paper logistics - passenger handling process and value chain improvement - jose fernandes

Frankfurt University of Applied

Sciences

University of Petroleum and Energy

Studies, Dehradun

Masters of Business Administration in Aviation Management

Logistics

Passenger Handling Process and Value Chain Improvement

Professor Loveraj Takru and Professor Mandan

José Joaquim Fernandes - 1034431

14th August 2014

Page i

Table of Contents

List of Appendices ....................................................................................... ii

List of Figures ............................................................................................ iii

List of Tables .............................................................................................. iv

Abbreviations ............................................................................................. v

Abstract ...................................................................................................... vi

1 Introduction .......................................................................................... 1

2 Problem Statement .............................................................................. 1

2.1 Scope ............................................................................................ 2

2.2 Selection of literature .................................................................... 2

3 Airport, Airline and Passenger Handling Process ................................ 2

3.1 The Value Chain ........................................................................... 3

3.2 The Aviation Industry Value Chain ................................................ 4

3.3 The Airline Value Chain ................................................................ 6

3.4 The Airport Value Chain ................................................................ 8

3.5 The Passenger Handling Process ................................................ 9

3.6 Empirical investigations .............................................................. 15

4 How can the passenger handling process further improve? .............. 16

4.1 Operations – Check-in and Boarding .......................................... 17

4.2 Baggage services and loading .................................................... 19

4.3 Flight disruption management services ....................................... 20

5 Criticism ............................................................................................. 21

6 Conclusions ....................................................................................... 22

7 References ........................................................................................ 23

Appendices .............................................................................................. 28

Page ii

List of Appendices

Appendix A Selection of literature ...................................................... 28

Page iii

List of Figures

Figure 1 Porters Generic Value Chain ....................................................... 4

Figure 2 Aviation Industry Value Chain ...................................................... 6

Figure 3 Airline Value Chain ...................................................................... 7

Figure 4 Airport Value Chain ...................................................................... 9

Page iv

List of Tables

Table 1 Passenger Handling Process and recommended KPIs .............. 11

Table 2 Level of Service Maximum Waiting Time Guidelines .................. 12

Table 3 Observed service times for passenger processing facilities ........ 14

Page v

Abbreviations

ACI: Airports Council International

CUTE: Common Use Terminal Equipment

CRS: Computer Reservations System

FIDS: Flight Information Display System

KPI: Key Performance Indicator

LOS: Level of Service

MRO: Maintenance, Repair and Overhaul

PTB: Passenger Terminal Building

ULD: Unit Load Device

Page vi

Abstract

This paper performs a theoretical analysis of the passenger handling

process that take place from a passenger enters the Passenger Terminal

Building (PTB) until aircraft pushback; and from aircraft on-block until the

passenger exits the PTB.

It set out by establishing the theoretical basis for using Porters Value

Chain (Porter 2004).

It then establishes the framework of the Air Transport Industry Value

Chain, the Airport Value Chain, and the Airline Value Chain and devises

the Passenger Handling Process as result of where passengers interact

with ground handling personnel in either the Airport Value Chain or the

Airline Value Chain.

It uses empirical investigations to document and confirm the link between

the passenger handling process, the airline value chain and the airport

value chain.

The paper conclude that limited added value can continuously be

achieved by further optimising the existing passenger handling processes

or by continuously further entertaining the passenger while queuing.

Instead, the paper concludes that the deployment of mobile technologies

in three main areas of the Value Chains of Airports and Airlines; Check-in

and Boarding, Baggage loading and Flight Disruption Management

services, will yield the most improvement and value to Passengers,

Airlines and Airports in the years to come.

1 Introduction

According to Ministry of Civil Aviation (Ministry of Civil Aviation 2010)

India’s aviation market is expected to grow at a rate of 9-10% annually

until 2020. Despite the continued growth in the aviation market competition

for passengers remain fierce.

Traditionally airports were part of a system, where the absence of price

competition reduced efficiency measures (Barrett 2004).

Full service airports have traditionally been able to count on decade-long

relationships with their legacy-airline customers (De-Neufville 2008). New

airports serving low cost carriers can not necessarily rely on decade long

relationships with low cost carriers (De-Neufville 2008).

Creation of further value for the airlines, the airport and the passengers is

therefore important in order to stay ahead of competition.

2 Problem Statement

This paper performs a theoretical analysis of the passenger handling




It set out by establishing the theoretical basis for using Porters Value

Chain (Porter 2004).

It then establishes the framework of the Air Transport Industry Value

Chain, the Airport Value Chain, and the Airline Value Chain and devises

the Passenger Handling Process as result of where passengers interact

with ground handling personnel in either the Airport Value Chain or the

Airline Value Chain.

