State of The Airline Industry – What Do We Do Now? · · 2016-05-12The US airline industry is...

State of The Airline Industry – What Do We Do Now? November 15, 2012

AvPORTS – A COMMERICAL AVIATION PIONEER

• Founded in 1929 as the Airport Division of Pan American World Airways

• Pioneered several aviation industries including: – Private Airport Management – Air Service Development – Airport Marketing

• One of the longest continuously operating aviation facility operators in the world

• Headquartered in Dulles, Virginia with regional offices in: – Allentown, Pennsylvania – Lincoln, Nebraska – Newburg, New York – Orange County, California – Roanoke, Texas – Teterboro, New Jersey

• Shares common ownership with AFCO (Aviation Facilities Corporation)

MEET YOUR TEAM

Thomas Reich Director of Air Service

Development

Susan Kittle Director of External Affairs

Barry Clark Senior Consultant

Fredrick Davis Senior Consultant

Oswin Moore President and Chief Executive Officer

John Harden Executive Vice President Chief Operating Officer

Brian D’Amico Air Service

Development Analyst

Charles Kurtz Vice President, Engineering and Development

Passenger Development Services

Bruce Tarletsky Director of Airport Marketing Project Manager

MEET YOUR PROJECT MANAGER

Bruce Tarletsky – Director of Airport Marketing

• Over 30 years of total marketing experience, with the past 20 years in the aviation/airport industry both a nationally and globally. Recent industry focus has been in the niche leisure carrier arena.

• As an air service marketing professional Mr. Tarletsky: – Assists communities with air service and airport marketing, developing strategies to attain new or

improved air service and identifying regional traffic and revenue leakage.

– Provides support to airport clients in all aspects of community outreach and airport marketing to stimulate new passenger demand and secure new air service.

• Specializes in a wide-range of air service related skills including: – Catchment Area Analysis

– Market Assessment

– Route Forecasting & Proposals

– Marketing and Advertising

– Strategic Planning and Implementation

– Establishment of Air Service Incentive Plans

ACI-NA National Leadership Award: – In recognition of outstanding leadership and exemplary service on behalf of the United States’ Region

Airports, Airports Council International-North America.

AvPORTS/AFCO FULL-SERVICE CAPABILITIES

AIRPORT CLIENT PORFOLIO

Allentown

Albany Rhode Island Airports

New Haven

Newark (Terminal A) Teterboro

Scranton

Long Beach Ontario

Sonoma

St. George

Ogden

Provo

Ft. Collins/Loveland

Colorado Springs

Lincoln

Wichita

Atlanta South Regional Airport

Harlingen

Gulfport/Biloxi

Tulsa

Austin

El Dorado

Parkersburg

Charleston

Indianapolis Moline

Harrisburg

Newport News

Atlantic City

Farmingdale Newark (Terminal A)

Scranton White Plains

Stewart

Airport Management & ASD Clients

AvPORTS ASD Clients

Airport Management Clients F. Davis & B. Clark ASD Clients

AvPORTS/THE SATTELITE AIRPORT SPECIALIST

Long Beach Ontario

Ogden

Provo

St. George

Near LAX & SNA

Near LAS

Near SLC Sonoma

Near OAK & SFO

Harlingen

Colorado Springs

Gulfport/Biloxi

Lincoln

Near MSY

Near BRO & MFE

Near DEN Near OMA Ft. Collins/Loveland

Newport News

Youngstown

Near CLE & PIT

Near ORF & RIC

Atlantic City

Near EWR, LGA, JFK & PHL

White Plains Stewart New Haven

Near BDL

Allentown

WHAT MAKES AVPORTS UNIQUE

SATELLITE AIRPORTS ARE OUR SPECIALTY

• AvPORTS longest standing airport contract is at the Westchester County Airport (HPN) located less than 30 miles from New York City. We have been managing ever aspect of the airport since de-regulation in 1978.

• Over half of this team’s air service development client airports (18 of 30) are satellite airports to larger hubs, the highest number of any air service development firm.

• Our techniques for growing satellite airports are tried and tested, we’re not practicing air service development, we’ve crafted it to a science.

UNDERSTANDING YOUR AIRPORT IS PART OF OUR DNA

• AvPORTS is more than just air service development, we manage airports, FBOs and other aviation facilities.

• We can speak your language like no other firm because we walk in your shoes every day.

