transforming airports - cisco report 2010

1Copyright © 2009 Cisco Systems, Inc. All rights reserved.Cisco ConfidentialCisco Confidential Internet Business Solutions Group

Transforming AirportsSmart Airport – Insights for sustainable business models for the future

June, 2010


1. Trends, challenges, and opportunities

2. Evolution of the airport

3. Toward a sustainable business model

4. Discussion

AGENDA


Aviation Trends, Challenges, and Opportunities1


Industry Uncertainty

Source: IATA Economic Reports 2008


Outlook

“… our resilience has been tested by disease, war, terrorism, spiking oil prices and even a volcano. The worst economic recession in 80 years saw revenues drop by $81 billion and

losses of almost $10 billion in 2009.Today there is some cautious optimism. Global traffic is back to pre-recession levels with load factors nearing 80% and the bottom line is improving. Asia-Pacific is powering the upturn with $2.2 billion in profit. North American carriers will move into the black at $1.9

billion. Latin American airlines will return $900 million, the only region with two consecutive profitable years. Middle Eastern and African carriers will each deliver profits of $100 million.

But not all regions are recovering equally. Europe with its weak economy will be the only region in the red, with a $2.8 billion loss. But today we are upgrading our global industry forecast to a full-year profit of $2.5 billion. This is the first global profit since 2007. It is a

reason to celebrate. But with a margin of 0.5%, it will be a modest party…” *

* IATA, State of the Air Transport Industry, 7 June 2010


Airport Economics Evolving


Global Aviation Trends

Network and AircraftHub Bypass

Point/Hub to Point

INTENSIFIEDCOMPETITION

Rise of Low Cost CarriersRegional Hubs Under Fire

CUSTOMERSHigh ExpectationsPrice Sensitivity

RISING COSTFuel Prices

Higher Operating Costs

Diagram Source: Blackstone Gates


Airports slash fees

Major airports across the globe are slashing charges in an attempt to help embattled airlines cope with the downturn in 2009.

In Singapore, the Civil Aviation Authority of Singapore has announced a slew of measures, including a 25 per cent rebate in landing fee at the Changi and Seletarairports.

In China, its civil aviation administration has suspended for six months its 10 per cent surcharge on landing fee at the nation's airports. Several other international airports have followed suit.


Responding to the Strategic Threat

Exploit technology to enhance the flow of people, goods and information, and to make the flow as efficient, reliable and safe as possible.

Deliver superior passenger care processes based on best-in-class Customer experience (along entire journey value chain)

Lead Operational efficiencies (e.g. high reliability in services, baggage handling, quickest plane turnaround) based on real-time operational information across Airport. Pass these benefits on-to the customer

Transform the Airport as multi-services hub

Create Key Metrics and Measure Relentlessly


Evolution of the airport2


Evolution to Smart Airports

SMARTAIRPORT

AGILE AIRPORT

AIRPORT2.0

Source: Cisco IBSG, 2008Services Framework

Busin

ess R

ele

vance

AIRPORT1.0

AIRPORT3.0


Evolution to Smart Airports

•Real-time operations and process integration, reduced latency

•World-class customer experience and personalized services

•Mobile workforce and collaboration•Extensive Sensing-Intelligent Analyzing-Responding (SIAR) capabilities and integration

„SMART“ AIRPORT

„AGILE“ AIRPORT

• Improved operations and flexibility (gates, terminal equipment, turnaround management)

• Improved Passenger experience (self-service)• Multi-business Hub• Single converged infrastructure• Basic sensor capabilities

•Many Airports today•Lacking operational efficiencies•Poor passenger experience•Siloed data, processes and systems

AIRPORT1.0

IATA initiatives• E-Ticketing (ET)• Bar Coded Boarding Passes

(BCBP) • IATA e-freight• Common Use Self-Service

(CUSS)• Radio Frequency ID (RFID)• Baggage management

Improvement Programme (BIP) & Fast Travel

Source: Cisco IBSG, 2008


Smart Airport vision

“Digital Grid” (Real-time

infrastructure) acting as nervous

system and touching every point

of interaction

Real-time operations and

process integration

World-class passenger

experience and operational

efficiency

Sensor-driven capabilities as

basis for smart services

Mobile workforce and

collaboration

Integrated Safety and Security

Vision



Toward a sustainable business model3


Non-Aeronautical Revenues


Non-Aeronautical Sources of Revenue

Managed Service

Passenger Wallet Share


Managed Service Provider Opportunity

Virtual Connection & Common Use Savings

Physical Security/ Connected Real-Estate.