It uses empirical investigations to document and confirm the link between

the airline value chain and the airport value chain.

The paper finds through review of empirical studies that limited added

value can continuously be achieved by further optimising the existing

passenger handling processes or by continuously further entertaining the

passenger while queuing.

The paper ends with self criticism and concludes that the deployment of

mobile technologies in three main areas of the Value chains of airports

and airlines; Check-in and Boarding, Baggage Loading and Flight

Disruption Management services will yield the most improvement and

value to Passengers, Airlines and Airports.

2.1 Scope

The scope of this analysis is the passenger handling process, which is the

interaction process that take place between ground handling staff and an

airline passenger, from a passenger enters the Passenger Terminal



The author define the ground handling staff as an employee either working

in the airline value chain or the airport value chain.

2.2 Selection of literature

The research articles were selected by undertaking a search through the

search engine Google Scholar and through the electronic databases

ScienceDirect and ResearchGate in addition to a general search on

Google.

For a detailed description of the selection of literature, please refer to

Appendix A.

3 Airport, Airline and Passenger Handling Process

This chapter establishes the concept of the Porters Value Chain (Porter

2004), the Aviation Industry Value Chain, the Airline Value Chain, the

Airport Value Chain and the Passenger Handling Process. The chapter

ends by supporting the Passenger Handling Process as an outcome of the

Airline Value Chain and the Airport Value Chain by empirical

investigations.

3.1 The Value Chain

This section establishes the concept of Porters Value Chain (Porter 2004)

and why this is a relevant analysis tool.

Value chain analysis has been widely used as means of describing the

activities of an organisation and relating them to an assessment of the

competitive strength of an organisation or its ability to provide value-for-

money products or services. The purpose of using value chain is to

describe the separate strategies which are necessary to underpin the

organisation’s strategies and how they link together both inside and

outside the organisation (Johnson and Scholes 1997).

Porter (Porter 2004) and (Porter 1998) argue that an understanding of

strategic capabilities must start with an identification of the separate value

activities.

An important outcome of the value chain analysis is to identify those

competencies which critically underpin the organisations competitive

advantage (Johnson and Scholes 1997). The bundle of skills and

technologies that enable a company to provide a particular benefit to

customers are also what Hamel and Prahalad (Hamel and Prahalad 1994)

call core competence.

The author is also aware of Stacey’s criticism (Stacey 1996) of Porter’s

Value Chain analysis in that the only circumstances to which a Value

Chain Analysis can possibly apply are those close to certainty and

agreement; a situation that neither airports nor airlines necessarily would

find themselves in; if for nothing else; due to the volatile nature of low cost

carriers (Graham 2013) and due to the risk of lack of long term certainty

for airports (De-Neufville 2008).

Applying, however, a post-modernistic perspective to the systems of value

chains of organisations implies also that the borders of the individual

organisations’ value chains are not fixed (Stacey 1996).

The value chain remains a powerful tool to analyze a business at strategic

level by identifying and analyzing the core activities and supporting

activities and links them with the analysis of competitive strength of the

organization. The value chain is a network of processes that create value

for customers (Evans and Collier 2007).

The focus is on primary activities of airport and airline companies, and on

the passenger side of the aviation industry.

In the below figure generic model of a value chain is displayed with an

overall impression of the activities of a company that is created by filling

out the business specific processes.

Figure 1 Porters Generic Value Chain

Source: http://eavoices.com/2014/04/05/business-architects-whats-at-the-core/

3.2 The Aviation Industry Value Chain

The aviation industry is a service industry providing transport services. Air

transportation shows many characteristics which are typical for service

industries, e.g. the intangibility and perishability of the product and the

high importance of personal contact to the customer. Airlines and airports

are the two main actors in the industry. Airlines offer the actual transport

service; airports provide the ground infrastructure to handle aircraft

movements. The manufacturing industry and aviation suppliers assemble

aircrafts and provide spare products. As a provider of supplementary

processes, the industry relies on general service providers such as air

traffic control (Tretheway and Markhvida 2014).

The aviation supply chain is characterised by a high degree of vertical

disintegration. As a general rule, airlines have limited or no ownership

interest in other sectors of the value chain. Over the years airlines have

gradually divested their ownership interest in several sectors of the

aviation value chain, either as a result of changes in national laws,

regulatory interventions or decisions to improve business competitiveness

and financial performance. Examples include airlines' past ownership and

subsequent divestiture of assets in aircraft manufacturers, computer

reservation systems (CRSs), maintenance, repair and operations (MROs)

providers and hotel chains, among others. At the same time, airlines have

invested in certain supply chain partners such as providers of fuel, ground

handling services, in-airport customer services, catering or other services.