• No matter your problem, we can always get you the answer. We have the largest and most diverse airport focused staff in the nation.

21 DIFFERENT

146 NEW & EXPANDED ROUTES FROM 21 DIFFERENT AIRLINES SINCE MARCH 2007

HPNHPNHPNHPNHPNHPNHPNHPNHPN

AVPAVPAVPAVPAVPAVPAVPAVPAVP

PIAPIAPIAPIAPIAPIAPIAPIAPIAPHFPHFPHFPHFPHFPHFPHFPHFPHF

MLIMLIMLIMLIMLIMLIMLIMLIMLIMDTMDTMDTMDTMDTMDTMDTMDTMDT

ABEABEABEABEABEABEABEABEABE

SDFSDFSDFSDFSDFSDFSDFSDFSDF

ORDORDORDORDORDORDORDORDORD

MDWMDWMDWMDWMDWMDWMDWMDWMDWCMHCMHCMHCMHCMHCMHCMHCMHCMH

YNGYNGYNGYNGYNGYNGYNGYNGYNGDTWDTWDTWDTWDTWDTWDTWDTWDTW

ACYACYACYACYACYACYACYACYACY

SWFSWFSWFSWFSWFSWFSWFSWFSWFELMELMELMELMELMELMELMELMELM

ICTICTICTICTICTICTICTICTICT

FSMFSMFSMFSMFSMFSMFSMFSMFSMOKCOKCOKCOKCOKCOKCOKCOKCOKC XNAXNAXNAXNAXNAXNAXNAXNAXNATULTULTULTULTULTULTULTULTUL

MCIMCIMCIMCIMCIMCIMCIMCIMCI

GSOGSOGSOGSOGSOGSOGSOGSOGSO

ATLATLATLATLATLATLATLATLATL

CLTCLTCLTCLTCLTCLTCLTCLTCLT

YYZYYZYYZYYZYYZYYZYYZYYZYYZBDLBDLBDLBDLBDLBDLBDLBDLBDL

BEDBEDBEDBEDBEDBEDBEDBEDBED

MYRMYRMYRMYRMYRMYRMYRMYRMYR

RDURDURDURDURDURDURDURDURDU

ACKACKACKACKACKACKACKACKACKMVYMVYMVYMVYMVYMVYMVYMVYMVY

HVNHVNHVNHVNHVNHVNHVNHVNHVN

ALBALBALBALBALBALBALBALBALB

COSCOSCOSCOSCOSCOSCOSCOSCOS

BHMBHMBHMBHMBHMBHMBHMBHMBHM

MCOMCOMCOMCOMCOMCOMCOMCOMCO

GPTGPTGPTGPTGPTGPTGPTGPTGPTDFWDFWDFWDFWDFWDFWDFWDFWDFWAUSAUSAUSAUSAUSAUSAUSAUSAUS

LASLASLASLASLASLASLASLASLASONTONTONTONTONTONTONTONTONT

SANSANSANSANSANSANSANSANSAN

SGUSGUSGUSGUSGUSGUSGUSGUSGU

AZAAZAAZAAZAAZAAZAAZAAZAAZA

TUSTUSTUSTUSTUSTUSTUSTUSTUS

RNORNORNORNORNORNORNORNORNO

PVUPVUPVUPVUPVUPVUPVUPVUPVU

ABQABQABQABQABQABQABQABQABQ

OGDOGDOGDOGDOGDOGDOGDOGDOGD CPRCPRCPRCPRCPRCPRCPRCPRCPR

DALDALDALDALDALDALDALDALDAL ELDELDELDELDELDELDELDELDELD

TPATPATPATPATPATPATPATPATPACRPCRPCRPCRPCRPCRPCRPCRPCRPTo: GDLTo: GDLTo: GDLTo: GDLTo: GDLTo: GDLTo: GDLTo: GDLTo: GDL PGDPGDPGDPGDPGDPGDPGDPGDPGD

