Rohit Talwar - Airport 2025 Keynote - ACI Airport Exchange Conference Abu Dhabi - 30 November 2011

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Rohit Talwar's keynote speech on Airport 2025 and the future of aviation, given to the ACI Airport Exchange Conference in Abu Dhabi, 30/11/11.

Rohit Talwar's keynote speech on Airport 2025 and the future of aviation, given to the ACI Airport Exchange Conference in Abu Dhabi, 30/11/11.

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  • 1. Airport 2025 –Transforming the Passenger ExperienceACI Airport Exchange - Abu Dhabi - 30/11/11 Rohit Talwar - CEO – Fast Future rohit@fastfuture.com www.fastfuture.com
  • 2. ContentsPresentation p3About Fast Future p 92Background Notes p 103Image Sources p 360
  • 3. MacroDrivers
  • 4. The World in 2025
  • 5. How do we get there from Here?Understand Research & Newthe Drivers Innovation Business Models
  • 6. New Business Thinkinge.g. Ultra-Quick Construction
  • 7. Growth is not Guaranteed……Thinking is Back in Fashion
  • 8. Transformational Change? It’s Only Just Begun
  • 9. 10 Key Patterns of Change Shaping the Next Decade Economic turbulence, a shift in wealth from west to east and political uncertainty are shaping the landscape Natural Society in Resource Demographic Transition Challenges Destinies Geo-political Generational Complexity Economic Crisis Crossroads and Power Shift RethinkingTechnology Talent,and Science Education, Training Enterprise 3.0 Global Internet Expansion Source: Designing your Future – Key Trends, Challenges and Choices – Fast Future
  • 10. Aviation Outlook
  • 11. Airport Expansion by 2020 China from ~150 to 244 India from ~100 to 140 Today - US – 3 Seats per head / China 0.3 / India 0.1Asia – a third of all flyers (2013) and travel spend (2020)
  • 12. 38% - Under 100 US Airports by 201539% - Airports only in Major Euro Cities
  • 13. Low Cost Carriers64% - Half will Collapse49% - Massive Growth
  • 14. Virtual Airlines
  • 15. New Business Models / AirlinesEmergence of Virtual Airlines?
  • 16. Industry Scenarios High Uncharted Paranoid Territory SurviveLow High Passenger Price Sensitivity Back to the Crash and Future Burn Low Business Model Innovation
  • 17. Sustainable Green Terminals
  • 18. Fast Build, Flexible and Temporary TerminalsNext - Sustainable Green Terminals?
  • 19. Redistribution of Aviation Profit Pools
  • 20. Embracing Open Innovation Airport Living Lab
  • 21. FutureCustomers
  • 22. Demographic Destinies 2 billion more people in 40 years –Demographics is Driving Economics 448 739 691 5231 344 1998 4157 729 1030 585 2010 2050
  • 23. Life Redefined – Lifespans are IncreasingUnder 50’s have 90%chance of living to 100.Aubrey de Grey suggestswe could live to 500 or 1000What are the health,consumption and resourceimplications?What kind of opportunitieswill be created?
  • 24. Tomorrow’s Traveler - Demographics• Over 60’s in developed economies to rise from 22- 33% from 2009 and 2050.• In developing world, from 9 to 20%• Global retirement market 2010-2020 could grow from $28 - $46 Tn• Global middle class could rise from 430M to 1.2 Bn (2000 – 2030)Source: United Nations Report Warns of Dire Effects of Under population, Fertility Decline,’ by Susan Yoshihara, PhD, March 5th 2010, LifeNews http://www.lifenews.com/int1479.html http://www.financial-planning.com/news/allianz-retirement-pensions-growth-2668604-1.html
  • 25. Tomorrow’s Traveler – Spending Patterns• By 2020, Asian consumers could account for over 40% of global middle class consumption• By 2030 Asian consumer spending could hit $32 trillion• By 2014 female wealth could reach $18 trillion• Females could control 70% of global consumer spending
  • 26. Traveller Mindsets Too Busy To Care Complex Lives, Pressurised Finances Craving Simplicity Wealthy and Hard to Please
  • 27. Buying Behaviour• Mobile• Low loyalty• Multiple searches and site visits• Word of mouth critical• Value conscious – price, offers, rewards• Shorter trips• Shorter notice71% - Traveler motivations will become increasingly fragmented / diverse and harder to segment into clear customer groupings
  • 28. Traveler motivations will become increasingly fragmented and diverse and harder to segment into clearly definable customer groupings604 Respondents
  • 29. I will book the bulk of my travel online in 2015 74% - Will use 64% Social Networks to Research and Find Deals 31% 3% 2%Very likely Likely Unlikely Very unlikely
  • 30. Technology Horizons
  • 31. Tomorrow’s Traveler – Technology• Number of mobile subscribers could rise from 4Bn to 5Bn 2009-2015• Mobile data traffic to rise 300- fold by 2015 (Nokia).• By 2020 the range and nature of interaction technologies / customer ‘touch points’ will expand dramatically.• ‘Go nowhere’ gamers• Personal genetic profiles
  • 32. TMT – Convergence and ImmersionTelephony Connectivity• Voice • Cellular• Messaging • Up to 14 bands• SIM card • WLAN/BT• Phonebook • GPS• Ring Tones • NFC• Security • FMData/ MultimediaEnterprise • Camera 8-16M • Camcorder• 100Mbps • 24M Color Display• Email • Memory (160GB)• IMS • Multiformat A/V• Browsing • HD Video/TV out• VPN • Games• PIM• Ecommerce Software (50-100M Tps) • Protocols • DRM• Payments • Middleware • Applications • User Interface • Minimize fragmentation
  • 33. Mobile Technology at the Airport Boarding Mobile Interactive Coupons ads Social Mobile networking payments Security Automated Notification Self-service Check-in & guidance Baggage drop Roaming © 2011 Amadeus IT Group SA Agent Airport entrance Private Transportation Public transportation
  • 34. TINA – The Intelligent Airport
  • 35. Cloud Computing
  • 36. Apps – What I Want, When I WantSource: Forrester
  • 37. Next Generation Smart Phones• Concierge / Schedule Management• Check in• Notifications / Directions• Route Management• User Generated Content• Wallet• Location Based Offers• Dynamic Rerouting• Personal Networking
  • 38. Apps / Personalised Advertising
  • 39. Holographic Displays
  • 40. Augmented Reality / Heads Up
  • 41. Augmented Reality atCopenhagen Airport
  • 42. Haptics / Holograms / Interactive Surfaces
  • 43. Wearable Displays
  • 44. Ambient Intelligence
  • 45. Real Time / Predictive Analytics
  • 46. 3D Printing – True Personalization
  • 47. Rethinking the Airport Experience
  • 48. Live the Customer Journeys and Experiences Stimulus / Search / Booking Transport to and from the Airport Check in to Flight Departure Flight Arrival to Airport Exit Flight Transfer - Arrival to Departure Airport Experience In Flight Experience Relationship Management
  • 49. Mapping Customer Journeys & ExperiencesSub ▪ Traffic ▪ Off airport flight ▪ Arrival at airport by ▪ Parking ▪ Transport fromprocess information information car/train parking to PlazaKPI ▪ Traffic jams ▪ Accessibility ▪ Price/Quality LT ▪ Ease of wayfindingScore 73% 91% / 90% 41% 90% <Plaza aankomst> <Picture>Sub ▪ Entering Plaza ▪ Services; ▪ Leaving Plaza ▪ Departure from ▪ Retrieving car &process rental, parking airport by bus/train Leaving airportKPI ▪ Clarity ▪ Clarity ▪ AccessibilityScore 77% 77% 90% / 80%
  • 50. Airport Arrival
  • 51. Extended Airport?
  • 52. Check In
  • 53. Next Gen Qantas Check-In
  • 54. Security
  • 55. Are Biometrics the Answer?
  • 56. Flight Departure
  • 57. Minimising Journey Times and Aircraft Turnaround
  • 58. Arrivals –Localizing the Experience?
  • 59. Enhancing the Airport Experience – Service, Food, Leisure and Retail
  • 60. ‘Virtual Assistants’
  • 61. Catering, Lounge and Service Experiences
  • 62. Extending the Experience
  • 63. The Slide@T3Changi Airport - Singapore
  • 64. Funding The Future –From Cabin to Cash Register
  • 65. Leveraging Customer Insight - Multiple Revenue Streams
  • 66. Leveraging Customer Insight
  • 67. Best Price Guarantees
  • 68. Partner Tie-insPullman Bangkok King Power Hotel
  • 69. In-flight Duty FreeKorean Air - Shop Onboard
  • 70. Passenger Centric, Context Related e.g. The Virgin Red Store Single swipe ‘open tab’
  • 71. In Terminal / In-Flight Travel Agency
  • 72. Booking/Boarding Pass Ads / Offers
  • 73. Daily Social Media Offers e.g. Twitter
  • 74. Rethinking Airport Retail
  • 75. Online Brands Appearing Offline
  • 76. Virtual Grocery Shopping – Tesco South Korea
  • 77. New Retail Concepts
  • 78. Auctions - The $5,937 Laptop
  • 79. Air Sahara/Jetlite
  • 80. Outsourcing In-flight Duty Free e.g. BA / Tourvest
  • 81. So How Can we Respond?
  • 82. So How Can we Respond?
  • 83. The Journey to 2025• Continuous research• Define change roadmaps – passenger journeys and experiences, operations and technology• Experiment• Develop uncertainty tolerant management
  • 84. Aviation Next – what does the timeline of developments looklike for the sector in your region?
  • 85. Deep Dive on Key Trends / Issues
  • 86. Be Magnetic
  • 87. Make Time and Space for Change http://news.nationalgeographic.com/news/bigphotos/images/090305-daylight-saving-time-facts-history_big.jpg
  • 88. Conclusions• Huge untapped potential• Technology is a key enabler• Encourage innovation and curiosity• Experiment with business models• Work with and for tomorrow’s passenger
  • 89. Thank YouRohit TalwarCEOFast Futurerohit@fastfuture.comTel +44 (0)20 8830 0766Mob +44 (0)7973 405145Twitter http://twitter.com/fastfutureLinkedIn http://www.linkedin.com/in/talwarwww.fastfuture.comwww.convention-2020.comBlog http://widerhorizons.wordpress.comSignup for our newsletters / Download past editions at www.fastfuture.comWatch a short video of Rohit at http://www.travelmole.tv/watch_vdo.php?id=14300Download the Hotels 2020: Beyond Segmentation Report athttp://www.amadeus.com/hotelit/beyond-segmentation.html
  • 90. About Fast Future 92
  • 91. Fast Future – Aviation and Travel Industry Services• Live Events - Speeches, briefings and workshops for executive management and boards of airlines, airports, hotels, venues, CVB’s and associations• Future Insights - Customised research on emerging trends, future scenarios, technologies and new markets• Immersion - ‘Deep dives’ on future trends, market developments, emerging issues and technology advances• Strategy - Development of strategies and business plans• Innovation - Creation of business models and innovation plans• Engagement - Consultancy and workshop facilitation
  • 92. Fast Future• Research, consulting, speaking, leadership• 5-20 year horizon - focus on ideas, developments, people, trends and forces shaping the future• Clients – Airports - Aeroports de Paris / Schiphol Group – Vancouver Airport Services – Industry Associations – ICCA, ASAE, PCMA, MPI – Corporates - GE, Nokia, Pepsi, IBM, Intel, Orange, O2, Siemens, Samsung, GSK, SAPE&Y, KPMG, Amadeus, Sabre, Travelport, Travelex, ING, Santander, Barclays, Citibank, DeutscheBank – Governments - Dubai, Finland, Nigeria, Singapore, UK, US – Convention Bureaus – Seoul, Sydney, London, San Francisco, Toronto, Abu Dhabi, Durban, Athens, Slovenia, Copenhagen – Convention Centres – Melbourne, Adelaide, Qatar, QEIICC – Hotels - Accor Group, Preferred, – Intercontinental – PCO’s - Congrex, Kenes
  • 93. Hotels 2020 – Objectives• Identify key drivers of change for the globally branded hotel sector over the next decade• Examine the implications for:  Hotel strategy  Brand portfolio  Business models  Customer targeting  Innovation
  • 94. Convention 2020• Global strategic foresight study to help the meetings industry prepare for the decade ahead - Industry-wide sponsors• Multiple outputs Nov 2009 – December 2011• Current studies on future strategies for venues and destinations
  • 95. Future Convention Cities Initiative• Members - Cities aiming to be global leaders in delivery of business events• Focus - Maximising long term economic benefit of events• Core Activities - Research, sharing of expertise and best practices• Engagement Model - Meet four time a year prior to major industry events• Management - Initiated and co-ordinated by Fast Future
  • 96. Rohit Talwar• Global futurist and founder of Fast Future Research.• Award winning speaker on future insights and strategic innovation – addressing leadership audiences in 40 countries on 5 continents• Author of Designing Your Future• Profiled by UK’s Independent Newspaper as one of the Top 10 Global Future Thinkers• Led futures research, scenario planning and strategic consultancy projects for clients in telecommunications, technology, pharmaceuticals, banking, travel and tourism, environment, food and government sectors• Clients include 3M, BBC, BT, BAe, Bayer, Chloride, DTC De Beers, DHL, EADS, Electrolux, E&Y, GE, Hoover, Hyundai, IBM, ING, Intel, KPMG, M&S, Nakheel, Nokia, Nomura, Novartis, OECD, Orange, Panasonic, Pfizer, PwC, Samsung, Shell, Siemens, Symbian, Yell , numerous international associations and governments agencies in the US, UK, Finland, Dubai, Nigeria, Saudi Arabia and Singapore.• To receive Fast Future’s newsletters please email rohit@fastfuture.com
  • 97. Designing Your Future Key Trends, Challenges and Choices• 50 key trends• 100 emerging trends• 10 major patterns of change• Key challenges and choices for leaders• Strategic decision making framework• Scenarios for 2012• Key futures tools and techniques• Published August 2008• Price £49.95 / €54.95/ $69.95• Email invoice request to rohit@fastfuture.com
  • 98. Our Services Bespoke research; Identification & Analysis of Future Trends, Drivers & Shocks Public Speaking, In- Company Briefings, Accelerated Scenario Seminars and Planning, Timelining & Workshops Future MappingPersonal Futuring forLeaders and Leadership Expert Consultations &Teams Futures Think Tanks Identification of Design & Facilitation of Opportunities for Innovation, Incubation Innovation and Strategic & Venturing Strategy Creation & Investment Programmes Development of Implementation Roadmaps
  • 99. Example Projects• Public and private client research e.g. : – Airport 2025 - Ongoing – Development of Market Scenarios, emerging trends and strategies for key clients – Government and OECD Scenario Projects – e.g. Migration 2030, Future of Narcotics, Chemical Sector, Family 2030 – Scenarios for the global economy for 2030 and the implications for migration – Designing Your Future (Published August 2008) – book written for the American Society of Association Executives & The Center for Association Leadership – Global Economies – e.g. The Future of China – the Path to 2020 – The Shape of Jobs to Come – Emerging Science and Technology Sectors and Careers – Winning in India and China – The Future of Human Resources – Exploiting the Future Potential of Social Media in UK Small to Medium Enterprises – Convention 2020 – the Future of Business Events – Future Convention Cities Initiative – Maximising Long-term Economic Impact of Events – One Step Beyond – Future trends and challenges for the events industry – Hotels 2020: Beyond Segmentation – Future Hotel Strategies – The Future of Travel and Tourism in the Middle East – a Vision to 2020 – Future of Travel and Tourism Investment in Saudi Arabia
  • 100. Example Clients
  • 101. Background Notes
  • 102. MacroDrivers
  • 103. We need to Prepare for Alternative Scenarios 8-10% Suspicious Love is in Minds the AirGDPGrowth Dancing inIndia 6-7% the DarkandChina Road to Nowhere 1-2% Recession 0% 1-2% 2-3% GDP Growth Europe, the USA and Japan
  • 104. Derivatives – Market Value vs. Global GDP 800 760 700 700 605 600US$ Trillion 500 400 300 200 100 69.8 14.2 4.33 0 Richard 2010 est Bank of World GDP US GDP Chinese GDP Duncan (June International 2008) Settlements June 2009 estSource: BIS, 2009 BIS - http://www.roubini.com/financemarkets-monitor/258502/___swap_tango________a_derivative_regulation_dance__part_12010 - http://www.newsmax.com/deBorchgrave/BankforInternationalSettlements-BIS-derivatives-MerrillLynch/2010/05/11/id/358672
  • 105. Public debt in 2020 (% of GDP)Source: Deutsche Bank Research ‘Public debt in 2020’ March 2010http://www.dbresearch.com/PROD/DBR_INTERNET_EN-PROD/PROD0000000000255134.pdf
  • 106. Economic Power Shifts The Top 20 in 2025?GDP US$ Source: IMF WEO 2009, PwC ‘the World in 2050 March 2008 edition
  • 107. Reorientation of Global Markets • Some 647 million air travelers — more than a quarter of the 2.2 billion passengers who flew worldwide — took to the skies in Asia in 2009, compared to the 638 million air travelers in North America, hitherto the traditional leader in global aviation. • By 2013, an additional 217 million travelers are expected to fly within Asia to push the region’s aviation market share to about one-third of the world market. • In the U.S. there are three aircraft seats per year for each of the 300 million people who live here. • China’s population of 1.3 billion is served by only 0.3 seats per person and India’s 1.1 billion population has only 0.1 seats available per person. • When Asians reach the stage of traveling as frequently as people in the U.S., that alone will triple the size of today’s global aviation industry.Source: Bay Area Travel Writers ‘Travel Trends: Asia Eclipses America in Aviation Markets — by Lakshman Ratnapala,’ March 2010http://www.batw.org/news/industry-news/travel-trends_mar-2010/
  • 108. Current Spending Patterns • Reinforcing the appeal of duty free Top Asia-Pacific Amount US$ duty free spenders savings, 43 percent of all respondents said they shopped at a duty free store Korea 358 during their last overseas trip. China 333 • Travelers from Japan (73 percent), Hong Kong 224 Korea (71 percent) and China (49 percent) were the region’s most Malaysia 195 frequent duty free shoppers while India 180 Korean and Chinese travelers also Thailand 178 made it to the biggest spender list. Japan 164 Australia 153 Singapore 153 New Zealand 134 Taiwan 125 Regional Average 212Source: China Travel Trends, September 2009 http://www.chinatraveltrends.com/2009/09/16/chinese-travellers-top-list-of-duty-free-spenders-in-asia-pacific/
  • 109. Future Regions of Multiple StressSource: Ministry of Defence ‘Strategic Trends Programme, Global Strategic Trends out to 2040,’ February 2010http://www.mod.uk/NR/rdonlyres/D70F2CC7-5673-43AE-BA73-1F887801266C/0/20100202GST_4_Global_Strategic_Trends_Out_to_2040UDCDCStrat_Trends_4.pdf
  • 110. Source: Tourism Futures http://www.tourismfutures.net/insights/demographic
  • 111. Source: Tourism Futures http://www.tourismfutures.net/insights/demographic
  • 112. Source: Ministry of Defence ‘Strategic Trends Programme, Global Strategic Trends out to 2040,’ February 2010http://www.mod.uk/NR/rdonlyres/D70F2CC7-5673-43AE-BA73-1F887801266C/0/20100202GST_4_Global_Strategic_Trends_Out_to_2040UDCDCStrat_Trends_4.pdf
  • 113. Climate Change
  • 114. The Climate Change Challenge• How fast can CO2 emissions be reduced per unit travel?• How can we move towards convergence on the most effective way to reduce aviation climate change impacts?• How can we best address non-CO2 climate impacts?• Where are carbon emissions owned?Source: Henley Centre Headlight Vision ‘Managing the environmental challenges of growth in aviation Draft report of stakeholderevent, Cambridge’ October 2006
  • 115. TravelOutlook
