Routes News Magazine, Issue 3, 2014 by routesnewsmagazine

routesnews ISSUE 3 VOL 10, 2014

The world air service development magazine

routesonline.com

High flyer: Turkish Airlines’ Temel Kotil

SPECIAL REPORT:

French market analysis

CARGO:

IAG Cargo’s Steve Gunning

ANALYSIS: Tourism’s role

in the EU’s economic recovery

routes-news.com Route in focus:

Destination:

Update:

Airports:

View from the top:

Air Europa’s Madrid–São Paulo

Spotlight on Tenerife

New era for Brasília

Marseille & Prague

European Regions Airline Association

Foreword EDITORIAL Lucy Siebert, Acting Editor +61 432 770 828 lucy.siebert@routes-news.com Justin Burns, Reporter +44 (0)208 831 7508 justin.burns@routes-news.com Joe Bates, Group Editor +44 (0)208 831 7507 joe@aviationmedia.aero

SALES Rebecca Randall, Group Advertising Director +44 (0)208 831 7513 rebecca.randall@routes-news.com David McCauley, Advertising Manager +44 (0)208 831 7515 david.mccauley@routes-news.com

PRODUCTION Elaine Harris, Design & Production Manager elaine.harris@routes-news.com Andrew Montgomery, Creative Director andrew.montgomery@routes-news.com Mark Draper mark@aviationmedia.aero Website Jose Cuenca jose@aviationmedia.aero Erica Cooper erica@aviationmedia.aero

PUBLISHER Jonathan Lee +44 (0)208 831 7563 jonathan@aviationmedia.aero Published by Aviation Business Media Ltd Sovereign House, 26-30 London Road, Twickenham, TW1 3RW, UK 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

routesonline.com

Europe has enjoyed more than two decades of liberalised air travel – and 20 years of unprecedented airline route development.

his year, the World Route Development Forum will celebrate its 20th anniversary. This comes almost exactly one year after easyJet celebrated its own 20th anniversary in 2013. For many people, it was hard to believe the famously orange-branded carrier had been plying first domestic, then regional routes, for two decades. Having first launched services between London and Edinburgh, today, its longest route stretches all the way across Europe, from Gatwick to Moscow Domodedovo. Of course, the iconic carrier’s rise and rise, along with numerous other LCCs throughout Europe, was made possible thanks to aviation liberalisation across the continent. Where once air travel was for the wealthy or business travellers, today, young (and old) Europeans think nothing of nipping over to Edinburgh for a weekend; flying to Copenhagen to savour some of the world’s best restaurants; or hopping on a flight to Barcelona for a weekend in the sun. For some youngsters turning 21 this year, they may never have flown on anything other than a low-cost carrier. For them, an LCC is not a low-cost carrier: it is simply an airline. The LCC phenomenon has effectively transformed destinations – where once some Mediterranean

towns were sleepy backwaters, today, they are home to bustling tourism industries. One example is the Canary island of Tenerife, which we feature on page 30. As the European route development community gathers in Marseille for Routes Europe, the region continues to creep out of its protracted economic slowdown. With the improving economic outlook, LCCs and full-service carriers alike are innovating. Norwegian is upping operations on transatlantic US routes, while Turkish Airlines has big ambitions both near and far. You can read more from the latter’s CEO, Temel Kotil, on page 22. And with Routes Europe taking place once again in France, we also take a closer look at Marseille on page 18, and the French aviation landscape on page 26. While I won’t be at Routes Europe, remember it’s easy to get in touch: lucy.siebert@routes-news.com @LucySiebert and @routesnews facebook.com/routesnews

Acting Editor Lucy Siebert

R™ is a Régistered 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.

ROUTES NEWS 3, 2014

Contents

8 World news

18 French ambitions

30 Star-struck

13 On the move

Marseille Provence is determined to grow its share of France’s inbound tourism, its airport CEO, Pierre Régis, tells Rob Gill.

15 A route in focus

22 Flightpath to success

11 Cargo news

Air Europa’s head of network planning and distribution, Albert Muntané Casanova, on the new Madrid–São Paulo service.

17 Airport one2one

Prague Airport’s director of aviation business, Jiri Vyskoc, on how the airport is transforming along with its home carrier.

Turkish Airlines has emerged as one of the fastest growing airlines in the world – CEO, Temel Kotil, outlines its aggressive growth strategy to Martin Rivers.

26 Regional fare

John Strickland takes a closer look at route development trends in the French market.

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

routes-news.com

routesonline.com

Following what Tenerife’s new president calls an “exceptional year” for airlift expansion, it has its eye on higher spending visitors and becoming a hub for Africa feeder flights, writes Debbie Ward.

34 Continental shift

European countries have been steadily prioritising their tourism industries since the economic crisis first swept across the continent in 2009. Gary Noakes takes a closer look.

39 Freight race

Shifts continue to sweep across the air cargo industry – and more transformation is inevitable, IAG Cargo boss, Steve Gunning, tells Martin Rivers.

43 Linking Europe

Smaller regional airports in France, such as Pau Pyrenees, are looking for growth, explains airport director, Jean-Luc Cohen.

ROUTES NEWS 3, 2014

Contents

45 Brighter forecast

61 Routes Asia report back

70 Events essentials R outes Silk Road will connect

There is more optimism in the UK airport sector than there has been for years, writes Darren Caplan.

47 Game on

All eyes will be on Brazil during the World Cup, and its recently privatised capital city airport is hoping the event will be a chance for it to shine, as Inframérica’s Brasília’s commercial director, Daniel Ketchibachian, explains.

51 Winning ways

Joe Bates gets all the news and reaction to the 2013 Airport Service Quality (ASQ) awards.

53 Joint venture

Tourism authorities are getting involved in route development more than ever before, writes Jon Howell.

57 Making waves

Doha’s new wave design inspired Hamad International Airport will become one of the world’s hightech airports, writes Joe Bates.

routesonline.com

65 Routes Americas report back

route planners from the CIS, Central and Eastern Europe, Middle East and Asia.

69 Social media

Ryanair has made a social media U-turn – Routes News caught up with the airline’s head of communications, Robin Kiely, to find out what was the catalyst for the change.

74 View from the top Simon McNamara, director general, European Regions Airline Association (ERA).

Announcing

The 20th Anniversary Book

routesnews Produced by

The world air service development magazine

2014 will see World Routes celebrate its 20th anniversary, marking two decades of market-leading excellence in the field of route development. Join us in recognising and celebrating these achievements. For more information visit: www.routes-news.com/20th-anniversary-book

ROUTES NEWS 3, 2014

World news

B787-9 for Melbourne United Airlines will launch direct flights between Los Angeles and Melbourne from October, operating a B787-9 Dreamliner on the route. The service is subject to government approval but is planned to operate six times a week. United is the launch customer of the B787-9 type and this will be its first international route. “This new service will benefit all our customers in Australia. Our Melbourne customers will enjoy faster journeys

to Los Angeles and beyond, as well as improved inflight comfort and amenities, and at the same time, we will seek to make changes to our Sydney schedule, which will enable faster connections via our San Francisco and Los Angeles hubs to destinations throughout the Americas,” said Jim Compton, United’s vice chairman and chief revenue officer. Under the plans, United is looking to retime its existing daily Sydney service to provide better connections in the US and beyond.

The B787-9 will feature 252 seats – 48 in business class and 204 in economy, including 63 premium economy seats. Melbourne Airport’s CEO, Chris Woodruff, said the US market continues to perform strongly. “The United States is our second largest long-haul market, growing more than 30% since 2010, and United Airlines is delivering more choice and convenience for Victorians and visitors, who will no longer have to travel through another Australian port,” said Woodruff.

Saudi’s flynas launches Gatwick Saudi Arabian low-cost carrier, flynas, has announced long-haul services with new flights to London. The airline plans to fly from Jeddah to Gatwick from April 8, and Jeddah to Manchester Airport from May 2. It will operate three flights a week to both UK cities, as part of its ambitious, Global Flight Routes, programme. Raja Azmi, flynas CEO, said: “London continues to feature at the top of Saudi Arabia’s most popular outbound destinations, especially during summer and key holiday periods.” The carrier will also launch flights this year from Jeddah to Paris, Kuala Lumpur, Jakarta, Karachi, and Casablanca.

Auckland and Mumbai airports have inked a sister airports agreement that will see them sharing insights in a bid to boost air services between the two hubs. Routes has signed a new agreement with the World Tourism Organization (UNWTO) to work more closely together on air service development issues.

ROUTES NEWS 3, 2014

Azmi added: “The jury is still out on the long-haul, low-cost model but enough people are willing to pay on an economical basis, and pay for the extra frills. We believe it will be successful for us and there is a market out there, with pilgrimages and a growing affluent Muslim economy.” Last year, flynas handled 3.3 million passengers, but hopes to grow to five million this year – and has an ambitious target to handle 20 million by 2020. Flynas now operates 27 aircraft, all of which are leased. Three A330s will service the new long-haul routes and 24 A320s regional destinations in the Middle East – but plans to expand to 60 aircraft by 2020.

Southwest has revealed more details of its international expansion, including new flights to Cancún, San Jose del Cabo/ Los Cabos, Mexico, and Nassau, Bahamas, from a selection of US cities, including Denver. Ethiopian Airlines will up its frequency from Addis Ababa to London to daily in July. The airline currently operates the route six times a

Raja Azmi

week. Ethiopian started operations to London in 1973 and has been providing uninterrupted service to and from the city for more than 40 years. Dragonair will launch its first flights to Indonesia with twice-weekly services from Hong Kong to Denpasar in Bali from April 27. The new service will be operated with an

A330-300 aircraft in a two-class configuration, with economy and business class cabins. Royal Jordanian is cutting Alexandria, Colombo and Milan from its network. The carrier said Alexandria flights would be halted in April, while Colombo and Milan services would cease in May. It said competition on the routes had made them “infeasible”.

routes-news.com

US expansion for Emirates Emirates has started flying to Boston and revealed plans to serve Chicago O’Hare from August 5. The new Chicago service will be operated by a Boeing 777-200LR, and the city becomes the airline’s ninth gateway in the USA. Tim Clark, president, Emirates, says: “This is good news for trade and tourism for both cities, and jobs that rely on both, as well as for consumers who will benefit

from greater competitive choice.” Chicago mayor, Rahm Emanuel, welcomed the new service. “Air transport links are critical for trade and tourism, and Emirates’ nonstop daily flights to Dubai will only add to our global connectivity and further our goal to host 55 million visitors by 2020, in turn generating jobs, not only at the airport, but across Chicago’s travel and hospitality industries,” he says.

SEASONAL BOOST

Seasonal San Francisco frequency boost with Air New Zealand.

AFRICAN CARRIERS

Two new African carriers planned with Kenya’s JamboJet and SAX Tanzania.

ETIHAD TO PHUKET

Etihad to launch daily Phuket flights.

Take off

or not Marking the new Boston flight (from left): Hiran Perera, Emirates’ senior VP, cargo planning and freighters; Rahul Agarwal, manager of recruiting, McKinsey & Co; Hubert Frach, Emirates’ divisional senior VP, commercial operations; Mohammad Khamis Bin Harib Al Muhairi, director general, the National Council of Tourism and Antiquities; Tim Clark, president, Emirates; Abdulrahman Saif Al Ghurair, chairman, Dubai Chamber; Adel Al Redha, Emirates’ executive VP & chief operations officer.

New China–Europe service Air China will launch a Beijing–Vienna– Barcelona service on May 5, and has confirmed Washington DC flights will launch in June. The new four-times weekly European service will be operated with an A330-300 in a three-class configuration, including premium economy. In a statement, the airline says: “Air China’s Beijing–Vienna–Barcelona service will not only make it easier to travel between East Asia and Central and Southern Europe, sparing passengers the trouble of having to make transfers, but also offer an additional option to travellers

routesonline.com

between such cities as Tokyo, Seoul, Hong Kong, Bangkok and Manila, and Europe.” In the US, the Chinese carrier will start serving the US capital this summer, its seventh city in the country. Air China already serves New York, Los Angeles, San Francisco, Houston, Hawaii and Vancouver. The new route will be operated four times a week, with a B777-300ER aircraft. This comes after the airline upped its Beijing–New York service to 11 times weekly and Beijing–Los Angeles to twice daily, and introduced Beijing– Houston and Beijing–Hawaii services.

MALAYSIA AIRLINES MYSTERY

Safety and security questions over MH370 incident.

FAA

FAA downgrade of Indian safety rating remains.

GUIDELINE ISSUES

The Association of European Airlines warn of issues on European guidelines on State Aid for airports and airlines.

QANTAS CUTS

Qantas to reduce staff by 5,000.

ROUTES NEWS 3, 2014

Cargo news

Cathay Pacific Cargo’s B747-8F will become a regular feature at Ohio’s Columbus airport.

Cathay ups Americas operations

Cathay Pacific has strengthened its cargo presence in the Americas with a new service to Mexico City, and one to Columbus, Ohio, in the US. The Hong Kong airline launched twice-weekly scheduled flights to Columbus’ Rickenbacker Airport on March 21. This comes after it announced a new thrice-weekly freighter service to Mexico City, which started on March 1. With the new services, it now operates 12 freighter destinations in North America.

Cathay Pacific’s director cargo, James Woodrow, says: “Cathay Pacific is delighted to further strengthen our industry-leading trans-Pacific service by adding Columbus to our network. Our 13 Boeing 747-8F freighters are the ideal aircraft to link Hong Kong with the Americas, giving a reliable and fuel-efficient service to our customers.” Cathay Pacific will operate the Columbus service on a Hong Kong–Anchorage– Columbus–New York (JFK)–Vancouver–Hong Kong routing, with a Boeing 747-8F.

DHL and Etihad team up DHL and Etihad Cargo have agreed to share capacity on DHL’s new five-times weekly freighter service operating through Abu Dhabi. The cargo service is operated by a DHL A300-600 freighter, which operates from Bahrain to Abu Dhabi and onwards to Bagram, Lahore, and Karachi, and back to Abu Dhabi. In Abu Dhabi, cargo can be transferred onwards to Etihad Cargo destinations across the globe. The DHL Abu Dhabi service started in January. Sponsored by

routesonline.com

Frank-Uwe Ungerer, country manager for DHL Express in the UAE, says: “Adding Abu Dhabi to our network will enable us to better service all-important trade lanes and markets in the Middle East and Asia.” David Kerr, Etihad Airways’ vice president cargo, adds: “Having access to DHL’s new freighter service from Abu Dhabi to Bahrain and more freighter capacity out of Pakistan enables us to provide our customers with more cost-competitive and enhanced routings, and quicker delivery times.”

Cargolux Airlines has ordered an additional B747-8F as part of its fleet renewal programme. The airline has 14 of the aircraft type on order. The additional aircraft is expected to be delivered in March 2015. Cargolux currently operates nine Boeing 747-8 freighters and 11 Boeing 747-400 freighters that are being replaced by the newer model. Emirates SkyCargo has signed a deal with Dubai-based Allied Transport LLC to move its freighter fleet to Al Maktoum Airport (DWC) from May 1. The five-year contract will see Allied Transport provide road feeder services between Dubai International (DXB) and DWC for Emirates SkyCargo, including the operation of up to a fleet of 45 trucks in the first year. Edmonton International Airport recorded 8.3% cargo growth in 2013. It also registered its 15th consecutive quarter of cargo growth in Q4 of 2013, with total volume growing by 23% over the past four years. “The growth we’re seeing in air cargo speaks volumes to the strength of the economy of central and northern Alberta. EIA has excellent capacity, superb facilities and is positioned for continued growth,” says Myron Keehn, EIA vice president for commercial development. US-based Kalitta Air has launched twice-weekly B747400F scheduled services between New York and Amsterdam. The flights began in March and Kalitta Air is operating the service in co-operation with Wallace Air Cargo Group/Inter Aviation Services (IAS) and HAE Group.

