Routes News magazine, Issue 1, 2015

routesnews ISSUE 1 VOL 11, 2015

The world air service development magazine

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Part of the community:

INTERVIEW:

Denver Airport’s Kim Day

REPORT:

Passenger rights

Hawaiian Airlines Mark Dunkerley

ANALYSIS: Canada

routes-news.com Interviewed:

Airports:

Airlines:

Focus on:

Plus:

Richard Scharf, VISIT DENVER

Belfast and Kunming

SilkAir CEO, Leslie Thng

Ecuador and Quito Airport

World News and Event essentials

EDITORIAL Graham Newton, Editor +44 (0)208 831 7560 graham.newton@routes-news.com Joe Bates, Group Editor +44 (0)208 831 7507 joe@aviationmedia.aero

SALES David McCauley, Senior Advertising Manager +44 (0)208 831 7515 david.mccauley@routes-news.com

PRODUCTION Erica Cooper, Design & Production Manager erica@aviationmedia.aero Mark Draper, Creative Manager & IT Co-ordinator mark@aviationmedia.aero

WEBSITE Jose Cuenca, Creative Manager & Online Co-ordinator jose@aviationmedia.aero

PUBLISHER Jonathan Lee, Managing Director +44 (0)208 831 7563 jonathan@aviationmedia.aero Published by Aviation Business Media Ltd 91 - 93 Windmill Road, Sunbury-on-Thames, Surrey, TW16 7EF United Kingdom T: +44 (0)208 831 7500 F: +44 (0)208 831 7501 The opinions and views expressed in Routes News are those of the authors and do not necessarily reflect any policy or position of UBM Information Ltd or Aviation Business Media.

Printed in the UK by The Magazine Printing Company using only paper from FSC/PEFC suppliers www.magprint.co.uk

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Foreword Welcome to the first Routes News of 2015 and my first as editor.

I

’ve taken an “if it isn’t broke” attitude to the magazine. Why change something that is proving enormously successful? But that doesn’t mean we aren’t always seeking ways to innovate and improve the product. I’d welcome your feedback and suggestions and can be contacted through the details below.

I also hope to see many of you at Routes Americas. The event promises to be special. Denver is certainly a unique location, framed by the Rocky Mountains and home to a number of fascinating attractions. We discuss the airport’s development plans with CEO, Kim Day, (page 18) and chat to VISIT DENVER boss, Richard Scharf (page 26), about all things Denver. The mile high city promises to be everything you expect plus a little bit more…

It will be interesting to talk to local delegates about the transformation of the US airline industry. Merger and acquisition activity seems to have strengthened the airline sector and kept capacity in check, but there are still plenty of challenges. The regulatory environment is right up there in that regard and I look at one particular aspect – passenger rights (page 33) – in this issue. We’ll cover other areas of interest to the industry in future issues.

Mark Dunkerley, Hawaiian Airlines’ CEO, also discusses US regulation in his interview (page 14). Mark is one of those bosses who never fails to give you a unique perspective. Route development, ‘Ohana and Honolulu International Airport are among the other topics discussed. We also speak with SilkAir CEO, Leslie Thng (page 23), about the carrier’s relationship with parent, Singapore Airlines.

I trust the latter gives you a taster for Routes Asia (Kunming, China 15-17 March). We review the host airport (page 42) in this issue. Routes events come thick and fast this time of year so it’s wise to mark your calendar now.

You wouldn’t want to miss out!

Thanks to everybody for the warm welcome I have received. I look forward to meeting friends old and new in the year ahead.

KEEP IN TOUCH

info@routes-news.com @routesnews facebook.com/routesnews

Editor Graham Newton

R™ is a Registered Trade Mark of UBM Information Ltd and is used under licence. © Copyright 2014. The content of this publication is the copyright of UBM Information Ltd and shall not be copied or stored in digital format without the written permission of the Copyright holder. Content is correct at time of printing. UBM Information Ltd shall not be liable for any errors or omissions contained herein.

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Contents

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8 World news

All the latest news in route development.

13 On the move

Who is moving where in the aviation industry.

14 A community spirit

Mark Dunkerley, Hawaiian Airlines president and CEO, says that despite the airline’s strong growth it will not forget its roots.

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23

18 M aintaining the wow factor

24 Canada: two’s company, three’s a crowd?

Developments at Denver International Airport could see the iconic facility once again capture the public imagination, writes Graham Newton.

Nigel Mayes, ASM senior vice president consulting and product development and Mike St-Laurent, senior consultant, explore the dynamics of the Canadian market.

23 Airline one2one

Leslie Thng, CEO of SilkAir, talks about the airline’s relationship with Singapore Airlines.

26 Sky high

The sky is the limit for Denver’s ambitions in the conference and tourism sectors.

Cover Story

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Contents

Contents

31

36

31 Airport one2one

Belfast International Airport managing director, Graham Keddie, discusses route development and the challenges facing aviation in Northern Ireland.

32 Passenger rights

36 No stone unturned

Ecuador’s Quito International Airport is the gateway to a diverse country intent on improving its tourism offer.

The plethora of passenger rights regimes around the world creates confusion for passengers and airlines.

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39 Events essentials

A look ahead to Routes Asia, to be held in Kunming China, as well as World Routes, taking place this year in Durban, South Africa. And Catherine Makrandreou, Routes and ASM marketing manager, gives her view on social media.

All the latest news, views and developments from the global network planning community online, plus exclusive airline and airport interviews.

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42 Welcome to the Spring City Host of the Routes Asia event, 15-17 March, Kunming Changshui International Airport promises a warm welcome.

To book now, visit www.routesonline.com/ routesasia

The HUB, your weekly, central source of information for everything related to Routes and Routesonline, is delivered to your inbox every Friday.

It includes event updates, airline and airport profiles and news and analysis. Sign up to receive The HUB at www.routesonline.com/register/

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World news

World Routes 2017 heads to Barcelona World Routes 2017 will be held at the International convention centre, Fira De Barcelona, Barcelona 23-26 September, 2017.

The announcement follows the culmination of a successful bid to host the event led by Generalitat de Catalunya – Departament de Territori i Sostenibilitat, Ports de la Generalitat, Departament d’Empresa i Ocupació and Agència Catalana de Turisme-and Ajuntament de Barcelona – Barcelona Turisme.

The bid was supported by many of Catalonia’s key stakeholders: Aeroport de Barcelona – El Prat; Port de Barcelona and Cambra de Comerç de Barcelona. In

Delta Air Lines will launch daily non-stop service this spring from SeattleTacoma International Airport to five new destinations as part of the continued expansion of its West Coast hub. Delta’s new Seattle services are Denver, Sacramento, Boise, Ketchikan, and Sitka. Delta will serve the top 15

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addition, it is fully supported by Vueling and Emirates, both of which will be official carriers for the event.

“Holding World Routes will be a huge boost in making Barcelona airport the hub of Southern Europe,” said Minister of Territory and Sustainability, Santi Vila. “It will be a magnificent platform for the economic promotion of the city, of Catalonia and, above all, of its businesses which are involved in the process of internationalisation and conquering foreign markets.”

Barcelona has more than 1.6 million inhabitants and is at the heart of a

destinations in the Western US with the addition of Boise, Denver and Sacramento, while Ketchikan and Sitka complete the top five destinations in Alaska.

United Airlines will operate additional flights to Shanghai and Chengdu from San Francisco during the peak summer travel season.

metropolitan area with close to 5 million people, representing 63.4% and 10.2% of the Catalan and Spanish population respectively. It is also one of the top three congress cities in the world, one of the world’s top ranking leisure tourism cities and the 5th O&D city in Europe.

Barcelona is also home to one of the world’s busiest cruise ports.

The local economy is thriving. Catalonia is responsible for more than 18% of Spanish GDP and 26% of Spanish exports.

The 2017 event is expected to attract more than 3,500 delegates, including 350 airlines, 1,000 airports and 300 tourism authorities from more than 125 countries.

The current daily service between San Francisco and Shanghai will increase to two flights daily from 6 May to 24 October 2015, and the three-times-weekly service between San Francisco and Chengdu will increase to daily service from 4 June to 1 September 2015, both routes subject to government approval.

British Airways is to start direct flights from London Heathrow to Krakow in May 2015. The new four times a week service from Terminal 5 will be operated by a combination of Airbus A319s and A320s, and offer customers a choice of 5,600 seats a month in Club Europe and Euro Traveller Cabins.

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S ingapore Airlines strengthens ties with Tourism Australia Singapore Airlines and Tourism Australia will strengthen their existing commercial partnership by signing a new, three-year strategic marketing deal worth A$12 million.

The agreement will see the two parties jointly fund a range of tourism campaigns and promotional activities in seven key inbound markets, including China, Germany, India, Indonesia, Malaysia, Singapore and the UK. Singapore Airlines will be the exclusive airline partner for all Restaurant Australia campaigns in Singapore, India, Indonesia and Malaysia as well as provide international flights for Tourism Australia’s key Corroboree Europe trade event, taking place in Adelaide in 2015.