  • 116. Multi Speed Recovery Leading to many Types of Tourist • The global travel and tourism industry will experience a “multi-speed” recovery taking up to a further four years to fully recover to pre-global downturn levels, reveals a report launched on June 16th 2010. • Euromonitor International’s Forecast Update – Recovery In Sight? - reveals the global travel and tourism industry will experience a “multi-speed” recovery kick started by the developing economies as high unemployment and debt in developed countries holds back their growth. • Global international arrivals will not recover to pre-crisis 2008 levels until 2012, while incoming tourism receipts will not recover until 2013. • Furthermore, the hotels sector will not fully recover to 2008 levels until 2014. • The hotel sector in Australasia, Latin America, and Europe will take the longest to recover. • Asia is again driving force behind the hotels recovery, due to the continued expansion of international and local chains. Source: World Tourism Directory, June 2010 http://www.worldtourismdirectory.com/news/4325/global-travel-industry-to-experience-multi-speed- recovery.html
  • 117. Travel in 2023• A report by KPMG released in April 2008 ranked transport and tourism as the sectors least well prepared for climate change and among those most commercially exposed to the physical risks it presents.• Forum for the Future in its ‘Tourism 2023’ report of October 2009 partnered with companies like British Airways, Carnival UK, and Advantage Travel Centres to analyze the impact our ever-growing ecological footprint will have on travel.• The four scenarios under which we could progress: – 1) Boom and Burst – 2) Divided Disquiet – 3) Price and Privilege – 4) Carbon Clampdown Source: Forum for the Future ‘Tourism 2023,’ October 2009 http://www.forumforthefuture.org/files/Tourism_2023_full_report_web_version.pdf
  • 118. Source: Forum for the Future ‘Tourism 2023,’ October 2009 http://www.forumforthefuture.org/files/Tourism_2023_full_report_web_version.pdf
  • 119. Boom and Burst• A booming economy and high disposable incomes have fuelled a growth in travel worldwide. People travel further, more frequently, and at faster speeds than ever before. There are many new reasons to go abroad as global political stability and prospering economies have opened up the world to more commerce and visitors.• Rapid advances in technology have been crucial, such as the breakthrough in algae- based fuels. Dramatic improvements in efficiencies have allowed the transport sector just about to keep pace with new regulations and their impacts, such as the steadily rising global price of carbon.• Legally binding carbon targets are being met – but many are asking how long this can continue. Many destinations are suffering from serious overcrowding. Wilderness is perhaps the scarcest resource as road, rail, sea and air routes have brought mass tourism to the last corners of the planet. Source: Forum for the Future ‘Tourism 2023,’ October 2009 http://www.forumforthefuture.org/files/Tourism_2023_full_report_web_version.pdf
  • 120. Boom and Burst highlights• Tourists flock to see the ancient shrines and archaeological treasures of Iraq.• Massive protests spoil the opening of the Mount Everest Theme Park.• Tourism puts huge strains on infrastructure in popular destinations like New York, Paris and London. Visitors are herded between attractions with timed tickets.• High-tech ‘carbon scrubbers’ installed on the ground ‘clean the air so you can travel’.• Overcrowding in popular destinations has led to the rise of glamorous ‘campsites’, ‘pop up’ hotels with stackable modules, and floating resorts.• Fastest growing destinations: the Democratic Republic of Burma, Yemen, Beyond Botswana Plc (Privatised Special Economic Zone), Somalia, Argentina, Brazil, Antarctica, Near space voyages, Papua New Guinea, Kazakhstan. Source: Forum for the Future ‘Tourism 2023,’ October 2009 http://www.forumforthefuture.org/files/Tourism_2023_full_report_web_version.pdf
  • 121. Divided Disquiet• A toxic combination of devastating climate change impacts, violent wars over scarce resources and social unrest has created an unstable and fearful world. This has made travelling overseas an unattractive proposition.• Many destinations were unprepared for the impacts of a changing climate. More extreme weather events, rising sea levels, increased flooding and frequent droughts have battered some places, while food shortages and malnutrition, malaria, and conflict over resources like water and oil have wreaked havoc in others.• Visitors are highly selective in where and when they travel, cramming into a small number of destinations where overcrowding compounds the problems.• A breakthrough in affordable telepresence technology has proved surprisingly popular with businesses that are keen to cut costs. This resulted in drastically reduced numbers of certain air routes, closing them to many holidaymakers. Source: Forum for the Future ‘Tourism 2023,’ October 2009 http://www.forumforthefuture.org/files/Tourism_2023_full_report_web_version.pdf
  • 122. Divided Disquiet Highlights• ‘One flight per year’ policy for major US company encourages executives to cut costs with telepresence technologies.• Tour guides with a military background hired as part of a holiday package for extra protection abroad.• Rising sea levels force Government of Maldives to step up relocation plans to India.•• Latest ‘hot’ holiday craze is massive resorts offering golf and skiing across sand dunes.• Eiffel Tower auctioned off to a multinational corporation as part of sponsored heritage plan.• Fast growing destinations: Norway, Ireland, Latvia, UK, Greenland Doomsday Park, Canada, Denmark, France, Sweden, The Estonian Army Base Experience. Source: Forum for the Future ‘Tourism 2023,’ October 2009 http://www.forumforthefuture.org/files/Tourism_2023_full_report_web_version.pdf
  • 123. Price and Privilege • A dramatically high oil price has made travel punitively expensive. Dwindling supplies and rising demand from the new economies of Asia have pushed energy prices into a series of sharp and unpredictable spikes. • The travel industry worldwide has been badly hit and aviation has shrunk dramatically. Fleet replacements have been slower than anticipated and the predicted efficiency gains could not keep pace. There have been mass redundancies across the travel industry and a period of dramatic consolidation across the world. • Although a small, elite market continues to fly regularly, the vast majority of people simply cannot afford the experience. The days of affordable travel are now just a nostalgic memory. • People who want to holiday abroad either save up for years and fly overseas or join the new mass market of overland connections. Pan-European rail, bus and sea networks offer the most cost-effective means of travel for most people. State-of-the- art super-hubs provide seamless connections between different parts of the comfortable and affordable system of overland travel.Source: Forum for the Future ‘Tourism 2023,’ October 2009 http://www.forumforthefuture.org/files/Tourism_2023_full_report_web_version.pdf
  • 124. Price and Privilege Highlights• Demonstrators take to streets in cities across the world demanding the ‘right to fly’.• Ukraine positions itself as the ‘Gateway to the East’ with new Kiev bus-rail megahub plan.• ‘Absolutely no frills’ airline sector from some non-EU countries offers standing room only and no cabin crew.• Banks offer holiday credit schemes allowing family and friends to save together for the annual trip.• Fastest growing destinations: Montenegro, France, Lithuania, Portugal, Germany, Central Europe Lakelands, SailRail breaks to Greece, Morocco, The Tropical Island Experience (Jersey), Ukraine. Source: Forum for the Future ‘Tourism 2023,’ October 2009 http://www.forumforthefuture.org/files/Tourism_2023_full_report_web_version.pdf
  • 125. Carbon Clampdown• Governments introduce tradable carbon quotas for all households as part bold plans to tackle climate change. Individual allowances are seen as the fairest way of allocating the ‘right to pollute’ equally.• The public has clamoured for tough action. Environmental impacts are increasingly felt. Although there has been no great shift in cultural values, support for regulation is high.• The economy is more localised, and disposable incomes are low.• Many holidaymakers are still keen to travel abroad, but perceptions of the purpose and real costs of travel have changed. Although distance is a key consideration, the reason for the holiday is crucial: what you are doing is more important than where you are.• Ethical travel is a new mass market, and the government encourages this with the carbon rebate for volunteering whilst abroad. Source: Forum for the Future ‘Tourism 2023,’ October 2009 http://www.forumforthefuture.org/files/Tourism_2023_full_report_web_version.pdf
  • 126. Carbon Clampdown Highlights• Major travel firm goes bust after massive boycott coordinated by a popular website over its environmental policy.• Red Cross Swarm uses social networks to send volunteers to disaster zones faster than official agency staff.• Peer-to-peer holidaying allows people to ‘swap lives’ with another family and spend a year in another part of the world.• Fastest growing destinations: Cornwall, Ukraine, Sweden, Mozambique Special Volunteer Zone, Lithuania, Northumbria, Cork, France, Slow Boat Community (registered to Guyana), Liverpool. Source: Forum for the Future ‘Tourism 2023,’ October 2009 http://www.forumforthefuture.org/files/Tourism_2023_full_report_web_version.pdf
  • 127. What does this mean?• Fast Company notes that ‘…the reality of vacationing in 2023 will probably be a combination of these scenarios, with high oil prices, disappearing wilderness, carbon quotas, and advances in air travel (i.e. biofuel-powered planes).’ Source: Fast Company ‘Tourism 2023 Imagines the Future of Vacations,’ October 2009 http://www.fastcompany.com/blog/ariel-schwartz/sustainability/tourism-2023-imagines-future-vacations
  • 128. Predictions • Charles Goddard, Asia Pacific Editorial Director, Economist Intelligence Unit, speaking at the ALTM Ultratravel Forum, said that ‘…China, despite the crisis, and because of economic stimulus packages, had continued to grow in the last 18 months by between 8% and 9%. This shift would be even more dramatic if China became more consumption driven as opposed to export led, and this was beginning to happen.’ • ‘Asia was the growth market ‘par-excellence’ with 50% of global consumption being centred in the region in the next 4-5 years. An explosion in travel would be an offshoot of this phenomenon,’ he said.Source: Travel Daily News ‘Bullish growth for inbound and outbound travel in Asia Pacific and China,’ June 2010http://www.traveldailynews.com/pages/show_page/37535-Bullish-growth-for-inbound-and-outbound-travel-in-Asia-Pacific-and-China
  • 129. Future of Travel and Tourism• 1. Keeping it local. If trends in energy, economy, and environment continue, then traveling long distances for recreation will become more rare. In order for the resort community to maintain a market, they will need to cater more to a local clientele. This is captured in the concept of the 10-kilometer hotel, one whose prime customers come from the local area for a respite.• 2. Alternative transport. In 2009 a newspaper in Seattle featured a photo of a local organic farmer delivering his wares via sailboat to the docks in Seattle. He calls it the no-oil food. In the travel and tourism industry this kind of move will be and is being mirrored as people seek out non-motorized experiences like biking through France, or taking trips by sail. Over the longer term, again depending on how energy, environment, and economic trends play out, it is likely that tourists will seek out slower, less energy intensive, even zero-fossil fuel energy experiences. Source: Futurist ‘Future of Travel and Tourism ,’by Glen Hiemstra on 01/07/09 http://www.futurist.com/2009/07/01/future-of-travel-and-tourism/
  • 130. Future of Travel and Tourism• 3. Destination evolution. This trend is underway, as destination resorts focus on becoming greener and more sustainable, more local in their attraction, more astute in their use of information technology for advertising and for management, and more knowledgeable of market trends via research.• 4. New whys of travel. It is said that there is graffiti from ancient tourists on the monuments in Egypt. People have always and will always travel to see new places and people, even if they have to walk or ride an animal to do so. That is not going to change. But, one more time depending on how the converging trends play out, we may see a return to the why of travel being for two primary purposes – to visit family, and to seek new adventure. Business travel may decline as 3D-net technologies become robust, and distance travel may decline as economic and environmental imperatives demand. Local travel may fill the need for reconnecting with yourself and recharging the batteries. In fact making that a focus of what you offer in the travel and tourism industry may be one key to the future. Source: Futurist ‘Future of Travel and Tourism,’ by Glen Hiemstra on 01/07/09 http://www.futurist.com/2009/07/01/future-of-travel-and-tourism/
  • 131. FutureCustomers
  • 132. Changing European Ethnicity
  • 133. Preference for Rail over Air 66% - Europe 18% - USA
  • 134. Trends• Concierge services are set to make a rise across the mid market travel sector according to Euromonitor International, who released their results for the 2010 global travel trends at the World Travel Market in November 2009• Kuoni are one company set to offer customers concierge options. Andrea Mueller, Communications Manager for Kuoni said; "Today people are overwhelmed by information on travel and tourism services and need more guidance. Concierge services will play and important role in helping them make intelligent choices based on their individual needs". Source: World Travel Guide, November 2009 http://www.worldtravelguide.net/news/3551/news/Global-travel-trends-2010.html
  • 135. Simple Identity• The Global Financial Crisis (GFC) plummeted the value of the High Net Worth population by US $32.8 trillion or 19.5% according to the World Wealth Report (2009) published by CapGemini and Merrill Lynch, so the rich are less rich.• Writing in the Harvard Business Review, Paul Flatters and Michael Wilmott argue that in most developed economies pre GFC, that the precession consumer behaviour was the product of 15 years of uninterrupted prosperity, driven by growth in real levels of disposal incomes, low inflation, stable employment and booming property prices.• As such, new consumer appetites emerged in which the consumer could afford to be curious about gadgets and technology, in which tourists shelled out for enriching and fun experiences on exotic locations. Where they could afford several holidays a year and rent premium experiences such as hiring a Ferrari for the weekend in exotic locations like Japan.• The GFC changed that, propelling tourist trends into slowdown, halting or even reserving the trajectory of growth in world tourism. Source: Tomorrow’s Tourist ‘Simple Identity,’ 2009 http://www.tomorrowstourist.com/simple_identity.php
  • 136. Simple Identity• So, is this a sample of the future, an era of the pension crisis, scarcity of oil, inflation and falling levels of disposal income in which tourism expenditure falls year on year?• If so, what will the future tourist look like? Rather than having a fluid identity it will be more akin to simplicity.• During an economic slowdown, tourists tend to travel less, stay nearer home (increase in domestic tourism) and seek simplicity such as exploreworldwide.com value based holidays focusing on basic facilities, meeting locals, lots of free time and cheap in exotic locations throughout the world. This trend is accelerated in a scenario of falling incomes as a simple and functional product that will suffice. A simple identity means that offering advice becomes extremely important, whether its websites farecast.com’s ,which advises travellers of the optimal time to purchase an airline ticket or price comparison technologies which are found on many online booking services. Source: Tomorrow’s Tourist ‘Simple Identity,’ 2009 http://www.tomorrowstourist.com/simple_identity.php
  • 137. Simple Identity• Research by the Trajectory Group highlights that affluent consumers have revealed mounting dissatisfaction with excessive consumption. Many desire a wholesome and less wasteful life. As such, there is a desire to get back to nature, something that is tranquil, basic, rooted, human and simple (Yeoman 2008). As a consequence, the desire for more authentic and simple luxury experiences accelerates. An example of simple luxury, are tree house hotels which offer a unique experience in a natural setting. A new experience which is not seen as conspicuous consumption, but overtly inconspicuous.• In a simple identity, ethical consumption declines as paying a premium for a Starbucks coffee falls by the wayside, even if they use organic coffee which supports children in a third world country. From a tourism perspective, many of the ethical tourism projects in third world countries such as Africa and India which depend on independent travellers will suffer. Source: Tomorrow’s Tourist ‘Simple Identity,’ 2009 http://www.tomorrowstourist.com/simple_identity.php
  • 138. Simple Identity• Tourists also have become canny at searching for bargains which economists call mercurial consumption, whether it is using price comparison software, or grabbing last minute offers from websites such as grabaseat.co.nz which offer last minute air travel deals to New Zealand consumers, or 5pm.co.uk which offers diners the chance of discounted meals after 5pm that evening. Technology and social media network enabling purchasing strategies, further accelerate this trend of mercurial consumption.• Attitudes to travel also change, as tourism has to compete with other forms of leisure expenditure, whether it is the latest technology gadgets or virtual holidays. There is a generation of Japan youth who prefer their X-Box than climbing Mt Fuji. The desire for new experiences is more about insperience, where technology provides a better experience than in which consumers desire to bring top level experiences into their domestic domain.• A simple identity is all about simplicity seeking, thrift, green yet mercurial tourists will hold tourism business and brands accountable. In a world of scarcity of resources this scenario becomes the norm. Source: Tomorrow’s Tourist ‘Simple Identity,’ 2009 http://www.tomorrowstourist.com/simple_identity.php
  • 139. Market Pain Points
  • 140. Market Pain Points • Research on passenger dissatisfaction reflects the obvious issues that make air travel difficult. Three main areas represent the majority of passenger complaints: service disruptions, long check-in lines and baggage issues. Through the adoption of new communication techniques and internal systems that take advantage of advanced technology and shared information, airlines and airports can improve their delivery of services focusing on these three primary passenger pain points. • Airlines and airports are challenged with updating their operational systems to eliminate unnecessary manual step whilst interconnecting existing information silos to better manage the entire passenger experience. Integration between Departure Control Systems (DCS), Passenger Service Systems (PSS), Baggage Reconciliation Systems (BRS), and airport services can provide improved passenger processing. Delivering services on advanced mobile devices will help all entities be more efficient and operate with lower costs.Source: Amadeus, 2011 http://www.amadeus.com/airlineIT/navigating-the-airport-of-tomorrow/docs/Amadeus-Navigating-the-Airport-Of-Tomorrow-2011-EN.pdf
