They generate $142.5 billion across the globe each year, but airports are coming under increased pressure to change their financial model. And according to a new study by Korn Ferry Hay Group, that’s going to mean a new type of talent to run them.
Only half of airport revenues now come from non-aviation sources—terminal rental, landing, and other fees paid by airlines. The rest must now come from increasingly innovative sources, including not only restaurants and retail kiosks, but in some cases spas, hotels, even museums.
“Due to increased security and other demands, travelers all around the planet find they must spend more time than ever in airports,” says Zack Deming of the firm’s Global Civil Aviation practice. “This presents powerful opportunities for forward-thinking airport leaders to provide a giant, affluent customer base with new, exciting, revenue-producing services and experiences.”
Airport leaders find themselves rethinking their business because, more than ever before, airports are competing with one another for traffic. Their operators, often public-private hybrids, aren’t eager to increase their funding, and the options to increase aviation-related revenue, especially by wrangling with airlines, aren’t good.
Instead, to drive revenue innovations, airports will need fresh and different talent, particularly in the C-suite role of chief commercial officer (CCO), a new Korn Ferry study suggests. Airports will need to recruit, retain and develop leaders from outside their traditional sources, including in mainstream aviation, government, and the military.
Tapping into the firm’s research-validated assessment tools, including the Korn Ferry Four Dimensions of Leadership (KF4D) and data from Forbes’s Most Innovative Companies list, the study sees new airport CCOs optimally possessing traits, characteristics, and experiences that give them a global perspective, strategic vision, a high degree of adaptability, tolerance for ambiguity, and the capacity to work collaboratively.
“We have seen other businesses, with creativity and energy, reinvent themselves to deal with big customer data and to become intensely consumer focused and savvy,” says Tim Shaw, also of the firm’s Global Civil Aviation practice. “This has occurred in airlines, hospitality and retail. Airports, too, can make their futures soar higher by becoming, yes, fun destinations for travelers to not only work efficiently but also to eat, play, shop, and enjoy themselves at the beginning and end of their journeys.”