Trolley Tracking and management
Table of Contents
Executive summary.............................................................................................................................. 3
1.
Introduction.................................................................................................................................... 5
2.
Problem definition......................................................................................................................... 7
3.
Delimitation .................................................................................................................................... 8
3.2. Source of Criticism ................................................................................................................... 9
Methodology ................................................................................................................................ 10
4.
4.1.
Paradigms ........................................................................................................................... 11
4.2.
Methodological approaches .............................................................................................. 12
A.
The analytical approach .................................................................................................... 13
B.
The systems approach ...................................................................................................... 13
C.
The actors approach ...................................................................................................... 13
4.3.
Chosen methodological approach in the report ............................................................. 14
4.4.
Methods ............................................................................................................................... 14
4.5.
Research design................................................................................................................. 15
4.6.
Structure of the project ...................................................................................................... 15
Aviation industry before and after ............................................................................................ 18
5.
5.1.
Competition within the airports ......................................................................................... 21
5.2.
The airport profitability ....................................................................................................... 24
5.3.
The development of the Airline Industry ......................................................................... 25
The Four P’s of Marketing......................................................................................................... 27
6.
6.1.
7.
Applying the Four P’s: Airport Strategies for Competing ............................................. 29
A.
Product – The Airport............................................................................................................. 29
B.
Price ......................................................................................................................................... 32
C.
Promotion ............................................................................................................................ 36
D.
Physical Distribution........................................................................................................... 38
Introduction to Trolley Tracking Systems ............................................................................... 40
7.1.
RFID in the aviation industry ............................................................................................ 41
7.2.
RFID and Airlines Trolley Tracking .................................................................................. 41
7.3.
RFID for tracking baggage trolleys .................................................................................. 43
8. Construction and maintenance of active RFID tags and their readers for Trolley Tracking
System ................................................................................................................................................. 45
8.1.
The Multi-mode active RFID tag by Lyngsoe Systems Denmark ............................... 45
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The Active RFID reader..................................................................................................... 47
8.2.
The System of Lyngsoe Trolley Management System ......................................................... 47
9.
10.
Theory of Disruptive Innovation ........................................................................................... 50
10.1.
Is RFID for Trolley Tracking System a disruptive technology? ............................... 51
10.2.
Why Disruptive innovation in airport baggage trolleys? ........................................... 52
10.3.
The technological life cycle model and RFID in TTS ................................................ 53
11.
Companies interested into entering the field...................................................................... 54
12.
Trolley with RFID V/s Trolley without RFID ........................................................................ 54
13.
Construction of Aerocodic Baggage Trolley System ........................................................ 55
14.
System’s benefits as per inventor’s view ............................................................................ 56
15.
Important of TTS in Present Aviation Industry ................................................................... 58
15.1.
Passenger Behavior....................................................................................................... 58
15.1.1.
Factors influencing passenger behavior concerning trolleys in airport .......... 59
15.1.2.
Passenger problem ................................................................................................ 59
15.1.3.
Airport service ......................................................................................................... 60
15.1.4.
How the passenger will react................................................................................ 62
15.1.5.
How TTS can influence passengers’ choice of airport? ................................... 63
15.2.
Benefits to Airlines.......................................................................................................... 63
15.3.
Benefits to Airports ......................................................................................................... 66
16.
Case Study .............................................................................................................................. 71
16.1.
Introduction ...................................................................................................................... 71
16.2.
System management of TAGS .................................................................................... 71
16.3.
The impact of the old trolley management system ................................................... 73
16.4.
Improving trolley system with AP management using RFID.................................... 75
16.5.
Theory of Clayton Christensen applied to the study case........................................ 76
16.6.
Case Conclusion ............................................................................................................ 79
17.
Conclusion ............................................................................................................................... 80
18.
Biblography ............................................................................................................................. 83
19.
Appendixes .............................................................................................................................. 87
19.1.
Appendix 1 - Care Evaluation ............................................................................................ 87
19.2.
Appendix 2 - Acknowledgement ....................................................................................... 88
19.3.
Appendix 3 - Definition ..................................................................................................... 89
19.4.
Appendix 4 – Abbreviation................................................................................................ 90
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Trolley Tracking and management
Executive summary
The aim of the report is to introduce a new innovative product as a tool to airport industry,
which can add value in the current aviation industry and especially to airports. Here aviation
industry includes airport and airline industry. This product is called Trolley Tracking System
(TTS).
This research project guides the reader through the problem formulation toresearch findings
in a structured and transparent manner. The first part of the reportis introduced aviation
industry, which gives brief explanation about aviation development and the gaps that exist in
the aviation model. To do that report covered the operation of the airports today and before
ten years. Moreover discussion of what an airport does, how it charges for its services related
with airlines will be carried out. In addition to that, the interaction between the airport and
airline is discussed to understand the airport as an intermodal hub.
It was also important to mention in the report to look at the development of the aviation
industry today to show a need for improvements with new TTS system within that industry.
To do that different airport and airlines are taken as an examples. Moreover, the needs and
important of TTS are discussed for airports to improve their image in order to attract more
customer as the competition is increasing within the industry.
After having all the discussion about aviation industry and understanding of improvement,
the report covered detail explanation about the product. This part gives a reader through
explanation about product and its usage. Development in the product gives support to TTS as
a new product. Information about product is based on qualitative information from articles
and RFID journals, together with company reports from Lyngsoe Systems Denmark.
Further to that, report mainly describes the solution of filling the gaps between airport and the
commercial entities there inside. To that can be done with the solution that is called TTS
(Trolley Tracking System), Which is able to change the airports’ business model in the future
depending on if it is chosen to be applied.
As the report is made to see how much value can TTS add to aviation industry? The further
analysis covered the importance of innovative trolley tracking system in respect to airlines,
airports and passengers.As well as the passenger behavior towards the trolleys and the impact
on the choice of the travelers about airport is covered.
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In order to show that TTS is not culturally bounded tool and to saw this product suitable for
all the airports apart from cultures, the report concludes a case study. This case study is about
Suvarnabhumi International Airport in Bangkok, Thailand. The theory of “Disruptive
Innovation” is applied to find the innovation of the new tools within the airport industry.The
theory gives idea about customers’ satisfaction. Based on the theory the
One of the
innovative tools- the Trolley Tracking System as already mention is be discussed in this
section. The final conclusion gives reader an answer to problem.
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1. Introduction
Nowadays the Airline industry is growing very fast and became one of the biggest. It will
constantly grow in the future according to experts. However the airline industry lost $16
billion in 2008 and $9.9billion in 2009, but according to Air Transport Association, Airline
industry has earned $15.1 billion profit in year 2010.1 The one the reason could be decrease
in number of passenger traffic in those years. According to the Airport economics survey
2010, 646 airports together handled 67.5 percent of worldwide traffic in 2009.2
It adds values in the economics growth by making tourism, world trade and international
investment easy. The main reason can be globalization and numerous of people traveling
around the world. People see this world as an opportunity and they want to use those
opportunities as much as possible with no time. Time has been biggest aspect to get any
opportunity and traveling with the airplane is one of the best available options to save time.
Whenever it come to airlines, it is also necessary to see airport industry as well because
airports and airlines are most important partner, who works closely with the airlines within
aviation industry. However, despite their close relation, they are working separately in their
own benefits. This is not only because they have different source of income but also because
of rising competitiveness in aviation industry. We know that that airport earn money from
various things and they have more non-aeronautical revenue from shops, parking and service
changes for airports. Despite of different ways of earning, airports need to find a way to
sustain their income and brand image. To do that one they need to differentiate themselves to
be more productive.
Airport and Airlines cannot exist without potential customers. Customers are the one who
decide from where they want to travel and from which airlines they want to travel. In addition
to that they also want satisfaction by having good services not only on the airport but also in
the airplane. Airlines and Airports are constantly improving their customer satisfaction level
by introducing new technology and service day by day. These days airports are doing their
job by providing various facility like internet service, free snacks (Dubai international
airport), shopping centers, parking and infrastructures, but these services are limited and
passenger find it similar to every airports. If we talk about airlines services, they are also very
Airline Industry outlook – Jan 2011
Airport Economics survey 2010 (Airports council international)
1
2
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standard. The biggest problem for airline is to give more services with low price to get more
passengers, where airport need to attract more airlines to increase passenger flow in that
particular airport.
Above description gives an idea about changing business model in aviation industry. It is
interesting study to know how airline and airport industry works together for their own
benefits. So the object of the report is to look different forms of aviation business model and
how Airport can increase their non-aeronautical income by influencing passengers and
airlines. For airline, they need busiest airport for their airline operation to get benefit of
economic of scale even having low price with good services.
As discussed above that Airports gets non-aeronautical income for various services, it is easy
to add value and build a brand to the airport by giving better customer service. It can be done
by introducing new innovative system in the Airport industry. So the report will mainly
discuss about new innovative product called Trolley Tracking system (TTS). How it can help
airports to increase relations between airlines and passengers because those good relation lead
to good profit and creates Win-Win situation for airports and for airlines.
This report indentifies major relation elements of the airports and airlines, which can help
each other by improving or adopting new technology system. To do whole research work
report will begin with aviation industry itself by looking at current aviation industry and ten
years before. It gives an idea about any gaps and needs for improvements.
After that a report will includes detail knowledge about new innovative product-Trolley
Tracking System (TTS), which gives an understanding about product and how it connects
with the aviation industry.
Having knowledge about aviation industry and product, report gives a brief how an
innovative product benefits to airport, to airline and to passengers. The purpose of individual
analysis is to saw interrelation and how they benefit each other by introducing new product.
Last but not the least, it is very important to put all above discussion in practice to show
potential of new product. To do that, report includes brief case study forSuvarnabhumi
International Airport in Thailand, which has trolley management system. The discussion of
this case study includes motivation theory to find why they have motivated to install trolley
solution.
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2. Problem definition
The aviation business model is exciting; perhaps only due to its sober but complex
interrelation with various industries. Mainly these industries include airline and airport. We
also know that there has been constant change in those industries to sustain in competitive
market. Those change also reflected in the aviation business model. Airlines and airlines both
are looking for more passenger traffic. However both have different approaches to attract
customers and to earn money. Airlines can only attract costumer by giving good on board
service with competitive price; these services are limited compare to services provided by
airport. Airport have different non-aeronautic income, however to continue with that income
they need more passenger and for more passenger they need more passenger carrier and to
have more passenger carrier, they need to be well developed with high passenger traffic. So
all in all we can say that they all are interdependent.
As we said earlier that airline has very limited and expensive possibilities to improve in
comparison with airports. So the aim of the report is to introduce a new innovative product
called Trolley Tracking System. So
“It is interesting to know that how a Trolley tracking system can add value in
the changing aviation industry?”
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3. Delimitation
The present report included Trolley Tracking System (TTS) as an innovative tool in aviation
industry, so the main focus would be on TTS. Aviation industry is discussed very briefly
discussed in general. To show industry development, report covers only last 10 years period.
Therefore the historical facts and data about its establishment will not be covered.
While introducing the product, report will not go into the technical aspects but just discuss
the use of it. Within the usage of the RFID technology, report includes analyze and in
particularly just the concept and use of it in TTS-Trolley Tracking System.
As RFID in TTS concept is the core component in the report, report will cover all the aspects
of this concept such as: product’s definitions, construction and usage. There after the entire
explanation of TTS concept, we are going to add the importance of TTS in present airports
industry as a whole and in general, without taking any specific airport as an example of TTS
implementation.
Following Chapter of the report is covers be a Case study in a way to prove finding and also
to give solid base. i.e. use of TTS in airports industry is able to contribute for more qualitative
and efficient servicing of passengers.
In the case study we are going to takeSuvarnabhumi International Airport in BangkokThailand as an example.
The difference between private owned airports and local/central government owned airports
is not made. In addition the disadvantages of that difference are not prevailed as it is not that
much relevant to the problem formulation.
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3.2. Source of Criticism
Taking into consideration other sources of information, particularly personal discussion with
Lyngsoesystems company’s Business developer, internet sites, newspapers, articles and
academic books, it can be considered as trustworthy sources, and there is no reason why
those sources cannot be reliable.
The fact is that the report only based on above sources and no respondents are considered to
give their view as a passenger. So there is also a risk of objective view in the writing for
passenger behavior towards airport and airline selection.
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4. Methodology
A research project’s methodology shapes how a topic is interpreted, carried out, andanalyzed.
It offers the underlying principles that guide a researcher throughout thejourney of initial
research to conclusion, and makes assumptions about reality (Arbnor&Bjerke, 1996).
Methodology differs from methods, which is a sub-set of methodology.
Methodology can
be
understood
as
the
supporting
structures
that
consist
of
theories,frameworks, concepts, a researcher’s approaches and individual interpretations of
subjectmatter, and the collection of methods that are employed. Methods are the tools that
allowa researcher to analyze and generate conclusions from the gathered data. The purpose of
this methodology chapter is to present the ideas behind the creation of the overall research
approach of the project. According to Arbnor and Bjerke (1997)3, two key factors must be
taken into consideration when choosing the most appropriate research approach: The ultimate
presumptions of the researcher about reality when creating knowledge, and the problem
under investigation.
The opposite of deductive studies are inductive studies where the researcher starts the study
with surveys or observations and tries to develop a theory from the results. Iterative studies
have elements of both deductive and inductive studies, as an iterative study requires an ability
to shift between theory and practice.
The ultimate presumptions of the researcher are basically about whether the researcher
believes that reality is objective or subjective. An objective reality is a reality that is
independent of the actions of the people and organizations it surrounds. Reality can be
measured with no concern for what the actors in it are doing. Subjective reality is a reality
where the people and organizations – the actors – are constructing the reality themselves;
hence the reality is subjective and very dependent of the actors. These two views are radical
endpoints of how reality can be understood. Arbnor and Bjerke (1997) have split these two
points into 6 views of the world. They call these social science paradigms.
IngemanArbnor and BjørnBjerke: ”Methodology for Creating Business Knowledge”, Sage
Publications, 2. edition, 1997.
3
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4.1.
Paradigms
Paradigms are, as mentioned above, explanations of how the researcher views the World.
Paradigms are important because they provide the linkage between the world view of the
researcher and which methodological approach the researcher has to choose. Methodological
approaches will be presented in the next section. Arbnor and Bjerke (1997) divide these
paradigms into 6 categories based on the above-mentioned objectivity vs. subjectivity – the
1st paradigm being the most objective and the 6th paradigm being the most subjective. The
paradigms will be described below:
 Reality as concrete and conformable to law from a structure independent of the
observer:
In this category, the researcher perceives reality as tangible, concrete and real and with
deterministic relations. Reality is independent of the observer and it can be measured and
observed. Subjects in this reality are assumed to respond in a deterministic way to stimuli,
so most research done in this category is based on the stimulus-response model.
 Reality as a concrete determining process:
The view here is that society and its parts is an organically evolving process which is
concrete in its nature but changeable in its details. People are social facts and they
influence the environment in which they live as well as the environment influences them.
Research within this paradigm usually takes form of extensive interviews and analysis of
documented material with the purpose of explaining patterns observed over time.
 Reality as mutually dependent fields of information:
In this paradigm, reality is consisting of constantly changing forms and activities based on
transfer of information. Relations are relative rather than fixed and real. Individuals
receive, interpret and react to the transferred information. The organization and its
environment evolve together and researchers are neither interested in separating these two
nor interested in cause-effect relations.
 Reality as a world of symbolic discourse:
In this view, the researcher focuses on patterns of symbolic relations and significances
that emerge out of human actions and interactions. Reality is an exchange and a question
of negotiations. Research is relative and specific to the immediate context. However,
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individual definitions and responses may be similar from one case to another; allowing
generalized theories to be formulated.
 Reality as a social construction:
Here, reality is a continuous process. It has no concrete status – there are shared but
multiple realities and is subjectively given. Researchers in this reality believe, in order to
create knowledge, that it requires an understanding of process or method through which
reality is created.
 Reality as a manifestation of human intentionality
The postulate of this view is that reality is created by individuals within their own
consciousness. Individuals are seen as intentional creatures that control their
psychological energy. Knowledge must be assessed inter-subjectively, because reality is a
projection of the creative imagination of separate individuals.
As the paradigms show, researchers have different views on whether reality is objective
and rational or subjective and relative. Those, who see reality as objective strive to
provide explanations based on generalizations and empirical results. Those, who see
reality as subjective seek understanding and try to create results that are specific for each
study.
When a paradigm is chosen, it is possible to create the linkage from a given world view to
an optimal methodological approach.
4.2.
Methodological approaches
Based on the six paradigms above, Arbnor and Bjerke (1997) have created three
methodological approaches for doing business research. The approaches are: analytical
approach, systems approach, and actor’s approach. The three approaches vary from each
other in the way they perceive objectivity vs. subjectivity, dependency vs. independency of
the knowledge created and whether the research seeks understanding or explanations.
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A. The analytical approach4
This is the oldest approach, and is the most commonly method used by business researches
and consulting. The analytical approach has its origins in classical analytical philosophy. The
analytical approach assumes that reality has summative characters that the whole is the sum
of its parts. The reality and knowledge is independent of its observers, meaning that once the
researcher gets to know the different parts of the whole investigation, the parts can be added
together to get the total picture. The knowledge created advances by means of formal logic
that is represented by specific judgments. These specific judgments are independent of
individual subjective experience and usually it consists of assumptions that can be true or
false. Models of analytical approach tend to contain quantitative elements. In this approach
mathematics and logics have a dominant position.
B. The systems approach5
This approach entered the business world after the analytical approach as a reaction to the
summative picture. The system thinking is the dominant point of view in both business
practice and business theories. The systems approach claims that reality is arranged in such a
way that the whole outcome of investigation differs from the sum of its parts. This means that
not only the parts of investigation but also the relation between them is essential. Knowledge
development through systems approach depends on systems.
