Routes News 3 2015 by routesnewsmagazine

ROUTES NEWS ISSUE 3 VOLUME 11 2015

routesnews ISSUE 3 VOL 11, 2015

The world air service development magazine

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Recipe for success

British Airways’ Keith Williams INTERVIEW:

ERA’s Simon McNamara

REPORT:

Rome’s intermodal plans

ANALYSIS:

The perfect presentation THE WORLD AIR SERVICE DEVELOPMENT MAGAZINE

routes-news.com Report:

Airports:

Airlines:

Focus on:

Plus:

The impact of low fuel prices

Bahrain, Cologne Bonn and Atlanta

Croatia and Frontier

Texas, Dallas/Fort Worth and Houston

World news and Event essentials

Foreword EDITORIAL Graham Joe Bates, Newton, Group Editor +44 (0)208 831 7507 Editor joe@aviationmedia.aero +44 (0)208 831 7560 graham.newton@routes-news.com Jonny Williamson, Senior Reporter +44 (0)208 831 7560 Joe Bates, jonny.williamson@routes-news.com Group Editor Justin Burns, +44 (0)208 831Reporter 7507 +44 (0)208 831 7508 joe@aviationmedia.aero justin.burns@routes-news.com

SALES

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

PRODUCTION

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Aberdeen is a great location for an event. It is not on the usual conference circuit but that just makes it all the more appealing.

outes Europe is going to be busy. Meetings about new air services are sure to be tempered with comments about the overall state of European aviation. This issue of Routes News examines the topic in some detail. We get expert comment from two leading airline CEOs. Keith Williams from British Airways (page 16) and Krešimir Kučko from Croatia Airlines (page 57) talk candidly about some of the challenges facing Europe’s carriers. We carry on that theme in the interview with European Regions Airline Association’s managing director, Simon McNamara (page 20) and in the article on the forthcoming EU Aviation Package (page 47). It is certainly a critical time for Europe’s airlines. Traffic is picking up but that has only served to highlight a number of challenges, from capacity bottlenecks to prescriptive regulations. A new EU Transport Commissioner has raised hopes of progress on all fronts but, as in the US, there is a danger of the aviation debate becoming mired in an argument about the Gulf carriers. We also examine another important industry topic; fuel. It is impossible to predict the future price of oil but we look at the factors coming into play (page 48). It is a critical issue for route development. Lower fuel costs should allow airlines to invest in their fleet. And new fleet could mean new airline services for airports – the core of Routes events. We explore the best way to approach an airline. The perfect

presentation (page 34) may seem like a lofty goal but it’s more achievable than you think if you follow some sound advice. Some airports certainly have plenty to shout about. Rome is a major European hub with extensive development plans (page 27). The article explores just one aspect of those plans, the train connection to downtown and beyond. It is a paradigm shift for the airport with important ramifications for route development. There are two major airport CEO interviews to enjoy. Atlanta is the world’s busiest gateway and we talk numbers with Miguel Southwell (page 51). Bahrain Airport may be smaller in scale but is equally ambitious (page 43). Mohamed Yousif Al-Binfalah gives details of the planned state-of-the-art terminal. Bahrain is also the location of our next event, Routes Middle East and Africa. Be sure to register now for what will definitely be a popular show. In the meantime, enjoy Routes News and I look forward to seeing everybody in Aberdeen. Safe flying! Editor Graham Newton

KEEP IN TOUCH

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ROUTES NEWS 3, 2015

Contents

8 World News

20 High hopes

Simon McNamara, director general of the European Regions Airline Association, remains optimistic about the future of air travel in Europe despite considerable challenges.

15 Cargo News 16 Recipe for success

Keith Williams, chief executive of British Airways, talks new routes, new aircraft and the perfect airline CEO. Graham Newton reports.

25 Welcome to Aberdeen

2014 Highlights for Aberdeen International Airport.

27 Seize the day

Rome Fiumicino’s new intermodal product opens up a world of opportunities.

31 New Frontier Barry Biffle, president, Frontier

Airlines, talks route development strategy and US market dynamics.

34 Don’t show a catchment map!

Nigel Mayes, ASM senior vice president consulting and product development, and Mike St-Laurent, senior consultant, explore the perfect presentation.

39 Airport one2one Cologne Bonn Airport’s Ulrich Stiller.

40 Texas

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ROUTES NEWS 3, 2015

Contents

40 Bigger is better

The sheer size of the Texas market makes it a magnet for air service.

43 Bold ambitions

Bahrain International Airport’s new state-of-the-art terminal is set to make a big impression on passengers and significantly enhance airline operations, writes Joe Bates.

47 The crystal ball

A new EU Aviation Package, due at the end of 2015, could bring a paradigm shift in policy.

48 Good to the last drop?

Krešimir Kučko, CEO, Croatia Airlines, says the airline will succeed with a little help from its friends. Interview by Graham Newton.

Oil prices may have slumped but airlines cannot assume the trend will continue.

60 Routes Asia report back

51 Life at the top

67 Event essentials

What next for the world’s busiest airport? Hartsfield-Jackson Atlanta International Airport’s aviation general manager, Miguel Southwell, talks to Joe Bates about his plans and ambitions for the gateway.

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

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57 Partnering for success

The HUB, your weekly, central source of information for everything related to Routes and Routesonline, is delivered to your inbox every Friday. It includes event updates, airline and airport profiles and news and analysis. Sign up to receive The HUB at www.routesonline.com/register/

ROUTES NEWS 3, 2015

World news

Historic flight for Solar Impulse Solar Impulse’s ground-breaking flight around the world using only solar power has begun. The aircraft took off from host city, Abu Dhabi, on 9 March en route to its first stop in Muscat. The aircraft has two stops in India and then will travel via Myanmar, China and the United States before heading to Europe. Piloted in turns by Bertrand Piccard and André Borschberg, the Solar

Allegiant will introduce routes to Raleigh-Durham, Myrtle Beach and Memphis from Orlando Sanford International Airport, beginning in May. Also in May, Branson AirExpress – operated by Orange Air – will begin services from the airport to Cancún. Etihad Airways’ A380 service to New York’s JFK International Airport now features “The Residence by Etihad”, the airline’s First Class, private threeroom suite – a first in commercial aviation.

ROUTES NEWS 3, 2015

Impulse is designed to fly continuously day and night powered only by sunlight collected by solar cells and stored as electricity in onboard lithium batteries. The aircraft will travel 35,000 kilometres over the course of its journey without using a drop of fuel. Sheikh Aimen Ahmed Al Hosni, general manager of Muscat International Airport said: “The technology behind this incredible

Iraqi Airways has two new services from the UK’s third biggest airport, Manchester. The airline now flies weekly to Sulaymaniyah and Erbil using a brand new Boeing 737-800 with capacity for 162 passengers. Spirit Airlines will offer daily non-stop service between Baltimore/ Washington International Thurgood Marshall Airport and Hartsfield-Jackson Atlanta International Airport and Los Angeles International Airport.

machine inspires all Omanis – young and old – to embrace sustainable and renewable energy for the benefit of future generations.” The journey is expected to take approximately 25 flight days spread over five months, with the aircraft travelling at speeds of up to 100 kilometres per hour during the day and flying at slower speeds at night to prevent the batteries from draining too quickly.

Southwest has gone international at Houston Hobby Airport, now serving Aruba. Turkish Airlines has added new flights to San Francisco, which becomes its 11th destination in the Americas. The flights will be operated from Istanbul, five times a week. Iranian airline Mahan Air now connects Tehran with Munich three times a week. Mahan Air also offers connections from Tehran to Bangkok, Kuala Lumpur, Shanghai and Guangzhou.

The Iberia Group is beefing up its services from Madrid to Marrakesh with a daily service using Airbus A320s and A321s. The flights are timed to offer good connections with flights to/from London Heathrow. ECAir, Equatorial Congo Airlines, the national airline of the Republic of the Congo, has inaugurated a Brazzaville-Dakar via Bamako route. The new route represents a strategic step in the company’s expansion process.

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New incentives in Portugal Portuguese airport operator, ANA, has launched a new incentives programme to support airlines which, in a sustained manner, contribute the most to traffic growth and the development of the network of destinations at national airports. The new programme is clearly aimed at supporting new routes, frequencies

and seats but, at the same time, provides marketing support, partly in collaboration with Turismo de Portugal through a protocol signed on 23 February 2015. The programme went into force at the end of March. Specifically, it will support an increase in operating

The connected passenger

According to The Future is Personal, the latest industry report from SITA, 97% of airline passengers carry at least one personal electronic device. Even so, global usage rates indicate passengers have been slow to adopt new airline and airport mobile services when travelling. The global rollout and adoption of new technologies is proving to be slower and more complex than was anticipated. Though half of passengers are keen to use their mobiles to find their way around the airport, access lounges or the aircraft, provide identification at checkpoints, or make payments, 24% of passengers have not yet used travel apps at all on their journey. “At a glance, airlines and airports might be discouraged by the slower than expected global usage rates but this hides the huge success that some airlines and airports are experiencing,” said Nigel Pickford, director market insight, SITA. “Our analysis has shown that the successful outliers, be they airports or airlines, are focusing on providing excellent customer service experiences that their passengers want. They are harnessing new technologies to give personalised services at the right moment of the journey.” SITA’s industry insights are based on research carried out directly with more than 6,000 passengers at 106 airports, flying with airlines that together carried more than half the world’s passenger traffic.

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efficiency (more passengers with the same number of movements) as well as more frequencies and new routes. These incentives will not apply to Lisbon, where only a system of marketing support to promote demand will be applied.

Air Seychelles making money Air Seychelles has posted a third consecutive year of profitability after recording a net profit of $3.2m for 2014. The result reflects continued improvement in the airline’s key performance indicators, following Etihad Airways’ acquisition of a 40% share in 2012 and the implementation of a turnaround plan to create a sustainable business. “Our strategy is to use Seychelles’ unique position in the Indian Ocean to capture the strong travel flows between East Africa, the Western Indian Ocean, the UAE and the Indian Subcontinent,” said Air Seychelles’ CEO, Manoj Papa. “For example, the strong growth in passenger numbers from Mumbai to other destinations on our network shows this approach is working.” Air Seychelles has codeshare agreements with five international partners giving travellers access to 45 destinations across 28 countries on five continents, with more planned. During 2014, available seat kilometres increased 27% following the delivery of an Airbus A320 and two DHC-6 Twin Otters, to complement the Airbus A330-200 that flies the longhaul routes to Paris and Hong Kong via Abu Dhabi and Johannesburg. “These leased aircraft were made possible because of the relationship with Etihad Airways,” Papa said.