“Combining Tourism Australia’s marketing prowess with Singapore

Airlines’ network reach remains a winning proposition in key target markets to bring travellers to Australia,” said Mak Swee Wah, Singapore Airlines’ Commercial executive vice president.

“Leveraging the opportunities presented across Europe and Asia in partnership with Tourism Australia enables us to reach better conversion rates and cement Singapore as the optimal gateway hub to Australia.”

Singapore is currently Australia’s fifth largest source market for international tourists with visitors from generating A$1.1 billion in total expenditure in 2013. The Tourism 2020 strategy estimates that the Singapore market has the potential to grow to between A$2.3 billion and A$2.8 billion in total expenditure by 2020.

easyJet has announced it will operate 26 new routes in summer 2015, including two – Essaouira in Morocco and Stuttgart in Germany – that are new destinations for the airline. easyJet is set to become the only UK airline offering direct flights to Essaouira, on Morocco’s western coast, with two flights a week from London Luton Airport. Meanwhile, Porto in Portugal has become a new easyJet base with new UK flights to and from Manchester, Luton and Bristol. Porto will complement the Lisbon base, which opened in 2012, and is set to improve economic links between the UK and Portugal.

Air France will begin a new route to Vancouver from Paris in March. Meanwhile, as of 5 May, KLM will offer three weekly flights to Edmonton from Amsterdam. This will increase to four times a week from 22 June.

f astjet is going places fastjet Zambia Ltd has received an Air Service Permit from the authorities in Zambia, a vital stepping stone to launching operations in the country.

Timescales before the first flight will be dependent on the time taken for the authorities to review the AOC application documents. fastjet has also received permission

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from the Uganda Civil Aviation Authority to operate flights from Uganda to Juba, Nairobi, Kigali and Johannesburg under fifth freedom rights using Tanzanian-based aircraft. In addition, the airline has signed an agreement that brings the total Tanzanian legal and beneficial ownership of fastjet Tanzania to 51%.

Finnair will fly to Chicago three times a week from 13 June to 17 October, 2015.

Flights will be operated with Airbus A330 aircraft. Other new summer destinations for Finnair include Athens, Dubin, Malta and Split. Due to the opening of the Chicago route, Finnair’s seasonal summer service to Hanoi will be discontinued.

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World news

Etihad works to strengthen codeshare ops

Keeping in touch with air mail The importance of air mail was highlighted by the 80th anniversary of the Australian Airmail Service.

The first Airmail letter was sent on 8 December 1934 when Imperial Airways, one of the forerunners of British Airways, began its regular weekly mail service between England and Australia.

British Airways still has the envelope of one of the first letter sent that day, to the Right Honourable Sir Auckland Geddes, which arrived in Brisbane 13 days later. His son, Eric Campbell Geddes, was then the chairman of Imperial Airways.

“Over the last 80 years British Airways has played a huge part in keeping families, friends, businesses, diplomats and governments in touch with one another, by providing the vital link for Airmail between the UK and Australia,” said John Chisholm, Airmail product manager for IAG Cargo, the cargo arm of British Airways and Iberia. “Australia is still one of our biggest airmail cargo destinations and we transport over 500,000 kgs of letters and parcels a year between Sydney and London.”

While the number of letters posted has fallen, the number of parcels sent between the UK and Australia has increased thanks to the growing popularity of e-commerce sites and Internet shopping.

Etihad Airways has improved its codeshare portfolio following a new deal with SAS and an expansion of its agreement with Alitalia.

The SAS agreement, which is subject to regulatory approval, will enable the carriers to offer greater connectivity to and from a number of key European cities. “This codeshare agreement with SAS will improve flight connections to Stockholm, Oslo and Copenhagen, as well as a number of important secondary cities across Scandinavia, greatly enhancing travel options and connections for air travellers and deepening our ties with Europe and European carriers,” said Kevin Knight, Etihad Airways’ chief strategy officer.

Etihad has also completed its 49% stake in the new Alitalia. The two airlines will offer enhanced connections between Abu Dhabi and Milan, Rome and Venice. Both airlines already codeshare on each other’s daily services between Abu Dhabi and Rome, and subject to government approval, Etihad Airways will codeshare on 15 of Alitalia’s domestic routes from Rome Fiumicino Airport.

Task Force on UK connectivity A 15-strong independent Task Force will examine the current and future requirements for improved connectivity between the UK’s regions and the major hub airports.

The Task Force – chaired by Lord John Shipley – will make recommendations on necessary improvements and how they can be practically delivered. Lord Shipley expressed confidence that the Task Force will come up with a number of important recommendations on how improved air links to London can contribute to national connectivity and regional growth.

Lord Shipley

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On the

move KLM has appointed René de Groot as chief operating officer. He succeeds Pieter Elbers who became president and CEO in 2014.

Fatima Beyina-Moussa, managing director of ECAir (Equatorial Congo Airlines), has been named president of the African Airlines Association (AFRAA).

Beyina-Moussa said that AFRAA represents continuity and complementarity. “It is an excellent opportunity to promote our air transport policy and to stimulate discussions with our partners,” she noted.

Sebastien Borel has been named general manager of Airbus ProSky. Borel will run all aspects of Airbus ProSky’s day-to-day operations, such as sales, marketing, communication, project management and technical services. “To remain at the nexus of innovative and efficient ATM solutions, we need a general manager who can both manage the organisation’s day-to-day activities, while providing us a vision for tomorrow’s skies,” said Paul-Franck Bijou, Airbus ProSky Group CEO. “Sebastien Borel encapsulates these qualities.”

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Inmarsat has announced the appointment of Captain Mary McMillan as vice president, Aviation Safety and Operational Services.

Prior to joining Inmarsat Aviation, McMillan was senior vice president, Aerospace Safety and Environment at Tetra Tech AMT. In parallel with her role at Tetra Tech AMT, McMillan was, from 2010, the independent safety advisor to Airservices Australia’s board of directors.

Todd Sampson has joined the Board of Qantas. Qantas has also made changes to its executive team: • Andrew David – CEO of Qantas Domestic (currently COO for Qantas Airways) • Gareth Evans – CEO of Qantas International and Freight (currently CFO for the Qantas Group) • John Gissing – group executive, Associated Airlines and Services (currently CEO for QantasLink, will now report to the Group CEO) • Robert Marcolina – group executive strategy, Transformation and IT (currently executive manager, Group Strategy) • Tino La Spina – Group chief financial officer, Qantas Group (currently Deputy CFO for the Qantas Group).

Malaysia Airlines (MAS) has chosen Aer Lingus boss Christoph Mueller to be its next chief executive.

Mueller will be the first foreigner to head MAS and is expected to take up the post no later than 1 May, 2015. In a statement issued

by Khazanah Nasional Bhd, Malaysia’s sovereign wealth fund that currently owns 70% of the airline, Malaysian Prime Minister, Najib Razak, called Mueller’s appointment “part of efforts by the government and Khazanah to lay strong foundations for the future success of our national carrier.” Mueller joined Ireland’s national carrier as CEO in 2009 and steered the company through several difficult battles, including fending off a takeover bid from Ryanair.

Bruno Delile has been appointed executive vice president, Long-haul Operations at Air FranceKLM and will also sit on Air France’s Executive Committee. Delile brings more than 25 years of experience in the aeronautical industry to this new role, having held several positions in the field of MRO at Air France-KLM.

Mary McMillan

René de Groot

Fatima Beyina-Moussa

Christoph Mueller

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A community spirit Mark Dunkerley, Hawaiian Airlines president and CEO, says that despite the airline’s strong growth it will not forget its roots, writes Graham Newton.

What are your thoughts on the airline’s performance in 2014?

What is your route development strategy?

Last year was a great one for the company and we’re looking forward to an even better 2015.

The strategy we’ve employed since 2010 – and arguably even before that – has started bearing fruit. The airline has been profitable throughout this time despite the company doubling in size, but 2014 was the year when we really began to see the full effects of the strategy.

Hawaiian embarked on an ambitious growth strategy in Asia that started with the arrival of our Airbus 330-200 aircraft and has continued right through to the inauguration of our Beijing service early last year.

We sell Hawaii as a destination. We’re very fortunate to be based in an incomparably beautiful part of the world.

So the aim is to bring to Hawaii all those people who want to come to Hawaii.

There is a natural focus on Asia because the spending power in that region is increasing all the time and Hawaii is often one of the first places that people want to visit. As for North America, our airline is well-established and obviously that is a strong market for us too.

Of course, our main strength is flying between the Hawaiian Islands. There are no bridges and no ferries transporting people on a convenient daily basis. So the people sitting on our aircraft can include high school athletic teams going off to compete against another school, or perhaps people flying to one of the larger islands for medical treatment.

The inter-island routes are big business. More people fly between Honolulu and Maui, for example, than between New York LaGuardia and Washington National.

Your on-time performance was, as usual, excellent. Have you made a particular effort in this area?

Our on-time performance is good and in fact we’ve been the industry leader for the past 10 years in a row.