Another sector where investment by airlines can be observed is cargo

terminal facilities, cargo handling operations or trucking operations related

to pick up and delivery of air cargo. In some markets, airlines have also

invested in airport terminals, although this is a more recent trend.

However, despite the high degree of vertical disintegration currently

observed, it is important to note that the aviation value chain is not a

collection of firms that operate in isolation of each other. There has been

significant facilitation in terms of creating standards and operating

procedures across the value chain members, and this has lowered

industry costs and increased customer service levels (Tretheway and

Markhvida 2014).

The Aviation industry value chain is shown in the below figure.

Figure 2 Aviation Industry Value Chain

Source: Adapted from (Wittmer and Bieger 2011)

3.3 The Airline Value Chain

The airline industry is characterized by fierce competition. Airlines

compete on a polypolistic market. On the one hand, the latter is

characterized by low entry barriers and a variety of different business

models. On the other hand, the airline industry is extremely capital

intensive and comprises specific investments in long-term assets that

create high exit barriers. While Information Technology, maintenance,

repair and overhaul (MRO) and catering providers are usually located

nearby the respective airlines (commonly large airlines), the airline leasing

market is dominated by two companies (duopoly). Oligopolistic structures

occur in regard to airports, usually one or a few of them dominating whole

regions or nations. At airports, often only limited competition exists

concerning ground handling services. While airlines and airports are

enclosed by the manufacturing and supplying industry on the upstream

side, the final customer is located at the downstream side. In addition to

competition stemming from within the industry, airlines and airports have

to cope with new competitors and are subject to potential substitutes

(Wittmer and Bieger 2011).

Within each airline category, specific activities are presented to provide a

basic understanding of the underlying complexity and requirements of the

General Service Providers

•Air Traffic Control

•...

Manufacturing Industry and Suppliers

•Aircraft Manufacturers

•Propulsion Systems

•Equipment Manufacturers

•Commodity Suppliers

•...

Airline Industry

•Airlines

•Leasing Companies

•IT Providers

•MRO Providers

•Catering

•...

Airports

•Airport managers

•Ground Handling

•Fuel Suppliers

•...

various processes. Within the airlines’ value chain, special attention should

be set onto the primary activity of operations since this includes the hub

management function. If an airline configures its route network as hub-

and-spoke system, hub management (as part of its network management)

is of special importance (Doganis 2005). It affects all conceptual,

coordinating and operational tasks for optimising the quality of hub

services. The most important factors influencing hub quality are transfer

reliability and punctuality. These influence both the airline operations as

well as the passenger‘s perception of the airline. Hub management thus

includes developing and implementing concepts for optimising the use of

central resources such as gates and aircraft positions, as well as

optimising and securing minimum connection times. Hub management

(along with decentralised station/spoke management) is one of the core

functions vital for ensuring ongoing operations. It also concerns the

organising and monitoring of many of the services and activities that are

provided by third parties, significantly increasing the complexity and

number of interfaces of this core activity (Albers et al. 2005).

The Airline Value Chain is shown in the below figure.

Lost and found

Complaints mgmt.

Lounges

Reservation ServiceTransfer (Luggage and

Media announcement

Fleet assignment

Route planning

E-tickets

Frequent flier programs

Advertisement

Pick & drop cab service

Ground handling

Base maintanance

Security Checks

Catering

Hub Management

Catering

Flight Disruption Management

SU

PP

OR

T A

CT

IVIT

Y

FIRM INFRASTRUCTURE: Financial Systems, Accounting, Legal Affairs, Management

HUMAN RESOURCE MANAGEMENT: Personnel Recruiting, Pilot-, Crew-

and Security Training, Luggage Dispatching Training, Sales Training, In-flight

training

TECHNOLOGY DEVELOPMENT : Computer Reservation System, Yield

Management Systems, Customer Relationship Management Systems, Online Check-in,

Self Service Check-in, Product Development, Market Studies, Onboard Internet

PROCUREMENT : Fleet, Fuel, Information and communication Technologies

SERVICE

PRIMARY ACTIVITIES

INBOUND OPERATIONS OUTBOUND MARKETING & SALES

Slot Allocation

Yield Management

Fuel Calculation

Scheduling

Crew planning and

Supply of production

Ticket offices

Ground handling / Dispatching

Flight operations

Service on board

Figure 3 Airline Value Chain

Source: Adapted from (Albers et al. 2005) and (Khan 2012)

3.4 The Airport Value Chain

IATA (International Airline Transport Association 2004) has defined the

passenger service and planning standards in its airport development

manual. This contains established level of service (LOS) parameters for

airport planning, although principally only relating to the queuing and

waiting standards in the main processing areas, which are in widespread

use in the airport industry. There are six levels: A (Excellent), B (High), C

(Good), D (Adequate), E (Inadequate), and F (Unacceptable). Typically

most airports design facilities to operate at level C in the peak (Graham

2008).