ROUTES NEWS 3, 2015

World news

Delta and Virgin Atlantic expand partnership Six new trans-Atlantic daily services are being offered by the Delta-Virgin Atlantic partnership. New or expanded services to Atlanta, Detroit, Los Angeles, Philadelphia and San Francisco all feature on the summer schedule. In total, the joint venture offers 39 return trans-Atlantic flights a day between the UK and 15 destinations across North America. “The Delta and Virgin Atlantic partnership brings increased customer choice on the trans-Atlantic routes at London Heathrow, “ said Perry Cantarutti, Delta’s senior vice president of Europe, the Middle East and Africa. “The strength of Delta’s

network in the US and Virgin Atlantic’s at London Heathrow delivers a very strong network proposition, allowing customers in the UK to easily connect to 215 destinations in the US.”

Belfast slams APD review Belfast International Airport managing director, Graham Keddie, has expressed his disappointment with an NICEP Economic Impact Assessment into the continued application of UK Air Passenger Duty (APD) in Northern Ireland. “This report fails to acknowledge the blatant and unique geographic challenge faced by Northern Ireland in UK terms, ironically at a time when both Scotland and Wales are pressing their case to have powers over Air Passenger Duty devolved,” he said. “The Dublin Government, in keeping with other national governments across the length and breadth of Europe, has recognised the economic folly of taxing travellers and visitors, and has taken timely steps to remove air tax and radically reduce other taxes on the hospitality sector. Furthermore, Dublin vividly recognises the opportunity which the continued air tax levy in Northern Ireland offers them to grow business directly to Northern Ireland’s economic detriment.

“Northern Ireland needs direct access from the outside world. If visitors do not touch down on our runways, by definition they spend much less of their overall time in the region. This results in thousands of jobs in the air transport and hospitality sectors being jeopardised or simply not realised. “We know there are airlines with available aircraft who will move swiftly to grow our network of direct air services, offering highly attractive fares to encourage international visitors to experience Northern Ireland. However, the continued application of APD is the most visible deterrent to securing their commitment and, while APD in Northern Ireland persists, they will choose more lucrative opportunities elsewhere. “In that regard Northern Ireland’s failure to transmit an unequivocal ‘open for business’ message is simply a high-profile lost opportunity.”

Miami pushes for Asian connection In March, Miami-Dade’s aviation director Emilio González travelled to Taipei, Taiwan, to hold a series of one-onone meetings with key Asian airline executives and government officials to discuss Miami-Asia passenger services. His agenda included meetings with China Airlines and EVA Air. The official visit was just the latest step in Miami International Airport’s long-term effort to establish the MiamiAsia travel connection. “I applaud director González and his team for taking the initiative to directly pursue air service that connects our community to the massive Asian market,” said MiamiDade County Mayor, Carlos Gimenez. “Expanding international trade, tourism and business are priorities of my administration and these outreach efforts are right in line with those goals.”

flydubai hits new heights Gulf carrier, flydubai, has reported a net profit of $68 million for 2014, an increase of 12.3% compared with 2013. Total revenue was $1.2 billion. The airline added 23 new routes, creating a network of 86 destinations,

ROUTES NEWS 3, 2015

and also increased frequency on many of its existing routes. The latest destinations to get improved services include Juba, Bujumbura, Zanzibar and Alexandria. The airline now operates some 1,400 flights per week.

All aircraft delivered since August 2013 have been configured with business class. Eight new Next-Generation Boeing 737-800 aircraft were delivered to flydubai in 2014, bringing the fleet to 43 aircraft.

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On the

move

Ulf Hüttmeyer

New airline in Malaysia Malaysian start-up, flymojo, has signed a Letter of Intent for up to 40 Bombardier CSeries aircraft. The airline, which will be based out of Johor Bahru and Kota Kinabalu, is expected to become the first customer and operator of the CS100 aircraft in the region. “With flymojo’s primary hub at Senai International Airport and secondary hub in Kota Kinabalu, the airline’s ultramodern fleet of CS100 aircraft will play a key role in improving connectivity between the Peninsula and Sabah

and Sarawak, as well as other parts of the region,” said Deputy Minister of Transport, Datuk Aziz Kaprawi. “In addition, as the only airline utilising the Southern Corridor as its headquarters, flymojo will transform Senai into a key regional aviation and logistics hub – augmenting the government’s initiatives in developing Iskandar Malaysia and the Southern Corridor. Further strengthening Kota Kinabalu’s standing as a gateway into Malaysia, flymojo will also boost tourism into Sabah and Sarawak,” he added.

Montréal spreads its wings Aéroports de Montréal (ADM) has announced several new air services from Montréal–Pierre Elliott Trudeau International Airport. New destinations in Europe include Budapest and Venice while many other European cities will benefit from an increase in frequency. Elsewhere, Air Canada will launch a new service to Mexico City with five weekly flights. New services will also be offered by Cubana (Cienfuegos and Holguin), Sunwing (Camaguay and Freeport), and Air Transat (Samana and Fort-de-France). Flights have also been added to several locations in the domestic and trans-border markets, including

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Edmonton, Moncton, Fort Lauderdale, Las Vegas, Los Angeles and Orlando by Air Canada, and New York–JFK and New York–LaGuardia by Delta. Overall, travellers can choose from a total of 105 non-stop destinations. Compared with 2014, carriers serving Montréal–Trudeau will offer 5% more seats, including 6% more seats to Europe, this summer. “We are pleased to note that air service from Montréal, already highly enviable, continues to improve in 2015 without counting other flights that could be added to the schedule in the next few months,” said James Cherry, president and CEO of ADM.

Etihad Airways has announced Ulf Hüttmeyer as its senior vice president, finance equity partners. Hüttmeyer joins Etihad from airberlin where he held the position of chief financial officer. “Etihad Airways has minority equity investments in eight airlines around the world and therefore it is vital that we build strength and depth in the financial strategy team to work with these partners on maximising the potential synergies and mutual benefits,” said James Hogan, Etihad Airways’ president and CEO. CEO Wolfgang ProckSchauer left the airberlin group Management Board on 28 February 2015 at his own request. Heinz-Peter Schlüter has also stepped down from the board of directors and is replaced by Dr Alfred Tacke. Lars Sandahl SØrensen is returning to SAS as its new group director and chief operating officer. He previously worked for the airline as group director for commercial. Emirates will recruit 11,000 staff in 2015, a 6% increase in its workforce. Ajith Dias is the new chairman of SriLankan Airlines.

ROUTES NEWS 3, 2015

Cargo news

Finnair Cargo joins IAG Cargo programme

Finnair Cargo has become the latest carrier to join IAG Cargo’s innovative Partner Plus programme. The partnership allows IAG Cargo and Finnair to deliver enhanced network connectivity to their customers, who will also benefit through confirmed bookings and a higher on-load priority. Steve Gunning, CEO of IAG Cargo, commented: “Our Partner Plus programme is much more than a standard interline programme where capacity is usually only held for partners on a standby basis. Rather, this is a hugely cost effective means of

growing our network reach through commercially active agreements where we aim to treat our partners’ cargo as we would a customers’. The addition of Finnair to the programme will provide IAG Cargo with additional capacity across the globe, including to strategic destinations in the Asia Pacific region. Finnair’s customers meanwhile will benefit from IAG Cargo’s network strength into the Americas and Africa. In total, six carriers now form the Partner Plus programme including Qatar Airways, Japan Airlines, the Avianca group and American Airlines.

Cargolux and Oman Air join forces Cargolux and Oman Air have signed an agreement that allows the Luxembourg-based carrier to develop its sea-air trade through Omani ports while also benefitting the local carrier and economy. Cargolux will now fly from luxembourg to Chennai via Sponsored by

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Muscat, using Oman Air’s facilities at the Omani capital. It plans to add other Indian destinations in 2015 and also intends to connect Muscat with other regions. Oman Air will also provide Cargolux with access to the belly capacity of its passenger fleet.

DHL going strong in Africa DHL has scooped the award for Africa’s International Freight Forwarder of the Year. The International Award for Excellence in Air Cargo was voted by STAT Times’ readers worldwide. DHL also won the title of International All Cargo Carrier of the Year for Africa. “DHL has been supporting business in Africa for more than 35 years but what’s most important is that we have continued to anticipate, adapt and create services that clearly meet Africa’s fast evolving business needs and help fulfil its vast potential,” said Roger Olsson, CEO, DHL Global Forwarding Sub Saharan Africa. IATA statistics show that African carriers’ freight tonne kilometres (FTKs) grew 12.2% in December, 2014 and 6.7% for the year as a whole. Globally, the air cargo business is growing again after several years of stagnation with demand growth up 4.5% compared with 2013 measured by freight FTKs.

Halifax record

Halifax Stanfield International Airport posted a record-setting year for air cargo in 2014, with over 32,000 metric tonnes shipped, up 8.5% over 2013. A big part of Halifax Stanfield’s cargo activity is fresh lobster and seafood exports, and demand is growing. In the last five years, Canadian live lobster exports to Asia have grown 428%. Several carriers transport seafood from Halifax Stanfield including Air Canada, CargoJet, FedEx, UPS, Purolator and Korean Air Cargo. Two trade agreements have positive potential for lobster and live seafood exports. The first is a pending agreement for a Comprehensive Economic and Trade Agreement between Canada and the European Union. The second agreement is a new Canada-South Korea free trade agreement.

ROUTES NEWS 3, 2015

Keith Williams, chief executive of British Airways, talks new routes, new aircraft and the perfect airline CEO. Graham Newton reports.

ROUTES NEWS 3, 2015

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British Airways How was 2014 for the airline? Are you optimistic that the industry is returning to steady growth and profitability? It was a good year for British Airways. It started well with the strength of our brand being recognised when we won the Consumer Superbrand for 2014 – beating the likes of Apple, Coca Cola and BMW. Other things that stand out for me are the sheer scale of aircraft delivery and change. We received 22 new aircraft and changed the cabin configuration of 51 A320s. This stands us in good stead for 2015 and was a vital pre-requisite for continuing growth at the airline. We launched six new routes from Heathrow, five from London City and four from Gatwick and we carried more customers than in any year since 2001.

requirements that need to be in place to make the route a success. Our route to Austin illustrates this quite nicely. We started operating there in March 2014 after extensive investigations. This route is doing very nicely and we are pleased with its performance. In terms of our wish list destinations, well, that would have our competitors rubbing their hands with glee! However, we’ve made no secret of the fact that we’re interested in the emerging economies and always looking for opportunities to add to our network.