  • 141. Market Pain Points
  • 142. What Passengers Want • As a result of social media-inspired discussion, and with the assistance of London City Airport’s sales director, Bernard A. Lavelle, Future Travel Experience reveals the views of passengers themselves on what they really want from the airport of the future. • As outlined in the chart, the aspect that can most improve the passenger experience on the ground is high-quality signage, communications and staff, with almost a third of all respondents highlighting this as a vital passenger requirement. • The second most common request was free Wi-Fi in the terminal building, while improved facilities, processing and queues, and an enhanced security process are also prominent on the passenger wish list. Airport layout was also identified as an area that can make a telling difference to the overall passenger experience.Source: Future Travel Experience, May 2011 http://www.futuretravelexperience.com/2011/05/what-do-passengers-really-want/
  • 143. What Passengers WantSource: Future Travel Experience , May 2011 http://www.futuretravelexperience.com/2011/05/what-do-passengers-really-want/
  • 144. EmergingCustomers
  • 145. Tracking the rise of the middle class across the BRICs and N-11:Share of population with incomes between $6,000 and $30,000 in PPP terms (Goldman Sachs) 2009 (%) 2015 (%) 2025 (%) 2040 (%) Brazil 46 52 59 57 Russia 71 71 56 29 India 6 16 46 89 China 37 59 75 53 Korea 67 46 23 7 Bangladesh 0 1 5 38 Egypt 39 57 84 82 Indonesia 16 29 57 87 Iran 70 77 73 41 Mexico 61 65 65 49 Nigeria 6 9 18 42 Pakistan 9 13 22 49 Philippines 15 23 40 69 Turkey 79 81 70 35 Vietnam 7 21 51 84 Source: Goldman Sachs, August 2009 http://www2.goldmansachs.com/ideas/demographic-change/power-of-purse-doc.pdf
  • 146. Primed for More TravelSource: Airbus Global Market Forecast 2010-2029, December 2010http://www.airbus.com/fileadmin/media_gallery/files/brochures_publications/Global_Market_Forecast/Airbus_Global_Market_Forecast_-_2010-2029.pdf
  • 147. Source: Airbus 2009 http://www.airbus.com/en/gmf2009/appli.htm?onglet=&page=
  • 148. Online Bookings in Asia-Pacific, 2008 and 2011 2008 2011 Australia / New Zealand $6.2B $10.9B China $6.9B $13B India $3.1B $5.5B Japan $11.5B $17.7B Source: PhoCusWrightSource: PhocusWright cited by Travel Weekly ‘China, India will lead regions online bookings boom’ January 2010http://www.travelweekly.com/article3_ektid209470.aspx
  • 149. China Consumer Report • By the year 2020, China will have a population of more than 1.4 billion people that will make up a significant portion in the worlds consumer market. • The annual disposable income of Chinese consumers is forecasted to increase to 65.4 billion Yuan (US$9.57 billion) by 2020 compared with 15 billion Yuan (US$2.19) in 2008. • The National Bureau of Statistics of China announced that the country would be considered a moderately affluent society by 2020, if development trends since the year 2000 continue. The estimate was made taking into account progress in the fields of the economy, social harmony, quality of life, democracy and law enforcement, culture and education, as well as resources and the environment. • Zheng Xinli, Vice-Minister of the Communist Partys central policy research office, said that taking price changes into account, 55% of the population will be middle class by 2020, with 78% of city dwellers and 30% of those in rural areas reaching that status. • Middle class is currently defined as having an annual household income of between RMB60,000 (US$8,700) and RMB200,000 (US$29,215). In 2008 prices, the annual disposable income per household will be RMB98,956 (US$14,900) in 2020.Source: Euromonitor 2009 http://www.euromonitor.com/Chinese_consumers_in_2020_A_look_into_the_future
  • 150. China and India Entering Era of Travel• Dun Jidong, spokesman for the China Travel Service notes that GDP per capita has hit $3,000 in China, ‘…a level that industry experts agree sends a signal that the country is entering a stage of explosive growth in travel consumption.’ (1) Share of population with incomes between $6,000 and $30,000 (PPP terms) (2) 2009 (%) 2015 (%) 2025 (%) 2040 (%) Brazil 46 52 59 57 Russia 71 71 56 29 India 6 16 46 89 China 37 59 75 53 Source: (1) China Daily January 2010 http://www.chinadaily.com.cn/china/2010-01/15/content_9323567.htm Source (2): Goldman Sachs, August 2009 http://www2.goldmansachs.com/ideas/demographic-change/power-of-purse-doc.pdf
  • 151. Source: Goldman Sachs ‘Is this the ‘BRICs Decade’?’ May 2010http://www2.goldmansachs.com/ideas/brics/brics-decade-doc.pdf
  • 152. AviationIndustryOutlook
  • 153. International Passengers in 2014Source: IATA 2010, Markets in 2014http://www.iata.org/ps/publications/Documents/Example%20-%20Projected%20Top%2010%20International%20Markets%20in%202014.pdf
  • 154. Freight in 2014Source: IATA 2010, Markets in 2014http://www.iata.org/ps/publications/Documents/Example%20-%20Projected%20Top%2010%20International%20Markets%20in%202014.pdf
  • 155. Aviation in 2029Source: Airbus Global Market Forecast 2010-2029, December 2010http://www.airbus.com/fileadmin/media_gallery/files/brochures_publications/Global_Market_Forecast/Airbus_Global_Market_Forecast_-_2010-2029.pdf
  • 156. Future Demand• Passenger air traffic is forecast to double by 2030 as 12 billion of us take to the skies. So what will the massive airports of the future look like?• One theory being discussed is that the future city will be an “aerotropolis”, with the airport at its heart rather than stationed far away from the centre – important if the city is to connect effectively to the global economy. In much of the western world, airports were developed years ago, when air travel was a luxury form of transport for the privileged. Now, of course, it’s a mode of mass traffic, requiring different capacity solutions.• Songdo, South Korea, is an example of a city built from scratch at a cost of $40 billion with an airport in the centre.• Dubai is rapidly expanding its airport for A380 traffic, where first-class passengers on the building’s upper level will be able to transfer direct to the upper level of the A380 aircraft. Source: TTG Nordic, 2011 http://www.ttgnordic.com/news/item/429-a-look-at-the-super-airports-of-the-future
  • 157. Future Demand• Nearby in Dubai, another gigantic airport, Al-Maktoum International, will eventually have five runways and enough capacity to make it double the size of the biggest airport around today. The first runway is already operational for cargo and passengers will be able to fly there by the end of 2011.• But developers are wary of building a future airport that is too big, creating long distances for passengers to walk between flights and concerns over the logistics and security of having large numbers of people crammed together. The key to this is to arrange connecting transport links such as trains or cars to be as close as possible to the plane.• In the Middle East there seems to be an airport capacity race. In Europe, it’s the contrary; it is extremely difficult for many airports to develop enough capacity to handle the forthcoming explosion in air travel. Projects like Berlin Brandenburg Airport, due to open in 2012, are few and far between. China, by contrast, plans to build 78 new airports by 2020. In Europe, there are plans for five new airports by 2030. Source: TTG Nordic, 2011 http://www.ttgnordic.com/news/item/429-a-look-at-the-super-airports-of-the-future
  • 158. IATA Launches Vision 2050• The International Air Transport Association (IATA) called on industry leaders to look beyond the crisis that buffeted the air transport industry over the last decade and to strategically define a sustainable future.• Giovanni Bisignani, IATA’s Director General and CEO, outlined his vision for aviation in 2050. “We will be very near to zero accidents. We will emit half the carbon. We will have eliminated queues with integrated systems ensuring security as we process more passengers. We will operate with almost no delays in globally united skies. We will share costs and profits equitably across the value chain. We will be a consolidated industry of a dozen global brands supported by regional and niche players. And we will deliver value to investors.” Source: IATA, June 2010 http://www.iata.org/pressroom/pr/pages/2010-06-07-02.aspx
  • 159. IATA Launches Vision 2050• “In just over a decade, I can see $100 billion in industry profits on revenues of $1 trillion. As we move towards 2050, this 10% margin will become even more robust. This is not just a crazy dream. Before the recession, at least a dozen IATA members already had 10% margins. We must make this a much broader reality. Change in all areas is possible. This vision—including sustainable profitability—can be our future,” said Bisignani.• Bisignani’s vision for 2050 rests on four cornerstones of change: – Profitability – Infrastructure – Powering the industry – Customer Source: IATA, June 2010 http://www.iata.org/pressroom/pr/pages/2010-06-07-02.aspx
  • 160. IATA Launches Vision 2050• Profitability: “Efficiency gains never make it to the bottom line because airlines are deprived of the commercial freedom to operate their businesses like a normal business. Our poor profitability makes every shock a fight for survival,” said Bisignani. He laid the blame on the industry’s hyper fragmentation with 1061 airlines as a result of the bilateral system which regulates the global aviation industry. The restrictions on international capital prevent consolidation across borders. “The restrictions of the bilateral system are a dam that holds us back. It is time for that dam to burst. Governments must act responsibly to ensure safety, security, and a level playing field. And airlines need the freedom to build efficiencies across borders, better serve their customers, and achieve sustainable profits to fund growth and innovation,” said Bisignani. Source: IATA, June 2010 http://www.iata.org/pressroom/pr/pages/2010-06-07-02.aspx
  • 161. IATA Launches Vision 2050• Infrastructure: “Infrastructure must be reshaped around the needs of airlines—the core of the industry’s value chain. Airports should compete for airline business based on efficiency. Commercial revenues will drive their business. I can see airports paying airlines to bring shoppers and airport revenues funding the air traffic management system,” said Bisignani.• Air traffic management must also change. “I can see ten global air navigation service providers (ANSPs) replacing the current 180 at half the cost,” said Bisignani. The Single European Sky (SES) would be the first of the ten global ANSPs. “But we need real leadership to replace the uncoordinated bureaucratic mess that Europe is today,” said Bisignani, pleading for a date to achieve the $6.5 billion (EUR 5 billion) cost savings that the SES promises. “After 20 years of waiting, we are fed up. Heads of governments must set a date and deliver,” said Bisignani. Source: IATA, June 2010 http://www.iata.org/pressroom/pr/pages/2010-06-07-02.aspx
  • 162. IATA Launches Vision 2050• Powering the Industry: “Today’s jet fuel cannot sustain air transport in the long-term. We must find a sustainable alternative and our most promising opportunity is bio fuels, which have the potential to reduce our carbon footprint by up to 80%,” said Bisignani. After successful testing by airlines, certification is expected within a year. Bisignani urged greater support from governments. “Too often governments are only committed to environment when it means grabbing cash. Governments should be investing in biofuels and green technologies. Local production with jatropha, camelina, algae, or even urban waste will open up economic opportunities in virtually any location. Not only will this secure a future power source for our industry, this will also break the tyranny of oil and drive economic development in all parts of the world. Source: IATA, June 2010 http://www.iata.org/pressroom/pr/pages/2010-06-07-02.aspx
  • 163. IATA Launches Vision 2050• The Customer: “The customer is at the center of our future vision. By 2050, we will have 16 billion travelers and handle 400 million tonnes of cargo. In just a couple of decades, we will see the middle class nearly triple from the 1.3 billion today to 3.5 billion people—a quarter of which will be in India and China. Accommodating that growth efficiently will be a challenge for all parts of the value chain—airports, air navigation service providers, manufacturers and governments. The solution must be strategic and aligned,” said Bisignani.• Bisignani noted that the air transport industry must engage its 2.4 billion passengers to change government’s “over-regulate and under-appreciate” attitude. “To turn our customers into industry activists, we must improve the value proposition of price, speed, and quality. We have reduced the price of flying by 40% since deregulation. But as we made travel more accessible, speed and quality suffered. The infrastructure has not kept pace, resulting in delays both in the air and on the ground. New security procedures created new hassles. Our challenge is to gain the support of customers in demanding change from the governments,” said Bisignani. Source: IATA, June 2010 http://www.iata.org/pressroom/pr/pages/2010-06-07-02.aspx
  • 164. EUROCONTROL: Long Term Forecast• Future air traffic will be limited by capacity at the airports, 0.7-5.0 million flights will not be accommodated in 2030, 5%-19% of the demand. The congestion is now lower than in the forecast two years ago. The recent drop in traffic has given the system some extra years to react and adapt but once the limits are reached the number of unaccommodated flights increases quickly. Congested airports create pressure on the flow of operations in the network and will exacerbate delays.• Even with airport capacity restrictions airports will grow. In 2030, there will be 13-34 airports as big as the top 7 are now. Some of the faster growing East-European airports will join the top 25. European hubs will be faced with competition from hubs outside Europe, primarily in the Middle-East. Source: EuroControl, 2010 http://www.eurocontrol.int/statfor/gallery/content/public/forecasts/Doc415-LTF10-Report-Vol1.pdf
  • 165. EUROCONTROL: Long Term ForecastSource: Eurocontrol, 2010 http://www.eurocontrol.int/statfor/gallery/content/public/forecasts/Doc415-LTF10-Report-Vol1.pdf
  • 166. EUROCONTROL: Long Term ForecastSource: EuroControl, 2010 http://www.eurocontrol.int/statfor/gallery/content/public/forecasts/Doc415-LTF10-Report-Vol1.pdf
  • 167. Source: EuroControl, 2010 http://www.eurocontrol.int/statfor/gallery/content/public/forecasts/Doc415-LTF10-Report-Vol1.pdf
  • 168. Visions ofTomorrow’s Airport
  • 169. Exploring the Airport of 2030• The importance of generating non-aeronautical revenue streams has also had a major impact on the recent developments in the aviation sector, and Alan Lamond, aviation director, Pascall + Watson Architects, explained that this will continue to impact on future airport models. He said: “We are seeing increased commercialisation of airports and a realisation that you have to exploit the opportunities presented, and this is done in Western airports through very intensive retailing. What is increasingly becoming clear is that, for businesses, there’s a distinct commercial advantage in being based near an international airport. This means that the space around the airport becomes far more valuable.” Source: Airport Business, July 2010 http://www.airport-business.com/2010/07/exploring-the-airport-of-2030/
  • 170. Siemens Airport Lab• Inside Siemens airy, 90,000-square-foot glass and steel structure in Germany is an entire infrastructure of an airport, minus only the planes, runways and control tower.• Nearly every aspect of airport operations is tested and developed here, from high-tech baggage handling and fleet-management systems to wireless passenger check-in and 3-D security.• The airport center, built in 2005, houses real-time, check-in counters, a parking guidance system, a control center and a luggage conveyor with belt and tray conveyors stretching more than 6,000 feet. The baggage system can handle 30 million pieces of luggage per year. (In Germany, only Munich and Frankfurt airports have larger systems.)• On the passenger side of the terminal, a prototype system is being fine- tuned that would allow travelers to check in using only their mobile phones. Once a passenger makes a phone call to check in, the system then sends back a bar code that displays on the mobile phones screen. Special readers at the airport then scan and print out boarding passes. Source: ABC News, May 2010 http://abcnews.go.com/Travel/siemens-dreams-airport-future-germany/story?id=10629236
  • 171. Siemens Airport Lab• Also being tested in the lab are new fingerprint and facial-recognition systems as Siemens targets the ever-expanding need for better security at airports everywhere.• Iris scans, fingerprint-based IDs and 3-D face digitization are all being tested here as part of the companys development of cutting-edge recognition and security systems.• One area developed by Siemens that is already being employed at airports from Seoul to Denver is a baggage system that employs radio-frequency identification or RFID technology.• The RFID tags are applied directly to baggage and are a much more efficient way of identification and tracking luggage using radio waves.• More than 3.1 million missing baggage reports were filed in the United States alone in 2009, according to the Air Travel Consumer Report produced by the U.S. Department of Transportation. Source: ABC News, May 2010 http://abcnews.go.com/Travel/siemens-dreams-airport-future-germany/story?id=10629236
  • 172. Siemens Airport Lab• Siemens says the radio wave technology will eventually replace bar-code tracking systems now employed at many airports because it allows bags to be instantly updated with changes to a passengers flight or security status. That should drastically lower the risk of the dreaded lost luggage nightmare.• From check-in to loading on an aircraft it allows more useful data to travel along with the bag.• Airport systems make up about 2 percent of the companys $100.7 billion annual revenue. But that number is expected to rise as the need for better airport technology surges along with the number of air travelers. Source: ABC News, May 2010 http://abcnews.go.com/Travel/siemens-dreams-airport-future-germany/story?id=10629236
  • 173. Visions of the Future • EADS Innovation Works (IW), the corporate network of research centres of EADS, and Altran, an international advanced engineering and innovation consulting group, are jointly working on projects supporting the long-term evolution of the air transport industry. • The goal of a recent study was to create revolutionary airport concepts. EADS IW and Altran organised workshops with representatives of airlines, airports, air traffic management and aircraft manufacturers as well as representatives of other transport sectors. • It was recognised that, for short and medium flights, future passengers experience will play a significant role in the competition between aviation and high-speed rail transport. • This research contributes to the goals set forth in the European Commissions report Flightpath 2050 - Europes Vision for Aviation, whose target is for 90% of travellers in Europe to be able to complete their journey, door to door, within four hours.Source: Airport Business, June 2011 http://www.airportbusiness.com/online/article.jsp?siteSection=1&id=45675