Similar to the airline value chain, the airport can classify its activities in the

airport value chain. There is a key difference between the airlines’ value

chain and the airports’ value chain, in that the value chain of the airport

does not include outbound logistics. This is because the airport offers the

product ―infrastructure which starts and ends at the airport. In other

words, there are no outbound logistics to perform.

Primary and supporting activities for a generic airport company are

illustrated in the below figure. In its narrow engineering sense, the core

tasks of an airport are the supply, maintenance and protection of the

infrastructure that is necessary for landing, starting, taxiing and parking of

airplanes. In its full social and commercial sense, its role is to facilitate the

link between passengers arriving by car, taxi and other modes and their

access to the aircraft. Additionally, and to support these primary tasks, the

airport provides facilities such as terminals, gates and maintenance

facilities which are essential for the completion of flight operations, and

which facilitate the access to energy, water or fuel for the aircraft. These

activities are the inbound logistics activities of airports (Albers et al. 2005).

Underdeveloped until the 1980‘s, the primary activity marketing has finally

turned out as an integral part of the value chain of an airport as well,

reflecting its importance as the core activity of a commercially run

enterprise also for the airport business (Graham 2008). Airports and

Airlines involve vertical relationships if the airport is seen providing

infrastructure and general services with the airline as its customer. The

airline, however, is only one customer of the airport—passengers and

other businesses also buy services from airport companies; the interests

of passengers, airlines and airports thus overlap. It is in these areas of

overlap where coordination of airports‘ and airlines‘ efforts can potentially

generate the greatest benefits for their customers. Such coordination can

be more complex for airports than for airlines. While airports regard both

airlines and passengers as their key customers, airlines only view

passengers as their customer group and consider themselves as

customers of the airports (Graham 2008).

The Airport Value Chain is shown in the below figure.

Retail, catering and other services

Conference facilities

Communication and internet

Room renting

Supply of advertising space

Air service development

activities

Media announcement

Baggage Handling system

Outdoor marketing

Social media

Online marketing

Television ads

Print mediaground operations, cleaning)

Flight disruption Management

Ramps/Baggage (Loading,

unloading the airplane, baggage

transfer)

Security checks

Emergency Services

Passenger (Luggage dispatch,

check-in, ticketing, transport

of passengers and crew)

Airplane (Crew briefing

SERVICE

PRIMARY ACTIVITIES

INBOUND OPERATIONS OUTBOUND MARKETING & SALES

Runways, Apron

Buildings (Hangars, terminals, car park etc)

Access to energy, water fuel

Resource planning

Cargo Facilities

Terminal facilities (offices

check-in counters, offices)

SU

PP

OR

T A

CT

IVIT

Y

FIRM INFRASTRUCTURE:Financial Systems, Accounting, Legal Matter, Management

HUMAN RESOURCE MANAGEMENT : Hiring staff, training emergency service

staff, refreshers training for such services, Safety trainings, System training, hiring force

to manage the systems, Luggage Dispatch Training, Sales Training, Catering Training

TECHNOLOGY DEVELOPMENT : Baggage sorting systems, check-in Systems,

Airport IT Systems, Parking Guidance, Market Studies, E-commerce solutions

PROCUREMENT : Purchasing, Service contracting, Co-branding, leasing land and

services, Building, landside and airside infrastructure, Baggage Handling system,

Ground Equipment

Figure 4 Airport Value Chain

Source: Adapted from (Albers et al. 2005) and (Khan 2012)

3.5 The Passenger Handling Process

The passenger handling process is the joint interaction between the airline

passenger in the airport value chain; and the airline passenger in the

airline value chain. The process consists of those facilities necessary for

the handling of passengers and their baggage prior to and after a flight. It

is the elements which links the ground access system to the air transport

system. The terminal curbs provide the interface on the ground access

side of the system and the aircraft gate devices provide the interface on

the airside of the system (Horonjeff et al. 2010).

In determining the particular needs of a specific component in this

process, knowledge of the types of passengers and the extent of visitor

impacting on each component is necessary (Horonjeff et al. 2010).

In his study Correia (Correia 2005) considers the following elements of the

passenger handling process: Check-in counter, Security Screening,

Departure Lounge and Baggage claim. In addition to the elements covered

by Correia (Correia 2005) will for international passengers also be

Immigration for departing passengers and immigration for arriving

passengers.