RSWRSWRSWRSWRSWRSWRSWRSWRSW

SATSATSATSATSATSATSATSATSAT

BOIBOIBOIBOIBOIBOIBOIBOIBOI

MSYMSYMSYMSYMSYMSYMSYMSYMSYPIEPIEPIEPIEPIEPIEPIEPIEPIE

SEASEASEASEASEASEASEASEASEAGEGGEGGEGGEGGEGGEGGEGGEGGEG

MRYMRYMRYMRYMRYMRYMRYMRYMRYSJCSJCSJCSJCSJCSJCSJCSJCSJCSFOSFOSFOSFOSFOSFOSFOSFOSFO

LGBLGBLGBLGBLGBLGBLGBLGBLGBLAXLAXLAXLAXLAXLAXLAXLAXLAX

FATFATFATFATFATFATFATFATFAT

SMFSMFSMFSMFSMFSMFSMFSMFSMF

To: PVRTo: PVRTo: PVRTo: PVRTo: PVRTo: PVRTo: PVRTo: PVRTo: PVR

PDXPDXPDXPDXPDXPDXPDXPDXPDX

FLLFLLFLLFLLFLLFLLFLLFLLFLL

To: OGGTo: OGGTo: OGGTo: OGGTo: OGGTo: OGGTo: OGGTo: OGGTo: OGG

STSSTSSTSSTSSTSSTSSTSSTSSTS

MTYMTYMTYMTYMTYMTYMTYMTYMTYTo: CUNTo: CUNTo: CUNTo: CUNTo: CUNTo: CUNTo: CUNTo: CUNTo: CUN

HRLHRLHRLHRLHRLHRLHRLHRLHRLNASNASNASNASNASNASNASNASNAS

BWIBWIBWIBWIBWIBWIBWIBWIBWI

SJDSJDSJDSJDSJDSJDSJDSJDSJD

OMAOMAOMAOMAOMAOMAOMAOMAOMADENDENDENDENDENDENDENDENDEN

JAXJAXJAXJAXJAXJAXJAXJAXJAXELPELPELPELPELPELPELPELPELP

PBIPBIPBIPBIPBIPBIPBIPBIPBI

SLCSLCSLCSLCSLCSLCSLCSLCSLC

SFBSFBSFBSFBSFBSFBSFBSFBSFB

New Service

Expanded Service

Upgraded Service

One-Stop Service

Client Airport

State of The Airline Industry – What Do We Do Now? November 15, 2012

William S. Swelbar MIT International Center for Air Transportation

“Isn’t It Interesting?” The US airline industry is marginally profitable when……

– Economic trends are weak – Consumer confidence is anything but – Manufacturing activity showing little to no expansion – Passenger traffic up; cargo traffic is in decline – European economic activity troubled – Premium travel trends are exhibiting little growth

“IN THE AIRLINE INDUSTRY – IT’S ALWAYS SOMETHING”

Source: William S. Swelbar, MIT International Center for Air Transportation

Crude Oil Vs. Jet Fuel Cost (Per Barrel)

Source: ACI-NA Economic Bulletin, July, 2012 & U.S. Energy Information Administration

Timeline of Recent Mergers & Acquisitions

Source: ACI-NA Economic Bulletin

M&A Airlines Market Summary

Source: ACI-NA Economic Bulletin, & Diio Mi

M&A Domestic Air Fare

Source: ACI-NA Economic Bulletin, & U.S.DOT O&D Survey

Source: William S. Swelbar, MIT International Center for Air Transportation

Aeronautical Vs. Non-Aeronautical Revenue for U.S. Airports

Source: ACI-NA Economic Bulletin, & FAA ASS-400: CATS: Report 127

Airport Costs as a Percentage of Airline Operating Expenses

Source: ACI-NA Economic Bulletin, & Diio Mi

Airline actions to ensure sustainability run contrary to airport interests – None more so than capacity cutting

– Consolidation is a second order effect negatively impacting airports

-Airports need to establish more passenger development strategies

-Airports need to continue shifting the revenue share away from Airline dependent revenue

-Airports need to identify international connection passenger opportunities, especially with beyond markets with alliance carriers

-Airports must continue to build alternative risk abatement programs with their communities

Concluding Thoughts

Concluding Thoughts

Airline winners and losers are being identified – Airport winners and losers less understood although the

market is at work • Seasonal capacity adjustments are likely to be a bigger part

of the vernacular

Old School

http://www.youtube.com/watch?v=MGTWmrnPdgk

New School What Do We Do Now?

What We Are Doing Now November 15, 2012

GENERAL OVERVIEW OF ENGAGEMENT AND DELIVERABLES OBJECTIVE

• To assist FNL in the development and implementation of a comprehensive Air Service Development & Marketing Strategic Plan that will give direction and recommendations to the Fort Collins/Loveland communities to regain commercial passenger air service.