ROUTES NEWS 3, 2014

On the

move Jimmy Kibati is joining African low-cost carrier, fastJet, as general manager, East Africa. He was previously with Kenya Airways, where he was acting commercial director. In his new role he will be responsible for leading the LCC’s expansion in East Africa.

Budapest Airport has appointed Patrick Bohl as head of retail and advertising. Bohl replaces János Bagoly, who has been appointed head of commercial planning and strategy development. Bohl will be charged with increasing spend per passenger and strengthening relations with the airport’s concessionaires. Gwenvael Ronsin-Hardy has joined Egis Airport Operation as project manager airport operation – routes development manager. Egis Airport Operation is involved in 14 airports. These include in Belgium (Anwers and Ostende), Cyprus (Larnaca and Paphos), Congo (Brazzaville, Pointe Noire, Ollombo), Brazil (Viracopos Campinas), French Polynesia (Papeete Faa’a, Bora-Bora, Raiatea, Rangiroa), Gabon (Libreville) and Ivory Coast (Abidjan). He was previously head of marketing & development for Carcassonne, Nîmes and Perpignan airports.

routesonline.com

Air Charter Service, a provider of aircraft charters, has appointed Andrew Summers as its managing director of its Middle East operation. Summers will be based in Dubai. Ruan Courtney, ACS’s group managing director, said: “Andrew has not only been a manager of our private jets team in London, but as a fluent Russian speaker, he has also played a key role in growing ACS’s Russian and Kazakh offices.”

Karl Ulrich Garnadt, CEO of Lufthansa Cargo AG, has been appointed to the supervisory board of Fraport AG. He succeeds Stefan Lauer, who has resigned from the board. Garnadt has been CEO of Lufthansa’s cargo arm since January 2011. His role on the board will be reviewed at the Fraport AGM on May 30 by the shareholders. Mark Haneke has left Vantage Airport Group, where he was manager network marketing and route development. The airport group is yet to name a replacement for Haneke’s role. EasyJet has made a number of changes to its team. This sees Alan McIntyre, previously head of network and scheduling, move to become director of proposition. In this

role, McIntyre is responsible for the airline’s business and leisure travel proposition, as well as easyJet Holidays, ancillary products and inflight product strategy and development. Andy Hodges, previously director of sales and distribution, will how head up network and scheduling. EasyJet is also recruiting for a head of product, who will report to McIntyre. Edmond Rose is leaving Virgin Atlantic, where he was director of airline planning. Rose’s position will not be directly replaced. Instead, Joe Thompson, director network and alliances, will take on additional commercial responsibilities for airline planning and airline alliances, in addition to his existing responsibilities with Little Red and Delta. Meanwhile, Oli Byers will take on the role of director, revenue management and strategy, responsible for revenue management, revenue planning and forecasting, and revenue analysis. Joyce Carter has been appointed president and CEO of Halifax International Airport Authority (HIAA) in Atlantic Canada. Carter joined the authority in 1999 and has held a number of senior roles at the airport.

Andy Hodges

Patrick Bohl

Gwenvael Ronsin-Hardy

Andrew Summers

ROUTES NEWS 3, 2014

Madrid–São Paulo

A route

IN F

CUS

Air Europa’s head of network planning and distribution, Albert Muntané Casanova, on the new Madrid–São Paulo service. You launched São Paulo in December 2013 – how has it performed so far? The loads are in line with our expectations and following the market pattern in terms of seasonality. Being a new entrant in a competitive market is always a challenge, but this is taken into account in our business case. At the end of May, we will be re-scheduling our flights, which will arrive in São Paulo at 5:15 in the morning. It will then depart at 14:10 in the afternoon. Without a doubt the service will enhance connectivity with our local partners in Brazil.

Are there plans to increase the service to daily? Our goal is to design a product that is aligned with what the market demands, so if we see the market is demanding more frequencies, we will add them. We will combine this with our development in the north-east of Brazil, where we are growing our presence in Salvador de Bahía and offering increased connectivity with our local partners to other cities in the region.

What are the main markets driving traffic on the route? Market analysis shows this route has a stronger business component than other routes in our network, where leisure or VFR are the key drivers. In the Spanish market, we expect not only the typical corporate passenger but also SMEs, mainly combined with VFR. One of the

routesonline.com

key markets for this route is Barcelona, where we can see a steady and growing flow of passengers connecting from our short-haul flights into the Madrid–São Paulo route.

How does São Paulo fit in with the rest of your Latin American network? For Air Europa, entering this market was a logical step. We operate a fleet of 14 widebodies (A330 family) and, while some years ago, most of our operation was focused in leisure routes to the Spanishspeaking Caribbean, more recently, we have shifted our focus to a more traditional hub-and-spoke operation, connecting Spain and Europe with Latin America. We have daily flights from Madrid to Buenos Aires, Lima, Havana and Santo Domingo, and several weekly frequencies to Salvador de Bahía, Caracas, Montevideo, Puerto Rico, Santa Cruz de la Sierra, Punta Cana and Cancún.

How has Iberia’s network review opened opportunities for you? Iberia’s withdrawal from some routes has opened some opportunities, like Montevideo, which we started operating in June 2013, or San Juan de Puerto Rico, which we will start operating on May 22. Some critics said it would be difficult for us to successfully operate these routes when Iberia was losing money [on them], but our unit costs are very competitive. Iberia is not our only competitor and other

carriers are expanding their networks into Latin America from other hubs, but we are confident that our business model enables us to grow profitably.

Will you be increasing capacity to Brazil for the World Cup? Yes, although it is a moderate increase and very specific in terms of which national team is playing, when, and at which city.

How do you expect the World Cup to affect post-event demand for travel from Europe to Brazil? A number of carriers have said they expect a decrease in business travel and an increase in leisure traffic during the tournament, which is what we expect. Post-event, we expect a surge in certain types of traffic (such as VFR), which will refrain from travelling during the event.

You have a number of Dreamliners on order – when are you expecting your first to join the fleet and what will those aircraft allow you to do that you can’t currently? We have eight Dreamliners (787-8) on order, which are expected to arrive in 2016 and 2017 on a gradual basis. The aircraft will provide more payload capacity in airports such as Bogotá, Quito or Mexico City, and our president has publicly stated his interest in operating from Madrid to these cities with the Dreamliner.

ROUTES NEWS 3, 2014

Airline one2one

Prague Airport’s director of aviation business, Jiri Vyskoc, on how the airport is transforming along with its home carrier. How have the changes at Czech Airlines affected the airport? Czech Airlines is the largest carrier at Václav Havel Airport Prague, so it naturally influences airport operations. The carrier has gone through a process of network optimisation, focusing on profitable routes and reducing its unprofitable services, which were mostly those dependent on transfer traffic. Currently, Czech Airlines offers, in co-operation with Korean Air, its 44% shareholder and strategic partner, incremental frequencies on its long-haul route to Seoul. Its existing co-operation with Travel Service on a codeshare basis also continues. Travel Service will become another Czech Airlines shareholder by the end of the year, joining Korean Air, Czech Aeroholding and Česká Pojišťovna, a minority shareholder.

How has traffic to and from Prague performed over the past year? The airport handled 11 million passengers in 2013, representing a year-on-year increase of 1.5%. The number of local passengers increased by 3.5%. The only category that recorded a decrease in results was transfer passengers. We expect to see our passenger numbers grow 2% this year.

Do you forecast your low-cost traffic growing in the future? The number of passengers on low-cost carrier flights grew by 5.9% year-on-year in 2013. For the upcoming summer schedule, the most evident growth in seat capacity is in the LCC segment.

How has your traffic mix at the airport changed since the economic downturn?

Korean is already serving Prague – is attracting more Asian carriers to the airport a priority?

We saw a slow down in low-cost traffic growth in 2009, but in 2011, the segment started growing again and currently represents 25% of our passengers. The full service carriers’ share has increased slightly and now holds about 64%-66% of our traffic. The most significant change has been with charter traffic, which dropped to 10% of our passenger traffic over the past five years. During the past two years, there has been a tendency for charter passengers to switch to regular scheduled flights, predominantly serviced by low-cost carriers.

The number of passengers on flights between Prague and Korea has been growing steadily. The increase in capacity of flights between Prague and Seoul provides passengers with new options for travelling to Asia via Seoul. Prague has also become a transfer point for Korean passengers travelling to Europe. We see potential for routes to China, Vietnam and Thailand. Chinese visitors to the Czech Republic have been consistently growing by double-digit figures for the past five years, and, currently rank as the second biggest tourist market to Prague.

routesonline.com

Prague is also home to many people from the Vietnamese community, the third largest ethnic minority living in the Czech Republic. And currently, there are no direct scheduled connections to Thailand.

Which routes would you most like to add to Prague’s network? In Asia, it would be Shanghai, Beijing, Hanoi and Bangkok. Developing longhaul routes to North America is also a priority and there is room for capacity increase on existing connections to New York and Toronto, both of which are only serviced seasonally. We believe there is potential for a direct service to Chicago. We would also like to see flights to Cairo return. In Europe, we have a number of new connections for the summer schedule, but would also like service to Goteborg, Birmingham, Bilbao, Tallinn and Zagreb.

Prague continues to be one of the most visited cities in Europe – what makes the city so popular with tourists? Prague attracts tourists from all over the world with its romantic allure. Prague’s appeal lies in its architecture and rich cultural and social life. The perception of Prague and the Czech Republic as a cheap destination has shifted, and while prices are still lower than some other European cities, Prague offers high quality services and products, which attract tourists who are interested in culture and heritage.

ROUTES NEWS 3, 2014

French ambitions Marseille Provence is determined to grow its share of France’s inbound tourism, its airport CEO, Pierre Régis, tells Rob Gill.

arseille Provence Airport’s CEO, Pierre Régis, has seen huge changes in the aviation industry during his 25 years at the city’s airport, but one thing that has never changed is the intense competition and constant pressure to improve facilities and grow passenger numbers. When Régis first joined the airport, Marseille Provence was handling 4.2 million passengers per year. That has nearly doubled to 8.3 million in 2013, and there’s still plenty of room to grow with a current capacity of up to 11 million. “In this type of industry, things are really changing every day – you never stay idle,” Régis tells Routes News.

ROUTES NEWS 3, 2014

“You are consistently pushed to go forward and are under immense pressure. There’s so much going on with construction, extending commercial activities and increasing revenues. It really never stops.” The CEO, who has been in his position for 23 years, will have plenty in his in-tray this year – the airport is due to spend another €30 million improving its facilities in 2014, including enhancements to both its legacy airline terminal (MP1) and lowcost terminal (MP2). The airport, which is operated by the Marseille-Provence Chamber of Commerce and Industry, spent a similar amount on infrastructure improvements in 2013.

Pierre Régis

That’s not to mention preparing for over 1,100 delegates from more than 100 airlines at Routes Europe on April 6-8. Régis says one of the reasons his airport wanted to host the event this year was to harness the momentum and publicity built up through Marseille’s year as European Capital of Culture in 2013. “Our main objective is to change the image of Marseille and to make it better known as a destination around Europe and the world,” he says. “We have a lot to offer visitors both as a city and as a gateway to the beautiful Provence area. We also want to convince decision-makers from airlines that we, as an airport, are well-equipped for all types of airlines and both long and short-haul routes.”

routes-news.com

Marseille Provence Airport status

Although Marseille is France’s second largest city with a catchment area of 6.4 million people within two hours’ drive, Marseille Provence only ranks as the country’s third busiest airport outside Paris – lagging behind Nice Côte d’Azur (11.6 million passengers in 2013) and Lyon (8.6 million). Currently, the airport has 127 direct scheduled routes to 95 destinations in 29 countries. Régis hopes passenger numbers will break through the 10mppa mark within five years and the key to this growth would be increasing the proportion of international flights – currently, around 56% of the airport’s passengers are flying internationally. The airport also wants to change the balance between inbound and outbound passengers by attracting more overseas tourists. “We are currently 40% inbound and 60% outbound but it is the reverse at Nice with 60% inbound and 40% outbound, as they have more leisure and VFR [visiting friends and relatives] traffic,” says Régis. “We are very good at exporting people from within our area. But our main goal is to reverse this, so that we attract people from around the world and we get to a situation where we have a similar proportion of inbound passengers as Nice.” Régis admits 2014 will not be a big year for growth, even with eight new scheduled routes, due to continued cuts in Air France’s capacity from Marseille Provence. Air France, which accounted for around 37% of the airport’s 2013 traffic, is due to cut seats by a further 10% this year. “It will be a stable year because of Air France’s capacity going down,” he claims. “Although we will gain capacity from airlines such as Ryanair and Turkish Airlines.” Last year’s traffic of 8.3 million only represented a 0.5% year-on-year rise due to Air France capacity cuts, which were offset by new flights from British Airways and Turkish Airlines. This was on the back of a 12.7% increase in 2012.

routesonline.com

Routes News caught up with Véronique Lemée-Alexandre, network development manager at Marseille Provence Airport. What have been your biggest recent route announcements? The charter flight from Seoul. We expect a small volume of passengers in 2014 but this charter operation marks the first stage of development with the Asian market. The strong interest of Korean tour operator, Kaltour, for Provence is very important for us and our tourism board partners. We are also pleased with the daily flight from Lisbon with Ryanair.

Which routes would you most like to add to your network? On the short-haul network, we would most like to add routes to Manchester, Düsseldorf, Naples, Oslo and Stockholm Arlanda. We would also like to add frequencies to Berlin Tegel, Copenhagen, Prague and Dublin. For long-haul, we would like to increase links to North America with more

Expanding network

One of Marseille Provence’s biggest targets is growing its long-haul services – both for scheduled and charter flights – particularly from the Far East and Middle East. The airport has been boosted in these efforts by securing its first charter flights from Asia with South Korean tour operator, Kaltour, due to operate three flights in April and May. Régis says getting these charter flights was “hugely symbolic” for the airport and hopes it will help persuade other companies in the Far East to introduce similar services to Marseille Provence. “It was very important to get this charter – it’s a big win for us over other airports,” he adds.

frequencies to Toronto and New York. Direct services to the United Arab Emirates and Indian Ocean are also priority markets.

What are your plans for Routes Europe 2014? We will showcase the destination and allow delegates to experience the transformation and dynamism of Marseille, following its European Capital of Culture year in 2013. Pharo Palace is a special venue for the conference and has breathtaking views of the harbour. We will also be holding the gala dinner at Marseille Cruise Terminal.

What does the airport hope to achieve by hosting Routes Europe? Our ambition is to open up to new international markets and hosting Routes Europe will allow us to raise awareness of the airport serving France’s second largest city.

“Everything from Asia previously connected through Paris, so we hope it will open up the French regions to long-haul and trigger more flights from Asia in the future. We are the first airport in France outside Paris to welcome such a service.” Long-haul services from Marseille will also be bolstered by a new scheduled summer route to Toronto through Canadian airline, Air Transat, which already flies to Montréal. A summer service by XL Airways to New York-JFK airport also began operating in 2013. The other area in Régis’s spotlight is the Gulf region, and he adds he is trying to attract carriers based in Dubai, Abu Dhabi and Qatar.