The Airports Council International recommended practice (Airports Council

International 2013), furthermore expands the passenger handling process

with baggage carts and transfer services and defines the passenger

process and their associated KPI’s for measuring passenger process

times as follows:

Passenger Process Key Performance Indicators

Ou

tbo

un

d P

roce

ss

Baggage Carts Number of baggage carts available

Check-in Average waiting time Counter processing speed (pax/hour)

Passport Control Average waiting time Checkpoint processing time (pax/hour)

Security Check-points

Average waiting time Checkpoint processing time (pax/hour)

Transfer Services Average waiting time Checkpoint processing time (pax/hour)

Boarding Process Time until the last passenger leaves the gate

Inb

ou

nd

Pro

ces

s Baggage Delivery Time for first bag to arrive on carousel

Time for last bag to arrive on carousel

Passport Arrival Average waiting time Checkpoint processing time (pax/hour)

Customs Inspection Average waiting time Checkpoint processing time (pax/hour)

Table 1 Passenger Handling Process and recommended KPIs

Source: (Airports Council International 2013)

How waiting times are managed is important because it has a real impact

on passenger satisfaction (Airports Council International 2012). In general,

the longer a passenger has to wait, the lower the satisfaction the

passenger perceives. There is as such a negative correlation between

waiting times and overall passenger satisfaction (Airports Council

International 2012).

Passenger satisfaction is important because dissatisfied passengers might

make a different choice of either airline or airport the next time they

choose to travel, and passenger satisfaction can as such impact both

airlines as well as airports profitability.

ICAO (International Civil Aviation Organization 1997) has in their

recommended practice 6.16 set a goal of 60 minutes for the completion of

departure formalities of departing passengers, calculated from the time of

the passenger’s presenting himself at the first processing point at the

airport (i.e. airline check-in, security control point or other required control

point depending on arrangements at individual airports) to the scheduled

time of his flight departure.

ICAO (International Civil Aviation Organization 1997) has in their

recommended practice 6.29 set a goal of 45 minutes for the clearance of

arriving passengers, from disembarkation to exit from the airport, for all

passengers requiring not more than normal inspection at international

airports. Although this includes time taken by government inspection

services, it provides an indication of an acceptable time framework.

IATA (International Airline Transport Association 2004) has defined the

following level of service maximum waiting time guidelines in minutes:

Short to Acceptable Acceptable to Long

Check-in Economy 0-12 12-30

Check-in Business Class 0-3 3-5

Passenger Control inbound 0-7 7-15

Passenger Control Outbound 0-5 5-10

Baggage Claim 0-12 12-18

Security 0-3 3-7

Table 2 Level of Service Maximum Waiting Time Guidelines

Source: (International Airline Transport Association 2004)(International Airline Transport Association 2004)

For airports and airlines that clearly do not fulfil the acceptable limits in

ICAO (International Civil Aviation Organization 1997) and IATA

(International Airline Transport Association 2004) recommended practices,

attempts to employ process optimisation methods, such as Lean Solutions

(Womack and Jones 2003), (Womack and Jones 2007) and Six sigma

(Pande et al. 2003) in order to achieve the goals set forth by the

recommended practices, should be considered.

Numerous papers and thesis’s are written on the topic of optimising

various parts of the passenger handling process (Quang et al.

2014),(Stolletz 2011) Airport Passenger Forecasting (Ahmadzade 2010),

Passenger Security Screening (Lee 2009), (Nikolaev 2008), (McLay 2006),

(Nie 2008), Airport Check-in Facilities (Ahyudanari and Vandebona 2005),

Aircraft Boarding Strategy (Bazargan 2007), Boarding Models (Tang et al.

2012), Boarding Methods (Milne and Kelly 2014) and how increased

security screening affect passenger satisfaction (Gkritza et al. 2006) and

how models and tools affect customer satisfaction in the aviation sector

(Arif et al. 2013).

According to ACI (Airports Council International 2012) there are three main

ways of impacting actual waiting times at an airport:

By opening more counters/lanes

By increasing the number of staff available

By improving the efficiency of the process, which means improving

not only the efficiency of the staff (through training for instance) but

also the efficiency of the machines

To optimise the airport processes, and to know how many counters to

open and how many employees to make available at different times of the

day, it is necessary to do waiting time measurements in order to be able to

define quantitative standards.

The observed service times for passenger processing facilities at airports

are shown in the below table.