But, to be honest, this has a very humble beginning. A dozen years ago, we needed to raise the confidence of employees that we could compete with the much larger network carriers, and we elected to take them on in operational reliability – a traditional weakness for the company in years gone by. We wanted it to be clear that there was no reason why Hawaiian

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Mark Dunkerley

Airlines should be second best in any aspect of business just because we’re a small airline.

Our on-time performance is the result of that internal effort. That it has become associated with us externally is merely an accidental by-product of an internal initiative.

Yes, of course, we operate in a largely benign weather environment.

But that doesn’t tell the story. We have an incredibly intense short-haul network. A single aircraft can fly 16 sectors a day and if each flight was just 5 minutes late, we’re 80 minutes behind schedule by the end of the day. So we can never allow delays to accumulate.

How important is the Air China deal and what role will China play in your future network?

Our partnership with Air China is extremely important to us. The Chinese market to Hawaii is relatively small at the moment but it is growing rapidly and has the potential to be huge.

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The Air China codeshare allows us to serve the market properly. Hawaii and Hawaiian Airlines are ideally placed to take advantage of the potential for air travel to/from China.

How far do your international ambitions go? Are you looking at Europe?

We’re certainly looking at Europe. But the A330-200 doesn’t have the range to fly there non-stop, and if you make it a one-stop service it becomes very hard to differentiate your product. But all that will change when we take delivery of the Airbus A330-800neos later in the decade and we may well use those aircraft to serve Europe.

As for Asia, we really are spoilt for choice. It is a good problem to have when you must choose between attractive alternatives. It may be that we will look at other destinations in China or we may

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decide to go to countries where we don’t have a presence at the moment.

What is the thinking behind the ‘Ohana brand?

Hawaii is made up of four large islands and two smaller ones. The Boeing 717 service we had was not well-suited to the smaller islands of Lanai and Molokai because of passenger numbers and airport constraints. Regrettably, a decade ago we had to suspend service but it has always been our intention to return.

It took a while to reach the various agreements needed to set up ‘Ohana

by Hawaiian but we’re there now and operating a turboprop service to these islands once again through a relationship with an independent commuter carrier.

We chose ‘Ohana as a brand because the customer base is very local. The name means “family” in the Hawaiian language, which conveys a sense of

community. Although Hawaiian Airlines flies to Sydney, New York and Beijing, it has not forgotten its roots.

That means ‘Ohana is not purely about being a feeder service. The ‘Ohana

by Hawaiian network does tie in with our long-haul services but it’s also geared up for the business person or day commuter who wants to fly out early and come back late to Molokai or Lanai.

Does your Honolulu hub need to improve – and if so, how?

A lot of work needs to be done at the airport, and I don’t think anybody would disagree.

There is a multi-billion-dollar airport modernisation plan, which will largely be funded by the airline. This includes taxiway widening, which will enable several new projects including the construction of a new maintenance hangar and cargo facility for Hawaiian

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Everywhere we fly we face competition from big, legacy carriers. But we have no ambition to become one Airlines, and the addition of widebody gates to our terminal. It is the first major expansion at Honolulu International Airport in over 20 years.

Work is still in its early stages because of the RFP process and suchlike. Progress has been slower than we hoped for, but our enthusiasm for the project has not dimmed.

But it is not just Honolulu. Maui, Hilo, Kona, Lihue, Lanai and Molokai airports are also in need of some updating.

In general, what is your view of the regulatory environment in the US? Is there a growing tendency to micromanage?

There is definitely a trend towards more regulation. We spent 30-odd years de-regulating in the US, but it seems the government is now regulating again as quickly as it can.

New regulations are coming our way with wearisome regularity.

Unfortunately, in 30 years’ time we might see the same sort of industry structure as existed before 1978.

We’re stuck with an antiquated ATC system. US delays are the worst

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in the world and NextGen is not happening as quickly as it should.

The industry is very wary because the costs are there but the benefits are not. There seems to be no delay in the regulations coming out that force airlines to equip their fleets with the latest technology, but the system improvements that are needed to utilise that equipment either lags behind or even gets cancelled.

Look at RNP approaches, for example. Many aircraft have been equipped, but few procedures have been published.

How have the airline mergers affected the US market and your airline?

It’s a very different market and there are pluses and minuses for little airlines like us.

Some of the airlines are so big that I think they lose their relationship with the individual customer. They also tend to focus on the business traveller. As a destination carrier, it makes it easier for us to differentiate ourselves. So those are pluses for us.

On the minus side, the massive network carriers have become larger and more powerful.

Even so, we compete against them every day. Everywhere we fly, we face competition from big, legacy carriers.

But we have no ambition to become one. There is definitely a role for smaller, niche carriers in the future. We have a fleet of 50 aircraft and we have a niche for ourselves that can and should grow.

Finally, tell us a little bit about your management style.

Has your British Airways experience been easy to marry with the Hawaiian style?

We’re all very fortunate to be living and working here. Hawaii is a fascinating place and by far the most culturally mixed environment I’ve ever experienced – more so than even the most cosmopolitan city. So I don’t stick out!

The common element is hospitality, and the last thing I want to do is change that. So my job is to set a direction for the airline and keep out of the way to let our employees do what they do best.

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Maintaining the wow factor

Developments at Denver International Airport could see the iconic facility once again capture the public imagination, by Graham Newton.

W

hen Denver International Airport (DIA) opened in February 1995 its Fentressdesigned peaked roof – reminiscent of the surrounding snow-capped mountains – drew admiring glances from passengers and aviation insiders alike.

The aesthetic appreciation soon gave way to more practical matters but again DIA hit its mark. Airline clients talked openly of the most efficient airport in the US system.

Twenty years on, DIA is intent on maintaining the feel-good factor. Kim Day, chief executive officer, admits the iconic facility brings with it a responsibility to plan wisely and build to a quality and design that complements and enhances the existing architecture.

“Denver International Airport was built with growth in mind,” she says.

“The airport has 53 square miles of land, making it the second largest physical airport in the world. At full build-out, the airport can grow from its current six-runway design, serving 53 million passengers a year,

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to 12 runways, serving 100 million passengers a year.”

A stepping stone on the path to this ultimate build-out is the Hotel and Transit Center Program. Part of the original vision for the airport, this includes three independent, yet physically integrated, projects: • The 519-room Westin Denver International Airport Hotel, which will include a 26,000 square foot conference centre for up to 2,500 people. It opens at the end of 2015.

• A public transit centre serving the regional bus system and the new commuter rail line connecting Denver International Airport to downtown Denver in about 35 minutes. Service begins in early 2016.

• An 82,000 square foot open air public plaza, an urban space at the airport, which will be a venue for performances and exhibits as well as a location for relaxation and dining.

“The design of the Hotel and Transit Center provides wonderful new amenities for passengers and a great location for

corporate meetings,” Day says. “The hotel is designed to create a dynamic, urban feel that maximises views of the city, the Rocky Mountains, the airfield and Jeppesen Terminal while providing connectivity to the airport.”

A pool and fitness centre will be situated in the “saddle” of the hotel’s 11th floor, offering views of Pikes Peak to the south and the runways to the north. The conference centre will include 12 meeting rooms (totalling approximately 10,000 square feet) a grand ballroom and two junior ballrooms (together totalling more than 16,000 square feet).

Meanwhile, the downtown rail connection has been described as a “game-changer” and recaptures the convenience more associated with Denver’s former airport, Stapleton.

As for the public plaza, that is designed to be an accessible and welcoming venue for arts and entertainment, integrating DIA into the community like never before and providing a true city experience at the airport.

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Kim Day

What advice would you like to give delegates at Routes Americas?

DEN Real Estate

DIA is taking that city experience concept seriously. The airport has more land for commercial development than any other airport in North America. “This gives us a big competitive advantage and opportunities for sustainable economic growth that most airports in the world envy,” Day says. “In the near term, about 10% of this land contains the infrastructure needed for aviationcentric, mixed-use development that might include hotels, logistic centres, training facilities, office, retail and industrial projects. We also have two additional commuter rail stations under construction that are ideal for true transit-oriented development.”

Until now, this potential development has been referred to as “Airport City Denver”. But the terminology is changing and the airport’s land development programme will in future be known as “DEN Real Estate”.

The focus remains the same though – leveraging the airport’s extensive land,

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geographic location, global connectivity and regional assets for economic development and aeronautical growth.

“Our location makes us appealing for companies that may want to distribute products throughout the US and the world,” says Day. “Our sheer size provides the ability for corporations to scale their operations as they grow. And our nonstop access to more than 180 locations around the world allows businesses to extend their reach around the globe.

“Together, this region can serve the needs of any business that wants to take advantage of the connectivity of metro Denver’s air and ground transportation system, highly motivated and well-educated workforce, and business-friendly environment,” adds the CEO.

Connecting the world

Certainly, there are few parts of the world the airport doesn’t reach. A recent addition to the long list of destinations is Panama City, served by United. Through United’s strategic partnership with Copa Airlines, the route will also act as a gateway to Central and South America,

Kim Day: Come early, stay late and make the most of this wonderful region! There is so much to see and do in Denver and across Colorado, especially during the winter season. I encourage everyone to take the time to explore before or after the conference: go up to the mountains, check out the hiking and biking and don’t forget to shop.

