Air Service Development Success

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.

COMMUNITY EMBRACE

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.

drone flying through orange sky

Protecting Airport Airspace

AIRPORTS CONFRONT DRONES WITH SAFETY AND SECURITY TOP OF MIND

By Sandy Smith

One of the last things a pilot on approach to a busy airport wants to worry about is an errant drone colliding with his or her aircraft. Unfortunately, as the world saw in December and January, this is exactly what happened in the airspace near London Gatwick and Newark Liberty International airports. The incident at Gatwick, reported to involve multiple drones operating over a 3-day period between December 19 to 21, resulted in hundreds of flight cancellations and well over 100,000 passenger disruptions during the very busy holiday travel season. The incident at Newark, although less disruptive, was reported by pilots to involve a drone flying “20-30 feet” away from an airliner and forced air traffic controllers to divert air traffic to other runways at the airport until the FAA was confident the drone no longer posed a threat to air safety.

Both events highlight the safety and operational impact unauthorized flights of Unmanned Aerial Systems (UAS) on or near airports can pose.

Airports are an obvious choice for a close encounter with an untrained drone operator who “looks for what appears to be a large, wide-open space to fly their drone that happens to be near an airport,” said Scott Brockman, President and CEO of the Memphis/Shelby County Airport Authority (MSCAA). Complicating the issue: “The speed at which drones and other technology is advancing and the ability of the aviation system to truly adapt. It’s coming. Are we ready for it?”

The answer to that question remains somewhat unclear. Still, some airports are taking a dual leadership role in making sure that protocols are developed and in exploring the many benefits of drones.

“It’s frustrating to see these near-misses and know there is potential for an awful accident,” said Marily Mora, President and CEO of Reno Airport Authority and a member of the FAA’s Drone Advisory Committee. “They have so much potential to help in airports that we don’t want to see the progress stopped.”

CONCERNS, CLOSE CALLS

As the technology improves and the price point declines, UAS offer potential for airports. But they offer that same potential for users outside the airport, threatening control of airspace.

ACI-NA member airports have been proactive on the issue. The Port Authority of New York and New Jersey hosted a winter working session that included the FAA, FBI, U.S. Department of Homeland Security, state police, the U.S. Coast Guard, and others. The PANYNJ issued a statement about the event:

“We are committed to keeping Port Authority airports at the forefront of protection and technology. Federal law empowers federal officials to respond to drone activity. The Port Authority hosted a working session at its World Trade Center headquarters to review and enhance protocols for the rapid detection and interdiction of drones…For security reasons, we cannot discuss specifics. We are committed to continuing our collaboration with the FAA and federal and state law enforcement partners to protect against any and all drone threats to the maximum extent possible.”

The FAA requires pilots that operate near airports use the FAA’s UAS Data Exchange – Low Altitude Authorization and Notification Capability (LAANC) system to identify their craft and UAS operations. One major problem: “The majority of people who use that system are the responsible pilots,” said Thomas Mackie, Aviation Practice Leader and Vice President at Woolpert. “There’s a lot of work to be done to help airports and air traffic organizations, for us in aviation to educate, and for the community to communicate properly back to the airports when flying.”

“It’s frustrating to see these near-misses and know there is potential for an awful accident… They have so much potential to help in airports that we don’t want to see the progress stopped.”

– Marily Mora, FAA’s Drone Advisory Committee

It also means that all players – airports, airlines, air traffic control and the government – get on the same page, Brockman said. “The biggest issue is one that’s probably the most difficult to solve: the identification and acceptance of the sharing of information and the blending of technology across the various industry groups. Right now, everyone operates in a very proprietary way, but in order to truly integrate and manage drones in a safe way, we have to find a way to safely share certain information.”

Brockman believes the solution is best tackled in small bites rather than “the whole enchilada,” which he fears will slow down evaluation, analysis, and implementation. “When you get the ruling that says, ‘That test was a failure, therefore, we’ve got to take a step back and re-evaluate which puts us further behind as technology continues to advance.”

Reno-Tahoe was one of the first seven airports to become part of the Low Altitude Authorization and Notification Capability (LAANC) system and accounted for about a fourth of the initial approvals, Mora said. She points to the local general aviation airport, the Reno-Tahoe owned Reno-Stead Airport, where NASA has been conducting UAS testing to develop protocols for the integration of drones with manned aircraft. The City of Reno, and Flirtey, a Reno-based UAS company, were selected in May 2018 as one of 10 projects for the USDOT’s UAS integration Pilot Program. More recently, on Jan. 14, 2019, the Nevada UAS Test Site’s Smart Silver State Project was named one of the three projects to mature technologies for unmanned aircraft traffic management.