Digital Surveillancee.g. IPCCTV

RFID Savings & Inventory Management e.g. Wheelchair / Asset location

Connected Digital Media (Universal Signage)

Airside/Gate/Office Unified Communications

Real Time Connected Passenger Processing

Mobile Workforce


Product Strategy

Diagram Source: Blackstone Gates


Enhancing Passenger Experience and Wallet Share


Cell phones

T-Mobile Sidekick

SmartPhoneTIVO

Direct TV

XM satellite radios in cars

Apple iPods

Laptop PCsDesktop PCs

Linux server

Wireless network

IP Telephones

Fax machine

Evolving Consumer Technologies

http://images.google.com/imgres?imgurl=http://www.microsoft.com/presspass/images/features/2002/07-15bmw_high.jpg&imgrefurl=http://www.microsoft.com/presspass/features/2002/jul02/07-15WinCEautomotive.mspx&h=1037&w=1377&sz=166&tbnid=XxeU1EhwkEIQ8M:&tbnh=112&tbnw=150&hl=en&start=13&prev=/images?q=telematics+car&svnum=100&hl=en&lr=


A revolution in mobile

iPhone 8Mb Blackberry Storm

Samsung 8330 Nokia N96 iPhone 76 Sony Ericsson iPhone 16Mb iPhone 16Mb Blackberry Bold

Easy to use, full screen touch interface 3G and wifienabled devices specifically designed for internet use are dominating the sales charts and being bought across market demographics.


Now services are easy to deploy, use and make money…

The iPhone, Windows Mobile and Linux offer a platform for a vast array of applications that are delight consumers and stimulate business


Sample Application – Resort Navigator

Admin ConventionSchedule

ResortNavigator

PersonalizedPromotions

Hi Holly:FragranceCoupons

Wi-Fi RoutingSwitchingVoiceSecurity

Monet 1 Monet 2Monet 3Galleria 1Galleria 2


Enhanced Mobility Services

First category appear: Help

Different icons are linked to different sub-services

Display web coupon (readable by IR scanner directly on screen)

Explore Store Map

Subscribe to RED card (loyalty card) online or view account status


Personal assistant Destination information with link to services

Directories and maps

Examples of Services delivered at the Airport

Airport

Airport

How can I help?

Airport

Video connectivity with personal assistance via wireless network.

Shopping assistant.

Maps

Directory

Destination information

Sponsored links to 3rd

party servicesDirections. We know their actual location so can give real time directions


Wireless Services

Accuracies of 3 feet are possible indoors using 802.11x to drive incentives in rich media form directly to customers

Source: Pictures and Diagrams from Acuity


Opportunities to Change the Game


Incomplete view of the customer

PNR – flight information, freq flyer, class of serviceProfiles – business, leisure, frequency, patternsMacro view – demographics, destination and origin


Customer Insights

What do my passengers

spend

When do they shop

What other items might they buy

How promotion sensitive are

they

Which items drive price sensitivity

How price sensitive are they

What’s my share of their

wallet

Who are my best

customers

What messaging or

media are most effective


Personalized Offers

Which routes yield highest results?What is the best time of the day to make the offer?Are there any specific days when the offer is more successful?

Passengers who redeemed the offer spent an average of over 50% more than the typical duty free shopper


Passenger Journey overview

research

booking

payment

check-in

taxi

car

metro/train/bus

check-in

baggage

passports

security

hotel

resort

retail

diningparking

retail

entertainment

food retail

catering

gate immigration

customs

banking

retailboarding baggage

way-finding, flight information and alerts

banking

taxi

hire car

metro/train/bus

home transit airport & journey transit destination

departure flight arrival


Green


Building Systems Evolution

Some RE devices are connected using open industry protocols. Others are not connected at all. There is little or no integration with the IT production network.

IP Network

Electrical

HVAC

Lighting

IP Network

Electrical

HVAC

Lighting

The real estate systems are connected to the IP network through gateways that convert protocols to IP and normalize the data. Separate networks remain and many devices are still not connected.

IP Network

Electrical

HVAC

Lighting

AP

AP

AP

Additional existing building devices such as light switches, ballasts, and power plugs are connected however they remain on separate systems and are connected through a low power wireless network.


