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10.7603/s40690-015-0013-9 JOURNAL OF AERONAUTICS AND SPACE TECHNOLOGIES JULY 2015 VOLUME 8 NUMBER 2 (25-33) Caglar UCLER Luis MARTIN-DOMINGO Ozyegin University, School of Aviation, Istanbul, Ozyegin University, School of Aviation, Istanbul, Turkey, email@example.com Turkey, firstname.lastname@example.org th nd Received: 20 April 2015, Accepted: 23 July 2015 ABSTRACT There is a high growth in the air traffic supported by the global trade and tourism and due to airport congestion travelers are spending more time at airports, which are competing to attract airlines with lower aeronautical costs reducing their profitability. The growing transit time spent at airports together with the waiting time in front of check-in, passport, security control or baggage claim is an idle time of the air traveler, which is not generating any value. The perception of waiting is also mostly negative, that the associated airports are disliked, leading to loss of revenue in commercial offerings. Another problem is that due to the high variety in the customer profile, the shops at the airports need to carry a high inventory over a wide spectrum of items required, which is not creating any value as well. Thus in order to deliver a sustainable value chain at the airport, an innovative customer focused integrated approach is proposed herewith, based on a smart phone platform called Gate Ø, facilitating the idle times of the air traveler. This strategic approach is evaluated successfully within a value chain analysis showing up its potential across the value chain stakeholders. Keywords: Airport, Air Travel, Innovation, Mobile Application, Supply Chain, Value Chain Analysis. HAVA YOLCULARININ BOù ZAMANLARI VE HAVAALANINDAKø DEö ER Zø NCø Rø ÖZET Global ticaret ve turizm güdümünde artan hava trafi÷ inin sebep oldu÷ u yo÷ unluk, hava yolcularÕ nÕ n havaalanlarÕ nda giderek daha çok zaman geçirmesine sebep olmaktadÕ r. HavaalanlarÕ ise rekabetçi olup, havayolu ú irketlerini kazanabilmek için, havacÕ lÕ k gelirlerini giderek düú ürmek zorunda kalmaktadÕ rlar. Bununla beraber transit yolculuklar, check-in, pasaport ve güvenlik kontrolü ile bagaj için olan bekleme süreleri düú ünüldü÷ ünde, hava yolcularÕ nÕ n de÷ er yaratmayan boú zamanlarÕ göze çarpmaktadÕ r. Üstelik bu sebeple ortaya çÕ kan memnuniyetsizlik, ilgili havaalanlarÕ nÕ n sevilmemesine ve buralarda elde edilen di÷ er ticari gelirlerin de düú mesine sebep olmaktadÕ r. AyrÕ ca yolcularÕ n de÷ iú ken profili havaalanlarÕ ndaki ticari iú letmeler için yo÷ un bir envanter maliyeti de oluú turmaktadÕ r. Bu sebeplerden ötürü, havaalanlarÕ na sürdürülebilir bir de÷ er zinciri sa÷ layabilmek amacÕ ile, akÕ llÕ telefon platformlarÕ ile çalÕ ú an, Gate Ø adÕ nda yenilikçi ve entegre bir sistem önerilmiú tir. Akabinde bu stratejik yaklaú Õ mÕ n sundu÷ u potansiyel, de÷ er zinciri analizi ile incelenerek, baú arÕ lÕ bir ú ekilde gösterilmiú tir. Anahtar Kelimeler: HavaalanÕ , Hava Yolculu÷ u, Mobil Uygulamalar, Tedarik Zinciri, De÷ er Zinciri Analizi. UCLER, MARTIN-DOMINGO Corresponding Author 25 Traveler’s Idle Time and the Value Chain at Airports 1. INTRODUCTION passport control, millimeter-wave technology security scans , mobile passenger identification, off-airport Air travel did grow over the last 27 years annually by bag drop , automated border control machines, 5.9 % on average in terms of passenger–kilometer personalized real-time information using RFID . performed (PKP), and by 6.1 % in terms of ton– The trend in functional airport partitioning is from kilometer performed (TKP), . With the increasing sharp to fuzzy, breaking down categories by pointing air traffic airlines are utilized above 10 hours per day out to social trends and technology , where reaching a load factors above 80% . As a result the information technology (IT) is used as a business forecasted annual traffic growth is around 4.8 % thru enabler . As a result the innovation at the airport 2036 , surpassing 9 billion passengers annually by shall include state of the art communication media 2025 . based on IT and thus shall response to the online community as well. Despite the growth in aviation, the economic constrains narrowed down the profit margins in The air travelers are from a higher socio-economic aviation. Consequently smart customization leading to group . Controlling their own trip, today’s they are advanced segmentation is driving innovative business part of the online community and want to experience models with the aid of new technologies on the airline increasing transparency, corporate responsibility and side . This resulted in the reengineering of the efficiency . The new social media is delivering airport concept. With the privatizations of the airports, many new communication channels that most of the they have become major business centers offering passenger are actively part of. With an increasing commercial development . Today’s airports are trend (see Figure 1), over 78% of the passengers multifunctional public spaces not only processing