ROUTES NEWS 3, 2014

Marseille Provence

Top five attractions Old Port

The heart of Marseille remains very much in its original port (Vieux Port) dating back to 600 BC, where freshly caught fish are still sold off the boats. The area is packed with restaurants and cafes, and has benefited from being largely

pedestrianised as part of improvements for the city’s stint as European Capital of Culture last year.

and Child, which sits on the top of the basilica. A small tourist train runs from the Old Port to the basilica.

Notre-Dame de la Garde

Le Panier

The Catholic basilica dominates the skyline from its location perched atop a 149-metre limestone cliff, which is the city’s highest natural point. The current church dates from the 1860s and the spectacular panoramas of the city from the clifftop are matched by the sight of the 11-metre golden statue of Madonna

On the short-haul network, Régis says the priority was adding capacity and frequencies on key routes around Europe, including the UK and Scandinavia’s major gateways. “We are well covered in Europe so it is mainly about adding capacity,” he says. “We would like to see more frequencies on some routes, as well as longer summer schedules and other services becoming year-round.” New short-haul routes for 2014 include Aegean Airlines flying to Athens and Heraklion in Crete, Vueling to Palma, Etihad Regional to Geneva, and Ryanair to Catania (Sicily) and Bordeaux.

Infrastructure

The airport built a dedicated terminal for low-cost carriers seven years ago but Régis says he wants to attract all types of airlines, including legacy and charter carriers. “We are a full-service airport and are geared up for any type of traffic,” he

ROUTES NEWS 3, 2014

A short walk north up from the Old Port, this area has been dubbed Marseille’s Montmartre with its hotchpotch of lanes crammed with colourful craft shops and workshops amid the tall narrow terraced houses and cobbled steps.

Château d’If

Located on a tiny island in the Mediterranean around a mile from Marseille’s harbour, this 16th century fortress, which was later turned into a prison, is

says. “We don’t want to just specialise in low-cost carriers, we are equipped for all airlines and we have capacity to go up to 11 million passengers per year.”

8.3 million passengers in 2013 Last year, the airport’s improvements included the opening of 14 new restaurants and 10 shops, while car parking facilities were expanded with 900 extra spaces. Régis says this year’s work will include spending €5.5 million on the MP2 terminal for low-cost carriers to create more space for security and an expanded shopping area. The work is due to be completed by the end of October. Other initiatives include the creation of new aircraft parking bays, new flooring

notorious for being featured in the literary classic The Count of Monte Cristo by Alexandre Dumas.

Electric bicycle tour These guided trips around the city on electric bikes, organised by E-Bike Tours, take the effort and pedalling out of seeing the major sights, including Notre-Dame de la Garde and Routes Europe venue, Pharo Palace, as well as more hidden areas. Tours last three or four hours with departures from the Old Port.

and toilets in the MP1 terminal, and the launch of a mobile app. “We really needed to expand the low-cost terminal as it is a sevenyear-old investment and it is too constrained on space,” he adds. “This will allow us to expand capacity and develop traffic.” As well as showcasing Marseille Provence’s facilities at Routes Europe, Régis also wants to emphasise the airport’s central location on France’s Mediterranean coastline as a gateway to the wider southern France region – Nice Côte d’Azur, for example, is 160 kilometres further east towards the Italian border. “We are extremely well located whether you want to go east towards Nice or to go to the west – it’s very easy to visit a large area of southern France from Marseille,” he adds. “This will be one of our key messages at Routes Europe.”

routes-news.com

Flightpath to success Turkish Airlines has emerged as one of the fastest growing airlines in the world – CEO, Temel Kotil, outlines its aggressive growth strategy to Martin Rivers.

hen Istanbul’s third airport is completed, the mega-hub on the European side of the city should have an annual capacity of 150 million passengers. The $30 billion project is, however, still shrouded in political uncertainty, with a court ruling in February blocking construction work until an environmental impact analysis has been conducted. That will almost certainly push the opening date beyond the current, optimistic target of 2018. With 150 million passengers already taking to the skies across the country last year, Turkey’s political leaders are under no illusions about the urgent need to plan for more growth. Istanbul Atatürk Airport, which will be replaced by the new facility, grew its passenger numbers 14% last year to handle more than 51 million travellers. It is now perilously close to capacity.

ROUTES NEWS 3, 2014

Sabiha Gökçen Airport, on the Anatolian side of the city, expanded its traffic by an even more impressive 27%, processing 19 million passengers. All 14 of the Turkish airports that handle more than one million people also grew their traffic in 2013. Much of this growth is driven by flag carrier, Turkish Airlines (THY), which grew passenger numbers 23% in 2013 to 48 million. Long-standing chief executive, Temel Kotil, expects that figure to balloon to 60 million this year, fuelled by higher frequencies and more than a dozen new routes. “Until 2023, we will not slow down,” he tells Routes News. “Sometimes it is difficult to understand why an airline is growing this much. But we are always under capacity … Istanbul is an excellent place to link Africa to Asia, Africa to Europe, Europe to Middle East.”

Temel Kotil

Turkey’s rising star as a sixth-freedom intercontinental hub did not come about by chance. In 2002, Turkish airports handled barely one-fifth of their current footfall. Deregulation the following year, combined with part-privatisation of the flag carrier in 2006, allowed the sector to fully exploit Turkey’s geographical advantage. Seven years ago, Atatürk was not among the world’s 50 busiest airports by traffic. Last year, it ranked number 17. “Around 2007 to 2010, we were pushing to open more destinations with a clear purpose,” Kotil recalls. “We added some African cities that maybe many airlines were not interested in, and we added so many small European cities – people were confused about why we were going there. We knew the strategy would pay back later on, and this is what happened.”

routes-news.com

Turkish Airlines CEO

This year, 37 more machines [aircraft] are coming, and I cannot put them at Atatürk. So this is why we are very heavily going to Sabiha Development of the hub-and-spoke model means that route launches are a frequent event for THY. The airline will add more than a dozen new destinations in 2014, bringing the overall network to 260 cities. Asked what regional white spots he is focusing on, Kotil simply remarks: “We don’t yet cover the whole world.”

Plugging the gaps

Little wonder, then, that the upcoming route launches are a mish-mash of better and less well-known cities across the globe. This year’s confirmed launches include Boston, Montréal, Rotterdam, Catania in Italy, Münster in Germany, Varna in Bulgaria, and Astrakhan and Stavropol in Russia. Countless others are being planned. “In Africa, we have 36 destinations, and about 10 more coming there,” Kotil notes, promising new destinations in Algeria, Egypt, Mali, Eritrea, Benin and Angola. “And still we want more. I believe that Africa is heaven for the future.” Europe and Asia are already well served and will continue growing apace. But the airline has a more modest presence across the Atlantic, operating just six routes to North America (New York, Washington, Chicago, Houston, Los Angeles and Toronto) and two to South America (Buenos Aires and São Paulo). “We have decisions to go to Mexico, Bogotá, Havana and Caracas already,” Kotil notes. “In North America … San Francisco and Atlanta are in the pipeline.” The growth will also be driven by higher frequencies. Noting that THY currently operates 1,200 flights per day, Kotil says 2,000 is an optimal figure for a network of its size.

routesonline.com

“This means we are at half of our matured frequencies,” he insists. “We’re growing about 20% this year on frequencies to existing destinations.” In the first two months of 2014, more frequencies were announced for Tehran, Basel, Lisbon, Marseille, Budapest, Donetsk and Edinburgh. Not content with its 31 weekly flights to Heathrow and 14 to Gatwick, THY is also adding a third daily service to the UK capital’s secondary gateway.

150 million Turkey’s air passengers in 2013

The flag carrier’s twice daily service to Tokyo is its second largest route when measured by Available Seat Kilometres (ASK), but Kotil says he wants to see a third flight added soon. Its New York route is already operated three times daily, making it the largest destination by ASK capacity. “Chicago, LA, Washington DC, Houston, they need to double too,” the chief executive says, rattling off a seemingly endless list of growth targets. Amid all the talk of expansion, it is tempting to question whether THY might be biting off more than it can chew. But a quick glance over the airline’s financial statements shows little cause for concern.

Privatisation success

The flag carrier has been profitable every year since its 2006 privatisation, when the government lowered its stake to 49%.

Unlike its sixth-freedom rivals in the Gulf – whose state owners can mask the financial burden of their double-digit expansion – THY is held to task by the country’s sole stock exchange, the Borsa Istanbul. This accountability, Kotil insists, shapes the attitudes of his staff and motivates them to excel at their work. “Subsidies from government to any company – airline or any commercial activity – is poison. It will kill you,” he warns. “When I became CEO, this place was a government company, then in 2006, it became private, and I saw the difference. “In state companies, workers believe the boss is the government. In private companies, employees believe the boss is the passenger. So, in 2006, we changed the boss. We have 60 million bosses today – some of them young kids. We love that. That’s the attitude.” This private sector mindset is enabling THY to pursue its ambitious growth plan and strive for greater efficiencies. The number of passengers per employee has risen from 1,000 a decade ago to 2,000 today. Wages account for less than 15% of the airline’s overall costbase, and Kotil has successfully fended off strike action by trade union, Hava-İş. “We agreed on everything,” he says of a new settlement reached in December. “We are happy. We make money, so our workers should also make money. No problem.” Rather than interfering with the management of the company, the government is credited by Kotil with creating the conditions necessary for growth. Lowering taxes and easing visa restrictions both helped, he says, but liberalising the sector was the biggest game-changer.

Decade of deregulation

Deregulation in 2003 allowed rivals, Pegasus and Atlasjet, to launch domestic services, growing the home market from five million to an expected 44 million passengers this year. THY now provides just 55% of that traffic – much of it through low-cost

ROUTES NEWS 3, 2014

Turkish Airlines CEO

subsidiary, AnadoluJet – in contrast with the previous monopoly. “Without other operators, there is no way the number of domestic passengers would be 44 million,” Kotil insists. “We need them. They keep me awake!” However, rapid growth across the sector entails its own set of problems. While Ankara is undoubtedly a proaviation government, its slow progress in getting the third airport project off the ground poses challenges for THY in Istanbul. Asked about the new gateway, Kotil is adamant the politicians must decide the future of the country’s infrastructure themselves. “There are years and years of decisions, and the authorities can do whatever they want,” he says. “But [aircraft] deliveries continue. This year, 37 more machines are coming, and I cannot put them at Atatürk. So this is why we are very heavily going to Sabiha, which is a little bit of a change on our strategy. “We will focus on Sabiha, focus on Esenboğa [in Ankara], and utilise the slots we have at Atatürk for our premium

ROUTES NEWS 3, 2014

networks … We can accommodate whatever growth until the new airport is ready,” the CEO says. Sabiha and Atatürk are both now looking at adding new runways.

60 million THK’s forecast passengers in 2014

Fleet planning

But while the roadmap for airport expansion is flexible, THY’s fleet growth has been clearly mapped out. Together with AnadoluJet, the mainline unit operates about 235 aircraft, and has orders and options for a further 265 units. Its fleet will total 267 aircraft by the end of this year, and 440 by 2023. Three-quarters of THY’s aircraft are narrowbodies, and this ratio is likely to be maintained. Its outstanding orders include 89 Airbus A320-family aircraft and 83 Boeing 737s, the vast majority of which are neos and MAXs.

Widebody commitments are also evenly split between Airbus and Boeing, with 20 777-300ERs and 17 A330-300s due to be delivered by 2017. Battling constant under-capacity – described as a “nice problem” by Kotil – ensures that new transactions are never far off. The airline is actively looking to wet-lease more widebodies this year, before placing a follow-up order probably in 2015. Elsewhere within the group, in February, SunExpress – the joint venture between THY and Lufthansa – placed another order for up to 50 737-800s and MAXs. With so much growth in the passenger fleet, new opportunities are also emerging at Turkish Cargo. The freight division contributes 10% of THY’s income, and Kotil believes this could eventually rise to 15%. “But passenger traffic is growing very fast,” he admits. “It’s hard to catch up.” More likely than not, THY’s competitors in Europe, the Middle East and Africa are thinking just the same thing.

routes-news.com

Analysis

Regional fare John Strickland takes a closer look at route development trends in the French market.

he French market is one of the largest and most important in Europe and features a blend of market segments that are relevant to all airline business models. These range from long-haul services to the country’s capital, as well as to some regional points; a large domestic market; significant ethnic traffic flows; and a strong leisure market. Last year, France’s airports handled 161.4 million passengers, a growth of 2.4% compared with 2012, according to the Union des Aéroports Français. To better understand the diverse market dynamics, we need to dig deeper below the headline figure.

Paris Orly

The Paris airport system is the principal gateway to France and had a record year in 2013, handling more than 90 million passengers for the first time, up 1.7% on a year earlier, according to Aéroports de Paris. The most robust growth was at Orly, Paris’s point-to-point airport that predominantly serves short-haul domestic routes and international services to large ethnic markets, such as Morocco and Algeria. Long-haul flights are mainly operated to French overseas territories, as well as a limited number of North American destinations. Air France is an important player at Orly but the airport’s easy access to the Paris business district means other

ROUTES NEWS 3, 2014

Paris Charles de Gaulle.

airlines have also moved to tap into this lucrative market. This includes easyJet, which has a base at Orly serving a mix of domestic and European services. International Airlines Group is also a strong player at Orly, with all parts of its business represented. Both of its own hubs are served with British

161.4 million passengers at French airports in 2013

Airways offering several daily frequencies to Heathrow, and Iberia to Madrid. Meanwhile, LCC partner, Vueling, has its most important non-Spanish base at Orly, from where it serves Spanish and other European cities. Completing the picture is a niche New York service flown by Open Skies using Boeing 757s, with an emphasis on premium classes. This

has been successful in tapping into the transatlantic business market.

Charles de Gaulle

Charles de Gaulle (CDG) is Paris’s hub airport and grew 0.8% in 2013. Of course, it is also the heart of Air France-KLM’s global network for the French market. Delta, Air France-KLM operates a powerful North Atlantic joint venture, which occupies the number one position in the Europe–US market. The company is also successfully focusing on rapidly developing Asian markets, particularly China, where it works closely with Chinese airline partners. It is also in the early stages of building a deeper partnership with Etihad, and this marks an important shift in strategy. Until recently, Air France-KLM was very much opposed to Gulf carrier partnerships.

Middle East presence

Looking more broadly at the Gulf group of airlines, Emirates, Qatar and Etihad are

routes-news.com

Analysis

French market figures 2013 Top 10 regional airports 2013

Traffic

% change

Paris Charles de Gaulle

62,052,917

0.8

Paris Orly

28,274,154

3.8

Nice

11,554,251

3.3

Lyon

8,562,298

1.3

Marseille

8,260,619

-0.4

Toulouse

7,567,634

0.1

Basel

5,876,042

9.8

Bordeaux

4,617,608

4.3

Beauvais

3,952,908

2.3

Nantes

3,930,849

8.2

Lille

1,661,741

18.9

Montpellier

1,422,793

10.4

Low-cost traffic at French airports 2013 Traffic

Share of traffic

Paris

12,615,404

14%

Regional

25,788,055

36%

Total

38,403,459

24%

Source: Union des Aéroports Français (UAF).

all present at CDG, with Emirates using the A380 on some of its Dubai services. Emirates is also currently the only one of the three to serve the French regions, having operated to Nice for a number of years, while last year, it added Lyon. The Lyon route carried more than 90,000 passengers in its first year of service, and the aircraft type has already been upgraded from an Airbus A330 to Boeing 777 equipment. The lack of broader Gulf carrier presence in the French regions is a function of a bilateral regime between France and the Gulf states. This is more restrictive than, for example, the UAE’s with the UK. This means that Emirates has only 32 services per week to France (20 to Paris, seven to Nice and five to Lyon),

routesonline.com

in sharp contrast with the 112 weekly frequencies it operates to the UK. While the restrictive France–UAE bilateral regime is a current feature, it is something I would expect to change in the coming years.

