BLENDING SMART TECHNIQUES WITH SEXY APPROACHES
By Nicole Nelson
The new carrier. The new city. The new growth. In the language of air service development, all of the above translate to “the sexy things” associated categorically with success, according to Brian Pratte.
As San Antonio International Airport’s Chief Air Service Development Officer, Pratte is proud to tout the “sexy” trifecta SAT has achieved with the announcement of service via Sun Country Airlines to its Minneapolis-St. Paul hub in May, followed by the commencement of Sun Country service to Portland International Airport in June. SAT is also thrilled with its Valentine’s Day gift of nonstop flights to JFK via American Airlines that began Feb. 14.
Yet as wonderful as these new routes may be, both Pratte and San Antonio’s Aviation Director, Russ Handy, attest that they are perhaps equally, if not more, gratified by the existing routes that continue to grow and thrive in the highly leveraged marketplace.
“This probably doesn’t sound real glamorous, but I’m as proud of the things that you don’t see as much of as I am about the big wins in air service,” Handy explained, noting the gratification that ensues when air carriers decide to not only stay in a route but expand in that route by adding additional seats or larger aircraft. “We’ve had a couple of airline meetings in the recent past where airlines have stressed how well their routes are doing. When you see a bunch of positives, you know that not only did you secure that new route, but you made a good overall decision. We’ll have some losses as well as wins, but I think that is what I’m most proud of.”
STEADY AND SEXY
Campbell-Hill Aviation Group Vice President, Kevin Schorr, applauded airports such as SAT that take a well-rounded approach to route development.
“People instinctively think about marketing and talking about new service, but we also need to keep the existing service in mind,” Schorr said. “Airports need to make sure the public knows what they offer because, in the end, it really comes down to butts in seats, and that is going to determine whether or not you maintain service for the long run or lose it before it has a chance to mature.”
Pratte said that SAT has taken a three-pronged approach to air service development to better serve the tremendous growth the mid-sized airport has experienced in recent years. In 2017, SAT exceeded 9 million passengers for the first time ever, and by 2018, the airport exceeded 10 million passengers.
“There is maintenance and keeping what you’ve got; expansion of what is already there and, of course, the growth,” Pratte said. “We have been able to hit on all three approaches. I think that’s really what’s more beneficial than just one singular victory.”
Three years ago, the city and the airport system made a strategic decision to focus on air service development, both air service new development and retention, Handy explained. “Brian and his team, in an impressive amount of time, developed an air service development plan, a strategic plan with goals and metrics identifying, with data, air service opportunities and how they might go about that, and they tackled it.”
Prior to Pratte’s hire, air service development was relatively flat – growing by roughly one percent per year – despite the fact that the San Antonio community was consistently growing. The numbers have risen very quickly since then due, in part, to the under-told story of up-gauging with added frequencies and added capacity. Pratte and his team developed the plan and have spent up to three-quarters of their time on the road, selling the realities of SAT’s demand potential to airlines. The result was that the airport system exceeded its five-year goal in a little over two years.
Once an airport has a stellar route development team in place, one might think the job of air service development is seemingly formulaic. Between meetings at air carrier headquarters and air service speed dating conferences on the road (ACI-NA’s JumpStart® Air Service Development Conference) and periodic conference calls with the airlines from the home airport office, there are seemingly tried and true techniques and strategies.
But truth be told, it is far from a wash, rinse and repeat affair, according to Campbell-Hill’s Schorr. As each airport has its own unique circumstances, the air service development consultant shared that in-depth data dives and community outreach have proven necessary to round out airport-airline mating and relationship rituals.
“What we now have at our disposal are new data and new tools that make us smarter and hence make the airlines smarter about existing opportunities and about how to market new service, as well,” Schorr said, emphasizing the customized approach. “We now have better insights as to who is using the airport or not using the airport, and other choices they are making. Which airlines are they flying, for example? While we have been able to get that kind of information for years, we can now get it sooner and with greater granularity.”
Edmonton International Airport is all about the granularity as it relates to air service development. Realizing the vast importance of data, the airport developed “EIA rewards” a proprietary program that has provided the airport with a steady stream of exclusive passenger data since the program’s inception in 2011.
“When our customers reserve a parking stall or become a rewards member, we have the data on where they fly,” said EIA Vice President of Air Service and Commercial Development, Myron Keehn, noting that EIA owns the data derived from the proprietary rewards program. “We have a lot of data on very frequent customers’ travel and we utilize that as a tool to provide data so we can go to the airlines to have a conversation.”
Used in tandem with industry data, Keehn said this valuable information has contributed to EIA’s acquisition of seat capacity, both on mainline Canadian carriers as well as in the lower-cost entrance market with Air Canada Rouge, Swoop and Flair.
“All three of (the new entry lower-cost airlines) provide service from our market and that has, honestly, helped on all routes,” Keehn said, noting the carriers have ‘thickened’ some routes, and added new routes based upon the steady growth demand. “This has opened opportunities for people to travel somewhere they haven’t gone before, which is really helpful.”
The other thing EIA is prone to do is work very closely with the Edmonton business community – whether it be the tech, health, manufacturing, professional services, finance or beyond.