Component Type Service rate per passenger, Seconds

Standard Deviation

Entrance and exit doors

Automatic with baggage 2.0 - 25 0.5

Automatic without baggage 1.0 – 1.5 0.75

Manual with baggage 3.0 – 5.0 1.0

Manual without baggage 1.5 – 3.0 0.75

Stairways 3.0 – 4.0 1.0

Escalators 1.0 – 3.0 1.0

Moving Sidewalks 1.0 – 3.0 1.0

Apron Doors

With stairs 3.0 – 8.0 2.0

Without stairs 3.0 – 7.0 1.5

Jetway 2.0 – 6.0 1.0

Ticketing and Baggage

Manual with baggage 180 – 240 60

Manual without baggage 100 – 200 30

Baggage only 30 – 50 10

Information 20 – 40 10

Automated with baggage 160 – 220 30

Automated without baggage 90 – 180 40

Security

Hand-check baggage 30 – 60 15

Automated 30 – 40 10

Seat Selection

Single flights 25 – 60 20

Multiple flights 35-60 15

Baggage Claim

Manual 10-15 8

Automated carousel 5 – 10 5

Automated racetrack 5 – 10 5

Automated tee 6-12 5

Table 3 Observed service times for passenger processing facilities

Source: Adapted from (Horonjeff et al. 2010)

Most of the time, airports are limited by space, financial and human

resources. In such cases passengers have to wait anyway at the different

processes. However, airports can try to influence the perceived waiting

time, that is the waiting time the passengers think they actually spend in

the different queues (Airports Council International 2012).

According to ACI (Airports Council International 2012) there are three main

ways of impacting perceived waiting time:

By clearly organising waiting times

By providing approximate or maximum waiting times

By entertaining passengers while they are queuing

It is possible to influence perceptions of waiting times through better

organization of the queues.

Impacting the perceived waiting time can also be done by giving the

passengers indications of how long they will have to wait.

This can be done either through static indicators or dynamic indicators.

Static indicators are where signs displayed along waiting lines or average

waiting times or communicated on the airport website. Dynamic indicators

are regularly updated, real or estimated waiting times displayed on

screens or through baggage delivery screens showing the status of the

delivery.

The last way of impacting the perceived waiting time is providing

entertainment for passengers while they are queuing.

Airports can implement different types of distractions to entertain the

passengers and reduce the perceived waiting time. According to ACI

(Airports Council International 2012) there are three main categories:

Process related media

Other media

Non-media

Process related media consists of informing the passengers about airport

processes through displays or virtual assistants.

Other media groups all kinds of media that are not linked to the airport

processes. Advertisements on television, internet stations or media art

installations are included in this category.

Non-media, refer to the use of live performances.

3.6 Empirical investigations

Empirical investigations over the past decades support relations and

continued work on improving the passenger handling process, minimising

time which does not create value to either the passengers or the other

stakeholders.

Recent empirical analysis and findings from ACI (Airports Council

International 2012) are that:

Economy passengers in Asia Pacific have the shortest check-in

times.

For passengers flying in business or first class, Africa / Americas /

Middle East has the lowest waiting times at slightly more than four

minutes.

European airports have the lowest waiting times at security, for both

regular and priority lanes.

Local and foreign passengers in Europe have the shortest waiting

times at immigration.

Airports from Asia Pacific have the lowest waiting times for the first

bag at baggage delivery, and for the last bag European airports

have the shortest waiting times.

The empirical investigations are important as they document and confirm

the link between the passenger handling process, the airline value chain

and the airport value chain.

4 How can the passenger handling process further

improve?

Airlines and Airports play a major role in constantly improving the

passenger handling process and creating value. Airlines and airports are

continuously working on improving profitability and satisfaction.

With the amount of research and mathematical optimisation models

available, there is only so much process optimisation which can be further

performed and so much further information and entertainment which can

be given to passengers. The author believes that significant improvement

in value chain creation will come from deployment of new mobile

technologies in the following three areas of the value chain:

Check-in and Boarding

Baggage services and loading

Flight disruption management

The below sections briefly elaborate on each of these topics.

4.1 Operations – Check-in and Boarding

On the passenger side of Check-In and boarding, mobile devices are

already in use, allowing passengers to perform their own Check-In and

generating or printing their own boarding cards, thus reducing the cost of

Check-In personnel and reducing the requirement of check-In counters,

while giving passengers and added sense of improved service by allowing

them to select their own seating.

Adding now location specific capabilities to the already existing mobile

services, allows an airline to even further market, target and customise its

additional ancillary services and at the same time increase the airlines

marketing knowledge of the behaviour of its passengers as they proceed

through the airport.

Already upon arrival at the Passenger Terminal Building (PTB) a

passenger could be notified that Check-In/Baggage drop is at a given

location.

This could reduce the time needed to search a Flight Information Display

System (FIDS) for the relevant check-In or Bag-Drop counter information,

reducing the time spent trying to determine where to go next.

Approaching the Check-In counter, an airline would be able to make on

the spot offer of upgrade facilities available to the passenger, potentially

convincing him to purchase an upgraded product at the time of Check-In.

Approaching security check, an offer of fast track security processing,

against a fee, could be made, again potentially increasing ancillary

services revenue.