C. The actors approach6
This approach is the most recent of all the approaches to enter the business world. It focuses
on social wholes. The actors approach is directed at interpreting the meanings that various
actors associate with their acts and the surrounding context. Reality is taken as a social
construction that is intentionally created by various processes. The actors approach claims
that systems used in the system approach are not real. Knowledge development depends on
the actor and the social environment around him. In this approach the reality depends on
observers.
4
Arbnor, Ingeman and Bjerke, Bjorn (1996a): Methodology for Creating Business Knowledge.
London: Sage publications
5
Arbnor, Ingeman and Bjerke, Bjorn (1996b): Methodology for Creating Business Knowledge.
London: Sage publications
6
Arbnor, Ingeman and Bjerke, Bjorn (1996c): Methodology for Creating Business Knowledge.
London: Sage publications
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4.3.
Chosen methodological approach in the report
When choosing what, or which, methodological approaches to apply, the authors have
discussed whether more than one approach could be applied and the conclusion was that a
mix of two of the approaches would be the best solution in this case. Arbnor and Bjerke
(1997) refer to researchers as situationalists when these believe that mixing approaches can
be done. In terms of world views, the authors are of the opinion that different world views fit
with different situations e.g. World view 3 – reality as mutually dependent field.
The approach chosen in this report is the System approach. This approach is chosen in
relation to the case and the historical study. Using the both studies the report will explain the
correlation between airport, airline and commercial outlets and to diagnose the system
problem which exists within the airports. In addition,this approach will be chosen to explain
how the Trolley Tracking System can bring value and being beneficial to the aviation
industry, especially to investor- airports.
4.4.
Methods
Methods are the tools that researchers use to investigate an issue. At a broad level methods
may be categorized as either quantitative or qualitative. Quantitative methods are grounded in
mathematics and investigate the relationships among quantitative phenomena, while
qualitative methods rely on examinations, analyses, and interpretations to discover underlying
meanings and patterns. Quantitative strategy often utilizes many natural scientific elements
and the view of the world is objective and independent of, and external to, the actors.
Quantitative strategy most often applies deductive approaches, where theory is tested in
practice. Qualitative strategy is highly dependent of the actors and relies on interpretations
instead of measurements. It usually employs inductive approaches where focus lies on testing
theories specific for each case rather than testing the theories in practice.
This research utilizes both types of research; however it is based primarily upon quantitative
methods. The research is divided into several chapters.
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4.5.
Research design
Besides methodological approach and research strategy, a choice of which research design
the researchers wish to use must be made. The options are: experimental, cross sectional,
longitudinal, case study or comparative designs. Experimental studies consist of intensive
primary data collection and they usually have strong internal validity. Cross sectional studies
are characterized of both qualitative and quantitative data collection. The data is collected at a
solitary point in time in several cases in order to detect patterns between different variables.
Longitudinal designs also collect data from several studies but the data is collected repeatedly
over time a time period to show differences between single points in time. Case studies focus
on concentrated analysis of a single unit instead of providing statistical reliability through
manifold studies. Comparative designs aspire to compare two or more cases with focus on
some key factors.
The research design for this report will be with a case study, asit will be concentrate on a
specific airport to answer the problem statement more precisely.
4.6.
Structure of the project
This research project attempts to guide the reader through the problem formulation toresearch
findings in a structured and transparent manner. Each individual chapterprovides an overview
of the subject at hand, while a glossary and various appendixes arereferred to throughout the
project to aid the reader in understanding the topic. Figure 1is a summarized overview of the
research project’s chapters, which should be referred to the below-mentioned parts.The
project’s problem formulation and methodology follows the introduction. The first chapter of
the report is its introduction which briefly explains the main topic the need of airports and the
role of the airlines in the aviation industry.
Chapter 2 is the Methodology of the project report in which it is explained how the
information research was conducted together with the chosen approach and the corresponding
paradigm.
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Based on qualitative data collection from different reports and books about aviation industry
Chapter 3 will describe that industry in the past and present, mainly its development and the
gaps that exist in the aviation model which is based on System approach as already
mentioned. There will be explained the airports’ correlation with the commercial outlets and
the airlinesas well as the benefits for the entities. The competition within the airport industry
will be also discussed showing that there is need for improving the airport image in order to
attract more potential customers.
Based on qualitative information from articles and RFID journals, together with company
reports from Lyngsoe Systems Denmark, the followingChapter 4 is mainly describing the
solution for filling the gaps between airports and the commercial entities there inside. The
solution that is called TTS (Trolley Tracking System) is able to change the airports’ business
model in the future depending on if it is chosen to be applied.
The next section named chapter 5 covers the importance of innovative trolley tracking system
in respect to airlines, airports and passengers. As well as the passenger behaviour towards the
trolleys and the impact on the choice of the travellers about airport will be covered.The
information will be gathered from qualitative data such as books, journals and articles based
on System Approach.
In order to show that TTS is not culturally bounded tool and this product will be suitable for
all the airports apart from cultures, the next chapter will be followed by a case
study.Bankok’s International Airport will be used as a case study to support the problem
statement. The theory of “ Disruptive Innovation” will be applied to find the innovation of the
new tools within the airport industry.The theory is to findout where it can satisfy the least
demanding customers and observing why the least demanding customers dropping the
existing product and how they can improve the existing product in an innovative way to give
a high performance on the basis of factors for example cost, convenience, satisfaction etc.
Furthermore, to observe whether the established product exceeds the needs of the most
demanding customers; sustaining innovations now fuel “performance over supply.” So the
disruptive innovation meets the level of performance required by the most demanding
customers; those customers who drop the established option on the basis of other factors.
Based on the theory the One of the innovative tools- the Trolley Tracking System, as already
mention will be discussed in this section. The final chapter will offer a defined solution forthe
reports’ problem statement based on the analysis of all the above chapters.
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Figure 1: Summary of the report
Chapter 1
• Introduction
• Problem formulation
• Methodology
Chapter 2
Chapter 3
•Aviation Industry
•System approach
•Qualitative data ( books and reports)
Chapter 4
• Trolley Tracking System
•System appraoch
• Qualitative data ( company reports, articles, journals)
Chapter 5
Chapter 6
•Importance of TTS
•System approach and partly actors approach (personal interview)
• Qualitative data ( books, Journals and articles)
•Case study - Bangkok Airport
•System approach
• Qualitative data ( Articles, Newspapers, books)
• Conclusion
Chapter 7
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5. Aviation industry before and after
This chapter attempts to cover the operations of the airports today and competition in airport
industry, which exist everywhere within that industry. Moreover discussion of what an airport
does, how it charges for its services related with airlines will be carried out. This will require
the consideration of the airport as an intermodal hub. In addition the interaction between the
airport and airline will be discussed. It is also important to look at the development of the
aviation industry today to show that there is a change in the customer preferences and need
for improvements within that industry. Different specific airports in and outside Europe will
be taken as an example to make clear the analysis and the statements. As the competition and
the situation differ all over the world, general discussion will be carried out to show that fact
and the changes today.
The information which will be provided in this chapter will contribute to the problem
formulation, in a way that it will prevails the airports need for improvement within the
changing business model of the aviation industry. Moreover it will discuss the need of the
airports to improve their image in order to attract more customer as the competition is
increasing within the industry. In the below figure -2 can be seen the main ingredients of the
aviation industry each of them will be discussed in the following chapter. As a final point the
chapter will be ended with the so called 4 P’s of Marketing to examine the strategies that
airports can utilize to compete with other airports.
Figure 2 Aviation industry
Airlines
Airport
Commercial
outlets
Aviation industry
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In order to begin, let’s define what is an airport. It is a facility; buildings, runways, airplane
parking stands, car parks etc. all built and maintained so that airlines can fly airplanes in and
out of a particular location. This facility enables passengers to get on and off those planes and
also for freight to be loaded and unloaded.
Airlines make their money by transporting passengers with their luggage and also by freight.
They have to pay the airport operating company to use the airport and its facilities; the
runway, the stands etc. rather like you would have to pay to moor a boat.7
Traditionally airports have viewed airlines as their primary customers partly because of the
legally binding agreements between the two parties and because airlines pay a variety of
charges such as landing fees and charges per passenger or tone of freight handled. So far
there has been little vertical integration between the airports and airlines. Airlines have
legally binding agreements with passengers and see passengers as their primary customers. In
today's commercialized and privatized environment, where airports place more emphasis on
non-aeronautical revenues from retail and concessions, the traditional airline–airportpassenger relationship has become more complicated.
Airports are increasingly seeing the importance of viewing passengers as customers because
they generate non-aeronautical revenue, but depend on the airlines to bring in the passengers.
So they are trying to satisfy both (Francis and Humphreys, 2001; Graham, 2001). This dual
role can lead to conflicts of interests such as aircraft being delayed on departure through the
passengers spending more time within the airport shops and not hearing gate announcements
because of a lack of loud speakers in shops, something that certain retailers have deemed
disruptive to the ideal retail environment (Humphreys et al., 2002).
Airports need to attract both airlines and surface operators to use them as one of the nodes in
their networks. They provide the physical infrastructure to make that possible, and usually the
management to operate the airport.8
7How
Airports Work October 2009 , Sean McCarthy, Director of Help-me-park report London Gatwick Airport
Competition: Forsyth, Edited by Peter Gillen, David Müller, Jürgen, G.A.R.S. June 2010
8Airport
19
Trolley Tracking and management
In a rapidly changing environment, airports have to adapt to economic downturns,
technological changes, market changes, airline commercial deregulation, and the worldwide
trend to convert airports from government organizations to more business-like entities. These
pressures have or have had or are having significant effects on the way airports do business,
not only from a financial perspective but also from an operational point of view. In these
challenging periods, and with emerging competition from other airports and other sorts of
transportation, it is of the greatest importance that airports engage and provide employees
andmanagers with the best available knowledge and skills. Regardless of their size and
complexity, airports operate in a highly regulated environment, they serve a wide variety of
customers with sometimes conflicting needs, they receive services from many external
providers, and they generate both positive and negative impacts on the community they serve.
Their activities extend well beyond their property boundaries. Finally, yet importantly, they
can be highly sensitive to social, economic, environmental, technological, and political
influences. In response to rapid and radical changes in the air transport industry, airports must
constantly adapt and forecast these changes. Adopting a business approach allows airports to
better serve their customers, in a safe, efficient and economical manner.9
When concerning about the aviation industry, airports and airlines are the most major and
important exchange partners. They are basically linked and rely on one another to operate
efficiently, based on different business models. Airlines are able to move quickly to respond
to changes in traffic flows by leasing or retiring capacity. Airports, on the other hand, must
make long-term planning decisions to safeguard capacity sometimes 50 years into the future.
Airports provide themselves, or through concessions, aeronautical infrastructure (runways,
taxiways, aprons), passenger and cargo terminals, ground handling services and surface
access facilities, including car parks. They also provide various commercial outlets such as
shops, premium lounges and banks. The mentioned above airport services are provided in the
context of the door-to-door transport network, whether for passengers or freight. Air services
will always be ‘consumed’ in conjunction with one or more sectors provided by other
transport modes: air to car/taxi/truck and vice versa; air to bus/rail and vice versa; air to air
and vice versa; surface to surface also possible. Competition should be considered in terms of
door-to-door service, time and price, rather than just on an airport to airport basis.
9IATA
http://www.iata.org/SiteCollectionDocuments/Example_Material_Airport_Distance_Learning.pdf
20
Trolley Tracking and management
5.1.
Competition within the airports
Until the 1980s, the traditional view of airports, held by many governments, industry
operators and academics, was that airports were monopolies (a view still held by many
today). Airports were seen as, and generally operated as, monopoly providers of services to
both airlines and passengers. Airports were not perceived as being subject to competitive
forces. As such, there was little an airport could do to increase demand for its services or
divert demand from other airports. Airport marketing was viewed as an oxymoron.10 Airports
were largely passive service providers. The job of marketing and identifying new air service
opportunities was left to the airlines.11
The deregulation of the aviation industry in many parts of the world lead to a change in the
way airports were operated. Deregulation was largely focused on the airlines, although many
countries, particularly, UK, Australia, New Zealand and Canada, have also divested or
privatized their airports and air traffic control services. As a result of deregulation, airlines
have become much freer to operate out of any airport of their choosing. Deregulation led to
development of Low Cost Carriers (LCCs), in many cases operating out of secondary,
uncongested, lower cost airports, challenging the monopolist approach of the traditional
airports. The aggressive expansion of the LCCs and their frequent choice of secondary
airports have resulted in airports, both primary and secondary, discovering that there may be
great payoffs to more sophisticated and aggressive marketing strategies.12
Airports compete with other airports to attract airlines. Once the airlines decide to serve the
airport, other service providers will also be attracted. These would include aircraft, passenger
and cargo handlers, fuel suppliers, shops and car park operators, as well as taxis and bus
companies. This is a key feature of a network: the need for critical mass to be reached before
it becomes attractive to many users. This occurred with the internet, developed exponentially
by offering free services (at least primarily). Therefore it makes sense for airports to attract
10See
M.W. Tretheway “Airport Marketing: An Oxymoron?” in G. Butler (eds.), Handbook of Airline Marketing,
McGraw Hill, 1998.
11Competition between airports in the new Millennium: what works, what doesn’t work and why: Dr. Michael
Tretheway Executive Vice President, Marketing and Chief Economist, InterVISTAS Consulting Inc.
12Ibid
21
Trolley Tracking and management
service providers through low charges, at least primarily, and even paying airlines to base
aircraft at their airport (for example, Ryanair at Gerona Airport in Spain)13. This suggests that
the main customer of the airport is the airline or surface transport operator, and not the
passenger or shipper. These customers can be sensitive to changes in the relative price
charged by one airport compared to that charged by a competing airport. Price here is
effectively the average of a basket of services, including in some cases ground handling. An
example of this price effect is the transfer by Ryanair of many of its Shannon flights to Kerry
Airport in 2003 (European Commission, 2004, p.8).
Airports compete on service and price. Service will cover such elements as location,
accessibility, and the quality and size of its aeronautical and related facilities. Airport
management can influence all these variables except location, but even this can be improved
by better surface access. Slot constraints will severely restrict an airport’s ability to compete,
as will environmental restrictions. Price will be reflected in various charges, the two major
aeronautical ones being for aircraft landings and passenger departures. However, airport
revenues can also be generated from the other service providers, and they may prefer to offer
low charges to airlines and earn more from non-aeronautical revenues such as commercial
outlets.14 These airport specific variables are important, especially for short-haul trips by air,
but not the only ones that determine travel demand and the passenger’s choice of airport.
In the next chapter of the report introduction to a new way of contributing to the airport good
image implementing new system called Trolley Management System will be discussed. This
new system can and will improve the customer satisfaction as well as influence the choice of
an airport.
ACI Europe identified different forms of competition or ‘perceptions of competition’
between airports:
 Competition to attract new services;
 Competition between airports with overlapping hinterlands;
 Competition for a role as a hub airport and for transfer traffic between hubs:
 competition between airports within urban areas;
 Competition for the provision of services at airports;
13Dr
Peter Morrell, Air Transport Group, Cranfield University Report
http://www.garsonline.de/Downloads/Future%20Airport%20Competition/031113-Morrell.pdf
14Aviation Activity
http://www.tyrmasterplan.com/airportmasterplan/file/doc/tyr___chapter_3_aviation_activity_forecast.pdf
22
Trolley Tracking and management
 Competition between airport terminals.
The last two are not competition between airports, but between service providers within one
airport. The second and fourth points above could effectively be combined as one, and only
then with the proviso that the competition is actually amongst airlines and surface transport
operators for the same origin-destination markets. The third point is basically the same, with
the reach of the network extending considerably by means of air connections. This leaves the
first form of competition as the only one that is strictly between airports: to attract new
services, to which one could add ‘from both airlines and other transport operators’.15
Let’s now look at the European airports and what is the difference when we talk about
competition. Europe has a number of regions which are densely populated and which are
served by several airports. The presence of former military airports has facilitated entry of
smaller airports. There is a variety of institutional arrangements for European airports, with
more privately owned airports in Europe than in other continents. Issues of competition
between and within airports have attracted much more attention from competition authorities
and regulators than elsewhere, and the trade-off between competition and regulation is being
actively considered. In Europe, policy decisions are now being made to promote competition,
something which is rare elsewhere. Airport competition is still in its early stages in Europe,
one or two decades ago there was little attempt by the mainly government owned airports to
compete. However airport competition is now a reality, though how extensive and intensive it
will become remains to be seen.16
Competition between airports exist everywhere not only in Europe. For example, where there
are several airports in big US cities, competition is possible (though does not always occur
because of common ownership, as in New York). Also in the more heavily populated regions
of the US, such as the north-east, travelers may have a choice of airports. On the other hand
airports in Asia, such as those at Singapore, Kuala Lumpur and Bangkok, compete for hub
traffic. A case study later one will discuss the Bangkok airport situation and the already
mentioned new way of improving the airports by implementing TTS. In countries with low
population densities, such as Canada and Australia, airports are separately owned, but they
only have limited scope to compete because they are mostly very far apart. However, in
15Federal
Department of Foreign Affairs, Air Transport Agreement
http://www.eda.admin.ch/eda/en/home/reps/nameri/vusa/wasemb/polaff/wasaus/wasata.html
16Airport Competition, The European Experience, edited by Peter Forsyth, David Gillen - 2010 - Business &
Economics G.A.R.S
23
Trolley Tracking and management
several cases Canadian airports compete with nearby US airports for trans-border and
international traffic; for example Vancouver and Seattle, and Toronto and buffalo.17
5.2.
The airport profitability
Apart from the competition between airports, let’s look how the airport industry generates
earnings and expenses. While we are looking at the general structure of revenue and
expenditure of airport industry, it can be divided into two categories. Those are ‘aeronautical’
and ‘non-aeronautical’. In broad terms, the aeronautical side of the business is made up of
fees paid for the traditional core airport-related activities such as the provision of runways,
aircraft stands, facilitation and security areas and the associated staff to undertake such
activities.
