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priority. Airports’ spending capacity declined
                                                                       in 2020 because of travel restrictions in place
                                                                       around the world; private airports that tended
                                                                       to be early adopters of passenger flow man-
        tified for the isolation of any suspected symptomatic passenger   agement solutions were among those most
        before transferring them to the designated facility.           affected. Potential airline bankruptcies present
        There are well over 4,000 airports across the globe with scheduled   a major risk for airports, especially for airports
        traffic. According to Airports Council International (ACI), a global   that serve as hubs to struggling airlines.
        trade group for the world’s airports, these generated revenues of
        US$172.2 billion in 2017, up 6.2 per cent year-on-year. The airport   Regulations focused on passenger data secu-
        industry has steadily expanded in recent years, driven by strong   rity and integrity will be a challenge for the
        growth in passenger traffic. In 2019, total trips exceeded 9 billion—  development and implementation of passenger
        up 3.4 per cent year-on-year.                                  flow management solutions. Internet of Things
                                                                       technologies will drive market growth, but a
        Airports have high fixed costs associated with the provision and   concern is that the implementation of sensors
        maintenance of infrastructure and services such as safety and   on a large scale increases the number of entry
        security. These are incurred regardless of traffic levels. Airport   points for cyberattacks that could disrupt air-
        owners and operators, therefore, have limited scope to curtail costs   port operations.
        when facing a downturn in demand. Operating expenses comprise
        about 65 per cent of total costs and include staff costs (30–40 per  In the near term, airports may pursue opportu-
        cent), contracted services (20–25 per cent), utilities (about 7 per  nities to leverage technology to help custodial
        cent), and rent or concession fees (about 7 per cent). Capital costs  services perform as efficiently and effectively as
        (on average, 35 per cent) mainly comprise depreciation (about 65  possible. Increasing channels for passengers
        per cent) and interest payments (about 32 per cent).           to report service issues can improve custodial
                                                                       responses and create a sense of control over
        COVID-19 has had an immediate, dramatic impact on airport traffic  the environment.  Airports can also take steps
        and revenue. The economic crisis that will follow the pandemic  to inform passengers of custodial measures
        will continue to drive lower demand for air travel in the immediate  already taken to convey commitment to clean-
        aftermath.                                                     liness—proactive and specific communications
                                                                       can give passengers confidence that the air-
        Effect on Passenger Traffic                                    port environment is clean and sanitary.
        The COVID-19 pandemic has reduced passenger traffic worldwide.
        The disruption began in Asia-Pacific, but the rapid spread of the  Finally,  airports  can  consider  the  extent  to
        virus and the containment measures implemented in response—    which they want to be involved in direct pas-
        such as government recommendations to avoid travel and airport  senger health through temperature scans and
        closures—led to a 22.9 per cent drop in global air traffic last  other advanced health screening technology
        February and 53.1 per cent last March.                         and look for opportunities to collaborate with
                                                                       airlines and terminal operators to implement
        The sudden drop in air traffic has led to almost complete paralysis  health-screening capabilities and other ser-
        of both aeronautical and non-aeronautical revenues. As airlines cut  vices. The stand-off temperature and fever
        capacity, the aeronautical revenues airports receive from airlines,  detection systems can help identify passengers
        such as landing charges for aircraft and security charges, fall.   for additional screening. The use of standard
                                                                       no-touch forehead thermometers can also pro-
        The pandemic has accelerated digital transformation projects  vide additional health and safety confidence
        related to passenger experience, with self-service becoming a  for passengers.

         12 | January/March 2021                                                   WWW .GBP .COM.SG/ AAA
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