What are your priorities for 2015? In short, making sure we deliver on our promises and fulfil our profitability targets in both long and short-haul. We have exciting opportunities to increase profitable flying from all our London airports and to work together to really focus on delivering a punctual, reliable operation and outstanding customer service. Life in today’s globalised economy doesn’t allow anyone to rest on their laurels. The journey toward establishing and maintaining a consistently successful business has no finishing post. Change is the new constant.

Tell us about your route development strategy. What is working well and what destinations are on your wish list? Our route development strategy is, on paper, quite straightforward. We analyse the markets we don’t currently serve and look at what our customers and competitors are doing. We then crunch the numbers and analyse the commercial and operational

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similarly benefit our partners. We need only look at the previously mentioned route to Austin to illustrate this: American Airlines customers now have a direct link from Austin to the UK and beyond with the start of this new route.

Are the A380s and B787s performing as well as you hoped? Introducing new aircraft can be challenging and the B787 and A380 arrived just days apart. But we’ve been pleased with their performance. We’ve had some excellent customer feedback, particularly for the A380, and we continue to introduce the 787 on new routes to great acclaim. This year, we will be introducing one new A380 to our fleet and five 787s – including our first 787-900, which will boast one significant addition; our next generation First cabin.

Give us an insight into the infrastructure at Heathrow – what does T5 give you and what does the lack of a third runway take away?

Keith Williams

How does the alliance and your various partnerships affect the way you develop your network? Being part of an alliance is essential to expanding the BA network while retaining our customers. It means that customers can continue to be rewarded for their loyalty to us while flying on partner flights to destinations, which are not in sufficient demand for us to fly to directly. A good example of this is the codeshare we announced with our oneworld alliance partner Qatar Airways last year. We have put our code back into Pakistan and Tanzania via Doha, both places to which we no longer fly. And it works both ways – any expansion of our direct flights will

Terminal 5 is a wonderful facility – and it’s not just us that thinks so. It is the current holder and five-time winner of the Skytrax best terminal award. While Heathrow has lost ground to competitor hubs such as Dubai, it still remains one of the busiest airports in the world and despite its well documented shortcomings, we make the best of it. Yes, its lack of runway capacity makes it vulnerable to disruption after even minor incidents but with IAG’s acquisition of bmi, we still have growth potential. We have always said that there is an overwhelming need for additional, affordable hub capacity in south-east England. This is imperative if the UK is to maintain its position as a leading global competitor. However, what we are lacking is the political conviction to act in the national interest and expand capacity where it is most required, and at a price that is worth paying.

ROUTES NEWS 3, 2015

British Airways

We want value for money for all our passengers and we want to get an excellent service for our considerable outlay

At least progress has been made on airport charges at Heathrow. What is your relationship with the airport like? As a tenant of the world’s most expensive hub airport, we are always going to be a demanding customer. We want value for money for all our passengers and we want to get an excellent service for our considerable outlay. Having said this, we have a good working relationship with Heathrow – this is an essential pre-requisite for achieving our needs.

How important is Gatwick to your strategy? Our operation at Gatwick is on an upward trajectory, even in the face of stiff competition. We have put the foundations in place for sustainable growth, with new routes and new aircraft. Customer numbers are growing and we’re making huge strides towards a more competitive cost base. By the end of 2016, we will have a new home in the airport’s South Terminal – this is an exciting opportunity for us to ensure our customers have state-ofthe-art facilities as well as direct access to trains that run to and from central London. Gatwick is our second biggest base and, as such, it is hugely important.

Air Passenger Duty (APD) in Scotland will be halved before being abolished entirely. Where does this leave the rest of the UK? The Scottish Government has got it right. It is estimated that APD costs Scotland £200 million per year in tourism alone.

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APD is a ridiculous tax and the sooner it is abolished, the better. And it’s not just tourism that’s affected – trade connections and wealth generation is curtailed by this self-defeating tax. But removing or reducing APD from Scottish airports would see passengers travelling across the border from northern England to take advantage of cheaper air fares. This will distort competition and you would see airports in Newcastle and Manchester demanding similar freedom from APD. And the Welsh Assembly would want it for Cardiff, which would upset Bristol. There could be a domino effect that starts in Scotland and ends in Westminster with a total wipe-out of APD – an Absolutely Pointless Duty.

Does the UK government understand the value of aviation? Why is there is no coherent aviation policy? The value of aviation is quite clear to anyone who wants to listen. It is a sector which contributes £52 billion to UK GDP, pays nearly £9 billion in tax and supports upwards of 200,000 jobs. It is also an industry that is acutely aware of its responsibilities, particularly towards the environment. However, it seems to have become a political hot potato that successive governments are reluctant to encourage, unlike virtually every other national government. Nevertheless, we will continue to beat the drum for aviation, delivering a great service for our customers, all the while seeking ways to improve our environmental and financial performance.

Tell us a little bit about the British Airways brand. Do you keep it consistent across the globe and multiple platforms or do you take a “horses for courses” approach to each market? Our brand values are not diluted or changed to fit different markets for the simple reason that they are universal: To Fly. To Serve. These words describe the passion and expertise that we demonstrate to our customers every day, everywhere. Of course, certain aspects of our marketing or communication are adapted to suit different countries and cultures – for example, food and drinks choices, social media platforms, and new technology roll-out. But our core standards and iconic British style remain the same.

What makes a good airline chief executive officer? Do you think it is important to have specific knowledge of the aviation industry or is it the same as running any other business? One part soothsayer, one part financial whizz kid, plenty of customer insight plus a dash of optimism – and you’ve got your perfect airline CEO. Aviation is not the same as any other business. It is very heavily regulated, there are severe restrictions on where you can trade, it is uniquely vulnerable to external shocks and, historically, profit margins are low. That’s why the optimism helps!

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High hopes Simon McNamara, director general of the European Regions Airline Association, remains optimistic about the future of air travel in Europe despite considerable challenges.

anuary 2015, figures from the International Air Transport Association (IATA) show that European traffic grew 5% for the month, with capacity increasing 4.6% and load factors 0.3 percentage points to 77.7%. A good performance at first glance, following on from a steady, if unspectacular, 2014. Closer IATA analysis reveals a slightly different story, however. As with 2014, much of the growth has come from the LCC sector and airlines registered in Turkey, which has helped “overcome some of the impact on travel of the ongoing economic weakness in the region”. Simon McNamara, director general of the European Regions Airline Association (ERA), agrees that European air transport is struggling compared with other regions. “Air travel is sluggish because of the overall economic situation in the region rather than the industry,” he says. “But there are some positive signs.” The challenge ahead is to ensure those positive signs trickle through to the industry and become a torrent of encouragement in the years ahead. The scenario, though, requires a structural transformation of the European air travel sector.

Taxing problem

McNamara starts with the problem of taxation. Aviation taxes in Europe have often been couched in environmental terms but it is rarely the case that governments have ecology in mind. The UK Government, for example, started

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“Air taxes are arbitrary and just add to the cost of air travel,” says McNamara. “And it certainly isn’t fair for our members as they face competition from high-speed rail, which isn’t burdened in the same way.”

Hub capacity

Simon McNamara

out Air Passenger Duty (APD) as a green initiative but has latterly admitted that it is a straightforward cash-raising exercise. Either way, taxes fail to achieve their objective. “The evidence is out there that taxes don’t work,” says McNamara. “In the Netherlands, people were driving across the border to Germany to fly. The tax was quickly repelled when the government realised it was actually losing them money. Ireland studied the tax it imposed and also realised it was acting as a disincentive.” In Scotland, with responsibility for APD devolved to the Scottish Parliament, the plan is to reduce it 50% immediately and ultimately scrap it altogether. Austria is similarly evaluating its air transport levy with an estimated 3,300 jobs at stake.

The infrastructure issue is equally concerning, notes McNamara. Capacity constraints have made headlines continent-wide, from east to west, north to south. An IATA study predicts that by 2035, one in 10 people who wish to travel will not be able to do so because of airport constraints. That equates to more than one million fewer jobs and some €75 billion in lost GDP. A further €100 billion is at risk due to delays and productivity losses caused by poor connectivity. In some countries, action has won out against verbosity. Turkey again steps to the fore with the new Istanbul Airport, due to come online in 2017, already being touted as a benchmark for other governments and airport operators to follow. But such cases are rare. More common are endless studies and political manoeuvrings that seem purposefully designed to push a decision to a succeeding administration. The UK’s turgid debate over a third runway in the southeast of the country is an obvious example. McNamara is especially concerned with hub capacity. “We need to start the debate on new terminals and runways

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now,” he explains. “There should be a plan about where new hub capacity can be delivered because it will take at least 10 years to build.” A European vision needs to be translated to, and implemented on, the local level. Otherwise, says McNamara, his members – and their customers – will soon begin to suffer. “The first services to get squeezed are the regional ones because airports will favour those flights that handle the greatest number of passengers,” he says. “But regional services are an intrinsic part of hub airports too, bringing in and taking out traffic for the major carriers.” The implication is that, without hub capacity, the hub and spoke system and transfer traffic that still dominates the European network structure would fracture. And secondary airports would not come to the rescue. “They could help

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but they couldn’t solve the problem,” notes McNamara. “They are also becoming constrained, they rely largely on links to the hubs and they are secondary airports for a reason. They mainly serve secondary markets and so cannot greatly affect demand for capacity at hub airports.”

Fluid dynamics

Regional services face pressure on several other fronts. EU261 – the regulation concerning passenger rights – has been under review for the past five years. Economic woes, a new European Commission and various other bureaucratic meddlings have buffeted the process, but the expectation is that the revision will be published by the end of the year and implemented in 2016. One critical talking point is the focus on missed connections. Essentially, the proposed revision will put the

onus on the first carrier – usually a smaller, regional airline – making them responsible for compensation far in excess of the ticket price. The outcome, according to most analysts, is that regional services will cut interline links, disrupting network planning and destroying customer convenience. As it stands, the situation is still totally fluid and it is impossible to know what will be included in the final bill. But ERA will continue to argue the case against such a stipulation. It is also working with industry partners to force the EU to come up with a clear definition of “extraordinary circumstances”. McNamara explains the phrase crops up in some crucial clauses but it is not clear what would, or would not, be covered by this ambiguous language.

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â&#x20AC;&#x153;There is hope because we are working on a technical annex to provide some clarity,â&#x20AC;? he says. â&#x20AC;&#x153;So we already know that if a flight is delayed or cancelled because a pilot notices something on his walkaround before the flight then the airline isnâ&#x20AC;&#x2122;t liable. That is sensible because it is a safety issue.â&#x20AC;?