traveled in 2013 with a smartphone that airports passenger movement, but offering spa centers, provide Internet mobile services and flight updates via boutiques and restaurants . The worldwide Mobile . Which means, when the air traveler is at commercial revenue average is around 48% , but the airport, he/she is online. Moreover there is a e.g. Schiphol is an airport city generating 70 % of its positive correlation between the time spent at the operating result is by non-aviation-related income airport terminal and the level of expenditure [22, 23], benefiting from the experience economy . This but e.g. 40% of the Schiphol Airport’s passengers change in business focus and increased environmental transfer to a connecting flight and are in the sensitivity drive together the innovation at the airports Netherlands just for a few hours . As a result the , which also positively effects airport’s marketing traveler’s commercially available time at the airport is performance . Moreover considering that the adjusted by scheduling of transit flights . commoditization is pushing the price as the key buying criteria; companies need to differentiate in the offerings , which implies innovation as well. When changes necessarily drive towards innovations , productive use of inputs via continual innovation is due to maintain competitiveness . Moreover some companies see the innovation as the enabler of additional growth . Airports do leverage local monopolies in the aviation value chain . By Figure 1. Smartphone penetration for air passengers delivering products and services together with the based on [24, 25]. flight processing they compete with each other to become successful hubs, centralizing the intermediary In addition to that considering the waiting times in stations of the connection flights. Airports are trying front of check-in, passport and security control and to satisfy airlines technically, but also travelers with baggage claim together with the time on the way smooth operations and with a wide range of to/from the airport, there is a huge amount of idle commercial offerings that they can innovate in time, where the traveler is not within the value chain strategy and vision, leadership, culture, processes or of the airport. Moreover the air traveler, who is mainly work environment . online, is virtually somewhere else that he/she is also mentally not integrated into the system as well. Innovation is about interaction of technology, market and organization, where competitive advantage can be However this idle time can be utilized by providing an generated in the ways in which product and service online system incorporating the traveler as an active offerings are created and delivered . This is member into the airport community by providing enabling also quality time spend at the airport, which information regarding the flight, but also offering must be offered by successful airports . As of today commercial products and services such as duty-free, some airport related innovations are self-service ground transportation, fast tracks or similar check-in, electronic permanent bag tags, self-service UCLER, MARTIN-DOMINGO 26 Traveler’s Idle Time and the Value Chain at Airports approaches, which is proposed here as the Gate Ø This chain can diversify depending on the airport, but system and explained in detail throughout the text. it is physically there. There are sometimes also innovative approaches using IT to crash some There are already researchers focusing on the impact processes, but these processes always physically do of the waiting time at the airports, but the utilization happen, when even in a faster manner. of this time is not covered in the literature, although it is critical to the perception of the service quality . In addition to that this research also complements the literature of airport digital strategy, which is an important consideration currently lacking as well . Finally the proposed Gate Ø system is also assessed by applying a value chain analysis, contributing to the literature of the airport value chain as well. 2. GATE Ø: THE AIR TRAVELER PORTAL Figure 2. Gate Ø as the integrator and commutator. Mobile check-in becoming bigger than web check-in By using Gate Ø first of all the airport will be virtually indicates that passengers are ready for commercial accessible at any time, meaning the traveler can mobile offerings as well . Motivated with that, prepare for a flight at home. Alternatively on the way Gate Zero (Gate Ø) is the innovative software portal to the airport, when stuck in the traffic, the time could proposed herewith, which is leading the way to utilize be used to go for a fast track option combined with the idle time of the air traveler into the value chain of duty free as well. Since the system is also connecting the commercial airport cities. It is integrating the to the commercial stakeholders, they can prepare a commercial offerings at the airports and enables the basket with procured goods and can get delivered at traveler an online access through smart mobile devices