There are so very many great restaurants that I can’t just pick one or two, but I would suggest checking out Larimer Square, the Highlands and Cherry Creek. They are three of Denver’s unique neighbourhoods with fun shops and excellent cuisine.

offering connections to 40 destinations in 11 countries.

While too early to determine the success of the flight (it began in December 2014), it is anticipated that the new service will generate $35-$40 million in annual economic impact to the State of Colorado and support more than 400 new jobs.

Meanwhile, the Tokyo service continues to perform well, generating

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high load factors and year-over-year growth in average fares. “Denver-Tokyo is truly a model for how the Boeing 787 is to be successfully deployed – on long, thin routes that would be unprofitable on larger aircraft,” suggests Day. Day’s short-term wish list for new destinations focuses heavily on Europe.

Although the largest region for DIA in terms of O&D traffic, Europe remains underserved. Later this year, British Airways will switch the Denver-London Heathrow service to a Boeing 747, representing a 23% increase in capacity.

Icelandair is also due to add frequencies to Reykjavik throughout the year.

Forging partnerships

The airport works very closely with a key group of primary partners to market Denver, including VISIT DENVER, the Metro Denver Economic Development Corporation, the State of Colorado and various organisations associated with the ski industry.

“In today’s globally competitive environment, we have to leverage all of the resources available to effectively market Denver and Colorado to airlines,” reports Day. “More flights mean more tourists, more jobs and more economic impact to our partner organisations and Colorado’s economy. We develop both long term and annual strategic plans with

Denver-Tokyo is truly a model for how the Boeing 787 is to be successfully deployed – on long, thin routes that would be unprofitable on larger aircraft

“This is all good news, but we are also out talking to carriers about adding a new European gateway,” says Day. “Paris recently surpassed Frankfurt as our second-largest market in Europe (London ranks first) and we are one of the largest US markets without non-stop service to Paris.

Amsterdam, Munich and Copenhagen are other large European hubs that offer potential for Denver service.”

Elsewhere, opportunities in both Canada and Mexico are being monitored closely. Despite being well-connected to both countries, Day feels there are some markets that would benefit from expanded or new air service.

In the medium term, the focus is on the Middle East and New Zealand, two long-haul markets that potentially offer sustainable, profitable service from Denver. Further out, China, Brazil and Ethiopia are all on the DIA agenda.

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our partners and focus joint resources on areas of overlap – regions where we all see growth opportunities for our various core business areas.

“In terms of campaigns for 2015, we will be celebrating the 20th anniversary of DIA on 28 February and our outreach over the next year will encompass messaging about what Denver International Airport will look like in the next 20 years.”

The passenger experience

At the heart of DIA’s appeal is the passenger experience. Winning customers’ hearts means listening to what they want and continuing to seek innovative ways to engage with them.

The airport has already responded to an array of desires. Developments at DIA range from improved Wi-Fi coverage to a five-gate expansion on Concourse C for Southwest Airlines.

The new Southwest space features integrated technology. iPads can be used to order beverages, receive concierge service, check e-mail and review flight status. Improved seating includes electrical outlets, cup holders and individual tables.

Another element in enhancing the customer experience is the transformation of the airport’s shopping and dining options. In September and early October 2014, DIA hosted a Beer Garden in the centre of Jeppesen Terminal, allowing travellers and airport patrons to sample local draft beer. The plan is to repeat this annually.

A total of 21 new shopping or dining locations last year. The food options range from a table awarding-winning restaurant, Root Down, to Steve’s Snappin’ Dogs, a family-owned local favourite offering a wide variety of hotdogs and burgers.

Other new venues include Elway’s, a fine dining establishment, Cru food and wine bar and a health food option in Etai’s Bakery Café.

“Our food offerings have not only got better, they have got better for you,” Day enthuses. “What used to be a smattering of fast food options has transformed into a wide range of dining destinations that offer new local tastes alongside established national brands.

We earned the number one ranking for healthiest airport food in the country from the Physician’s Committee for Responsible Medicine.”

Improved nutrition may give patrons renewed energy for shopping. Recent retail additions include MAC Cosmetics, TulehRuche, ExpressSpa, the Tattered Cover bookstores and Final Approach.

The latter facility has reimagined the cell phone waiting lot by offering food, fuel, a children’s area, flight information boards and free Wi-Fi.

Healthy finances

A number of factors has helped Day manage the plethora of developments at DIA. Arguably most important is the airport’s strong financial position. “Our financial strength has benefitted from

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Denver International Airport extensive planning and the strong passenger growth we have seen over the past four years, which has helped us to outperform the objectives we established in our 10-year financial strategy,” Day informs. “Our long-term plan focuses on balancing three primary metrics [cost per enplaned passenger, cash on hand and debt coverage] while funding ongoing maintenance and facility upgrades. We work hard to maintain competitive operating costs for our airline partners. Our plan also supports the airport’s need to adapt to changing markets and economic climates. We established targets

against which we can manage and measure performance.”

Day also places emphasis on the airport leadership team, empowering and encouraging them to outperform their own vision of their abilities. According to Day, a key part of her job is to keep them focused on the overall strategic vision of the city and the airport, while providing them with the resources to accomplish their individual strategic and tactical plans.

“I try not to micromanage, while keeping a pulse on the details of individual initiatives,” she says. “That is a difficult rope to walk, but I think it is vital. I also think personal touches

like handwritten notes, face-to-face conversations and birthday cards sent to all employees’ homes help to create a culture of caring and collaboration, and makes individuals at all levels of the organisation feel a part of something bigger, inspiring them to contribute.”

Externally, Day notes the imperative to build a relationship of transparency and trust with the Mayor (Day’s boss), the City Council, other elected officials and the overall business community.

“As a public agency, it is important to maintain the public trust, by making fair and ethical decisions in all that we do,” she concludes.

Environmental initiatives at the airport Denver International Airport was the first commercial airport in the US to achieve ICAO certification for an overall property Environmental Management System.

Some of DIA’s environmental initiatives are clearly visible, such as the fourth solar power array added in June 2014. The photovoltaic farms have the capacity to generate 10 megawatts, or 16 million kilowatt-hours of electricity. That’s enough electricity to power about 2,600 typical Denver-area homes each year or about 6% of the airport’s annual demand.

Less visible is the recently-implemented Aerobahn De-icing Manager, which integrates airport surface surveillance and flight data to provide real-time situational awareness of de-icing pad activity. Aerobahn use during a typical snow event will reduce airline delays by 2.6 minutes per aircraft, saving the airlines

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$5.8 million per winter season, while also reducing fuel use and emissions. DIA also has one of the most comprehensive de-icing fluid collection and recycling systems in the world, boasting an average collection rate of 69% of all fluid applied to aircraft in a typical winter season.

Environmental gains will also be had from Denver’s work with the Federal Aviation Administration on its NextGen programme.

NextGen procedures have transformed Denver’s skies and will enable DIA to meet increased demand while minimising aviation’s environmental impacts.

United Airlines, which has a hub in Denver, estimates uninterrupted idle descent from cruise to final approach results in 200-800lbs of fuel savings per flight, depending on the size of the aircraft.

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Airline one2one

Leslie Thng, CEO of SilkAir, talks about the airline’s relationship with Singapore Airlines.

Tell us about your new routes, including Hangzhou.

What do you look for in a new destination?

In 2014, SilkAir launched services to three new destinations – Kalibo (Boracay) in the Philippines, Mandalay in Myanmar and Hangzhou in China.

Prior to launching any new routes, SilkAir will conduct feasibility studies to evaluate the potential demand from leisure and business travellers.

On Hangzhou, SilkAir is the only full service carrier connecting this destination directly to Singapore. China has always been an important market for SilkAir and the launch of our flights to Hangzhou portrays our commitment to develop this market.

As the regional wing of Singapore Airlines, SilkAir aims to enhance the connectivity options available to our customers through our combined network of destinations with Singapore Airlines.

What is your relationship with Singapore Airlines?

Do you only look for destinations that are not served by you parent airline?

SilkAir is the regional wing of Singapore Airlines and operates the Singapore Airlines Group’s narrowbody fleet, with a different product, brand and cost base from the parent airline.

In terms of destinations, SilkAir has long been the champion of diverse,

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secondary destinations in Asia, some of which are still relatively untouched by mass tourism, while our parent airline typically flies to major cities.

Through synergising the networks of both airlines, we aim to enhance the connectivity options available to our customers through our combined network.

What is the reasoning behind your aircraft order of 49 Boeing 737s?

SilkAir strives to maintain a young fleet and the large aircraft order will cater to both growth and fleet renewal needs. Additionally, Airbus and Boeing are both well-established players in the narrowbody aircraft market. After careful deliberation and consideration of each manufacturer’s proposal, we felt Boeing’s proposal to be a better fit for our overall requirements.

How do you see the AsiaPacific market developing?

Do you agree with the majority of forecasts that place such an emphasis on growth, in particular in China?