The regions

Outside of the capital, France has several large regional airports including Nice, Lyon, Marseille, Toulouse, Bordeaux and Nantes (in order of traffic volume). Air France-KLM is an important customer at each of these airports but the relationship is a delicate one. The national carrier has been steadily reducing its non-hub, short-haul activity as part of its cost-cutting focus, and a number of regional services into Paris Orly have been cut back and many

others are now operated by regional subsidiary, Hop! The airline has also attempted to set up low-cost bases in Nice, Toulouse and Marseille to compete with the LCCs but, to date, these have proved unsuccessful. There have been a high number of discontinued routes and overall capacity has been reduced. The low-cost subsidiary of Air FranceKLM, Transavia France, concentrates its activity on leisure routes out of Orly, with regional activity focused on Nantes and Lyon. Air France-KLM operates no long-haul services outside of Paris. Indeed, except for the limited presence of Emirates, there are no regular scheduled long-haul flights from the regions by mainstream carriers from any of the global alliances, with the exception of Delta, which operates a summer service from Nice to New York.

90 million passengers at Paris airports in 2013

It is perhaps surprising that a country with several large regional cities and worldwide tourism appeal finds itself so poorly served in the long-haul arena, but this may provide future opportunities for airlines using the smaller next generation Boeing 787 or Airbus A350.

Low-cost growth

The consequence of Air France-KLM retrenchment in the regions and the lack of long-haul services means the regional airports have increasingly turned to LCCs for traffic development. More than 38.4 million passengers used low-cost services in France in 2013, and while growth at 9.3% was rapid, this still only accounted for 24% of the total market, much lower than for the UK and Germany. This masks the greater importance of LCCs in the regional market, where they account for 36% of all activity.

ROUTES NEWS 3, 2014

Analysis There is sometimes a mistaken perception that the French regional domestic market is limited due to rail competition from the TGV high-speed train. This is only partially true, as TGV routes are chiefly limited to services to/from Paris and operate almost wholly on a north-south axis. TGV services do not always operate at high-speed, with some journeys lasting as long as seven to nine hours. Nor are fares necessarily low (the French rail company, SNCF, uses revenue management in the same way that airlines do). This has left enormous potential for LCCs to stimulate existing markets and create new ones, reflecting France’s relative underdevelopment in the low-cost segment, compared with the UK and Germany. Ryanair and easyJet have seized this opportunity and established footholds in France. They both operate regional domestic and international services to European cities and Morocco.

90,000

passengers on Dubai–Lyon in first year France is a strategic market for easyJet and the airline has established two regional bases in Toulouse and Nice, where it is the largest operator. EasyJet is increasingly opening up regional routes that have historically been underserved and overpriced, resulting in dramatic traffic growth. Lille in Northern France is a good example of this. Located in the heart of one of France’s most important economic regions, Lille was the fastest growing airport in the country for the second consecutive year in 2013, with almost 1.7 million passengers (+18.9%). Most of this growth resulted from new low-cost services: easyJet operates four routes, Ryanair two and Vueling one. Another fast growing airport in 2013 was Montpellier, on the Mediterranean

ROUTES NEWS 3, 2014

coast, which saw 10.4% traffic increase to 1.4 million passengers. Montpellier has been successful in attracting a diverse range of carriers and delivering sustainable traffic. Low-cost services are offered not only by Ryanair and easyJet, but also Norwegian, Transavia and Air Arabia, the latter serving three different destinations in Morocco due to the strength of the local Moroccan community. Germanwings is also commencing a summer service to Düsseldorf this year. Legacy airlines have also been successful, with Alitalia introducing a year-round Rome service in 2013, while Lufthansa is adding a summer 2014 service to its Frankfurt hub, supplementing existing seasonal Munich flights. Brussels Airlines, SAS and Royal Air Maroc will also add seasonal services in summer 2014. France’s numerous smaller airports around the country rely on a range of low-cost services to leisure markets and important ethnic destinations, including Morocco, Portugal and Turkey.

A mixture of summer charters, services to Corsica, winter ski and, in some cases, flights to Paris or Lyon (typically operated on a Public Service Obligation basis) makes up the balance of business. Many of these airports are not directly financially viable but provide wider economic benefits, particularly for tourism. The European Commission recently issued new Regional Airport Guidelines for the discount and marketing deals such airports can negotiate with airlines. While this gives some welcome flexibility to smaller airports, this is for a finite period. The Commission’s objective is to see these airports commercially viable within 10 years. The French airport landscape remains varied and is likely to go through changes in the years ahead. Paris CDG will retain its pre-eminent hub status but negotiation of liberal air service agreements will likely stimulate regional long-haul growth, adding to the current short-haul low-cost success. For the smaller airports on the map, the future is not quite as clear.

ABOUT THE AUTHOR John Strickland is a UK-based aviation consultant and director of JLS Consulting. He can be contacted at john@jlsconsultancy.com

routes-news.com

Star-struck Following what Tenerife’s new president calls an “exceptional year” for airlift expansion, it has its eye on higher spending visitors and becoming a hub for Africa feeder flights, writes Debbie Ward.

he largest of the Canary Islands has long been favoured by European tourists as a ‘fly-and-flop’ destination. Its location near the African coast means it has year-round temperatures averaging 23˚C, making it one of the few spots in Europe with reliable winter sun. Despite its maturity as a tourist destination, it is not resting on its laurels. The Tenerife Tourism Corporation’s recent air service development efforts earned it an award at Routes Europe last year, after the island gained 36 new routes and more than a million additional seats. Most significantly, new bases were created by budget airlines, Norwegian and Vueling. Other developments saw

ROUTES NEWS 3, 2014

the return last March of British Airways, which last served the island in 2008 through GB Airways. Overall visitors to Tenerife in 2013 were up 1.5% and approaching five million. The UK remains the island’s biggest source market, accounting for nearly a third of arrivals, but the biggest growth is coming from Norway – up 21.3% to around 122,100 for 2013 compared with 2012, and from Russia, which grew by 32% to around 185,000 visitors. New president of the Council of Tenerife, Carlos Alonso, who also continues as Tenerife’s tourism councillor, tells Routes News he wants to see more competition for services

between the Canaries and mainland Spain, particularly on the Madrid route, which is “highly affected by lack of seats and high prices.” Russia is another target for expansion, as are summer frequencies from Scandinavia. “The Russian market is one of our fastest growing, increasing incrementally year over year. However, 30% of passengers still travel indirectly,” says Alonso. “Aeroflot has twice-weekly operations which are very successful, but we’d like to see more regular direct flights to cover the increasing demand and further stimulate the market,” he adds.

routes-news.com

Tenerife Norwegian’s expansion in December 2013 has also been good news. The carrier upped frequency to Tenerife from Hamburg and several Scandinavian cites, increased ex-UK flights to daily and added a twice-weekly service from Berlin. With several Spanish bases already established, and Madrid and Barcelona recently announced, Tenerife is an integral part of the airline’s Spanish growth says communications manager, Lasse Sandaker-Nielsen: “We are gradually becoming a more international player and, as we are continuously taking delivery of brand new Boeing 737800s, we have the available capacity to establish a base in Tenerife. Demand for flights to and from Tenerife suggests that there’s room for us there.” While Tenerife welcomes any capacity boost on underserved routes, its main expansion targets lie in the higher end of the scheduled market. “We are talking to all [airlines] but I will say with our new focus we are

concentrating much more on companies like BA, who have a very good level of quality,” explains Alonso. “We want to be able to increase the quality of the passengers we have; those with more money. In Germany, we are talking to Lufthansa for instance, and we’re also talking to Air France. We want more flags to operate to the island.”

Attractive landscapes

“Besides beaches and its year-round warm climate, another of Tenerife’s draws is its photogenic landscape,” says Alonso. “We have the third highest volcano in the world and endemic flora and fauna only seen on this island,” he says. UNESCO-listed volcano, El Teide, is popular for day trips, along with animal theme park, Lorro Parque, with its parrot and dolphin shows, and the waterslides of huge Siam Park. The island’s cultural side remains less well known as tourism tends to cluster around resorts like Playa de la Americas

many regional bases. The demographic hasn’t changed hugely, though there’s less focus on the youth market these days as there are so many competing destinations.

Jody Clapham, product and commercial manager, Cosmos Holidays, UK, explains Tenerife’s appeal for UK tourists. Where does Tenerife rank for your business? It’s our best-selling destination year-round, split 60% summer and 40% winter. We use our own Monarch flights from

routesonline.com

How’s it been selling and why? Sales for both seasons are significantly up year-on-year; the trend of the last few years. Tenerife’s maintained its popularity and we’ve increased flying capacity.

Which durations are popular? Our ‘flexi-stay’ model was introduced about nine years ago and Tenerife was

in the sunnier beach-orientated south. The greener north includes beach resort, Puerto de La Cruz, but has traditionally drawn walkers and discerning holidaymakers in search of ‘real Spain’. Beside scenery, attractions here include capital, Santa Cruz – focus for the world’s second largest carnival each spring, and UNESCO-listed heritage town, San Cristóbal de la Laguna. It’s about an hour south to north by road. Fewer airlines (notably Iberia, Finnair, Norwegian and airberlin) link the north directly to non-Spanish destinations. There seems to be demand, however, with a nearly 7% increase in northern arrivals last year.

Stargazing and sports stars Tenerife is supporting its repositioning towards higher spending tourists with marketing and product development. In particular, it’s promoting the niche products of sports, gastronomy and stargazing.

one of the first featured destinations. Since then, our programme’s grown extensively, offering daily and sometimes double-daily, from some UK airports. Customers can choose their duration, although seven nights and 10 nights are most popular.

Which hotel product sells best? The Cosmos ‘elite’ branded 4/5 diamond-rated allinclusive hotels are currently among our best-selling and we’d like to see more, with the same family facilities. This trend has increased in the last four years with customers needing to pre-budget.

What are Tenerife’s unique selling points? The climate has year-round appeal but it’s also the variety of experiences on offer as well as beaches, like watersports, cycling and hiking, and the natural beauty including Mount Teide National Park. For families, Siam Park, Europe’s biggest waterpark, is a big draw.

Which new products you are excited about? North Tenerife has much appeal and we’ve developed our programme around the more authentically Canarian Puerto de La Cruz as it increases in popularity.

ROUTES NEWS 3, 2014

Tenerife

Arrival figures (approx) for 2013, compared to 2012 Total:

+1.5% to 4,973,000

Biggest increases: Ireland: Switzerland: Sweden: Norway: Russia:

El Teide National Park has recently been recognised as a Starlight Tourist Destination for its low light pollution. An astronomy festival, stargazing excursions to Teide observatory and a new cable car stargazing dinner are offered. The island’s mild climate and rugged terrain have also made it a popular training ground for professional football teams and Olympic athletes, while public sports events include the Santa Cruz and El Teide Xtreme triathlons, Bluetail long-distance mountain race and a major windsurfing contest. Golf is another big attraction, with several courses and a new app guide. “Our goal is to create novel experiences that will attract high-end customers. We’re also trying to increase the level of the quality of tourism by building new fivestar hotels, and also investing a lot in renovating touristic areas as well,” says Alonso, though he points out the island already has more five-star hotels than Barcelona and Madrid.

Five-star properties

There seems to be demand from the upscale market, with stays in Tenerife’s five-star hotels up 4.2% last year over 2012, and up 9.3% from its biggest market, the UK. Tenerife is shifting its marketing from solely sun and beach to segmented messages about island experiences. New

ROUTES NEWS 3, 2014

imagery concentrating on the emotions will be the exclusive focus in mature markets. Meanwhile, a social media video marketing campaign divides the island into ‘five volcanic territories’, focusing on nature and authentic experiences.

Airline incentives

In terms of encouraging airlines, airport operator, Aena, has a new incentive scheme promising between 50% and 75% discount on passenger landing fees for routes that increase passenger numbers, as well as for new flights. There’s also a 30% reduction of passenger and security charges for those with connecting flights. Some preexisting incentives also remain in place for 2014, including half-price landing and passenger fees on off-peak days – Thursday at Tenerife South and Saturday at Tenerife North. However, Alonso is sceptical about the new scheme, believing it is “very complicated to calculate in advance”. Tenerife has been a regular at Routes events since 2011. It attends both regional and Routes World, with a particular interest recently in America and Africa. “The Routes events have been invaluable in providing us with the opportunity to meet the right decisionmakers and establish relationships. Our meetings are always with network

+5.5% +10.7% +11.5% +21.3% +32.0%

to 183,500 to 48,700 to 183,500 to 122,100 to 185,100

Biggest decreases: Denmark: Germany: France: Italy:

-2.0% -2.3% -2.5% -2.8%

to 88,700 to 557,700 to 150,000 to 94,100

Biggest market UK:

+0.8% to 1,581,000

New target market: US:

+2.6% to 13,800

planners,” says Alonso. “We also attend most of the seminars Routes organises, so for us, it’s very informative.” Alonso explains that, in negotiating with airlines, part of Tenerife’s strategy is to become an ‘allied partner’, keeping in constant touch about route performance, sharing marketing techniques, feedback from hotels and more. For the future, Tenerife is looking beyond Europe, with ambitions to be a feeder into West Africa from North and South America. A Royal Air Maroc flight to Casablanca, the island’s first scheduled link with the African continent, which launched in October, is a step in the right direction. A Dakar route is also proposed. “Basically, we want to emulate the model that has been so successful in Dubai,” says Alonso. “Our primary goal now is working on getting more US routes. It won’t be easy, but we’re working hard on it.”

routes-news.com

Continental shift European countries have been steadily prioritising their tourism industries since the economic crisis first swept across the continent in 2009. Gary Noakes takes a closer look.

urope’s economies have had it tough over the past few years, but one shining light for many countries blighted by recession has been tourism, and the much-needed income it brings. In absolute terms, Europe leads the world in inbound tourism, outstripping growth forecasts and recording impressive 2013 figures. According to the United Nations World Tourism Organization (UNWTO), Europe saw 29 million additional international arrivals in 2013, an impressive achievement that raised the total to 563 million. Europe’s increase represented more than half of all additional visitors globally. Moreover, Europe’s growth rate of 5% exceeded the WTO’s forecast and, significantly, is double the region’s average for the period 2005–2012.

ROUTES NEWS 3, 2014

The Organization’s World Tourism Barometer comments: “This is particularly remarkable in view of the regional economic situation as it follows an already robust 2011 and 2012.” UNWTO secretary-general, Taleb Rifai, adds tourism “has been among the few sectors generating positive news for many economies”, and points towards another good year in 2014, despite a 3% to 4% forecast dip in growth in Europe. France, the world’s most popular destination, which, in 2012, attracted 83 million visitors and is still growing, highlights the health of the industry. Final 2013 figures are not yet published, but statistics from accommodation sources show arrivals grew 8% in the third quarter, which the WTO says is “an extraordinary result for a mature market”.

The WTO highlights Central and Eastern Europe as the key growth areas, up 7%, followed by Southern Mediterranean Europe, up 6%. Within this latter region, Spain increased arrivals by 6% or three million, crossing the 60 million mark.

