Disruptive technology risk

Airport Airport

Description (What is the Risk)

The risk that a new emerging technology unexpectedly displaces an established technology used in airport sector.

Risk Allocation (Who typically bears the risk)

Allocation: Public Private Shared
Rationale

Digital technologies will allow for quicker, more efficient check in, baggage drops and security screening. This will reduce the time it is necessary to spend at the airport as much could be done at home or the office. The effect is to reduce the 'dwell time' at airports which is likely to lead to less time in the shopping area so less spending and therefore less revenue for the airport derived from duty free and food and beverage sales.

Driverless cars when they are introduced will mean that it will be possible to travel to the airport in your driverless car and, rather than paying very high airport parking charges for the length of your trip, you could send the car home. Car parking revenue, which is a good source of revenue for airports, either directly or through fees charging to parking concessionaires, would be greatly reduced.

The increased usability and availability of digital communications such as virtual meetings and personal video conferencing may lead to less business travel and so lower aircraft movements and passengers at non-tourist airports. Coupled with businesses' desire to reduce their carbon footprint and wishing to save money this could lead to lower revenues.

The need to mitigate the harmful effects of climate change may well lead to greater costs being imposed on airlines (which will pass them on to passengers) or on passengers directly will make flying more expensive and so reduce demand in some countries.

Mitigation Measures (What can be done to minimize the risk)

Airports could (as some are doing already) require passengers to turn up several hours before their flight and earlier than the time needed to undertake the more automated check in, baggage and security checks (and longer than the airlines themselves recommend) in an attempt to ensure passengers have to spend 'dwell time' in the retail and food and beverage areas and so spend money. Reducing the number of seats for waiting passengers also increases the likelihood that they will need to buy food and drink to actually have somewhere to sit or wander around the shops and be tempted to spend.

When driverless cars are prevalent airports could introduce drop-off fees to compensate for reduced parking revenue.

The Private Partner would need the flexibility to introduce this.

Back to Airport

Description (What is the Risk)

The risk that a new emerging technology unexpectedly displaces an established technology used in airport sector.

Risk Allocation (Who typically bears the risk)

Allocation: Public Private Shared
Rationale

Digital technologies will allow for quicker, more efficient check in, baggage drops and security screening. This will reduce the time it is necessary to spend at the airport as much could be done at home or the office. The effect is to reduce the 'dwell time' at airports which is likely to lead to less time in the shopping area so less spending and therefore less revenue for the airport derived from duty free and food and beverage sales.

Driverless cars when they are introduced will mean that it will be possible to travel to the airport in your driverless car and, rather than paying very high airport parking charges for the length of your trip, you could send the car home. Car parking revenue, which is a good source of revenue for airports, either directly or through fees charging to parking concessionaires, would be greatly reduced.

The increased usability and availability of digital communications such as virtual meetings and personal video conferencing may lead to less business travel and so lower aircraft movements and passengers at non-tourist airports. Coupled with businesses' desire to reduce their carbon footprint and wishing to save money this could lead to lower revenues.

The need to mitigate the harmful effects of climate change may well lead to greater costs being imposed on airlines (which will pass them on to passengers) or on passengers directly will make flying more expensive and so reduce demand in some countries.

Mitigation Measures (What can be done to minimize the risk)

Airports could (as some are doing already) require passengers to turn up several hours before their flight and earlier than the time needed to undertake the more automated check in, baggage and security checks (and longer than the airlines themselves recommend) in an attempt to ensure passengers have to spend 'dwell time' in the retail and food and beverage areas and so spend money. Reducing the number of seats for waiting passengers also increases the likelihood that they will need to buy food and drink to actually have somewhere to sit or wander around the shops and be tempted to spend.

When driverless cars are prevalent airports could introduce drop-off fees to compensate for reduced parking revenue.

The Private Partner would need the flexibility to introduce this.

Back to Airport