Privatisation of airports has led to airport authorities all over the word stepping up their game when it comes to marketing, and Airports Authority of India (AAI) is no exception as they have been taking progressive steps in this department.
In 1987 when the United Kingdom sold its major airports, including Heathrow, Gatwick and Stansted located in the London area to the Heathrow Airport Holdings Limited (formerly, British Airport Authority), a 100 pc private sector firm – it kicked off the trend of privatisation of airports. Earlier, airports worldwide were owned and operated by governments. After the evolution of airport privatisation, the concept of airport marketing started in early nineties in developed economies.
In India too, after the privatisation of airports, airport operators started developing and implementing marketing strategies to increase airline customer base, enhance passenger footfall and generate revenues.
Airport marketing can be described as the function by which airports interact with their target groups and identify and address each group’s needs in order to stimulate and accelerate their growth, resulting in more aviation and non-aviation revenues.
Airports have to commit to make marketing a top priority in order to attract more passengers, additional concessions, or new carriers. Even countries with low Gross Domestic Product (GDP) and scarce operational budgets are moving fast in developing a robust marketing strategy. Therefore, airports need to have a robust marketing strategy in place that can be regularly reviewed and that can keep up with economic, environmental and industry issues.
Marketing strategies can vary for each airport depending on its geographical location, economic conditions, industries in the area, passenger profile and their spending powers, market size, etc. Strategies thus must also adjust according to the market dynamics including airline industry performance and overall demand for travel. Every marketing strategy needs to be consistent with the overall business goals of the airport for maximum effectiveness.
Aviation scenario in India
AAI has been developing world class airports located across the country with the objective of promoting air traffic, improving direct connectivity between the cities for the convenience and comfort of travelling public and for the overall economic development of the country.
Currently AAI is managing more than 126 airports across the country. However, more than 35 airports are non-operational and many other airports are under-served despite continuous demands from local state governments, trade and business associations and the travelling public for introducing or increasing flights.
Only few airports, especially metro airports, are earning significant revenues whereas airports in medium and small towns are suffering losses due to various reasons like industrial and economic growth of the city, tourism potential, population with spending power, economic viability of airline operations, lack of marketing initiatives, etc. During the preparation of Strategy Document 2010-2015 by Ministry of Civil Aviation (MoCA), it was clearly emphasised to strengthen the marketing capabilities of AAI. Therefore, Airport Marketing Directorate was created in 2015.
The scope of airport marketing in AAI
Airline Marketing: One of the main of role of airport marketing is airline marketing and its focus is to develop business cases. This is done after in-depth market intelligence is gathered, economic and trade analysis is conducted and air traffic analysis is done by using various market intelligence tools and then presenting the same to the airlines to develop air services/ route connectivity at un-served and under-served national and international airports of AAI in domestic and international markets.
Apart from metro cities, Tier II cities of India are also growing rapidly and we have seen a significant growth of passengers from these cities. There is huge demand for direct flights from various airports cities such as Ahmedabad to Newark, Ahmedabad to JFK, Kolkata to London, Goa to London, Amritsar to London, Chennai to Paris, Chennai to New York, etc. Passenger from these airport cities travel to the above mentioned international destinations either through hubs in the Middle East or some other hubs in Europe. There is also a considerable demand for a direct flight from Kolkata to China, as passengers travelling from Kolkata and its catchment area have to go through other airports to their final international destinations.
MoCA has also launched the Regional Connectivity Scheme (RCS) to connect smaller towns by air, which is going be a game changer in times to come. It will boost tourism, flow of passengers, flow of goods and services, etc., which will stimulate the growth of the aviation industry.
Airport marketing has also taken the initiatives of engaging stakeholders such as airlines, ground handlers, freight forwarders, tourism agencies, industry associations, local authorities, etc., at various airport cities such as Chennai, Kolkata, Guwahati, Allahabad, Jaipur, Kullu, Shimla, etc. to identify challenges, exchange and share ideas and market dynamics for the growth of industry.
Cargo Marketing: There is also a huge potential in cargo exports (general and perishable cargo) especially from the above mentioned cities. Guwahati and its catchment area in the north-east region has abundant scope of export of perishable cargo, however due to lack of infrastructure such as pack houses, refrigerator vans, cold storage and lack of international connectivity perishable cargo cannot be fully exploited.
Strengthen marketing capabilities of AAI
There are several opportunities for improvement in the financial performance of smaller airports (existing and planned). For instance, improved development and use of retail opportunities at the airports – as witnessed in several of India’s newer airports. This could act as an attraction for the airport and add another revenue stream to them. Joint initiatives with tourism players (government and private) to create packages in a bid to promote a destination is another move.
Working with the state governments and other local stakeholders to create schemes that will enhance the usage of the airport are also actions that will help strengthen the marketing capabilities of AAI.
The capabilities may be built afresh, or developed through private partnerships. Outsourcing options may also be assessed as needed.
Hence, marketing is a core business component in the airport industry in a highly competitive environment and requires a specialised skill-set and attention to industry needs.
A thorough and frank discussion about these issues can provide guidance for how to update or revise the airport’s marketing strategy, from which an airport can develop a targeted marketing and communications plan of action.
Tariq Husain Butt, Head Airport Marketing, AAI
- Landing, Parking, Passenger Service Fee, UDF, CIC, etc.
- Aero-related Revenues: Ground Handling (include Cargo Handling), Flight Kitchen, Fuel Farm, etc.
- Concessions – Retail, Duty-Free, F&B, Advertising, etc.
- Car Parking and Airport Access Fee
- Terminal/Land Rent