The non-aeronautical revenues come from activities that are undertaken on top of this core
business, such as retail (commercial outlets), parking, other concessions and rentals. At
medium and large airports this revenue may account for over 50% of the total income,18
growing at much faster pace than aeronautical income or traffic figures and producing greater
profit margins. This is a very important and interesting indicator to be considered and it is
related with the TTS which can add value in a way that customers can get more satisfaction;
while they are walking within the shopping area. The TTS can add value to the airport in
other ways when concerning the shopping area but that will be discussed in the next section
of the report.
The additional income from non-aeronautical revenue is a key element in allowing airports to
generate funds for the major investment. They must undertake in terminal and airfield
expansion. The commercial revenue stream is essential for positive credit ratings for the
airport’s ability to attract the investors, private or public (and the associated financing of
large infrastructure projects). Without this revenue, airports would be considered less
attractive investments. Therefore nowadays airports focus on giving high services to the
customers to gain more money from the commercial outlets than aeronautical revenues. If we
look back the beginning stage of airports; those were more focused on the primary activities
17Ibid
18www.aci.aero
”The airports business”
24
Trolley Tracking and management
such as managing the check in, security system and customers’ baggage etc. Also the main
income within that period was from aviation revenue, which includes aircraft runway
movement charges and aircraft parking charges.
5.3.
The development of the Airline Industry
As we mentioned in the early stage, while looking at the basic information about airline
industry and how it operates; it provides air transport services for travelling passengers and
goods. This can be done by lease, rent or by owning. As well as to get more benefit this has
been done by partnerships or alliances with other airlines. Generally, airline companies are
recognized with an air operating certificate or license issued by a government aviation
organization. In the introduction period of the airline, it carries only goods and mails from
one place to another. As the time passed, the development of technology opened the path for
the people to travel by air. Airlines differ from those with a single aircraft carrying mail and
cargo or transporting customers. Through full-service international airlines are operating
hundreds of aircraft. Airlines services can be categorized as being domestic, regional or
international.19
In the early stages airline industry was owned and controlled by the state. As the number of
passengers increase over the period it has been hard to control the industry. Therefore few
airline companies were introduced by the private firms. Similarly most of the world's airports
are earlier managed and owned by local, regional, or national government, who then lease the
airport to private corporations to supervise the airport's operations. But the majority of
world’s airports are owned and directly controlled by the central and local government.20
In the past years the main costs for the airlines were for the flying operations such as fuel and
pilot salaries, maintenance, aircraft and traffic service basically the cost of handling
passengers, cargo and aircraft on the ground and including the salaries of baggage handlers,
dispatchers and airline gate agents, for the promotion, passenger service. Mostly in-flight
service includes food and flight attendant salaries and depreciation etc.
19ICAO.
20
2006. Economic Contribution of Civil Aviation. International Civil Aviation Organization, 2006 Edition
Air transport Services by World Trade Organization, Council for Trade in Services
25
Trolley Tracking and management
The biggest challenge for the airline and airport industry in the past years was having
extremely different objectives regarding the cost structure. For example: While airlines trying
to reduce their cost of landing and traffic. The airports try to increase those cost to gain
income. In present as airports were mostly focusing to gain income from the commercial
outlets this challenge has been overcome.
Nowadays as the aviation industry grows rapidly together with passenger demands due to
worldwide development the global air traffic is set to double within 20 years.21 Dozens of
major international airports continuously operate at or over capacity. It is due to their
efficiency, flexibility and innovations that the air transport system has been able to absorb
ever growing passenger numbers. Broad requests to reduce or freeze airport user charges are
limited and ultimately do not encourage efficient airport operations given the urgent need for
investment in new infrastructure. They are also proving to be detrimental to airline and
system efficiency as the continued and growing lack of airport capacity produces significant
cost due to delays in the air and on the ground to the disadvantage of the wider economy.
Most of the airports commercial facilities are provided by concessionaries, who will be
specialists in their own field of business. The airport authorities will collect concession fees
or rents from these firms. But there are few airport authorities, who are themselves directly
involved in running some or virtually all the commercial outlets. As the airport industry is
being more competitive, it has been a tough challenge for each individual airport to attract
more passengers. Therefore nowadays airport business model has been change into gain more
profit from commercial outlets rather than from their core business activities such as landing
tax etc.
Aviation is a service industry which is like all other service industries. The passengers have
preferences and today their choice of airports is expanding. Still, even if their airport choices
are limited, they will choose how they will spend their time and whether they will spend their
money while at airport. Customers are also forced, especially when dissatisfied, to tell other
people about their experiences. These individuals may have even more choice about which
airports to use.
Customer choices will impact airport’s bottom line. And the choices airports make in terms
of serving their customers will impact on the costs and revenues. There is a relationship
21www.aci.aero
”The airports business”
26
Trolley Tracking and management
between customer satisfaction and net revenues. That is why customer satisfaction is so
critical. If airports can maximize the union between the choices that have made with those the
customers will make, then the airports are positioned to maximize their net revenues.
Therefore airports nowadays are giving more attention to the customer services and
preferences.
In present the customer preference has been changed into shopping inside the airports rather
than only considering the airport as a travel destination. The factors that influencing the
choice of flights and airlines from the customers point of view are availability of flights
towards a certain destination, availability of flights from a certain preferred airline, the
frequency of flights, ticket price, flight time, quality of available flights (on- board service,
punctuality). Regarding to the choice of airports in the early stages has been mostly the check
in facilities, baggage/customs/immigration facilities and accessibility of the airport including
the parking cost and parking facilities.
In present another factor that affects the customer choice related to the airport is shopping,
lounge, restaurant facilities etc. To make this happen; airports were now focusing more on
fast service to the customers to allow them to have more time for shopping. In this case the
problem that the airports were facing was lack of trolleys available according to the increased
number of passengers. As the number of travelers increasing day by day it has been
extremely hard for the airports to manage their trolleys. Mainly this has been a problem for
the European countries as the labor cost is high, if they appoint people to manage the trolleys.
The next chapter will be based on what will be the solution to manage the trolleys.
6. The Four P’s of Marketing
The previous sections have argued that airports provide services in many markets that are
competitive. This is not saying that there are no airports services that should be considered to
be monopolies; but there are many airports and many airport services that are demonstrably
subject to competition. Having discussed the nature of airport competition, we move on to
examine strategies that airports can utilize to compete with other airports. To do this the
familiar paradigm used in the marketing field will be used. This involves strategies related to
27
Trolley Tracking and management
the classic “four P’s of marketing”, familiar to us as students of business administration and
marketing:
A. Product
B. Price
C. Promotion
D. Physical distribution.
The first area of this marketing paradigm is defining the product to produce and sell. This
includes issues such as the functionality, styling and quality of the product, as well as the
support and accessories provided for the product. Ultimately, ‘product’ is about developing a
goods or service which will be useful and attractive to the market. For example, a few years
ago Boeing developed the Sonic Cruiser as a product which provided shorter travel times
than current aircraft. However, Boeing found that the market (i.e., the airlines) did not so
much want a faster aircraft, but rather a more cost effective one, and switched development to
the “Boeing-787” one.22
Price is the second dimension of marketing. Here the marketing issue is what price (or prices)
the chosen products will be sold at, or alternatively, what price segments of the market to
pursue. Pricing the product too high could result in loss of sales to less expensive products
that are reasonable substitutes. For example, if a burger chain prices its meals too high, it may
lose sales to other, lower-priced burger chains, to alternative products (subway sandwiches),
or families may decide to save money by eating homecooked meals. Equally, pricing too low
can result in sub-optimal revenue levels. There may also be different consumers at different
price points, and choosing which to serve is an important strategic decision.
Promotion, the third area, involves creating awareness of the product and price with potential
consumers. Some claim that promotion itself can create "image" value, such as the image
created by advertisements for certain sports cars. The last P, physical distribution, has to do
with getting the product to the consumer. A manufacturer may offer a great product at a great
price and may have succeeded in creating awareness in the consumer and getting the
consumer to commit to a purchase, but if the product cannot be delivered where and when the
consumer wants it, the sale will be lost. Traditionally physical distribution has been thought
of as a "place" value, but today the time value must also be considered. Physical distribution
22Hamburg
Aviation Conference: Competition between airports in the new Millennium, Dr. Michael Tretheway
Executive Vice President, Marketing and Chief Economist, InterVISTAS Consulting Inc.
28
Trolley Tracking and management
is relevant not only to manufacturing industries but also to service industries. For example, in
the airline industry the product needs to be made available to consumers where and when
they want it via computer reservations systems (CRS), websites and the like.
6.1.
Applying the Four P’s: Airport Strategies for Competing
A. Product – The Airport
Each airport provides a product to air carriers and passengers with certain physical and
operational characteristics. These characteristics can have a major impact on the type and
quantity of traffic handled by the airport. Just like any consumer product, airports need to
examine the package of features they want to provide in order to develop a product attractive
to the market. Consider the package of features (both positive and negative) presented by a
typical primary and secondary (low cost) airport:
Primary Airport
Secondary Airport
Closer to the city
High frequencies
More remote location to the central city(not
alwaysthe case), but closer location to some parts
of themetro region
Lower frequency
Wide range of non-stop destinations
Limited non-stop destinations
Enables connecting traffic
Focused on point-to-point traffic
Higher fares
Low fares
Wide range of retail and food & beverage
Capacity constrained
(due to physical or political limitations)
Limited retail and food & beverage offered
May be subject to night curfew or noise quotas
Ample capacity, uncogested
Wide range of handling equipment and facilities
Typically 24 hour operations
Higher airline operating costs due to long taxi
times, congestion, higher labour rates
Some handling equipment may be unavailable
(E.g., wide body main deck cargo loaders)
Lower airline operating costs due to short taxi
times, lack of congestion, lower labour rates
29
Trolley Tracking and management
Both types of airports may be attractive to different customers (both airlines and passengers),
depending how the air carriers weigh the trade-offs offered. The task for the airport
management is ensuring that their product fits the market(s) they are targeting, and provides a
competitive edge over rival airports.
I.
Infrastructure
The core element of the airport product is its infrastructure: runways, taxiways, terminal, etc.
This infrastructure impacts on the airport’s competitive position, and the level of provision of
this infrastructure should reflect the marketing strategy of the airport. A number of regional
airports in British Columbia, such as Cranbrook and Kamloops, are seeking government and
private funding to extend their runways or construct other infrastructure that would allow the
airport to accommodate longer range aircraft. This infrastructure upgrade is an important part
of strategy to further develop these regions as international ski.23
II.
Passenger facilitation
Passenger facilitation is an increasingly important area in which airports can achieve a
competitive advantage. Airport design and processes affects the amount of time required for
Passenger connections, as well, nowadays, passengers at nearly all airports must pass through
rigorous security screening as must their baggage, and international passengers must clear
customs and immigration. To meet these requirements, while ensuring the efficient
movement of passengers and their baggage through the airport is receiving increased
attention from airport managers. Airports that manage to improve passenger facilitation
processes to reduce processing and connection time can enhance their competitive position.
The airport will be more attractive to passengers, due to the reduced time and hassle
involved, particularly for connecting passengers. The airport will also be more attractive to
airlines as it may achieve faster turnarounds and fewer missed connections for passengers,
which have both customer service and cost benefits for the airline. In Canada, a number of
major airports provide preclearance services, namely Vancouver, Calgary, Edmonton,
Winnipeg, Toronto, Ottawa, Halifax and Montreal. Preclearance involves US customs,
immigration and other inspection processes taking place at the Canadian origin airport rather
than at the US destination.24 For originating passengers, there is a real convenience with US.
23Ibid
24In
Canada, air traffic between Canada and the U.S. is referred to as trans border traffic
30
Trolley Tracking and management
Customs preclearance, as once they arrive in the US, they are processed the same as a US
domestic passenger, without any need for an international arrivals process. If the passenger is
connecting at a US airport, their connection time will be considerably shorter. Passengers can
immediately leave the airport rather than queue up for US customs and immigration.25 An
important attraction of US Preclearance for Canadian airports is in regards to connecting
traffic.
As a further product develops, Vancouver pioneered a ‘transit preclearance’ process, whereby
international connecting travelers are able to go directly to Vancouver’s U.S. preclearance
facility, without needing to clear Canadian customs and immigration. This eliminated one
whole customs process, simplifying and reducing cost for baggage handling, and allowed the
removal of almost a half hour of connection time. The latter improved the airport’s CRS
rankings for connections, resulting in increased traffic volumes. The increase was equivalent
to adding roughly two 747 flights per day.26
Baggage processing is another area in which an airport can achieve a competitive edge.
Airports are starting to explore the use of Radio Frequency Identification (RFID) tags to track
baggage as it makes it way through the airport. This technology enables security officials to
quickly identify and locate baggage that they wish to inspect further. If implemented
effectively, RFID tags could allow aircraft-to-aircraft movement of baggage for international
arriving passengers connecting to a domestic flight. By eliminating the need for customs hall
delivery of baggage, there is considerable savings in airport capital cost (baggage delivery
systems and space requirements) and connection times. Typically customs inspection
authorities only wish to inspect a small fraction of the baggage of such connecting
passengers. With RFID deployment, it is possible to quickly find and deliver the small
amount of baggage to the customs inspector without the need to delivery all connecting
baggage to the customs facility.The RFID is used in the so called already TTS which will be
discussed in the next part of the report and which also can bring more customer satisfaction
as already mentioned.
III.
Flexible airport design.
25The
programme also enables air service between a Canadian preclearance airport and a U.S. airport that
does not have customs and immigration facilities. To date, no U.S. airport has asked for the establishment of a
Canadian preclearance facility
26Hamburg Aviation Conference: Competition between airports in the new Millennium, Dr. Michael Tretheway
Executive Vice President, Marketing and Chief Economist, InterVISTAS Consulting Inc.( 2006)
31
Trolley Tracking and management
Airports can design their terminal and other facilities to allow them to be adapted to new and
changing traffic demands. In this way the airport can respond to changing market conditions
in a cost effective manner and ensure that its product stays relevant to the changing market.
For example, the expanded Ottawa Airport has developed a system that enables it to adjust
the number of gates provided for domestic and international air service, simply by opening
and closing partitions, moving the wall that separates the two types of traffic.27
IV.
Service provision and third party vendors.
Airlines require a number of services when using an airport: a runway to land on, a terminal
to process passengers, a warehouse to hold and process cargo, ground handling, fuelling,
maintenance, etc. An airport must decide how it is going to provide these services. One
option would be for the airport to provide all of these services, as a one-stop shop for the
airline. It may be perceived that there is some kind of economy of scale in the airport
providing all the services required by the airline. However there may also be the temptation
to extract monopoly rents as the sole provider of, say, ground handling services.28
Increasingly though, airports are recognizing the benefits of allowing third party providers of
services such as ground handling, fuelling, warehousing, etc. In doing so, the airport can
create a competitive market for the provision of these services, resulting in lower rates and
higher service levels for the airlines. This can be achieved either through allowing two or
more providers to actively compete or through a contract with a sole third party provider that
is subject to regular review. In addition, this strategy allows the airport to focus on those
services in which it specializes, and in which has a comparative advantage, e.g., landings and
passenger processing.29 As discussed in the price section below, this is another strategy in
which
the
airport
competes
by
attempting
to
minimize
the
airline’s
cost.
B. Price
Pricing is another tool airports use to compete with other airports. When considering airport
pricing, not only should the airport’s own fees and charges be considered, but other charges
27
28
Ibid
Ibid
29The
airport normally still obtains some revenues from these third party services, through rents, fees or
royalties paid by the third party provider to the airport
32
Trolley Tracking and management
paid by the airline should also be considered. Any means of reducing costs for the airlines are
a means to lower the ‘price’ they pay for using the airport.
Airport fees and charges: Two stage pricing?
The general consensus is that airlines are price inelastic for airport services.30This would
suggest that it may be irrational for airports to reduce fees and charges as a means of
competing with other airports. However, it may be useful to consider whether airline
elasticity’s are different for different services or at different times. In particular, they may be
price elastic when choosing a new destination to add to their network, but once that service is
established and the airline has sunk marketing and facility costs at the chosen airport, the
airline may become price inelastic with regard to airport fees and charges.
This suggests that the pricing of airport services (landing fees, terminal charges, etc) should
be viewed as following a similar pattern to that of services associated with durable goods.
E.g., at the time an individual is considering purchasing an automobile, he may be fuel price
elastic, but once the durable goods (the auto) is purchased, the consumer becomes fuel price
inelastic.
When starting a new air service, airlines can be highly price sensitive (price elastic, in
economic terminology), as the economics of the route can initially be marginal. Even modest
changes in fees and charges can have a major impact on route viability and thus strongly
influence airline service decisions. As a result, it may be good economics for airports to
discount their fees and charges, as well as provide other incentives (such as contributions to
marketing costs, free office space, assistance with pilot training and staff accommodation,
etc.) to attract new air carriers or new routes. However, once the service has established itself
and becomes profitable (the airline is “locked in”), the airline appears to become less price
sensitive (i.e., price inelastic). The airport is then able to increase its charges (i.e., return
charges to normal) without losing the air service to a competitor airport. Such airports are
necessarily acting in an underhand manner. This behavior can be consistent often the twostage elasticity phenomena. Even the European Commission ruling on the agreement between
Ryanair and Charleroi airport allowed the carrierto keep to keep some of the discounts and
incentives for a limited period.
30Very
few studies have been conducted which examine the price elasticity of airlines with respect to landing
fees. One study, Airport Pricing Policies: An Application to Canadian Airports, Gillen, D., Oum, T. and
Tretheway, M., Transport Research Forum, Volume XXIX No. 1, 1988, estimated the elasticity to be between –
0.02 and –0.08, considerably below unity
33
Trolley Tracking and management
The issue for the airport is at what point the airline starts to become price inelastic, the degree
ofinelasticity, and whether elastic behavior applies to some all airlines all the time (i.e., are
LCCs such as Ryanair willing to abandon a successful route). Also, the success of two stage
pricing is dependent on whether the airport is being under-cut by another airport. Does the
airport risk losing the air service to another airport if it attempts to increase the rate?31
Facilitating airline efficiency to reduce ‘price’
Airport design, layout and processes play a critical role in airline operating costs. For
example, measures that enable airlines to achieve faster turnaround times can have a major
impact on an airline’s bottom line and ultimately enhance the airport’s competitive position.
