Following on from our previous ‘Above Wing’ efficiency blog we have shared our practical suggestions below on how to make efficiency and cost savings for ‘Below Wing’ throughout the airport.
The statistics published by Eurocontrol and Civil Aviation Authority all indicate that UK airports will be in ‘survival’ to ‘intermittent recovery’ for the rest of 2020 and into 2021. ‘Consistent recovery’ and ‘growth’ may build early in 2021 for summer schedules, but there is still great uncertainty. You can clearly see these phases in our blog ‘Revised route to airport recovery’.
It is therefore clear that airport operators must look at their businesses in this ‘new business environment’. No longer is growth guaranteed. No longer is income from airlines, parking, retail & food & beverage assured. The fixed overheads including your licensing costs continue to run. Revenues and profits will be squeezed.
Therefore, the management skills to run the airport in an environment of continuous growth and development need to be re-aligned. The management team now need to look as never before at the cost base of the airport in-order to survive. The management team need to hone their skills in looking for cost savings and improving efficiency.
Airport Efficiency – Above the Wing vs Below the Wing
Above the Wing is often the centre of attention in an airport because it is more visible, but so often it has a heavy investment in people to implement new systems of operation and technology – for example Touchless Technology or Common Use Terminal Equipment (CUTE), Common User Passenger Processing System (CUPPS), Airport Collaborative Decision Making (A-CDM) and Airport Planning and Operational Control Centre (APPOC).
In our previous blog we explored in detail the efficiency savings for Above Wing, read more here. You can see from reading this blog that there is less opportunity to make simple and quick improvements unlike ‘below wing’. It is possible that ‘below the wing’ might contribute equally or more to the savings to be made in the next period by rethinking, re-engineering and being more commercially aware.
While budgets lines are frozen, extensive discussions with airport operators have shown some interesting approaches and this blog shares some of the work we have carried out looking at activities below the wing.
Below the Wing Airport Efficiency Savings
Many contracts have been negotiated pre-Covid-19. Flight demand is now variable and external contracts need to reflect this new demand. Contractual clauses need to be built in to handle the inevitable changes to future demand.
- Fuel Management
- Waste Services
- Exterior and Interior Cleaning Services
- Car Park and other concessions
- Busing and Transfer Concessions
- Concierge services
- VIP Services
- Power and Air Conditioning
- Facilities and Grounds Maintenance
- Airport Maintenance Engineering
- Wildlife management
Can contracts be fused? For example, can contracts be merged by re-engineering processes such as summer ground maintenance with snow clearance and waste management with recycling?
As re-organised management teams come out of Furlough at the end of this month, the task is to rethink how to structure contract clauses providing varying service levels and flexibility. There is a need to formalise the learning into the contractual and commercial management of the business.
Regulatory and Licensing Compliance
These areas will not be unaffected by the change in activity levels but clearly, they are sensitive and need cast iron, fact-based cases to be made to propose any changes in resources.
- Regulatory licensing costs
- Air traffic management
- Health Services
- Border force
Some of these services may need more resources, not less. There will be unknown requirements set by Governments to allow air corridors and to give passengers the confidence to fly again. What is certain is that there will need to be a degree of flexibility for some time in the future with service level agreements having to consider the changes in the airport operation.
Closing Facilities and Resources
Most airports have already frozen contracts for construction and any non-essential expenditure and have taken action to include:
- Closing terminals or parts of the airport
- Closing or combining facilities such as check-in or security lanes
- Combining security Control Posts to be more efficient
- Closing stands or taxiways to save maintenance and possible upgrades
Closing terminals or facilities has been a relatively easy task in comparison with the task of re-opening. Re-opening must be timed to provide optimum service levels for new flight schedules but must be justified economically. There are Operational Readiness Activation and Transition (ORAT), Health and Safety and Engineering costs involved with opening ‘mothballed’ equipment and facilities.
The ‘nirvana’ of disruptive technologies is well understood. It is still developing, but it is in reach. Clearly, capital expenditure is not going to be justified in the near future, but in the equipment replacement cycles, these technologies can be planned for. Thinking about how to use disruptive technologies is timely to make the Airport business more efficient and more resilient for these uncertain times. Some suggestions are below:
- Drones – used to inspect infrastructure, security fences and the airfield
- Robotics – the movement of goods, cleaning, movement of people with reduced mobility
- Autonomous driving systems for snow clearing, landscape maintenance or runway FOD vacuum
- Solar Farms
- Apps for facilities management and cleaning routines. Apps for booking staff access through Security Control Posts
- Remote monitoring of equipment to sense overheating and vibration or the filling of waste bins
- Electrification of vehicles
- 3 D printing for maintenance components or as a passenger service
- Digital twins to parallel track your day to day operations
- Internal positioning systems to facilitate robotics
Planning for Airport Restart – Recovery & Growth
The survival/recovery phase will last the rest of 2020. The restart is likely to come in 1st Quarter 2021 as airports consider their business plans for 2021. Resources will need to be matched against the predicted demand curve in a way never done before by anyone. This exercise is totally new.
Airport Recovery Modelling
Determining resources can be done by guesswork or more recommended by fact-based airport modelling. Using simple, quick and therefore inexpensive models of activity against flight demand can be used to clearly determine the resources needed. A critical part of this work is modelling demand dependent functions where the activity may reach peaks and creativity is needed to design shift patterns to cover these peaks while maintaining acceptable utilisation of staff and service to the passenger. Our advice is:
- Mine the data – quick and simple – facts not opinions
- Understand the data – avoid unintended consequences
- Model the system to the level of detail needed by the potential cost savings possible
- Financially model the system to understand the peaks, the range of activity and the risk
- Develop the possible efficiency savings with the stakeholders – honest communication is essential to build trust
- Present the Business Case – and facilitate the decisions
- Implement – and make sure that the fluid and developing environment is factored in
Airport modelling is a core service of AiQ Consulting using our bespoke software ‘TransvisionAiR’. Teamed with our award-winning airport planners we provide a range of fast, flexible, and cost-effective kerbside to airside recovery services as below:
- Airport Planning Services – You can outsource your strategic and operational needs to us as airport planning experts providing a better, cheaper, faster and more flexible planning service than traditional in-house planning.
- Airport Recovery Tool – Alternatively, you can license our ‘Airport Recovery Tool’ providing airport managers with a holistic operational vision across 14 key processes to determine key resources. Read more here
- Airport Efficiency Service – Launching very soon, this service will analyse the entire airport operation from kerbside to airside to identify key commercial and operational cost-saving efficiency opportunities to support the airport’s survival through to recovery and growth. Contact Adrian Todd on 07885 227317 to find out more or email firstname.lastname@example.org