the gate in front of the aircraft. Marketing campaigns such as phones and pads, which can be used by the can be prepared and delivered to the customer, which travels in their idle times (see Figure 2). In general it can be accessed when visiting a city in the hotel or in is a showcase of all the offerings available, but it is a café downtown. Moreover the traveler can comment also a business platform and is an interactive or read comments of other travelers, creating the communication channel suitable for marketing content of Gate Ø providing visibility, which is further campaigns and for user evaluations. supporting comparison possibilities of Gate Ø. As a result a traveler can access Gate Ø when being at The classical airport experience is associated to the home, base in City X, or on the way to the Airport A, physical airport, where a linear flow of processes is at Airport A, during the flight from Airport A to B, at fallowed, i.e. for a departure flight after arrival by arrival in B during immigration queue or baggage ground transportation, security check, check-in, claim, during ground transport to City Y and in City Y baggage drop, passport control, last security check (see Figure 3). when due and there is just a short free time available prior departure. Figure 3. Positioning of Gate Ø in the air travels commercial chain. UCLER, MARTIN-DOMINGO 27 Traveler’s Idle Time and the Value Chain at Airports During the initial implementation Gate Ø can be used for a time based imbursement. The Info line includes in a limited manner providing some additional streaming data according to the phase of the travel. capability only. Even this would mean for a smaller Prior flight the time to boarding and departure info airport without the facilities a wide variety of such as delays, gate number and flight number are offerings hence a radical improvement. When being shown in this line. After arrival the baggage claim belt used on the wide basis the stakeholders of Gate Ø are number associated to the flight is indicated here, (i) travelers, (ii) commercial service & product followed by the car park position when available. Also providers directly along with (iii) airports indirectly. important information and advertisement are streaming here on a lower frequency. An alerting and communication system with pup-ups is available as well, where advertisements can be turned off in the settings branch, iconized at the lower part together with the SOS button. The SOS functionality is informing the authorities with the coordinates of the mobile device in the case of an emergency, where massages indicating the situation can be send as well. Finally it has to be mentioned that the commercial users have a sophisticated desktop GUI enabling them e-commerce transactions and other functionalities, which is not shown here. 3. METHOD: VALUE CHAIN ANALYSIS In order to assess Gate Ø, value chain analysis is used. “The value chain is a general framework for thinking strategically about direct, indirect or quality activities involved in any business assessing their relative cost and role in differentiation, since the competitive advantage cannot be seen by looking at a firm as a whole” . Consequently all stakeholders of Gate Ø Figure 4. Mobile GUI structure of gate Ø. are to be analyzed within the value chain including the suppliers, the commercial service & product suppliers When using the Gate Ø the customer has a lean at the airport, the travelers and at least the airport mobile graphical user interface (GUI) as shown in itself. Figure 4. Since the system is using positioning services it can enable the navigation through the Due to the lack of the ability to fully conceptualize the airport facilities. It uses interactive maps with complex adaptive nature of service innovation and destination selections from a searchable library value  the assessment of Gate Ø is not an easy including landmarks such as gates or administrative mathematical computational task. Traditional value locations and commercial spaces as well. Under the chain analysis is very structured and uses isolated Check-In & Status branch all associated services and processes and appropriate costs and incomes. detailed information are available. Also fast tracks and According to  the principal steps are first the digital boarding card is included herein. With the identifying the firm’s value-creating processes to Transportation and Parking branch the standard determine the portion of the total cost of the product transportation means to and from the airport can be or service attributable to each value creating process, studied including time plans and procurement which can be used to identify the cost drivers for each possibilities for packages of city public transportation process and to identify the links between processes. cards together with offers of other commercial However IT innovations enable a user value, which services available at the airport. Moreover daily, cannot be measured by traditional accounting and weekly or monthly subscriptions for the parking can