“We take the opportunity to say, ‘Where do you guys need to go?’” Keehn said, noting that the May 18 launch of air service to San Francisco was a community-driven objective with an Air Canada partner. “There is a large tech sector in Edmonton, and they need connectivity from a financing perspective to get to Silicon Valley. The tech communities simply don’t connect, so going through L.A. wasn’t working. They wanted point to point.”
From an airport perspective, Keehn said his team strives to work hard with the airlines in partnership.
“It is a partnership, and we really view it that way,” Keehn said. “We work on both the supply side, working with the airlines to look at where capacity is unserved or underserved, and where they can thicken routes, increase frequency or drive a larger aircraft under the same route itself, and still maintain the same crew cost.”
But that is only part of what EIA does. The other part is the work on the demand side of it.
“My team actually goes out and acts like an airline sales agent,” Keehn said, explaining the airport personnel work with tourist agencies, travel agencies, and trade agencies on both sides of the network route. Keehn again cited the recent Air Canada launch of the nonstop, year-round EIA-SFO route as a prime example.
“We actually had trade missions go down on the business side in advance, and after the route was actually launched, we had a bunch of business-to-business meetings in both cities,” Keehn said. “We actually hosted a group that came up here, and at trade shows as well. So, we drive from a business perspective, a political perspective, and an association perspective – like a Chamber of Commerce or Board of Trade. Then, we do it from a travel and tourism perspective as well.”
Keehn said he believes 2018, by far, was the year EIA has proven to be the most effective at community outreach.
“We were very deliberate, and we spent a lot of time and effort planning and working from both ends,” Keehn said. “I have a team of folks that I like to see often, but I tell them, ‘I really don’t want to see you in the office’ because their business is out of the office.”
DIALING IN THE DATA
Mined data, combined with community education and support, has also played a large role in Ontario International Airport’s rise from a small regional airport under the Los Angeles World Airports system to a vibrant, independent aviation gateway.
In recent years, the Inland Empire airport has marketed its convenience and accessibility in serving one of the fastest-growing population and economic centers in the United States, giving its airline partners more reasons to put more flights in the air. The result has been a double-digit increase in traffic over the past two years.
“I can really get my hands dirty in data,” remarked ONT CEO, Mark Thorpe, who has utilized his vast air service development background to work with reliable sources and consultants to process data and make appropriate industry inferences. “I spend a lot of time myself with it; it is what I enjoy and what I do best.”
Thorpe explained that LAWA acquired Ontario Airport back in the 1960s mainly for diversions. After a long period of growth throughout the early 2000s, the financial crisis hit and service was retrenched to primary airports.
As Thorpe recalled, the LAWA management team focused on building up and adding new facilities at LAX – and they needed to keep all the revenue that they could at that airport.
With that change in management philosophy came a division between the cities of Los Angeles and Ontario, which ultimately resulted in the transfer of the airport with the support of local, state and federal government. As a result, the dynamics changed and the realization took hold that overdependence on one airport wasn’t going to be a good thing for the region in terms of environmental and infrastructural impacts, among others.
“There are a lot of reasons that went into why it was transferred back, but what it means for us now is that we have the only airport in Southern California that can accommodate any significant amount of passenger and cargo traffic growth,” Thorpe said.
ONT had been the most expensive airport in Southern California in terms of airport costs on a per unit basis. But the tables have turned since the transfer to make ONT the least expensive airport in Southern California, in terms of rates and charges. This structure has led to ONT’s ranking as a Top 10 cargo airport in North America with a UPS hub, the Amazon West Regional hub, and the current build out of a FedEx hub facility.
“We’ve already got a lot of cargo traffic growth, but we want an airport that can really accommodate passenger traffic growth,” Thorpe explained.
For this reason, Thorpe has used numeric proof to make a significant case for the resurgent airport in its first stage of redevelopment. For example, Thorpe noted, ONT is more convenient than LAX for 10 million out of 18 million people in Southern California. “We have a huge market to go appeal to and we’re really careful in seeing where we have an advantage of getting to this airport, as opposed to LAX or the other airports on the coast. And that’s where we focus our marketing and our advertising. That’s what we tell airlines about – where our catchment area is.”
Thorpe said the airport is bullish about regaining essential routes that were lost a decade ago to reinstate ONT as a true gateway.
“We’re at this first stage where we’re getting back a lot of services that we’ve lost,” Thorpe said, citing as a case in point the April 22 reinstatement of daily Delta service to Hartsfield-Jackson Atlanta International Airport – as well as a red-eye beginning in June from ONT to the world’s busiest airport.
In addition, red-eye flights prevailed with recent additions to include JetBlue’s service to the JFK market and United’s overnight to Houston. Southwest is entering the San Francisco market for the first time via ONT with four daily flights planned this summer, and Frontier has proven to be “a really great partner” offering frequency to a multitude of markets.
Most notably, however, is ONT’s banner offering of transoceanic service with China Airlines flights to Taipei.
“When you think about a flight to Taiwan from Ontario Airport, it was kind of a seven on the Richter Scale,” Thorpe said, noting that the route is historic as the only commercial aviation flight to either Asia or Europe originating from an airport in Southern California beyond LAX. “It was a major occurrence in the aviation world, at least in Southern California.”
“We’re starting to see things really take off and I think we’ll start to see things reach a tipping point where we really can develop this airport into a second major international gateway in the United States,” Thorpe projected.