Resilience in Airport Management

Resilience in airport management involves preparing for and adapting to change rather than trying to avoid it. A strong grasp of business fundamentals is key to achieving this (Kovács & Spens, 2007). Passenger and cargo traffic are primary drivers of an airport's revenue and costs, influencing every aspect of its operations. Therefore, management must assess demand variability to evaluate the potential impact on revenue, costs, and capital investment (Graham, 2014). This allows airports to plan strategies for revenue enhancement or cost reduction, offsetting financial losses from lower traffic levels.

However, airports face a significant challenge due to their high fixed costs, primarily stemming from substantial capital investments. This makes it harder to mitigate the effects of reduced traffic. Conversely, if traffic exceeds forecasts, having adaptable infrastructure that accommodates higher traffic flows or a different mix of traffic types provides a competitive advantage. This flexibility allows management and investors to shift their focus from cost control to seizing new opportunities. In this context, adaptability is crucial for airports to remain competitive (Halpern & Graham, 2013). By embracing change and quickly implementing new strategies, airports can better position themselves for future success.

Psychological safety is also vital in fostering innovation within airports. A supportive environment that encourages experimentation promotes innovation, leading to improvements in passenger experience (Edmondson, 1999). Timing is essential when introducing new technologies or processes. Implementing changes during peak travel times can disrupt operations and negatively affect passengers. Careful planning and flexibility to adapt to feedback are necessary for successful execution.

Flexibility remains essential for airports to thrive in a rapidly changing market. Yet, high fixed costs often hinder their ability to respond quickly to shifts in demand. One strategy to overcome this challenge is outsourcing. By outsourcing services like cleaning, security, and parking management, airports can reduce costs and enhance efficiency. This approach introduces flexible labor practices and allows airports to adjust their operations according to fluctuating demand, especially in cases of variable airline schedules (Domberger & Jensen, 1997). Outsourcing, combined with technological advancements, enables airports to adapt more effectively to market changes.

A case study of Budapest Airport following the collapse of Malév, Hungary's national carrier, in 2012 illustrates the benefits of proactive crisis management. When Malév ceased operations, the airport's management quickly responded, attracting airlines like Wizz Air and Ryanair, which launched new routes, while existing carriers increased flight frequencies and capacities. These actions minimized the decline in passenger numbers and mitigated the financial impact (Forsyth et al., 2010).

Budapest Airport also took proactive steps to maintain profitability. They consolidated operations at Terminal 2, cutting operating and maintenance costs while optimizing commercial revenue streams. In addition, the airport implemented cost-reduction programs, froze wages, reduced staff, and introduced new working practices. Despite

lower traffic volumes, these measures enabled Budapest Airport to maintain profitability, demonstrating the effectiveness of a flexible and adaptive approach.

This case underscores the importance of being proactive and adaptable during disruptive change. By identifying potential airline partners, presenting route forecasts, and building business cases, airports can respond to challenges while seizing new opportunities. Developing a diverse range of routes reduces dependence on any airline, strengthening airport resilience (Francis et al., 2004).

Technological advancements, such as electric aircraft and autonomous aviation, promise to reshape the industry. Shifts in consumer behavior, including growing demand for sustainable travel and personalized experiences, will also influence the future of air travel (G?ssling & Higham, 2020). While these trends present challenges, they also offer significant opportunities. Airports and airlines that embrace new technologies can enhance operational efficiency, reduce environmental impacts, and improve passenger experiences.

Sustainable practices, such as using biofuels and implementing carbon offset programs, can attract environmentally conscious travelers. Additionally, leveraging data analytics and artificial intelligence can enable airports to offer personalized services, increasing customer satisfaction and loyalty.

However, successfully adapting to these disruptive changes requires careful planning and foresight. Airports must invest in scalable infrastructure and technologies to meet future demands. Collaboration among industry stakeholders, including airlines, airport authorities, and regulators, is crucial to navigating this evolving landscape (Doganis, 2002). By staying flexible, innovative, and forward-thinking, airports can remain resilient in the face of ongoing challenges.

References

Kovács, G., & Spens, K. M. (2007). Humanitarian logistics in disaster relief operations. International Journal of Physical Distribution & Logistics Management, 37(2), 99-114. doi:10.1108/09600030710734820

Graham, A. (2014). Managing Airports: An International Perspective. Routledge. doi:10.4324/9781315848527

Halpern, N., & Graham, A. (2013). Airport Marketing. Routledge. doi:10.4324/9780203797352

Edmondson, A. C. (1999). Psychological Safety and Learning Behavior in Work Teams. Administrative Science Quarterly, 44(2), 350-383. doi:10.2307/2666999

Domberger, S., & Jensen, P. (1997). Contracting out by the public sector: theory, evidence, prospects. Oxford Review of Economic Policy, 13(4), 67-78. doi:10.1093/oxrep/13.4.67

Forsyth, P., Gillen, D., Müller, J., & Niemeier, H.-M. (2010). Airport Competition: The European Experience. Ashgate Publishing, Ltd. doi:10.4324/9781315564526

Francis, G., Humphreys, I., & Ison, S. (2004). Airports’ perspectives on the growth of low-cost airlines and the remodeling of the airport–airline relationship. Tourism Management, 25(4), 507-514. doi:10.1016/S0261-5177(03)00117-8

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G?ssling, S., & Higham, J. (2020). The low-carbon imperative: Destination management under urgent climate change. Journal of Travel Research, 59(6), 1050-1065. doi:10.1177/0047287519878522

Doganis, R. (2002). Flying Off Course: The Economics of International Airlines. Routledge. doi:10.4324/9780203401679