Faster turnarounds can have major benefits for the airlines:
 Lower unit costs. Increased utilization of aircraft enabled by faster turnarounds mean
that the capital and fixed costs of the aircraft are distributed over a greater number of
passengers.
 Higher revenue distribution. Faster turnarounds enable an airline to increase the
amount of the time the aircraft in the air, generating greater revenue.
There are a number of ways in which airports can facilitate airline efficiency:
 Duel boarding bridges. These bridges allow for much faster loading and unloading of
passengers from aircraft. In April 2003, WestJet installed a duel boarding bridge (also
known as an over-the-wing bridge) at Calgary Airport to be used for WestJet’s 737
aircraft, reducing unloading/boarding times by roughly ten minutes.32
 Taxiway design. Airports can design the runway and taxiway layouts in order to
minimize time spent taxiing.
 Swing gates. Airports can design terminal facilities and gates (or at least some gates)
that can be switched from domestic to international services, enabling airlines to
switch an aircraft from one service to another without towing the aircraft between
gates.
 At-gate hydrant fuelling. This enables the airline to reducing fuelling times relative to
a fuel bowser system.
31Airports
must also be wary of not upsetting existing airline customers by offering discounts to new entrants,
from both a business and legal point of view
32Airport Competition: Forsyth, Edited by Peter Gillen, David Müller, Jürgen, G.A.R.S. June 2010
34
Trolley Tracking and management
 Ground power. This can reduces the airlines’ fuel costs while at gate.
 Dedicated facilities for shuttle services (or other types of services). As already
mentioned in the product section, dedicate facilities can reduce aircraft turnaround
times.
Incentive pricing
Airports can become more creative in how they charge for services, and develop pricing
schemes that meet the needs of the airlines and incentivize airlines to make better use of
airport facilities. For example, rather than charging airlines a standard charge per use of a
gate, the airline couldbe offered the option to rent the gate for the whole day for a fixed daily
amount. Doing so would incentivize airlines to increase utilization of the gate in order to
reduce unit costs – spreading the fixed daily charge of the gate over a greater volume of
traffic. If designed properly, the airport would still receive the same revenue per day from the
gate, but will have enabled the airline to reduce its unit costs. Incentive pricing would allow
better use of airport capacity, reducing the need to expand capacity (or at least delaying it).
The latter outcome has cost benefits for both the airport and the airlines. As well, lower unit
cost may eventually be passed on in lower fares, stimulating the airport’s traffic.
This pricing scheme may not be attractive to all airlines for all services. For example, an
airline operating a long haul service that uses the gate once in a day may prefer to pay per
use, while a LCC operating a short haul service may prefer a daily gate rental. The important
point is for airports to provide its customers with a greater choice of pricing options in order
that the airline can match the pricing scheme with its own economics.33
When we are talking about pricing and reducing the cost airports can use the new tool – TTS
to reduce their stuff salary cost and they can have other benefits from implementing it but
again the tool will be discussed later on.
33A
parallel, if imperfect, example would be mobile phone providers who offer a wide range of pricing schemes
in order to attract a greater range of customers
35
Trolley Tracking and management
C. Promotion
In the increasingly competitive environment that airports operate in, promotion has become
an essential part of airport marketing.
I.
Air Service Development
Many airports now have very active Air Service Development (ASD) programs to attract new
air carriers to the airport, and expand existing air services. ASD programs are a much
targeted approach which connects an individual airline’s needs and opportunities with the
offerings of the airport. These programs attempt to demonstrate to air carriers that there is
sufficient demand, and suitable airport facilities, to profitably operate a route from the airport.
In effect, airports are attempting to divert airline capacity from other possible routes or
airports.
II.
Passenger Marketing
While many airports now commit resources to promoting the airport to airlines, it is also
necessary to ensure passenger, travel agency and shipper awareness of available airport
services.
This is especially important for secondary airports in a region, and for secondary international
gateways. For secondary airports, residents in the airport’s primary catchment area may have
a general awareness that some services are available, but may continue to support the major
regional airport due to lack of awareness of the full spectrum of flights. They may not be
aware of expanding range of destinations, increased frequency on existing routes, and
especially of one stop/connection opportunities.
Secondary airports must communicate flight options to tour operators, convention planners,
travel agents, freight forwarders and the general public. This can involve sending
representatives to aviation industry and tourism conferences, putting on road shows, and
advertising in the trade, local and national press. The aim of these efforts is to create an
awareness of the airport’s specific flight opportunities. Often this promotion will focus on the
attractive characteristics of the airport. For example, a secondary airport may place an
advertisement in the local paper highlighting the airport’s short drive time (perhaps to combat
the perception that it is remote) or the availability of lower cost and more convenient parking.
36
Trolley Tracking and management
Airports need to create awareness not just in the local market but also at the spoke-ends. This
is a more challenging task but is particularly important for secondary airports and those
attempting to establish themselves as secondary international gateways.
For secondary international gateways, the challenge is to create awareness of connection
opportunities at spoke ends on another continent. For example, Vancouver Airport routinely
conducts visits with travel agents and major businesses in Asia to make them aware of the
benefits of using Vancouver as an alternative to Los Angeles or San Francisco for onward
travel to destinations in North America. (Vancouver provides a shorter routing to many North
America
III.
destinations
than
airports
further
South
such
as
LAX
and
SFO.)
Integrated marketing approaches
For nearly all air passengers, the aviation product is just one part of the total travel
experience. Therefore, it makes sense for the airport to integrate its marketing efforts with
those of other members of the travel supply chain, such as national and local tourism
authorities, airlines, hoteliers, cruise ship lines and other relevant players.
One opportunity is for the airport to take a role in coordinating the marketing approach of the
various market players. For example, the tourism authority may be focusing its resources on
attracting more tourists from the North American market, while the air carriers are increasing
capacity in the Asian market. These two efforts do not mutually reinforce each other. Greater
impact could be obtained if the tourism authority were to direct advertising and marketing
dollars in those markets to which air carriers have organized new capacity. The airport can
work with the two groups in order to ensure that all parties are working in the same direction.
IV.
Naming the airport
Considerable attention is paid by some airport management to the name of the airport. The
name gives an immediate indication of the type of service and major city served by the
airport. The most common manifestation of this is the use of the word “International” in the
airport’s name to demonstrate the scope of the airport’s services, even if it only serves one
international destination. Forsecondary airports, another approach is to include the name of
the nearby major city, even if it is some distance away, for example:
37
Trolley Tracking and management
 London Heathrow (the same for Gatwick, Luton and Stansted);
 Brussels South Charleroi Airport;
 Baltimore/Washington International Airport
 Hamburg Lübeck Airport.
As discussed below, this naming convention, when combined with how the airport is linked
to city names, can also have implications for reservation systems. The naming of airports is,
of course, controversial
Airport branding has also developed as a practice used by some airports over the last few
years. Through naming, logos, styling and merchandising, airports have attempted to develop
a consistent and recognizable brand for the airport. However, there is little evidence that this
branding gives the airport any competitive edge.
D. Physical Distribution
Even with an outstanding product that is competitively priced and effectively promoted,
airport still needs to ensure that its product gets to the final consumer.
 Computer Reservation Systems
Whether through a travel agent, the airline or through the internet, virtual all airline tickets
are booked through a Computer Reservations Systems (CRS). When a user makes a search
for a flight, the CRS will rank the available flights based on a number of factors including
price, flight times and connections. Ranking can have a major impact on consumer decisions
as to which flight to book as, typically, travelers select from only the top few flights listed.
The CRS will generally increase the ranking of connecting flights with shorter connect times.
Airports can adopt a number of strategies to minimize passenger connect times and thereby
move their airport up the rankings on the CRS. For any airport wanting to compete for
connecting traffic, minimizing connect times must be a core focus. Airport naming and
registration can also have an impact in CRS systems. If a traveler searches for flights from
Washington, DC to New York on Travelocity.com, options appear for flights from Reagan
38
Trolley Tracking and management
National, Dulles and Baltimore/Washington, despite the latter airport being 53 kms from
Washington, DC.34
 Travel agents
Despite the increased use of the internet, travel agents still book a considerable share of
airline tickets. As a result, secondary airports need to promote the airport to travel agents and
develop close relations with them. Unless a local travel agent is aware of the service provided
by a secondary airport, they are highly unlikely to direct travelers to use that airport. Airports
will routinely send out information on routes, fares, facilities and timetables to travel agents.
Some airports have gone even further, and taken matters entirely into their own hands by
buying up travel agents; both Cardiff and Norwich Airports in the UK, have followed this
strategy.35
 Airport websites
For many travelers, and even travel agents, the internet has become the primary source for
obtaining information relating to their travel and making bookings. Although airport websites
play a part in airport promotion, they also can also have a role in distribution. The website
can be used to direct travelers to the airlines operating from the airport so that they can make
bookings. Some more sophisticated sites (such as that for Hamburg Airport) actually allow
the user to make flight bookings on the airport website, acting a mini-Travelocity for flights
from the airport. Airport websites can also act as a 24-hour information source on the airport.
As well as flight information, they tell travelers how to reach the airport, parking
arrangements and the range of services provided at the airport.
For secondary airports, a major target must be to obtain status as serving the major metro
market. This is especially important as a vehicle for accessing the difficult to reach travelers
who originate at spoken ends.
34Airport
Competition: Forsyth, Edited by Peter Gillen, David Müller, Jürgen, G.A.R.S. June 2010
35Ibid
39
Trolley Tracking and management
7. Introduction to Trolley Tracking Systems
In the present, there are many usages of trolleys. People and enterprises face problems
regarding managing the trolleys and after all there are different impacts of trolley misusage,
impact on the environment and impact on the time period a trolley is in use.
For example the management of trolleys is an important issue in the shopping areas in
Australia.36 By statistics, the retail industry in the country spends more than 200 million
dollars in collecting, maintaining, repairing and replacing trolleys. Abandoned trolleys can
become hazard for the environment and also can cause accidents. Therefore, people who
wanted to prevent these factors to happen started a Trolley Tracking service provided across
Australia. Some trolley tracking companies also propose anti-theft alarms integrated in each
trolley etc. 37
Trolleys are tracked also in meat smokehouses in order to make the process of smoking more
efficient and also to make the right information about the animals available at the smoking
process.38
While in Australia people track shopping trolleys in Great Britain they track laundry
trolleys.39 All these examples work in order to prove that tracking trolleys reduces much of
expenses regarding trolley thefts, replacements and maintaining.
Although these are examples of Trolley Tracking, they are not much sophisticated and their
tracking is based on more simple technologies and/or integrated alarms.
There after these simple solutions, technology grows its development and a more efficient
and accurate way of tracking trolleys have been very popular since year 2004 40 , when a
trolley study was launched by IATA41 , which is called RFID-Radio Frequency Identification.
This technology has been used in tracking many moving objects from industrial big
36
Source: http://www.trolleytracker.com.au/AboutUs/TrolleyTracker/tabid/54/Default.aspx
Source:http://www.australiantrackingsystems.com/images/TrolleyCop%20Brochure%20%20New%
20PDF.pdf
38
Source: http://www.vbssys.com/Products/Traceability/Smokehouse%20Tracking/smokeTrack.php
39
Source: http://www.codegate.co.uk/healthcare/tracklaundry
40
Source: http://www.rfidjournal.com/article/view/3429
41
IATA-International Air Transport Association
37
40
Trolley Tracking and management
trolleys42in goods stores till catering trolleys on airplanes43, baggage trolleys in airports and
equipment and handicap wheelchairs in hospitals and even scooters.
7.1.
RFID in the aviation industry
One of the usages of RFID44 in aviation industry is when used for tracking catering trolleys 45
on the board of airplanes. This implementation happens because airlines are still looking for
additional revenue. One of the promising ways of getting this revenue is the trolley that is
used for food and beverage service, which today expanded to fast-become a mobile point of
sell. RFID tracking of trolleys and their contents is a big part of this revenue goal.
Additionally, in an industry that is shaken by rising fuel cost, airline trolleys are being
showed as key elements in most airline strategies, as they are the vehicles through which
food, beverages, and a variety of service items are routed through in-flight passenger service.
Airlines know that airline trolleys represent the future of a changing business model,
dependent on what is referred to in the industry as “ancillary revenue” in other words helping
revenue. A problem is very often that airlines have no recall on how many of these critical
assets they own, where they are situated, and what condition they are in.
7.2.
RFID and Airlines Trolley Tracking
The IATA46 - International Air Transportation Association has chosen a wide range of airline
operations that could be better managed and add cost savings through the application of RFID
technology. Based in Montreal, IATA has firstly been known in RFID circles for its
participation in helping the airline industry track baggage since the 1990s. IATA begun the
trolley study in 2004, then two years later put together a task force including airlines,
42
Source: http://www.id-it.nl/index.php?option=com_content&task=view&id=28&Itemid=39
Source: http://www.bukisa.com/articles/372776_the-smart-trolley-radio-frequency-identificationand-airline-trolley-management
44
RFID- Radio Frequency Identification
45
Source: http://www.bukisa.com/articles/372776_the-smart-trolley-radio-frequency-identificationand-airline-trolley-management
46
Source: http://www.bukisa.com/articles/372776_the-smart-trolley-radio-frequency-identificationand-airline-trolley-management
43
41
Trolley Tracking and management
caterers, regulators, galley-equipment suppliers, aircraft manufacturers and technology
vendors, to identify how ID technology could bring about the most benefits.
In a study conducted in year 200947 the airline organization found that the world’s airlines
could receive fast and in the long-term benefits from RFID trolley tracking. Airlines would
benefit from both improved business intelligence to their trolley stock management, being
able to reduce the number of trolleys in operation by removing unnecessary stock and
improving their capabilities to manage the maintenance of trolleys.
Further, as trolleys are commonly inter managed between aircrafts and between catering
services sustaining airline operations, at remote locations, the improved inventory
accurateness and tracking of trolleys in movement will provide further savings. The IATA
also found that through improved tracking of the food and beverage contents on trolleys,
airlines could cut costs by reducing the number of wasted meals, while making a better flight
experience of customers.
In all, the IATA has constructed a business case that trolley tracking will provide quick return
on investment for airlines, often in from 12 to 24 months, and even shorter if RFID trolley
tracking investments are combined with an overall RFID strategy involving baggage
handling, ULD-unit load services tracking, and close watch of parts and safety equipment.
Overall, the IATA estimates that benefits will vary based on the size and routes structure of
each airline, the world’s airline industry could achieve almost half a billion dollars in annual
savings from RFID-enabled trolley tracking. This implementation of RFID-tracking
technology will lead to not only above the almost $500 million48 in immediate cost savings
after acquisition, but to a much more reduced trolley purchases to support the airlines’
present operations.
More and more airlines are adopting the business models created by low-cost European
airlines, such as Ryan air and Easy jet. While U.S. airlines implemented fees for checked
baggage to meals and drinks and coach seats, all of these actions may be the start for a new
business model for the airline industry. One of the proofs is the fact that in 2009, the world’s
airlines generated over $2.5 billion49 in such revenue, with growth rates of 20-30%50annually.
47
Source: http://www.bukisa.com/articles/372776_the-smart-trolley-radio-frequency-identificationand-airline-trolley-management
48
Source: http://www.rfidjournal.com/article/view/3429/1
49
ibid
42
Trolley Tracking and management
It will become increasingly important to have properly stocked trolleys with passenger
consumables ready for use.
After having mentioned the benefits of Catering Trolley Tracking within the airlines industry,
we can observe the next step of the RFID tracking into a new concept from which not only
airlines will benefit but airports as well. Airports will mainly be more competitive,
convenient for the passengers when having available luggage trolleys at any time. This will
reduce the cost of labor and will make the labor distribution much more efficient. But these
are not the only benefits and usages of the RFID TTS for baggage trolleys. The entire concept
will be explain further with an example taken by Lyngsoe Systems Denmark and their
sophisticated multi-mode RFID tag and Active reader and the options that both system tools
can offer together with their maintenance and guidance software.
7.3.
RFID for tracking baggage trolleys
Along with the many benefits of trolley tracking systems on the board of an airplane, comes a
further application of the ID concept incorporated into luggage trolleys also at the airports,
not only on board.
Since IATA started tracking baggage bags in 1990s the idea of RFID in helping aviation
industry expanded to a next level, where we can observe RFID active tags in helping the
tracking of baggage trolleys at airports.
The appearance of this application of RFID51 is mainly because to know where are all
baggage and transit Trolleys in all terminals of an airport is a challenge today and this
problem impacts demand management and labor productivity in collecting, re-shuffling and
providing of trolleys. Timely availability of trolley also affects customer service quality. The
trolleys must be available at the right time and at the right location for supreme passenger
service. Trolleys should be available at parking areas, arrival and departure areas. Given the
large area of some airports, it would be an extremely resource-demanding task to manage the
availability of trolleys, if carried out manually.
50
51
ibid
Trolley Tracking Project Brief
43
Trolley Tracking and management
The biggest objective is to improve productivity and service standards in airport operations
and to achieve cost savings during the process. One technological solution that is very easy to
maintain and that can identify and monitor the location of each trolley in real time will
greatly improve the service standards of an airport today. A very reasonable solution
therefore is the active RFID multi-mode tag and active reader by Lyngsoe Systems Denmark.
The system installed must be and is able to perform the following functions in real time:
1) To track the location of each trolley in real time on terminal map to help:52
 Identify trolleys location via zones / areas for faster and more efficient re-collection
and returning on the needed place.
 Prevent theft of trolleys with an alarm signal also sent to a control room, where action
should be taken.
 Simply diagnostics to determine if trolleys are in use, almost stationery or stationary
to be truly ready for recollection.