Mediterranean performance Greece, where confidence among potential visitors has risen since the 2010 Eurozone crisis, saw arrivals at airports in 2013 jump almost 11% to 12.7 million. Tourism is especially important to Greece’s 200-plus inhabited islands and in 2012, accounted for 16% of GDP and 18% of employment. Spain and other Mediterranean countries have undoubtedly benefited from political upheaval in North Africa. Enrique Ruiz de Lera, UK director of the Spanish National Tourist Office, says:

routes-news.com

Analysis

“Our competitors experienced some trouble, especially Egypt. It didn’t help much in summer, but it did in winter – the Canary Islands had nearly 100% occupancy.” The UK is Spain’s strongest market, making up almost 24% of its arrivals, up more than 5% in 2013. The next strongest markets, Germany and France, showed similar increases. Spain’s economy is in the doldrums and tourism has been a saviour, as the industry equates to 11% of GDP. “Because it is very labour intensive, it is also 11% of the workforce as well,” says Ruiz de Lera. Spain’s goal is to increase tourism spend by 20% by 2018, in part by lengthening the season. “It’s very seasonal to the coast and islands, so we need to spread that to the shoulder season,” adds Ruiz de Lera. As an incentive, airlines starting new routes to Spain get a 75% reduction in airport fees in the first year and 50% in the second. The Tourist Office is highlighting Northern Spain for growth and believes there is more to be done with secondary cities like Valencia and Seville, which are eclipsed by Barcelona, Europe’s biggest city break destination. The plan also includes the promotion of sports and nature tourism, plus fly-drives. Ruiz de Lera admits it will be a difficult task. “Changing the position of a leader is not easy. It’s difficult to convince people to go to the North if they are used to going to the Balearics.”

routesonline.com

One dark spot has been Madrid, where numbers at Barajas airport fell 7% across all markets and 2.5% from the UK. “We are working with airlines to get back that capacity,” Ruiz de Lera says.

5% growth

in Europe’s tourism rate Spain has had some success in attracting new markets. Arrivals from Russia grew almost 32% in 2013, although they are less than 3% of total visitors. Similarly, visitors from Norway and Sweden grew around 22%, making just over 5% of the market.

Valencia’s efforts

Valencia is a good example of a proactive Spanish city. It has seen overnight stays from within Europe grow 51% in the period 2009–2012, an impressive achievement given the economic situation and one underlined by the number of domestic visitors, which fell 1%. In the same period, it increased overnight stays from Eastern Europe and Russia by 166%, and 111% from Asia. Russian visitors alone in 2013 numbered more than 28,000, an increase of 7,000, added, since mid-2012, by direct S7 flights from Moscow. Valencia’s website is already translated into Chinese, Russian and Arabic, and it offers offline marketing support to partner airlines.

A key target is flights from Frankfurt or Munich, which Valencia says would get some of the Asia and Eastern Europe traffic, given a raft of joint marketing incentives. “Despite weak national demand, our city keeps growing international demand year after year,” said Valencia Tourism’s promotion executive, Miguel Angel Perez Alba.

Emerging markets

It is the emerging markets that will in future provide a reliable second source of visitors if the western Europeans decide to stay at home. Greece is already beginning to see this. “Russia, China and Turkey could be described as the new big markets,” says Dimitra Voziki, deputy director of the Greek National Tourism Organisation in London. These markets may not yet be important in actual numbers, but they are in terms of expenditure. The WTO points to Russia and China as standing out among the world’s 10 most important source markets in terms of tourist spend. China became the biggest spending outbound market in 2012, with an expenditure of $102 billion, replacing Germany in the top spot. China then grew this figure by an astonishing 28% in the first three quarters of 2013. In 2012, The Russian Federation became the fifth largest spender, moving from seventh place to below the UK and

ROUTES NEWS 3, 2014

Analysis

growing at 26% in the period to autumn 2013. To put this into perspective, the UK grew its outbound tourism expenditure less than 3%, as did the planet’s second biggest spenders, US travellers, while Germany reported a decline.

Gulf carrier networks

Air access will, of course, be the key influence in driving tourism growth, with the Gulf carriers now having a profound effect on travel patterns into Europe via new route launches and capacity upgrades. The past year or so has seen a flurry of activity from Emirates and this continues into 2014. Dubai-Amsterdam services have gone double-daily, as will Dublin from September. One of Emirates’ Gatwick services will be operated by an Airbus A380 from March, increasing capacity by a third. The aircraft was also introduced to Barcelona and Munich last year, and to Moscow in January, and was used to launch a service to Zurich in the same month. Aircraft serving Lyon have also been upgraded and routes launched to Stockholm and Warsaw. Rival, Qatar Airways, has made more modest moves, launching services from Doha to Larnaca in April, and Edinburgh in May this year. Meanwhile, Etihad has signed a £2 million joint marketing deal with Visit Britain, which is very keen to attract new visitors from the Gulf region. This is understandable; the average Saudi visitor spends £2,354 – four times the average. Visit Britain launched a trade mission to the country in January and undertook a similar one in Mumbai and Delhi last year. India has been another success story, as last year, visits to friends and

ROUTES NEWS 3, 2014

relatives in Britain were down 4%, but tourism rose 11%.

Tourism board innovations

Gone are the days when tourist boards can just push out a few posters to travel agents, with thematic approaches now all the rage. Visit Britain has produced ‘Sounds of GREAT Britain’, a £2.5 million global film campaign, run in the US, Brazil, China, India, the Gulf states, and throughout Europe, while Scotland has also taken key themes for the year.

83 million

visitors to France – Europe’s leading destination “We have already got an amazing product. The success comes from an understanding of how we can make our offering even more topical,” explains Denise Hill, Visit Scotland’s head of international marketing. The success of 2009 as a Year of Homecoming, designed to attract those with Scottish ancestry, meant Scotland will try it again in 2014. Ireland ran a similar campaign, The Gathering, in 2013. “We worked on the key themes, clans, golf, ancestry, food and drink,” says Hill. “When so many of our competitor destinations saw a dip, we saw an increase in international visitors. This way of marketing your country with certain themes to give it a highlight is one we have adopted, but that doesn’t mean we ignore the key products like touring or golf.” The US is Scotland’s number one overseas market and, despite a 3% fall in numbers in 2012, their spending

soared 20%. Hill explains that this, again, is down to targeting. “During the economic downturn, we tended to target travellers that are a bit more secure with their salaries.” Scotland is also adjusting its focus towards new horizons. Hill says the US and Germany will continue to be the biggest sources until 2020. “Beyond that we are targetting emerging markets – China, Russia, India – to make sure we get Scotland in tour operator’s programmes,” Hill adds.

Ireland and Scotland

New air routes have been key. “We are having enormous success with Emirates adding capacity [to Glasgow] and Qatar coming to Edinburgh from May. We lobby with Scottish Development International and Transport Scotland and we work very closely with the airports,” she adds. Ireland has been particularly successful in working with airports to attract new airlines, with lift from the US up 25% last year, and Germany up 14%. “In 2011, we saw a big fall-off in the financial crisis, so we produced a hit list with the airports,” says Niall Gibbons, Tourism Ireland chief executive. “We also put a lot of money into co-operative marketing – we spent €45 million in 22 markets.” The US was key, being among four countries that make up 75% of the market, with new services and increased frequencies from Philadelphia, Chicago, Boston and New York a mark of the strategy’s success. “All that capacity is held for 2014,” Gibbons enthuses. It is clear that despite the economic situation in many parts of Europe remaining a difficult one, travel and tourism is one of the bright spots for the continent in the years ahead.

routes-news.com

Cargo

Freight race Shifts continue to sweep across the air cargo industry – and more transformation is inevitable, IAG Cargo boss, Steve Gunning, tells Martin Rivers.

ATA’s upbeat report on air freight activity in January belied lingering uncertainty about the sector, which has experienced years of contraction and sluggish growth since the global financial crisis. Cargo traffic expanded by 4.5% in the first month of 2014, the industry group said, marking a sharp acceleration of the 1.4% full-year growth recorded in 2013. Just weeks before the update, Tony Tyler, IATA’s director general, described air freight markets as the “biggest worry” for the airline industry. One month of buoyant traffic does not equate to a decisive turnaround, and freight operators continue to warn that a structural change is taking root across the sector.

Changed patterns

“There used to be two assumptions everybody worked by,” Steve Gunning, IAG Cargo’s chief executive, tells Routes News. “That air freight demand will be two-times world GDP, and that air freight demand is a six-month lead indicator to passenger demand. Both of those historic relationships seem to have been broken over the last two or three years.” Recent traffic trends support this view with 2011/12 being only the second time that global air cargo markets contracted for two successive years. The first time, tellingly, was in 2008/09. Understanding the nature of this structural change and the potential ramifications for the industry requires a more nuanced look at air freight activity.

routesonline.com

Beyond aggregate volumes, changes are also occurring to the profile of cargo types and the makeup of freighter fleets. Far from sounding a death knell for the sector, Gunning says these shifts create new opportunities for established operators. The biggest challenge facing cargo airlines, he insists, is the disconnection between freight and passenger traffic. This divergence creates an Steve Gunning over-supply problem, with extra passenger flights the industry does control is the amount adding bellyhold space despite no of freighter capacity that exists.” corresponding uptick in demand He says there is “clearly” scope to for freight forwarding. collaborate more closely with Qatar Fresh approach Airways – the commercial agreement IAG, the parent company of British currently focuses on its Hong Kong– Airways and Iberia, is combatting this London routing – but replacement ACMI over-supply issue by tackling the one deals are unlikely. “outlet valve” that the industry still has “I’ve got nothing against that model. control over: dedicated freighter aircraft. We used it for a long time,” Gunning In May, BA will end its longstanding insists. “But I do think, in these prevailing ACMI agreement with Atlas Air’s Global market conditions, that model comes Supply Systems, grounding its three under stress. It’s a more costly model.” Boeing 747-8Fs and instead buying Other operators appear to be capacity on freighters operated by reaching similar conclusions. oneworld partner, Qatar Airways. In February, Air France-KLM chief “Depending on how you measure it, executive, Alexandre de Juniac, said he 30%-40% of capacity in the market is was open to further reducing the size of freighter capacity,” Gunning notes. the group’s freighter fleet. Air France has “The question is, ‘Can the market already committed to retiring three 747reach equilibrium?’. One outlet valve that 400ERFs, but de Juniac’s comments cast

ROUTES NEWS 3, 2014

Cargo doubts over the fate of its remaining two 777Fs, as well as KLM’s four 747-400ERFs. “A number of our competitors have reduced [dedicated freighter operations],” Gunning affirms. “Even some that are talking a big game are actually reducing their freighter capacity as well.”

Revenue decline

IAG’s 2013 financial results illustrate the challenges facing the industry. In an otherwise positive report that saw the group return to profitability, IAG Cargo suffered an 11.8% decline in revenues, a 7% decrease in cargo tonne kilometres (measuring traffic), and a 5.2% reduction in yields. Gunning insists the headline results only tell part of the story. Roughly 3% of the revenue decline was down to the strengthening euro, for example, while another 3% can be attributed to intentional capacity reductions. That leaves approximately another six percentage-point fall, which Gunning blames on “market weakness”. He adds: “A couple of [those six] points are underlying yield reduction, and about four points are load factor reduction.” Adjusting to this difficult climate, IAG has begun stepping up its focus on higher-yielding premium freight. The group forecasts that express volumes will grow at about 5% per year moving forward, compared with 3% to 4% for general freight. Describing premium products as having a “more resilient demand characteristic”, Gunning says IAG Cargo is investing heavily in its temperaturesensitive facilities in London and Madrid. Last October, the company opened its new Constant Climate Centre at Heathrow, enhancing processing facilities for pharmaceuticals. The new centre ensures shipments maintain stable internal temperatures, ranging from -20˚C to +25˚C. The group is also redoubling its focus on freight flows from the Asia-Pacific region to Latin America. The combination of BA’s Asian network and Iberia’s South American network has allowed IAG Cargo

ROUTES NEWS 3, 2014

A number of our competitors have reduced [dedicated freighter operations]. Even some that are talking a big game are actually reducing their freighter capacity as well to grow its market share on this corridor “from low single-digits to nearly 20%”, Gunning notes.

Structural shifts

He admits that, along with over-capacity pressures, the air cargo industry is experiencing structural changes on the demand side of the business. “Nobody fully knows why. It’s not straightforward or simple. A combination of factors are coming into play,” the chief executive says. He lists a raft of contributing variables, including the “miniaturisation and digitisation” of goods; the trend towards manufacturers “near-shoring” or producing domestically; technological advances in the versatility of sea freight; and a general wariness of the “debtfuelled consumerism” that led up to the global financial crisis. “It’s a whole slew of factors – none of which answers the question on its own,” Gunning continues. “When compounded, that probably builds towards an overall picture of structural change.” Although the outlook for air freight is undoubtedly challenging, IATA’s positive

January figures may point to an easing of global headwinds. IAG Cargo’s prediction of cumulative average growth rates of 3% to 4% per annum over the next five years, if accurate, suggests improving market conditions. Echoing this, Gunning says he believes that freight demand “bottomed out” in 2013. Nonetheless, he also cautions that the “mismatch between supply and demand will probably be at its worst point in 2014”. That means yields are likely to remain under pressure, validating IAG Cargo’s focus on premium products and perhaps spurring other airlines to ground their freighters. Amid growing evidence of a cyclical recovery in the airline industry, IAG is balancing long-term optimism with nearterm vigilance. “I do think there is a positive outlook for this industry,” Gunning concludes. “These last couple of years have been challenging, and I suspect 2014 will continue to be challenging. The market can reach equilibrium. It will just take time and discipline and rational behaviour,” he concludes.

routes-news.com

Pau Pyrenees

Linking Europe Smaller regional airports in France, such as Pau Pyrenees, are looking for growth, explains airport director, Jean-Luc Cohen.

au probably couldn’t be described more eloquently than in the words of French writer and poet, Alphonse de Lamartine, who said: “Pau has the world’s most beautiful view of the earth, just as Naples has the most beautiful view of the sea.” The city was referred to as “La Ville Anglaise” in the 19th century, and it saw the development of the very first golf course on the European continent in 1860 (which is still being played on today). Strong links with the UK remain and more than 30,000 Brits have made the area home, either permanently or for holidays. Large communities from Morocco and Portugal also live in the region.

How is the airport performing in a challenging regional airport market? The performance of Pau-Pyrenees Airport in term of yields and load factors is among the best in France. With an average yield of 0.36 cents and a passenger throughput of +5.9% in 2013, traffic has consistently performed well. We’ve strengthened key routes serving the local business market and enriched our leisure offering with new scheduled flights to Corsica by Hop!, which is announcing Ajaccio, in addition to Bastia, this summer.

routesonline.com

What are the key traffic drivers for the airport? Pau is one of the most dynamic economic centres in south west France and employment rates are much higher than the national average. From the 1950s to the 1990s, Pau depended on the production of natural gas and sulphur and saw the creation of Elf Aquitaine, now part of Total. Total has heavily invested in the region with the creation of its main technical and scientific research centre, which has more than 2,900 employees. The sector has transformed in recent years to become one of the premier petrochemical research and innovation hubs, with major players such as the Japanese Toray, Arkema and dozens of others. The SAFRAN Group is also prominent in the region with Turbomeca, the leading manufacturer of gas turbine for helicopters, and Messier-Dowty, the world’s largest manufacturer of aircraft landing gear. A strong food-processing industry is also present, with one of the leaders in the agriculture and food industry markets, Euralis, and also Lindt. Most large corporations in Pau are multi-nationals and are the airport’s strongest asset. Our market provides business passengers that require the right service to the right destinations. The UK, Netherlands, Germany, Italy and Spain are our top priorities to satisfy the

demand. We also want to recapture the leakage from medium-sized companies and leisure travellers that may not have sufficient choice at the moment.

