Runways to Riches: Airport Tech is Cleared for Take-off
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Airports could unlock billions of dollars in economic value by modernising their core infrastructure technology, lifting earnings by as much as 6 per cent to 8 per cent for operators that deploy digital tools at scale.
The figures come from a McKinsey & Company analysis which suggests that gains need not come from futuristic moonshots, but rather from wider use of proven technologies already operating in pockets of the industry.
And as our own round-up of several airport technology startups reveals, the market also provides fertile ground for emerging firms that can help the ecosystem accelerate.
The finding matters because airports are under pressure on multiple fronts: passenger volumes are rising, margins are tight, infrastructure is ageing, and customer tolerance for friction is shrinking. McKinsey’s October 2025 report argues that many airports look digitally advanced on the surface but remain hamstrung behind the scenes by fragmented data, legacy systems and pilot projects that never scale.
Take the traveller’s reliable irritation: the bag drop. Australian firm Elenium assesses that roughly 4.5 billion suitcases trundle through the world’s airports each year, yet only a small percentage are processed through automated bag-drop systems, an inefficiency that speaks volumes about how much of aviation’s “modernisation” still stops short of the baggage belt.
Business opportunities
The opportunity to unlock value by digitally transforming the airport ecosystem sits atop a fast-growing base of technology investment. Airport IT spending reached about $US8.9 billion in 2024, according to SITA’s Air Transport IT Insights report, and many operators expect budgets to rise further over the next two years.
The highest-value opportunities cluster around a small set of technologies. McKinsey, for instance, ranks digital twins and automated gates among the strongest levers for revenue generation, productivity and cost reduction, followed closely by AI-driven capacity planning, predictive maintenance and smart baggage systems. These tools promise not only lower operating costs, but also higher throughput, better asset utilisation and more resilient operations during disruptions.
Passenger acceptance is also strengthening, particularly for biometric processes that speed up check-in, security and boarding. IATA’s 2025 Global Passenger Survey found that half of respondents had used biometrics at some point in their airport journey, up from 46 per cent a year earlier. About 85 per cent of those users said they were satisfied with the experience, and 74 per cent said they were willing to share biometric data if it helped them move through the airport faster.
Challenges addressed
The economic upside stems from solving persistent operational problems. Many airports still rely on disconnected systems across airlines, baggage handling, security and terminal operations, leaving managers to react to congestion rather than anticipate it. McKinsey argues that AI-powered planning tools can reallocate gates, check-in counters and staff in real time based on actual passenger flows, reducing queues and missed connections.
Maintenance is another quiet saboteur of airport efficiency. Fixing things only once they break keeps baggage belts stalled, escalators idle, and terminals uncomfortably warm or cold. Predictive maintenance, using sensors and analytics to spot trouble before it strikes, promises fewer breakdowns and lower costs, making it potentially one of the quickest wins even for cash-strapped airports.
Energy use is a third pressure point. Airports are large, complex buildings with fluctuating demand across terminals. Digital twins, which create virtual replicas of physical assets using sensor data, can help operators coordinate operations and optimise energy consumption. SITA in 2024 reported that 86 per cent of airports listed building energy efficiency as their top sustainability priority, up sharply from 2023.
Business impact
Early deployments point to tangible gains, though many results are based on vendor-reported case studies rather than independently audited data. At Amsterdam’s Schiphol Airport, a digital twin used to optimise heating, ventilation and air-conditioning reduced carbon emissions by about 375 tons a year and cut operating costs, according to engineering software provider Hysopt.
Schiphol has also used condition monitoring on baggage handling equipment to reduce downtime. Industrial analytics firm Samotics says the airport avoided more than five hours of baggage belt outages through predictive detection, helping smooth peak-period operations.
At London’s Heathrow Airport, meanwhile, materials handling specialist Vanderlande has rolled out predictive maintenance across roughly 2,000 baggage system assets in Terminal 3, using sensors and cloud analytics to anticipate failures. The system went live in 2024 and is intended to improve reliability while lowering maintenance costs.
McKinsey cautions that the biggest risk is not technology failure but organisational inertia. Many airports run multiple pilots at once without a clear path to scale. The report recommends narrowing focus to one or two high-impact initiatives that can be expanded across terminals within six to 12 months.
Industry context and outlook
Adoption is accelerating, but barriers remain. Privacy regulation continues to shape how biometric systems are deployed, particularly in Europe, where data protection authorities have scrutinised facial recognition in airports. The European Data Protection Board issued guidance in 2024 on the lawful use of such technologies, underscoring the need for careful governance alongside efficiency gains.
But even here, opportunities abound. OneReg, a New Zealand maker of aviation-compliance software, offers a disarmingly simple pitch: speed, without recklessness. By converting regulations and audit evidence into a searchable digital system, it aims to replace the industry’s fondness for Word and Excel paper trails with something closer to a working memory.
Despite those constraints, industry groups see momentum building. Airports Council International Asia-Pacific and Middle East reported a 14 per cent increase in planned technology investment for 2024 and said about 60 per cent of airports expect to roll out biometric processes across the passenger journey within five years.
For airport operators, the choice is narrowing from operational to essential. The tools are ready, passengers are willing, and the prize is material. What remains uncertain is not the technology, but whether airports can move from pilots and promises to execution at scale.
In Article Two, we set out the tech opportunity through speaking with three smart startups: Elenium, Neoke and OneReg. If you’re an investor in the broader Travel Tech sector these are quite interesting plays: they don’t sit at the top of the marketing funnel, duking it out with the bots to generate and convert traffic; they’re firmly below the bottom of the funnel, playing where and when consumers actually travel. So in theory, they pick up the growth attributes of travel, but with infrastructure-like qualities. What’s not to like?
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