economic based measuring techniques , where the be done where also the parking place is stored for later customer contribution is further boosting the value. usage. Dining & Lounges branch includes a Moreover operational performance is measured presentation of available food court, lounge and against non-financial value drivers such as operational airport hotel facilities including sleeping cubes, with efficiency, service quality, environmental the option to buy special combination packages. responsibility and corporate sustainability . Shopping branch is mainly an e-commerce site, where Consequently a more qualitative approach is used visibility over product comparisons is provided. It herewith for the primary and support activities based includes all duty-free procurement options with on the generic value chain  as shown in Figure 5. several delivery options. Within the entertainment branch the associated facilities at or around the airport are promoted. Moreover movie channels are provided UCLER, MARTIN-DOMINGO 28 Traveler’s Idle Time and the Value Chain at Airports Figure 5. The generic value chain based on . The qualitative value chain analysis of Gate Ø is increase the level of value and quality. Moreover Gate summarized in Picture 6. The infrastructure delivers a Ø is integrating the supplier into the value chain on a customer focused system enabling the collaboration collaborative basis that some outbound duties of the across all stakeholders including the streaming of the stores can be taken over from the suppliers such as voice of the customer (VOC). It is a superior delivery or inventory, which again mitigates the management information system (MIS), integrating requirement on HR. On the top of this the shared sales & marketing with the tracking of key resources on several locations provide a much better performance indicators (KPIs) enabling financial coverage on global basis and deliver a higher level of reporting as well. Successively it is a top management visibility. support tool including but not limited to selling strategy. The infrastructure is delivering an electronic As an innovative platform Gate Ø has its main data interchange (EDI) environment, enabling contributions on the technology development computer to computer exchange of business activities. Being an automated business to business documents preventing manual interaction limiting (B2B) system it enables the smooth information error sources and streamlining all processes. Moreover exchange between the suppliers and the companies. it provides a great overview of the current as-is As a result the inbound logistics is made on a fault situation by delivering transparency to the customer free basis in shortest time possible. There are several leading to a higher image perception. services of the airports available in Gate Ø in an integrated context, which is 7/24 available to access. For inbound logistics processes Gate Ø is capable to The lean system is providing a robust IT platform and be used as a web based training resource with the since most of the transactions are carried in virtual provided online catalogue. With shared resources as a reality the need of physical department store space at main character, Gate Ø can facilitate online support on airports decreases. The bidirectional information flow all primary activities reducing the need of human is contributing to the transparency. The idle time resources (HR). The automated processes require a integration into the value chain is one of the main lower work force and increase the quality of work assets of Gate Ø. The traveler, here the customer, is together with the efficiency. On the top of this Gate Ø virtually present at all times and can follow up the is not only a customer focused system, the customer content provided to fulfill even transactions, where the acts in Gate Ø as the content provider, i.e. it is required support can be provided in an online manner. generating content within the processes. This implies Moreover the service/product providers can use shared that the customer is as well functioning as an associate resources to fulfill the requirements of the orders. E.g. in the self-organizing concept. He/she uses the while a store in Airport A is passing by the delivery of information on the system, realizes his own one selected item which is not currently available to transactions, but guides also other participants. By another store at Airport B, it can still give out taking over some of the load from the sales force the beverages locally. Many similar tailored business customer also supports the organization to get leaner, models can be worked out to maximize the profit of enabling free resources which then can be converted all contributing parties. to higher skilled back office personnel, who can UCLER, MARTIN-DOMINGO 29 Traveler’s Idle Time and the Value Chain at Airports Figure 6. The value chain analysis for gate Ø. Being a customer to business (C2B) system it is also benefiting from the experience economy the value an integrated system enabling just