Airport Economics put pressure to increase non-aviation revenues
So many of the Factors affecting Cost per Enplaned Passenger are beyond Airport’s control
LAX creates innovative ways to increase revenues
Airports have a difficult economic equation to solve. They build runways, but have no direct control of how many flights (or landing fees) are operated. The proprietor builds terminals which include retail sections to create non-aviation revenues, while the vendors decide what product/services to offer. Further, these sales are a function of how many passengers walk past these stores and how inclined they are to buy. TSA unintentionally boosted the likelihood of purchases by increasing the time that potential customers spend on the other side of the inspection area.
That defines a number of exogenous factors which impact one of the measures of an airport success—cost per enplaned passengers (CPE). That reality pressures the landlords of this aviation shopping center to try to maximize the revenues from their concession fees on food (liquor), books/newspapers and consumer goods. To encourage its members to explore new retail tactics, the American Association of Airport Executives (AAAE) established Airport Innovation Awards for innovative developments that are a model for airports around the country in develop new strategies in their retail offerings.
The 2019 award went to the Los Angeles World Airports (LAWA) for extending access of passengers to their retails over the internet, i.e. one can buy a meal before entering or while in the terminals to pick it up on the way to the gate
Los Angeles World Airports (LAWA) announces that Los Angeles International Airport (LAX) has been named the “Most Innovative Airport (large hub)” by the American Association of Airport Executives (AAAE). The award, which is given as part of AAAE’s Airport Innovation Awards for innovative developments that are a model for airports around the country, recognizes LAX for its new Shop and Dine digital marketplace developed in partnership with Unibail-Rodamco-Westfield.
“This award recognizes that LAX is leading the aviation industry by developing and embracing leading-edge technologies,” said Deborah Flint, Chief Executive Officer, LAWA. “The LAX Shop and Dine digital marketplace is just one of the ways in which we are providing our guests with a seamless and enjoyable experience from curb to gate.”
The Shop and Dine digital marketplace allows guests to pre-order food from airport restaurants while at the gate or before they even arrive at the airport. Guests can also browse an online catalog of products, digital menus and new offerings by visiting FlyLAX.com to place their orders and make purchases. By utilizing new technologies, LAX Shop and Dine is a giant step forward in bringing LAX’s many amenities to travelers’ fingertips. It creates a convenient travel experience for LAX guests to access food and retail options right in the palm of their hands.
“Airports are constantly embracing innovation and deploying creative solutions to better serve their passengers, and Los Angeles World Airports is one of the clear leaders in the field,” said AAAE President and CEO Todd Hauptli.
LAX’s new digital guest experience also includes multiple channels such as personalized web and mobile sites, Alexa, Facebook Messenger Chatbot and social media. In addition to Shop and Dine, LAX has created new ways of sharing information that is essential to the guest experience regarding parking, traffic, shuttle bus locators and construction impacts. LAX continues to innovate with several initiatives underway for smart parking, customer engagement and wayfinding, all in an effort to create mobile, anticipatory guest experiences.
You can view LAX’s awards video submission : https://www.youtube.com/watch?v=cLLvvFYcGqc&feature=youtu.be
The Airport Innovation Awards were established by the Airport Innovation Accelerator in 2016 to honor innovative and forward-looking projects that utilize the latest technologies and strategies to offer passengers the best traveling experience and improve airport operations.
Increased airport revenues through extending access to the retail offerings is deserving of an award and can be easily replicated by other airports.
 The lease may stipulate what categories of items/food to be sold, but the actual inventory/menus are the lessee’s decision.
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