Airlines and airports face escalating costs, revenue growth constraints and an increasingly dissatisfied customer base. By offering passengers a highly differentiated experience and simultaneously enhancing its operational efficiency, the aviation industry can position itself to become and remain profitable in a volatile business climate. To accomplish this, we believe the industry should adopt a new business model that combines distinctive customer services, a flexible infrastructure and greater collaboration, among partnering airlines and between airlines and airports.

Today, the average waiting time for travelers to check-in at a desk is 13 minutes. But it's become common practice to bypass the agent and use a kiosk to get boarding passes and check baggage. And the kiosk is just the beginning of self-service in air travel.

• Common User Self-Service (CUSS) kiosks enable different airlines to provide passenger facilities at a shared kiosk and split the running costs. This can reduce heavy traffic times at specific terminal entrances, spreading the flow of passengers more evenly throughout the airport. The system can even include hotel check-in and rental car information.

• Short messaging service (SMS) technology can help passengers receive flight notifications, gate change information and even digital 2D boarding passes on their mobile phones.

Second only to flight delays, baggage handling is a top concern for air passengers worldwide. Here's how baggage handling can be improved quickly lowering costs, reducing the number of lost bags and improving the customer experience.

Causes of baggage delay worldwide, 2005

Leverage RFID and SOA
It is estimated that an airport operation has an average of some 30 disparate systems running concurrently. New technologies can enable closer collaboration and a more holistic view, especially of baggage handling. Service-oriented architecture (SOA) enhances information sharing between baggage and other systems. Linking systems can improve quality of baggage handling through more up-to-date and complete data, and connection of baggage information with passenger information.

Radio frequency identification (RFID) is a key underlying technology that can enable, in conjunction with traditional barcoding techniques, virtually 100% tracking and tracing of baggage to improve the irregularities rate, lowering the need for lost baggage retrieval. Among its major benefits, enhanced baggage tracking through RFID can:

• Improve the security of baggage.
• Increase baggage traceability along the whole chain.
• Enable automation and speed processes.
• Optimize transit management, thus reducing transit times.
• Reduce baggage reconciliation times.

Air passengers know the drill by now: identification out, boarding pass in hand and, quite likely, shoes off your feet. But current screening processes are time-consuming and ineffectual, not to mention expensive.

The entire experience can be improved through simpler processes using advanced technology. And innovation in identity management will change how air travel passengers are screened and determined secure.

Key innovations are expected to be adopted within the next 5 years.

1. 1-2 years:

   Web technologies to connect customs airlines and airports. Hand/fingerprint recognition to identify passengers at customs. Automated document identification systems.

2. 2-3 years:

   Wireless technologies to connect customs, airlines and airports. Iris-scan technology to identify passengers at immigration and customs.

3. 3-4 years:

   Facial recognition technologies. Data analysis systems to prescreen passengers using closed circuit television (CCTV).

By 2010 the majority of countries are expected to require machine-readable ePassports. An ePassport is a paper document, similar to the passport we use today, with an embedded chip that can be read by a secure scanner using radio waves. The scanner retrieves the passenger's digital picture which the border guard may use to compare against the person presenting the documents.

As self-service empowers passengers do be independent, gate agents and airline representatives can focus their efforts on building relationships. Today, airlines interact with their passengers for a limited time. The bond lasts from check-in to baggage pick-up, and starts over again on the next flight. But airlines can look to retailers to learn valuable lessons: collect information, reward loyalty and customize experiences. Managing the customer relationship is more than awarding miles. It's about recognizing and fostering the lifetime value of each passenger.

For example, a passenger checks a bag that is over the weight limit. The gate agent sees that, on a previous flight, the airline lost that passenger's luggage. Rather than penalize for extra weight, the gate agent can recognize and reward that customer by waving the extra fee. Then the airline can continue to customize the passenger's experience in the air, serving targeted content in the seatback entertainment system or presenting shopping coupons based on previous credit card purchases.

The average airport has become a mini-metropolis, with more focus on retail than transportation. This drives revenue into facility operations, offering welcome distraction for delayed passengers, but it does little to address the issues facing the airport's biggest clients: the airlines.

The Airports Council International (ACI) predicts that the number of global passengers will rise from 4.3 billion in 2006 to more than 5 billion by 2010, and more than 9 billion by 2025. But forecasted facility growth can't match the rise in passengers. In fact, only 25% of airports reported plans to add new runways in the next 20 years.¹

Airlines and airports must prioritize collaboration in at least four areas to address the major challenges they share: security processes, common use self service, new pricing models and airport capacity constraints. IBM calls this the Smart Aviation Model, and it includes:

• A more flexible environment—physical gates, check-in spaces and baggage handling systems that can work for all airline tenants.
• A more flexible infrastructure—converge multiple networks onto one integrated platform, allowing more opportunity for growth with advanced network applications like video over internet protocol (IP) and RFID tracking.
• A more flexible information system—not just sharing information with passengers, but with the cleaning, catering and cargo delivery firms, alerting them to aircraft status in real-time.

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