Environment deadline

Air traffic management has its safety implications, too, but the Single European Sky remains as elusive as ever. Two problems stand out; targets are weak and even then, they are not enforced. â&#x20AC;&#x153;The Commission must act as a policeman to enforce the targets and states must be more ambitious when they set these targets,â&#x20AC;? says McNamara. Its technical arm, Single European Sky ATM Research (SESAR) is making progress and ERAâ&#x20AC;&#x2122;s director general informs there are six projects underway that will increase productivity and traffic flow. â&#x20AC;&#x153;But we are now at a critical point and SESAR is beginning to mandate new technology,â&#x20AC;? he says. â&#x20AC;&#x153;We need to be sure these technologies are bringing

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the expected benefits and that these benefits outweigh the costs.â&#x20AC;? How ATM is managed will have an impact on the effect of any environmental legislation. Airlines the world over are awaiting the results of the next ICAO Assembly in 2016 when in theory a global market-based measure for emissions trading will be agreed by ICAO member states. ERA is heavily involved with the work going on behind the scenes to put the theory into practice. There is certainly a vested interest given Europeâ&#x20AC;&#x2122;s stance on the topic, which McNamara describes as previously â&#x20AC;&#x153;bordering on the fanaticalâ&#x20AC;?. At the moment, the European Emissions Trading Scheme is restricted to intra-EU flights. â&#x20AC;&#x153;European aviation is committed to environmental protection and we are playing our part,â&#x20AC;? he says. â&#x20AC;&#x153;But our members are just paying for big administration costs because it is thought about only 20% of aviation emissions over Europe are captured by the scheme. â&#x20AC;&#x153;But I am hopeful that we will get a rational, sensible approach to the topic whatever happens at ICAO.â&#x20AC;?

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European vision

The hope has its origins in a new European Commission and Parliament. A new Commissioner for Transport, Violeta Bulc, could provide the vision needed for air travel through an innovative â&#x20AC;&#x2DC;Aviation Packageâ&#x20AC;&#x2122;, promised by the end of 2015. McNamara says the knee-jerk reactions seen to date have originated in the failure of the Commission to see aviation as an enabler for economic growth. The Aviation Package could change that so long as it covers all aspects of the industry and doesnâ&#x20AC;&#x2122;t just focus on one particular issue, such as foreign airline competition. â&#x20AC;&#x153;I would really welcome a change in the political attitude towards aviation,â&#x20AC;? he concludes. â&#x20AC;&#x153;I want aviation to be seen in the positive light it deserves. Right now, there are few politicians in Europe who stand up for aviation. But there is an opportunity for a new generation of politicians to think differently about the industry. It is the start of a four or five-year political cycle and there is the potential to make a real difference, to build a stronger air transport industry.â&#x20AC;?

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Seize the day Rome Fiumicino’s new intermodal product opens up a world of opportunities.

ore than 43 million passengers (+6%) passed though Aeroporti di Roma’s Fiumicino (FCO) and Ciampino (CIA) airports in 2014 . Near enough 39 million of those journeyed through Fiumicino, 27 million of which were international travellers. Much of this success was built on the staples of a good growth strategy; new carriers and new destinations increasing the pulling power of the airport. Vueling, for example, significantly increased its presence at FCO. Establishing the airport as a second hub, Vueling has grown in the last two years to 55 connections. And though European traffic remains FCO’s bread and butter, few world cities

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remain out of reach of the Italian capital. New Delhi (Air India) was a fresh addition to the portfolio while frequencies were increased to Shanghai (China Eastern), Dubai (Emirates), New York (Delta), Montreal (Air Canada). The new-look Alitalia also promises much and has already improved Brazilian traffic. Moreover, it has added new flights to Germany and boosted its domestic services to maximise the role of FCO as its primary hub. In all, over 100 airlines operate regular flights from Rome Fiumicino, serving some 200 destinations across the world. Adding nearly 30 Italian connections to the mix confirms FCO as a strong European hub.

Grounded thinking

Typically, FCO has added a touch of Italian flair to the mix, however. In December 2014, the airport introduced a new intermodal product that looks certain to make 2015 an even greater success. Working with the Italian main train operator, Trenitalia, FCO has launched a high-speed rail service that connects the airport not only to downtown but also directly to the important cities of Florence, Bologna, and Venice. Milan and Naples will join the network in the near future. “The integration of the two transport systems – air and rail – is a first for Italy and will confirm Fiumicino as the country’s hub,” says the airport’s Diego Giannone, route manager, domestic and

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Rome

feeding hub. “Customers from major Italian cities can reach FCO within a few hours and use Rome to connect to intercontinental destinations rather than go through other European airports, such as Frankfurt and Paris CDG.” It is not just about easy connections. Aeroporti di Roma (AdR) and Trenitalia are building an integrated product. The Rail & Fly programme has already been adopted by a host of airlines from Emirates to Air Transat and further development of the service is planned. In the near future, a passenger will get a unique reservation code that allows access to the rail network. But this simple step has enormous benefits. At Venice, for instance, the passenger will check-in at the rail station and once at FCO can proceed directly through security to boarding. Finally all rail passengers are offered special conditions to use the “fast track” services at FCO Terminal 3, as well as VIP Lounges. Dedicated staff is on hand throughout the journey to provide assistance. “The launch of high speed rail in FCO is a good result not only for

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the airport but also for the entire Italian transportation system,” says Marco Gobbi, route manager, Americas & Africa. “A lot of work is still in front of us as we are just beginning this important integration. The aim is to attract new long-haul operators and enhance existing service by building on the potential of a greater overall Italian catchment area.”

Building the future

With this in mind, AdR is actively working on a new master plan, which will better enable the airport to cope with expected demand in the future. By the end of 2016, it is expected that an extension of Terminal 3 will be completed, adding about 90,000m2, two boarding areas and a brand new state-of-the-art commercial centre. New baggage systems will complement the refit and establish FCO as a hub of international quality. Shiny new infrastructure may bring its reward in shiny new services. Main long-haul markets like Latin America and North America look certain to be enhanced. And new services to

the Far East – South Korea and China in particular – are being constantly explored. The results of this important work are clear to see in the 2015 summer schedule, such as the opening of a new direct connection to Chongqing by Hainan Airlines and an increase in direct frequencies to Seoul with the entrance of both Alitalia and Asiana on the route. The main aim is to enhance connectivity by improving the number of direct connections to long-haul destinations. At the same time, Rome will continue to nurture the strong traffic flows from Europe and look to further exploit them. With Rome’s approximately three million inhabitants and per-capita income higher than the Italian average, FCO has all the basics in place for a successful business. The addition of the intermodal product and revamped infrastructure adds to the Roman allure. The gateway to the Mediterranean is not being built in a day but seems sure to secure a long-term future.

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Rome

New Frontier Barry Biffle, president, Frontier Airlines, talks route development strategy and US market dynamics.

rontier Airlines has been revamped over the past year. The ultra-lowcost carrier (ULCC) has been busy realigning its network and bringing in a new senior management team to improve its competitive advantage. According to Barry Biffle, president, Frontier Airlines, the change has all been about improving customer service. “If you look at the background of the senior management we have recruited, it is obvious that it is about the customer experience,” he says. “Low fares mixed with the best possible customer experience is what we call, ‘Low Fares Done Right’. It’s a key differentiator.” Biffle admits, however, that driving cost down has featured high on the agenda. The appointment of Jimmy Dempsey as CFO, the Ryanair veteran treasurer, hints at a strategy to not so much shave costs as to force them into submission. And Biffle – who also knows a thing or two about low cost having worked at

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Spirit and VivaColombia – is happy that the double-pronged attack is working. “We had strong views on what makes a good ULCC,” he notes. “By the end of 2015, we will be on a par or better than any of our competitors when it comes to cost, adjusted for size.”

The price is right

Driving down cost feeds into the Frontier route development strategy. The basic format is to root out those cities where consumers are paying above average fares because that would suggest that there is an opportunity for a carrier able to offer low fares to the market. “We then compare our product to our competitors’ products and look at the cost advantage we have,” Biffle informs. “Obviously, we want to go where our cost advantage gives the biggest bang for the consumer.” A final step is to look at how the destination would fit into the Frontier network operationally. The key here is ensuring a gate full of operations.

Having just one or two flights a week doesn’t appeal to Frontier. Biffle explains that having to fit in a sporadic service to the network makes the entire operation more complex – “and complexity adds cost”. The top 30 US cities are, not surprisingly, at the forefront of Frontier’s thinking. But Biffle says that a general increase in yields in recent months makes about two-thirds of the US of interest to the airline. “The truth is you start with the destinations you are interested in and then you look for the love,” he says. “Which airports or cities really want you? It’s very seldom that we are presented with a destination that we hadn’t already considered.” To handle the predicted growth, Frontier has A320neos and A321s on order. To what extent the new aircraft will be used for growth rather than replacement is still to be decided but the expectation is that Frontier will have a fleet of 100 aircraft or more within a few years.

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Frontier

The need to diversify

Frontier is headquartered at Denver and while Colorado will remain important to the ULCC the airline will diversify its operations. “There are great facilities at Denver but it’s about the fare environment,” says Biffle. “There are lower than average fares and higher than average costs. That is not a great combination. Part of it is to do with airport charges but it’s also about the market. Other carriers here have tried to hurt us but it’s ended up hurting them. I’m sure capacity will come out of the market here eventually and that will put fares back up.” Despite this positive long-term prognosis, Frontier won’t be thinking as big at Denver as it did in the past. Biffle doesn’t believe the airport is the right solution for the airline and already operations have been cut down to about 70 flights a day, a number with which the airline is happy. It doesn’t mean Frontier is looking to get out of Colorado. But the strategy does call for the airline to reduce its connections there. Connecting traffic used to comprise more than 50% of Frontier’s total traffic at Denver but, by summer 2015, the aim is to bring this down to about 20%.