2) Allow multiple users group and staff to keep and use this information with easy
to use end-devices, equipment while on the move.
 To allow Trolley Retrieval Staffs to track and collect the trolleys while moving on the
ground.
 To provide reasonable and timely updates to Duty Terminal Managers on the present
status of Pax53 Critical Resources54e.g.Trolleys in real time for meeting flights in/out
pax volume on a terminal level.
 To provide updates on existing trolley supplies in holding area and to sound alert if
supply
of
trolley
is
excessively
low
for
determined
period
of
time.
3) To assist in trolley management and generate useful reports:
 Establish electronic Trolley Profile allowing The airport to store trolley specific
information on trolley directly – For Example: When was the last time the trolley was
52
Ibid
Pax-passengers
54
Pax Critical Resources-Resources an airport need to have for servicing critical issues for passengers
53
44
Trolley Tracking and management
repaired, which parts were replaced, How much distance has the trolley travelled, rate
of usage etc.
 Allow the airport management to view the systems to link staff effort and actual
performance.
 Provides transparent and clear usage model for the airport trolley recollecting and
decision making.
After having described all the options such a system provides, its usage and its benefits,
comes the construction and maintenance of such active tags, that are placed on each and
single trolley, as these tags are the product to be analyzed in this report. For the brief
description, a very efficient and developed system is going to be described created by
Lyngsoe Systems Denmark.
8. Construction and maintenance of active RFID tags and
their readers for Trolley Tracking System
8.1.
The Multi-mode active RFID tag by Lyngsoe Systems Denmark
The LS1123 Multi-mode RFID Tag is an advanced active RFID tag which uses a battery to
transmit its ID every time when it is in motion, 6.0cm long, 2,9cm wide and 1.8cm thin and
can be configured to solve almost any RFID challenge, when placed on a single baggage
trolley.
Its weight is only 30 grams with 30 meters a read range in open space approximately. It is the
result of Lyngsoe Systems’ more than ten years of experience designing RFID tags for
challenging applications in industrial environments. The tag has been designed with
maximum changeability in mind while at the same time incorporating features that will
ensure a longer battery life. It can function in the following environmental temperatures:
Operation temperature from -25°C till +55°C and Storage temperature from -40°C till +70°C.
The tag has four configurable modes of operation, which can be used separately or in
combination:
45
Trolley Tracking and management
 Motion mode:
In motion mode the tag will transmit its ID when moved, shaken or otherwise put into
motion. The motion sensor serves the double purpose of being able to immediately report
when the tagged item is moved, while at the same time ensuring that no power is consumed
when the tag is not moving.
 Beacon mode:
In beacon mode the tag automatically transmits its ID at a configurable time interval, which
means every 10 seconds.
 Excitation mode:
The LS1123 can operate as a semi-active tag. With this mode enabled a low-frequency RF
field generated by an exciter can wake up the tag. The tag will transmit its ID together with
the ID of the exciter that turned it on. Exciters55 are RFID devices used to mark tag
registrations at strategic congestion points56 , e.g. at a dock door.
 Deep sleep :
When the tag is not moving it will enter into deep sleep state of low power consumption. The
tag can be configured to wake up and transmit a heartbeat signal at configurable intervals,
which means every 2 hours.
 Expected Battery Life
The battery life of an active RFID tag is mainly reliant on how often the tag transmits its ID.
For this reason battery life is highly dependent on the configuration on its mode and the
application. In typical use case scenarios the expected battery life is approximately 5 years.
 Message Format :
Every time the tag communicates its ID to the reader in the data message will be included
information about the mode that initiated the transmission as well as the current batterystatus.
The tag will report motion sensor activation, exciter ID, if it is available, beacon signal during
continuous motion, heartbeat signal at a configurable interval when not in motion, and battery
55
Exciter-The Exciter wakes up the tags in (125Khz) so it can be read by the reader in (433 Mhz)
excites to save battery in the tags
56
Strategic congestion point-is a possible point for bottlenecks (traffic-jam) ineg. Baggage hall or
distribution center
46
Trolley Tracking and management
level.
8.2.
The Active RFID reader
The LS3300 RFID Reader collects data from all active Lyngsoe RFID tags, such as postal
tags, asset tags etc. when these are passing a congestion point. The collected data (unique tag
id number and exciter number) are time stamped by the reader before being transmitted to a
server, with a record of the exact information on which tag passed which registration point at
what time. The LS3300 is designed to be installed close to strategic congestion points such as
entrance and exit gates, conveyors, sorting machines etc. along with one or several exciters.
The reader can collect data from all active Lyngsoe tags within a reading distance of approx.
15 m. Also, the special Lyngsoe asset tags (LS1100 series) enable coverage of 40-50 meters
in diameter, providing low-cost asset location management. The LS3300 is LAN-enabled,
which facilitates fast and easy installation, and is Ethernet/RS485-enabled for daisy-chain
connection of multiple readers, which is beneficial for applications with long distance cabling
between readers and server. The LS3300 is powered by the LS9110 power supply or Power
over Ethernet (PoE), which also enables fast and easy installation. The LS3300 Reader has a
range of built-in watchdog functions such as automatic reset functions and thus optimum
operation availability. It is capable of buffering over 1000 tag readings in case of a network
problem or power loss and thus avoids loss of data. The reader’s dimensions are: 28cm long x
18cm wide x 4.7cm thin. And it can operate under the following environmental conditions:
Humidity max. 95% non condensing at +40°C and Operation temperature from -20°C till
+55°C.
9. The System of Lyngsoe Trolley Management System
Implementing the Lyngsoe Trolley Management System will provide any international
airport with an automatic, real-time tracking and overview of the present location of trolleys.
When having set a service level for each airport area, the operators will then know exactly
when the minimum and maximum number of trolleys is reached in this particular area. When
knowing the location of trolleys, they are easier to re-arrange when needed. This also
47
Trolley Tracking and management
increases the usage of each trolley with less “dormant” trolleys in the area, the stock level and
asset investment can be reduced accordingly.
 Forecast
The Lyngsoe Trolley Management System is, amongst others, connected to the airport’s
flight information system. The Lyngsoe Trolley management System predicts where and
when the trolleys are needed base on these real –time information and the forecast algorithms
in the system.
 Alarm
In the event of accident, the Trolley Management System will send an alarm. If a trolley
passes the readers at the exit locations it is thus configured to send an alarm to the control
room.
 Online Management Tool
There is an online management tool that is optimizing the service levels as well as the cost of
managing the personal and trolleys. Availability of trolleys is one of the key performance
indicators for the airport.
 Supply Scope
The Lyngsoe Trolley Management System comprises of an RFID tag plugged on each trolley
and RFID readers placed throughout the airport area connecting with each trolley. The
readers are mostly placed at parking areas, elevators, and departure and arrival areas. The
system servers are supplied as a configuration with workstations for three different control
rooms. These three control rooms are: Trolley Manager Office, Crisis Center and Control
Room.
The very standardized, web-enabled Lyngsoe Trolley Management System can be accessed
everywhere in the airport. There are the unique services available for the Trolley Operators
and Managers: Trolley Overview, Trolley Distribution in Zone and detail, Theft protection,
Alarm Overviews and Forecast of Trolley needs.
 The RTLS Value chain57
57
Source: Real Time Locating Systems (RTLS) 2007-2017
48
Trolley Tracking and management
The RTLS value chain mainly revolves around small portable tags, almost always battery
powered scanners or in other word called readers, sophisticated software and system
integration. However other items of hardware are also needed and facilities management,
training, support, legacy integration and other services are often involved.
 The newest form of RTLS58
The newest form of RTLS called Wi-Fi RTLS has become very popular since 2007 because
of the high efforts of the suppliers of it to make it popular among by publishing their
capabilities and achievements. It was widely made to believe that these Wi-Fi tags sell
around millions yearly. This is actually not true, because the leader, a company called
Aeroscaut has sold only 15000 that year. One of these tags costs from 60 to 80 dollars. Wi-Fi
RTLS is not the largest part of RTLS market, as yet. Partly because it needs fewer
infrastructures installed. There is also no concern about extra radiation of this application, but
there are also some disadvantages to be considered compared to the active RFID-real-time
tracking technology.
 Disadvantages:
1. First of all it is Rarely feasible outdoors
2. Regular remapping is needed
3. There are usually necessary more Wi-Fi nodes
4. The tags are relatively expensive, compared to the around 10 dollars RFID active
multi-mode tag
5. Availability can be as low as 70%, which means not full data transferred
6. There is also a concern about overload effecting essential users
7. Last but not least, accuracy may be sometimes less than 10 meters
58
RTLS-Real time locating systems
49
Trolley Tracking and management
10.
Theory of Disruptive Innovation59
There are two types of disruptive innovation. The first one is Low-End Disruptions. They are
products and services that do not create a new market; they are simply low-cost business
models that grow by picking off the least attractive of the established firm’s customers. Lowend disruptions motivate the incumbent firms to stay away of the attack. These products and
services are targeting over served customers in the mainstream market. So they do not need
special knowledge or training to use this kind of products or services. Performance of these
goods and services is along the traditional performance at the low end of the mainstream
market. To reach this group of customers, these products are mostly sold on discount prices
that are chosen to win business at the low end of the market.
The second type of disruptive is New-market disruptions60 which compete with “nonconsumption” in other words there were no customers that were using that new disruptive
products or services. These new-market disruptive products are much more affordable and
simpler to use that they enable a whole new population to begin owning and using the
product, and to do so in a more convenient setting. But at the same time they are not always
cheap61 on an absolute scale, however. The disruptive innovation doesn’t invade the
mainstream market; it pulls customers out of the mainstream value network into new one
because these customers find it more convenient to use the new product. Although newmarket disruptions initially compete against non-consumption in their unique value network
of customers, as their performance improves they then can ultimately become good and
popular enough to pull customers out of the original value network in the new one, starting
with the least demanding customers. When targeting non-consumption, new-market
disruptions target customers who historically lacked money, skills and information to buy and
use this new product. In this way the business model makes money at lower price per unit
sold, and at unit production volumes that initially will be small, because the product is not
popular at its introduction, or in our case said less RFID TTS purchased in the beginning.
Source: The Innovator’s Solution by Clayton Christensen and Michael Raynor p.45-46
Source: ibid p.51 Table 2-1
61 Source: Seeing What’s Next; Using the Theories of Innovation to Predict Industry Change by
Clayton Christensen
59
60
http://books.google.dk/books?id=SZQnfdM9O7wC&printsec=frontcover&dq=isbn:9781591391852&as_brr=3
&ie=ISO-8859-1&cd=1&source=gbs_api#v=onepage&q&f=false
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New-market disruptions have improved performance in new attributes and they are typically
simple and convenient.
10.1. Is RFID for Trolley Tracking System a disruptive technology62?
At first disruptive innovations tend to be used and valued only in new markets or
applications; in fact, they often enable the emergence of new markets. It is the mechanism of
action- disruptive technologies appearing and being used initially in new or unimportant lowend markets, and then improving at such a rapid pace that they attack and penetrate
mainstream applications from the underside-that can cause many admired big companies to
lose their position and market share.
Therefore in the connection between disruptive
technology and RFID for TTS, we observe that RFID has established through different
phases. Phase one was the tracking of luggage with RFID tags and followed by tracking of
catering trolleys on aircrafts. Third concept of RFID tracking in the airport industry that we
reveal in this project is the RFID active tags and readers especially designed for tracking
baggage trolleys. Disruptive technologies are simpler and more convenient to use, and
therefore RFID is a technology that is convenient, the RFID multi-mode active tag is cheap
and the software that leads the readers and the tags is simpler to use than the monolith and the
storage rails by the old version of trolley tracking by Aerocodig Baggage Trolley System. In
this line of thoughts new- market disruptive innovations are most of all products or services
that help people do more conveniently what they are already trying to get done. Disruptive
technologies can be fatal to well-managed companies-even though from a technological point
of view, the disruptive innovations are far simpler products than the sustaining innovations.
The sustaining innovations have their performance improved in attributes most valued by the
industry’s most demanding customers. The sustaining innovations are also radically and
incrementally improved products introduced to existing customers. The most attractive and
profitable customers in the mainstream markets are targeted. They are willing to pay for
improved performance. Managers rarely sense urgency for investing in disruptive technology.
Ironically, it is disruptive, rather than the sustaining innovations, that are the reason of the
failure of many of history leading companies. This is why in the future with the more
62
Source: Innovation and The General Manager by Clayton Christensen p.9
51
Trolley Tracking and management
popularity of the RFID tags and active readers many more airports that get enough money to
invest in innovation will chose this trolley tracking system instead of the solution by
Aerocodig Baggage Trolley System.
10.2. Why Disruptive innovation in airport baggage trolleys?
In the history of the trolley in the airport, the company stumbled of the disruptive
technological change: when the light weight trolley shrank from the original heavy weight,
then the trolley become more comfortable with handle break, then it got a magnet in the
wheel to stick to the escalator, then it was changed with good material for its components and
finally to have been installed RFID tags in it. Each of these new designs and the new
technology offered the airport substantially convenience for serving passengers rather than
the typical trolley in the established market required.63
The first passenger trolley was with the weight of approximately 40 kg. It was offered to the
airport when it was introduced, while primary market for trolley at that time required lighter
than the original. The reason of the inconvenience was the difficult control over it. Afterward,
the airport industry rejected the heavy trolleys and preferred the ones with lighter weight. As
a result, the suppliers, whose mainstream luggage trolley were with lighter weight providing
more convenience and more function of capacity; they did not pursue the disruptive products
innovation aggressively. The trolley was re-produced when magnet and break function were
introduced: the airports rejected to have original trolley as inadequate, and use the new
innovated luggage trolley in the aviation industry. While their suppliers, who offer
comfortable luggage trolleys to the airports, the disruptive designs created other important
attributes. The RFID tags, which can be used to tag all the trolleys for better management and
loss and theft prevention. The availability of this system made possible the development of
aviation industry, respectively.
The importance for companies to introduce a disruptive product is that then companies are
able earn more profit and increase their growth. Moreover, it is a good opportunity for the
companies that they can be able to sell large number of the innovative product in the future.
63
Source: Innovation and The General Manager by Clayton Christensen
52
Trolley Tracking and management
10.3. The technological life cycle model and RFID in TTS
The technology life cycle (TLC)64 model maps the life cycle of a technology in much the
same way as the ‘product life cycle’ (PLC), highlighting the trajectory of sales over the
lifetime of a technology. Both the TLC and PLC generally incorporate four stages or phases:
introduction, growth, maturity and decline. During the introduction phase, the slope of the
curve is shallow, representing the gradual adoption of the new technology. The growth stage,
at which sales begin to accelerate, is indicated by the steep incline of the curve. As RFID for
tracking purposes was introduced in 1990s in order to track baggage bags in airports later the
RFID tags for trolley tracking was introduced in 2004, as we mentioned above in the TTS
introduction part, the special concept of RFID for tracking baggage trolleys comes later and
now it has started to sell. That is why it is still not massive influence but it is coming to a
higher growth by the increased with time popularity. Therefore the RFID concept for baggage
trolley tracking at airport is in its growth stage of the TLC. Maturity is the stage which sales
reach their peak, and the curve begins to tail off, flatten, and, ultimately, to fall. Finally, the
decline phase in the life of a technology occurs when it is made obsolete by the emergence of
a new substituting technology; the faster the process of substitution, the more rapid the
decline and thus the steeper the downward slope of the TLC. All of the four stages and the
RFID technology development place on the curve are to be observed in the following picture.
Picture 1 Technology life Cycle (TLC)
Substitute Technology
for Trolley Tracking
RFID for TTS
RFID for TTS
Picture 1. Source: Managing and Shaping Innovation by Steve Conway and Fred Steward
64
Source: Managing and Shaping Innovation by Steve Conway and Fred Steward p.128-129
53
Trolley Tracking and management
11.
Companies interested into entering the field
Particularly interested are a more than hundred of companies which are currently involved in
active RFID. Companies that are currently involved in Wi-Fi, ZigBee65 and GPS are also
interested to become RFID involved. However, although parasitic Wi-Fi RTLS has taken
market share, and it needs little fewer infrastructures, it is not seen to take over the majority
of the RTLS market, because of its disadvantages mentioned on the previous page of the
report.
By stressing all useful aspects of RFID integrated for the purpose of Trolley Tracking
Management in this report and advising big, world airports to implement the concept many
players have already heard and adopted the concept. They are mainly from Europe, namely
companies such as: Aeroscaut from USA with their Wi-Fi Trolley Tracking at the Munich66
International airport in Germany. Another big competitor on the market is the German
company Wanzl that offers many Passenger Handling Services and have installed TTS in
Dubai67 with cooperation with Lyngsoe Systems Denmark. Other companies with the same
RFID concept for TTS are: KTC Kazarooni Co68 . from UK, Trolley Scan (Pty) LTD69 from
South Africa, ART Technology LTD70 from UK, Tag Master RFID71 North America Inc.
with their TTS in Schiphol Airport in Amsterdam Holland etc.
12.
Trolley with RFID V/s Trolley without RFID
A company from Spain called Aerocodic Baggage Trolley System 72 based in Barcelona has
developed a renting system for trolley at three airports in Cuba, in the International airport in
Lisbon Portugal and other European countries. The company offers the three options for
attaining a trolley:
65
ZigBee- ZigBee is a specification for wireless personal area networks
Source: http://www.aeroscout.com/content/news-and-events/press-releases/munich-airport201009/munich-international-airport-selects-ae
67
Source: http://www.wanzl-airport.de/300/En/Home/Press.html
66
68
http://www.kazarooni.net/products_services_engineering_technical_service_trolley_management.htm
69
Source: http://trolleyscan.com/
70
Source: http://www.active-radar.co.uk/tracking_trolleys_in_airports.html
71
Source: http://www.tagmasterna.com/products/Brochure_New_generation_AVI.pdf
72
Source: http://www.codicbcn.com/down/aerocodic%20dossier%20english%202003.pdf
54
Trolley Tracking and management
1. A free service that has the advantage of promoting traveler goodwill as no payment is
involved. This also avoids any conflicts in currencies. However, a free system has
many disadvantages because it is costly to the airport, the airport then needs more
trolleys to be effective, staffing and maintenance costs are high and last but not least
trolleys are damaged more frequently.