Before Connected Real-Estate ConvergenceENTERPRISE APPLICATIONS Facility Management

Maintenance ManagementIT Network Management

Wireless

IP Telephony

VAV

FCU

Heat Pump

Chilled Beam

Boilers

Chillers

BMS

AHU

Building Mgmt

VAV

FCU

Heat Pump

Chilled Beam

BMS

Building Mgmt

IP Camera

CCTV

DVR

Lighting Control

General Lighting

Channel Controllers

DSI/DALI Interface

Occupancy Detectors

Lighting Control

General Lighting

DSI/DALI Interface

Occupancy Detectors

Access Control

Access Control


Fully Converged Connected Real-Estate Solution

Energy & Power Metering

CCTV

DVR

Fire Alarm System

Smoke Sensor

Break Glass

Sounder

ENTERPRISE APPLICATIONS

Energy ManagementBuilding ManagementFacility ManagementSecurity ManagementMaintenance ManagementIT Network Management

Door Controllers

Access Control

Reader Technology

Intruder Panels

VAV

FCU

Heat Pump

Chilled Beam

Boilers

Chillers

BMS

AHU

Lighting Control

General Lighting Channel

Controllers

DSI/DALI Interface

Occupancy Detectors

UPS Monitoring

IP Camera IP Telephony

Wireless

Middleware Server

Translation of disparate protocols to Common format


Beyond Smart Airports


Real-Estate business is becoming key for Airports

Source: Different presentations


Airports becoming Virtual Service Provider

Source: IBSG, 2009


Airports evolutionSummary

Airport 3.0„Smart Airport“

Airport 2.0„Agile

Airport“

Airport 1.0Basic Airport

operations


•World-class customer experience, personalized

services and security

•Real-time operations and process integration,

reduced latency

•Mobile workforce and collaboration

•Extensive Sensing-Intelligent Analyzing-Responding

(SIAR) capabilities and integration, digital grid

• Advanced operations and flexibility (gates, terminal

equipment, turnaround management)

• Advanced passenger experience

• Multi-business Hub

• Single converged infrastructure, basic sensor capabilities

•Basic operational efficiencies

•Landlord model, poor passenger experience

•Siloed data, processes and systems


Airports evolution


Airport 2.0„Agile

Airport“

•Airports exhibit highly evolved operational efficiencies, but pay

insufficient attention to passenger experience.

•Capabilities necessary for safe and efficient management of landings,

departures, and other aircraft operations. Only basic passenger services

•Operating in a landlord model

•Siloed operations, systems, and business units. Little ability for

information sharing and centralized management.


operations


• Advanced operational efficiencies, faster turnaround times for airlines,

faster set-up times for tenants, and improved passenger experience

• Business entities and ecosystem share information quickly and

seamlessly, enabling agile airports to respond rapidly to changes.

• Airport-wide, converged network architecture offers shared services on a

common services platform

•Significantly improved operational efficiencies, passenger services,

advanced security capabilities and passenger experience

•Fully exploit the power of emerging and maturing technologies, with

advanced and pervasively deployed sense-analyze-respond capabilities.

•Systems built around a “digital grid”: a single, converged, often carrier-

class IP network that enables high-speed broadband traffic throughout the

entire ecosystem

•Exchange of real-time information, deep cross-silo collaboration, and

airport-wide process integration


Airports evolution –Airport 1.0 Basic Airport operations

•Focus on capabilities necessary for safe and efficient management of landings,

departures, and other aircraft operations. They offer basic passenger services,

including check-in, boarding, security, baggage pick-up, and moderate retail, food, and

beverage services.

•Operate in a landlord model, where the airport/landlord provides the real estate, while

airlines, concessionaires, and other tenants design and implement their own business

environments.

•Airports exhibit highly evolved operational efficiencies, but pay insufficient attention to

passenger experience.

•Operations, systems, and business units are likely to be highly siloed, making it difficult

for different entities to collaborate across business boundaries.

•While there is always an airport-wide master strategic plan, the airport business units

and tenants procure and implement technologies in a stovepipe fashion, with little

ability for information sharing and centralized management without costly and often

suboptimal systems integration.


operations


Details


Airports evolution –Airport 2.0 Agile Airport

•“Agile airports” adapt well to a changing environment and fast-paced operational

tempo. Technology-enabled collaboration is highly evolved throughout these airports

and is implemented across business units and functional silos.

•Business entities and ecosystem partners share information quickly and seamlessly,

enabling agile airports to respond rapidly to environmental and operational changes.

•By employing a centralized and shared services strategy, agile airports often preclude

tenant deployment of single-use and proprietary technologies. Instead, an airport-wide,

converged network architecture offers shared services on a common services platform.

Tenants take advantage of services such as managed communications, IP telephony,

broadband, Wi-Fi, and video surveillance at competitive market prices, without the

need to deploy and maintain their own technology solutions.