Due to the growing Asia-Pacific economies, air traffic is expected to grow in the AsiaPacific region, leading to more demand for air travel. SilkAir, together with Singapore Airlines, is excited to be part of this growth by continuing to expand our service offerings and providing our customers with more choices and convenience.

Additionally, SilkAir and Singapore Airlines together serve 11 Chinese cities, with 120 weekly flights. This shows our commitment to develop this market, which has strong potential for growth.

Tell us about your brand.

How do you want SilkAir to be viewed by passengers?

SilkAir is a full service carrier, which offers a quality product and reliable service. We set ourselves apart from the competition by offering all that is needed for an enjoyable and reliable travel experience.

SilkAir offers passengers with the full in-flight experience, including in-flight meals and a recently-launched wireless in-flight entertainment, SilkAir Studio, where customers can stream video and audio content directly to their personal device, all on a complimentary basis.

Passengers are entitled to 40kgs and 30kgs baggage allowance for Business Class and Economy Class respectively.

We also offer passengers the options of online check-in, seat selection and the ability to earn miles under the KrisFlyer Frequent Flyer Programme.

SilkAir additionally leverages its position as a subsidiary of Singapore Airlines to offer benefits such as smooth and seamless connections to the combined SQ-MI network of over 90 destinations around the world.

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23

Canada: two’s company, three’s a crowd?

Nigel Mayes, ASM senior vice president consulting and product development and Mike St-Laurent, senior consultant, explore the dynamics of the Canadian market.

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here is a strong tradition of two dominant carriers in the Canadian market. Air Canada and Canadian were the mainstays in the 1980s and 1990s. More recently, Air Canada has been joined by WestJet. It appears that “three is a crowd” in the Canadian aviation market, with the other carriers taking a smaller share of the seats.

Capacity overview

Canada is the 15th largest country market in terms of O&D passengers and the market has seen seat capacity grow steadily over the last ten years at an average rate of 2.4% CAGR. Air Canada and WestJet operate a combined 68.3% of the seats in the Canadian market. WestJet has steadily eroded Air Canada’s market share with an increase of seven percentage points in seat capacity over the last ten years from 17.1% to 24.4%, while Air Canada’s share of seats has fallen from 46.8% to 43.9%, a three percentage point fall.

Relative newcomer, Porter Airlines, captured 4.2% of seats in 2014 despite only starting operations in 2006 and only flying Q400s from Billy Bishop Toronto City Airport. Air Transat and Sunwing are the 4th and 5th largest carriers with 2.3% and 1.8% market share respectively.

The vast majority of seat capacity from Canada is to either another Canadian destination (63.9%) or to the US (19.6%), with only 16.5% of seats to points outside of these markets. The next largest

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Nigel Mayes

countries served are the UK, Mexico and Cuba, reflecting Canada’s close ties to the UK and the desire for sunshine during the cold winter months.

Interestingly, France is only 7th after Germany, a result of Air Canada feeding the Star Alliance hubs at Frankfurt and Munich, although the majority of the traffic will be for onward points across the Lufthansa network.

The Canadian outbound leisure market is very seasonal, with a strong summer flow to Europe and a strong winter market to Florida, Mexico and the Caribbean. Indeed, Canada is a good market for Europe charter capacity where aircraft from both Thomson and Thomas Cook switch across to Canada during the winter months.

Toronto is by far the largest source of traffic and accounts for 26.6% of the seats in the Canadian market, while

Mike St-Laurent

Vancouver, Montréal and Calgary account for 13.5%, 10.6% and 10.5% respectively.

These four markets account for two thirds of the total Canadian capacity.

New business models

The two dominant scheduled carriers have segmented the market through sub-brands.

Air Canada launched a low-cost subsidiary, Air Canada rouge, on 1 July, 2013. The rouge fleet has grown to 29 planes and the stated target is 50 aircraft.

The carrier uses A319s and B767-300s, both of which have higher density seating than the same aircraft at Air Canada.

Air Canada rouge was designed to enable the parent airline to compete more effectively in lower yielding leisure markets by operating at a lower seat cost. In addition to its higher density seating and lack of a business class cabin, rouge also has its own pilots

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Canada Snapshot and flight attendants. The end result is that unit costs at rouge are more competitive with carriers such as Air Transat, and are substantially lower than those at Air Canada.

In November 2014, the airline reported that costs per ASM on the rouge 319s are 23% lower than Air Canada while the767 costs were 30% lower.

WestJet launched their Q400 operation, branded as WestJet Encore, in June 2013. Encore was designed to provide feeder services to WestJet, and to enable WestJet to compete with Air Canada Jazz in the country’s regional markets where their 737s were too large, such as Brandon, Nanaimo, Fort St-John, Terrace and Penticton.

But both rouge and WestJet face competition. Canada Jetlines is a new carrier that plans to start operating in 2015 using five leased B737s. The airline will be based in Vancouver and predicts base fares 30%40% lower than those of Air Canada and WestJet. The airline is in the midst of an IPO designed to raise C$50 million.

Network changes

In 2014, WestJet entered the transatlantic market for the first time, operating a 737 service between St-John’s Newfoundland and Dublin. A second route, Halifax to Glasgow, is scheduled to launch in 2015.

Because of the range limits of the B737, transatlantic opportunities are limited as the aircraft cannot operate direct to Europe from Toronto or Montréal. However, WestJet is scheduled to receive four B767-300s in 2015.

Although the company plans to deploy these planes on flights to Hawaii, it has said it is considering ordering additional widebodies in the coming years.

With the addition of the Q400s in 2013 and the planned addition of widebodies this year, WestJet appears to be moving away from a traditional LCC business model to become more of a network carrier.

The launch of rouge added new international destinations to Air Canada’s network, such as Nice, Lisbon, Venice, Edinburgh and Manchester. In addition, Tokyo-Haneda, Milan, Panama City and

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Rio de Janeiro took their place on the Air Canada network last year. In 2015, Air Canada will add Dubai and Delhi as well as Austin, Texas (all from Toronto).

Air Canada has been successful over the past several years at capturing an increasing share of sixth freedom traffic between the US and Europe and Asia via their Toronto hub. Over the past ten years, passenger volumes in these markets have more than doubled, from 473 passengers per day each way in 2005 to over 1,100 in 2014.

GDP Per Capita

US$43,247 Top Carrier

44%

Future world

The Canadian market has grown steadily over the last ten years and hasn’t witnessed the volatility of other country markets around the world. The market continues to be dominated by two carriers. The pure leisure carriers (Air Transat and Sunwing) remain an important, but relatively small part of the overall market.

So what’s next for the Canadian market? New carriers have emerged in recent years. Porter Airlines has carved out a niche in Billy Bishop Airport, where they own the terminal. The carrier wants to sell the airport terminal infrastructure to raise funds to expand their operations with CSeries jets, but may not be able to compete without the protection of a capacity-constrained airport like Billy Bishop.

New leisure carriers like Enerjet have entered the market using 737 on charters for the oil industry and tour operators and even providing capacity for Air Transat, serving thinner markets. If they remain as a leisure carrier, however, it is difficult to see how they can compete on a large scale with WestJet and any future overseas LCC capacity.

It is more likely that WestJet will become a stronger second carrier in Canada with a more robust long-haul network targeting key leisure markets in Europe and developing connecting flows through Toronto.

As WestJet’s business model gravitates towards that of Air Canada, there may be room for a new LCC to fill the void.

Canada Jetlines may be able to do this but it will take time. For now, two will remain company and three will still be a crowd!

Population

over

35 million

Seat Capacity Growth (10 Years)

2.4% CAGR Key Outbound Markets

%

(Seat Capacity 2014)

Canada

64

USA

20

UK

2

Mexico

2

Key Origin Markets

%

(Seat Capacity 2014)

Toronto

27

Vancouver

14

Montréal Calgary

11Source: xxx

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25

Sky high The sky is the limit for Denver’s ambitions in the conference and tourism sectors.

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eing a mile high may be Denver’s call sign but there are other distances just as significant to the city. It is just 500km from the exact geographical centre of the Continental United States and 1,000km from the nearest city of a similar size.

With the mighty Rocky Mountains forming a formidable backdrop, it means Denver is without doubt a standalone city.

That doesn’t stop people visiting, of course. On the contrary. According to Richard Scharf, president and CEO, VISIT DENVER, The Convention & Visitors Bureau, 2014 is likely to have ended up as the best year ever for the convention business in Denver.

“It should finish with a minimum of 422,000 delegates, significantly up over the previous best year of 2013, in which Denver had 385,292 delegates, and better than 2008, when we hosted the Democratic National Convention,” he says.

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Scharf expects 2015 to be equally strong, beginning as usual with the 20,000-delegate SIA Snow Show. The Clinton Global Initiative will also be back in Denver along with many other high profile groups meeting at the award-winning Colorado Convention Center.

A year-long study of the Convention Center has yielded a series of recommendations to keep the building relevant to the dynamic event sector.