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A dynamic market

Be it at Denver or another focus city, Frontier’s growth plans will be affected by the overall US aviation environment. A country that led the world in deregulation has appeared to turn full circle and though competition is still fierce, mergers and acquisitions have brought a greater degree of stability to the market. “Mergers were necessary for the viability of the carriers involved,” says Biffle. “It allowed them to increase revenues and reduce costs. But to translate that into consumer terms, it means they are paying higher fares. That gives us a great opportunity. It gives us a lot of growth room because we have lower costs and lower fares.” The recent, massive drop in oil prices gives Biffle further cause for optimism. It’s good for all airlines but as a ULCC – and hence with a higher proportion of total costs allocated to fuel – Frontier will benefit more than most. There is one downside, though. Lower oil prices have now entered the public consciousness and incredibly, for an industry that survives on razorthin margins, aviation is already being scrutinised for what some deem to be excessive profiteering. Even though

companies such as Apple make vastly greater profits and outsource much of their work overseas, US airlines are falling under the steely gaze of the government, suggests Biffle. The solution, he says, is better communication. “The industry must do better at getting the message across about the service we provide to consumers and the wider economy. Two quarters of profits shouldn’t dictate aviation policy,” he warns. Dealing with such issues makes Biffle glad he has aviation experience. He feels industry knowledge is a must if an airline is to be led forward in such a challenging environment. “It’s such a complex, dynamic industry that people from outside the industry have such a steep learning curve,” he says. “There are many aspects of the business that are unique to aviation.” And many aspects that are unique to the Frontier model too, it seems. Biffle underlines his belief that the airline has the lowest cost and the best passenger experience. “To be honest, it’s easy to rally people around a vision like that,” he concludes. “It’s good to be leading a company like Frontier. You just need to communicate the vision.”

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Don’t show a catchment map! Nigel Mayes, ASM senior vice president consulting and product development, and Mike St-Laurent, senior consultant, explore the perfect presentation.

o airlines really believe the catchment maps that are put in front of them at every Routes event? Or are they met with polite smiles and nods of agreement? If they are fabrication and not defensible, why include them? Surely by stretching the truth you risk undermining the very “circle of trust” that you are hoping to build with a potential customer. ASM has been asking airlines what they want to see in “the perfect presentation” and we have been honing this feedback through our own consultants who have worked as airline executives and sat across the other side of the table.

Airline requirements

ASM regularly asks the airline community what they would like to see included in a proposition from an airport or region. In an airline survey conducted by ASM, after the top pick of “Financial Support”, (well they would say that), came “Implementation and Actions” and “Market Information”. These top three areas should all be included in an airline presentation. It tells the airline an important story: what the market is and how much of it they will capture, as well as the total revenue opportunity; how the airport and region will help deliver passenger traffic for the airline; and how the airport and destination will share some of the risk of starting a new air service.

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An airline’s investment in operating a new long-haul service can be over $100 million, so an appreciation of the cost is important. In terms of market information, the airlines highly rated catchment and demographics; population and GDP; and seasonality and fare. We would argue that the catchment area needs to be quantified with information and data with a realistic view on the market share an airline can expect from that catchment area. It is believed that if you add up all the catchment areas provided by airports across the world, the global population would probably treble! Mike St Laurent, one of our consultants who was formerly with Air Canada for over 30 years, says “the danger with being unrealistic with your catchment area is that you risk losing their trust in the other aspects of your presentation”. It is also interesting that a route traffic forecast and a view on market segments is important, but a route profit/loss assessment (P&L) is ranked very low. Trying to tell an airline what their costs are is a high risk approach as it is almost impossible to understand every airlines’ accounting practises. You risk alienating the very people with whom you are trying to build a relationship. Don’t get into a debate the airline will know better than you.

So save the P&L for when there is an objection to be overcome. As one airline executive mentioned during the survey: “A profit [and] loss assessment is least important because the airline will calculate this on its own, using internal data; the airport or consultant’s data will not be as accurate, so it’s better for the airport to focus on and share other data about its market that is not generally available to the airline route planner.”

Bespoke approach

It is vital to remember that no two airline meetings or presentations are ever the same. The airline, environment, audience, time and stage of conversation all need to be taken into account. Some of these points may seem obvious but we frequently hear stories of airports and destinations not tailoring their offering and style to the meeting.

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The Perfect Presentation

Obviously, network carriers, low cost carriers and charter carriers will all expect to hear radically different proposals. Also think of your audience and study the job title of the person you are meeting. If the job title is in procurement, the questions will be different from those of a network vice president or somebody involved in industry affairs. Each person will have their own interpretation of the requirements needed to serve a market. A presentation at a Head Office may require a different approach to a meeting at an event and it is important to be clear where you are in the process and with the audience you are meeting. If the airline manager knows very little about your market it is an “introductory meeting”, if the business case has already been ratified then the discussion may move to “route support” or “traffic delivery”.

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If you have been having the same meeting year after year, focus on why the carrier is not serving your market, be it the level of corporate traffic or pulling together tour operator support. Closing the deal is one of the most difficult meetings and requires careful negotiation skills. There are many “do’s and don’ts” in this specific type of meeting.

Data and market size

The route development field is awash with rich data sources from country level passenger statistics, MIDT data and the even the emergence of online aggregator sites that can provide search data, such as Skyscanner. There is no excuse for not being able to estimate a route market size from your airport and deliver a traffic forecast. The presentation must include robust data and MIDT data is a language that all

airlines understand. But it must be used correctly. Airports must accept that the data will always be a survey and assumptions will be made. Forecasts may use different techniques whether it is QSI, Frequency Share or Market Share and may use different data to support an assumption. The important aspect to remember is that the forecast must be stress tested. Can it hold up to scrutiny?

Flow and format

Provide careful thought to your presentation flow and format, particularly in a Routes environment. Out of the 20 minutes, research has shown that only 13 minutes is spent discussing the opportunity, so don’t provide a 25-page presentation when you will have only 30 seconds per slide. The airline planner will have received over 34 presentations in

ROUTES NEWS 3, 2015

The Perfect Presentation Market information requirements 1 = not important 10 = essential

Route proposal profit/loss assessment Route proposal operating costs assessment Route proposal predicted seasonality profile Route proposal average fare predictions Route proposal schedule recommendations Route proposal traffic forecast breakdown by passenger segment Route proposal traffic forecast Traffic seasonality profile Details of exsisting route netowrks and operating airlines Total air passenger traffic at airport Regional economics and infrastructure development plans Key catchment tourist attractions Key catchment industries, corporations Population GDP, Income Data Catchment Area and Demographics

Source: ASM.

TOP 10 TIPS 1. 2. 3. 4. 5. 6. 7. 8. 9. 10.

Present the market opportunity size Don’t overstate your catchment area. If you want to include a map, make sure it is realistic Provide some idea of the fare and yield on the route Provide a traffic forecast and the expected total revenues available to the airline Explain how the airport will help support the delivery of traffic Over 15 slides is too many Think carefully about format and clarity of message. Don’t provide too much depth that will be forgotten in the 34 or so meetings the airlines will have over three days Think carefully about the meeting objective and whether your presentation meets those needs Ask questions – especially why the airline is not serving your market Don’t include any photos of the runway. The airline knows you have a runway!

two days, so focus on the market size, the forecast volume, the percentage of business traffic, or the average fare. Provide soundbites that can be supported with a more detailed document. Given time constraints, one should organise the presentation in order of importance, followed by questions

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and answers. Start with a statement regarding opportunity and details about the expected market size, value and competitive benefits. Move through a traffic forecast, fare estimations and rankings against other competing markets, and then finish on how the traffic will be delivered.

Finally, don’t do all the talking and make sure you provide your view on the market opportunity and how it sounds to you. The format is probably the area where the technology and design will change how these presentations look and the medium upon which they are delivered. We believe that there are a range of formats for different types of meeting, ranging from A3 fold-out leaflet designs to an interactive tablet design powered by an integrated dataset. There is no reason why the latter should not be deliverable on a smartphone for those conversations that take place in a bar and not a boardroom. The stakes are high for an airport or region. The direct revenue of a daily widebody flight can stretch to millions depending on aeronautical and nonaeronautical revenues, while the wider economic benefits to a region can be $8 million-plus. The more thought and expertise that goes into creating the perfect presentation, the greater the likelihood of success. That doesn’t necessarily mean including a detailed catchment map!

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Sponsored editorial

ROUTES NEWS 3, 2015

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The crystal ball A new EU Aviation Package, due at the end of 2015, could bring a paradigm shift in policy.

he European Commission Work Programme for 2015 contains just 23 initiatives, all of which have won through a rigorous “better regulation” review. The fact that a new “Aviation Package” is among the 23 is probably significant. As yet, there is no confirmation on the content of the Aviation Package. A meeting of Transport Ministers was held in midMarch and a formal consultation process is due to begin shortly. It is expected that the proposals will be published by the end of 2015. Nevertheless, director general of ACI Europe, Olivier Jankovec, who has met with the EU Commissioner responsible for Transport, Violeta Bulc, believes a paradigm shift for European aviation is possible. Bulc is a Slovenian who has held the job since November 2014. Early indications suggest she supports policies that will bolster connectivity. “It looks like the EU is finally connecting the dots between aviation and the economy,” says Jankovec. “There is a real change in tone.”

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There are a number of structural issues within European aviation that need to be addressed from a Single European Sky to passenger rights regulations. And for once the emphasis seems to be moving away from the micromanagement of the industry. “I don’t think the Aviation Package will be focused on intra-Europe but instead [will] look at the bigger picture and EU aviation’s position on the global stage,” says Jankovec. Other talking points include how to encourage innovative business models and to improve the competitiveness of European aviation companies. Jankovec also feels legislation may move the European Aviation Safety Agency (EASA) to become the European equivalent of the US Federal Aviation Administration – a move that would be welcomed by many. The current regulation is enforced on a state-bystate basis, leading to minor variations and duplication.

Olivier Jankovec

CEO of the Association of European Airlines, Athar Husain Khan, also welcomes a fresh look at the EU aviation sector. “By announcing a Communication on the competitiveness of the European aviation sector, the Commission recognises the vital role the European network carriers play in the EU economy, by promoting trade and tourism and acting as a vehicle for employment and growth,” he says. “We support the revision of the EASA Basic Regulation, provided that extensions of EASA’s competence fill existing legislative gaps and are publicly funded.”

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Good to the last drop? Oil prices may have slumped but airlines cannot assume the trend will continue.

ROUTES NEWS 3, 2015

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Fuel

he price of oil has dropped about 50% compared with 12 months ago. And there are plenty of reasons to suggest that the trend is not about to end any time soon. US shale production has increased the overall supply of oil as have the Canadian Tar Sands and the return of Libyan oil to the market. At the same time, the Organization of the Petroleum Exporting Countries (OPEC) has said that it has no intention of cutting production from its 30 million barrels a day quota even if oil fell to $20 a barrel. OPEC’s major player, Saudi Arabia, has enormous cash reserves, and although it may need oil prices to double to balance its budget, it can afford to be patient.

development as airlines will look to re-invest any surplus cash into new aircraft and routes. But there is lot more to this story than meets the eye, and airlines shouldn’t be counting their chickens just yet.