What about Pau’s tourism credentials? Pau-Pyrenees Airport is the gateway to the Pyrenees and Gascony regions. The city’s heritage sites and gastronomy make it the perfect base to explore the region. Both Pyrenees resorts and the ocean are reachable in one hour and the Lourdes sanctuary is only 40 minutes away. Pau is also a city of sports and events, hosting world-class horse races, international golf competitions, car races and the Tour de France every year. The largest white water sports centre and ski resorts are also only 60km away. We are working in partnership with several foreign tour operators and believe the inbound leisure segment, for LCCs or charter operators, has potential for development.

What are the big opportunities in Pau? There are a number of opportunities to capture the market with additional direct services. As part of our expansion strategy, we are working with Airport Strategy and Marketing (ASM) to better identify opportunities and liaise with airlines that suit the market.

ROUTES NEWS 3, 2014

Brighter forecast There is more optimism in the UK airport sector than there has been for years, writes Darren Caplan.

he next few years will be crucial for UK airports and, for the first time since 2010, the Airport Operators Association (AOA) is quietly optimistic that the UK aviation sector will be able to grow in the years ahead. This will benefit not only the UK aviation sector and AOA members, but also the wider economy. In 2010, the aviation policy of the UK government was “better not bigger”. Considering aviation supports one million jobs, £50 billion (€60.6 billion) GDP and £8 billion (€9.7 billion) in tax revenue, you would have thought that the government would be encouraging our sector to grow from the first day of its term in office. Two developments, however, in the past 12 months indicate the industry could be able to look forward to both a ‘better’ and ‘bigger’ future. Firstly, there is the Aviation Policy Framework (APF), published last March. The government said in its foreword to the APF: “The government believes that aviation needs to grow, delivering the benefits essential to our economic wellbeing, whilst respecting the environment and protecting quality of life.” At the AOA, we could not have put it better ourselves. Secondly, there is the independent Airports Commission, led by former deputy Bank of England governor, Sir Howard Davies, which has been looking into options to maintain the UK’s hub status. The Commission published an Interim Report in December, which clearly states that, given the UK’s future passenger

routesonline.com

numbers and connectivity needs, the UK will need one new runway by 2030 and, in all likelihood, a second new runway by 2050. It lists Heathrow and Gatwick as options for the former, and Stansted and Birmingham for the latter. The APF and the Airports Commission pull no punches on the need for the aviation sector to play its part in carbon emissions and noise. However, taken together, the APF and the Airports Commission indicate that politicians and aviation policy makers have recognised the importance of a flourishing airports sector to the wider economy, supporting tourism, exports, manufacturing, investment, services, and a whole host of other industries. We now call on the government to further develop the APF, furnishing it with more detail. With regard to the Airports Commission, we call on all the political parties to commit to acting on the Commission’s recommendations, when they are eventually published in the summer of 2015. Of course, UK airports still face many challenges, including crippling rates of Air Passenger Duty (APD). The AOA campaigns through ‘A Fair Tax on Flying’ to call for reform of APD. There is also the challenge of sustainability and growing our sector while dealing with carbon and noise impacts.

The AOA works closely through Sustainable Aviation (SA) – a world-first partnership, including airports, airlines, aircraft and engine manufacturers and air traffic control sectors – which demonstrates how UK aviation can almost double its air traffic movements to 2050 without increasing its carbon and noise impacts. In 2014, SA will be producing a Sustainable Fuels Road-Map to further demonstrate how an increase in sustainable biofuels can reduce aviation carbon emissions. The next few years will be crucial. We will be battling high aviation taxes, which are uniquely punitive in the UK. We will be working hard to rise to the sustainability agenda, delivering on carbon and noise while seeking to grow. And we will lobby the government, the Airports Commission and all the political parties to be positive about, and support growth in, our sector. More and more politicians understand that a flourishing and expanding UK aviation industry is vital if we are to continue to secure the exports, investment and tourism that we need to deliver economic success for our country in the future, in an increasingly competitive global market place. If aviation grows, the country massively benefits too.

ABOUT THE AUTHOR Darren Caplan is the chief executive of the UK’s Airport Operators Association: www.aoa.org.uk

ROUTES NEWS 3, 2014

Brasília

Game on

When did you win the bidding process for the airport?

The Inframérica Consortium is part of the largest private airport operator in the world. The consortium is formed by Infravix, controlled by the Engevix Group, and Corporación América, a company with experience in over 50 airport concessions around the world, including Argentina, Armenia, Ecuador, Italy, Peru, and now Brazil. Each company has 50% participation in the consortium, which in turn, owns 51% of the shares of the Specific Purpose Entity (SPE) created to operate the Brasília Airport. Infraero, through its subsidiary, Infrapar, is the other partner, with 49% of the shares of that SPE.

We won the concession bid in February 2012, and the consortium was then awarded the right to operate, expand and modernise Brasília’s Juscelino Kubitschek International Airport. We have the concession for the next 25 years.

routesonline.com

What is your vision for the airport? Guided by the aerotropolis concept, we see Brasília International Airport becoming a robust, booming commercial centre, with several choices of entertainment, leisure, food and hospitality ready to serve passengers and visitors. By the end of the concession,

Inframérica will have invested more than R$1.2 billion in works to improve and expand the airport. Of these, R$900 million are to be invested before the 2014 World Cup.

What makes the airport unique in Brazil? Brasília Airport is the only airport in Brazil offering two parallel runways, enabling limitless expansion. At the end of the enhancement work, the airport will have increased its capacity from 16 to 41 million passengers per year.

What is the economic outlook in and around Brasília? With the highest GDP in Brazil – over 93% higher than the second, which is

ROUTES NEWS 3, 2014

Brasília

>>> FAST FACTS • Operated by Inframérica • 25-year, R$1.2 billion concession • 16 million passengers per year • Third biggest airport in Brazil • R $387 million being invested ahead of World Cup • Duty free expansion to 1,069sqm • International brands to include Hudson News and Red Lobster • Boarding bridges being increased from 13 to 28

São Paulo – Brasília offers huge opportunities to industries, companies and service providers looking to make excellent investments and do great business. This is a key element of consideration for airlines, as it ensures high yields on the network generated by businesses and officials. Brasília is also much more than the country’s capital city. With its innovative architecture, renowned and admired worldwide, it is the capital of modernity itself. With its 2.5 million inhabitants, Brasília has the highest income per capita in Brazil and ranks among the cities offering the best quality of life. The city of Goiânia and neighbourhood state of Goiás are adding 6.1 million inhabitants that are using Brasília airport as their main gateway to travel internationally and in Brazil.

What role do you see Brasília playing in the country’s air travel network? Being the geographic centre of the country, flights from Brasília to anywhere

ROUTES NEWS 3, 2014

in Brazil take about two hours. Brasília offers international passengers less flying time to the northern, central and eastern regions of Brazil, reducing travel time by as much as five hours, compared with connecting in the south. In addition to the geographic advantage, the airport’s terminal infrastructure and processes are being improved to enable a minimum connecting time of 45 minutes. We also have no airline congestion and no slot constraints.

How will Brasília be transformed into an international gateway? Air France’s announcement of its new Paris service starting in March, and Aerolineas Argentinas’s new link from Brasília to Buenos Aires, are both important steps in the transformation process. The airport has enormous potential to be the best hub in Brazil and all the investments we are making will make infrastructure more efficient and attractive to airlines. Brasília International Airport will have six international destinations served by direct services

from summer 2014: Paris; Miami and Atlanta; Lisbon; Panama City; and Buenos Aires. We are also in very advanced talks with other airlines and we will have more news soon.

What role do you see Brazilian airlines playing at the airport? The domestic airlines scene is very interesting and there are some good opportunities for Brasília. TAM joined oneworld in March. This airline already has the largest domestic network in Brasília. Avianca Brazil is the fastest growing airline in the country and is based in Brasília. It is expected to join Star Alliance in 2014. Finally, GOL is increasing its presence at the airport and will benefit from more interline agreements with more foreign airlines. All those changes will impact Brasília positively. International airlines are also looking at more efficient ways to leverage the massive presence of new alliance partners in Brasília, to offer better connectivity throughout Brazil and serve the capital city with more direct routes.

routes-news.com

ASQ awards

Winning ways Joe Bates gets all the news and reaction to the 2013 Airport Service Quality (ASQ) awards.

1257+ $0(5Ζ&$

(8523( $6Ζ$ 3$&Ζ)Ζ&

%(67 %< 5(*Ζ21 ΖQGLDQDSROLV 2WWDZD 7DPSD

%(67 %< 5(*Ζ21 0RVFRZ 6KHUHPHW\HYR =XULFK 3RUWR

%(67 %< 5(*Ζ21 6HRXO ΖQFKHRQ 6LQJDSRUH %HLMLQJ

)(:(5 7+$1 0 3$; 4XHEHF &LW\

)(:(5 7+$1 0 3$; 6NRSMH

)(:(5 7+$1 0 3$; /DQJNDZL

%(67 Ζ03529(0(17 6DQ $QWRQLR

%(67 Ζ03529(0(17 *RWKHQEXUJ

%(67 Ζ03529(0(17 .RONDWD

sia-Pacific gateways have once again shone in ACI’s annual Airport Service Quality (ASQ) customer satisfaction survey, occupying the top spots in all the global best by size categories. Changchun (China), Haikou (China), Seoul Gimpo (South Korea), Seoul Incheon (South Korea) and Singapore Changi (Singapore) respectively topped the 2-5mppa, 5-15mppa, 15-25mppa, 2540mppa and over 40mppa categories. ASQ champion, Incheon, was also named Best Airport in Asia-Pacific – ahead of Singapore Changi, Beijing Capital, Shanghai Pudong and New Delhi – while Abu Dhabi was voted Best Airport in the Middle East (ACI’s Asia-Pacific region incorporates the Gulf airports). Kolkata (India) and Amman (Jordan) also won awards for being the most improved airports in Asia-Pacific and the Middle East respectively, while Langkawi was named best airport handling under 2mppa in Asia-Pacific. Elsewhere in the world, Cape Town (Africa); Moscow Sheremetyevo (Europe); Guayaquil (Latin America & Caribbean); and Indianapolis (North America) were voted the best gateways in their respective regions. In the special regional awards for airports handling under 2mppa, the other winners were Mazatlán (Latin America & Caribbean); Upington (Africa); Skopje (Europe); and Quebec (North America). Finally, Best Improvement awards by region were won by East London (Africa); Nassau (Latin America & Caribbean); Gothenburg (Europe) and San Antonio (North America).

routesonline.com

/$7Ζ1 $0(5Ζ&$ &$5Ζ%%($1

$)5Ζ&$

%(67 %< 5(*Ζ21 *XD\DTXLO &DQF¼Q 0RQWHJR %D\

%(67 %< 5(*Ζ21 &DSH 7RZQ 'XUEDQ 0DXULWLXV

)(:(5 7+$1 0 3$; 0D]DWO£Q

)(:(5 7+$1 0 3$; 8SLQJWRQ

%(67 %< 5(*Ζ21 $EX 'KDEL 'XEDL 'RKD

%(67 Ζ03529(0(17 1DVVDX

%(67 Ζ03529(0(17 (DVW /RQGRQ

%(67 Ζ03529(0(17 $PPDQ

0Ζ''/( ($67

Indianapolis

Incheon

Moscow Sheremetyevo

San Antonio

Indianapolis Airport Authority’s executive director, Robert Duncan, enthuses: “We owe our unprecedented three first-place finishes among North American airports to our dedicated, world-class employees. “It is their tireless commitment and pride to maintain a safe, clean, courteous and dependable airport operation that allows IND to consistently elevate the travel experience for our guests.”

Director general, Mikhail Vasilenko, now refers to his gateway as being a “two-time champion”, in recognition of being named Best Airport in Europe for the second successive year. “The award is evidence that the airport has become better and that we are working in a more efficient manner than a year ago,” he says.

Jung Chang-Soo, president and CEO of arguably the most successful ASQ champion of all-time, claims that its top performing ways are down to its total commitment to customer service – and the fact that this philosophy is shared by its staff and the Korean government. “Our success is only made possible with the full support and confidence of the government, and the united efforts of over 40,000 airport staff,” he says.

Aviation director, Frank Miller, believes that his gateway’s customer-focused approach to business was behind the airport winning the Best Improvement by Region award for North America. He remarks: “A customer-focused approach is critical to the airport’s success in an increasingly competitive and demanding aviation market.”

ROUTES NEWS 3, 2014

Tourism

Joint venture Tourism authorities are getting involved in route development more than ever before, writes Jon Howell.

t a time when many other major industries around the world have struggled through decades of decline, the travel and tourism industries have clocked up record figures in recent years. The number of tourists globally exceeded one billion in 2012 and this is on track to hit the UNWTO forecast of 1.8 billion by 2030. With more than half of all tourists arriving at their destination by air, the future of the aviation and tourism industries are inextricably linked. The need for closer alignment of the tourism and aviation industry was a key theme of the UNWTO/WTM Ministerial Summit in London in 2013. Taleb Rifai,

UNWTO secretary general, said the two industries should be closer than ever before, but he went on to describe them as “unknown siblings”. “Our destinies are linked…despite these clear linkages, they seem to be like unknown siblings that do not talk to each other the way they should,” said Rifai. The discussion highlighted how each country was taking a different approach to aligning their aviation and tourism industries and that there was no “one size fits all” solution. Despite different approaches across the globe, one issue that features in virtually every country is that of air access.

52%

of all travellers arrive at their destinations by air

Opening skies

More and more governments are encouraging greater liberalisation and revisiting archaic air service agreements in a bid to stimulate their tourism industries. These agreements were traditionally based on the concept of reciprocity, but increasingly there has been a move towards open skies, as is happening in Israel. This year sees the implementation of that country’s reform agreement, something that has already prompted the announcement of low-cost flights to more than 25 destinations from Israel. Liberalisation has also paved the way for simplified visa processes, something that is clearly highlighted in

routesonline.com

the Seychelles, which now operates a virtual open-door policy for tourists. That country’s Minister of Tourism, Alain St Ange, has referred to the Seychelles as a “friend of all and enemy of none” and he maintains that many tourists choose the islands over competitor destinations due to its ease of entry. However, the issue of visas is not as simple in other parts of the world, where a relaxation of visa rules needs to address questions around security and immigration, and various political hurdles.

New approaches

Meanwhile, in London, David Scowsill, president and CEO of the World Travel and Tourism Council (WTTC), said that in order to be successful, the aviation and tourism industries needed to adopt a regional approach in order to attack the issue of air access at a global level. This regional approach has been successfully implemented in the European Union and there are numerous other examples of where the wheels are in motion to adopt similar approaches, specifically ASEAN. The skies are due to open across the ASEAN states in 2015, some 20 years after originally proposed. This union will bring together economically mature regions, such as Singapore, with emerging states like Myanmar. If all goes to plan, the ASEAN region will find itself more accessible and more attractive to tourists on a global scale. The competition between states for tourist dollars will require each member to be more proactive with its marketing –

ROUTES NEWS 3, 2014

Tourism increasing the prominence of the region worldwide, and helping to stimulate demand in the long run.