•From a business value perspective, the agile airport offers advanced operational

efficiencies, enabling faster turnaround times for airlines, faster set-up times for

tenants, and improved passenger experience. Examples of the agile airport include

Toronto Pearson International Airport, London Heathrow Airport, Singapore Changi

International Airport, Hong Kong International Airport, and McCarron International

Airport (Las Vegas).Source: Cisco IBSG, 2009

Airport 2.0„Agile

Airport“

Details


Airports evolution –Airport 3.0 Smart Airport

•Airport 3.0 comprises “smart airports” that fully exploit the power of emerging and

maturing technologies, with advanced and pervasively deployed sense-analyze-respond

capabilities.

•Systems are built around a “digital grid”: a single, converged, often carrier-class IP

network that enables high-speed broadband traffic throughout the entire ecosystem,

including the airport, airport city, airlines, seaport, logistics, authorities, and other parties.

The digital grid is the airport’s nervous system, touching and managing every point of

interaction.

•By enabling the exchange of real-time information, deep cross-silo collaboration, and

airport-wide process integration, smart airports significantly improve operational

efficiencies, passenger services, and advanced security capabilities.

•They also take passenger experience to new heights by delivering a range of

personalized services enabled by seamless exchange of passenger data to anticipate

needed services. Broad process integration among airlines, retailers, fuel providers,

caterers, and other ecosystem partners creates new benefits along the entire value chain.



Details


Vision on Aviation in the year 2025

Segmentation of the Airport market Low cost vs. Premium carrier Aircrafts getting larger and smaller Retail & Real-Estate business Connected Airport – Airside – Landside - Airport city Airport as service provider for all utilities Completely shared services, no dedicated services No check-in counters Interactive Digital signature leading the way Connected mobile workforce, e.g. agents, fuelers, Maintenance Satellite based (GPS) communication & navigation overtaking land-based

communication



Case Example: GTAA, Toronto – Connected Common Use

51

Challenge

Leverage a common services platform that connects a variety of Airport service providers to conduct business effectively and with cost savings

Solution

Unified Airport Operational Platform providing Unified Communications, CUPPS and CCTV.

Benefits

Decreased dependency on real-estate Self Service + CUPPS

Increased efficiencies (event reporting)

Improved real-time interactive information and digital signage

Reduction of infrastructure complexity

Improved leverage of e-Learning and Unified communications

Seamless flow of passengers and cargo

AdminAir Canada, GTAA and SITA Closets

Catalyst 3548

Air Canada Q318

Catalyst 3508

Air Canada STOC

Catalyst 3508

Catalyst 6506

6506

GTAA B108

Catalyst 3508 & 2 x 3548

Catalyst 3508

MPLS Core

ONS 15252

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MPLS

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MPLS

Distribution

ONS 15327

IHT

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Temporary

VPN Router

Temporary

VPN Router

Route

Reflector

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5/4

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Case Example: Toronto Pearson International Airport

“In the past, airports were designed intrinsically for passenger comfort as opposed to airline and airport efficiency,” says James Burke, GTAA Vice President, IT&T. “We needed to combine all those issues into one. Integral to our vision is the ability to develop a dynamic and pervasive technical infrastructure that will enable a more modern approach to Airport Business Practices & Communications.”

BUSINESS VALUE:

NETWORK SOLUTION:

Toronto Pearson’s new integrated network infrastructure runs on two independent dense wavelength-division multiplexing (DWDM) rings with Multi protocol Label Switching (MPLS) services layered to provide high reliability and scalability for accommodating increased traffic and new IP applications. Unified Communications and Wireless technologies were critical to the operational flexibility of the common use environment.

.

BUSINESS BENEFITS:

Flexible Gates

Common-use terminal equipment and integrated IP telephony enable GTAA to offer multi-airline gate use. When an agent closes out a flight, another airline can come in and use the same gate with both voice and data services

Self-Service Kiosks

Fixed and wireless networking enables passenger check-in and ticketing, which improves passenger flow and space utilization. Travelers can use any available airport kiosk to check in for any flight on any airline.

Wireless Networking

The wireless LAN extends the reach of the network, increasing operational flexibility and providing access to applications, data, and emergency response where and when needed (real time).

COST SAVING

COMPLIANCE

CLIENT SATISFACTION

NEW SERVICE REVENUE


Case Example: Ramp Collaboration @ Cairo International, Egypt

53

Challenge

Meeting passenger growth from increased Aircraft movements Cairo Airport employees and service providers needed a solution to channel ramp and operational work flow efforts

Solution

Cisco 2710 Location Appliance identifies the Location of Authorized ramp personnel via their mobile 802.11 devices. Adjacent technology partner’s Context-Engine automatically displays applications on a user’s device according to the user’s profile or job function, type of terminal, time and location.