POTENTIAL FOR GOOD

It is clear that drone technology is coming, and airports must be a participant in driving how drones impact the airspace in the community. That said, airports see positive benefits in their own operations. Woolpert, for instance, uses drones as “another layer of our remote sensing capabilities,” said Mackie. That includes construction site monitoring, aerial photography, pavement and structural assessments, wetland delineation and environmental applications.

Woolpert also advises its airport clients on integration efforts, ranging from regulatory and UAS technology to public outreach and awareness.

Perhaps nowhere is the potential for drone technology more exemplified than at Woolpert client Savannah/Hilton Head International Airport in Georgia. “They have sections of fence that are in the swamp and are primarily accessible in waders or via boat. Within five minutes of us flying an inaccessible perimeter fence line and showing what we could do, we identified trees that had recently fallen and taken out a section of fence,” Mackie said. “You can’t hire enough people to do this efficiently.”

As one of nine lead participants in the FAA’s UAS Integration Pilot Program, MSCAA landed approval to test drones at Memphis International Airport for checking the perimeter fence security. It helped that the airport knew the topography of the airfield, what the fence looks like and how it should be maintained. The idea is to input the GPS so that the drone can recognize changes to the fence lines. Brockman sees a future of nesting stations, where a battery of drones can recharge and download information before returning to scan the perimeter, increasing the efficiency and effectiveness of the system.

When the drone encounters a taxiway or runway, “it will stop and communicate with the tower independently to get approval to cross that area,” Brockman said. If the drone detects an anomaly in the perimeter, it will communicate that personnel need to be dispatched.

The saving of staff time would be enormous, Brockman said, especially if implemented at airports around the world – and the possibility for human error would be removed. It is not a perfect system – not yet at least. “If the battery life and distance can be improved, it will be a phenomenal benefit to aviation by being able to do this,” Brockman said.

Memphis’ tenant FedEx also is participating in the tests using drones to inspect aircraft. Brockman said the drone could be programmed with the manufacturer’s specifications for that exact plane. “It knows every rivet, every protrusion, every light.”

This inspection would not replace the pilot and mechanic inspections, but rather supplement or enhance human inspection.

“Right now, everyone operates in a very proprietary way, but in order to truly integrate and manage drones in a safe way, we have to find a way to safely share certain information.”

– Scott Brockman, Memphis/Shelby County Airport Authority

Airports also could use drones in ways similar to large construction projects. “Instead of sending people up on roofs to inspect buildings and facilities, there are several design and engineering construction companies that are using drones to do so,” said Dean Schultz, Reno’s Chief Operating Officer. “They are much more efficient and gathering a lot more data in a short amount of time. We wouldn’t want to miss out on that opportunity as well. Soon, we could have a drone doing the runway inspection.”

With the pace of adoption and improvements of technology, the sky is the literal limit. “There is testing going on every day at airports,” Schultz said. “It’s little by little, following the crawl, walk, run method. We’re in the crawl stage, but it won’t be long before we’re walking and running.”

FUTURE FOCUSED

Mackie anticipates a day when the general public will gain more of an understanding of the potential impact and the importance of abiding by the regulations. Improvement in sense-and-avoid technologies and the UTM also are being developed.

As improved drones and safety mechanisms merge, “that’s going to allow a large variety of UAS applications while helping mitigate the safety concerns with midair collisions and property damage,” Mackie says. “Every year we see better and better safety mechanisms on the aircraft themselves. You’ll see another adjustment to our federal regulation in the U.S., which will ease the ability for more UAS operations over people, over public areas.”

It may be just in time, because drone technology itself continues to march forward and new uses will continue to be adapted, Brockman believes. “At some point, there will be a cost-effective drone that will be able to carry a payload of more than a couple of pounds for longer than 10-15 minutes. When that occurs, the pressure to put some of those things into society without a real good plan to integrate them safely and effectively is really a concern at least for me.”