1 in 11 jobs worldwide depend on tourism

Tourism at Routes

As an industry, we can lobby for future structural changes, but what can destinations do now to help grow their arrivals figures? In the age of competition for tourist dollars, destinations that do not adapt will lose out to their rivals. Routes celebrates its 20th anniversary this year and was created from the realisation that, as the skies began to open in Europe, there was more need for airports to compete and promote themselves to airline network planners. The event has gone from strength to strength and continues to evolve to include more and more stakeholders. Ten years ago, the Routes events were dominated by exhibition stands with imagery of airports. It is a very different scenario today. It may sound obvious, but airlines fly to a destination, rather than an airport â&#x20AC;&#x201C; something that was reflected in the stands and content at World Routes in Las Vegas last year. Tourism authorities have long understood the economic impact of a new air service is vast, but traditionally they have left route development to their airports. This conversation has changed and is now a sales pitch for the destination as a whole. We see more and more tourism authorities that want to be involved earlier in the route development process, and the result has been a 300% increase in tourism participation at Routes events during 2013. This is set to continue to grow as airlines look for stakeholders to share the financial risk of a new route. Those destinations that are today building airline partnerships are clearly reaping the rewards, and this is increasingly something that the airlines are actively

ROUTES NEWS 3, 2014

Tourism organisations are increasingly teaming up with airports and other economic stakeholders on air service development (above). Tourism Australia has been a trailblazer with co-operative marketing, and its efforts were rewarded when it won the 2013 Routes Marketing Award in Las Vegas (right).

encouraging. The World Routes 2013 airline survey identified that 70% of all airline delegates felt that tourism authority involvement in their meetings was beneficial. This is further highlighted by the fact that, for the first time, a tourism authority was named overall winner of the Routes Airline Marketing Awards in 2013, when Tourism Australia walked away with the

gong. Plus, Turismo de Tenerife was named runner up. This is a major feat, considering airports had won the award for the previous 17 years. It is clear that the future of air service development will inevitably include more involvement from the worldâ&#x20AC;&#x2122;s tourism authorities. The added value and expertise they will provide to airline meetings cannot be underestimated.

ABOUT THE AUTHOR Jon Howell is regional sales manager â&#x20AC;&#x201C; Europe and Africa at Routes. He can be contacted at jon.howell@routesonline.com

routes-news.com

Doha

Making waves Doha’s new wave design inspired Hamad International Airport will become one of the world’s high-tech airports, writes Joe Bates.

oha’s new Hamad International Airport must certainly be impressive, because it has already been described as ‘dazzling’, ‘stunning’ and ‘game-changing’, and all this before it has even opened for business. One thing for certain is that when it does open, it will transform air travel in Qatar, as the new gateway will be one of the best equipped, environmentally friendly and high-tech airports on the planet. Indeed, such is the upgrade from the existing Doha International Airport, that national flag carrier, Qatar Airways, and Qatar’s Civil Aviation Authority (QCAA) have stated that the new $15.5 billion gateway will usher in a new chapter in the country’s aviation history. His Excellency Abdulaziz Al Noaimi, chairman of the New Doha International Airport (NDIA) Steering Committee, describes the gateway’s imminent opening as a “a proud moment for aviation in the State of Qatar”. “In the 1950s, we created history by building runways – a milestone that forever transformed the way people

routesonline.com

travelled across the Gulf region and provided a window to the world for our country. Nearly six decades later, the State of Qatar will mark yet another milestone with the opening of a brand new airport,” says Al Noaimi. “A new workplace and stunning architectural masterpiece will enhance the skyline of Doha, providing new surroundings for airport employees and the travelling public from around the world. “This state-of-the-art airport will create new benchmarks in passenger travel and convenience. It is the fulfilment of our Father Emir’s vision to establish a world-class gateway to the world, one that will support the country’s booming growth and be on par with global developments and demands.” Located on a 30 square kilometre site just five kilometres from downtown Doha, Hamad International Airport (HIA) will initially boast a single 600,000sqm terminal building and two runways – including one of the world’s longest at 4,850 metres – which between them, ensure that it will be equipped to handle 30mppa.

The three-storey terminal building, designed by HOK – which will eventually have up to five concourses – will be equipped with a huge central plaza, 41 gates, an impressive 28,000sqm of duty free and concessions space (retail and F&B outlets), and its own museum. The terminal’s design emphasises Qatari hospitality and will give visitors a spectacular and lasting impression of the country, says HOK president, Bill Hellmuth, AIA. “The airport is an important investment by the government of Qatar in the country’s infrastructure and economy,” claims Hellmuth. “Our design responds to their desire to create an iconic, world-class airport that will be a gateway to Qatar and the preferred travel hub for the Middle East.” According to Hellmuth, the signature 18-metre canopy overhang of the terminal’s undulating roof creates a grand entrance and provides significant solar shading to the most exposed portions of the facade. “The glazed facades also provide great views of the airfield and adjacent Arabian Gulf,” adds Hellmuth.

ROUTES NEWS 3, 2014

Doha

The three-storey building will have up to five concourses and a huge central plaza.

To help ensure that passengers enjoy fast, efficient flight connections, Hellmuth notes that HOK’s design team used computer simulations to model passenger flows and create the most efficient circulation and processing systems. In conjunction with Lea+Elliott, HOK also designed a 700-metre-long internal automated people mover (APM) system, which is accessible on the second level of Concourse C. The APM links the terminal’s north and south sides and, according to the airport, is the only airport rail system in the world that is completely inside a concourse. “Lea+Elliott has played a key role through all phases of this project, as it relates to the APM System and its interfaces with the building,” says the firm’s project manager, Gregory Love. “Until now, we could only imagine how the APM system would look integral with the building. Now, we see the beautiful masterpiece and the clear result of a vision, hard work and dedication.” In addition to the main passenger terminal, upon opening, the gateway will have 20 remote stands, an Emiri Terminal, 2,100sqm central mosque,

ROUTES NEWS 3, 2014

cargo facilities, maintenance hangars, three utility plants, a 29-hectare lagoon that reinforces the visual and physical connection to the sea, and car parking for 3,450 vehicles. Water droplets were the inspiration for the design of the mosque, which is described as resembling a glass shell with a gently domed roof. It has a 35-metre high minaret and can accommodate up to 500 worshippers. When fully operational, the airport will be able to accommodate 30 million passengers per annum. Bernardo Gogna, project director of the NDIA Steering Committee, believes that the airport will set the benchmark for others to follow. Speaking to Qatar Today, he said: “The sense of space, with the sunlight streaming in through the beautiful skylights, the signage that is functional without being conspicuous, and the latest available technology will take that passenger experience far beyond what is normally expected at an airport. “The wave-like structure of the terminal’s roof reflects the airport’s waterside location. The wave is especially prominent in the departure

terminal, replicating the notion of departure, of the movement of people from one destination to another, something that is a constant in an airport. The movement of the roof also follows with the movement of the passenger. “The retail space is also artfully designed. But the fact that there is a delicate balance between all these facilities, without being overly ambitious on any one of these features, is what makes HIA a benchmark in airport design.” According to Al Noaimi, Hamad International Airport will become one of the world’s most technologically advanced airports, purpose-built to serve the latest advancements in aviation and passenger needs of the 21st century. Qatar Airways CEO, Akbar Al Baker, notes: “It is an historic time for the State of Qatar, Qatar Airways and the country’s aviation industry. “This will be a world-class facility that promises to propel our nation further on the international stage. These are exciting times for our aviation industry and the people of Qatar, so let us relish the moment.”

routes-news.com

Routes Asia • Report Back

AirAsia X headlines event Innovation was the focus of this year’s Routes Asia event, where delegates heard from a range of low-cost carriers at the Strategy Summit.

irAsia X is aiming to grow in the years ahead by continuing to develop in its home market of Malaysia, as well as in other countries in the region where it operates. Speaking at the Routes Asia Strategy Summit, CEO, Azran Osman-Rani, said the long-haul, low-cost business model continues to evolve and change. “We are constantly tinkering with the model and changing as we go forward, adapting to the market,” he said. “We have grown from one aircraft to 18 and one route to 19 destinations since our launch [in 2007], but there remains a massive potential within Asia,” Osman-Rani added. “An equilibrium of a 50/50 balance between full-service and low-cost operators exists in mature markets but, although we have a strong presence in our home Malaysian market, the lowcost, long-haul penetration on routes of between four and nine hours is marginal across the region,” he said. Thai AirAsia X, a subsidiary of AirAsia X, has recently secured its Air Operator’s Certificate and is anticipated to launch operations this year. A similar venture in Indonesia is also on the cards.

routesonline.com

This new affiliate supports AirAsia X’s ambitious strategy to triple growth in a short, three-year timeframe without opening a new country market through the establishment of virtual hubs. “We have really seen the power of adding frequency across our network and how it unleashes additional traffic. By growing frequency to our existing destinations and flying to these from multiple points across our network, we can grow the business,” explained Osman-Rani.

Strategy Summit speakers included: Venggatarao Niadu, head of network and fleet management, AirAsia X Andrew Cowen, deputy chief executive, Hong Kong Express Airways Dr Anurag Jain, senior VP network planning & revenue management, Spicejet Vijay Poonoosamy, VP international & public affairs, Etihad Dr Alan Khee-Jin Tan, professor of aviation law, National University of Singapore

China Eastern eyes Toronto China Eastern Airlines is planning to launch flights from Shanghai to Toronto, according to Routes News’ sister blog, airlineroute.net. The website updated its information earlier in March, ahead of Routes Asia, to show that the route, the airline’s second to Canada, could be launched in June, subject to government approval. Air Canada already operates on the route. According to airlineroute. net, China Eastern is planning a three-times weekly service, using an A340-600 aircraft.

ROUTES NEWS 3, 2014

Download the free app View all the latest issues: just search for â&#x20AC;&#x2DC;Routes Newsâ&#x20AC;&#x2122; in the Apple or Android app stores. routes-news.com/app

Routes Asia • Report Back

Sarawak woos business tourism Growing the meetings, incentives, conventions and exhibitions market is a key priority for Sarawak, its Minister of Tourism, Datuk Amar Abang Haji Abdul Rahman Zohari bin Tun Datuk Abang Haji Openg, said at Routes Asia. Speaking on the first day of the event, the minister said Kuching and its surrounds were ideally placed to benefit from more business tourism and major events. This year, the destination hosted the Asean Tourism Forum, as well as Routes Asia. These comments were echoed by Mike Cannon, managing director, Sarawak Convention Bureau, ahead of Routes Asia. Cannon highlighted that improved air connectivity to the rest of Asia-Pacific was vital for Sarawak to reach its MICE goals. “The important thing for any city to realise is that with today’s connectivity and technology, meetings and conferences can be held anywhere in the world,” he said. “About 82% of our events go to Kuching, although we do receive a fair amount of events in Miri and Sibu,” said Cannon. “Kuching has been described as fresh and novel by those who have held their events here. In their minds, an event held in Borneo has an appeal of its own because of the association with nature, wilderness and adventure,” he added.

China hosts Yunnan Airport Group will host Routes Asia 2015 on March 15–17. This will be the fifth time that China has hosted a Routes event.

routesonline.com

Abu Dhabi crowned number one Abu Dhabi International Airport won the Asia heat of the Routes Marketing Awards. The airport will now go through to the final, which will be announced at World Routes in Chicago. Routes Asia was hosted by the Ministry of Tourism, Sarawak, and attended by Datuk Amar Abang Haji Abdul Rahman Zohari bin Tun Datuk Abang Haji Openg, Sarawak’s Minister of Tourism. The awards are voted for and judged by the airline network planning community. The panel of judges consisted of: Venggatarao Niadu, head of network, AirAsia; Genen Nishimura, international & domestic network planning, Managing Division, Route Marketing, Japan Airlines; Eric Nabong, manager – business planning, Philippine Airlines; and Trevor Spinks, head of planning & revenue management, Scoot. Katie Bland, director Routes, UBM Live, said: “In the past 12 months, Abu Dhabi has achieved some great results. The airport recorded double digit growth for the fourth year in a row, at 12%, in 2013, and welcomed six new carriers with 49 additional weekly flights operated by foreign airlines.” The shortlisted airports and winners were:

Over 20 million passengers

Winner: Changi Airport Group Highly commended: Chengdu Shuangliu Kunming Changshui Shortlisted: • Melbourne Airport

4 – 20 million passengers

Winner: Abu Dhabi

Highly commended: Christchurch Shortlisted: • Bangalore • Nanning Wuxu International • Sultan Hasanuddin International

Under 4 million passengers

Winner: Darwin

Highly commended: Cambodia Airports - Sihanoukville International Airport Shortlisted: • Clark International, Ras Al Khaimah

Destination award

Winner: Tourism Australia

Highly commended: Philippine Department of Tourism Shortlisted: • Singapore Tourism Board • Tourism Malaysia • Tourism New Zealand

ROUTES NEWS 3, 2014

Routes Americas • Report Back

Regional reach Routes Americas, incorporating Network USA for the first time, was a bumper event, attracting high-level delegates from right across the region. Richard Maslen reports on the highlights from El Salvador.

he Routes Americas Strategy Summit revealed there is currently a sense of positivity right across the aviation industry in the Americas region. In his opening statements, Peter Creda, regional vice president Americas at IATA, highlighted how far the industry has come over the past 100 years. He said that if the cost of the first 23-minute passenger flight that marked the birth of IATA a century ago was converted to modern currency, the flight would have cost $10,000 – or $434 a minute. Peter McGlade, senior strategic advisor to Southwest Airlines, also highlighted how the industry has changed during his 37 years in the business, noting how airlines are continually searching for the holy grail of a business model and product that is financially viable. “The margin for error is minimal,” said McGlade. While in the past, some carriers had made irrational decisions, these days airlines are showing an “increasing responsibility” when verifying the viability of air services, he added. History has shown that niche plays can successfully compete against larger rivals, but VivaColombia’s Juan-Emilio Posada noted that multiple factors posed a constant challenge to the operational and economic success of smaller airlines.

routesonline.com

Posada said the low-cost carrier is constantly challenged when it comes to flying internationally. He said he believed there is more potential for domestic operations in Colombia than for international services. “One major problem is the taxation system. I’m not anti-government, simply pro-passenger,” he said. “There is no point differentiating domestic and international flights in Latin America and the Caribbean. It costs the same to fly passengers from, say Bogotá to Quito, as it would to fly them to London. This is undermining business in Central America. We need a regime like Europe, where everything in the region is treated as a domestic service,” said Posada.

Strategy Summit speakers included: Hernan Pasman, head of the directorate, LAN Colombia, LAN Daniel Ketchibachian, commercial director, Corporación America Todd Scott, global network planning manager, UPS Zhihang CHI, VP & general manager, North America, Air China, Air China Andrew O’Brian, president & CEO, Quito International Airport

September Dreamliner delivery Colombia’s Avianca will take delivery of its first Boeing 787-8 at the end of the third quarter of this year, but it will be a while before it debuts on European routes, said executive vice president and chief revenue officer, Estuardo Ortiz. The former TACA executive, who is part of the management team that masterminded the merger with Avianca over the past five years, revealed at the Strategy Summit that the carrier would receive its first Dreamliner in September 2014. Speaking to Routes News, he said: “We will receive our first Boeing 787-8 Dreamliner in September and will use the aircraft to replace our Airbus A330200s. This will allow us to serve more cities with much better economics than before. “We plan to initially deploy the aircraft on familiarisation flights to close-by markets, such as Lima and Buenos Aires, but will eventually, perhaps from early 2015, use them on our routes to Europe to Madrid and Barcelona in Spain, and our new route to London Heathrow in the UK,” he added.