“We’re adding live help on our conventions website so that we can assist our clients 24 hours a day, no matter where in the world they might be,” notes Scharf. “We are building rail service between downtown and the airport, and we just opened our completely restored Union Station, which will serve as a transportation hub for Denver with ten new restaurants and bars, shopping and a hotel.”

A new interactive Visitor Information Center will further the cause by providing greater assistance to

Richard Scharf

international visitors. And while 2014 data on leisure visits hasn’t yet been formalised, the presdient and CEO is similarly confident that these too will earn a place in the record books. Events and exhibitions in 2014 included Chihuly at the Denver Botanic Gardens; Maya: Hidden Worlds at the Denver Museum of Nature & Science; the BMW World

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VISIT DENVER

>>> DENVER FAST FACTS Championships; the FIL World Lacrosse Championships; and the finish of the USA Pro Challenge bike race.

Each of these events became a visual postcard of what Denver has to offer providing the kind of coverage that money just can’t buy.

Airline service

Also keeping Denver at the cutting edge is new airline service. A non-stop to Panama City, for example, opens up Denver to tourism and business in Central and South America.

VISIT DENVER works closely with airlines, the City and County of Denver and Denver International Airport to establish new direct service.

But it is only once a new service opens that the real work begins with airlines and the Colorado Tourism Office and their in-country reps to help market the route and promote Denver and Colorado as destinations for leisure and conventioneers.

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Not surprisingly, there has been an increase in international travellers staying overnight in Denver, before they move on to other parts of Colorado or to national parks in the west. “Our major international markets are also where we have direct flights – the UK, Germany, Scandinavia/ Iceland, Mexico and Canada,” Scharf reveals. “Since United started non-stop service to Japan, we have noticed an increase in travellers from Asia to Denver.”

Domestic visitors also fly in to the mile high city. Dallas, Chicago, Houston, Albuquerque and Phoenix are all major source markets within the US. Because of Denver’s remote geographical location, visitors are twice as likely to fly in compared with other US cities. Scharf believes that makes air service an extremely important economic driver for Denver.

“The more non-stop flights and major carriers we have coming into Denver, the more opportunity we have to market to visitors and business travellers outside

• D owntown Denver has some 9,000 hotel rooms and another 35,000 rooms in metro hotels, resorts and spas.

• There are 300 high quality restaurants, 5 art museums, 3 sports arenas and the 2nd largest performing arts centre in America.

of the city,” he says. Even so, Scharf notes visitors from adjacent and nearby western and mid-western states, such as California, Texas, Arizona, Illinois and Kansas are common.

Top attractions

For the leisure visitor, there is plenty to do. Attractions range from the 16th Street mall to the Rocky Mountain National Park. “In our study, we found that people think of Denver as very friendly, diverse, young and active,” says Scharf. “While Denver has all the amenities of a major city – great hotels,

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VISIT DENVER

Routes Americas 2015 “This is a fantastic opportunity showcase the airport and the city to many of the most influential people in the airline industry,” Scharf says of the Routes Americas event. “With people’s schedules and limited time, we simply could never get this many influential people in the airline and travel business to come to Denver and experience our city.

cultural offerings, shopping, dining – we also have a unique backdrop with the Rocky Mountains.

“Our blue skies and 300 days of sunshine energise visitors and locals to have an urban adventure outdoors,” he continues. “Whether they bike around the city using Denver B-cycle (the citywide bike sharing program), grab a beer at one of the more than 30 breweries in Denver, take in a baseball game and a sunset at Coors Field, or enjoy world class shopping, Denver has all the amenities of a major American city.”

There are challenges. One of the biggest misconceptions about Denver is that it is under snow yearround. The city actually has very mild winters with an average daily high temperature of 45 degrees Fahrenheit. Days reaching 60 degrees are not uncommon. With 300 days of sunshine a year, Denver outperforms the likes of Miami and San Diego. Golf courses and outdoor cafes stay open all year.

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“We hope to be able to show how progressive Denver is, how far the city has developed in the past few years, how technologically superior and efficient our airport is and why people should begin to add Denver to their future travel and business plans,” he adds. “All this, we hope, adds carriers, flights and more business for the city and for the state.”

More generally, awareness is the key issue. “For decades, the US was the only major industrialised nation to not actively court international tourism,” says Scharf. “There are still concerns over visas. The huge geographic size of the US is another challenge. There are also many misconceptions about America generated from films and popular culture, particularly in the area of safety.”

But such concerns seem mere flies in the ointment. Denver is booming and there’s no indication that it’s stopping any time soon. In 2014 alone, Denver opened three new, high-end boutique hotels downtown, with four more under construction. A new brewery opened every other week last year, and the city is diversifying with wineries, distillers and farm-to-fork restaurants that specialise in locally-sourced foods.

Some 90 new restaurants opened their doors in summer 2014 alone.

“Our neighbourhoods are booming with one-of-a-kind shops, galleries and cafes,” Scharf enthuses. “Denver has

become a magnet for young, creative people. There are more than 8,000 apartments and 1 million square feet of office space under construction right now.”

The train from Denver International Airport to downtown Denver – scheduled to begin service in 2016 – will be another major addition and will connect the airport to the recently refurbished Union Station every 15 minutes, with a journey time of just 35 minutes.

Scharf explains why that is so important: “There are more than 70 outdoor and rooftop cafes, all centred on our mile-long pedestrian zone – the 16th Street mall,” he concludes.

“It is a young, walkable, very creative downtown with public art, flowers, parks and an active population that loves to be outdoors. And right in the middle of downtown, within easy walking distance of everything, we have one of the bestdesigned convention centres that has ever been built.” The mile high city is flying sky high.

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Airport one2one

Belfast International Airport managing director, Graham Keddie, discusses route development and the challenges facing aviation in Northern Ireland.

Having been appointed in September 2014, what attracted you to the position?

Belfast International Airport (BIA) is the largest airport in Northern Ireland, the second biggest on the island of Ireland and it was just too good an opportunity to miss. I work with a fantastic team of people who are passionate about what they do and about Northern Ireland.

The country really is a changed place.

The Northern Ireland of today is very different to that of 20 years ago. Belfast in particular is a great destination offering world-class restaurants, experiences and attractions.

Belfast has considerable scope for future growth. Where do you see this growth coming from?

Growth will come from our existing carriers, particularly easyJet and Jet2; the charter sector; our trans-Atlantic longhaul offering; and our ability to attract new airlines.

BIA handled around 4 million passengers in 2013 and 2014 looks set to show a slight increase of around 1%, which will be its first year of growth since the recession.

At our height in 2007-2008, we handled around 5.2 million passengers, so we’ve got plenty of room to grow.

Regional airports across the UK and Ireland took a hit during the financial downturn, but with the economy

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recovering and people starting to travel again, we are building back up to those previous peak numbers.

Can traffic growth be sustained given Northern Ireland’s population of approximately 1.8 million people?

We are looking to diversify the business, enhance our commercial standing and become less reliant on passenger revenue by gaining Enterprise Zone status. This will develop the airport’s more than 100 acres of greenfield land.

For route development, the key is making everyone aware that Belfast is open for business. My personal attitude is that we have to look at every single potential route. Our catchment area within 60 minutes is exactly the same as Dublin’s. So if a carrier is flying into Dublin, they can fly into Belfast.

What are BIA’s most important routes?

London is definitely one of our most vital routes. We serve London with a dozen daily flights with easyJet operating to Gatwick, Stansted and Luton.

Liverpool, Glasgow and Edinburgh are also all crucial and, from a Jet2perspective, Prague and Rome are key.

On the long-haul side, United Airlines flying into New York is probably the jewel in our crown.

What routes would you most like to see added to Belfast’s network?

A big focus is Canada because of its cultural connections with Northern Ireland.

Germany is another obvious choice, alongside both France and Italy. We’d love a route eastwards. It would be fantastic to attract someone like Turkish or one of the big three Gulf carriers, or even see one of our larger existing airlines take on a route.

What is the biggest challenge facing Northern Irish aviation in general and BIA more specifically?

Over-taxation is a huge challenge for Northern Irish aviation. The UK has the highest departure tax in the world.

Additionally, corporation tax is 21% versus Ireland’s 12.5% and VAT is 21% versus Ireland’s 9%.

Air Passenger Duty (APD) on shorthaul does two things to our business. It drives customers to Dublin, where there is no similar tax, and serves to hamper and restrict us in our efforts to attract new airlines and open new routes.

There’s no doubt about it – overtaxation is stifling our ability to grow the business, create employment and generate wealth. We are talking to politicians who appreciate our position and are fighting our corner with the British government to eliminate this growth-retardant that we call APD.

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Passenger rights

Passenger rights gets it wrong The plethora of passenger rights regimes around the world creates confusion for passengers and airlines.

T

here are around 60 countries that have consumer protection regimes covering air passengers.

And the number is growing with several governments, most notably in Africa, considering their next move.

While the intent – as with all consumer rules – is to ensure fair treatment for the buyer, most air passenger rights regimes carry with them unintended consequences that have the opposite effect.

Some have extra-territorial elements, for example. This leads to a lack of consistency across jurisdictions, compliance challenges for airlines and, more importantly, confusion for passengers.