Brockman believes within the next decade, there will be unmanned, low-altitude personal aircraft that can ferry passengers downtown – and he believes airports can play a role in that. “Business models will operate differently than they do now. How are you going to monetize your airport if you lose parking, because of autonomous vehicles? I see a day when things are so automated that you’ll need to find a new way to monetize operations. You’ll still need miles of runway, terminals to get people on the plane, but how much of this other stuff are you going to need? That will be determined over time.”

“There is testing going on every day at airports… It’s little by little, following the crawl, walk, run method. We’re in the crawl stage, but it won’t be long before we’re walking and running.”

– Dean Schultz, Reno Airport Authority

If there has been one good thing to come out of the recent UAS incidents at Gatwick and Newark, it is an increased awareness, Mora believes. “In both cases, to have operational considerations and delays because of drones, it’s something we don’t want to see happen. It’s going to step up the cry for airport operators to get the drone detection technology that the FAA is working on. This will just speed up the conversation and the need for all of that.” <

TRANSPORT CANADA: TIGHTER RULES

Transport Canada is implementing new rules for drone use on June 1, which will require a certificate for non-commercial drone pilots. These pilots must pass an online examination to receive a pilot certificate. As of that date, they will need to have their pilot certificate and proof of registration readily available.

Other changes coming June 1 raise the altitude at which drones can fly – from 300 to 400 feet in the air. Rules requiring a distance from an airport – 5.6 km (3 miles) – remain the same.

Canada’s Airport Capital Assistance Program Needs Reform – Urgently

By Chris Phelan, Vice President, Industry and Government Affairs, Canadian Airports Council

The Canadian Airports Council has joined with several other Canadian associations that represent local and regional airports to send a national, united message to the government of Canada: Reform the Airport Capital Assistance Program (ACAP) to provide more funding and modern criteria that better matches needs and realities of small airport capital or run the risk of air services declining for Canadians living in small communities.

ACAP was created in 1994 as a companion to the National Airports Policy (NAP), which handed over the operations of the majority of airports from the federal government to private sector airport authorities or in the case of most small airports, local interests. ACAP recognizes that although the intent of the NAP was to ensure that airports would be both self-governing and self-financing, small airports did not have the critical mass of passengers to generate enough funds to pay for capital improvements related to safety. ACAP is intended to fund financial projects related to safety, asset protection and operating cost reduction. Overall, there are approximately 200 regional/local airports in the country that are eligible for ACAP funding.

Fast forward 25 years and ACAP has become an invaluable source of funding for the airports that are eligible for it. But, gaps and issues with the program have not been addressed and are becoming more acute.

In the last quarter century airports have seen air demand – and complexity – soar. Today, Canada’s airports are expected to serve passengers with increasingly diverse needs and must fulfill new safety requirements that have changed and become more complex over time. To provide context, just one runway rehabilitation project covered by ACAP costs about $12 million, almost one-third of the total ACAP funding envelope. Yet ACAP funding has not risen since 2000, nor has the program adapted to the changing air service environment.

While there have been program improvements in recent years, funding has failed to keep pace with demand for ongoing safety and security maintenance. ACAP receives $38.5 million in federal funding a year, an amount that has not changed in 18 years. The funding shortfall is exacerbated by the fact that Canada’s airports also face a host of new regulatory requirements in the coming years that have not been addressed in any way by the government program.

In order to be eligible for ACAP funding an airport must:

  • Not be owned or operated by the federal government;
  • Meet certification requirements; and
  • Offer year-round regularly scheduled commercial passenger service.

Further, in each of the three previous calendar years, the airport must have handled at least 1,000 year-round regularly scheduled commercial passengers, although airports designated as a “Remote Airport” under the NAP, do not need to meet this requirement.

Not all airports are funded equally. ACAP funding is pegged to the level of airport activity. For example, an airport with fewer than 50,000 commercial passengers receives 100 percent funding for projects. That number decreases by increments of 5 percent for every increase of 15,000 passengers. When an airport reaches 525,000 passengers, the funding is listed at 0 percent.

The current categories for ACAP funding are:

  1. Safety-related airside projects such as rehabilitation of runways, taxiways, aprons, associated lighting, visual aids, sand storage sheds, utilities to service eligible items and related site preparation costs, including directly associated environmental costs, aircraft firefighting equipment and equipment shelters necessary to maintain the airport’s level of protection as required by regulation.
  2. Heavy airside mobile equipment and safety-related items such as runway snowblowers, runway snowplows, runway sweepers, spreaders, winter friction testing devices, and heavy airside mobile equipment shelters.
  3. Air terminal building/groundside safety-related considerations such as sprinkler systems, asbestos removal, and barrier-free access.