2. A rental service which provides an improved service to the user while totally
financing the baggage trolley service including equipment costs. Moreover, the rental
service provides an extra and steady income to the airport which makes it even more
attractive to implement. A disadvantage is that the income may not be significant
because people might not even like to rent any trolley when they need to pay for it.
3. A deposit-refund service which provides an improved service to the customer while
providing a potential income for the Airport to manage with running costs. To obtain
the refund back the user should return the trolley to a dispensing unit, and perform
one more operation. However, the refund system has also been shown to encourage
taxi drivers, airport staff, or other molesting people to assist the users in replacing
their trolley in order to obtain the refund as a tip. And also the potential income for
the Airport may be insignificant as amount earned.
In conclusion all of the stated disadvantages under each option are not possible when RFIDtracking of trolleys is implemented.
13.
Construction of Aerocodic Baggage Trolley System73
The invention from 2003 consists mainly of a Main Board Dispensing Unit (monolith) in
which all the components necessary to operate the system reside.
The whole dispensing system comprises of the monolith together with a release mechanism
for the trolleys and a storage rail on the floor onto which the trolleys are stored.
In the monolith there are: CPU Main board, Thermal printer, Ethernet Card, Control Card for
devices, Receipt push button, Alarm switches, Cooling box, Power supply, and Coin and
Banknote valuator.
73
Source: http://www.codicbcn.com/down/aerocodic%20dossier%20english%202003.pdf
55
Trolley Tracking and management
14.
System’s benefits as per inventor’s view
When after looking at the systems components, the company states the following benefits
which can bring a good argue and a ground for good comparison with RFID TTS.
According to Aerocodic, their rental system is usually implemented at no cost to the airport
and is self financing. The airport can receive a steady income from such a system. It is also
said that this system reduces the usage of trolleys by 30-40%. Here comes the question: Why
to reduce the usage of trolleys when they are needed especially at the big airports to serve the
passengers in a proper way. This can be found as a disadvantage compared to RFID TTS.
Moreover, as also said the Aerocodic system is not free, and according to the company in this
way an indiscriminate use is eliminated and the general reduction in usages keeps the
equipment in good order. Here we can also argue on the basis of the statement and say that
instead of decreased usage, a more often monitoring of the trolleys and their condition is
better for their good maintenance. Also the RFID tag of Lyngsoe Systems provides a special
individual ID for each trolley in which a maintenance report is also stored in the tag. This
report states the checks and repair of the trolley, its condition and all useful information right
available for the airport trolley management authorities.
The company also adds that less use of trolleys and better directed staff results in a minimum
level of abandoned trolleys, this phenomenon of abandoned trolleys is not an option possible
if an RFID tag is attached to the trolley.
Aerocodic adds also that by a rental service there is a reduced theft of trolleys to the
minimum, which is not possible when a trolley is RFID-tracked.
Moreover, the Spanish company states in their brochure that with less abandoned trolleys,
more accidents are prevented, but if a trolley is RFID-tagged no accidents will happen
guaranteed, if the staff at the particular airport is acting fast and responsible in this situation.
In the case that an Airport decides to implement a Rental Service provided and operated by
CODIC under a license agreement, in most cases the equipment is provided and installed
free of charge, but the service is paid by each customer (passenger who will rent a trolley).
56
Trolley Tracking and management
A general maintenance is also carried out on all equipment to ensure trouble free running on a
daily basis, but if compared to RFID –trolley tracking the check of trolleys is performed at
every time before a plane arrives at the airport’s particular gate. This means that the troublefree running of the trolleys is guaranteed at any time at the airport, when trolleys are needed,
because they are checked by the staff before moved to a bottleneck spot.
57
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15.
Important of TTS in Present Aviation Industry
15.1. Passenger Behavior
If we observe today’s airport services, it is very improved because servicing before 10 years
ago was slow with less use of technology. Nevertheless, it was clearly difficult to get a good
service with high technology. The airports it selves were significantly low level when
compared to those high-tech airports today. In order to provide a service in the airport,
passengers required good facilities and services.
Airports are large and divided into compartment for instance inner area; immigration service,
custom, duty free shops, check-in services and lounges etc. outer area; taxi services and
parking lots.
Checked-in baggage is common for most passengers and many travelers do not carry more
than one hand bag on broad of the aircraft. However, before checked-in baggage, passenger
needs trolleys to move his luggage along the way from the parking lots or transportation’s
area services. The passenger profile during this era is marked by the following:
 To fulfill their satisfaction
 They were interested in new technology
 They were interested in comfort and convenience
The outlined characteristics are the preferences for most of the passengers’ and these
characteristics influence also their behavior in the airport. Interestingly, when social scientists
have tried to explore passenger behavior, hardly do they find a logic of personal indicators
that can determine ‘good’ or ‘bad’ behavior.74 The fact is that passenger expectations are
better indicators of behavior.
Launching new facilities or developing new system and
technologies in airport industry could meet passengers’ expectations.
74
Robert Bor, Passenger behaviour, 2003
58
Trolley Tracking and management
15.1.1. Factors influencing passenger behavior concerning trolleys in airport
 Availability:
Does the traveler have enough trolleys available? Do passenger feels comfortable when using
a trolley? Are trolleys available at any times?
 Frequency:
How often a passenger is using trolleys? Do passengers use trolley when they are in the
airside area?
 Comfort:
How easy to use trolley? Can passenger use trolley all the way long to the gate? If there is big
and heavy luggage, can the trolleys handle it? Are there any large trolleys to be offered in the
airport?
15.1.2. Passenger problem
Many busy airports in the world are facing problems. For instance, lack of luggage trolleys
when many planes land in the same time. The passengers need trolley to carry their
belongings. Unfortunately, there are not enough trolleys provided. Thus, some passengers
have to drag their luggage by themselves or some have to search trolleys manually from
another area. This uncomfortable situation mainly causes problems such as: the problem of
being late when having to connect onto another flight or to check-in late at the gate.
Moreover, some airports use low trolley’s quality. Heavy trolleys also counted in the
category, they are hard to control due to overweight and this can cause passenger accidents or
injuries. The complaint from passenger lack of trolleys available and the need of manual
trolley search can be found in the articles or airport’s websites.
Each passenger needs good services from the very first moment at an airport. Firstly, they
need trolleys to carry their belongings after they get off from transportation into an airport to
go to the next step. Secondly, after having a trolley to move along with their belongings they
need to reach the check-in base, passengers also need a trolley to carry their hand luggage. In
case they want to do shopping in the duty free shops, having food at cafeteria or restaurant,
and exchange their money; it is necessarily that the airport provides trolleys to make
passenger’s travel life easier.
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Trolley Tracking and management
The problems that might occur in case of not enough trolleys or lack of trolleys in the exact
location are; passenger have to pull luggage themselves through the check-in base, after
checked in luggage passenger have to carry hand luggage all the way long to the airplane. In
that case, passengers will not be willing to go shopping, buying a souvenir or having food on
the way long to airplane till their departure. Additionally, if airport offers weighty trolleys
they will be uncomfortable to control. In the case of heavy trolleys, neither passengers want
to take one, nor is it easy job for employee to manage trolleys in the proper areas.
This all results in decrease in passenger satisfaction and there might be chance that customer
avoid travel through that particular airport. This scenario leads to decrease in airports’ nonaeronautical revenue. Those are the reasons for the airport industry to consider and think for
new and innovative idea or product to improve customer satisfaction because they are core
source of income.
15.1.3. Airport service
As discussed before, to gain passenger satisfaction, airport needs to provide the best possible
service along with giving comfort on the way to the airplane. The availability of trolleys in
landside and airside areas also plays a role in the airport service. To have enough trolleys that
are serving to the passengers at the right time is possible only if an airport has a good trolley
system and management. The trolleys should not be in the outside area of the airport, for
instance, trolley left by passengers at parking lot or taxis service area. The airport should
manage trolley by allocating them back to the proper area.
Interesting requirements that passengers have when concerning airport trolley service:
 Trolleys should be:
 Light weight
 Free of charge
 Comfortable
 Durable (Able to carry a lot of baggage: suitcase, handbag, packages etc.)
 Silent
 Easy to handle
 Luggage protected
 Have an effective break
 Have hygienic handle
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Trolley Tracking and management
 Have clear instructions for use
Most of world’s airports compete in the aviation industry itself became the best airport to
arrive on. The passenger satisfaction, technology and system are core component in that
process. Based on passenger survey, in overall, concerning which airport is the most
satisfactory will be named in the report.
Hong Kong International Airport got the World’s Best Airport by air travelers across the
globe continuously achieved for eight years.75 The result is as such because the airport made
some improvements each year. In top ten of best airports in the world, those airports are
mostly concerned with convenient and comfortable facilities of use in the industry. Trolleys
management system is included to be dominant advantage to bring a higher customer
satisfaction rating.
So from above discussion it is clear that to improve revenue airport needs more customer and
for more customer they need innovative idea and product. Fortunately, in recent time there is
a system (Trolley Management System) available for better trolley management. As report
gave detail ideal about product, now it is time to see how it can change aviation business
model by giving benefit to airline, to airport and to passenger.

Trolley Management System TTS
New innovation technology can make people’s life easier. Researchers had invented high
innovation to develop existing products, such as trolley management system in this case.
Radio Frequency Identification (RFID) technology can help operations in the supply chain
increasing efficiency and more effectiveness. As airport industry needs a good system and
management of trolleys, RFID would be a priory option to install. In particular the RFID
chips in the trolleys. This enables the exact location of each trolley to be determined at any
time. Ensure there are trolleys in appropriate locations all times. The tracking and
management system enables the airport to arrange trolleys to be returned to the collection
point.76
75
76
The airports have a planning tool to ensure that the right number of trolleys is
Source: www.worldairportawards.com/Awards_2011/Airport2011.htm
Trolley management systems, Wanzl’s expanded product programme, October 2007
61
Trolley Tracking and management
available for incoming and outgoing passengers. TTS is enhanced service with quality that
can bring higher passenger satisfaction.
15.1.4. How the passenger will react
Passenger need to get most satisfying time spent while using trolley in the airport. They
expect to have a good service, good system management and good facilities from airport. For
instance:
1. Check-in baggage. Before the passengers check-in their baggage into an airplane,
they need trolleys to transport all their belongings. It is important to have enough
trolley offered at the beginning point. TTS can facilitate a service, offering enough
trolleys for the passenger.
2. Airside- long walks from the checking base. No more carrying heavy hand luggage,
especially when passenger goes shopping while waiting for the flight, or is having
meal in the restaurant.
Passenger does not need to manual search for trolley themselves. TTS can help and improve
service in the airport, as TTS is an innovative tracking and management system which can
locate each individual trolley. The system’s information makes it possible for the airport to
arrange trolleys placed into the collection point, and in this way to offer the best services to
the passenger.
According to a report, there is 12% increase in passenger number for Suvarnabhumi airport. 77
Passenger behavior changed considerably; influenced by the evolution of airport service,
system management, facilities in the airport and profile of passenger themselves. Passenger
behavior tends to change in a very relevant level in the aviation industry after improvements
in the management system and services in an airport have been made. Passenger expects to
have good services while they are provided with improved system facilities. For instance,
automatic check-in machines, implementation of body scans for transit passengers and
installation of system that manages trolleys. Therefore, passengers would definitely choose
the airport that can provide such services and recommend it to others.
77
Suvarnabhumi Airport , Thailand is in range of 15th Busiest airport in the world,
http://www.pattayamail.com/travel/suvarnabhumi-airport-passenger-volume-up-12-6657
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Trolley Tracking and management
15.1.5. How TTS can influence passengers’ choice of airport?
Passenger will be pleased to use airport service again when they got a good service at the first
place. If passenger is satisfied by trolleys tracking system, they will definitely tell to other
travelers regarding their comfortable journey and how they benefited with new TTS system.
Trolleys can be offered to passengers at any time, even though there are many flights on
arrives on same time. Trolley with TTS is managed easily compared with the old version of
trolley which had no tracking system integrated.
15.2. Benefits to Airlines
As we have gone through many TTS advantages for air travel passengers, those advantages
directly or indirectly help airlines. TTS also adds value in the airline industry and can be
explained as below.
Today, airlines decide their services according to price of travel ticket. The price of airline
ticket has become very complicated and unstable because of fuel rate, demand, services,
destination, travelling time and number of ticket sold.78In that unstable situation airlines still
need to be profitable and reputed. As a normal business term we can say airlines gets profit
on each ticket they sell, only after deduction of high operating and fixed costs. These costs
includes fuel, labor, maintenance, spare parts, insurance, salary, sales and marketing and
catering; where they receive incomes only from ticket selling and cargo loading. So from
above explanation, we can say that airlines can get profit only by increasing ticket sell or by
reducing operating costs. We know that operating cost includes so many other costs, so it
might be difficult for airlines to reduce operating cost but they can increase ticket sell by
using proper marketing mix.79
The marketing mix is probably the most famous marketing term, which also known as a Four
P’s. The marketing mix elements are price, product, promotion and place.
Out of above all promotion mix, an airport refers to a Place for airlines. Here place with TTS
systems because it adds value in airport services. We know that airports and airlines are
78
79
Airline revenue http://en.wikipedia.org/wiki/Airline
Philip Kotler
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Trolley Tracking and management
interdependent, so an empty airport always wants heavy traffic from airlines where airlines
needs busy airports to have more passenger traffic.
So the question is how an airport having a TTS system can benefit to airlines? So to give
answer to that question we will go through airlines’ some basic activities.
To explain below point we consider one airport having TTS system and how that particular
airport and TTS system benefits to airlines.
 Profit maximization:
Just like any other business, profit is prime objective for any company in any industry. So as
we said above that airline need more passengers to get good profit margin. We consider that
airport having TTS has good customer satisfaction and brand image. So more and more
people likes to travels through that particular airport and it resulted in increase in passenger
traffic. From airline perspective they need to vise before they choose any airport to operate. If
they choose airport with high customer satisfaction and brand image, it automatically gives
more passenger to airline.
 Scheduled flights:
This is most critical element for any airline because its effect reflects many ways. Different
airline have a different policy regarding flight delay. Some flights are only known for their
punctuality in timing because it increases airline’s image.
If we talk about low air fare carriers like Ryanair80, Cimber81, Norwegian82 and SAS83, they
need to move fast and spend less to compete to low air fares. So to be schedule flights need to
ready to departure with all expected passenger. Some might argue that how a TTS can help to
flight for online departure. So to answer to that we can say that TTS cannot take passenger
early to flight but TTS always make sure that passenger will not come late due to problem in
airport transit.
 Decrease airport landing fees:
Off course increase in number of passenger is very important but also decrease in operating
cost is also equal or more important because decrease in operating cost leads to increase in
80
http://www.ryanair.com/en
http://www.cimber.com/
82
http://www.norwegian.com/en/
83
http://www.flysas.com/en/uk/?vst=true
81
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Trolley Tracking and management
profit margin. Just to conclude above point we can say that having online flight’s departure
and arrival can decrease in airport landing fees.
Further to that online flights can save money on other expenses on airport. For example in
winter time if there is a snow and as per aviation rule, flights are not allowed to fly without
cleaning that snow. So to do that they need to spray deicing chemical on airport and it cost
money. More the waiting time creates need of deicing.
 Strong relation with airports:
As we talked so many times about interrelation and interdependency of airport and airline, it
is clear that for any airport it is wise to have a good and strong relation with airports. That
relation gives airline a chance to increase its business. For example, Person needs a good
relation with everyone to get respect and help from them. This relation also makes his life
easy by taking motivation from other people.
 Trust towards passengers:
This point follows from above point because good relation between airline and airport creates
loyalty in the eyes of passengers. Passengers can see good facility like TTS on the airport and
they also expect the same from the airlines. So with that, airline can also try to keep them upto-date.
 Smooth and transparent work:
Having good reputation by having good system like TTS, airport expects smooth and
transparent work from airline as well. This expectation and efforts can add value in the new
aviation businessmodel.
 Easy to adopt changes:
Above discussion about relation and work is plus for airline and airport because having those
advantages they can implement any change very easily. This is all because of transparency
and improved relation.
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Trolley Tracking and management
 Economic of scale:
 Economic of scale is very famous term in economy to earn enough profit margins in
pressure situation. Economies of scale refer to the cost advantages. Company can
decrease cost per unit by increasing number of production unit.84
Here airline can take advantage of well-equipped airport because famous and good airport
normally have enough passenger traffic for any airline. So having more passenger airline can
afford to buy new airbus 380, which can facilitate three times more passenger than normal
airbus 330-380.
This economic of scale can also airline to decrease air fare and still they can maintain profit
margin.
15.3. Benefits to Airports
Over four billion passengers travel by air for many reasons each year and purpose can be
business or personal. However, the aviation industry is also getting the recent economic
downfall: Number in passenger has dropped in this year. However, the industry association
ACI Airports Council International has reported the first signs of stabilization since the
middle of the year. Even so, airports throughout the world are under intense cost pressure
when it comes to their daily operations – now more than ever before. In view of this situation,
cost cuts are unavoidable – and this includes trolley tracking management.85
Increasing growth of air traffic is resulted by increase of individual mobility. This increasing
number of passengers has different demands for airport. This demand can be luggage
transport service and convenient shopping during transit time at airports. TTS offers a
complete solution for luggage trolley and those trolleys can also make passenger’s shopping
easy and very convenient. Those trolleys can design according to particular airport’s need, so
we can say that they are made to satisfy individual need for trolley.86
`
Airport with leisure facilities, high customer satisfaction and all other possible
services considers as a best and valuable airport. Passenger automatically attract to this kind
of airports.