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Take a flight from the US to Israel via Europe. This potentially involves three regulations: the US Department of Transportation Consumer Protection Rules, the Israeli Aviation Services Law and EU Regulation 261.

“That is an administrative and costly nightmare for airlines and creates confusion for the passenger who doesn’t know where to turn for compensation,” says Paul Steele, senior vice president of Member and External Relations for IATA.

Regulation changes

The US Tarmac Delay rule provides another example of unintended

consequences. It states that airlines cannot wait for more than four hours on the tarmac for international flights or three hours for domestic flights without incurring a hefty fine. There are no conditions attached. So if airline management believes that an approaching weather front may cause a problem or the skies are congested, the most logical decision is clear.

“Airlines have a disincentive to incur the costs of delaying the flight and prefer to cancel it outright, an action that is a more stressful and uncertain experience for the passenger,” says Steele. “According to the US Government

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Passenger rights

Accountability Office, flights were 24% more likely to be cancelled before leaving the gate after the US tarmac delay rules were introduced.”

In Europe, proposed changes to EU Regulation 261 could make a bad situation worse. The changes suggest that the first airline in an interline journey should pay all costs relating to a delay. That first airline – often a smaller, regional player – would naturally question whether it should risk interlining. If the answer is negative, passenger connectivity and convenience would certainly be diluted.

IATA estimates EU 261 already costs airlines €4 billion annually. The association forecasts that in 2015 airlines will make just over $7 per passenger so it is easy to see how potentially damaging regulation could mean some routes simply won’t be viable. It is also worth noting that airlines are estimated to be responsible for less than half of all delays in Europe. The EU figure was only 40% when EU 261 was introduced.

Light at the end of the tunnel Fortunately, the call for harmonisation may be gaining some traction. At the ICAO 6th World Air Transport Conference in 2013, ICAO received support from member states to develop principles on consumer protection.

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These principles should include consistency with the Montreal Convention 1999 (MC99). Despite some states having ratified MC99, they have gone on to introduce passenger rights regimes that are in conflict with the Convention.

Airlines also argue that the principles must state that there can be no compromise on safety. Technical issues that force an aircraft to divert should be excluded from compensation packages, says Steele. Otherwise there is an unhealthy incentive to continue the flight to avoid costly penalties. One of the EU’s proposed revisions suggests diversions be treated as cancellations.

“Passenger rights regimes should also be fair and reasonable in their cost structure and in their application to circumstances within airlines’ control,” says Steele. “You cannot have compensation that is many times higher than the cost of the ticket – a ruling that doesn’t exist for other transportation modes.”

In the 2012 McDonagh versus Ryanair case, the Court of Justice of the European Union ruled that there are no limits with respect to time or money on the obligation on airlines to provide care and assistance to passengers. A volcanic ash cloud that holds up flights for a week could be ruinous for an airline.

The challenge for the industry is to change the debate. It can no longer focus on governments’ attempts to protect passengers from airlines but rather must concentrate on the need for a global approach. “We want to protect consumers but it must be done in a harmonised way,” says Steele.

Non-industry supporters with a similar perspective could be crucial in this respect, particularly consumer rights NGOs. They could be powerful allies if the industry’s concerns are properly argued.

It will also be necessary to work with governments in the process of implementing or revising passenger right regimes to ensure they align on key principles.

Perhaps most tellingly, whenever possible, governments should leave the market alone to do what it does best.

If an airline doesn’t treat a passenger well there are many alternative carriers keen to acquire the custom. Customer service is a key differentiator in a fiercely competitive aviation market.

Again, effectively taking this aspect of competition away from consumers does not benefit them in the long term.

“Governments fail to recognise the strong market forces, which act as a powerful incentive for airlines to avoid disappointing passengers,” concludes Steele. “Let the market place work.”

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Four worlds in one Ecuador’s Quito International Airport is the gateway to a diverse country intent on improving its tourism offer.

T

he diversity of Ecuador’s Galapagos Islands gave rise to one of the great scientific theories. Today, that same diversity is still a driving force. But it is now the country’s tourism industry that is benefitting from its powerful influence.

Year-on-year, tourism traffic to Ecuador is growing in excess of 10%.

Situated on the equator, Ecuador’s year-round spring climate bestows an incredible variety of flora and fauna on the country. In its 24 provinces, a visitor can find 1,800 species of orchids, 1,640 species of birds, 4,500 species of butterflies, 345 species of reptiles, 358 species of amphibians and 258 species of mammals.

Nature tourism is big business but it is not just the Galapagos and the Amazon that people are flocking to see. Many visitors to the

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ROUTES NEWS 1, 2015

country also take advantage of the opportunity to go from the Pacific Coast to the Andes, from diving along the sea beds to trekking across the peaks of active volcanoes.

An equally impressive range adorns Ecuador’s cultural heritage. A succession of influences throughout history have left their mark. From the ethnic groups that call the Amazon their home to the Afro Ecuadoran, the country symbolizes the modern, multicultural world. Little surprise that Quito has been named a UNESCO world heritage site.

Meanwhile, the dollarisation of the economy seems to have worked wonders, with GDP growing around 5% and inflation roughly 3% or below.

Although oil exports are critical and poverty is still apparent in rural areas, the World Bank predicts the economy is set to remain strong.

Quito on the rise

Whether visiting Ecuador for business or leisure, improving the infrastructure to handle air traffic growth is vital. The most obvious development is the new Quito International Airport, which handles the majority of international arrivals. Situated in the Tababela region, some 24km east of Quito, the airport comes complete with all mod cons.

Built by the Canadian-US-Brazilian consortium, Quiport, it can handle some 5 million passengers per annum and features a 4,100 metre runway, capable of accommodating the Airbus A380.

The control tower is the highest in Latin America at 41 metres while the cargo area has tripled in size compared with the old facility.

“We have worked with airlines operating at Quito International Airport to better understand their needs,” says

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Ecuador and VivaColombia, airlines that began operations in Quito in December 2013 and December 2014 respectively.”

Also important is forging close ties with interested partners, including the tourism authority. The airport maintains permanent contact with the Ministry of Tourism of Ecuador and Quito Tourism to identify the most attractive markets

Just west of the new airport, the Great Condor Wyndham hotel is taking shape.

Built on a plot of 22,000 m2, the first phase of development will feature 146 rooms together with the usual amenities of a five-star hotel. A second phase will add approximately 100 rooms.

In Guayaquil, Swissôtel and its SwissTowers will eventually become the

Quito’s route development efforts are focused on several fronts, including low cost airlines, charter service and new destinations

Andrew O’Brian, Quiport president and CEO. “We shared with them our vision as airport administrators and we have set priorities. The airlines have appreciated all the improvements implemented and actions carried out. In fact, our passenger growth has been quite important, which led us to start expanding our facilities to ensure we are ready to provide the best service. The new area, which will mainly be used by domestic flights, will be in operation as of May 2015 as part of our overall master plan of the airport.”

Quito’s route development efforts are focused on developing new connectivity on several fronts, including low cost airlines, charter service and new destinations. “Participating in Routes World and Routes Americas has been very productive for our airport,” says O’Brian. “Our active participation in these conferences began in 2008 and has helped us take advantage of the opportunities they offer. It was at Routes where we established first contact with Aeroméxico

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and establish joint ventures to develop strategies. In fact, at World Routes 2014, the Ministry of Tourism’s stand was there to complement the efforts of the airport in promoting Ecuador to potentially interested airlines.

Meanwhile, Guayaquil – the other international air gateway to Ecuador – continues to play a vital role with connections to Amsterdam and Madrid as well as several destinations throughout the Americas.

Twelve other airports complete the Ecuadoran network. Good connections and short flying times make these easily accessible for the international traveller.

First Stone projects

Other infrastructure development is sure to boost tourism further. New roads connect Quito to the regions while 95 new bridges span the jungle chasms of the Amazon, bringing a vast area within easier reach.

And in excess of $600 million is being invested in the “First Stone” (las primeras piedras) project, consisting of a number of separate tourism developments in all the main regions. Key among these are new hotels or redevelopments.

tallest buildings in the country. The hotel complex, located on the Simon Bolivar Malecon, overlooking the Guayas river, will have two towers of 190 metres.

Between them, the towers will house 300 hotel rooms, 120 apartments and about 30 floors of office space.

“We have a unique geography and incredible bio-diversity; but without quality infrastructure we won’t be the quality destination we want to be,” says the new Vice Minister of Tourism, Dominic Hamilton.

Target markets

As far as the Ministry of Tourism is concerned, marketing campaigns will concentrate on the traditional key markets. Argentina, Australia, Brazil, Canada, Chile, Colombia, France, Germany, Italy, Mexico, Peru, Spain, the UK and the US will be all strengthened in terms of Ecuadorian presence, consolidating a significant foothold in the tourism market.

Opportunities also exist in secondary markets such as Austria, China, Russia and Sweden. These have not yet been profiled as target markets but remain of interest because of the potential and diversification they offer. Promotion opportunities will be scrutinised according to the usual criteria of arrival statistics, connectivity and other qualitative components.