ROUTES NEWS 3, 2014

Routes Americas • Report Back

Making connections

El Salvador hopes recent air service additions from Aeromexico, Iberia and Spirit mark the start of a major expansion that will further boost connectivity. “We are convinced of the great potential we have as a country to do business and to continue growing in tourism and air connectivity,” José Napoleón Duarte Durán, El Salvador’s Minister of Tourism, said during his welcome address. MITUR is mandated to promote and position El Salvador domestically and internationally as a tourist destination that is sustainable, attractive and competitive. Durán – the son of the former President of the Republic of El Salvador, the late engineer Jose Napoleon Duarte – and former First Lady of the Republic of El Salvador, Doña Inés Duarte Durán, revealed more about the country’s strategy to Routes News. “El Salvador in the last four years has seen major changes in connectivity, with the purpose of expanding the flow of tourists. Recognisable airlines have begun operations in the country with great success. In total 10 airlines now operate into El Salvador International Airport,” he said. “This has allowed us to record a growth of 44.5% in the air flow of visitors between 2009 and 2013, a positive development which has forced us to expand our main airport to accommodate twice its current capacity of two million passengers,” he added.

routesonline.com

Tampa triumphs Florida’s Tampa International Airport landed the first heat of the 2014 Routes Awards. The airport will now go up against the winners of other regional awards in the main awards ceremony at World Routes in Chicago in September. The airport’s vice president marketing, Christopher Minner, said: “This is a victory for our entire team, and our approach. We have got the best partners in the industry and we are so proud of all of the success that we have brought for our airlines this year.” The annual Routes Awards are voted for and judged by the airline network planning community. The airline community votes for the airports or tourism authorities that provide them the best overall marketing services, including provision of data and information or innovative techniques to establish new, or maintain and develop existing, routes.

Over 20 million passengers

Winner: George Bush Intercontinental, USA

Highly commended: Orlando, USA Shortlisted: • Boston Logan, USA • McCarran, USA • São Paulo/Guarulhos–Governador André Franco Montoro, Brazil • Seattle-Tacoma, USA

4 – 20 million passengers

Winner: Tampa, USA

Highly commended: Pittsburgh, USA Shortlisted: • Oakland, USA • Portland, USA • Southwest Florida, USA

Under 4 million passengers

Winner: Lynden Pindling, Nassau, Bahamas

Highly commended: Hato, Curacao Shortlisted: • Akron Canton, USA • Charleston, USA • Juana Azurduy de Padilla, Bolivia • Sangster, Montego Bay, Jamaica

Destination award

Winner: Las Vegas Convention & Visitors Authority Shortlisted: • Jamaica Tourist Board • Nassau Paradise Island Promotion Board

Denver to deliver Routes Americas will be hosted by Denver International Airport and supported by Visit Denver on February 1-3, 2015.

ROUTES NEWS 3, 2014

Social media

Online with.... Ryanair has made a social media U-turn – Routes News caught up with the airline’s head of communications, Robin Kiely, to find out what was the catalyst for the change. Michael O’Leary hosted his first Twitter chat last year – what prompted this new approach to social media? I was appointed head of communications in February 2013 and it was an area I was keen to develop. Our Twitter account was launched in September (after we had more than 30 fake Ryanair accounts shut down), and we have grown to more than 53,000 followers so far.

Which social media channels are Ryanair now on? Twitter, YouTube and LinkedIn, and we are also exploring other options. Twitter is something of a test platform for us and, so far, it’s been successful.

What are you aiming to achieve with these respective platforms? We use LinkedIn primarily for recruitment and company news, and YouTube for video news content, information videos and general social media videos. Twitter has three components for us: 1) it’s the first source of Ryanair news for our followers and media; 2) it’s a direct messaging tool to our customers; 3) it’s a communication tool for our customers to contact Ryanair.

Do you have a dedicated social media team? No, our social media is primarily managed by the press office (a dynamic team of two!). Our Twitter feed is run by

routesonline.com

the press office but it is manned daily by our customer service team, who answer customer queries. YouTube also falls under the press office remit, while LinkedIn is mostly utilised by our personnel department.

What upcoming social media plans do you have?

Do you have a Ryanair blog?

We have a few more initiatives in the pipeline. Currently, we post a morning update on any flight or weather issues; we run daily Twitter-only ‘flash sales’ offering discounted fares for limited periods; we host a weekly Twitter chat with senior management, #AskRyanair; and every Friday, we ask our followers to send in their Ryanair photos (#RyanairFotoFriday) and the best one is chosen as our profile pic for the week. We’ve also run a number of competitions. The interaction with our customers has helped create a positive vibe, which is evident in the feedback they post, and we also like to have fun with them, which is an essential element of social media.

Not at present, however, we are considering a number of new platforms to incorporate into our new website, which will be launched in the coming months.

What has been your most successful social media initiative so far?

Do you participate in social media in markets outside of the UK and Ireland, and in different languages? At the moment, we only operate in English, although a large proportion of our followers are from non-English speaking countries. We plan to expand our social media reach into specific markets as we grow our sales and marketing teams.

How many downloads has the Ryanair app had since it went free in October? I don’t have that statistic – however, we are working on a brand new state-ofthe-art app, which we hope to launch in the summer.

Have you promoted any route announcements or launches via social media? Yes, all of them. All Ryanair news is announced via Twitter first.

Twitter has proven remarkably successful, particularly in the area of customer communications. Customers can now contact our care team directly on Twitter and have their issues resolved almost instantly. It’s been incredibly useful for updating customers with weather or air traffic control delays or flight issues, and it’s also been a way of announcing customer service improvements. YouTube videos have also helped inform our customers of these changes, such as allocated seating, in a practical and demonstrative way.

ROUTES NEWS 3, 2014

Events essentials

FE B

APR

JUN

JUL

SEP

esse ntial s

MAR

Routes Silk Road carves regional focus

even

Routes Silk Road will connect route planners from the CIS, Central and Eastern Europe, Middle East and Asia, this year taking place in Tblisi, Georgia, from July 6–8.

bilisi, the beautiful old capital of Georgia, will host Routes Silk Road, which is expected to attract about 250 delegates. Hosted by United Airports of Georgia LLC, a 100% state-owned enterprise, it is being held instead of Routes CIS and will offer airports, airlines, tourism authorities and other stakeholders a key new platform in which to do business and improve air transport networks. As the state airport authority, UAG owns all airports in the country, which include one domestic and three international airports. Over the past eight years, all of UAG’s airport terminals have been fully rebuilt and its airport infrastructure modernised. Georgia has also seen rapid passenger growth in recent years. Kutaisi International Airport was opened in September 2012 and is the first low-cost airport in the whole region, focused on attracting low-cost carriers and facilitating tourism development in the country. “We are privileged to host Routes Silk Road 2014 in Tbilisi,” says Minister of the Economy, Giorgi Kvirikashvili. “It is a unique opportunity for Georgian airports, airlines, tourism authority and their stakeholders to further develop its

ROUTES NEWS 3, 2014

business and expand the network. “I believe Tbilisi is a perfect location for this event and it will be a great experience for all attendees. The From left: Irakli Nasidze, head of business development division, United fact that Georgia is Airports of Georgia; Ketevan Aleksidze, CEO, United Airports of Georgia; hosting such an event Katie Bland, director Routes, UBM Live; and Gerard Brown, head of future underlines the great hosting, Routes, UBM Live. dedication of our community, and promote the country as country to the industry, an important geographical location. as well as reflecting our aspiration to turn Georgia’s airports have experienced Georgia into a regional hub, in the future, a 30% upturn in passenger traffic since as one of the important points of 2012, with further growth expected the historic Silk Road.” this year. New infrastructure “The passion and commitment of UAG’s CEO, Kate Aleksidze, notes: the United Airports of Georgia and its “In recent years, Georgia has seen stakeholders impressed our selection unprecedented growth in passenger and team and we are thrilled that Routes Silk tourism numbers, but we are more than Road will take place in Georgia,” enthuses equipped to cope with rising demand, Adrian Newton, group director, transport as we have completed some major and technology at UBM Live. infrastructure development projects in the “Georgia connects the important last few years. We look forward to showing economic regions of Europe, the Newly them off to the visiting international Independent States (NIS), Turkey, the community when we host Routes Silk Caucasus and Central Asia. As such, Road in July.” it is the ideal location for Routes The event promises to help its host Silk Road, and one we are very much deliver on its objectives to raise awareness looking forward to sharing with the of the destination to the global aviation broader airline and airport community.”

routes-news.com

Events essentials Routes Europe 2014

Marseille, France 6-8 April 2014

Routes Silk Road 2014

Tbilisi, Georgia 6-8 July 2014

Routes Africa 2014

Victoria Falls, Zimbabwe 22-24 June 2014

World Routes 2014

Chicago, Illinois, USA 20-23 September 2014

Strategic partnership with UNWTO

Routes and the World Tourism Organization (UNWTO) recently agreed to work together more closely to advance the understanding of all matters that concern air connectivity and travel facilitation, and their newly created Silk Road Task Force will meet during the event. It is hoped that the partnership will provide Routes with the opportunity to strengthen and grow its relationship with UNWTO, of which it is an affiliate member. In terms of the Silk Road Task Force meeting, it is expected to bring together key representatives from Silk Road destinations, United Nations agencies, the private sector and associations to discuss and plan priorities. Raising tourism profiles, driving sustainable and responsible development within the region, and enhancing co-operation between Silk Road countries are some of the key issues that will be addressed during the meeting.

Tourism growth

International tourism to Georgia Mosi-oa-Tunya, and Tbilisi (the smokehas soared in recent years, thatmost thunders). with visitors coming from Turkey and Armenia.

routesonline.com

Tblisi has been a crossroads for trade between Europe and Asia for centuries. Today it is a modern capital city.

Tbilisi has helped connect Europe and Asia for over 1,600 years, and the combination of its past, reflected in the many historic buildings found around the city, and warm and welcoming population of 1.2 million, led to it being voted Europe’s safest city in 2012. Indeed, in Georgian tradition, hospitality is fundamental to the culture and guests are considered to be “a gift from the gods”. In total, Georgia boasts 12,000 historical and cultural monuments, 14 nature reserves, eight national parks and 2,400 springs.

In addition, Georgia is one of the world’s oldest Christian countries and widely believed to be the birthplace of the first European civilisation, courtesy of the discovery of 1.8 million-year-old human remains in the foothills of the Caucasus Mountains. Located at the crossroads between Europe and Asia, Georgia connects several economic regions including Europe, the Newly Independent States (NIS), Turkey, the Caucasus and Central Asia region.

ROUTES NEWS 3, 2014

Events essentials

Routes Africa thunders into Zimbabwe Routes Africa is heading to Victoria Falls in Zimbabwe in June this year, hosted by the Civil Aviation Authority of Zimbabwe. The event is expected to attract about 300 delegates, including representation from 40 airlines. This annual event is the only network planning event where airlines, airports and tourism authorities meet to discuss route development for the entire African region. With more than 600 route development meetings

Mosi-oa-Tunya (‘the smoke that thunders’).

taking place over three days, the event offers an unrivalled platform for airlines and airports to do business face-to-face with the key decision makers in the industry. “Routes Africa 2014 will be the experience of a lifetime with the fantastic hospitality of the Zimbabwean people and the chance to see firsthand one of the seven natural wonders of the world, the majestic Victoria Falls,” said O.M. Mpofu, Minister of Transport & Infrastructural Development for Zimbabwe. Victoria Falls is a resort town accessible by road or air and located on the southern bank of the Zambezi River at the western end of the Victoria Falls. The falls have been deemed sacred by the local Tonga people and are known as the Mosi-oa-Tunya (‘the smoke that thunders’). The natural wonder of the world is shared by Zimbabwe and Zambia and is the region’s prime tourist attraction. The town of Victoria Falls is part of the UNESCO World Heritage site and the Victoria Falls green belt.

Scotland lands a Routes Europe first Routes Europe will take place in the United Kingdom for the first time in 2015, when the event takes place on April 12-14 in Aberdeen, hosted by Aberdeen City and Shire. Aberdeen is the gateway to Scotland’s castle and whisky country. The city is within 15 minutes of the stunning countryside that surrounds Aberdeen, and is also the capital of the Grampian Highlands with the majestic Grampian Mountains and unspoiled coastlines. Routes Europe is the region’s largest route development forum and the largest of the Routes regional events.

Stands snapped up for World Routes Airports and destinations are snapping up World Routes sponsorship packages and exhibition space. World Routes will take place in Chicago on September 20-23 and hundreds of airports and airlines have already confirmed their attendance at the event. A stand at the event can boost exhibitors’ image and credibility to the world’s airlines. About 170 exhibitors are expected at the 20th World Route Development

ROUTES NEWS 3, 2014

Forum this year and 65% of stands have already been sold. Sponsorship packages are another way to boost your brand visibility at the event, and options still available include the Monday Lunch, which offers an opportunity to address the entire Routes audience, delegate folders, Routes Marketing Awards and Route Exchange Theatres. There are a range of exhibition and sponsorship packages available to suit all budgets. Visit routesonline.com for more information.

routes-news.com

p o t e h t m o r f w ie V NAME JOB TITLE ORGANISATION WEBSITE HEADQUARTERS MEMBERSHIP

ue What is the economic val vices ser air al ion reg of or impact ? in Europe ng feed Regionals, whether providi al points ion reg from s to major hub oint o-p nt-t poi e nich ng or providi nities mu com the to l vita services, are they offer. they serve and the routes of great As an industry, regionals are d to keep economic value and we nee reminding people of that. llenges What are the biggest cha Europe? in s ine airl al ion facing reg regionals, The whole industry, not just nge continues to evolve and cha llenges cha the of One . rate at a rapid p pace for ERA’s members is to kee vices ser r offe and nge cha with that ses need. that consumers and busines ly coming Europe appears to be slow and ERA out of a protracted recession l with a members also have to dea fidence. con er sum con of general lack

SIMON McNAMARA Director general

Association (ERA) European Regions Airline YEAR FOUNDED 1980 www.eraa.org Surrey, United Kingdom ate and affiliate members 50 airlines and 120 associ

ing and find new business. Hav is a re the rm, weathered that sto pite des t, tha sense of optimism regions continuing tough conditions, t and rke ma the fulfil a vital niche in future. the into so will continue to do ions In which countries or reg ? ter bet ing are regionals far and ts cas Generally, the fore er predictions are that the high be seen will s rate percentage growth el. trav the further east you

re Is it likely there will be mo tions rup air traffic strikes and dis this year? nagement Yes, it is likely. Air traffic ma g (ATM) in Europe is undergoin e Som . change and modernisation s rea whe see that as a threat to jobs, to it is actually an opportunity t has modernise an industry tha years. changed little in the last 30 to ds ERA’s view is that ATM nee cult diffi modernise, and there are to n decisions that must be take achieve that.

Would more consolidation al between European region the for e itiv carriers be a pos industry as a whole? s and I think that network carrier re mo see will low-cost carriers als. ion reg n consolidation tha d of Within Europe, there is a tren of up gro e cor consolidation to a st -co low and k dominant networ will s one ker wea carriers, and the als, ion Reg re. face a tough futu How would you describe lved. however, in general, have evo al the health of the region s in vice ser of ge They provide a ran oint airline industry? o-p nt-t poi e nich their own right as ionals It’s a positive picture. The reg to s der fee as act carriers, and also n through in business today have bee vices and network carriers, ACMI ser five probably the most challenging cation rsifi dive ad hoc charter. This and years in both the industry’s that ans me risk and spreading of s. Europe’s economic historie ht. brig their future looks pt They have had to change, ada

ROUTES NEWS 3, 2014

for What are ERA’s priorities the rest of the year? ent With a new European Parliam jor ma and Commission in 2014, a eral sev off focus will be to try to close t tha ion important pieces of legislat ude incl ERA is lobbying on. These ns passenger rights and emissio ying trading. In addition to its lobb be activities, the association will strategy working hard to deliver the r. agreed by members last yea ses The agreed strategy focu and ERA’s work around promoting tion ocia ass communicating what the as l and its members do, as wel to providing a forum for them from n exchange information, lear er. and network with each oth

routes-news.com