  • 174. Visions of the Future • Intermodal transfers will be seamless and final destinations are to be reached smoothly, predictably and on time while accommodating the increasing demand for air travel. These concepts put passengers at the heart of the air transport system. The result is a passenger-friendly experience and lean processes which we have labeled Friend- Lean Airport of the Future, said Guy Gallic, head of the Technical Capability Centre Innovative Concepts and Scenarios at EADS IW. In future, we will speak not only about infrastructure but about an extended door-to door experience. • The airport terminal will become a lean step in the journey towards co-modal and connected travel, explained Sebastien Renouard, Executive Director AeroSpace & Defence International at Altran. • On an average day in 2010, 6.5 million passengers flew an average of 2,000km on one of 14,000 commercial jets. • By 2050, the number of passengers per day will increase to roughly 44 million globally. Beyond 2040, the study aimed to find revolutionary airport concepts capable of handling 25-100 million passengers per year.Source: Airport Business, June 2011 http://www.airportbusiness.com/online/article.jsp?siteSection=1&id=45675
  • 175. Eye to the Sky
  • 176. Visions of the Future • The following three concept from EADSs were selected and elaborated in more detail. • The Eye to the Sky concept. • The aircraft traffic area is located above the terminals, while the flow of passengers through the terminals to their planes is vertical. From arriving at the airport to reaching their seats on the plane, passengers use spiral ramps that link every level of the airport. This concept focuses not only on infrastructural design but also on solutions for guiding passengers through an augmented reality information system. A mobile device would connect to the airport network and act as a portable personal guide to help people find their way at the airport. Lean security systems based on new technologies would also be embedded.Source: Airport Business, June 2011 http://www.airportbusiness.com/online/article.jsp?siteSection=1&id=45675
  • 177. Visions of the Future • The Passenger Airport Shuttles (PAS) concept. • With a predicted time of at most seven minutes to get from anywhere in the airport to any Skygate, passengers can choose to spend more time at the airports central terminal facilities or they can arrive at the airport less than 10 minutes before departure and still catch their flight. • In this decentralised approach, passengers are moved in Passenger Airport Shuttle vehicles which are guided by an automated central airport control system. An identification function ensures that passengers and their travel data are recognised by the control system as soon as they board, and the vehicle then offers them a transportation and information service dedicated to their specific needs. Aircraft will be docked to a Skygate, a minimal building that forms the interface between the aircraft and the PAS. Baggage will be handled at the Skygate, reducing the baggage deposition and retrieval times to a minimum.Source: Airport Business, June 2011 http://www.airportbusiness.com/online/article.jsp?siteSection=1&id=45675
  • 178. Visions of the Future • The Extended Airport concept • The Extended Airport concept addresses the vision of providing a door-to- door travel service in the literal sense by extending the transportation service so that passengers (or just their luggage) are picked up at their home or office. In this vision, air transport and airports are fully integrated with other transport modes. The proper competition and collaboration between modes of transport are ensured by a transport planner on the user interface where passengers can plan their trips. It will take many revolutions in the air transport sector to create solutions that deliver on the ambitious objectives set forth by the European Commissions FlightPath 2050.Source: Airport Business, June 2011 http://www.airportbusiness.com/online/article.jsp?siteSection=1&id=45675
  • 179. User Friendly Terminals • Munich Airport’s new InfoGates allow passengers to obtain quick and detailed information to help them navigate around the terminal. • Passengers using the InfoGate can simply push a button, which connects them immediately to an information service representative via videoconference. • Six InfoGates are already operational in the public and non-public areas of the airport, and 17 Interactive InfoGates are positioned at key crossroads throughout the terminals. • These consist of touch-screens mounted on pillars, offering a full range of information on services, shopping and dining at the airport.Source: Future Travel Experience, June 2011 http://www.futuretravelexperience.com/2011/06/munich-airports-infogates-offer-improved-wayfinding/
  • 180. Future of Airports • David Holm, Principal Architect, Woodhead, explained that retail, commercial, advertising and other forms of revenue generation will be crucial within the development of terminals of the future. Not only do these forms of commerce provide funding incomes, they also play a key role in crafting the unique character of the place and in enhancing the “total journey experience”. “It is our design view that retail and commercial developments and strategies must be incorporated at the earliest phases of project planning. In this way, the form of a new project is designed from the inside out in harmony with the outside in pressure applied by the equally crucial requirements of exterior aircraft planning,” he said. • At the Check-In 2010 Conference in Las Vegas, Holm referred to four key themes:Source: Future Travel Experience, March 2011 http://www.futuretravelexperience.com/2011/03/the-airport-of-the-future-2020-thinking/
  • 181. Future of Airports • Urban Catalyst – “Innovative civic and transport leaders are now seeing airports and their surrounding and supporting infrastructure, often referred to as airport cities, as the catalysts of urban growth and often regeneration; a key part of the ‘c21st polycity concept’.” • Civic Buildings – “The contemporary airport within the ‘c21st polycity’ is today’s crossroads celebrating trade and community gathering. As such the urban structure and the built forms of the airport must stand as civic buildings respected by the community and designed with a sense of community, flexibility and longevity.”Source: Future Travel Experience, March 2011 http://www.futuretravelexperience.com/2011/03/the-airport-of-the-future-2020-thinking/
  • 182. Future of Airports • Sense of Place – “Our design projects endeavour to make the subtle connection between context, place making and built form in order to weave our built form into the community within which it exists.” • Total Journey Experience – “The transport node, whether it be a domestic or international airport or multi-modal station, has existed as an evolutionary control at the edges of regions or borders. As such the node has performed a variety of functions, ranging from service industries to authority procedures. This variety of stakeholders has many functions to address, though all conjoined represent the overall brand and experience of the transport node.” • It appears clear that a consistent approach towards design provides the passenger with a coherent total journey experience throughout their incoming and outgoing experiences as a traveller.Source: Future Travel Experience, March 2011 http://www.futuretravelexperience.com/2011/03/the-airport-of-the-future-2020-thinking/
  • 183. Exploring the Airport of 2030• The impact of a master plan, which often outlines a blueprint for the airport with a vision for the next two decades or more, is the most integral part of the planning process and can often provide an idea of how airports will continue to develop in the mid-to-long-term.• Curtis Fentress, principal-in-charge of design, Fentress Architects, said: “With master plans you almost need a crystal ball. You have to design for flexibility, which can accommodate for future needs even though you don’t know what these will be. Flexibility really is key and I think that because of this, you will see more airports with column-free buildings. At LAX we’ve designed large, column-free buildings so that we’re completely flexible for any future developments. This is even something that you can see in the design of Denver International Airport, which has just celebrated its 15th birthday.” Source: Airport Business, July 2010 http://www.airport-business.com/2010/07/exploring-the-airport-of-2030/
  • 184. The Intelligent Networked Airport • A passenger-sensing, self-organising unified network to track the location of every passenger and bag in the terminal will feature in future airports. • It’s not much fun sitting in an airport waiting for a plane. But might it be less of a chore if you could download your in-flight films in the departure lounge? Might you even pay for the service? If you find that airport bars usually serve the best antidotes to tedium, would you be glad to know that a nearby display can detect your presence, prompt you when your gate number changes and provide clear directions to it at drinking-up-and-boarding time? • It’s being developed by scientists from the University of Cambridge, University College London, and the University of Leeds. The idea is to tidy up the tangle of wired and wireless networks used in most modern airports by installing a single infrastructure that can handle GSM, 3G, Wi-Fi and RFID communications, as well as locating every person and piece of baggage in the building. Source: The Institution of Engineering and Technology, July 6th 2009 http://www.nytimes.com/2009/06/14/magazine/14searchgrimshawside-t.html
  • 185. The Intelligent Networked Airport • TINA - The intelligent networked airport • “For instance, can we solve problems like bags being in one place but the passenger not showing up, or a passenger being on an airplane and not knowing where their bags are?” asks Jon Crowcroft, Marconi professor of communications systems at the Cambridge University Computer Laboratory. • Organising a building’s network infrastructure in this way could also create opportunities for airport operators to generate money. • “In an airport environment, where in-building communications systems [such as Wi- Fi] are often used to generate revenue for the airport operator, the adoption of such a technology could lead to some interesting innovation with regard to the commercial models under which airports operate,” says Justin Trevan, a consultant at the communications division of Arup - an engineering consultancy well known for its work on airports, including Heathrow’s Terminal 5 and Dubai International Airport. Source: The Institution of Engineering and Technology, July 6th 2009 http://www.nytimes.com/2009/06/14/magazine/14searchgrimshawside-t.html
  • 186. The Intelligent Networked Airport • To track people and assets, researchers are looking at both active and passive RFID tags, locating the active tags by comparing the different time delays of the transmitted signals as they arrive at neighbouring antenna units, which are typically positioned tens of metres apart. • Being battery-powered and expensive, active RFID tags would only be suitable where they could be re-used and recharged, such as when issued to members of staff or applied to airport vehicles. In contrast, passive RFID tags could be printed cheaply on disposable paper boarding cards or luggage labels, given to every passenger and attached to each of their bags. In Hong Kong airport, luggage is already labelled with bar-coded passive RFID tags that are read (by conventional short-range means) with two antennas placed either side of the luggage conveyer belt.Source: The Institution of Engineering and Technology, July 6th 2009 http://www.nytimes.com/2009/06/14/magazine/14searchgrimshawside-t.html
  • 187. The Intelligent Networked Airport • Zinwave application • A ‘long-range’ passive RFID sensing scheme is novel and technically difficult. • However, Sithamparanathan Sabesan, Michael Crisp, Richard Penty and Ian White at the University of Cambridge’s department of engineering, have found a way to reduce the fading and improve the accuracy of RSSI techniques, using an optimised Zinwave radio-over-fibre hub with multiple antennas. • “The first challenge was getting the range up to 20m. The second, which we’re still working on, is the resolution at that range. We’ve got the location accuracy down to around 2m, but we’d like to do better,” said Professor White, head of photonics research in the electrical division of the department of engineering at Cambridge. • Tracking every single passenger anywhere in the building all the time may not be feasible with passive RFID tags. But the technology could indicate if a passenger has moved from one space to another, maybe from a lounge to a bar, which is enough to target a message to a nearby display, page them, or send someone to find them.Source: The Institution of Engineering and Technology, July 6th 2009 http://www.nytimes.com/2009/06/14/magazine/14searchgrimshawside-t.html
  • 188. The Intelligent Networked Airport • Network architecture specifications • The basic TINA network architecture is being designed to support a terminal with typically 1,000 fixed and 500 mobile video cameras (demanding 10Gbit/s of bandwidth); 500 displays (10Gbit/s); 500 biometric scanners (10Gbit/s); private and public fixed and wireless LAN (20Gbit/s); cellular services (10Gbit/s); TETRA and private radio (500Mbit/s); as well as passive RFID (300Gbit/s) and active RFID (5Gbit/s). These figures, which include projections for future demand, are based on input from BAA and other companies involved with the network installations in Heathrow Terminals 4 and 5. • The software tool can model and simulate passenger flow, radio propagation delays, optimum antenna position, and bandwidth requirements to give a top-down picture of how the network might perform under various circumstances. • In this way, designers can better understand how the flow of people in indoor spaces, traffic demands and energy consumption constraints might influence different architectures.Source: The Institution of Engineering and Technology, July 6th 2009http://www.nytimes.com/2009/06/14/magazine/14searchgrimshawside-t.html
  • 189. TINA – Key FactsThe network will support:• 1,000 Fixed and 500 Mobile Video Cameras - 10 Gb/s• 500 Displays - 10 Gb/s• 500 Biometric Scanners - 10 Gb/s• Private and Public Fixed and Wireless LAN - 20 Gb/s• Cellular services - 10 Gb/s• TETRA and private radio - 0.5 Gb/s• Passive RFID - 0.2 Gb/s• Active locatable RFID - 5 Gb/s• Aggregate Mean Rate 65.7 Gb/s; assumed Aggregate Peak Rate 100 Gb/s
  • 190. Flexible Terminals
  • 191. Flexible Terminals • An Austrian company, TMT, has installed a mobile passenger terminal at Switzerland’s Geneva Airport. It is designed as a flexible structure, to expand and contract airport capacity, depending on demand. With a growing number of companies providing such facilities – driven by the increasing seasonality of flight operations and the continuing lack of available finance – is the future going to be "temporary and mobile"? Could this be the ultimate low-cost terminal? • TMT’s management stated the terminal can be installed and dismantled within a week.Source: Centre for Aviation, February 2011http://www.centreforaviation.com/news/2011/02/14/upwardly-mobile--airport-terminals-that-match-the-seasonal-nature-of-the-airline-business/page1
  • 192. Flexible Terminals • Thomas Melcher, managing director and inventor of TMT The Mobile Terminal - Melcher has ambitious plans for TMT The Mobile Terminal, particularly in emerging markets in Eastern Europe, Asia and Latin America. “In the next three years, we are targeting 20 to 25 mobile terminals worldwide,” he said. • Indeed, the effectiveness of the terminal solution during major events in an airport’s catchment area means discussions are already underway with the Russian market with regards to the 2014 Winter Olympics, which take place in Sochi, and the 2012 European Football Championships in Poland and Ukraine. TMT The Mobile Terminal is also exploring the possibility of renting its terminal solutions for short-term periods.Source: Airport Business, April 2011 http://www.airport-business.com/2011/04/first-tmt-the-mobile-terminal-opened-at-geneva-airport/
  • 193. The ‘Airport City’• This geographical advantage has led to the rapid rise of the ‘airport city’ and, according to Curtis Fentress, principal-in-charge of design, Fentress Architects, this is likely to become an increasing trend in years to come.• “I think you will see more of the ‘airport city’,” he explained. “In the Middle East, you see a tremendous surge in passenger numbers and there is then a need for hotels and other services and this is something that we may see elsewhere in the next 20 years. Airports will become more multi-modal and the construction of office buildings, conference buildings, air freight facilities, and even the likes of beauty salons within the actual airport are things that are already becoming more widespread.”• With environmental sustainability now firmly established toward the very top of the list of priorities within the field of airport architecture, the need to explore the use of ‘green’ energy is more evident than ever before. Source: Airport Business, July 2010 http://www.airport-business.com/2010/07/exploring-the-airport-of-2030/
  • 194. Airport Cities: Manchester
  • 195. Airport Cities: Manchester • More than 10,000 jobs could be created around Manchester Airport when it is turned into a ‘mini city’. • The £400m Airport City project was given the green light after the government named it as one of its first Enterprise Zones. • It is one of 21 designated areas nationwide that will offer tax breaks for businesses, simplified planning rules and super-fast broadband as part of plans to grow local economies and jobs by removing barriers for new companies. • Money raised from discounted business rates in the area will be available to re-invest in Greater Manchester’s redevelopment. • Airport bosses say the Enterprise Zone status means they can start immediately on Airport City, which is expected to bring 10,500 full time jobs – 13,000 in total – over the next 10 to 15 years. A 60-acre site, centred around Manchester Business Park to the north of the airport, will introduce new offices, hotels, shops and manufacturing space.Source: Manchester Evening News, March 2011 http://menmedia.co.uk/manchestereveningnews/news/s/1416306_manchester-airport-enterprise-zone-will-generate-mini-city-with-10500-jobs
  • 196. Airlines and Aircraft Futures
  • 197. Impact of Consolidation
  • 198. Impact of Consolidation• The airline industry continues its consolidation trend: in Europe things started with the Air France-KLM merger in 2004, soon followed by Lufthansa-Swiss.• The action continues with SN Brussels, BMI and Austrian taken over by Lufthansa, Air France-KLM buying a significant stake in Alitalia and getting full control of the Dutch leisure and cargo airline Martinair and FlyVLM.• British Airways and Iberia have completed a merger.• Airlines are likely to continue consolidating aligning their products for their passengers: pricing, loyalty programs, joint check-in areas.