84
http://en.wikipedia.org/wiki/Economies_of_scale
http://www.wanzl-airport.de/300/En/Home/Press.html
86
http://www.wanzl-airport.de/300/En/Home/Press.html - CONVENIENT ADVANTAGES
85
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Trolley Tracking and management
According to Skytrax audit Dubai International airport scored highest in the serve result for
best possible services on or at airport in year 2009.87 This conclusion is drawn especially after
installation of Trolley management solution in new terminal-3 by Lyngsoe systems. Dubai
International airport also scored highest when it comes to customer satisfaction.
That new installed TTS makes life easy for the authority staff. They can track trolley and
make available at required place. This efficient work can also be done with fewer staff than
before. Dubai airport also had a problem with missing and damaged trolleys but with
installed TTS they have total control over each and every trolley movement. Just like human
data, airport can have all data for individual trolley for further decision making and
maintenance task.
TTS also work as a planner, which works with the flight schedule and number of require
luggage trolley for arrive and departure passengers. So having this additional facility airport
able to transport require trolley at required position. This task can be done by one person,
who can push 30 trolleys on trolley scooter.
Advantages88
After having so much discussion about TTS in relation to Airport, now it is time see
how it benefits to airport. This is most important part, as airports are the prime customers for
TTS.
Below some advantages can give a brief idea about their future investment within their
airport and below advantages can also influence their choice and preference towards future
change.89
 Instantly locate all Trolleys:
As TTS works with RFID which can track and give exact location of the trolley. So operator
can see all the trolleys’ location and they also can also count trolley by looking at the system
87
http://www.wanzl-airport.de/300/En/Home/Press.html
http://www.wanzl-airport.de/300/En/Home/Press.html - New wanzi TTS
88
67
Trolley Tracking and management
screen.
 Accurate location of trolleys:
As discussed before TTS can give operator an accurate location of the trolleys and this is
done by installed RFID in the trolleys.
 Scheduled and on-demand trolley availability:
This TTS helps in daily airport operations and add values in airport services by giving
comfort to passengers. TTS also work as a planner, which works with the flight schedule and
number of require luggage trolley for arrive and departure passengers. So having this
additional facility airport able to transport require trolley at required position.
 Preventive and easy maintenance due to easy visibility on map:
TTS for airports propose all trolley visibility and availability and this will add value in the
daily airport operation. It makes ground staff’s work easy and makes them more productive.
We know all assets need maintenance and TTS makes this work easy for ground staff
because they know exact date and work for individual trolley. By doing this they can save
time and money for airport.
 Events triggering variety of alerts for e.g. equipment entering restricted area:
Use of RFID in TTS gives more possibilities and advantages to airports because with that
airports can set their privacy policy regarding trolley. For example: If Trolley goes in to the
shopping area it saws whole map with specific alert. In the same way they can differentiate
area to track trolley’s movement. TTS gives clear picture for location of trolleys, which
makes it easier to take action against these irregularities
 Disappearing trolleys:
Beside above all advantages, TTS allows airport to identify weakness in the infrastructure,
which can create possible theft or damage of trolleys. This system makes airport staff up-todate, especially for trolleys. This can decrease loss and damage of trolleys because loss of
trolley means loss of money for airport.90
90
http://www.lyngsoesystems.com/airport/trolley_management.asp
68
Trolley Tracking and management
 Alert for shortage of trolleys, when a shortage exists91:
As mentioned earlier about RFID in trolley, which connect to censors and those censors gives
data about trolley’s movement. This is all computerized system and person at the airport can
easy for shortage of trolley by indicator, special color or by special alert. System is also
connecting with the airport flight schedule, so with the shortage alert it automatically gives a
required number of trolley for particular shortage.
 Airport image
This is center point for all other advantage because this is most important and also connected
directly with customer. Airport image is depending on available possible facility at airport.
As TTS is new technology for airport, so it is not available for all airports. However having
this facility gives high score for customer satisfaction and it results in increase in airport
image.
 Increase in customer satisfaction:
Whether landside or airside – the worldwide new and until now one-of-a-kind TTSis
improves service quality and thereby also passenger satisfaction.
 Possibility to know customers’ buying habits:
It is also true that the innovative product can be used to passenger routes, for example: To
know customer satisfied and happy shopping within airport can identify with available data in
the system about individual trolley. They can also use this data to make any future change or
to take decision to improve customer satisfaction.
 Less administration staff required:
After having data about number of required trolley at required place, it is very easy for a
person to direct himself or to other person to perform that task. In general one scooter can
move 30 trolleys at one time and this can be done by one person. So it is clear that this task
required less staff and time in comparison with manual work.
91
http://graphicmining.com/tracking - Tracking at airport
69
Trolley Tracking and management
 Increase in airports’ productivity and efficiency:
TTS for airports fulfill all requirements regarding trolley management and this is noticed to
be big and important task for any airport.
New trolley solution improves the operational efficiency, maintenance activities and asset
management, which increases airports’ productivity and efficiency.
 Improve the distribution process of trolleys:
Airports need reliable logistic system to ensure effective distribution process of trolleys. It
has been very important these days in today’s heavy air traffic. Implementation of TTS at
airport proves best possible for solution for airport trolleys’ distribution process. Many
proactive airports already facilitated with this solution. However it needs to available each
and every possible airport for best possible result.92
Multiple benefits:
 Reduce costs and increase performance:
The prime benefits to airport are cost saving in wages because with this system airport
requires fewer man-hours. This is just because TTS make things easy and airport
staffs do not have to run for trolleys all the time. This increases performance as well.
It reduces asset investment and gives optimized services to passenger by increasing
performance level.
 Passenger-oriented approach:
As discussed in the beginning that airports are more focus on passenger service and
with TTS system they can meet the future increasing demand for passenger service.
TTS is designed to improve trolley management on the airport, thus improving
passenger satisfaction in the airport.
92
http://graphicmining.com/tracking
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Trolley Tracking and management
16.
Case Study
16.1. Introduction
Suvarnabhumi International Airport established in 2006, offering a 130 passport control
checkpoints for arrival, 72 for departures. 26 customs control checkpoints for arrivals, 8 for
departures. 360 check-in counters and 100 additional counters for passenger without luggage
including 22 baggage conveyor belts.93 The airport can currently support about 45 million
passengers. Currently, passengers that use Suvarnabhumi International Airport are
approximately 50,000 per day.94 AOT’s committee expected to increase its capacity to
welcome more travelers under the idea of Single Airport project. Airport will be able to
support about 103 million passengers in year 2025. It will be about 73 million international
passengers and 30 million domestic passengers.95
The airport listed in 10th range of the world’s top 10 airports in year 2010. It was announced
by the world’s largest airline & airport site, Skytrax. The airport moved up from 16th position
in year 2009.96 It was regarding the improvements of its service- Suvarnabhumi Airport Rail
Link or Airport Link. The express rail services to traveler from airport directly to downtown.
Besides, the airport link is giving direct check-in service to passenger who needs to use
airport link, they do not need to carry their luggage from airport. They can take it from the
rail station that they preferred. Thus, they just need only to confirm when check-in at the
check-in counter. That was the one reason Suvarnabhumi International Airport was listed in
year 2010.
16.2. System management of TAGS
The necessity in the airports’ view is trolley management. AOT97 first had a contract with
TAGS98 to arrange and manage trolleys in Suvarnabhumi International airport in order to
service to the passenger. Included; luggage trolley (land side), shopping trolley (air side) and
93
www.airportbangkokonline.com
www.oknation.net/blog/print.php?id=426958
95
www.prachachat.net/news_detail.php?newsid=1311924837&grpid=&catid=00&subcatid=0000
96
www.worldairportawards.com/Awards_2010/Airport2010.htm
97
Airports of Thailand Public Company Limited
98
Thai Airports Ground Services Co Ltd.
94
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Trolley Tracking and management
large trolley for the group tour. With contract binding 532.8 million THB in 7 year since 28th
of September 2006 till 28 September 2013. There were stated two main responsibilities in the
contract;
1. Providing enough trolleys for the passenger and
2. Providing enough employees to manage trolleys in Suvarnabhumi International Airport.
Thus, Trolleys are asset of TAGS. All responsibilities are TAGS concern; trolleys must be
ready for use, not broken or defected. The company is required to store and prevent loss of
the trolleys. When the problem of lost trolleys occurred TAGS refused to have any
responsibility and refused to pay penalty.99
Giving better service to passenger through their destination is to provide trolleys management
which can give comfort to the passenger. Unfortunately, there are not so many airports that
have a good trolley management. This would influence directly the airport and also all
airlines that land there.
On the other hand, some airports do provide a better service for the passengers; this would
also influence directly the airport and its airlines. As Suvarnabhumi International Airport
listed on the 17th position in 2010 moved to the 15th position in year 2011 as the busiest
airport for passenger traffic in the world.100 As huge number of passenger arrive in, depart
from or transfer through the airport every day, the airport ought to give the passengers better
service, as they expected. One of the services that most passengers are using is to take trolley.
Therefore, the airport should have a new innovation technology and well management
system.
TAGS had a contract with AOT to provide enough trolley to the passenger, without any
management system or high technology innovation. So, then comes the situation, when there
are not enough trolleys in the proper area. The staff of TAGS would contact the trolley
department, and then the department would contact their staff to find trolleys. Then it was
understood that some trolleys were in the parking lot, some were in the food center or
restaurants and some of them were out of service area.
99
www.gotomanager.com/news/details.aspx?id=74876
www.airports.org/cda/aci_common/display/main/aci_content07_c.jsp?zn=aci&cp=1-5-212-218222_666_2__
100
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Trolley Tracking and management
What happened between TAGS and AOT? The number of trolleys in the airport started to
decrease. The reason was that some group of people stole them away and separated them by
parts when each part was sold to recycle shops depending on the material of the part. TAGS
could not admit any responsibility because they did not have a tracking system, which can
show where the trolleys are. The big trouble between TAGS and AOTs was in November
2008.101 It started with closing down of the airport due to political tension; passengers inside
the airport could not go out. Traveler outside the airport could not get in the airport to travel
to another destination. Flights by the airlines had been cancelled and there were no direct
flights to Suvarnabhumi International Airport. People got stuck in the airport hopelessly
around 1 month. This situation, “No Way Out” had called by Thai’s newspaper. 102 Terrorist
took all properties that belong to the airport. Mostly trolleys because they were the only thing
which could be moved around and able to carry another thing. Trolleys were lost one by one,
some terrorist took it away and some were sold. TAGS could not monitor that situation.
After coming to a regular situation, TAGS could not arrange new trolleys to the airport. The
system was getting worse, because TAGS could not find trolleys back for the airport and
could not even manage trolleys system. They did not know where the trolleys are, because
they had no RFID tags. AOT needed to develop all service and material that had been
destroyed. Thus, AOT decided to cancel the contract with TAGS and to have a new contract
with a new company.
16.3. The impact of the old trolley management system
Naturally, the airport had experimented with trolley management system, but TAGS
agreement with AOT failed in terms of responsibility towards the trolleys handling. The
problem was not enough trolleys serving to the passenger. The contract stated the service of
9,034 trolleys per day but there were only 3,000 trolleys serving the passengers per day.
AOT cancelled the contract with TAGS, and also sued them to pay a penalty of 2,000 million
THB.103
There were many topics discussed about the trolleys in Suvarnabhumi International Airport.
Most of them were about the trolleys weight, they should not be too heavy, difficult to
101
http://gill-hart.suite101.com/thailands-airport-closures-strand-tourists-a81277
www.bangkokpost.com
103
www.innnews.co.th
102
73
Trolley Tracking and management
control, should have an alarm, they should move smoothly. Some trolleys offered had a
completely not comfortable design.
Besides, inside airport area, where passengers are taking their luggage, there were no trolleys
at the belt no.8-23 there were trolleys in the belt no.6 which was approximately 1 km far
away. Passengers had to take trolleys to carry all belongings themselves. Passengers found
out that the staff of TAGS had hidden away from work and they were not working at all. 104
In addition, when passengers leave trolleys at the parking lot, the staff did not care to take
them back. That shows that the staff did not have any responsibilities towards their job. And
also the company could not manage with this problem; TAGS did not know where the
trolleys were, because the company did not installed tracking system in the trolleys, so they
could not monitoring it. And they could not contact the staff to collect trolleys to the proper
areas.
Meanwhile the weight of previous trolley was 44 kg. This was a big inconvenience for the
passenger to control it, a lot of passengers complained about the weight of the trolley; it was
hard to control, it was not moving smoothly, when passengers go onto an escalator with a
trolley, they could easily to fall down and attack and injure passengers. Due to the heavy
weight, trolley’s break was not working properly when used onto escalator.
In conclusion to this paragraph trolleys that are unreadable simply get lost when using
peoples’ labor trolley management. AOT could not stay in this situation. It impacted the
image of the airport, also within the industry itself when competing with the other airports to
become the world’s best airport in the world.
Trolleys that were lost in July 2008 were 522 and 3.000 lost trolleys in august 2008. This
number could not recover. The reasons for the problematic situation were:
 No tracking system
 Low technology
 Low innovation
 Loss prevention in low level
 No security check point
 Could not monitor losses trolleys
104
www.hflight.net/forum/m-1246249497/
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Trolley Tracking and management
As mentioned above there was huge number of passengers traveling and using the airport.
This could impact an image and the income of the airport when there is a trouble in the
trolley management system.
The contract bounded TAGS to hire 228 trolley staff per day, after the problem occurred
TAGS had been hiring up to 260 staff to work on the management per day. 105 They were
supposed to move trolleys faster in order to show efficiency of the company, but there was no
improvement any better, even when TAGS hired more staff to fulfill the trolleys service.
There were some gaps, for instance; the staff was not working properly their job and they
were getting lazier to take any responsibility.
16.4. Improving trolley system with AP management using RFID
As the problematic situation of trolley management inefficiency of TAGS Company has
happened, AOT cancelled the contract with TAGS and decided to have new contract with
another company. The decision had been made successful by using an auction; AP
Management was set up with registered capital of 10 million THB and won a seven-year
contract, and with this company it worth 566.24 million THB for AOT to provide trolley
services to passengers at Suvarnabhumi International Airport.106 AP management faced the
challenge of offering products that AOT will agree to buy, by giving the best offer to AOT
including the most recent technology, RFID. By contrast, RFID tags can be fitted in secure
locations and recognized by RFID readers without contact.
AP
management
knew
what
problem
Suvarnabhumi International Airport was
facing through. So they thought that, this
was the solution to solve the problem at
Suvarnabhumi International Airport.
AP Management is providing trolleys with
new
105
106
design;
three
wheeled
aluminum
www.gotomanager.com/news/details.aspx?id=77728
m.bangkokpost.com/articledetail.php?channelID=2&articleID=34889
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Trolley Tracking and management
trolleys which are passenger-friendly, stronger, lighter, safer and easier to maneuver than the
older trolleys.107
AP management has invested 250 million THB on its trolleys and radio frequency
identification (RFID) system that ensures trolleys are there ready for passengers at any time,
and also there is prevention of losses of trolleys. Besides, AP management plans to invest 50
million THB more to expand the RFID coverage to all areas of airport’s terminal as well as
parking lots.
Compared to weight of Wanzl trolleys to the previous trolleys, Wanzl have produced light
weight trolley at only 18 kg. With anodized aluminum and good quality stainless steel. AP
management provided a Voyager 3000/Voyage 3000EX from Wanzl. The special about this
model is that it is able to load luggage up till 400 kg. Antibacterial handle with printed
operating instructions, Maintenance-free rod, and break shoe design prevents the castor tread
from wearing.108
16.5. Theory of Clayton Christensen applied to the study case
The idea of Clayton Christensen shows that most of the successful companies stick to
competitor analysis, customer analysis and Market attractiveness. Therefore, in this way the
company believes and follows them to manage the organization. Unfortunately, this extended
analysis can help for the enforced failure of company on the market. Thus, the company is
not focused on creating a new product and/or service.
All the aspects under this theory are for the small
companies to use the opportunities and generate new
products and services. This action of new product
generation is called “Disruptive Innovation” to compete
the market leader.
That is the reason why AP management tried to find the
way to have a contract with big company such as AOT.
107
Ibid m.bangkokpost.com/articledetail.php?channelID=2&articleID=34889
www.wanzl.com/000/En/Home/Products/Passenger_Handling_Services/Landside_luggage_trolleys
/Voyager_3000_Voyager_3000_EX.html
108
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Trolley Tracking and management
By offering a new innovative RFID system, that can keep control over and monitor all
trolleys in the airport. Therefore, giving the best solution for the company and improving
image of airport.

Suvarnabhumi International Airport has developed structure of innovation.
The idea of Disruptive innovation in the aspect of new-market disruption is the new option to
provide new technology or better product than existing product in the market to fulfill
demand that no one compete with.
Suvarnabhumi International Airport faced the problems of lack of trolleys and losses of
trolleys, as airport is listed the top 20 busiest airport in the world as mentioned above. So, it is
quite normal that sometimes the management is not work smoothly. The best solution came
from AP management who challenged the disruptive innovation to the airport. Previously the
trolleys got lost, and staff could not get it back. But AP management offered RFID system
that efficiently prevents losses. The system knows exactly where the trolleys are. Besides, it
can show with the system software where an adequate amount of trolleys in the proper area is
needed by using RFID system monitor to show also which area lacks of trolleys in the
moment.

How all servicing of passengers will be improved, how the problems can be
solved, what will be the future
The answer of these questions is - RFID in trolley system, at Suvarnabhumi international
Airport assisted by AP management to manage trolleys and to provide enough trolleys in the
proper area based on flight schedule in Suvarnabhumi Airport. RFID system that includes
security alarm which is working against loss of trolleys. The system will inform directly to
the controller department which is placed in the parking building of the airport, regarding
trolleys that had been in the trolley free area or outside service area. The controller
department will inform the staff to take them to the service area or proper area.