Crossing the security check and entering airside of the PTB, passengers

could be made a range of offers, all potentially increasing ancillary

services revenue while giving the passenger a sense of increased

personalised service. On-the-spot GPS directions to lounge facilities for

eligible passengers could be pushed to the mobile device. For non-eligible

passengers, on the spot offers of lounge access against a fee or against

accrued air-miles could be made.

Airports always have an interest in keeping passengers inside the

shopping section of the PTB for as long as possible.

The increased exposure to services and goods inside the PTB not only

gives an opportunity for potential sale, but also reduces clogging of

passengers around the space-constrained boarding gates.

In anticipation of generating additional sales while the passenger is inside

the PTB, targeted marketing offers could be made, either against payment

or against redemption of accrued miles.

When passing a shop, special offers of interest to that particular

passenger could be made, for example, books, watches, tax-free sales

etc.

Example: “Your wife’s favourite perfume is available with the tax free shop

at a special discount available to you upon presentation of this message”

Linking social networking with location specific PTB sales could mean that

a passenger would know who of his social network were present inside the

PTB at the same time.

Airline lounges, food establishments, bars and cafes could then promote

the opportunity to offer a passenger his social network connections

present inside the PTB to meet at a lounge against a fee or to meet at a

food establishment, bar or cafe again for a special group offer upon

presentation of a personalised message.

In relation to flight delay management and passenger boarding, linking

these passenger processes to location specific services would give the

gate personnel a better opportunity to keep track of passengers that do

not show up at the gate in time for boarding.

In Copenhagen Airport, for example, passengers transiting through the

airport and causing either boarding delays or baggage offloading, were

often found to be having lost track of time either in the Duty Free Shopping

area or in one of the many pubs available inside the PTB.

Being able to pinpoint the exact location of a particular passenger at the

time of boarding would allow the airline to directly approach the passenger

and advise him of boarding, rather than making endless number of last-

minute boarding calls. This facility could potentially reduce boarding delays

caused by passengers.

As with at the time of Check-In, at time of approaching the boarding gate,

additional targeted customer specific offers could be made to the

passenger, specifically relating to upgrading and in-flight services prior to

the passenger boarding the aircraft, again giving the airline an opportunity

for generating additional ancillary revenue.

On the ground staff side, equipping check-in agents with a mobile CUTE

Terminal (Common Use Terminal Equipment) might even completely

eliminate a passenger’s need for visiting a dedicated landside check-in

counter in a fixed location inside the PTB prior to security check.

Check-in staff roaming with a mobile device might be able to assist with

check-in of passengers, for example passengers with hand baggage, as

they proceed directly from the entry of the PTB towards security. Such

measures could ease the flow of passengers through the landside PTB

while at the same time further reducing the airline’s requirement and cost

for fixed CUTE check-in counters.

4.2 Baggage services and loading

One of the biggest worries for most frequent travellers is the “Send and

Pray” approach that passengers have had to adapt to their checked

baggage.

Typically, we see our suitcase disappear at the check-in counter or at the

bag drop, and pray that our chosen airline will successfully be able to

deliver our checked baggage at the correct baggage belt at our arrival

destination.

Most of us have surely been very anxious to the extent of feeling a

complete ruin of either a business trip or a vacation, particularly when our

checked baggage appears at the “last bag” on the baggage carousel.

Even worse is, of course, the situation when the baggage does not turn

up.

Airlines would be able to remove much anxiety and concern for travellers,

by being able to push real-time information about each passengers

checked baggage to their mobile device.

Most of us are used to the real-time tracking of our DHL or Fed-Ex

package, and a similar approach would be welcomed by many travellers in

relation to our checked baggage (International Airline Transport

Association 2012).

On the operations security side, such real-time tracking might aid check-in

ground staff and ULD- and belly loaders in improving baggage

reconciliation. This might in particular be the case if information of a

passenger’s location sensitive mobile device could safely be related to the

baggage reconciliation process.

Real time tracking might even be a preventive measure to limit misdirected

baggage. A passenger having boarded one aircraft, receiving information

on his mobile device that his checked baggage is in the process of being

loaded on another aircraft, might even in a timely manner be able arrange

for the safe reloading of his checked baggage or arrange for minimal delay

in redirecting his misdirected baggage to his final destination.

4.3 Flight disruption management services

Flight disruption management services have traditionally been dealt with

by transfer desks only after a passenger reaches his final destination or

intermediary flight stop. The dreaded situation of being the last passenger

disembarking a 747 only to find all co-passengers queuing at the same

transfer counter for rebooking of the missed connection flight out of an

foreign airport, can sure haunt even the most hardened air traveller.

Proactive notification of flight disruptions are unanimously preferred by

passengers (International Airline Transport Association 2012).