• The Plan will make the recommendation that FNL will re-position its service area, through in-depth market research, and be the Airport of choice for Northern Colorado, Southeastern Wyoming and Southwest Nebraska. Furthermore, will assist FNL to promote new commercial air service by creating a detailed new air service development, communications, and marketing plan focused on attracting out-bound business passengers and in-bound leisure passengers.· Will also work to improve the quality of air service for residents of the Fort Collins – Loveland Municipal Airport (FNL) catchment area by studying and developing a wingless flight program that allows FNL to serve as an offsite location for ticketing, check-in, and security screening for flights originating at Denver.

FNL WORK PLAN

OCT NOV

Phase

1 Initial Project Survey Planned Start

Planned Finish

Duration Status

1.1 Kick-off Meeting with FNL Officials 10/23/2012 10/25/2012 2 Started 1.2 Initial Defining of Catchment Area 10/17/2012 11/2/2012 12 Started

1.3 Acquisition of Global Point of Sale GDS Data & Other Needed Data 10/26/2012 11/30/2112 26 Started

1.4 Initial Discussion of Action Plan with FNL Stakeholders 11/12/2012 11/16/2012 3 Started

1.5 Updated Overall Project Schedule 11/12/2012 11/16/2012 3

Started

PROJECT WORK PLAN – PHASE ONE – INITIAL PROJECT SURVEY

PHASE ONE - COMPLETED

PROJECT WORK PLAN – PHASE TWO – STRATEGIC ANALYSIS

Phase 2 Strategic Analysis

11/5/2012 12/3/2012 29 Started

2.1 SWOT Analysis 11/5/2012 11/23/2012 19 Started

2.2 Inventory of Airport Assets and Issues as they relate to International Revenues 11/5/2012 11/16/2012 12 Started

2.3 Assessment of Airport's Current Performance and Trends 11/12/2012 11/16/2012 5 Started

2.4 Assessment of Airport's Competitive Position as it Relates to Passenger Demand Opportunites in Northern Colorado 11/19/2012 11/27/2012 9

Not Started

2.5 Preliminary Point of Sale Analysis (International & Domestic) 11/19/2012 12/7/2012 19 Started

2.6 Updated Overall Project Schedule 12/10/2012 12/13/2012 4

Not Started

PROJECT WORK PLAN – PHASE THREE – REALISITIC AREAS OF INTEREST

Phase 3 Formulating Realistic Areas of Interest 12/5/2012 1/3/2012 26 Started

3.1 Re-Evaluation of Original Interest Areas (Air Service, Wingless Flight Initiative, Contract Tower, In-Bound Destination Strategy) 12/5/2012 12/10/2012 5 Started

3.2 Identification of Target International & Domestic Revenue Markets and Global Point of Sale Activity 12/7/2012 12/17/2012 8

Not Started

3.3 Identification of Achievable Objectives 12/14/2012 12/20/2012 5 Not

Started

3.4 Preliminary Marketing Strategies Overview 12/14/2012 12/20/2012 5 Not

Started

3.5 Development of a Corporate Outreach Program Designed to Support Efforts 10/31/2012 11/08/2012 7 Started

3.6 Initial Community & Business Research (Field Interviews) 1/3/2012 1/25/2013 19 Not

Started

3.7 Establish Corporate/Community Out Reach Task Force Blue Print 10/31/2012 11/08/2012 4 Started

Updated Overall Project Schedule 12/27/2012 12/31/2012 3 Not

Started

STRATEGIC COMMUNITY BASED WORKING GROUP PLAN

PROJECT WORK PLAN – PHASE FOUR – PLAN DEVELOPMENT

Phase 4 Plan Development 1/4/2013 2/8/2013 26

Not Started

4.1 Draft of Preliminary Top International Connecting Revenues to Pursue 1/4/2013 1/8/2013 3

Not Started

4.2 Draft of Preliminary TopDomestic Revenues (markets) to Pursue 1/4/2013 1/8/2013 3

Not Started

4.3 Draft of Preliminary Targeted Corporations Based on Field Research & GDS Global Point of Sale Data 1/4/2013 1/11/2013 5