Benefits

Real-time information / Increased efficiency and communications

Improved productivity, monitoring and reporting on the ramp.

Better security and improved response times in cases of emergency

Improved customer service with updated information concerning service disruptions, scheduling, routing and destinations.

Reduced costs, improved punctuality and increased innovation.


Case Study Example : Major Airport PilotUnified Airport Services Mobility : Turnaround Management

Areas of Improvement

Business Benefits

Agreed operational real time status (shared metrics/

definitions) lead to improved shared understanding

and decision making

Measurement of processes are captured - leads to

analysis and improvement in process

Clear audit trails reduces effort required for

legislative reporting

AODB gains immediate Real time relevancy that

becomes information asset for sale

Pilot: Wireless Gate/ Stand

Typical turnaround:

Long haul – 70 minutes; Short haul – 40 minutes

Ground time estimated at €150 per minute

Target for reduction in turnaround by 3 minutes on 10 gates

At 7500 turnarounds per year equates to ~ €3 M savings

Need for Collaboration

25 workers of many different disciplines per aircraft

Real-time + Mobility view of status operational processes

and audit trail for analysis & improvement

COST SAVING

COMPLIANCE

CLIENT SATISFACTION

NEW SERVICE REVENUE


Case Example: Athens International (1/2)

55

Challenge

AIA's initial vision was to develop valuable services for its passengers and onsite businesses by designing a flexible airport that uses advanced technology to increase operational effectiveness, improve safety, and provide competitive services to airport travelers, employees, and customers..

Solution

A secure Unified Wireless Network based on the Cisco Service-Oriented Network Architecture (SONA), in conjunction with new common-use infrastructure facilitates advanced services and provides immediate access to real-time information across the entire airport This delivers mission-critical information and innovative services.

Benefits

The integration of voice and data services reduces AIA's costs, optimizes its existing resources, and consolidates its investments, making it the most cost-effective, competitive, secure solution for the airport, its 300 onsite tenant companies, and its almost 14 million annual passengers.


Case Example: Athens International (2/2)

Cisco was able to converge the separate networks into a single more secure and flexible platform. AIA was able to address high levels of traffic during the Olympic games and faultlessly meet the demands of the resultant increase in customers without escalating cost.

BUSINESS VALUE:

NETWORK SOLUTION:

The Cisco Unified Airport Solution is an IP-based network integrating transactions, data, voice, and video. Addressing the Business challenges of Airport Operations and Communication needs.

BUSINESS BENEFITS:

Enhanced Safety and Security for Travelers, Baggage, and Airport Staff

Optimised Capacity and Productivity thus streamlining passenger flow

Network Security , resiliency and responsiveness; protecting the business against threats

COST SAVING

COMPLIANCE

CLIENT SATISFACTION

CONTINUOUS SERVICE REVENUE


Improving Airport Passenger Experience

There is an opportunity for the airports to build a relationship with the passenger by

providing added value services in return the airport would receive travel and

preference information that would enable more targeted offers and services.

Example services:

• real-time travel services that keep passengers informed of any travel problems and

offers premium services (eg valet parking or route switching) if passenger is at risk

of being late

• mobile or kiosk concierge service that provides location based information to help

passengers through the terminal to the gate plus personalised hospitality and retail

offerings.

• dynamic advertising, product testing or travel information in departure lounge, gate

or arrivals targeted according to passenger destination origin or reason for travel.

• integrated expert locator and equipment tagging systems to allow better use of

people and terminal assets to smooth the passenger journey


The Connected Experience:Airport Duty Manager – IMPACTFUL on Process

Gate 54 boarding

stopped

Re-assign departure

loungesPTT

FIDS

DCS

IPCCTV

AODB

Push-to-Talk uses

iPICS for instant

communication

http://www.picsearch.com/info.cgi?q=escalator&cid=220450595884&opt=&size=1t50&aui=1


The Connected Experience:Airport Duty Manager

PTT

FIDS

DCS

IPCCTV

AODB


Airport city components

Retail

Industrial & Logistics

Connected Real-Estate

Passengers

Safety and security

Digital Grid


transforming airports - cisco report 2010

Documents

cisco systems

sustainable business

sustainable business

global profit

landing fee

civil aviation administration

global industry forecast

global traffic