Smart Airport Market Size, Share & Trends Analysis Report By Technology (Security systems, Communication systems, Passenger, cargo, & baggage ground handling control, Air/ground traffic control, Wireless, Near Field Communication, RFID, Bluetooth, LPWAN and WLAN, Endpoint Devices, Sensors, Wearables, Data Storage, Software and Solutions, Platforms, Software and Applications, Data Analytics, Managed Services), By Application (Aeronautical operations, Non-Aeronautical operations, Air Traffic Management, Aircraft Maintenance, Aircraft Turnaround Management), By Location (Landside, Airside, Terminal side) and By Region(North America, Europe, APAC, Middle East and Africa, LATAM) Forecasts, 2023-2031

Market Overview

The global smart airport market size was valued at USD 2.62 billion in 2022. It is projected to reach USD 8.86 billion by 2031, growing with a CAGR of 14.5% during the forecast period (2023–2031).

The airport industry is developing rapidly and is bolstered by the swift rise in air traffic. Increasing air traffic has paved the way for various challenges, including capacity issues and security problems. The airport operators are adopting multiple digital solutions to mitigate such constraints. Smart airports leverage the network and data-driven capabilities to provide passengers with a superior level of security and travel experience. Operators are implementing various smart components for various services, including baggage & document checks, automatic check-in, and security checks.

Today, airports are considered an important economic driving force of a city or a country. They also are a vital part of travel and tourism, further compelling governments worldwide to invest in their infrastructure. The adoption of smart airport technologies presents significant opportunities for the worldwide aviation industry. Technologies such as machine learning and natural language processing have the potential to bring about substantial improvements in a variety of fields, including airport security, customer service, and resource management. Major aircraft manufacturers have announced AI-based research activities in recent years. Similarly, airport operators are actively working to adopt new technologies to transform airport businesses and provide passenger satisfaction. Thus, the smart airport market is gaining traction across the globe.

Market Dynamics

What are the factors driving the market growth?

Adoption Internet of Things in Airports

The Internet of Things (IoT) is considered a notable trend that is driving the market growth. IoT is used in airports for flight booking management, passenger traffic monitoring, automatic check-ins, facility management, and baggage systems. The technology also enhances the efficiency of airport security. Additionally, escalating the need for real-time information to reduce the workload of airport staff and operators drive market growth.

The airport industry is also harnessing various technologies such as augmented reality, near-field communication, and quick response codes for efficient automation of airport processes. Rising terrorist attacks have raised concerns about passenger safety, further driving market growth. Smart airport technologies update security personnel with relevant information and assist them in identifying potential threats.

The Advent of Advanced Technologies

The introduction of innovative devices with novel features, such as passenger identification via a unique heartbeat pattern, drives market growth. The devices employ biometric and biodynamic signatures and implement artificial intelligence for handling colossal airport databases. The incorporation of artificial intelligence in inquiry systems delivers automated answers to passengers and reduces the need for the human workforce.

Artificial intelligence assists in the predictive maintenance of aircraft and real-time pricing and increase airline efficiency. For instance, Beijing International Airport leverages the 'Aviation Brain,' a part of Alibaba Group's AI program. Aviation Brain helps to reduce congestion in the airport, as Beijing International Airport is ranked as the second busiest airport across the globe, as per the Airports International Council. The technology supports various other airport handling functions, including route planning for airline carriers and ground-staff assignments.

Increasing demand for renewable energy sources drives the incorporation of smart technologies in the airport sector. Airports consume a significant amount of electricity, which subsequently increases pollution and carbon footprint. However, the application of smart technologies helps with pollution reduction by using sustainable energy sources. Moreover, the renovation of old airports, the development of new airports, and advancements in commercial aviation provide impetus to market growth.

What are the factors restraining the market growth?

Lack of Skilled Staff

Greater adoption of recent technologies in the aviation industry is only practicable if there is a large pool of skilled and experienced personnel capable of managing complex algorithms and implementing the appropriate technology for various applications. In addition, the administration of AI and automated systems can be challenging and demands great software engineering abilities and extensive experience with distributed and concurrent programming or communication protocol debugging. Nonetheless, many places, especially emerging economies, lack individuals with these talents. Consequently, the scarcity of skilled labor is one of the primary problems that impede market expansion.

Regional Analysis

North America is estimated to hold the lion's share of the market owing to the technological advancements in the region, coupled with the early adoption of such technologies. In the US, airports have introduced RFID/NFC-based luggage tracking, automated immigration systems, smart security gates, and mobile applications providing notifications, among others. For instance, the Miami International Airport (MIA) has developed a mobile application to offer personalized services to passengers. The application provides updates on flight timings, gate numbers, customized information regarding shops and cafeterias, and baggage carousel numbers, among others. MIA is considered a leading player in terms of adopting mobile technologies, including broadly distributed Bluetooth beacons, which collect data to improve passenger satisfaction and the efficiency of airport operations.

