The Smart Airport Market is projected to expand from US$ 26,073.62 million in 2022 to US$ 66,763.46 million by 2028, reflecting a compound annual growth rate (CAGR) of 17.0% during this period.
A notable trend within the smart airport market is the rising demand for cost-effective and efficient systems in airport operations. According to the International Air Transport Administration, operational costs for airports can soar to approximately US$ 13.69 per passenger, encompassing both aeronautical and non-aeronautical revenues. However, the existing systems utilized in airport management can be expensive, necessitating frequent maintenance, upgrades, and servicing, which adds to the financial burden on airports.
Smart parking serves as a prime example of an economical airport solution that is gaining traction in the realm of smart airports. These systems assist passengers in locating available parking spots and can be integrated with electronic ticketing to enhance the overall passenger experience. By boosting the operational efficiency and dependability of parking facilities, these mobile smart parking applications enable airports to increase revenue while minimizing costs.
Effects of the COVID-19 Pandemic on the Smart Airport Market
The global air travel sector experienced a significant surge over the last decade; however, the COVID-19 pandemic severely disrupted airport operations worldwide in the second quarter of 2020, leading to a dramatic decrease in passenger numbers for that year compared to 2019. The Middle East was particularly hard hit, suffering a 69.3% decline in air travelers in 2021 due to its reliance on international travel and connectivity, which has been recovering at a slower rate than domestic travel. Conversely, South America is anticipated to rebound more swiftly than other regions in 2021. Despite the considerable challenges faced, the recovery trajectory is gradually becoming clearer, with smart airports playing a pivotal role. For instance, Dubai Airports partnered with Huawei to create a smart airport that meets consumer expectations for shorter queues, seamless online services, and timely flights. Smart airports in the UAE are focusing on features such as complimentary Wi-Fi, smart gates, data collection and sharing, airport applications, demand forecasting, asset management, maintenance, and monitoring of flight punctuality. Additionally, Dubai International Airport aims to increase its capacity to handle 120 million passengers annually by 2023, up from its current capacity of 90 million.
The UK ranks as the second-largest market in the European smart airport sector, with London Heathrow Airport and Edinburgh International Airport being the only fully operational smart airports in the country. These airports rank among the busiest in the region, accommodating a substantial number of passengers each year, and are continually exploring innovative smart airport technologies to improve their operational frameworks. For example, Heathrow Airport recently trialed Amadeus' touchless bag drop technology in 2021. While UK airports are implementing strategies to recover from the revenue losses incurred during the COVID-19 pandemic, the recent Border IT failure in 2021 disrupted electronic passport gates across all UK airports. Such IT challenges could hinder the adoption of smart technologies within the UK's smart airport market.
During the forecast period, the Asia Pacific (APAC) region is anticipated to witness the highest growth rate in the global smart airport market. The market analysis for smart airports in the APAC region encompasses countries such as Australia, China, India, Japan, South Korea, and others. In 2022, the remaining countries in the APAC region are expected to hold the second-largest share of the smart airport market within the region.
Countries like Singapore, Malaysia, Indonesia, and Thailand are part of the Rest of the APAC region, which hosts some of the largest smart airports globally, including Singapore Changi Airport. Kuala Lumpur International Airport and Indonesia International Airport are also implementing advanced systems to minimize boarding times and enhance passenger experiences. To deploy various smart airport systems, airports across the region are launching multiple initiatives. For instance, in December 2021, SITA installed 100 biometric-enabled self-service Smart Path kiosks and the SITA Smart Path Bag Drop at Kuala Lumpur International Airport. Furthermore, in 2020, the Thai government announced a partnership with a Chinese telecommunications firm to provide 5G networking and services as part of the country's 'smart airport' initiative, starting with Krabi airport as a pilot project. These advancements are expected to drive the growth of the smart airport market in the Rest of the APAC region in the near future.
Key players in the global smart airport market include Honeywell International Inc., Cisco Systems Inc., Huawei Technologies Co., Ltd, Indra Sistemas SA, Amadeus IT Group SA, SITA, Collins Aerospace, Daifuku Co. Ltd., Thales Group, and T-Systems International GmbH, all of which are profiled in this market study.
The size of the smart airport market has been determined through a thorough approach that integrates both primary and secondary research. The research process began with extensive secondary research from various internal and external sources to gather qualitative and quantitative data on the smart airport market. This methodology aimed to provide a comprehensive overview and forecast of the smart airport market growth across all segments. Additionally, numerous primary interviews were conducted with key industry participants and experts, including VPs, business development managers, market intelligence managers, national sales managers, valuation experts, research analysts, and key opinion leaders, to validate the collected data and gain valuable analytical insights into the market.