Being able to make use of in-flight Wi-Fi during actual flying time to enter

into a dialogue with passengers regarding re-booking, hotel overnight

compensation and airline delays would be able to address and remove

much anxiety of passengers already before they arrive delayed at their

next airport.

Using in-flight Wi-Fi, Airlines would be able to negotiate, agree and

transmit rebooking PNR, revised itineraries, hotel compensation vouchers,

airport meal vouchers, transportation arrangements and other relevant

information and documentation to the passengers. Consulates, embassies

and immigration authorities could be notified to facilitate unanticipated

time-limited entry into the nation of a transit airport which would normally

require an entry visa.

Airlines will, by entering into a dialogue with each and every passenger

during in-flight of a delayed flight, be able to spread out the peak load on

the transfer counters while at the same time providing far more timely

information to passengers, delay-stay hotels, supporting service providers

and consulates, embassies and immigration authorities, reducing the

requirement for un-predictable stand-by capacity in all these parts of the

value chain. Passengers will on their side arrive at their next airport

knowing that all possible measures have been taken by their preferred

airline of choice in accommodating their unfortunate delay.

5 Criticism

Very few academic references are dealing directly with South Asia. The

academic literature which I have found seems to discuss mostly Airport

and Airlines from a predominantly western European view, the American

view, and some recent optimisation models completed in the emerging

economies such as China.

Huge cultural differences as well as significant stages of maturity of the

Passenger Handling Process, seem to have been experienced by the

author when travelling in India and when travelling abroad; and a model of

passenger handling process that works well in, say Scandinavia may not

at all be applicable across the globe, or in places like India without

significant modification or adaptation to very local circumstances.

6 Conclusions

This paper has performed a theoretical analysis of the passenger handling




It set out by establishing the framework of the Airport Value Chain, the

Airline Value Chain and devised the Passenger Handling Process as result

of where passengers interact with ground handling personnel in either the

Airport Value Chain or the Airline Value Chain.

The paper has through review of empirical studies found that limited added

value can continuously be achieved by further optimising the existing

passenger handling processes or by continuously further entertaining the

passenger while queuing.

Instead, the paper concludes that the deployment of mobile technologies

in three main areas of the Value chains of airports and airlines; Check-in

and Boarding, Baggage loading and Flight Disruption Management

services, will yield the most improvement and value to Passengers,

Airlines and Airports in the years to come.

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Appendix A Selection of literature

The research articles were selected by undertaking a search through the

search engine Google Scholar and through the electronic databases

ScienceDirect and ResearchGate in addition to a general search on

Google.

In addition to this, research also involved studying Operations

Management and Supply Chain Management textbooks recommended for

use of the MBA in Aviation Management at Frankfurt University of Applied

Sciences (Chopra et al. 2013),(Christopher 2006),(Evans and Collier

2007),(Waters 2010) and(Johnston and Clark 2013) as well as

professional aviation text books by De Neufville (De-Neufville and Odoni

2003), Deshpande (Deshpande 2001), Horonjeff (Horonjeff et al. 2010)

Graham (Graham 2008), Kazda (Kazda and Caves 2007) and Wells

(Wells and Young 2004).

For the search engines and databases a number of searching keywords

related to Passenger Handling Processes (such as “Value Chain”, “Airline

Value Chain”, “Airport Value Chain”, “Airport Processes”, “Passenger

Process”, “Passenger”, “Security Check”, “Boarding”, “Check-in”, as well

as words related to a geographical region (such as “USA”, “Asia”, “South

Asia”, “India”). This produced an extensive range of diverse articles (130+)

which had to be narrowed down by considering their significance to this

paper.

One of the major difficulties in determining their relevance was that the

majority of the articles included the concept of processes on a very

specific topic, such as “Evaluating the multi-period operating efficiency of

international airports using data envelopment analysis and the Malmquist

productivity index”, “Monte Carlo simulation of animal-product violations

incurred by air passengers at an international airport in Taiwan” or

“Forecasting of Hong Kong airport’s passenger throughput” but not

necessarily a subject or a geographical limitation which could be

generalised.

Consequently a subjective judgement had to be made as to whether there

was different coverage of focus for the relevance of this paper.

Whilst the database search ensured that international papers that

conventionally tend to be written in English were identified, a potential

limitation was that papers written in other languages, such as any of the

Indian languages, may have been omitted, which in turn may have

influenced the geographical perspective of the articles.

The majority of the bibliography and references came from specialist

Aviation sciences journals (Journal of Air Transport Management,

Transportation Research Part C) and from specialist Logistics journals

(International Journal of Production Economics, Computers and

Operations Research) but some also appeared in other journals, such as

Tourism Management.