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An African first

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ts

esse ntial s

19–22 SEPTEMBER, 2015 DURBAN, SOUTH AFRICA

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he 21st World Route Development Forum will take place in Durban, South Africa at the Inkosi Albert Luthuli International Convention Centre from 19-22 September 2015 – marking the first time that the event has been hosted on the African continent.

“We are the most popular tourism destination for all South Africans and more international visitors are now sampling our attractions every year,” said Provincial Minister of Economic Development, Tourism and Environmental Affairs, Michael Mabuyakhulu. “Durban is South Africa’s premier port handling more than 80 million tons of cargo per year. In addition, the region is recognised as the country’s biggest manufacturing hub. We are also witnessing growth in

the number of international investors such as Samsung who are establishing their factories in the city, thus capitalising on its strategic location for global trade.

This positive trend is carried through in the improvement of our air transport logistics, particularly at Dube TradePort to ensure convenient cargo movement.

We believe that hosting World Routes 2015 will further assist the province in securing more direct air linkages with the rest of the world, which is essential for accelerating the region’s radical economic growth, especially in the tourism sector.”

Many of the region’s key stakeholders have joined forces in support of World Routes in Durban 2015 and these include the KwaZulu-Natal Department of Economic Development, Tourism and

Environmental Affairs; Tourism KwaZuluNatal; Trade & Investment KwaZuluNatal; Airports Company of South Africa; King Shaka International Airport; Dube TradePort; Durban and KZN Convention Bureau; and eThekwini Municipality.

Katie Bland, director Routes for UBM EMEA commented: “We are very excited to be taking World Routes to Durban in 2015, the first time in Africa – a new frontier for growth. The air service development community will have the opportunity to experience the market, including King Shaka International Airport and Dube TradePort as well as the many cultural and tourist attractions the City of Durban and KwaZulu-Natal province have to offer.”

Routes Asia Strategy Summit

S

enior figures from the aviation industry will speak at this year’s Routes Asia Strategy Summit, which will once again be sponsored by ATR – Avions de Transport.

Taking place on 15 March and open to all attending delegates, The Strategy Summit will open the 13th Routes Asia event in Kunming, Yunnan Province, China hosted by Yunnan Airport Group Co., Ltd. owners of Kunming Changshui International Airport, and supported by their partners Yunnan Provincial Civil Aviation Development and Management

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Bureau and Yunnan Provincial Tourism Development Commission.

Topics covered at the Summit, which will consist of a series of keynote presentations and moderator-led panel discussions, include the Expansion of LCCs in China and North Asia, airport infrastructure and capturing the Chinese tourism market.

Confirmed speakers so far include: Zhang Xiuzhi, CEO of Spring Airlines; Conrad Clifford, Regional Vice President for Asia-Pacific, IATA; Senthil Balan, Regional Group Head,

Route & Fleet Planning for the AirAsia Group; Andrew Cowen, Deputy CEO of Hong Kong Express; Datuk Badlisham Ghazali, Managing Director of Malaysia Airports Holdings Berhad; Hou Wei, Chief Marketing Officer and Vice President of Hainan Airlines; Mario Hardy, CEO of PATA and Michael Burke, Assistant Director, Commercial of Hong Kong Airlines Routes Asia is expected to attract over 900 senior members of the route planning community from the AsiaPacific region and beyond.

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39

Routes Americas 2015

Denver, Colorado, USA 01-03 February, 2015

Routes Europe 2015

Aberdeen, Scotland 12-14 April, 2015

Routes Asia 2015

Kunming, Yunnan, China 15-17 March, 2015

Routes Silk Road 2015

Tbilisi, Georgia 05-07 July, 2015

Routes Middle East & Africa 2015

Manama, Bahrain 31 May - 2 June, 2015

World Routes 2015

Durban, KwaZulu-Natal Province, South Africa

19-22 September, 2015

Catherine Makrandreou, marketing manager, Routes & ASM explains the wonders of social media.

Tell us about the Routes brand.

It must have considerable market reach?

The Routes concept is simple but unique: pre-arranged one-to-one meetings between airlines, airports, tourism authorities and economic development agencies, combined with other formal and informal networking opportunities, provide the ideal platform through which senior decision-makers develop new air services.

Routes has grown from the first event in Cannes in 1995, to having events all over the world in 2015. A record number of 6,116 delegates representing 144 countries attended the six events that Routes organised around the globe in 2014. These forums, which focus entirely on air service development, have become the must attend events of the annual calendar recognised for shaping the world’s future air networks.

What other sectors would you like to get involved in Routes events?

I would like to see more technology firms represented at future Routes events, to showcase some of the innovations and spark discussion and debate on how they are shaping the future of aviation.

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How has social media changed your job?

Social media, and specifically the ability to engage with our stakeholders and the aviation community at large in real-time, has changed the way we market Routes events.

Multi-channel marketing is important for the simple reason that you must be where your customers are; the Routes community is everywhere, with more choices than ever when it comes to how each customer seeks to obtain information. Customer experience is one of the most powerful competitive differentiators, where consistency is important. That’s because your customers experience your brand as a whole, whether their interactions with you are online, over email, on social media or in print.

Print is still incredibly successful at eliciting an emotive response at that first point of contact while email marketing is the most effective medium for getting brand messages in front of a captive audience. It allows us to deliver highly personalised, relevant and targeted content to our customers regarding Routes events.

LinkedIn is a great forum for entering into a professional dialogue with industry colleagues but Twitter is the channel where the bulk of real-time marketing

MEET THE TEAM

takes place and where the Routes personality comes to the fore. We also share content via our Facebook fan page.

If you had an unlimited budget, what would you like to do to market Routes?

At Routes, we believe that the key to successful route development lies in changing people’s perceptions and capturing the interest and imagination of influential players in the industry.

With this in mind, to communicate the core attributes of the Routes brand, I would purchase a small fleet of aircraft, brand it with Routes livery and fly Routes ambassadors all over the world, making the brand instantly recognisable and a trusted symbol in all the markets that we serve and beyond.

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41

Kunming Changshui International Airport

Welcome to the Spring City Host of the Routes Asia event, 15-17 March, Kunming Changshui International Airport promises a warm welcome.

K

unming Changshui International Airport (KMG) – the flagship gateway of the 12 airports in Yunnan Province operated by the Yunnan Airport Group Co, Ltd – opened on 28 June 2012 and has all the mod cons expected of a new airport. There are 2 independent runways, 6 taxiways and 110 parking positions (68 boarding bridges and 42 remote stands).

Not surprisingly, the number of passengers and airlines serving the gateway is on the up. In 2013, KMG recorded a total of 254,600 aircraft movements, equating to 29.68 million passengers and 293,600 tons of cargo.

In 2014, passenger numbers will be around 32 million.

As of November 2014, 46 airlines (29 domestic, 13 international and 3 special regional airlines) were operating 269 routes (225 domestic, 39 international and 5 special regions) and connecting 130 destinations (97 domestic, 29 international and 4 special regions).

Beyond the figures

To an extent, it is still a numbers game for the airport. The goal is to attract more international airlines to the

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ROUTES NEWS 1, 2015

Yunnan market. The Group’s ambition is to directly connect with every capital and secondary city in southeast Asia as well as major tourism sites. Further intercontinental routes would be the icing on the cake.

But there is more to Kunming and Yunnan than a state-of-the-art airport.

A thriving city and province have their own appeal. Consequently, the Yunnan Airport Group Co, Ltd is not alone in its marketing efforts. It has partnered with the Yunnan Provincial Tourism Administration on the Aviation and Tourism Confluent Development Agreement. This will see the two partners co-operate on marketing strategy and event attendance, maximising the destination’s potential.

Fortunately, Kunming and Yunnan Province are a relatively easy sell.

Kunming, known as the Spring City, enjoys an average temperature of 15°C, an ideal climate for the natural world and for those looking for the perfect holidaying destination. Culture lovers are equally well rewarded. There are the 26 rich ethnic minority cultures in Yunnan and four UNESCO natural and cultural heritage sites; Lijiang Ancient Town, the Stone Forest, the Three Parallel Rivers

Welcome to Routes Asia 2015 Kunming promises to be a valuable and attractive trip for delegates. The potential of Yunnan Province and China in general is well documented and will cater to myriad route development ambitions.

A unique cultural experience as well as beautiful landscapes also await. Two tours on offer to delegates will provide an opportunity to visit the Stones Forest National Park and Yunnan Provincial Ethical Village. But there is also the Dianchi Lake just beside the convention center with great views of the Siberian seagulls passing the winter in warmer climes.

To book now, visit www. routesonline.com/routesasia

of Yunnan Protected Areas and Honghe Hani Rice Terraces.

If the hard marketing work pays off, KMG will need to be ready. Additional aircraft stands are planned as is a runway upgrade to ILS CAT II. The reconfiguration and expansion of the main terminal’s commercial and retail space is already underway. A second phase of the airport’s expansion will include two more runways, a new cargo terminal dedicated to freighters and another passenger terminal that will enable KMG to handle 80 million customers annually.

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