As it stands, ACAP is underfunded, overly complex, highly prescriptive, suffers from a lack of transparency, and has not kept pace with changes to regulatory and weather safety equipment needs.

Working with its counterparts, Atlantic Canada Airports Association, Airport Management Council of Ontario, Réseau québécois des aéroports, BC Aviation Council, Manitoba Aviation Council and the Saskatchewan Aviation Council, the CAC is working to develop a set of recommendations to the government on how ACAP may be improved. This coalition believes that we are at a critical time for airports. Given the above-mentioned changes, adjustments need to be made to ACAP to make it more responsive and useful to those that rely on the program.

If ACAP funding kept pace with inflation, the annual budget for 2019 would be approximately $56 million.

Unfortunately, even if the government tried to catch up by raising the program level to $56 million to match inflation, ACAP would still be underfunded because new safety requirements will be putting even more pressure on the funding envelope. These new regulations are neither minor nor cheap. They include upgrades to accessibility, changes to the Aerodromes Standards and Recommended Practices and the Accessible Canada Act, as well as changes to Global Reporting Format/Takeoff and Landing Performance Assessment (GRF/TALPA) and new Runway End Safety Area (RESA) requirements. RESA alone will cost Canada’s small airports at least $165 million to fully implement. The pressure is on ACAP to fund these new initiatives, but it doesn’t have the financial resources or mechanisms in place to handle its existing commitments, let alone these new requirements.

To complicate matters further, airports are facing new challenges that were not even imagined in 1994. These include the impact of climate change, which causes changes in storm patterns and freeze/thaw cycles that place additional strain on equipment. ACAP must stay current with new needs by adopting a new forward-thinking dynamic program design that can account for and adapt to climate and other factors associated with the geographical location of the airport.

Make accessing the program simpler, more transparent and more predictable

Based on member and industry experience with ACAP, the CAC has determined that ACAP criteria need to be modernized. Runway length and passenger volumes are not appropriate measures for equipment requirements. The amount of precipitation should be a factor in determining the size of a plow eligible (or other type equipment) for funding. An airport in southern Ontario has different needs than one in Northern BC, and so forth. One size does not fit all, especially when it relates to transportation infrastructure.

Moreover, the complexity of the application process is a challenge in itself. Airports go through an extensive consultation process with Transport Canada staff regarding needs, eligibility parameters, thresholds and airport conditions and also discuss the likelihood of being considered for funding if a project were submitted. The result is some category level 2 projects and most of category level 3 projects are being pushed further and further into the future.

In fact, in the program’s 25 years of existence, and having funded almost 1000 projects, only 18 of those projects have been category 3. This inequity of funding approvals is now shaping behavior. Recognizing the low probability of receiving funding for a category 3 project, airports are simply not applying for those projects. Ultimately this gives the government a false impression of need – airports are not applying, therefore, there is not demand. Meanwhile, the reverse is true and with changes to accessibility regulation and legislation, this need will only be more pronounced.

While the CAC recognizes that Transport Canada has made efforts to improve the ACAP application process when consulting companies offer services to help airports prepare applications, the process is overly complicated.

The coalition will be conducting its research and developing its recommendations over the coming months. If this year’s federal budget doesn’t address ACAP funding, given the time horizons and realities of the 2019 election cycle, the group is hoping to have its input considered and implemented for Budget 2020.

In the meantime, the CAC will be more visible with our asks of the political parties as they compete for votes in the 2019 election. In fact, one of the main asks of all political parties is to increase funding for small airport infrastructure programs for safety and security.

Concessions – Tailored and Transformed

DIGITAL AND MOBILE TECHNOLOGIES ENHANCE TRAVELERS’ EXPERIENCES, MAXIMIZE REVENUE

By Sheryl Jackson

While technology plays a large role in many different aspects of the airport industry from operations and security to customer service, airport concessions have just begun their digital transformation in recent years.

While the transformation may be recent, airport leadership and concessionaires realize the impact it can have on the industry. Between 50 and 75 percent of airports plan to develop or use mobile applications to enhance travelers’ experience and to maximize revenue by 2020, according to a study conducted by an airline industry technology company. These efforts include the use of airport beacons and sensors to tailor offers and promotions to smart devices for items such as food, beverage, duty-free merchandise and delivery of food or merchandise to the gate.