The x-factor

For a start, the bigger picture in terms of the future price of oil is very hard to judge. It is reported that OPEC and US shale oil producers are waiting to see who will blink first – that is, cut production – as the current price of oil is simply unsustainable if many existing wells are to continue production. Arctic oil, for example, does not work at less than $100 a barrel, says

All things being equal, by mid-2015 oil stocks may come close to the all-time high of 2.83 billion barrels

Combined with this, demand has dropped thanks to a strong dollar that makes oil more expensive while the performance of the Chinese and EU economies remains uninspiring. Stuart Elliott at energy specialist Platts has suggested that the oil market has entered a new chapter of its history, “which is now starting to operate like any non-cartel commodity market”. All things being equal, by mid-2015 oil stocks may come close to the alltime high of 2.83 billion barrels reached in August 1998. At that point, the price averaged a little over $11 a barrel. It seems like good news for the airlines and, by and large, that’s true. With fuel accounting for 30-40% of an airline’s total costs, the reduction affects the bottom line significantly. That’s good news for air service

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Brendan Cronin at Poyry Managing Consultants, so any plans for polar drilling are likely to be shelved for the foreseeable future. And at $50 a barrel, North Sea oil is unprofitable. So it could be that just as the world economy starts to boom and air travel follows suit, oil supply will fall dramatically. This would lead to tremendous upwards pressure on oil prices and potentially a greater spike than seen during 2008.

The need to adapt

Even if prices do stay low, however, airlines may not be wallowing in the extra cash any time soon. “Falling fuel prices have never been more than a temporary boost to airlines and their shareholders,” says Brian Pearce, chief economist at the

International Air Transport Association. “Competition and the nature of airline economics means that a uniform cost reduction like this gets passed on to consumers, once the delay caused by hedging passes. However, airlines will need to use some of the cash from any reduction in fuel costs to pay down debt, renew old fleet, and invest in service improvements.” Fuel hedging means that most airlines are either not yet benefiting from lower fuel prices or they are reporting mark-to-market losses – depending on the type of fuel hedge, according to Pearce. Fuel supply remains a concern too. It’s not just about Africa either, where the security of supply is under threat in several countries. At London Heathrow, for example, there is only enough tankage for 1.7 days. It should be at least double that. Other issues will also come into play from refinery capacity to the demand for biofuels. How it all plays out could have a fundamental effect on airline strategy. The low cost of fuel could tempt low-cost carriers in to the long-haul market, for example, which could have a shattering impact on the existing network. Such uncertainty means airline strategy going forward is far from clear. “It is fuel price volatility that makes life so difficult for airlines,” says Pearce. “They can adapt to periods of high or low fuel prices, as we have seen with improving profitability in the past two years. If airlines could be sure low prices will persist they could start to adapt.” The futures market suggests the price will recover to about $70 by 2019, with most experts agreeing on a $40-$80 range. “The challenge for forecasting price is that oil markets are driven just as much by strategic supplier decisions as market fundamentals,” concludes Pearce. “This makes it hard to predict. But it is likely that airlines will not plan on the basis that fuel prices will stay low.”

ROUTES NEWS 3, 2015

Life at the top

ot so long ago, Hartsfield-Jackson Atlanta International Airport (ATL) wasn’t the most proactive gateway in the world when it came to route development. Arguably, as the busiest passenger airport on the planet and main Delta hub, it didn’t have to be. It is still the world’s busiest airport for passenger traffic, of course, welcoming an incredible 96.1 million (+1.85%) in 2014. That’s around 12 million more than its nearest challenger, Beijing Capital International Airport. And it remains Delta’s main hub, with the carrier accounting for around 70% of its traffic. However, there has been a change in the operating environment over the last decade, in which airports now openly compete against each other for business, while airlines have shown that they are prepared to up sticks and move elsewhere if they are not happy. This has led to a very different approach to route development. Indeed, aviation general manager, Miguel Southwell, is more than aware that not even the world’s busiest airport can afford to rest on its laurels and is actively looking to build HartsfieldJackson’s marketing team to better promote the gateway to airlines and passengers.

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“If the airport did have a reactive and not proactive approach to route development it certainly isn’t the case now as the operating environment today is very different from just a decade ago,” says Southwell. “There has always been a debate about the incremental value of airport marketing with some saying it is the key to success and others not really believing in it. “What I will say is that if the marketing of an airport doesn’t have a value, it will be the only industry segment in the world... Clearly, airlines have a choice where they fly and airports that fail to recognise this and do all that they can to market and promote their facilities will do so at their peril.” Like most other airports, ATL works with a number of different stakeholders, organisations and local and state agencies to attract new airlines and new routes. But in terms of direct marketing efforts to travellers, Southwell believes that ATL is currently missing a trick by not doing more to market the benefits of the Atlanta region in transferring passengers before they catch their onward connections. “We have around 64 million passengers transferring through Hartsfield-Jackson each year and therefore millions of opportunities to target people to try and grow our O&D network,” he says.

“Whether they are here for 30 minutes or an hour, it is an amazing opportunity to market Atlanta by showing them something that will compel them to come back as an O&D passenger and maybe even set up a business in the city. “If you don’t make the most of this opportunity then you are really missing the point about why an airport exists. Airports exist to serve as an economic tool for the development of cities and community. More routes mean more jobs and greater prosperity for the region.” ATL is currently working with a group of top marketing companies in Atlanta to discover the best ways of marketing the airport, including ways to promote the city and region to transfer passengers at ATL who might only spend 30 minutes at the airport. “A 30 minute time window doesn’t sound long, but it is long enough as a lot can be done in a very short space of time. Otherwise why would companies spend millions of dollars on TV commercials that last less than 30 seconds,” notes Southwell.

Airlines and route network Delta and its partners account for 70% of the passengers at HartsfieldJackson, so is ATL too dependent on the airline?

ROUTES NEWS 3, 2015

Atlanta

“I would say that Delta is vital to the success of not only the airport but also the city of Atlanta and all the other airlines serving Hartsfield-Jackson because of the passengers it feeds into their networks,” says Southwell. “However, I’d also point out that Atlanta is in the unique position of having two hub carriers as Southwest Airlines also has a base here. Delta may be dominant, but I think with Southwest and the entry into the Atlanta market of airlines like Spirit and Frontier, passengers have a breadth of choices here.” ATL’s route network now extends to non-stop flights to 150 US cities and 60 destinations in 45 countries across the globe. Its huge US route network ensures that domestic passengers account for around 90% of ATL’s annual throughput and international traffic for just 10%, although Southwell is quick to point out that 9.6 million passengers is not an insignificant number. He also notes that international traffic is the “brightest and fastest growing segment of the business” based on annual increases of around 7% per annum. And Southwell believes that there is a lot more to come from ATL as he and his route development team look to grow the number of international destinations served non-stop from Atlanta.

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“We are focusing on the fast growing economies in Asia, more specifically China, as well as India and Africa when it comes to international route development,” enthuses Southwell. “In addition, we are working on building our presence in Latin America and the Caribbean, most notably Brazil.”

Facilities and expansion

Today, ATL boasts 6.8 million square feet of terminal space spread across a Domestic Terminal, Maynard H Jackson Jnr International Terminal and concourses T, A, B, C, D, E and F, which between them hold 207 gates, including 40 dedicated for international operations. The new 1.2 million square feet Maynard H Jackson terminal and 12-gate Concourse F is arguably the jewel in the crown and most environmentallyfriendly facility based on its LEED (Leadership in Energy and Environmental Design) certification. In terms of future expansion, Southwell lists the next priority projects as being new car parking facilities and the addition of a $75 million outer taxiway that will boost airfield efficiency by ensuring that aircraft no longer have to taxi across active runways to get to the terminal buildings.

A total of $600 million has been set aside for new car parking facilities, which will be built on the site of its existing north and south car parking complexes, and the modernisation of car parking facilities A and B. Next on the agenda is a 10-gate Concourse G and new cargo facilities, which Southwell wants to boost freight activity at ATL – an area he feels is still underdeveloped – despite more than 600,000 tonnes of cargo being handled at the airport last year.

Cargo development

“Our number one priority from a commercial point of view is to grow cargo at the airport,” explains Southwell. “It’s more about growing the number of jobs we are producing at the airport than raising volumes.” He believes that cargo is ripe for development because of Atlanta’s route network, “favourable location” within a two hour flight of 80% of the US population and the fact that the airport is hugely underutilised after the final daily passenger flights take-off or land at around 11pm. “We have 63,000 employees on the airport campus and during the day it is really exciting to watch this kind of economic activity, but all this changes after about 11pm each night,” he says.

ROUTES NEWS 3, 2015

Atlanta

“What we are trying to do is have an economic engine that runs 24-hours a day, and cargo fits this model perfectly, as it is an activity that traditionally happens overnight. “We are not necessarily looking to compete with any airport per se, but we want to drive more jobs.” ATL’s annual freight volumes make it the tenth biggest cargo gateway in the US and around the 35th busiest in the world. He concedes that it will be difficult for ATL to move much higher up the world rankings because it doesn’t have the dedicated cargo airlines of airports like Hong Kong or Shanghai Pudong and isn’t the global hub of an express freight giant like FedEx, which is based in Memphis, but he still believes that ATL can become much more of a “significant” cargo player. ATL’s cargo volumes have declined in recent years, but Southwell believes

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that the airport can address the balance by concentrating more on specific growth areas where it can offer a specialised service. One such area is the perishables market, which in Atlanta’s case covers everything from cut flowers to pharmaceuticals, frozen meats and fresh fish. And in a bid to make it happen, ATL is investing in a range of new refrigerated facilities for perishable consignments, which Southwell hopes will convince more shippers to use the airport. “We think that from a logistical point of view we have a superior location for increasing activities with perishable goods, particularly with items like flowers, most of which are driven past Atlanta today on refrigerated trucks heading to the northeast region of the country,” he adds.

Life at the top

With Beijing Capital closing the gap fast on ATL for the crown of the world’s busiest passenger airport, can the gateway hold on to its much-coveted status for much longer? “I think certainly we will pass the 100 million mark in the next two years, so I expect us to hold on to top spot this year and next, after which it is going to be a struggle if Beijing continues to grow at the rate at which it has done,” he says. “We operate in a mature market, of course, where 90% of our traffic is domestic, which is only growing about 0.5% to 1.5% per annum. The Chinese domestic market in comparison is growing around 6% per annum. So, if you do the math, that means that they will pass us by 2017. “We will, however, do all we can to buck the recent growth trends and make sure this doesn’t happen for a while yet.”