in time (JIT) differentiation can be achieved as shown in Figure 7, logistics with wide spectra of delivery options. The where the positive perceived value is raised by the customer therefore can choose to pick-up the goods on application of Gate Ø and the negative actual input a designated site for cost cutting or can prefer to have cost, the actual value, is decreased due to the optimization of processes. Consequently the an in-house delivery against a small reimbursement fee. All in one the inventory management captured by difference between perceived and actual values of A Gate Ø provides a good visibility and enables and B respectively can be used to determine the smoother transactions. Providing a higher awareness differentiation value. Moreover the customer has more level to the online community and streaming time to process the transactions by using e-payment. information over mobile devices a higher This relaxes the customer and he/she can decide to go advertisement level can be achieved by Gate Ø. for expensive products from elevated segments. All Moreover the availability period is extended by two together a new high end customer segment can be means; (i) the shared resources enabling physical created, which can be served by means of account access and (ii) the virtual environment providing management. access making the ecosystem available over a longer period without time lapses. Qualitative VOC together with the quantitative metrics extracted from Gate Ø can be used to conduct extensive market research making successful promotions possible. Moreover with subscriptions with longer term commitments special offers can be arranged to increase total profit. Moreover there are practically no physical restrictions anymore. Theoretically any product can be included virtually in the offerings enabling a diversification of product lines as well. Special pricing and packaging Figure 7. Value differentiation. promotions can be carried out within innovative corners at stores with another core business than retail, which also enables cross selling. Since the customer is UCLER, MARTIN-DOMINGO 30 Traveler’s Idle Time and the Value Chain at Airports All in one the JIT procurement with possible delivery economies of scale shifting a large part of planning options enables a positive environment aspect as well. and administrative tasks to the central unit, which will All goods flown directly with the customer do require save time and resources in stores, increasing a higher amount of fuel consumption due to air negotiation power . In addition to that Gate Ø transportation. Each kg carried on board is used to drives a process innovation from the perspective of the calculate the total fuel boarded. In other terms when commercial stakeholders. It has been shown that the customer choses to have delivery at destination it supply chain is totally reengineered by using state of is not just a comfort choice done in order to prevent the art ecommerce platform enabling inventory carrying around the goods, it also results in a lower optimization along with several new delivery options. carbon foot print. Thus shared inventory has a green The traveler gets part of the process at all physical aspect as well. locations possible, that idle time utilization has been proven to be correct. The integrated approach also In addition to that the reverse logistics concept, which implies paradigm innovation, since it changes the starts with the procurement of the customer and underlying mental model  associated to the immediately escalades the information down to the experience at the airport. suppliers, is also reducing the unnecessary inventory, lowering space requirements and thus electricity and Considering that at airports marketing innovation is other overheads financially and environmentally. Joint found in service companies , where the product is procurement enables also the selection of most simultaneously produced with and consumed by suitable goods to create services. Finally the best participating customers , one can question the located warehouses holding the inventory in the name positioning of Gate Ø therefore. Since Gate Ø is of duty free shops can be selected to provide the goods integrating the customer into the processes it is on the greenest pathway. As a result interrelationships addressing the required needs as content created by in joint procurement cover joint interface of Gate Ø, customers. Furthermore communication of special shared financing of the inventory, order processing, combined offerings such as lounges together with fast advertisement and promotion. tracks or with duty free shopping implies the marketing character of Gate Ø. 4. RESULTS AND DISCUSSION On the top of this, todays airports are like big cities, The findings of the value chain analysis are consistent which are competing with each other. The more they with the expectance. By breaking down the processes attract people by delivering them a pleasant traveling and focusing on subsystem level it has been found that experience the more the