CONVENIENCE: GOOD FOR BUSINESS, CUSTOMER

“The main driver of innovation, technological or other, is customers; wants and needs,” said Gregg Paradies, President and CEO of Paradies Lagardère. “For instance, there is an increased expectation by travelers that the convenience delivered by technology in their everyday life is going to be available at the airport,” he said. “Along the same lines, our airport partners expect us to embrace innovation so we can properly align with their goals. Ultimately, for us, it’s just part of how we want to continue to deliver first-class customer service.”

Making the purchase of food, retail items or services in an airport more convenient is not only good for the airport customers, but also for the airport and concessionaires, pointed out Liz Grzechowiak, Assistant Director of Concessions and Business Development at Minneapolis-St. Paul Metropolitan Airports Commission. “It’s all about revenue growth because when you reduce the length of lines, more people are likely to purchase because they don’t perceive a long wait and throughput is increased,” she said. “Technology such as point-of-service ordering and pay stations and mobile order and pay apps make it easy for customers to get food quickly and improve customer service.”

ESTABLISHING STRATEGY, BOOSTING REVENUE

Technology can also help in the back of a restaurant, explains Grzechowiak. “Smashburger is implementing new cooking technology that reduces the cooking time for their burgers, which also speeds delivery of food,” she said. Another emerging technology that she has seen demonstrated is robots in the kitchen – sautéing, stirring and performing other repetitive tasks that reduce the number of line cooks needed. “This will be a valuable technology as food service vendors look for ways to handle today’s difficult labor market.” Not only will fewer line cooks be needed, but employees can spend time taking and filling orders rather than handling tasks in the kitchen.

Paradies’ technology strategy is built on three dimensions: the transactional, the functional and the experiential, said Paradies. The first one is about user-friendly payment solutions, the second one helps our stores operate with speed, accuracy and reliability, and the third one is all about using technology to create fun and “cool” factors in airport retail and dining. “We believe that executing on these three dimensions delivers the ultimate customer experience and drives higher revenues.”

Examples of Paradies’ use of technology include payment options such as Apple Pay, Android Pay, Mobile POS and Samsung Pay. “We were also the first to partner with Grab, an app that allows travelers to pre-order meals at airport restaurants, and we’re working to leverage the partnership in our retail stores,” said Paradies. “We also have a Server Pager system in our restaurants to assist with orders and to help travelers check out faster, and Vino Volo has developed a proprietary app that combines a customer rewards program with the ability to locate stores and products.”

In the retail arena, visitors to TripAdvisor stores can use a touchscreen that brings the world’s largest travel website to a traveler’s fingertips, allowing them to plan their visit or the next leg of their journey while in our store, said Paradies. Not only is this a valuable service for visitors, but it creates a reason to enter the store and spend time in it, creating more opportunities for sales.

Another example of how technology can increase revenue, Paradies points to his company’s Mobile POS, which allows for menu orders to be taken and payment processed remotely while customers line up at peak times. The orders are instantly sent to the kitchen staff for preparation while the customer is in line. “This solution was tested at DCA at several of Paradies Lagardère’s bars and restaurants, such as Wow Bao and Washington Pour Bar in 2016 and 2017,” he said. “After it was used during the lunch and dinner rush periods for several weeks, sales went up at Wow Bao by 10 percent and at Washington Pour Bar by almost 17 percent as a result of faster order processing and delivery of menu items to the consumer.”

Grzechowiak said that kiosks used by McDonalds at Minneapolis-St. Paul International Airport have also resulted in higher sales. “Although employees might forget to suggest additional menu items to customers, the kiosks suggest another item with every order, and images entice customers to add bacon to their sandwich or add a dessert to the order,” she said. “Human behavior also plays a part in this result because I might say no to bacon when I’m asked by an employee because I don’t want to be judged as someone who doesn’t eat healthy; however, a kiosk doesn’t judge!”

DIGITALLY ENHANCED INTERNAL DELIVERIES

Food delivery within the airport is a fast-growing convenience made possible by technology, points out Grzechowiak. “As airports and their concessionaires consider these services, be aware of how each might differ and what additional support they need to succeed,” she suggested. Grab is an application-based program that allows people to order and pay for food from a participating restaurant via mobile phone and then pick up the food with no wait.

