-handling themselves, and 65 percent judged airline-handling in the same way

Increasing privatization, driven by tight public budgets and large airport investments, can accelerate the transformation of airports’ businesses into competitive transportation hubs. In addition, competition is increasing in various areas. For example, according to the research:

• More than three-quarters of respondents (77 percent) agreed that high-speed rail will emerge as a significant threat.
• By 2010, 90 percent agree, that international airport-in-airport investment will increase to enhance an airport’s competitive position.

In response to these threats, the research shows that airports must undertake a search for new sources of revenue in new, non-aviation businesses. This can range from facility management to building better passenger relationships. For example, it might be beneficial to offer loyalty programs for frequent travelers regardless of airline, such as for shopping at airport stores, special parking spaces and “fast track” check-in, security and immigration stations.

“The increased scrutiny processes of airport security, following the events of September 11, will make the business environment even tighter”, said Haarmann. “Airports will have to revise their operating strategies. They have a variety of solutions available to them, including customer relationship management capabilities and information technology, which will be a significant catalyst for innovation and optimization according to the survey. Above all, airports should decide which capabilities they want to keep in-house, those at which they want to become ‘best in class’ and those at which they should collaborate with other partners and suppliers to outsource.”

Methodology
Airport 2010 was based on interviews with 51 executives, representing 25 airports and five aviation experts from nine European countries. Of the 46 airports executives interviewed, 57 percent were board members or directors.

About Accenture
Accenture is the world’s leading management and technology services organization. Through its network of businesses approach -- in which the company enhances its consulting and outsourcing expertise through alliances, affiliated companies and other capabilities -- Accenture delivers innovations that help clients across all industries quickly realize their visions. With more than 75,000 people in 47 countries, the company generated net revenues of $11.44 billion for the fiscal year ended August 31, 2001. Its home page is www.accenture.com.

###