  • 199. Shifting the Goalposts
  • 200. Shifting the Goalposts• Booz suggests ,that ‘…airlines must take an objective, data-driven look at their business models and cost structures, challenge existing assumptions, and provide CEOs and program managers with the analysis they need to take decisive, innovative, and informed action.• One measurement whose validity should be actively questioned is the ubiquitous metric of the airline industry, cost per available seat mile (CASM). Although it is an interesting data point, CASM is not the most relevant gauge for determining the success of an airline’s business model because it focuses solely on the cost of supply and not on demand. We believe that a better metric would be cost per passenger seat mile, which would calculate the expense of operating the seats that travelers are actually willing to purchase. Source: Booz & Co, 2008 http://www.booz.com/media/uploads/Future_of_Green_Aviation.pdf
  • 201. Shifting the Goalposts• Examining operating costs through the prism of demand, and augmenting that data with CASM, would reveal the routes and schedules, types of travelers, and overall markets worth serving, as well as what types of aircraft to put into service.• One result of this approach could very well be a rethinking of the hub-and- spoke business model, a sharp rejection of the status quo that could produce vastly improved results for the industry. Source: Booz & Co, 2008 http://www.booz.com/media/uploads/Future_of_Green_Aviation.pdf
  • 202. What if…?• The aviation industry now uses 5 million barrels of jet fuel every day.• The Air Transport Action Group predicts the biofuel share for aviation will be 15% in 2020, and 30% in 2030.• If this is either optimistic or insufficient, the industry could be in trouble. Source: Associated Content: Is there a future after peak oil? May 2010 http://www.associatedcontent.com/article/3018604/aviation_after_peak_oil_is_there_a.html?cat=15
  • 203. Weight Reduction – a Core Priority
  • 204. Future Scenarios for theEuropean Airline Industry (2015)Source: Leipzig Graduate School of Management: Center for Scenario Planning ‘Future Scenarios for the European AirlineIndustry.’ 2010
  • 205. Future Scenarios for the European Airline Industry (2015) • Network Fortress describes a future, in which the European network carriers have regained a strong competitive position in both the long-haul and the intra-European market. The recession of 2008 and 2009 was followed by a quick economic recovery, which increased corporate travel budgets again in 2012. In turn, the demand for low-cost travel stagnated in favor of high quality and convenient travel, which led to growth in the more profitable business and first class segments. The growing long-haul market connecting Europe with the booming ASEAN region and China is dominated by European airlines, which can operate from a largely protected European market to which competition from Asia and the Middle East had only limited access to due to restrictive traffic rights legislation.Source: Leipzig Graduate School of Management: Center for Scenario Planning ‘Future Scenarios for the European Airline Industry.’2010
  • 206. Future Scenarios for the European Airline Industry (2015) • Europe under Siege describes a world in which Asian and Middle Eastern competitors dominate the future of European network carriers. Despite growing business travel based on solid economic growth in Europe, the industry faces severe competition, also in its home market. However, low- cost carrier have not been able to continue their growth seen in the first decade of the new millennium as customers became increasingly aware of the total cost of flying low-cost. "New World", a new alliance by Middle Eastern and Asian airlines was formed in 2012 focusing on capturing the growing demand for high quality air travel around the world. The alliance also partners with a major European airline to gain easier access to the attractive European market. With their new fleet and superior service offering, the alliance has quickly gained market share and is expected to continue its growth.Source: Leipzig Graduate School of Management: Center for Scenario Planning ‘Future Scenarios for the European Airline Industry.’2010
  • 207. Future Scenarios for the European Airline Industry (2015) • Decline of Champions describes a world that is characterized by declining European network carriers struggling to survive the intense local and global competition. While Europe and the United States of America are again in the middle of an economic crisis, Asia is flourishing. The recession in the western world has led to a shift in the mindsets of business and private customers towards a strong price orientation. European network carriers therefore are under heavy pressure from both European low-cost rivals and strong Asian and Middle Eastern competitors on long-haul routes. These companies have grown significantly in recent years due to favorable cost position, innovative product and high client recognition.Source: Leipzig Graduate School of Management: Center for Scenario Planning ‘Future Scenarios for the European Airline Industry.’2010
  • 208. Future Scenarios for the European Airline Industry (2015) • New Horizons refers to a world in which Europe is still struggling with the aftermaths of the financial crisis, which originated in 2008 and 2009. Thus, business travel has been cut to a minimum as companies face severe cost pressure. In addition, an increasing market share of this shrinking segment is captured by low-cost airlines. While Europe is still faced with the aftermaths of an economic crisis, the ASEAN region together with China has developed into the most vibrant business area worldwide, which has increased the demand for long-haul flights to and from Asia tremendously over the last 5 years. These traffic flows are dominated by European carriers, which benefit from political protection of the sector in Europe and a growing customer sentiment to buy European.Source: Leipzig Graduate School of Management: Center for Scenario Planning ‘Future Scenarios for the European Airline Industry.’2010
  • 209. Cost Comparison of CarriersSource: Leipzig Graduate School of Management: Center for Scenario Planning ‘Future Scenarios for the European Airline Industry.’2010
  • 210. Future Scenarios for European Airline IndustrySource: Leipzig Graduate School of Management: Center for Scenario Planning ‘Future Scenarios for the European Airline Industry.’2010
  • 211. Scenario: Network FortressSource: Leipzig Graduate School of Management: Center for Scenario Planning ‘Future Scenarios for the European Airline Industry.’2010
  • 212. Scenario: Europe Under SiegeSource: Leipzig Graduate School of Management: Center for Scenario Planning ‘Future Scenarios for the European Airline Industry.’2010
  • 213. Scenario: Decline of ChampionsSource: Leipzig Graduate School of Management: Center for Scenario Planning ‘Future Scenarios for the European Airline Industry.’2010
  • 214. Scenario: New HorizonsSource: Leipzig Graduate School of Management: Center for Scenario Planning ‘Future Scenarios for the European Airline Industry.’2010
  • 215. Impact/Uncertainty Grid for European AirlinesSource: Leipzig Graduate School of Management: Center for Scenario Planning ‘Future Scenarios for the European Airline Industry.’2010
  • 216. Training Needs• Boeing predicts that nearly half-a-million new pilots and almost 600,000 in support-staff will need to be trained by 2030 years to accommodate higher travel demand – up from about 233,000 pilots and 100,000 mechanics/engineers who are currently employed by airlines worldwide.• About 40 percent of this increased demand will come from the Asia-Pacific region. China alone will need 70,600 new pilots over the next 20 years.• Boeing also forecast that on the whole airlines will buy 30,900 aircraft valued at $3.6 trillion between 2010 and 2029, with more than two-thirds of that demand for smaller single-aisle jets such as Boeings 737 and Airbus A320. Source: IB Times, September 2010 http://www.ibtimes.com/articles/63951/20100920/airlines-recession-pilots-boeing.htm
  • 217. Political/Market Pressures
  • 218. Political/Market Pressures• Air travel has become more competitive and efficient, but is subject to significant market failures. One is that many passengers, especially infrequent travellers, know very little about the quality of service of any given airline. So they are disproportionately influenced by the ticket price, says Kevin Neels of Brattle, a consultancy. The internet accentuates this: a ticket that costs only a few dollars more may not show up on the first page of an online search.• Airlines have little financial incentive to take into account the cost to passengers of, say, delays. Instead, they cram their planes to bursting, taking the view that every empty seat is a bundle of money flying away. When freak weather strikes, they have little spare capacity to replace cancelled flights. So it might make sense for regulators to impose some cost on airlines when passengers are stranded for a long time—so long as the cost is not too great. Source: Economist, January 2011 http://www.economist.com/research/articlesBySubject/displaystory.cfm?subjectid=348873&story_id=17857391
  • 219. Political/Market Pressures• Mr. Neels also worries that airline bosses’ financial incentives make them do things that yield short-term profits but risk harming their firms’ reputations. They cut costs by skimping on service, for example. They may even economise on safety. There is concern among regulators that some pilots are now paid dangerously little.• Airlines are operating in a mostly deregulated market, but they are using infrastructure that is largely government- owned and heavily regulated. Even as the number of flights and flyers has soared, the airports that must accommodate them have been neglected. Market forces have not been allowed to allocate access to scarce infrastructure more efficiently. A system of peak pricing for landing slots, for example, would ease congestion in good weather and bad. Source: Economist, January 2011 http://www.economist.com/research/articlesBySubject/displaystory.cfm?subjectid=348873&story_id=17857391
  • 220. Political/Market Pressures• Instead of market forces, there is massive political interference. Gleaming but empty airports are built in places represented by powerful politicians. Security checks are excessive because no politician wants to be blamed if a terrorist gets through. New technology that would allow more planes to fly but put air-traffic controllers out of work is blocked by unions. “The aviation system is collateral damage to the political problems we are seeing in all mature democracies,” says Michael E. Levine of New York University, a longtime proponent of deregulation.• When bad weather strikes, market forces could determine which passengers and flights should go first, says Mr. Levine. For example, airlines could bid for the right to be prioritised in the event of an airport’s capacity unexpectedly being cut. Passengers would then be able to choose (and pay more for) an airline that is less likely to leave them stranded for long. That would reveal the currently hidden costs of congestion and increase the likelihood of airlines competing on service quality as well as on price.Source: Economist, January 2011http://www.economist.com/research/articlesBySubject/displaystory.cfm?subjectid=348873&story_id=17857391
  • 221. New Model – Virtual Airlines
  • 222. New Model – Virtual Airlines• IBS chairman & CEO V K Mathews -“What is most striking is that even in 2010, 80% of the time cargo is waiting to be moved at some location and only 20% of the time it is actually moving. It’s clear to see how much of an improvement in efficiency is yet to be achieved.”• What that means is extra cost, because cargo idling at some location adds to inventory holding cost, and what the situation should spur is a new dimension to capacity usage utilising the benefits of technology.• The IBS chief feels there has, for long, been a focus on the cost side, and that it ought to shift to the value side, enabling companies to tap more value than merely eking out savings through cost arbitrage. He winces at the present situation in which aircraft, which are million-dollar assets, idle frequently and are utilised suboptimally , all for want of adequate tech support for optimisation and rationalisation of their usage.Source: Economic Times, September 2010http://economictimes.indiatimes.com/opinion/comments--analysis/virtual-airlines-future-of-aviation/articleshow/6633586.cms
  • 223. New Model – Virtual Airlines• “In fact, the question should be whether an airline company should be handling all the components involved in passenger or cargo movement. The future will belong to virtual airlines, a concept in which about five major global entities would take up the business of flying aircraft in large numbers around the world and the airlines that we know of today will be able to use that capacity to run services under their individual brands.”• Mathews says there are compelling reasons to adopt this model. First, there will be economies of scale as the few companies that operate aircraft will fly massive numbers of planes as against multiple airlines flying far fewer numbers of aircraft today. Secondly, the virtual airline concept will help those in the business of operating branded travel services to operate without the massive fixed cost component of owning aircraft, and instead operate with variable costs.• Thirdly, the aircraft-flying companies can better internationalise their costs, like using pilots from different parts of the world, as against the current practice where pilots are restricted in aircraft use linked to their companies.Source: Economic Times, September 2010http://economictimes.indiatimes.com/opinion/comments--analysis/virtual-airlines-future-of-aviation/articleshow/6633586.cms
  • 224. NASA: Flight in 2025
  • 225. NASA: Flight in 2025 • In late 2010, NASA awarded contracts to three teams—Lockheed Martin, Northrop Grumman and Boeing—to study advanced concept designs for aircraft that could take to the skies in the year 2025. • While each design looks very different, the space agency noted all final designs have to meet NASAs goals for less noise, cleaner exhaust and lower fuel consumption. "Each aircraft has to be able to do all of those things at the same time, which requires a complex dance of tradeoffs between all of the new advanced technologies that will be on these vehicles," NASA documents stated. "The proposed aircraft will also have to operate safely in a more modernized air traffic management system." • In addition, each design has to fly up to 85 percent of the speed of sound, cover a range of approximately 7,000 miles, and carry between 50,000 and 100,000 pounds of payload, either passengers or cargo.Source: eweek January 2011 http://www.eweek.com/c/a/Government-IT/NASA-Releases-Look-at-Flight-in-2025-523435/
  • 226. NASA: Flight in 2025• Shape memory alloys, ceramic or fiber composites, carbon nanotube or fiber optic cabling, self-healing skin, hybrid electric engines, folding wings, double fuselages and virtual reality windows are just a few of the far-out conceptual materials passenger planes in 2035 might embody.Source: eWeek, January 2011 http://www.eweek.com/c/a/Government-IT/NASA-Releases-Look-at-Flight-in-2025-523435/
  • 227. Futuristic Flight
  • 228. Futuristic Flight • One of the trendiest topics in aviation is futuristic design and innovation. While green energy and drone technology are often incorporated into futuristic plans, more outlandish design quirks are also exciting engineers. A prime example is Airbus 2030 Concept Plane, which features elements that airplanes might have 20 to 40 years from now. Conceptual components include self-cleaning cabins, smart seats that form to passengers bodies, and see-through walls, floors and ceilings. Engineers even imagine holographic projections that could turn the cabin into a home office or Zen garden. • The Airbus conceptual plane features extra-long wings, a U-shaped tail and a highly efficient fuselage. • "Its not a real aircraft, and all the technologies it features, though feasible, are not likely to come together in the same manner. Here we are stretching our imagination and thinking beyond our usual boundaries," says Charles Champion, vice president of engineering at Airbus. Still—these designs might provide the keys to safer, greener and more comfortable air travel.Source: Smarter Technology, July 2010 http://www.smartertechnology.com/c/a/Technology-For-Change/The-Future-of-Aviation-3-Trends-in-Flight/1/
  • 229. UAV Flapless Flight • A novel unmanned air vehicle (UAV) which showcases a wide range of new technologies has successfully demonstrated flapless flight in the UK • The UAV, called DEMON, made the historic flight from an airfield at Walney Island in Cumbria on Friday 17 September. Developed by Cranfield University, BAE Systems, and nine other UK universities, DEMON is designed to be able to forgo the use of conventional mechanical elevators and ailerons which usually control the movement of an aircraft in favour of novel aerodynamic control devices using blown jets of air.“ • Such an approach offers several advantages over moving flap technology which has been used since the early days of aviation, in that it means fewer moving parts, less maintenance, and a more stealthy profile for the aircraft. DEMONs trial flights were the first flapless flights ever to be authorised by the UK Civil Aviation Authority.Source: BAE Systems , 2010 http://www.baesystems.com/AboutUs/ShowcaseUAVDemonstratesFlaplessFlight/index.htm
  • 230. UAV Flapless Flight • The flapless system, developed around a concept called fluidic flight control, was the result of collaborative work between Manchester and Cranfield universities together with BAE Systems Advanced Technology Centre and was tested in wind tunnels and on models before the full-scale trials on DEMON took place. • The DEMON is designed to fly with no conventional elevators or ailerons, getting its pitch and roll control from technologies which rely on blown air and so requires much fewer moving parts, therefore making it a lot easier to maintain and repair. • DEMON can fly parts of its mission by itself but, as it is currently an experimental vehicle, is not fully autonomous. • The shape of the DEMON aircraft is referred to as a "blended wing-body" configuration.Source: BAE Systems , 2010 http://www.baesystems.com/AboutUs/ShowcaseUAVDemonstratesFlaplessFlight/index.htm
  • 231. Drone Flight • Today, unmanned aircrafts are commonly used for war operations in many countries. But as drone planes grow more capable of performing complex tasks and carrying passengers, unmanned commercial flight seems to be on the horizon. In June 2010, the Federal Aviation Administration announced its two-year plan to bring unmanned flight to the American skies, possibly in a commercial form. Commercial drone crafts could mean cheaper—and possibly safer—flights. • One particularly promising non-combat application of unmanned aircraft is search and rescue. A team of researchers at Brigham Young University recently revamped a cheap propeller-driven plane with computerized maps and cameras that determine the locations of lost hikers. These drones can find people more quickly and safely than human rescue teams or helicopters.Source: Smarter Technology, July 2010 http://www.smartertechnology.com/c/a/Technology-For-Change/The-Future-of-Aviation-3-Trends-in-Flight/1/
  • 232. Sustainability
  • 233. Green Terminals • San Francisco’s renovated second terminal is slated to become the nation’s first airport terminal to be certified by the U.S. Green Building Council’s Leadership in Energy and Environmental Design (LEED) rating system. • The upgrade is expected to reduce the airport’s carbon emissions by an estimated 1,667 tons annually. • The revamped 640,000-square-foot terminal, called “T2,” will be the new base for Virgin America’s and American Airlines’ domestic flights. Designed by Gensler Architects, T2 also aims to educate SFO’s 6 million visitors about green living. • “SFO is setting new standards for sustainability and the traveler experience,” said SFO Director John Martin. “T2 has been built to accommodate today’s and tomorrow’s modern traveler — and they expect sustainability, comfort and convenience. We have found a way to provide all of those elements here at SFO.”Source: Earth 911, March 2011 http://earth911.com/news/2011/03/07/the-airport-of-the-future/
  • 234. Green Terminals • Here are some highlights of T2’s green features: • Energy savings: T2 will use energy-efficient lighting and other equipment to reduce the terminal’s energy use. The bulk of T2’s estimated annual carbon savings will come from energy efficiency: 1,640 tons of greenhouse gas emissions per year. • Daylighting: T2’s design harnesses the sun’s natural light to reduce the need for artificial lighting and to make the airport’s atmosphere more pleasant for travelers and employees. • Recycling and composting: The renovation’s contractors, Turner Construction, have recycled 90 percent of the project’s construction and demolition material. SFO already had an extensive recycling and composting program and will require all food vendors in the new terminal to use compostable service ware and compost their food waste.Source: Earth 911, March 2011 http://earth911.com/news/2011/03/07/the-airport-of-the-future/
  • 235. Green Terminals • Waste reduction: To encourage passengers to travel with reusable water bottles, T2 will have “hydration stations,” where visitors can refill water bottles once they are through security screening. • Water savings: T2’s new plumbing fixtures are very efficient, using 40 percent less water than standard fixtures. The terminal also has a dual plumbing system, so treated wastewater can be used for restroom toilets. • Green dining: Food vendors will offer local organic food whenever possible. • Green building materials: The renovation used recycled-content flooring, carpet and tiles to conserve virgin materials and used low-emitting paints to create excellent indoor air quality. Much of the existing building was reused in the renovation, which reduced the project’s carbon footprint itself by about 12,300 tons of greenhouse gas emissions. • Access to public transit: T2 will have a pedestrian bridge to connect travelers with the Bay Area’s subway system.Source: Earth 911, March 2011 http://earth911.com/news/2011/03/07/the-airport-of-the-future/
  • 236. Aviation - Environmental Outlook The Initial Scenario SetSource: Henley Centre Headlight Vision ‘Managing the environmental challenges of growth in aviation Draft report of stakeholderevent, Cambridge’ October 2006
  • 237. Potential Emerging Risks• Technology risks: Much of the technology which the industry has developed, but which is not yet in the market, involves incremental improvement rather than a step change in performance.• However, if governments take more stringent action on climate change targets, that could involve reductions in emissions of 60% or more between now and 2050.• The risk is that the type of technology needed to achieve such reductions while maintaining substantial aviation volumes would be disruptive rather than incremental. It is not clear if the industry has a model of how it would adapt to a radically different environmental policy framework.Source: Henley Centre Headlight Vision ‘Managing the environmental challenges of growth in aviation Draft report of stakeholderevent, Cambridge’ October 2006