“Currently, RFID informed that there are 20 trolleys that are out of the service area per day
and mostly they are in the airlines offices area.” said CEO of AP Management.109
109
www.thairath.co.th
77
Trolley Tracking and management
As contract was awarded to newly established subsidiary, AP Management (smart traffic
co.ltd) manages 9034 trolleys per day following the contract, consisting of 2,000 small
trolleys in the airside area. 7,000 medium trolleys for landside and 34 large trolleys for tour
groups.
AP Management is also providing an airport scooter to transport and collect trolleys. Trolleys
can be functioning in two modes - pushing mode and pulling mode. Pushing mode is used to
help the service staff to control trolleys remotely from the first trolley in the row. It is
possible for the staff, in that way, to pull trolleys in a huge number in the same time with
safety. With this option the most important fact is to provide the most availability of trolleys
to continually meet the passengers’ need.
The solution of RFID system can allow control manager to adjust service staff levels and
labor timetables to provide optimum service. In the case with TAGS, the company was hiring
a lot of labor and service staff to work and manage the trolleys. Unfortunately, staff did not
exactly do their job. They thought it might be some other staff to work on this job, so they did
not take any responsibilities. In order to sum up trolleys from outside service area were not
taken back to the collection point. With the help of TTS, it is shown that the good service
does not require a lot of employee or labor for the trolley management process. If the
company tries to manage more efficiently the trolleys they own and invest in the high
technology and innovation, the need of hiring service staff or labor can be minimized.
Passenger got higher satisfaction after new TTS was installed. There were published a lot of
articles and there were a lot of news discussed about the new trolley system in Suvarnabhumi
International Airport. In the discussion forum written by a lot of passengers they explain that
they had used trolleys and experienced the good management of AP Management Company.
This results show the higher passenger satisfaction level and stated also that all the
passengers, who tried the system, wanted that the airport keeps providing this good service in
the future.
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Trolley Tracking and management
16.6. Case Conclusion
It had been clearly showed that the TTS infrastructure allows human arrangement and
management, to be reduced. Besides, trolley availability in airport to be improved (the right
number of trolley at the proper area and at the right time), in regard to provide a high
technology with new innovation. Improper area where trolley losses typically occurred has
been identified. TTS also creates passenger satisfaction and makes passengers safer and
travelling is made easier because the system’s software always knows where trolleys are
located. The delivery of trolleys to the passengers is together with the superior service.
Therefore airports can benefit a lot from TTS adoption.
Airport can benefit from TTS concession because it helps to increase airport’s image, and this
is proved by passenger satisfaction’s survey. With TTS an airport can receive reward and be
better within the industry. Regarding the passengers’ aspect, they get a better service and
their satisfaction gets improved. TTS also helps their travels become easier and this brings
more positive final experience.
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Trolley Tracking and management
17.
Conclusion
As it was revealed the aviation industry is developing as well as changing their business
model throughout the past years by focusing more on non-aeronautical activities. As
nowadays peoples’ living standard is improved along with the developing world, the
customer preferences are increasing by demanding better service, in this case within the
aviation industry. To cope with the customer preferences the airports are competing by
providing high services. In present most profitable area within the aviation industry is retail
shops. As the numbers of travelers are increasing and the airports competition boost, they
need to improve their image by providing better service in order to attract more passengers
followed by more airlines landing at the specific airport.
From the marketing mix analysis, it shows that airports do compete with each other in a
number of major business segments. The emergence of secondary airports has created intense
competition for some major airports. As well, major airports compete among themselves for
connections, for gateway traffic, branding image, attracting more customers and airlines and
even more destination. The 4P’s revealed a number of dimensions in which airports can
compete. The product offered by an airport will affect both carriers and consumer choice. The
most important part is the airport product nowadays is more focusing to reduce operating
costs for air carriers. Price competition was discussed, with emphasis on a) the two stages of
air carrier price elasticity – leading to different pricing policies for the different stages; b)
finding means to lower airline costs, such as through competitive choices for various
services; and c) investigating use of incentive prices which allow air carriers to lower their
unit costs by making more efficient use of the airport’s infrastructure.
Promotion of the airport is especially important for secondary airports in a region and for
secondary international gateways. Promotion does not imply airports should simply advertise.
Rather promotion should focus on creating awareness of specific services at an airport and
advantages such as reduced driving times for some parts of the region to attract more
passengers as well as airlines. Finally regarding the physical distribution, it points out the
airports must pay attention to how they appear in CRS systems and on the internet so as to
access the greatest number of passengers possible.
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Trolley Tracking and management
The success of all the businesses depends on how they satisfy their customers; therefore
aviation industry should focus more on what are the customer needs in a daily basis as it
changes frequently.
One of the most important factors while choosing an airport from customers’ point of view is
available number of shops as well as comfortable carriage of the baggage. In order to feel
relaxed while shopping the customers need trolleys to make it easy. In past years it has been
easier to manage the trolleys as there is not that much passengers who travels and shop inside
the airport. But nowadays one of the biggest challenges the airports are facing is to make
trolleys available according to the number of passengers. Therefore most of the airports are
now trying to find a solution to manage their trolley system. Moreover this has been a huge
problem for the European countries as the labour cost is high. Therefore there should be a
technical solution in order to manage the trolleys and improve the customer satisfaction. It
will be highly recommendable for the countries with higher labour cost but as well as to
Asian countries where people cost is cheap but the people are not much responsible and there
are more human mistakes. One of the technical solutions that airports can benefit from will be
introduced in the next chapter.
Tracking of trolleys may be different depending on the industry and technology involved but
more or less it is a concept developed to help people and improve efficiency in many business
fields. By taking TTS in airport industry, the report looked carefully on airports’ and airlines’
operations and how such a system can bring value in this environment with complicated
processes. When people are involved, the high level of customer service plays a very
significant role and in private within the aviation industry a change is needed for a better
passenger service. The RFID in the TTS concept that some companies offer is one solution
that can improve the airports’ operations. As an introduction of this part of the project, RFID
TTS concept historically since 2004 to airlines also brings value in increasing the airlines
income from catering and free-duty items on board. For a better explanation on our findings,
this section that revealed all RFID TTS benefits helps us to conclude that the system is very
efficient, there are no defaults and compared to the old solutions from other companies it is
easier and free of charge to its users/the passengers at any airport. It is also worthy to mention
that the investment will increase the airport’s competitiveness by improving its image and
also the airport will benefit with decreased labour cost, decreased number of trolley thefts and
increased revenue by more travelers who will chose to land on an airport with the best
service.
81
Trolley Tracking and management
Having TTS in the airport industry helps fulfill passenger satisfaction. Besides, it is easy to
manage and control. The new innovation for trolleys can be very helpful to both passengers
and airports. TTS system helps also to prevent losses of trolleys, because airport’s authority
can easily check where exactly all the trolleys are. With flight schedule checks available-the
airport can offer enough trolleys for the passengers at any time. Passenger will certainly be
more satisfied when having been provided a new innovation such as TTS. Passengers will
also complain if the airport provides low service: for example if the passenger has to
manually search for his trolley. Thus, having TTS installed can easily prevent having trolleys
in outside service area and therefore create a good image for the airport, plus fulfilling
passengers’ satisfaction.
Quick changes in air traffic, the increase in passengers and growth of low-fare carriers
have forced airport to take action towards improvement. Fortunately TTS is an innovative
product with ultra-modern technology for professional luggage transport in the airport area.
From above all discussion we must say that airport having trolley management system can
definitely differentiate from other airport with high level of service because directly and
indirectly TTS adds value. These added value can not only benefit to airport but also it add
values in airline industry and these two changes makes aviation business model profitable,
advance, trustworthy and proactive.
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18.
i.
Biblography
Articles
 Airline Industry outlook – Jan 2011
 Airport Economics survey 2010 (Airports council international)
 Competition between airports in the new Millennium: what works, what doesn’t work
and why: Dr. Michael Tretheway Executive Vice President, Marketing and Chief
Economist, InterVISTAS Consulting Inc.
 Dr Peter Morrell, Air Transport Group, Cranfield University Report
 How Airports Work October 2009 , Sean McCarthy, Director of Help-me-park report
London Gatwick Airport
 M.W. Tretheway “Airport Marketing: An Oxymoron?” in G. Butler (eds.), Handbook
of Airline Marketing, McGraw Hill, 1998.
 Real Time Locating Systems (RTLS) 2007-2017
 Robert Bor, Passenger behaviour, 2003
 Trolley management systems, Wanzl’s expanded product programme, October 2007
ii.
Literature
 Airport Competition:
Forsyth, Edited by Peter Gillen, David Müller, Jürgen,
G.A.R.S. June 2010
 ICAO. 2006. Economic Contribution of Civil Aviation. International Civil Aviation
 Ingeman Arbnor and Bjørn Bjerke: ”Methodology for Creating Business Knowledge”,
Sage Publications, 2. edition, 1997.
 Innovation and the general manager by Clayton M. Christensen
 Managing and shaping innovation by Steve Conway and Fred Steward
 Philip Kotler – Marketing Management
 The innovator’s solution by Clayton M. Christensen and Michael E. Raynor
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iii.
Websites
 Air transport Services by World Trade Organization, Council for Trade in Services
 Airline revenue http://en.wikipedia.org/wiki/Airline
 Federal Department of Foreign Affairs, Air Transport Agreement
 http://www.eda.admin.ch/eda/en/home/reps/nameri/vusa/wasemb/polaff/wasaus/wasat
a.html
 http://en.wikipedia.org/wiki/Economies_of_scale
 http://gill-hart.suite101.com/thailands-airport-closures-strand-tourists-a81277
 http://graphicmining.com/tracking
 http://graphicmining.com/tracking - Tracking at airport
 http://trolleyscan.com/
 http://www.active-radar.co.uk/tracking_trolleys_in_airports.html
 http://www.aeroscout.com/content/news-and-events/press-releases/munich-airport201009/munich-international-airport-selects-ae
 http://www.airport-business.com/2008/05/t3-dubais-latest-infrastructural-marvel/
 http://www.australiantrackingsystems.com/images/TrolleyCop%20Brochure%20%20
New%20PDF.pdf
 http://www.bukisa.com/articles/372776_the-smart-trolley-radio-frequencyidentification-and-airline-trolley-management
 http://www.bukisa.com/articles/372776_the-smart-trolley-radio-frequencyidentification-and-airline-trolley-management
 http://www.bukisa.com/articles/372776_the-smart-trolley-radio-frequencyidentification-and-airline-trolley-management
 http://www.bukisa.com/articles/372776_the-smart-trolley-radio-frequencyidentification-and-airline-trolley-management
 http://www.cimber.com/
 http://www.codegate.co.uk/healthcare/tracklaundry
 http://www.codicbcn.com/down/aerocodic%20dossier%20english%202003.pdf
 http://www.codicbcn.com/down/aerocodic%20dossier%20english%202003.pdf
 http://www.flysas.com/en/uk/?vst=true
 http://www.garsonline.de/Downloads/Future%20Airport%20Competition/031113Morrell.pdf
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 http://www.iata.org/SiteCollectionDocuments/Example_Material_Airport_Distance_
Learning.pdf
 http://www.id-it.nl/index.php?option=com_content&task=view&id=28&Itemid=39
 http://www.kazarooni.net/products_services_engineering_technical_service_trolley_
management.htm
 http://www.lyngsoesystems.com/airport/trolley_management.asp
 http://www.norwegian.com/en/
 http://www.pattayamail.com/travel/suvarnabhumi-airport-passenger-volume-up-126657
 http://www.rfidjournal.com/article/view/3429
 http://www.rfidjournal.com/article/view/3429/1
 http://www.ryanair.com/en
 http://www.tagmasterna.com/products/Brochure_New_generation_AVI.pdf
 http://www.trolleytracker.com.au/AboutUs/TrolleyTracker/tabid/54/Default.aspx
 http://www.tyrmasterplan.com/airportmasterplan/file/doc/tyr___chapter_3_aviation_a
ctivity_forecast.pdf
 http://www.vbssys.com/Products/Traceability/Smokehouse%20Tracking/smokeTrack
.php
 http://www.wanzl.com/000/En/Home/Products/Passenger_Handling_Services/Airport
_Cart_Service_ACS/Trolley_management_concession.html - Trolley management
concession.
 http://www.wanzl-airport.de/300/En/Home/Press.html
 http://www.wanzl-airport.de/300/En/Home/Press.html
 http://www.wanzl-airport.de/300/En/Home/Press.html
 http://www.wanzl-airport.de/300/En/Home/Press.html
-
CONVENIENT
ADVANTAGES
 http://www.wanzl-airport.de/300/En/Home/Press.html - New wanzi TTS
 m.bangkokpost.com/articledetail.php?channelID=2&articleID=34889
 m.bangkokpost.com/articledetail.php?channelID=2&articleID=34889
 www.aci.aero ”The airports business”
 www.airportbangkokonline.com
 www.airports.org/cda/aci_common/display/main/aci_content07_c.jsp?zn=aci&cp=15-212-218-222_666_2__
 www.bangkokpost.com
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 www.gotomanager.com/news/details.aspx?id=74876
 www.gotomanager.com/news/details.aspx?id=77728
 www.hflight.net/forum/m-1246249497/
 www.innnews.co.th
 www.oknation.net/blog/print.php?id=426958
 www.prachachat.net/news_detail.php?newsid=1311924837&grpid=&catid=00&subc
atid=0000
 www.thairath.co.th
 www.wanzl.com/000/En/Home/Products/Passenger_Handling_Services/Landside_lug
gage_trolleys/Voyager_3000_Voyager_3000_EX.html
 www.worldairportawards.com/Awards_2010/Airport2010.htm
 www.worldairportawards.com/Awards_2011/Airport2011.htm
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19.
Appendixes
19.1. Appendix 1 - Care Evaluation
The Group adopted the CARE as their core values – CARE: C for Considerate, A
forAccountable, R for Respectful and E for Energetic. Adoption of these four values madethe
group able to work successfully and with eagerness. We also believe that besideproject
process, it was important for us as individuals to improve ourselves by learning from each
other. This has been done with our good team work. Such values are not only for the success
of the report but also forindividuals’ maturity and growth.Considering the fact that this is our
first semester project for our study at the Aalborg University and most importantly it was first
project for us to work together. Even though we have not worked together before, all
members agreed that the project workingprocess was satisfying. We took the opportunity to
work in a group with individualscoming from different countries- Bulgaria, Thailand,
Srilanka and India. The project language was only English and everyone had to follow that
rule and show respect to the others who does notunderstand his/hers mother language.The
group decided not to point out any leader as every individual was considerate andrespectful to
the others and brought a unique perspective to the project. Everybody hadthe chance to
express their opinion with respect to other opinion as well. Decisions were made on the base
ofevaluation of opportunities and vote for the best ones. Main principal for our group was
tomeet expectations for each member of the group.Regular meetings were usually held on
either in the University or in the Aalborg library. It wasan advantage for the group members
that we all live close to the Randers library and noone had trouble of attending the meetings.
The Library suggested us a great workingenvironment, quite inspirational and very
convenient. In the breaks the group memberswere discussing hobbies, home countries’ habits
and traditions inspired by all the books,music and movies at the library. These moments of
chatting brought us closer relationshipand more tolerance in the project work. We also used
some material from the library inour project.The actual proof that everybody was committed
to the group work was that all memberswere present in all meetings and especially punctually
on time. We were energetic and consistent in our work. We had a pre-schedule of themain
activities with certain individual responsibilities. The project work was progressing fast
intime and we managed to have well distributed work for the last days so that we do notpush
everything for the last minute. Some of the members had an arrangementfor the Christmas
and the group tookthe decision to be respectful andconsiderate to their needs. So the work
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wasfinished two weeks before the deadline. Itchallenges us to study more about theparts and
tasks assigned to us. In additioneverybody has to study the whole projectitself.There were
some disagreement and deepdiscussion on some topics but it is allabout achieving excellent
result forproject. One of the greatest challengesthat the Group faced was about thecontent of
project. What do we includeand exclude in the project? Why writesomething about that?
Interesting thing isthat we only had hard words like “I do notunderstand your point. Can you
explainagain?” Not real arguments haveoccurred in the working process and allmembers
were left with positive feelingtoward it.
19.2. Appendix 2 - Acknowledgement
In construction and submission of this report, we would like to thank each and everyone who
involved and helped in this very important process to get the final output.
First of all we would like to thank our tutor Keld Arenholt Christensen, who gave us
opportunity to work with him and has helped us to find good topic. Special thanks for his
thoughtful support throughout the course of process. He gave us confidence from the
beginning to end. Most importantly he trusted us and gave us as much as primary data he can
in relation with the study.
Secondly, we would like to thank our teacher, who gave us priceless knowledge about the
course, practically and theoretically. This knowledge helped us to work very effectively.
Special thanks to Aalborg University to give us an opportunity to study in its highly reputed
organization. Without that we have not reached this far.
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19.3.
Appendix 3 - Definition
 Exciter-The Exciter wakes up the tags in (125Khz) so it can be read by the reader in
(433 Mhz) excites to save battery in the tags
 Landing and passenger processing: - The airport normally still obtains some
revenues from these third party services, through rents, fees or royalties paid by the
third party provider to the airport
 Pax Critical Resources :- Resources an airport need to have for servicing critical
issues for passengers
 Strategic congestion point:- is a possible point for bottlenecks (traffic-jam) in eg.
Baggage hall or distribution center
 Suvarnabhumi Airport :- Thailand is in range of 15th busiest airport in the world
 Transborder traffic:- In Canada, air traffic between Canada and the U.S. is referred
to as transborder traffic
 ZigBee:- ZigBee is a specification for wireless personal area networks
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19.4.
Appendix 4–Abbreviation
AOT - Airports of Thailand Public Company Limited
ASD – Air Service Development
CRS – Computer Reservation Systems
IATA-International Air Transport Association
LCC – Low Cost Carriers
RFID – Radio Frequency Identification
RTLS-Real time locating systems
TAGS - Thai Airports Ground Services Co Ltd.
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