At Your Gate is an actual delivery service for food and retail items that has been pilot tested at Minneapolis-St. Paul International Airport. “The test was limited to our employees, and it was successful,” said Grzechowiak. “Although there is a $2.99 delivery fee, many of our employees choose to pay it to save time since they might spend as much as 28 minutes of their 30-minute lunch break walking to a restaurant, waiting in line, waiting for food and walking back to their post if they are not close to food service areas.” Now, employees can order food for delivery and enjoy their full 30-minute lunch break, she added.

While Grab does not require physical space at the airport, At Your Gate does require space from which employees operate, said Grzechowiak. “It is also important for each of these services to have marketing support from the airport and its airlines to make sure that customers know about the services and understand how to access them.”

‘TIME’ FOR TECHNOLOGY

Technology will continue to play an important role throughout airport interactions with customers because “time” is the most precious commodity, said Dominic Lowe, Executive Vice President of Unibail-Rodamco-Westfield Airports. “To effectively serve the customer, however, technology must be relevant, simple to use and connect seamlessly,” he said.

Lowe said that this means that airports, concession operators and service vendors need to work together to create a connected infrastructure that supports all digital touchpoints – mobile phones, point-of-service applications, airport directories, retail catalogs and food menus. “While mobile technology is important, we have to remember that mobile is beyond a phone – it extends to tablets and wearables.”

As more applications are adopted and new technologies introduced, it is important for airports and concessionaires to make sure that the technology is agnostic, which means it can connect to other applications or platforms easily to share content and information, said Lowe. “We must work together to get customers what they want – easy access to information, shorter wait times and a way to find and obtain the product or services they need.”

As everyone looks toward the future of technology in concessions, Paradies points out that technology that enhances the traveler experience will be paramount, whether it’s tools to make it easier to make purchases, or order meals, to entertainment. An example of entertainment made possible by technology is his company’s partnership with JFK Terminal 4 that enabled the deployment of PeriscapeVR, the first-ever interactive virtual reality center of its kind in an airport – offering travelers an interactive and blissful escape, he said. “Also, I think it’s fair to say that smartphones are here to stay and will likely become the preferred vehicle for payment. This will not only make interactions with the consumer more fluid, it will also create an opportunity to enhance the intimacy between concessionaires and the traveling consumer through better and faster access to data.”

Paradies does caution airports, vendors and concessionaires about adopting trendy or cool technology. “I would advise against technology for technology’s sake,” he said. “Paradies Lagardère is doing our research on the needs of our airport partners and travelers throughout North America. We’re excited about what technology and innovation can offer. But we want to make sure it fits the needs of our partners and our customers.”

SLC – Designing for the Future

By Bill Wyatt, Executive Director, Salt Lake City International Airport

I’m often asked why, after a week of retiring from the Port of Portland (PDX), I decided to accept an offer to go back to work as the new executive director of the Salt Lake City International Airport (SLC).

The reason is simple: SLC is building what will be the first new hub airport in the country in the 21st century. We’re not talking a remodel or an expansion, but an entirely new airport. The new airport will secure SLC’s position as a global aviation hub that will serve and grow with the region for decades to come.

As with many airports, SLC is experiencing tremendous passenger growth and operating in facilities that are over-utilized and well past their prime. The history of SLC goes back to 1961, when Terminal 1 first opened. Over the years, we added Terminal 2, additional concourses and an International Terminal. Our newest building is the International Terminal, which was constructed more than 20 years ago.

Our facilities were originally built to accommodate 10 million passengers and, today, SLC is seeing upward of 25 million passengers each year. We have become a thriving hub airport for Delta Air Lines and today are Delta’s fourth largest hub.

Our passengers experience congestion at SLC daily, whether it’s curbside, in the parking garage or when trying to find a seat in gate hold areas and restaurants. Plus, the lack of available gates limit new air service to SLC.

But that will all change the fall of 2020, when the first phase of The New SLC Redevelopment Project opens with a parking garage with double the capacity, one central terminal with 16 security lanes and portions of two new concourses. Once we open the first phase, the process to build the second phase begins with the demolition of current facilities, which allow construction to the east to commence. Come 2025, the entire project will be complete and passengers will travel through an entirely new, modern airport.

The advantage to building a new airport is that you can design for the future. The New SLC will be more efficient and more sustainable. The new concourses are designed in a parallel configuration, which will eliminate aircraft bottlenecks, so airlines can get their planes back in the air faster.

