A new report by ACI World confirms and quantifies what advocates of seamless passenger travel have said for a long time: happier passengers spend more money at airports.

The study found that for every 1% increase in passenger satisfaction, airport non-aeronautical revenue  (“NAR”), which includes airport retail revenue, increases by 1.5%. These findings are based a survey of 500,000 passengers at 300 airports of different sizes worldwide.

This multiplier effect is good news for technology providers developing more passenger friendly security screening solutions – and airlines and airports considering investing in them.

LAM LHA has broad experience connecting these technology providers and airport/airline operators. This collaboration brings new capabilities to market faster and ensures solutions are tailored to each unique circumstance, with passengers at the core!

Why NAR matters

Every airport faces the increasing pressures to improve efficiency whilst simultaneously driving stronger NAR streams due to:

  • Increasing competition between airports.
  • The steady growth in passenger volumes.
  • Increasing customer expectation of a high-quality airport experience.
  • Limited opportunities to increase aeronautical revenues with NAR accounting for as much of 40% of an airport’s revenues.

Key insights of the ACI Report

Given the importance of NAR streams, the report made the following conclusions:

  • Most notably, a 1% increase in passenger satisfaction increases NAR by 1.5%.
  • A 1% increase in the number of passengers increases NAR between 0.7%- 1%.
  • A 1% increase in the size of commercial space increases NAR by 0.2%, a much less than proportionate relationship.
  • The impact of passenger satisfaction on NAR is subject to diminishing marginal returns. Other things being equal, the higher the current level of customer satisfaction, the more difficult it will be to increase NAR.

These findings illustrate that, for most airports, the main path to NAR growth is to drive overall passenger satisfaction, rather than through traffic increases or expanding commercial space.

Drivers of passenger satisfaction

Airport customer service encompasses a range of formats and communication points. The passenger journey encompasses airport access, parking, check-in, security, ID checks, restaurants, shopping and gate areas, each of which contribute to the overall level of customer satisfaction.

According to the IATA 2019 Global Passenger Survey, the main source of passenger dissatisfaction relates to security screenings and border control. Passengers identified the following pain points (in terms of % of respondents):

  • Removal of personal items (60%).
  • Removal of laptops and large electronic devices (48%).
  • Variation in screening processes at different airports (41%).
  • The need for more efficient queuing at the boarding gate (60%).
  • Needing to go through security and immigration again at the transfer airport (60%).

70% of passengers surveyed were open to sharing personal information, including biometric identifiers, to speed up the security processes at the airport. A similar proportion agreed that speed was the major benefit of using automated immigration gates or kiosks.

According to a 2016 study in the Journal of Air Transport Management, the use of advanced technology at passenger screening points may also increase traveler perception that air transport is safe, which boosts passenger satisfaction.

These studies illustrate how an improved security screening and border control process could act as a driver of passenger satisfaction, increasing an airport’s NAR.

The path forward for airports

The ACI Report has outlined a three-part plan to prioritize airport investment towards maximizing NAR:

  • Determining the airport’s most impactful processing and non-processing activities.
  • The relationship between operational activities (actionable dimensions) and overall satisfaction must be accurately measured to identify which dimension will increase satisfaction the most.
  • Undertake financial analysis to assess the viability of these plans and create and implement an action plan.

As illustrated in the IATA study, airports must also consider how investments in technology can improve the passenger experience. A key takeaway is that airports which implement seamless travel solutions and better security technology can expect to see improvements in non-aviation revenue.  LAM LHA is working with some of the best and brightest in the industry to help operators realize this vision!



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