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Partnering for success

Krešimir Kučko, CEO, Croatia Airlines, says the airline will succeed with a little help from its friends. Interview by Graham Newton. Were you happy with the airline’s performance in 2014? Looking at the preliminary, unrevised financial results for 2014, Croatia Airlines generated a profit for the second consecutive year. Operating profit totalled HRK13.1 million. With the financial costs included, the net profit was HRK 7.1 million. In 2013, the net result was HRK721,000. The number of passengers transported grew 2% (1,825,063 passengers). Passenger kilometers increased 1% and the passenger load factor was 69.2% compared with 68.8% in 2013. Also in 2014, Croatia Airlines achieved an excellent level of punctuality: 84.7% of departures in scheduled traffic were realized within the 15 minutes, which is above the Association of European Airlines’ members’ average (83.6%).

Has the restructuring programme made a big difference? The restructuring programme of Croatia Airlines was approved on 27 June, 2013 by the Croatian Competition Agency and refers to a period 2011–2015, with

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two additional years for assessment after the restructuring is finalised. The restructuring comprises a wide range of measures covering strategic, operating and financial restructuring. It is an unavoidable step aimed to prepare the company for long-term sustainable business operations. The implementation of all restructuring measures generated a positive financial result in 2013 and 2014. It is important to emphasise that these positive results were the first since 2007, when much of the world was in recession. The restructuring measures are being strictly realised as defined in the restructuring plan. The compensation and self-contribution measures are in line with EU competition, restructuring and state aid rules.

What are your priorities for 2015? It’s the final year of the restructuring plan so we will continue applying the measures with a focus on increasing labour productivity and competitiveness as well as operational and financial efficiency.

Our intention is to continue the positive trend in the business and create the conditions for stable and sustainable operations. It is expected that economic trends in the surrounding countries will have an impact on our business operations. The anticipated result will be affected by competition and will also depend on the upcoming tourist season.

Tell us about your route development strategy. What are your most profitable routes and where do you want to fly to in future? Our dependence on leisure traffic is higher than in other European countries. The major problem for Croatia Airlines is a seasonal demand and this seasonality represents the main issue to be resolved in future network development. Currently, Croatia Airlines connects Zagreb, our hub, with western Europe and southeast Europe. When we add our domestic network on top of this, you see a small but efficient network. The most significant gap is to the east and we see our opportunity right there.

ROUTES NEWS 3, 2015

Croatia Airlines

At first, eastern countries within the EU are our priority. At a later stage, we intend to fly east outside EU boundaries

At first, eastern countries within the EU are our priority. At a later stage, we intend to fly east outside EU boundaries. We should not forget significant demand for air service between North America and Croatia too and we are keeping an eye on this market as well. But to achieve this goal, we will first need to develop our regional network much more.

Does being a member of Star Alliance affect the way you develop your network? Being a part of the alliance, for a small airline in todayâ&#x20AC;&#x2122;s Europe, is a huge advantage. A big portion of our production represents a seat placed on a route to one of the Star hubs in Europe. Through the alliance partners, we can reach our customers and offer our product to the whole world without the necessity of being represented in a country with our own sales organisation. There are no restrictions within the alliance and we can decide, on our own, to develop the markets where we see the most potential. However, in the role of Star alliance member and full service carrier, we are most efficient when our network is complemented by the Star product.

How will you develop your fleet to complement your network? We operate A320, A319 and Q400 aircraft. We are now studying a new

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type because of the difference in capacity between the A319 (144 seats) and Q400 (76 seats) and because of the market environment. So, we are analysing the effect of having 100-seat aircraft in our fleet. Such an aircraft would help us to operate cost-efficiently during the winter months and to open new markets in summer. We are now developing various models, with a different number of units for our future plans. From these various models we will eventually choose one; the most sustainable, most efficient and most prosperous.

Are you happy with the infrastructure at Zagreb? The infrastructure at Zagreb Airport is not adequate and is the limiting factor in traffic planning. The size and passenger flow is not in line with traffic demand and passenger volume. This is particularly evident in peak hours when the volume of passengers is much higher than capacity of the terminal. But Zagreb Airport is constructing a new terminal, which will have almost double the capacity of the existing one.

What is your view of the regulatory environment in Europe? The EU air transport legislative process is extremely complex, including passenger rights, the Emissions Trading System (EU ETS), ownership restrictions and sector-specific state aid rules. For sure, European airlines need a

better regulatory environment that supports the sustainable development of European aviation. Increasing competition from the Middle East carriers, together with Turkish Airlines, with different state aid rules in those countries, could create unfair competition environment. Even so, the restructuring programme and future strategic positioning of Croatia Airlines is creating a sustainable business model within the existing legislation.

What role does a smaller airline play in the modern European market? Is there a danger you will find it difficult to compete in an era of mergers and acquisitions? Given the global situation, strategic integration is almost unavoidable for companies of our size. Financially, it ensures sustainable growth. We want to make Croatia Airlines a modern, middle-sized European airline operating with a profit and basing its recognisable success on flight safety and customer satisfaction, with quality services. Our strategic goals are defined in our restructuring plan and, with strategic partners, we have the potential to be a strong player in the southeast Europe air transport market. The Croatian Government has indicated it will begin a privatisation process for the airline and this will also be important.

ROUTES NEWS 3, 2015

Routes Asia 2015 • Report Back

The city of Eternal Spring

osted by Yunnan Airport Group, owners of Kunming Changshui International Airport, and supported by their partners Yunnan Provincial Civil Aviation Development and Management Bureau and Yunnan Provincial Tourism Development Commission, Routes Asia welcomed some 800 delegates representing 118 airlines, almost 230 airports and near 60 countries. “Our Host, Yunnan Airport Group, is very proactive at marketing to airlines and has attended many Routes events,” said Katie Bland, director Routes for UBM EMEA. “Through

ROUTES NEWS 3, 2015

hosting Routes Asia, they have the opportunity to showcase Kunming Changshui International Airport as well as the city of Kunming and Yunnan Province.” The region’s leading airlines were represented by senior delegations in Kunming including a strong representation from China Eastern, China Southern, Hainan Airlines and Air China as well as other carriers such as Xiamen Airlines, Shenzhen Airlines, Sichuan Airlines, China Airlines, Shandong Airlines and Shanghai Airlines.

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Routes Asia 2015 • Report Back

Routes Asia Marketing Awards

ourism Australia was announced as the overall winner of the Asia heat of this year’s Routes Marketing Awards. Commenting on the win, Tim Jones, regional general manager Asia and strategic partnerships for Tourism Australia said: “It’s a fantastic honour to collect the Best Destination Marketing and Best Overall Marketing awards on behalf of everyone behind ‘team Australia’ – recognition of the work of Australia’s airports, our State and Territory tourism colleagues and Tourism Australia. Our partnerships with airlines around the world are crucial in helping us drive demand for Australia and sharing with the world why ‘There’s nothing like Australia’ through innovative marketing campaigns.” “We are so pleased to announce Tourism Australia as the overall winner of this regional heat of the Routes Marketing Awards,” commented Katie Bland, director Routes, UBM EMEA,

continuing: “Over recent years they have demonstrated that they really understand their customers by running a diverse set of campaigns with a unique approach to each individual market. In addition their latest campaign targeting China and building an elite network of specialist travel agents to sell their product to this country’s emerging sophisticated travellers shows just how deserving of this award they really are.” The annual Routes Marketing Awards are voted for and judged by the airline network planning community. They provide the airline community with the chance to have their say as to which airport or tourism authority they think provides the best overall marketing services to them whether this relates to their particular relationship, effective results, provision of data and information or innovative techniques to establish new or maintain and develop existing routes. As overall winner of this regional heat of the Routes Marketing Awards Tourism Australia will be automatically shortlisted for the World Routes Marketing Awards, which will take place at the event in Durban, 19-22 September, 2015. They join AustinBergstrom International Airport, which was announced as the overall winner of the Americas heat. The judging panel consisted of the following experts: • Senthil Balan, Group Head of Network and Fleet, Air Asia • Mateusz Klimek, New Routes Project Manager, Lot Polish Airlines • Michael Burke, Assistant Director Commercial, HK Airlines • Eric Nabong, Manager Business Planning, Philippines Airlines • Andrew Cowen, Deputy CEO, HK Express

ROUTES MARKETING AWARDS OVERALL WINNER: TOURISM AUSTRALIA Over 20 million passengers

4-20 million passengers

Under 4 million passengers

Destination Award

Winner: Changi Airport Group

Winner: Auckland Airport

Winner: Darwin Airport

Winner: Tourism Australia

Highly commended: Melbourne Airport Shortlisted: • Hong Kong Airport • Kuala Lumpur International Airport (KLIA) • Shanghai Airport Authority

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Highly commended: Christchurch International Airport Shortlisted: • Dhaka Shahjalal International Airport • Ngurah Rai International Airport, Denpasar • Okinawa Naha Airport

Shortlisted: • Karratha Airport • Kununurra Airport • Nelson, N ew Zealand • Townsville Airport

Highly commended: • Tourism Victoria • Okinawa Convention and Visitors Bureau Shortlisted: •T ahiti Tourisme •T ourism New Zealand Promotion Board

ROUTES NEWS 3, 2015

Routes Asia 2015 • Report Back

Routes Asia heads to Manila

ollowing a successful Routes Asia event in Kunming, which saw almost 800 delegates in attendance, Yunnan Airport Group Co., Ltd. have officially handed over to Manila, Philippines, the host destination for Routes Asia 2016. The event – hosted by the Philippine Department of Tourism and co-hosted by the Philippine Department of Transportation & Communications – will take place 6-8 March, 2016. Speaking at the official handover ceremony, director Verna C. Buensuceso, officer in charge of market development, Philippine Department of Tourism said: “We will be proud to see all of you at Routes Asia 2016 in Manila and take part in our vision to become a premiere multi-gateway destination in Asia, providing world-class arrival and departure experiences in its major and secondary international airports.” “We’re thrilled that Routes Asia will be taking place in Manila in 2016,” commented Gerard Brown, head of future hosting, Routes & Airport Cities for UBM EMEA: “This event is sure to be full of opportunities for our entire community and will allow the Philippines to increase new air services and visitor numbers. With superb connections to the whole of Asia, one of the fastest growing economies of Southeast Asia and both a modern and

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rapidly developing infrastructure, the Philippines is the ideal destination to hold Routes Asia in 2016.” The Philippines is currently modernising and expanding its premier gateway and secondary airports to sustain its international market growth and improve the arrival and departure experience. The upgrading of Ninoy Aquino International Airport’s Terminal 1 is ongoing and will be completed in time for the hosting of the Asia Pacific Economic Cooperation in 2015 while the construction of an elevated highway linking Terminals 1, 2, and 3 to the Skyway and Manila Bay is expected to be completed by 2016. There is also planned expansion at the passenger terminal building of MactanCebu International Airport, which will accommodate 8 million passengers per year once complete. A multi-faceted destination, Manila is also the core of education, culture and the arts. It boasts several notable attractions including a UNESCO World Heritage Site and 45 other cultural heritage landmarks. It is a well-known shopping destination in the Asia-Pacific region with over 100 shopping malls that can be found in strategic locations throughout the city.