  • 238. Potential Emerging Risks• Demand management: Similar issues may push governments towards imposing demand management on airlines, or influencing demand, to restrict usage. Some of these may also affect scheduling and flight operations. Again, there appears to be little understanding of how such a change in approach may affect industry structures and systems.• Capacity issues: Technical capacity issues, such as runway capacity and air traffic management capability, were reviewed and are captured above. However, capacity could get restricted through shifting public attitudes towards the social impact of airports. It is a commonplace of the urban economics literature that one of the main limits to economic growth is the ability of public infrastructure to support it (Cambridge is a good example). Capacity issues may result from social limits as well as technical limits to supply.Source: Henley Centre Headlight Vision ‘Managing the environmental challenges of growth in aviation Draft report of stakeholderevent, Cambridge’ October 2006
  • 239. Potential Emerging Risks• Business model: In two of the scenarios, demand for aviation fell. In most industries, this would most likely lead some players to exit the industry. The regulatory structure of the aviation industry makes this option difficult – or all but impossible. This instead encourages economic competition between airlines which is environmentally damaging, e.g. pricing in favour of interlining via environmentally inefficient locations. But little air system and airline planning appears to be about how to manage environmental aspects of the business in a growing, static or even shrinking market, or the impacts of this on current regulation.• Climate change: A number of participants observed that some of the more complex impacts of aviation on climate change were poorly understood. While this is true, and is an appropriate subject for knowledge transfer, it is also the case that the industry is extremely unlikely to make an error if it presses as hard as possible to reduce CO2 and NOx as early as possible.Source: Henley Centre Headlight Vision ‘Managing the environmental challenges of growth in aviation Draft report of stakeholderevent, Cambridge’ October 2006
  • 240. Potential Emerging Risks• Attitudinal shift: As was observed, the Restoration scenario requires that there is a significant shift in social and public values about the environment. There were competing views as to the likelihood of this. However, there have been significant shifts in the UK, and elsewhere, in each of the last three decades: around smoking in the 1980s; around road use and road development in the 1990s; and around obesity in the current decade. In each case, the shift was driven by a combination of NGO pressure, changing regulatory views (partly driven by changing perceptions of public cost), and a shift in social perception. In each case, the shift also involved a change in the way individual choice and consumer choice were perceived. There are risks for the aviation sector associated with how an equivalent debate in relation to the environmental impacts of aviation are perceived, weighed and resolved in society.Source: Henley Centre Headlight Vision ‘Managing the environmental challenges of growth in aviation Draft report of stakeholderevent, Cambridge’ October 2006
  • 241. Biofuels: How Much Would weNeed to Grow to Power Aviation?Sq km 3,500,000 3,287,590 3,000,000 2,700,000 2,500,000 2,000,000 2,000,000 1,500,000 1,000,000 809,000 500,000 380,000 68,000 70,000 0 Algae Ireland Montana World Camelina Jatropha India Annual Corn Crop Source: Enviro. Aero , 2009 http://www.enviro.aero/Content/Upload/File/BeginnersGuide_Biofuels_WebRes.pdf
  • 242. Clean Sky• Flying can become considerably more environmentally friendly -- the aviation experts from the "Advisory Council for Aeronautics Research in Europe" ACARE are certain of this. In the guidelines that they compiled for the European aviation industry, the experts are calling for a 50 percent reduction in carbon dioxide and noise emissions by 2020; nitrogen oxide output should be reduced by 80 percent.• To achieve this goal, new structural concepts and aerodynamic profiles have to be engineered, along with better drive concepts as well as adapted logistical designs, and then put to use. Source: Science Daily, June 2010 http://www.sciencedaily.com/releases/2010/05/100510092513.htm
  • 243. Technology Horizons
  • 244. Science and Technology Our Personal ‘Ecosystems’ Will Evolve Augmented Fully Reality Mapped Personal Genome Memory Capture / Body AreaEnhancement Network
  • 245. Travel Technology• Japanese healthcare specialist Tanita is using RFID on a common pedometer.• The device is designed to be worn on a waistband.• Instead of just giving a readout of distance traveled and calories burned, the device shoots the data off to a nearby RFID travel card.• Once home, the data can be synced with a PC and uploaded to the company’s Karada Karute (Body Card) website, where ongoing progress can be monitored.• Although Tanita’s system currently works only in Japan, the possibility of taking the combined healthcare and travel card global is clear. Source: CNN Go ‘Hi-tech gear for tomorrows traveler,’ January 2010 http://www.cnngo.com/explorations/none/new-travel-gear-workout-tech-get-excited-about-405322
  • 246. Travel Migrates Online• While most Chinese visit traditional travel websites for research, they are likely to finalize their itineraries via interaction with other netizens on social networking platforms, according to the survey.• Nearly 100 million Chinese netizens regularly visit online bulletin boards to share opinions, ask for help or socialize with friends, according to 2008 figures from the China Internet Network Information Center.• “Word of mouth is the major factor for travelers when picking airline tickets or hotels,” said Nan Nan, marketing manager for travel search engine Qunar.com. “For them, strangers are more reliable than advertisements.”• Online advertising, however, is also having more influence on Chinese travelers than advertising in more traditional mediums, like television and print. Almost 70 percent of those surveyed remembered seeing travel ads on the Internet, the Nielsen survey said. Source: China Travel Trends, August 2009 http://www.chinatraveltrends.com/2009/08/29/travelers-hit-internet-to-plan-vacations/
  • 247. Travel Software• With more than 1.6 billion Muslims globally, religious tourism to Saudi Arabia alone generating $7bn annually, a figure which is expected to grow at 20% over the next decade, and an increasingly affluent Arab population under 21-years-of-age, Halal-friendly travel is being widely tipped as one of the industrys fastest growing market segments.• "We are seeing massive growth within this market segment and it was something we needed to be part of. To cater for demand, we have developed our very own rating system and website for travel based on a set of Halal- friendly criteria," said Fazal Bahardeen, CEO and Member of the Board, Crescentrating. Source: AME Info, May 2010 http://www.ameinfo.com/231843.html
  • 248. Travel Software• With a rating of 1 to 7, 1 being the lowest and 7 being the highest, the criteria for rating include prayer-related facilities, Kibla direction in rooms, serving of Halal food as well as those that respect the fasting month of Ramadan, washroom facilities suitable for Muslims, and non-serving of alcohol.• More than 100 hotels worldwide currently avail of Crescentratings services, including three in the UAE, four in Qatar, one in Bahrain, as well as 6-rated hotels in Saudi Arabia and South Africa.• In addition, a significant number of hotels located in China, Malaysia, Indonesia and Singapore have also signed-up to Crescentratings services.• A 6-rated hotel facility is one that serves Halal food and does not serve alcohol at all. Whilst those that have been given a 1-rating are those whose personnel are at the very least, trained to provide all the necessary information to Halal-conscious guests.• Crescentratings website also offers its own booking facility for hotels. It plans to include ratings for restaurants, shopping malls and theme parks. Source: AME Info ‘Halal Friendly travel services make Middle East debut at Arabian Travel Market 2010,’ May 2010 http://www.ameinfo.com/231843.html
  • 249. Smart Mobility Strategies that Will Transform the Industry
  • 250. Smart Mobility Strategies that Will Transform the Industry • Airline Mobility Evolution • Traditional airline business models are evolving rapidly to exploit the growth of mobility, and many airlines are beginning to experiment with mobility- enabled personalized services. • Solutions such as websites optimized for mobile access and bar-coded boarding passes sent to smartphones are seeing double-digit growth. Based on the survey, SITA forecasted (2010) that by the end of 2010, mobility optimization for websites will grow from 15% currently to 51%. • Mobile phone-based boarding will increase from 7% today to 31%, and other paper- and card-based applications such as baggage receipts, card access to premium lounges, and cash and credit card payments are also expected to be replaced by mobile applications. In the meantime, use of wireless devices by airport staff to support aircraft maintenance will grow from 17% currently to 31% by the end of 2010.Source: Cisco, ‘Airline of the Future,’ July 2010 http://www.cisco.com/web/about/ac79/docs/pov/Airline_of_the_Future_PoV_FINAL0712.pdf
  • 251. Smart Mobility Strategies that Will Transform the Industry • Airport and airline operations are also seeing innovative mobility enhancements in the areas of “operational messaging” (between the aircraft and airline headquarters), maintenance, pre- and in-flight services, flight planning, and asset and spare parts management • Mobility 3.0: The Future • While Mobility 1.0 and 2.0 have enabled airlines to move beyond basic and maturing services, Mobility 3.0 will ultimately empower airlines to combine 1.0 and 2.0 capabilities with context-aware applications to transform their business models, enhance their relevance to customers, and provide passengers with greater control over every aspect of their travel—anytime, anywhere, through any device.Source: Cisco, ‘Airline of the Future,’ July 2010 http://www.cisco.com/web/about/ac79/docs/pov/Airline_of_the_Future_PoV_FINAL0712.pdf
  • 252. Smart Mobility Strategies that Will Transform the Industry• Examples of Mobility 3.0 services and applications include: – Personal travel assistant—for travel-related interactions such as alerts pertaining to all aspects of the journey, including drive time to the airport, flight times, and security line status – Mobile marketing—dynamic packaging of personalized offerings and discounts – Mobile concierge service—with the push of a button, access a virtual concierge whose familiarity with the user’s profile (likes, dislikes, etc.) enables delivery of a highly personalized experience – Mobile payment—smartphone as a secure e-wallet, taking advantage of context aware security capability – Augmented reality—context- and location-aware applications enable an immersive, context-rich environment for the passenger – Real-time business intelligence for airlines—rather than conduct analytical yield management on a batch basis, airlines can perform optimized real-time yield management based on passengers’ location, what they are doing, and what they might want
  • 253. Smart Mobility Strategies that Will Transform the Industry • Mobility 3.0 solutions enable passengers to make far more intelligent and precise decisions about their travel to and from the airport. When combined, such capabilities create a mashup that offers context-aware, location-based services that can notify passengers of whether they need to leave for the airport earlier or later based on real-time and predictive data of traffic, airport, and airspace conditions.Source: Cisco, ‘Airline of the Future,’ July 2010 http://www.cisco.com/web/about/ac79/docs/pov/Airline_of_the_Future_PoV_FINAL0712.pdf
  • 254. Smart Mobility Strategies that Will Transform the Industry • New Business Models • Mobility 3.0 will permit new business models that enhance customer experience, facilitate new services, increase revenues and profitability, streamline airport operations, lower sales and marketing costs, boost employee productivity, and encourage further service-level differentiation. The impact of Mobility 3.0 capabilities spans the various business models of network, regional, and low-cost carriers. The picture on the following slide depicts a high-level smart mobility vision that, through successful execution of a mobility strategy, enables new business models and benefits.Source: Cisco, ‘Airline of the Future,’ July 2010 http://www.cisco.com/web/about/ac79/docs/pov/Airline_of_the_Future_PoV_FINAL0712.pdf
  • 255. Smart Mobility Strategies that Will Transform the Industry • These capabilities can streamline and unburden the travel process by empowering passengers with enhanced self-service, real-time data, and context-aware services. Such services can dramatically expand the airlines’ value chain with multiple opportunities to shape a rich, personalized passenger experience, creating new ways to drive profitability. • Mobility 3.0 will further accelerate the airline industry’s current migration to direct sales and ticket/product distribution. Airlines expect to increase the proportion of tickets sold through online channels from 26.7 percent to 41.4 percent by 2012, and through their own websites. • Smart mobile devices are a key driver of this development. This is especially true in emerging countries, where low penetration of fixed Internet access hampers direct airline ticket sales. Here, mobile phones can play a critical role in delivering new services and enabling airlines to interact with customers.Source: Cisco, ‘Airline of the Future,’ July 2010 http://www.cisco.com/web/about/ac79/docs/pov/Airline_of_the_Future_PoV_FINAL0712.pdf
  • 256. Smart Mobility Strategies that Will Transform the Industry • Offering smart, mobility-enabled, personalized services and products can generate new revenues, in addition to monies from the sale of core products and ancillary services/products. Such new revenues may include the sale of perishable products (for example, empty seats) through real-time auctions for aisle or window seats, or sales of overhead storage as space becomes available; commissionable products such as food, drinks, music or movies, premium airport parking and car services; or use of frequent flyer points.Source: Cisco, ‘Airline of the Future,’ July 2010 http://www.cisco.com/web/about/ac79/docs/pov/Airline_of_the_Future_PoV_FINAL0712.pdf
  • 257. Smart Mobility Strategies that Will Transform the Industry • New Operations and Processes • Airlines traditionally operate in a highly siloed fashion where specific processes necessary to support extremely efficient operations are departmentally isolated. Because of this, sharing cross-departmental information is typically not a priority. To extract maximum value from smart mobility, airlines must achieve a greater level of information sharing. To achieve this, they must retool their operational processes to support a passenger-journey-centric framework instead of the existing “seat- production” model. Airline operations that can benefit from smart mobility include: • Collaborative ramp management—Mobility 3.0 solutions can enable employees to collaborate based on real-time information such as gate changes, leading to a reduction in aircraft turnaround times.Source: Cisco, ‘Airline of the Future,’ July 2010 http://www.cisco.com/web/about/ac79/docs/pov/Airline_of_the_Future_PoV_FINAL0712.pdf
  • 258. Smart Mobility Strategies that Will Transform the Industry • Innovative asset management—Smartphone solutions can provide ramp workers with up-to-date information required for their specific task. For example, lost luggage is an ongoing concern for passengers. Using smartphones to manage luggage along its journey, airline baggage agents can trace baggage by accessing and logging real-time information about the luggage’s location. This capability leads to faster problem resolution and asset identification, and improved passenger satisfaction. • Workforce management—Using smartphones, employees working on the ground, for example, can access real-time information from flight crews to handle passenger requests (such as flight delays) more efficiently. • Airport footprint—Smartphone capabilities will also allow airlines to reduce their airport footprints (personnel, counters, kiosks, real estate, and more). Airlines typically have relied on self-service capabilities delivered by the web and airport kiosks to lower costs and, in many cases, improve customer experience. Kiosks are expensive systems to deploy and maintain, and web solutions address only a narrow portion of the passenger journey.Source: Cisco, ‘Airline of the Future,’ July 2010 http://www.cisco.com/web/about/ac79/docs/pov/Airline_of_the_Future_PoV_FINAL0712.pdf
  • 259. Airline Driven Change
  • 260. Airline Driven Change • Fly Delta is Delta Airlines official Android app. It lets you check in for your flight, watch flight statuses, and even download a mobile boarding pass to your phone. A new update gives the ability to choose your seat from a handy little map. • Normally you have to choose your seat when you purchase your ticket, and if you want to try and change it at the airport you have to wait in line for a terminal to check availability. • Now you can do it on your phone wherever you please. You can even check your upgrade eligibility. • The Delta app is an example of how much smartphones can do just to make the little things easier.Source: Android Community, July 2011 http://androidcommunity.com/delta-airlines-app-update-lets-you-choose-your-seat-20110720/
  • 261. Airline Driven Change• Delta Airlines customers can now check in to flights on the company’s Facebook app.• From the Ticket Counter application, Delta customers can now check SkyMiles and preview what amenities are available for various flights, too. Delta launched its app back in August 2010, at which time it was the first airline to allow users to book flights through the social network.• Using the app, which was developed by 8thBridge, boarding passes can be printed from the Facebook, just like on the website. Delta also lets users share details about their travel plans or itineraries with users over Facebook. Source: Mashable. March 2011 http://mashable.com/2011/03/17/delta-facebook-check-in/
  • 262. Airport Automation
  • 263. Airport Automation • Airport automation has always involved significant investment in infrastructure. • Airports strive to balance passenger comfort with operational efficiency whilst striving for a unique experience that reflects the specific destination. • A growing global trend is the privatisation of airports. This may entail a complete shift to private ownership or a government industry hybrid model where investment from private equity firms is combined with government support. This has created a more business-centric focus on return on investment for any airport IT expenditure. As Low Cost Carriers continue to grow and embrace secondary city airports it puts added pressure on traditional airports to modernise to effectively compete. • Airport technology is often locally deployed. This approach has been chosen by airport executives because of the perceived value and control of locally installed software.Source: Amadeus, 2011 http://www.amadeus.com/airlineIT/navigating-the-airport-of-tomorrow/docs/Amadeus-Navigating-the-Airport-Of-Tomorrow-2011-EN.pdf
  • 264. Airport Automation • With the IT industry moving to cloud based computing, the idea of installing software at the airport for individual functions is both antiquated and inefficient. This local focus not only impacts the airport’s ability to execute common processes across airlines and terminals, but also does not allow airports to share best practices by using a common platform. • The reality is that today’s airport technology is highly fragmented. • For example, a key component of baggage automation is the Baggage Reconciliation System (BRS). In some airports a BRS does not exist, in other airports a different BRS exists in different terminals and in most cases the BRS is not integrated with airline systems. This standalone nature of the BRS is symptomatic of the bigger problem of lack of system integration within airport systems and between airport and airline technology.Source: Amadeus, 2011 http://www.amadeus.com/airlineIT/navigating-the-airport-of-tomorrow/docs/Amadeus-Navigating-the-Airport-Of-Tomorrow-2011-EN.pdf
  • 265. Airport Automation • Airports suffer from a lack of customer insight. This takes the form of both operational weakness as well as limitations on customer centric services. To counteract this lack of customer knowledge some airports have launched loyalty programmes. • In order to increase profitability, merchandising of airport shops and services is critical. • To effectively promote relevant airport services to the right customer at the right time, customer insight is mandatory. • Products and service offers need to be customised to fit specific traveller preferences encouraging greater spend at airport shops and restaurants. • Whether or not the airport decides to invest in new systems to improve passenger processing and merchandising, passengers themselves will increasingly demand enhanced services that they receive from other transportation providers and retailers.Source: Amadeus, 2011 http://www.amadeus.com/airlineIT/navigating-the-airport-of-tomorrow/docs/Amadeus-Navigating-the-Airport-Of-Tomorrow-2011-EN.pdf
  • 266. Airport Automation • For example, as rail companies embrace Near Field Communication (NFC) to simplify and improve the passenger boarding process, the customer will expect the same type of experience at the airport. Retailers such as Best Buy and Macys have implemented sophisticated mobile marketing platforms offered by innovative start-ups such as Shopkick. By implementing Shopkick, the retailer can target specific mobile promotions based on the customer’s precise location in the store. As retailers offer specific • targeted mobile promotions to shop visitors, passengers will come to expect this same type of one-to-one marketing at the airport. In fact, the airport could be viewed as a shopping mall and thus consumer behaviour which is being shaped by technology such as Shopkick will be expected by the always connected traveller. Without passenger insight this type of electronic merchandising will not be possible.Source: Amadeus, 2011 http://www.amadeus.com/airlineIT/navigating-the-airport-of-tomorrow/docs/Amadeus-Navigating-the-Airport-Of-Tomorrow-2011-EN.pdf
  • 267. Airport Systems of the Future • Widespread 2015-2020 • To support the airport of the future, an integrated technological eco-system must be created. This would allow all airport functions to be unified under an integrated airport system that is tightly aligned with the airline systems to deliver a comprehensive airport experience. • The self service trend will continue with the widespread adoption of Near Field Communication. NFC will be used for boarding, payments and personalised promotions. Once the majority of passengers own a NFC enabled smartphone, the creation of methods to automatically check-in the passenger is possible. Today, NFC requires the passenger to swipe their mobile phone against a NFC reader. As NFC becomes more widespread, any interaction the passenger has in the terminal could trigger a check-in.Source: Amadeus, 2011 http://www.amadeus.com/airlineIT/navigating-the-airport-of-tomorrow/docs/Amadeus-Navigating-the-Airport-Of-Tomorrow-2011-EN.pdf