We are also aiming for a LEED Gold Certification from the U.S. Green Building Council and plan to achieve this through a variety of ways, such as converting all airline ground service equipment to electric by 2023. The use of natural light will also help to achieve our energy goals.

Those who have arrived at Salt Lake City may have experienced a phenomenon that is unique to our airport and which we are addressing in the new terminal. Thousands of young men and women travel around the world on missions for the Church of Jesus Christ of Latter-day Saints and depart from our airport. SLC is also the place where friends and families come to greet these missionaries when they return home. It’s not unusual to see large gatherings at the luggage carousels with family and friends holding signs welcoming back their loved ones. This also presents a challenge to passengers attempting to get their luggage. In the new terminal, we will have a Meeter-Greeter Room where those waiting for passengers to arrive – whether they be military personnel, missionaries or a winning sports team – can relax in a comfortable setting.

But beyond the brick and mortar, the new airport has been designed to leave a lasting impression on travelers. Art and other elements will provide a sense of place through the use of sandstone, copper colors and native plants. The design incorporates plenty of windows to provide views of the mountains from many vantage points throughout the airport, including from an outdoor deck from Delta’s Sky Club.

Passengers will be wowed by massive art installations, such as The Canyon, which is being integrated on both walls of the airport terminal. The Canyon evokes the Salt Lake City landscape and spans roughly the size of a football field.

An expanded concessions program with 29 retail stores was recently announced and includes a mix of local, regional and national brands, including new brands such as Coach, Frye and Mac. The restaurant program announcement is coming soon and is expected to be just as impressive.

And the good news keeps on coming. The $3.6 billion-plus airport is being built without one cent of local tax payer dollars. For years, SLC was the only large-size, hub airport in the country to be debt free. That has since changed, but the foresight of those planning this project allowed the project to begin with savings. It will all pay off in the end. A recent economic impact study showed the project is contributing approximately $5.5 billion to the local economy.

SLC is currently one of the nation’s most cost-effective airports for airline operations and plans to maintain one of the lowest CPEs in the country for a hub operation.

So you can see why my plans to retire have been put on hold – so that I can be part of this remarkable program that will make traveling through SLC truly unforgettable.

Airports Council Supports Bipartisan Legislation to Strengthen CBP Staffing

Maintaining the safety and security of the traveling public is a top priority for airports. With more than 1.7 billion passengers traveling through a U.S. airport in 2017, airports continually work with Transportation Security Administration (TSA) and U.S. Customs and Border Protection (CBP) to protect passengers while providing an efficient screening process. But, staffing shortfalls from these government agencies have proven to be an on-going challenge for airports.

In recent weeks, there has been significant conversation in Washington to redeploy already scarce CBP officers away from U.S. airports to the southern border.  Airports continue to monitor this situation and remain concerned about any negative impacts to passenger wait times –especially ahead of the busy summer travel season – and delays in cargo processing given the already existing understaffing issues at CBP points of entry at airports.

Now is not the time to divert officers away from airports.  Instead, we should be adding more.  That’s why ACI-NA has applauded recently introduced bipartisan legislation by U.S. Senators Gary Peters (D-MI) and John Cornyn (R-TX) to strengthen border security and address personnel shortages at ports of entry. Entitled Securing America’s Ports of Entry Act of 2019, this legislation would require U.S. Customs and Border Protection (CBP) to hire no less than 600 additional officers a year until the agency’s staffing needs are met at America’s airports, seaports and land ports of entry.

“The airport industry thanks Senators Peters and Cornyn for their leadership in introducing the Securing America’s Ports of Entry Act,” said Kevin M. Burke, President and CEO of Airports Council International – North America. “This legislation is an important step towards ensuring CBP has sufficient staffing to both address lengthy passenger wait times and open new air service opportunities in communities around the country. It also will provide greater transparency and accountability to CBP’s increasing reliance on reimbursable services agreements and temporary duty assignments to cover its system-wide staffing shortfalls.”

CBP’s current workforce staffing model still shows a deficit of over 3,700 CBP officers. The chronic staffing shortfalls are only expected worsen as CBP deploys the biometric entry-exit requirements mandated by Congress.

The legislation also aims to provide greater transparency and accountability to CBP’s increasing reliance on reimbursable services agreements and temporary duty assignments to cover staffing shortfalls.

More information on the legislation can be found here.