Not Started

4.4 Marketing Concepts and Proposals 1/8/2013 1/14/2013 5 Not

Started

4.5 Recommendations for Business Growth/Retention Incentives 1/8/2013 1/11/2013 3

Not Started

4.6 Recommend Next Steps for Securing Financial Resources 1/14/2013 1/18/2013 2

Not Started

4.7 Strategic Air Service Development Plan 1/14/2013 1/31/2013 13 Not

Started

4.8 Updated Overall Project Schedule 2/1/2013 2/5/2013 3 Not

Started

COMMERCIAL AIR SERVICE ROR ON INVESTMENT – WICHITA CASE STUDY

Prepared by Center for Economic Development and Business Research W. Frank Barton School of Business Wichita State University Janet Harrah, Director Kasey Jolly, Regional Economic Analyst Wichita State University, 1845 Fairmount St., Wichita, KS 67260-0121 Telephone: (316) 978-3225 Fax: (316) 978-3950 www.wichita.edu/cedbr

Economic and Fiscal Impact of AirTran Airways on the Wichita MSA February 2008

Good airline service is an important factor in urban economic development. Frequent service to a variety of destinations at competitive rates are reflected in a high level of passenger enplanements, which facilitates easy face-to-face contact with businesses in other cities, attracting new firms to the metro area and stimulating employment at established companies. Recognizing the importance of air service to the area’s economic growth, business and government leaders spearheaded the development of the FairFares program in the spring of 2002. As a joint public/private initiative between the city of Wichita and local businesses, the FairFares program was designed to attract and retain new low-cost carriers to Wichita’s Mid-Continent Airport through the use of subsidies.


Prepared by Center for Economic Development and Business Research W. Frank Barton School of Business Wichita State University Janet Harrah, Director Kasey Jolly, Regional Economic Analyst Wichita State University, 1845 Fairmount St., Wichita, KS 67260-0121 Telephone: (316) 978-3225 Fax: (316) 978-3950 www.wichita.edu/cedbr


Low-cost carrier AirTran Airway’s, entrance into the Wichita market generated positive economic and fiscal impacts for the Wichita MSA. The economic impact of low-cost air service occurs in a number of ways including: • Increased sales, wages and employment generated by business activity.

In the case of this analysis, the operations of AirTran were analyzed including the firm’s Wichita employment, payroll, and expenditures of AirTran flight crews on overnight stays.

• Increased airport activity measured by enplanements and increased airport spending, such as increased concession and parking revenues.

• Decreased ticket prices as a result of increased competition, benefiting all Mid-Continent passengers whether flying AirTran or not.

Taking into account multiplier impacts, the average annual number of Wichita metro area jobs attributed to low-cost carrier AirTran Airways’ entrance into the Wichita market totaled 9,720 during the six-year analysis period from 2002 through 2007. The average annual payroll for these jobs totaled $283.4 million.


Prepared by Center for Economic Development

and Business Research W. Frank Barton School of Business Wichita State University

Janet Harrah, Director Kasey Jolly, Regional Economic Analyst Wichita State University, 1845 Fairmount St., Wichita, KS 67260-0121

Telephone: (316) 978-3225 Fax: (316) 978-3950 www.wichita.edu/cedbr


PROJECT WORK PLAN – PHASE FIVE – PLAN OF ACTION

Phase 5 Plan of Action 1/11/2013 3/7/2013 40 Not

Started

5.1 Marketing Strategies (Short and Long Term) 1/11/2013 1/15/2013 5

Not Started

5.2 Marketing Tools Identification and Recommendations 1/11/2013 1/15/2013 5

Not Started

5.3 Development of an Airline Presentation Packages Based on Plan Recommendations 1/18/2013 1/25/2013 6

Not Started

5.4 Final Draft of Document 1/25/2013 2/8/2013 11 Not

Started

5.5 Final Document 2/11/2013 2/20/2013 8 Not

Started

5.6 PowerPoint Plan Presentation 2/25/2012 2/27/2012 3 Not

Started

5.7 Next Step Recommendations with Airline Targets and Meetings 2/25/2012 2/27/2012 3

Not Started

Tomorrow

Thank You….

State of The Airline Industry – What Do We Do Now? · · 2016-05-12The US airline industry is...

Documents

Transcript of State of The Airline Industry – What Do We Do Now? · · 2016-05-12The US airline industry is...