  • 268. Airport Systems of the Future • Airports may consider installing NFC readers throughout the terminal to sense the passenger’s presence and provide an automated check-in notice to the airlines. NFC may be combined with location based social networking applications such as Foursquare which enables automated check-in for favourite places. • Clearly the future airport experience will track the passenger’s location (with their permission) enabling a more productive experience, reducing the need to wait in line. • By this time all baggage will be location aware. Passengers will know that their bag is on the airplane and airline and airport personnel will be able to easily locate lost bags, or offload baggage when required improving departure times. If a flight is cancelled the passengers will know when their baggage is offloaded. Improved baggage passenger notification will save the airline, airport and ground handlers time and money reducing staff needed to track and deliver lost bags.Source: Amadeus, 2011 http://www.amadeus.com/airlineIT/navigating-the-airport-of-tomorrow/docs/Amadeus-Navigating-the-Airport-Of-Tomorrow-2011-EN.pdf
  • 269. Airport Systems of the Future • Underlying these new services is a fully integrated airline/airport ecosystem. Airports will adopt integrated IT solutions that provide seamless connectivity between flight operations, resource management, baggage systems and merchandising efforts. At the centre of this new airport infrastructure is an operational database that manages all customer information. • This new infrastructure will be connected to next generation DCS and PSS airline systems exchanging key passenger information to help both airlines and airports manage passenger flows. • At the heart of this technological revolution is the more informed passenger. We are already in the age of ubiquitous connectivity. • The ‘always connected’ passenger will demand information and services delivered on their preferred personal computing device that is personal, location sensitive and contextually relevant. By improving the efficiency of the traveler and informing them of all facets of the airport experience, airlines will be able to deliver a differentiated enhanced experience that corrects many of the passenger issues present today.Source: Amadeus, 2011 http://www.amadeus.com/airlineIT/navigating-the-airport-of-tomorrow/docs/Amadeus-Navigating-the-Airport-Of-Tomorrow-2011-EN.pdf
  • 270. Next Generation Smart Phones
  • 271. Internet of Things
  • 272. Interactive Surfaces (2011 onwards) • Interactive Surfaces • 2011 onwards • Even skin has become an interactive surface, with scientists able to create a system that allows users to use their own hands and arms as touchscreens by detecting the various ultralow-frequency sounds produced when tapping different parts of the skin. Skinput uses microchip-sized projectors to allow for interactive elements rendered on the user’s forearm and hand.Source: ZDNet, March 2010 http://blogs.zdnet.com/emergingtech/?p=2146
  • 273. Augmented Reality • Copenhagen Airport has updated its CPH Airport iPhone app, available for free download in the Apple’s iTunes store, to enable users to view the distances and locations of restaurants, information desks, lounges, shops and gates. • This Live View feature comes through augmented reality technology and was developed for the airport by SITA Lab and Novasa. Augmented reality has been around for awhile, but the CPH Airport app is special because it claims to be the first augmented reality application that works indoors. • Most augmented reality apps use GPS technology to determine a user’s location, but concrete terminal buildings make that untenable indoors. So, instead the CPH Airport app uses signal strength and triangulation from Wi- Fi access points around the airport to determine the location of each traveler’s mobile phone.Source: Business Insider, April 2011 http://www.businessinsider.com/copenhagen-airport-gets-augmented-reality-app-2011-4
  • 274. Augmented Reality • Of course, the airport plans on commercializing the whole thing as soon as possible, meaning you’ll probably have the choice of opting in to receive special promotions from retailers when using the app. • Other upgrades to Version 2.0 of the app include the capability of viewing your location at the airport on maps, and the parking map shows the number of available spaces.Source: Business Insider, April 2011 http://www.businessinsider.com/copenhagen-airport-gets-augmented-reality-app-2011-4
  • 275. Kiosks and Interactive Surfaces
  • 276. QR Tags
  • 277. Mobile Commerce
  • 278. Growth of EvolutionaryPsychology (2011 onwards)
  • 279. Growth of Evolutionary Psychology (2011 onwards) • Evolutionary psychology (the contention that many aspects of our behaviour and emotions are evolutionary adaptations) may merge with cognitive neuroscience to produce a new understanding of how the mind and brain evolved and thus offer a platform for deeper understanding of human behaviour (Sigma Scan).Source: Sigma Scan, 2009 http://www.sigmascan.org/Live/Issue/ViewIssue.aspx?IssueId=410&SearchMode=1
  • 280. Virtual Worlds
  • 281. Virtual Products Answering the Call of the Passenger Global Research Study – Identified High Merchandise InterestSource: GuestLogix ‘Opportunities Abound in Virtual Products’ presentation, June 2011
  • 282. Virtual Products Answering the Call of the Passenger Global Research Study – Identified Strong Consumer BenefitSource: GuestLogix ‘Opportunities Abound in Virtual Products’ presentation, June 2011
  • 283. Virtual Products Support Access at all Travel Touch PointsSource: GuestLogix ‘Opportunities Abound in Virtual Products’ presentation, June 2011
  • 284. Paris – Virtual Boarding and Beyond? • An airport in Paris is tinkering with boarding staff that are not, in fact, real people, but holographic images of people. • The project is being piloted at the Orly airport in the French capital and over the past month the virtual staff have received a mix reception from air travelers. • The semi-holographic agents appear seemingly out of thin air at the beginning of each boarding process and give instructions to passengers much like any human agent would. • The “holograms” are actually pre-recorded, two dimensional projections set against human-shaped silhouettes made of Plexiglas. Three real live humans pre-recorded the virtual agents’ messages and mannerisms in a studio earlier this summer. • Depending on passenger reaction and a number of other factors, the concept could spread to other parts of the airport in 2012.Source: TMC Net.com, August 2011 http://telepresence.tmcnet.com/topics/telepresence/articles/209747-airport-employs-holographic-staff-paris.htm
  • 285. ‘Virtual assistants’ • London Luton Airport has introduced two ‘virtual assistants’ – Holly and Graham – to communicate important security messages as passengers move from the check-in area to the departure lounge. • The next-generation digital signage utilises the latest holographic imaging technology. Already in place at a number of UK airports, there is growing interest, both within the UK and globally, and the range of applications for the ‘virtual assistants’ looks set to grow. • The aim of the two holograms – Holly and Graham – installed at London Luton was to deliver a compelling “how to prepare” message, which, if successful, would result in fewer passengers needing to be stopped and searched. Since their introduction, the number of bags identified as being packed incorrectly has been reduced by 5%. • A customisable solution, looking ahead, the holograms could be deployed throughout the airport in both operational roles disseminating passenger information and for use by retail or catering outlets.Source: FTE, August 2011 http://www.futuretravelexperience.com/2011/08/virtual-assistants-simplify-security-and-improve-passenger-experience/
  • 286. Technology in Aviation: Holograms • To shorten security lines, improve customer service, and make passengers feel like they are in a Star Wars film, Manchester and London Luton airports have introduced holograms at their bag check queues. • Manchester unveiled their two holograms “John” and “Julie” on January 31st and a few days later “Holly” and “Graham” were introduced at Luton. • The goal of both is to brief passengers on security rules which will hopefully decrease wait times. The airports claimed to not be aware that the other was developing such similar technologies. • The virtual staff will improve check in time etc by reminding them of security requirements like the ban on most liquids.Source: Nile Guide, Travel News, by Morgan DeBoer, February 2011http://www.nileguide.com/blog/2011/02/07/the-future-of-airport-customer-service-holograms/
  • 287. Business Traveler Innovation Award Winners
  • 288. Business Traveler Innovation Award Winners • Category 4: Outstanding Apps • Criteria: Applications that help business travelers organize and/or make best use of their time on the road • Winner: GateGuru • Innovation: In-airport tool/guide • GateGuru is the first mobile application to refine your airport experience. The app offers information to guide any trip. It provides instant access to your itinerary, security wait times, airport maps, and a structured database of airport amenities, including ratings, reviews and tips from fellow travelersSource: GBTA, August 2011http://www.gbta.org/BusinessTravelInnovationAwards/Pages/BusinessTravelInnovationWelcome.aspx?Referral=Innovation
  • 289. Business Traveler Innovation Award Winners • Category 5: Travel Convenience & Efficiency • Criteria: Services that expedite the travel process • Winner: Intelity • Innovation: ICE Touch on iPads • The Intelity ICE Touch provides a virtual concierge stationed on iPads in hotel rooms. Guests quickly navigate services such as housekeeping, transportation, room service, spa and flight info without ever picking up the phone.Source: GBTA, August 2011http://www.gbta.org/BusinessTravelInnovationAwards/Pages/BusinessTravelInnovationWelcome.aspx?Referral=Innovation
  • 290. Rethinking the Airport Experience
  • 291. Drivers of Future Airport Design• More passengers • Modular Design• Self service • Rapid Turnaround• More luggage and storage requirements • High Throughput• Time poor / cash rich travellers • Rethinking Security• Intolerance of longer waiting times • Larger Airports• Demands for better food and entertainment • Climate Proofing• Rising Asian traveller numbers • Support Religious Needs• National Pride • New Models of• Environmental concerns and expectations Commercialisation• Increasing no. of peaks in demand from one • Sustainable Design off events e.g. Olympics • Temporary Structures• IT advances and Expectations • ‘Airport Lite’ • Leading IT CapabilitiesDesign Drivers Solutions
  • 292. Enhancing the Airport Experience • NFC • The main goal of the airport is to ensure the safe flow of passengers from the airport entrance to the gate. • Along the way, the opportunity to merchandise airport products and services represents an essential revenue opportunity for the airport. • Technology such as NFC will likely play a critical role in the airport experience but requires a significant investment in infrastructure and a critical mass of smartphones with NFC readers. • By 2015, 247 million smartphones will be NFC enabled, up from 0.96 million in 2011.Source: Amadeus, 2011 http://www.amadeus.com/airlineIT/navigating-the-airport-of-tomorrow/docs/Amadeus-Navigating-the-Airport-Of-Tomorrow-2011-EN.pdf
  • 293. Enhancing the Airport Experience • By placing NFC readers throughout the airport, passengers will be able to • › Check-in with their mobile phone › Receive coupons for airport shops › Pay with their mobile phone › Interact with NFC enabled advertisements › Exchange information with other travellers by simply bumping their NFC enabled phones › Use the phone for boarding › Use the phone for public transportation • NFC does require a significant infrastructure investment and a critical mass of NFC mobile phone penetration, and as a result, the move to NFC will be evolutionary. • Pilot tests at airports around the world have begun, but full implementation of NFC at airports is likely to take 4-7 years.Source: Amadeus, 2011 http://www.amadeus.com/airlineIT/navigating-the-airport-of-tomorrow/docs/Amadeus-Navigating-the-Airport-Of-Tomorrow-2011-EN.pdf
  • 294. Enhancing the Airport Experience • ‘As NFC becomes more widespread, any interaction the passenger has in the terminal could trigger a check-in,’ the Amadeus report said. • Near field technology could also be used for boarding, payments and personalised promotions on an opt-in basis. • ‘NFC technology has the potential to change every aspect of the airport experience,’ the report added. • The Navigating the Airport of Tomorrow report says all baggage will be ‘location aware’ within a decade, meaning passengers with mobile devices will be able to see that their bag is on the plane.Source: Amadeus, 2011 http://www.amadeus.com/airlineIT/navigating-the-airport-of-tomorrow/docs/Amadeus-Navigating-the-Airport-Of-Tomorrow-2011-EN.pdf
  • 295. Enhancing the Airport Experience • Self-service and mobility are the key themes of the airport of tomorrow. Ubiquitous connectivity means the passenger is always online and thus expects real time communication. Simple advances such as verifying that the passenger’s baggage is on board the aircraft can help minimise frustration and uncertainty. • Automating responses to periods of service disruption where vouchers are generated automatically and delivered to mobile devices is a key opportunity to shift this activity to a more self service mode. Roaming agents handling severe disruptions, coming to the passenger rather than making the passenger stand in an extended queue helps manage limited resources and improve overall efficiency. • To achieve this vision of the airport of tomorrow, airlines and airports must invest in new systems that automate manual tasks, share information and provide proactive communication to the passenger.Source: Amadeus, 2011 http://www.amadeus.com/airlineIT/navigating-the-airport-of-tomorrow/docs/Amadeus-Navigating-the-Airport-Of-Tomorrow-2011-EN.pdf
  • 296. Enhancing the Airport Experience • Airlines need to provide airports critical passenger data so they may better plan manpower needs. Baggage systems need to provide real time awareness of location to all parties to reduce loss and accelerate the reuniting of the baggage and passenger. • At the centre of all this technology is customer information. With comprehensive customer information all stakeholders can improve service to the passenger and use customer insight to market ancillary airline services and airport products and services. • The airport revolution has already begun. The revolution is actually an evolution continuing today’s efforts to increase self service capabilities for the passenger and communicating to the traveller the status of their flight, and bag in real time whilst enhancing and improving their in airport experience.Source: Amadeus, 2011 http://www.amadeus.com/airlineIT/navigating-the-airport-of-tomorrow/docs/Amadeus-Navigating-the-Airport-Of-Tomorrow-2011-EN.pdf
  • 297. Next Gen Qantas Check-In • The next generation check-in should provide greater speed and ease through the airport terminal by eliminating airport queuing, based on a new Qantas frequent flyer card, a Q card reader and bag drop facility. • The new Qantas frequent flyer card features an intelligent Q smart chip and will act as a permanent boarding pass, replacing eligible customers’ existing frequent flyer cards. • The card will be used at various points throughout the experience, including at check-in, at bag drop, and to board the aircraft. • Customers arriving at the airport who have not yet checked in online or via their mobile device, will be able to simply touch their card at an all-new Q card reader located throughout the check-in hall. • The Q card reader will provide both visual and audible recognition of successful check-in.Source: Design Boom, July 2010 http://www.designboom.com/weblog/cat/8/view/11002/marc-newson-next-generation-check-in-for-qantas.html
  • 298. Next Gen Qantas Check-In• Qantas’ ambitious Next Generation Check-in system, including the smartchipped Q Cards and Q Bag Tags, picked up a global award for innovation in airline technology.• The Airline Strategy Awards 2011 (London, July 2011), said that while Qantas is not the first airline to embrace radio-frequency identification (RFID) technology, its “innovative Q Bag Tag and faster, smarter check-in have developed its scope beyond any previous use”.• “RFID has been around a long time, but not much has happened” the ASA11 judging panel noted. “(Next Generation Check-in) shows real creativity.”• “Initial RFID baggage tracking solutions have relied on single-use disposable tags and only focused on improving baggage sorting after check-in. Next-Generation Check-in also addresses the front end of the process with the aim of simplifying a passenger’s complete journey through an airport while improving the efficiency and accuracy of baggage (sorting).” Source: RD Hub, July 2011 http://www.rdhub.com/?p=7156
  • 299. Biometrics• Passengers at Amsterdam Schiphol are being promised a speedier passage through immigration after the installation of new electronic border-crossing gates.• In a deal with Accenture, the airport claims the new gates will speed up the identification process by using the latest in biometric technologies, including facial recognition.• Accenture will initially deliver 36 electronic border-crossing gates to be used at Schiphol during 2011. Source: Travel Mole, July 2011 http://www.travelmole.com/stories/1148551.php
  • 300. Biometrics and an Airports Security Strategy• Jim Slevin of HRS: ‘Biometrics allows us to definitively answer who somebody is, whereas behavioural analytics permits us, when we dont know who you are, to least work out what youre doing. Biometrics is going to, over time, play an increasing role in airport security. The main reason for this is that there appears to be a real desire in the industry to change the model from a sheep dip, a one-size-fits-all security processing model, to one thats based on some threat and intelligence basis, based on individuals. If youre going to base security decisions on an individual, then you have to lock down who that individual is.’ Source: Airport Technology, February 2011 http://www.airport-technology.com/features/feature109762/
  • 301. Biometrics and an Airports Security Strategy• ‘Realistically, biometrics is the only answer because tickets and other breeder documents can be swapped or falsified and are therefore fallible. Dont get me wrong, there are data protection issues and privacy concerns to be overcome with biometrics, but I believe they will be overcome if the security model and the facilitation of access is beneficial. Id also say its the only valid way to permit the intelligence sharing of that information. One of the things we often forget about is the people who get access to that data; there are lots of concerns over data protection and privacy of information. Biometrics can identify you as a member of staff, and says whether or not you have permission to see a particular piece of information.’ Source: Airport Technology, February 2011 http://www.airport-technology.com/features/feature109762/
  • 302. Biometrics and an Airports Security Strategy• Secondly, as biometrics increases its penetration in airports, you start to get some amazing management information back regarding passenger flow. So if you imagine a position where your biometric is your ticket and youre logged at various stages, there will be people who worry about the Big Brother aspect of that. But if you view that biometric from an anonymous perspective the system can simply know its seen a unique passenger at points A, B, C, etc through the airport and knows what times they were there - consider that for all passengers going through and you have an enormous amount of journey measurement information upon which to make real-time operational decisions. Its maybe an output from a different security regime, and its invaluable information in terms of what is a normal flow, so you start to see, for instance, bottlenecks if there are queues developing Source: Airport Technology, February 2011 http://www.airport-technology.com/features/feature109762/
  • 303. Less Intrusive Screening • Heeding to calls for a less intrusive way to screen passengers at the airport, transportation authorities have proposed a high tech solution that includes eye scanners, x-rays, metal and liquid detectors. • The International Air Transport Association (IATA) demoed the first mock-up of a Checkpoint of the Future at the Association’s 67th Annual General Meeting (AGM) and World Air Transport Summit, in Singapore. • “We spend $7.4 billion a year to keep aviation secure. But our passengers only see hassle. Passengers should be able to get from curb to boarding gate with dignity,” said Giovanni Bisignani, IATA’s Director General and CEO. “That means without stopping, stripping or unpacking, and certainly not groping.” • The system was developed to address invasion of privacy concerns, make better use of available background information and ensure that most travelers can get through the procedure with minimal hassle or delays.Source: Smart Planet, June 2011 http://www.smartplanet.com/blog/thinking-tech/video-airport-security-checkpoint-of-the-future/7384
  • 304. Less Intrusive Screening • “Today’s checkpoint was designed four decades ago to stop hijackers carrying metal weapons,” said Bisignani. “We need a process that responds to today’s threat. It must amalgamate intelligence based on passenger information and new technology. That means moving from a system that looks for bad objects, to one that can find bad people.” • To ensure that the security screening is as hands-off and efficient as possible, passengers will be directed to one of three scanner-equipped tunnels. Each tunnel is tiered as ‘known traveler’, ‘normal’, and ‘enhanced security,’ with each offering a different level of scrutiny. The system designates which tunnel each passenger must go through depending on how much of a security threat the person poses, a determination that’s made using results of an internal risk assessment conducted by the government before the passenger arrives at the airport.Source: Smart Planet, June 2011 http://www.smartplanet.com/blog/thinking-tech/video-airport-security-checkpoint-of-the-future/7384
  • 305. Less Intrusive Screening • A passenger can speed through the “known traveler” tunnel if the person had completed background checks with government authorities while the majority will likely walk through the “normal” tunnel. Also, a passenger may be required to pass through an additional “elevated-risk” tunnel if the system detects something suspicious during the walk-through screening. • Perhaps the system’s biggest selling point is that the screening technology should allow passengers to walk through the checkpoint without having to remove clothes or unpack their belongings. • The IATA is hoping to have these checkpoints installed in airports within five to seven years, a process that will require the cooperation of government agencies to define what standards to use and also agreement on how the data would be shared.Source: Smart Planet, June 2011 http://www.smartplanet.com/blog/thinking-tech/video-airport-security-checkpoint-of-the-future/7384