airlines prefer the airports as Gate Ø integrates the idle time of the air traveler into hubs or home bases. Since Gate Ø is elaborating the the value chain of the airport. travel experience it is also indirectly contributing to the marketing of the airport. Moreover airports have Focusing on the sustainability criteria for airports as also revenue generating units such as parking, which economic efficiency, environment, coordination, and integration into Gate Ø would make airports direct community , it has been shown that Gate Ø delivers stakeholders of the system as well. As a result by a suitable platform by providing an integrated limited application Gate Ø can be impact incremental collaborative approach involving the JIT, VOC innovation contributing to sales and marketing, but integration and transparency. Especially the new has been shown that it is a radical innovation for social community wants to be involved in processes, airports, not possessing any comparable duty free zone which is satisfied herewith, supported by this prior implementation. Since in-store technology transparency referred and the bidirectional information facilitating purchasing via mobile phone platforms flow. It has been shown that Gate Ø is enabling the easily gives benefits to retailers and suppliers , required differentiation  for sustainable success by competitive positioning of Gate Ø adopters is reducing the power of price with the perceived value enhanced. The underlined corner logic is in line with increase due to the IT and participation to the content. shop-in-shop concepts and the fuzzification of food Considering that consumers are increasingly aware of and non-food areas . social and ecological consequences , the indicated green character of Gate Ø cutting down fuel Furthermore enabling further optimization in the consumption by optimized logistics contributes to the organization it also delivers higher efficiency in HR sustainability of both the ecosystem and the business contributing to the reduction of costs. Together with model incorporating Gate Ø. the new optimized logistics and reduced inventory as shown by the analysis, the cost impact is even higher. Moreover Gate Ø implies technological innovation by This contributes to the referred differentiation, which the adaptation of the mobile platform applications together with the new business opportunities justified integrating the supply chain of several locations. the Gate Ø application. Cooperation possibilities as indicated in the value chain analysis seek the bene¿ ts of centralization and UCLER, MARTIN-DOMINGO 31 Traveler’s Idle Time and the Value Chain at Airports 5. CONCLUSIONS 6. REFERENCES Despite the growth in air traffic the profit margins of  Mazraati, M., (2010) “World Aviation Fuel aviation is lowered due to competitive positioning of Demand Outlook”, OPEC Energy Review, Vol. 34, alternative airports, trying to attract airlines with Issue 1, pp. 42-72. competitive aeronautical fees. 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Société Internationale de Télécommunications defense and automotive industries. He worked in Aéronautiques, http://www.sita.aero/surveys- Aritas as the Engineering Director and as the founding reports/industry-surveys-reports/airport-it-trends- manager of the German Branch. survey-2014 .  Torres, E., Dominguez, J.S., Valdes, L. & Aza, He is currently faculty member in the School of R., (2005) “Passenger Waiting Time in an Airport and Aviation at Ozyegin University and is also consultant Expenditure Carried out in the Commercial Area”. for Worthington Aritas. He focuses mainly on product Journal of Air Transport Management, 11 (6), pp. development and its management. 363–67.  Castillo-Manzano, J.I., (2010) “Determinants Luis MARTIN-DOMINGO, MSc. Luis Martín-Domingo received a BSc Aeronautical of Commercial Revenues at Airports: Lessons Learned from Spanish Regional Airports”. Tourism Engineering (1994) at Universidad Politecnica de Madrid (Spain) and later an MSc Air Transport Management, 31 (6), pp. 788–96. Management (1998) at Cranfield University (UK).  SITA, (2013) “Passenger Self-Service Survey 2012”. Société Internationale de Télécommunications He has more than 10 years of experience in the areas Aéronautiques, http://www.sita.aero/surveys- of Marketing and Distribution of airlines and airports reports/industry-surveys-reports/passenger-self- in Europe and China. Before joining Özye÷ in service-survey-2012. University he lectured at Eseune Business School in Beijing (China) and is visiting lecturer at Paul Sabatier  SITA, (2014b) “Airport IT Trends Survey University in Toulouse (France). 2013”. Société Internationale de Télécommunications Aéronautiques, http://www.sita.aero/surveys- Now in Istanbul he combines his Air Transport reports/industry-surveys-reports/airport-it-trends- lectures at Özye÷ in University with his PhD at Las survey-2013. Palmas University (Spain) where he research on the use of mobile internet services at airports. UCLER, MARTIN-DOMINGO
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