Europe represents the second-largest market share because of the substantial investments made in replacing conventional systems with technologically advanced systems and the growing need for smart and environmentally friendly airports in the coming years. The European Union Agency for Cyber-Security (EUAC) actively participates in the design, development, and implementation of cyber-security-based systems at these airports. The United Kingdom owns the largest share of the market in Europe and is anticipated to maintain its dominance during the projected period. Due to the importance of aviation to the nation's GDP, emphasis is being placed on the efficient utilization of current capacity and strategic investment in upgrading airport services. Early in 2018, the UK government invested in creating artificial intelligence to improve security and shorten lines at some of the busiest airports in the nation. Similarly, airport authorities, airlines, and service providers are investing in the integration of new technologies to increase passenger flow by minimizing delays, noise, and pollutants, as well as by streamlining airport operations.

Asia-Pacific is anticipated to have the highest growth rate during the projected period. Rapidly increasing air passenger traffic in the region over the past few years has prompted airports to implement modernization initiatives to increase their passenger handling capacity and operational efficiencies. It is projected that these improvements to the airports would stimulate the growth of the market in the region. Additionally, developing new airports in the Asia-Pacific region, notably in countries such as China and India, is anticipated to boost market growth throughout the forecast period.

The Middle East is anticipated to witness amplified growth in the market. The escalating passenger traffic, coupled with the modernization programs of old airports, drives the regional market growth. Increasing investment in the domestic airports of the UAE and Saudi Arabia is also anticipated to fuel the Middle East market. In the UAE, airports are adopting voice-based AI tools and assistants to provide real-time information to passengers. The entire process flow architecture in airports is predicted to undergo a revolution due to the system's increasing automation. Airports are implementing a variety of autonomous technologies to improve operational efficiency. For instance, the UAE intends to expand Dubai International Airport to accommodate 120 million people annually by 2023, up from 90 million passengers yearly. It is anticipated that these advancements will improve market prospects during the forecast period.

Segmental Analysis

On the basis of technology, the market is categorized into security systems, communication systems, passenger, cargo, & baggage ground handling control, and air/ground traffic control.

The communication system segment is projected to be the fastest-growing segment during the forecast period. Today, airports are collecting passenger data and generating databases to deliver various information, including nearest retail stores, live updates on flight status, taxi and bus services, and traffic updates.

By application, the market is bifurcated into aeronautical operations and non-aeronautical operations.

The aeronautical operations segment is further segmented into gate management and noise management, while the non-aeronautical operations segment is divided into supply chain management and advanced transport services. The noise management segment is projected to hold the highest share as most of the airports adopt noise management programs to lower the noise generated by aircraft during landing and take-offs. For instance, Toronto Pearson Airport introduced Noise Management Action Plan for 2018–2022 in December 2017, which will be reviewed every five years.

Based on location, the market is classified into landside, airside, and terminal side.

The terminal side segment holds the largest share of the market as flight details and locations directing the passengers to various terminals are displayed on the kiosks positioned in different areas of the airport.

Impact of covid-19

The COVID-19 has severely impacted the world, with the death toll rising at a concerning rate every day. As per the Center for Disease Control and Prevention (CDC), new laboratory tests have been introduced to identify the COVID-19 specimens, which is further accelerating market growth. The state and local public health departments are actively working to collect the specimens, which is further driving the demand for biological safety testing kits. The World Health Organization (WHO) recommended the use of new point-of-care immunodiagnostic tests in the research settings. 

The Indian Council of Medical Research (ICMR) enabled subsidized tests due to National Public Health Emergency. The market players are supplying their diagnostic test kits to the private labs to make test operations feasible. The ICMR instructed the laboratories to undertake appropriate biosafety and biosecurity precautions while collecting samples. For biological safety testing, ICMR has urged the laboratories and hospitals to create a separate disease-specific sample collection site.

Recent Developments

• October 2021- The Memphis airport aims to improve its operating capabilities by using numerous Amadeus Airport Management Solutions. Memphis International Airport will use the Amadeus Resource Administration System (RMS) to manage shared gates, ticket counters, and baggage drop-off locations based on a real-time assessment of airline demand.

• September 2021- Collins Aerospace released Izon, a new digital platform that unifies and streamlines business aviation services such as flight planning, weather, and fleet operations. Izon provides pilots and flight operators with a centralized location to access all their applications at any time and on nearly any internet-connected device.