ROUTES NEWS 3, 2015

Routes Asia 2015 • Report Back

Budapest back on the network Air China will resurrect links between Beijing and Budapest, a route that was previously served by Hainan Airlines. A four times weekly service will be introduced from 1 May, 2015 on a triangle route also serving the Belarusian capital, Minsk, on the inbound sector. Air China revealed the flight schedule for the new link, to be operated using a 237-seat Airbus A330-200, during Routes Asia in Kunming. Hungary is a fast growing tourism market for China, increasing 19% in the past 12 months. Estimates suggest a Chinese diaspora of over 40,000 in Hungary and demand for around 90,000 bi-directional passengers per annum. Subject to the completion of final paperwork, Air China will be the sole operator providing a non-stop connection between

China and Hungary. It will be the Chinese carrier’s 22nd European connection. “We’re absolutely ecstatic to welcome Air China as a new airline, adding Beijing to our significant brand new services available this year,” said Balazs Bogats, head of airline development at Budapest Airport. “We have been working hard to secure this service and we are proud to announce the launch of this vital link from East Asia to Budapest. We are enormously excited to be able to offer Air China customers a best-in-class airport experience and have no doubt the new route will be a huge success,” added Bogats. Budapest has recently secured other notable long-haul links with Emirates Airline and Air Transat. South Korea stands out as a future target.

Kunming secures Vancouver link China Eastern Airlines is to introduce a direct air connection between Kunming’s Changshui International Airport and Vancouver International Airport in Canada, the first regular scheduled air link from Yunnan Province into North America. The route will launch in June, 2015 and operate three times a week as an extension of the existing service between Shanghai and Vancouver. Flights will now originate in Kunming and arrive back there after a stop in Shanghai. “This new service marks another step toward achieving our mission of connecting British Columbia to the world,” Craig Richmond, president and chief executive officer, Vancouver Airport Authority, said at Routes Asia. “Kunming is a key gateway destination and is the largest city in Yunnan Province, with a rich and vibrant history and a great future as a transportation hub,” he added. “Having service to Kunming from YVR opens up exciting new tourism and business opportunities for Canadians and further establishes Vancouver as a gateway hub between Asia and the Americas.”

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The new direct service to Vancouver complements the recent agreement between China and Canada to provide 10-year multiple-entry visas to Canadian and Chinese citizens for business, tourism or family purposes. In addition to increased passenger flow and economic opportunities between the two cities, foreign passport holders connecting to a third country via Kunming can enjoy the 72-hour visa free transit in Kunming before departure. And passengers originating from Vancouver or Kunming can have their bags checked through to either end. “The economic impact of these new flights is huge. Every international flight to YVR generates the equivalent of 200 direct jobs,” said Carl Jones, director, air service development, Vancouver International Airport. “These passengers take taxis, rent cars or hop on the Canada Line.” All Nippon Airways’ 2014 service from Vancouver to Tokyo Haneda produced 356 jobs, contributed $21 million to GDP and generated in $7.4 million in tax revenue. And early estimates of 2015’s flights show over 500 jobs – more than $29 million in GDP and at least $10 million in tax revenue.

ROUTES NEWS 3, 2015

Get booking for World Routes!

King Shaka International Airport

his year’s World Routes will be held at the Durban International Convention Centre, which was opened in 1997 by former president Nelson Mandela. As South Africa’s first International Convention Centre, the Durban ICC has played a pioneering role in attracting international events to the country. The convention centre is located just 30 minutes away from King Shaka International Airport and just minutes away from the city centre and there is no better time to begin planning your stay in Durban. Organisers recommend booking your hotel accommodation early to avoid disappointment as the event draws closer. There are many hotels to choose from in Durban but, during World Routes, it is recommended to stay in one of the event preferred hotels which can be booked

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through Events in Focus, Routes’ only Official Accommodation Partner. Using Events in Focus to book your stay in one of the preferred hotels will ensure that World Routes delegates will benefit from preferential rates and complimentary transfers to the event venue, networking evening and King Shaka International Airport. All preferred hotels are located within 20 minutes of the event venue. You’ll also find dedicated World Routes information desks in each of the official hotels providing advice and information on all the event details. There are a range of hotels to suit various budgets including the Hilton Durban, just a two minute walk from Durban ICC providing easy access to Durban’s beaches and central business district. The Suncoast Hotel & Towers

Durban is just a 10 minute drive away from the venue and provides guests with breathtaking views of the Golden Mile beachfront. Alternatively there are a number of hotels situated in Umhlanga, just a 20 minute drive away from Durban ICC, including Protea Hotel Umhlanga, Three Cities Gateway Hotel Umhlanga, Coastlands Umhlanga and Three Cities Royal Palm Umhlanga. These hotels are convenient for the famous Gateway Theatre of Shopping complex, Umhlanga Village and the beachfront. Hotel bookings are managed by Events in Focus, Routes’ Official Accommodation Partner. Visit Routesonline or contact Aimee Stevens: Aimee@eventsinfocus.net to book.

ROUTES NEWS 3, 2015

Routes Silk Road returns to Tbilisi in 2015

ollowing the success of the inaugural Routes Silk Road event, which took place in July of last year, the 2015 event will once again take place in Tbilisi, the beautiful and historic capital of Georgia. The event will be hosted by United Airports of Georgia (UAG) under the auspices of the Ministry of Economy and Sustainable Development. Routes Silk Road is the route development forum that connects CIS, Central and Eastern Europe, Middle East and Asia and will offer attendees the perfect platform to do business and improve air transport networks to, from and within the region. Over 300 senior level executives from airlines, airports, tourism authorities and other aviation stakeholders are expected to attend the event to discuss air service development. The decision by United Airports of Georgia to host the event for the second

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year running is largely due to the success of the 2014 event and a number of key routes that they negotiated during Routes Silk Road 2014. Air Arabia and Aeroflot commenced new routes from Tbilisi International Airport in October 2014 (to Sharjah and Moscow respectively). Etihad Airways is due to begin flights from Tbilisi to Abu Dhabi in October 2015. Furthermore, UAG is currently in the process of active negotiations with two airlines to begin routes from Kutaisi International Airport. UAG opened Kutaisi International Airport in 2012 as the regionâ&#x20AC;&#x2122;s first low cost airport. It is mostly focussed on attracting low cost carriers to facilitate tourism development in Georgia. Routes Silk Road 2015 promises to help its hosts develop more new routes for Kutaisi International Airport, as well as Tbilisi and Batumi airports, and to further promote Georgia to the wider aviation community.

Hosting Routes Silk Road in 2014 allowed UAG to showcase Georgia as a destination and the interest shown by airlines and the new routes already secured have proved that there is still huge potential for the Georgian aviation market. The media coverage gleaned from the inaugural event placed Georgia at the centre of the aviation industryâ&#x20AC;&#x2122;s attention and spread throughout the country and the Caucasus region. Georgian airports have experienced a robust 17% compound average growth rate for the past eight years, with annual increases between 9% and 25%. Traffic in 2014 was nearly four times the volume achieved in 2005.

For more information and to register for Routes Silk Road 2015 visit Routesonline.com

ROUTES NEWS 3, 2015

Routes Middle East & Africa 2015

Manama, Bahrain 31 May - 2 June, 2015

World Routes 2015

Durban, KwaZulu-Natal Province, South Africa

19-22 September, 2015

Routes Silk Road 2015

Tbilisi, Georgia 5-7 July, 2015

Routes Americas 2016

San Juan, Puerto Rico 7-9 February, 2016

Routes Asia 2016

Manila, Philippines 6-8 March, 2016

Simon Baxendale, scheduling manager at Routes, explains how face-to-face meetings are the core of Routes events. How important is scheduling to the success of Routes? Routes events are renowned for the quality of their pre-scheduled faceto-face meetings; it is what the event has been built on, the foundation of the Routes experience. This makes the scheduling process extremely important. The scheduling team manage every single meeting request to build personalised diaries that take into account all factors of a Routes event, such as the Strategy Summit and Airline Route Exchange Briefings. The attention to detail is extremely important. If we make mistakes it can have a direct impact on how the entire event is perceived. This is something we strive to eradicate; we endeavour to make sure that the diaries contain as many meetings as possible, and that we fulfil not only the delegatesâ&#x20AC;&#x2122; meeting entitlement but also their expectations.

So how will you improve the service in the future? Over the last year, I have looked at all the feedback we have received from our delegates to try to improve the

ROUTES NEWS 3, 2015

scheduling process both before and during the events. We are always listening to our clients and aim to improve the events year on year. The major points that have come out are the onsite extra meeting system, final diaries available before the event, and the ability to request to attend the Strategy Summit via the meeting system. Each one of these issues has been looked at and a solution put into place to improve the Routes experience for our delegates. The main innovation this year is our new electronic extra meeting system, a completely digital way for delegates to request meetings in real time while at the event. This is a very exciting development and one we are confident will be a huge success and will again keep Routes at the forefront of the aviation events industry. All delegates will have access to this system via the official Routes App, Routesonline homepage, and dedicated terminals around the event. Take advantage of this new system and pack more meetings into your diary! One thing I am looking at is an entirely paperless scheduling process, removing all the paper-based

Routes Europe 2016

KrakĂłw, Poland 24-26 April, 2016

MEET THE TEAM

diaries and extra meeting request sheets to make everything completely digital. Keep an eye on Routesonline for further updates on this.

Any other aspects of the job we should highlight? At the forefront of the scheduling process is customer service. A littleknown fact about the meeting requests is that each one is placed into the diaries manually by our dedicated scheduling team in Manchester. This may sound like a long-winded process but it makes sure that each meeting is added correctly and that everything is checked each step of the way by a member of staff. We do this to provide the best service we possibly can, keeping our delegates up-to-date with their meeting requests every step of the way.

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