  • 306. Security Innovation • Traveling through Shanghais Pudong International Airport, every single bag of every passenger is swabbed and tested and tested for explosives. • Sounds costly and time-prohibitive, doesnt it? • Unlike the one-by-one testing done in the USA, the testing at Pudong is done in batches of about 20 passengers at a time. The bags of all passengers in a group are swabbed as they proceed past a checkpoint to a cordoned-off area. As that group of passengers waits, all their bags are subjected to a single test. The process takes only a few seconds, then that batch is released. • Harvard Business Review describes this as ‘…a useful service innovation. From the airports perspective, it satisfies a need for greater vigilance, even while keeping costs and passenger inconveniences in check. From the customers perspective, it meets the desire for efficiency in the screening processes and for reassurance that the flight will be safe.’Source: Harvard Business Review, October 2010 http://blogs.hbr.org/cs/2010/10/how_do_customers_experience_yo.html
  • 307. Security Innovation • It also provides two useful reminders about service delivery innovation. First, it does not need to be expensive to make a positive difference. Some of the highest-impact innovations are about how services are delivered rather than what services are delivered. Second, at its best, it finds ways to resolve long-standing conflicts (such as the differing priorities of customers and service providers, or tradeoffs between quality and cost).Source: Harvard Business Review, October 2010 http://blogs.hbr.org/cs/2010/10/how_do_customers_experience_yo.html
  • 308. Self Boarding
  • 309. Self Boarding • Lufthansa is installing second-generation gates at several of its larger operations. • “We have self-boarding gates at our two hubs Frankfurt and Munich, plus six more in Germany,” says Lufthansa’s Jan Baerwalde. “With the recent upgrade of the boarding gates, we have increased the number of people passing through those gates within one minute from 14 to 17 people – an increase of almost 30%,” he adds. • This improvement in throughput is significant at airports where space for expansion is limited. As the number of air travellers increases, the need for a timely boarding procedure is more prevalent than ever.Source: Future Airport.com, March 2011 http://www.futureairport.com/articles/025_mar2011/FAI025_automatic-for-the-people.pdf
  • 310. Arrivals
  • 311. Automated Immigration? • Taiwan will be launching a trial of an automated border control system at offshore Kinmen island in order to simplify and speed up border controls. • Once the trial runs are successful in the outlying island, the scheme will later be expanded to two airports in northern Taiwan, Taiwan Taoyuan International Airport and Taipei Songshan Airport, and Kaohsiung International Airport in the south. • A total 35 of the new automated border control system sets will ultimately be introduced to the customs areas of these locations by the end of May, said the officials. • To make use of the new procedures that are expected to largely speed up and modernize border controls, people have to apply for the service first and provide his or her biometric data. • Travelers can either choose to leave a picture of their face or choose to leave a fingerprint record for future identification purposes.Source: China Post, January 2011 http://www.chinapost.com.tw/taiwan/national/national-news/2011/01/27/289245/Govt-to.htm
  • 312. Transport Synergies
  • 313. Transport Synergies• GuestLogix, Inc. has been awarded the 2011 “Innovation of the Year: Implementation” at the 2011 Global AirRail Awards.• GuestLogix received the award for OnTouch® Ground Connections; a technology and merchandising platform that allows airlines’ passengers to purchase Heathrow Express tickets through their network in a secure and highly accessible manner.• As the airline industry continues to battle against price commoditization, operators have looked to find new ways to generate revenues while creating a true value-add to their passengers• GuestLogix generates revenues for both parties and gives increased service to travelers, providing the sale of Heathrow Express tickets to airlines’ passengers prior to arrival at the gate.• GuestLogix’ platform also provides access to additional sales channels. Source: GuestLogix, May 25th 2011 http://www.guestlogix.com/pr/pr_05-25-11.html
  • 314. Facilities
  • 315. Localising the Experience
  • 316. Localising the Experience • San Francisco’s T2 is also intended to be a place for travelers to enjoy themselves. • There will be installations by world-known artists, children’s play areas, and a retail street with shops, a wine bar and a spa. • “Gensler’s design for SFO T2 will upend the generic placelessness of many airports by creating an authentic Bay Area experience within the terminal’s walls,” according to the architecture firm’s press release. • For business travelers, the terminal offers numerous laptop plug-in stations and free wireless Internet. • The airport adopted a goal of making its operations carbon neutral by 2020. • SFO gives customers discounts for renting fuel-efficient vehicles. At kiosks in one terminal, passengers can purchase carbon credits to offset their travels by funding sustainable forestry and renewable energy projects in Northern California.Source: Earth 911, March 2011 http://earth911.com/news/2011/03/07/the-airport-of-the-future/
  • 317. Localising the Experience • As soon as international passengers depart the aircraft at Christchurch International Airport, they can expect to experience a multi-sensory journey, which is designed to reflect New Zealand’s South Island/ • The unique arrivals experience starts in the airbridge corridors, where specially commissioned floor-to-ceiling photographs highlight four separate regions: the West Coast, Abel Tasman National Park, the Mackenzie Country, and the Antarctic, while a soundtrack of the environment and evocative smells of the region also feature. • Passengers are then guided into the terminal building by wall graphics, which represent the braided rivers of Canterbury, with water fountains also offering Canterbury’s famous artesian water. • “For us, this is a way to let people know they have arrived at a very special place,” explained Jade Reeves, Christchurch International Airport Limited (CIAL) Marketing Manager, who was the instigator and driver of the project. “It also makes the arrivals experience more positive and peaceful.”Source: Future Travel Experience, April 2011 http://www.futuretravelexperience.com/2011/04/christchurch-airports-sensory-arrivals-experience/
  • 318. Localising the Experience • While passengers queue in the Customs area, they can watch a video presentation of the South Island’s natural environment on Australasia’s largest video wall, which comprises 54 seamlessly linked screens. Even the baggage reclaim hall is designed to reflect the destination through seasonal imagery. • According to Reeves, the project, which took 18 months to complete, has received a positive response from passengers since its unveiling in late December, and has succeeded in making the “passage of travellers through the airport a more interesting and relaxing experience”. • Furthermore, the installation of the Sensory Arrivals Experience has had a positive knock-on effect for the region’s tourism industry, which is recovering following the damage caused by February’s earthquake. • “Travellers are so inspired that they come to our Travel and Tourism desks, where travel and accommodation can be booked, and request to have a trip to exactly the place they have just seen on the airbridge, or along the walkways, or in the Customs area,” Reeves explained.Source: Future Travel Experience, April 2011 http://www.futuretravelexperience.com/2011/04/christchurch-airports-sensory-arrivals-experience/
  • 319. Heathrow Redesigns Lounge Experience
  • 320. Heathrow Redesigns Lounge Experience • A new lounge in Terminal 3 of Heathrow Airport boasts a spa, game rooms, a la carte dining and even sleeping facilities. • Phil Cameron, founder and CEO of No.1 Traveller, said: "With a new world- class lounge, designer bedrooms, shower facilities and invigorating spa treatments, the passengers time at the airport can now be another highlight of their journey. • "Were delighted to have created this new level of innovation in association with Heathrow Airport." • Entry to the new lounge costs £30 on the door per adult, and £25 if booked in advance online. There are discount rates available for 2-11 year-olds and toddlers (under two years) can enter for free. The price includes a selection of hot and cold food, coffee, juice, wine and beer. You can also enjoy the use of a mini cinema, family room, relaxation areas and Wi-Fi.Source: Cheap Flights, August 2011 http://news.cheapflights.co.uk/2011/08/heathrow-aims-for-luxury-with-brand-new-lounge/
  • 321. Heathrow Redesigns Lounge Experience • The "Fun areas" for children are surrounded by soundproof glass walls, ensuring that any noise from these areas will not disturb other passengers. • At the end of the lounge there is a travel spa service which offers massage, nail and hair dressing treatments which are individually priced. • Those looking to get a quick nap will have to wait until September when the bedroom facility is due to open. Of the 12 bedrooms that will be available, the rate for an hour in a single bed will be £20 and £30 for a double. There is a minimum two-hour booking period for the beds. This is the first of its kind at Heathrow and all rooms will include en suite shower areas, TVs and mini-bars.Source: Cheap Flights, August 2011 http://news.cheapflights.co.uk/2011/08/heathrow-aims-for-luxury-with-brand-new-lounge/
  • 322. More Amenities
  • 323. More Amenities • Amsterdam Airport Schiphol has opened a brand new Airport Park, which offers passengers a multi-sensory experience designed to mirror the atmosphere of a city park. • Travellers are able to relax on the terrace surrounded by greenery, with images of famous parks all over the world, projections of butterflies, and the sounds of animals, bicycle bells and playing children adding to the natural outdoor ambience. • The Airport Park also features food outlets and shop kiosks. Sustainability has also been placed at the heart of the project and travellers can recharge their mobile phone by pedalling energy-generating bicycles, while LED lighting is also used.Source: Future Travel Experience, March 2011 http://www.futuretravelexperience.com/2011/05/amsterdam-opens-worlds-first-airport-park/
  • 324. Airport Innovation: Pester Power?• Reminiscent of artist Carsten Höllers wildly popular installation in the Tate Modern a few years back, The Slide@T3 at Changi (Singapore) bills itself as the worlds tallest slide in an airport.• That may well be true, for the thrill-seekers dream stands four stories (a full 12 metres high) permitting top speeds of up to six metres per second.• To encourage visitors to experience the thrill, Changi gives consumers two slide tokens for every SGD 30 they spend at the airport in a single receipt at duty free stores. Source: Springwise, June 2010 http://www.springwise.com/tourism_travel/slide_t3/
  • 325. Leveraging Scale Through Innovation / Technology• Continuous research on emerging airport technologies• Adopt an ‘open innovation’ approach• Create a Future Airport Lab - Attract partners to pilot innovations• Partner key R&D actors (e.g. TINA)• Shape the Agenda - Drive airport standards• Create s technology development roadmap• Establish an innovation fund to support staff ideas
  • 326. Hotels Pushing for Better Airport Facilities
  • 327. Hotels Pushing for Better Airport Facilities • When you stay at the Hilton Maldives/Iru Fushi Resort & Spa, Beach House Maldives A Waldorf Astoria Resort or Conrad Maldives Rangali Island, you start getting amenities even before you arrive at the hotel. The perks actually start rolling in when you step off of the plane. • After you arrive at Maldives International Airport and await your seaplane transfer to your island getaway, you get to relax in the new VIP seaplane lounge that gives out a number of freebies. • These include a complimentary shoulder massages, which are probably much-needed after a long, cramped international flight. • Other freebies in the air-conditioned lounge include hot and cold food prepared by a resident chef, drinks, Wi-Fi, computer stations, toilets, showers and changing areas. There are indoor and outdoor lounging areas. • Guests staying at the Beach House Maldives and Conrad Maldives Rangali Island get a large shared lounge while guests of Hilton Maldives Iru Fushi Resort & Spa receive their own separate area.Source: Hotel Chatter, May 2011http://www.hotelchatter.com/story/2011/5/1/23651/77295/hotels/No_Fair_The_Hilton_Maldives_Hotels_Have_Their_Own_Seaplane_Airport_Lounge
  • 328. Hotels Pushing for Better Airport Facilities • In March 2010, the W Retreat & Spa -Vieques Island opened a welcome lounge at the tiny, un-air-conditioned Vieques Airport, off the coast of Puerto Rico. • Hotel guests are greeted with chilled towels, cocktails and light snacks. "While theyre relaxing, we check them into their rooms, tag and load their luggage into a Jeep, and then whisk them to the retreat, which is five minutes away," says the hotels Nikolai Ursin. Use of the air-conditioned lounge includes free Wi-Fi and is complimentary for hotel guests at both arrival and departure.Source: USA Today, July 2011 http://www.usatoday.com/travel/experts/baskas/2011-07-19-airport-lounges-access-memberships_n.htm
  • 329. Retail andRevenues
  • 330. What Will the Future of Onboard Retail Look Like? • In surveying travellers globally, GuestLogix found that more than half would take advantage of destination-related offers onboard a flight. The company expect items such as tickets to entertainment, ground transportation, attractions, tours and other offers that add immediate value to a trip to be in demand, not just in Asia, but around the world. • ‘In response, leading onboard duty-free concessionaires will evolve their business models to include broader shopping categories with the convenience of home delivery. This will represent the next wave in onboard innovation that will usher in other important changes in the onboard experience.’ • ‘Airlines will need to upgrade their existing POS systems to meet more stringent global payment standards. As connectivity slowly takes its place onboard aircraft, payments will incorporate real-time credit card authorisations to support higher-value transactions.’Source: Retail in Asia, April 2011 http://www.retailinasia.com/article/tech/retail-systems/2011/04/boardroom-inflight-retail-20-catching-asia-says-guestlogix
  • 331. New Business Models81% - Pay to Present67% - Experience Lounges67% - Monetize Clients48% - Airport Seminars
  • 332. New Business Models• A number of new revenue models are available to us. Respondents were asked to assess the likelihood of six strategies which the travel sector might adopt to generate new revenues in the face of growing pressure on price and margins.• 81% think that product vendors will be willing to pay to present to the ‘high net worth’ individuals who are ‘captive’ in an airport, flight or hotel room on a holiday.• Fully 84% expect that vendors will test new products in flight or in customers’ rooms and survey their opinions via the seatback TV / room TV. Given the increasing amount of time passengers spend waiting in airports,• 67% think it likely that we will see ‘experience lounges’ in airports that pay high net worth individuals and business customers to test out new products.• As marketing strategies become ever more targeted and consumer profiling techniques are refined, 54% think product manufacturers and marketers will take proven high spenders on free product testing conventions or holidays.• As travel agents come under increasing pressure from direct booking, 67% of respondents think agents will try to monetise their customer base by charging companies to survey their network of customers and then share the rewards with customers.• 48% think airports will run short business and personal development seminars for customers waiting to travel – for which a fee would be payable.
  • 333. How to Attract Non-Shoppers?• Luxury?• Convenience?• Choice?• Inspiration?• Price?
  • 334. Integrated Travel Solutions
  • 335. Reinventing Formats
  • 336. Chain vs. Independent
  • 337. Store and Product Locators
  • 338. Personalisation
  • 339. Dynamic Billboards
  • 340. Holographic Displays
  • 341. Ambient (Embedded) Technologies (IP in Everything)
  • 342. Reaching into Retail
  • 343. Reaching into Retail: Changi• In March 2010, CAG launched Changi Rewards: a programme that rewards shoppers for spending at Changi, providing them with even more reason to shop and dine there.• In April 2010, CAG launched ‘Let’s Do Lunch’ – a two-month dining promotion at the public areas of Changi, targeted at local residents and those who work near the airport. Under this promotion, 22 dining establishments offered enticing weekday set lunches at an attractive rate of just S$10.• In May 2010, GST-absorbed shopping was extended to the public areas of all terminals at Changi (from just Terminal 3) under the Flying or Not, You Shop We Absorb programme, with about 90% of the stores at the public areas absorbing GST on all purchases.• In June 2010, CAG launched the Be a Changi Millionaire shopping promotion, which saw one lucky patron walking away with the grand prize of S$1 million at the end of the six-month campaign in January 2011. Source: Future Airport.com, March 2011 http://www.futureairport.com/articles/025_mar2011/FAI025_qa-changi.pdf
  • 344. Future of Retail ?
  • 345. Future of Retail • By Brett Proud, GuestLogix • ‘The new in-flight retail environment will be distinguished not by the reselling of once-included products and services, but rather by embracing and extending the relationship between airline and passenger. It will be marked by accurate assessments of consumer needs and wants and by the fulfillment of these at any (and every) touch point of the journey. It will be defined by customer experience and framed by retail-informed strategies of merchandising and product mix.’ • ‘Creating and promoting a successful customer relationship may be second nature for ground-bound retailers but for airlines it means re-conceptualising the passenger.’ • ‘While the unbundled airfare relies on presenting fee-or-no-fee options to passengers for basic, almost compulsory, products and services – a checked bag, a seat assignment – the new approach to in-flight retail puts the emphasis on the passenger.’Source: Travel Tourism Middle East, June 2011 http://www.ttnworldwide.com/GeneralNews.aspx?artid=10521
  • 346. Future of Retail • ‘Within the onboard store, virtual shelves replace physical shelves with great effect. Products are offered based on predetermined tastes and preferences, flight duration and destination. A brand can be established and extended through interaction with this onboard store – much as it has for most of the retail success stories in the past decade. But in a controlled Wi- Fi-enabled environment or through the use of smart wireless point-of-sale devices, passengers can explore the onboard store from the comfort of their seat as well as interact with in-flight entertainment systems through their own personal electronic devices.’ • ‘Airlines also have information on their passengers’ demographics, itinerary and immediate purpose (i.e business or leisure) readily available. Traditional retailers would have to spend countless weeks collecting data – and probably paying market analysts to interpret it – to get the sort of valuable information airlines have at their fingertips. Utilising this data to develop a compelling retail experience is central to the onboard store approach and bound to become industry standard very soon.’Source: Travel Tourism Middle East, June 2011 http://www.ttnworldwide.com/GeneralNews.aspx?artid=10521
  • 347. Online Brands Appearing Offline Google • The world’s first Google store, ‘The Chromezone,’ had a low-key opening in London, England inside a branch of PC World on Tottenham Court Road. The temporary 285 square-foot store will be there until Christmas, selling Google’s Chromebook laptop and a range of accessories. Another pop-up store will open in Essex and more around the world in the coming months. If this experiment is successful then Google could follow its rival Apple in opening a large number of permanent stores. [1] eBay • eBay has teamed up with designer Jonathan Adler to launch a ‘shoppable storefront’ in New York City. • The storefront features various products chosen by top trendsetters who were asked to compile their fall shopping wishlists. Items are accompanied with QR codes, which shoppers scan using the eBay app. Scanning a code brings the user to a buy page in the app. [2]Source 1: PSFK, 08/10/2011, http://www.psfk.com/2011/10/google-opens-store-in-london.htmlSource 2: PSFK, 25/08/2011, http://www.psfk.com/2011/10/spotted-ebay-inspiration-shop-on-park-avenue-nyc.html
  • 348. Online Brands Appearing Offline Richelle Parham, chief marketing officer of eBay North America: “Consumers today expect to shop how they want, when they want – and mobile technology is blurring the lines between online and offline retail to meet this demand. The Inspiration Shop brings to life how eBay enables people to immediately act on their passion for shopping in this new commerce environment.”Source: PSFK, 25/10/2011, http://www.psfk.com/2011/10/spotted-ebay-inspiration-shop-on-park-avenue-nyc.html
  • 349. Online Brands Appearing Offline Paypal • To help make better businesses for merchants, Paypal has announced that it will be opening a pop-up store in New York on November 1 2011. This venue, situated within Manhattan’s Tribeca neighborhood, is intended to showcase the latest in online payment technology. • Merchants and interested entrepreneurs may soon come into the Paypal store and get info and product demos to improve their business payment methods. Among the new technologies Paypal is set to launch within the next few months, is a means for in-store owners to use the online system for mobile checkouts.Source: PSFK, 05/10/2011, http://www.psfk.com/2011/10/paypal-pop-up-store-is-coming-soon-to-manhattan.html
  • 350. Virtual Grocery Shopping • In a trial run Tescos South Korean supermarket chain Home Plus has plastered a subway station with facsimiles of groceries, labelled with a unique QR code for each product. • As commuters pass by on their way to work, they can use a mobile-phone app to take pictures of the products they want, then check out. The groceries are automatically delivered to their doorstep by the end of the work day. • The virtual grocery store has been a hit among more 10,000 customers, with Home Plus reporting a 130 percent increase in online sales.Source: MIT Technology Review, 05/07/11, http://www.technologyreview.com/computing/37966/?p1=MstRcnt&a=f
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