Routes News Magazine, Issue 5, 2014

routesnews ISSUE 5 VOL 10, 2014

The world air service development magazine

routesonline.com

Next stop Chicago

VIEW FROM THE TOP: ACI’s Angela Gittens

INTERVIEW:

Ferrovial’s Jorge Gil

DESTINATION:

Discover Chicago

routes-news.com

In the spotlight:

Airports:

Interview:

Event reports:

Cast your vote:

Cebu Pacific’s Lance Gokongwei

Ireland’s airport system

NOK Air’s CEO Patee Sarasin

Routes Africa and Routes Silk Road

World Routes Awards 2014

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

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

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

PUBLISHER Jonathan Lee +44 (0)208 831 7563 jonathan@aviationmedia.aero Published by Aviation Business Media Ltd Sovereign House, 26-30 London Road, Twickenham, TW1 3RW, UK T: +44 (0)208 831 7500 F: +44 (0)208 831 7501 The opinions and views expressed in Routes News are those of the authors and do not necessarily reflect any policy or position of UBM Information Ltd or Aviation Business Media.

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

routesonline.com

Editorial comment Routes News reflects on busy times for the aviation industry and looks forward to World Routes in Chicago.

W

ith Routes Africa and Routes Silk Road now behind us, our focus is fully on World Routes in Chicago, which I am sure will be one to remember.

How could it not be with a worldfamous venue like the Windy City, a host as generous as the Chicago Department of Aviation (CDA), and high-calibre speakers such as Emirates CEO, Sir Tim Clark; Jim Compton, vice chairman and chief revenue officer of United Airlines; Tewolde Gebremariam, CEO of Ethiopian Airlines; and Rosemarie Andolino, the commissioner of the CDA? Chicago will actually mark the 20th anniversary of World Routes, and we plan on celebrating the occasion in style with a spectacular Gala Dinner and the presentation of a special 20th anniversary book.

In this pre-event issue of Routes News, we find out more about Chicago as a destination, but also report on the highlights of our most recent events, Routes Africa, which was held in Victoria Falls (Zimbabwe), and Routes Silk Road (Tbilisi, Georgia).

We also hear from Lance Gokongwei, CEO of Cebu Pacific; Angela Gittens, director general of Airports Council International (ACI); and Jorge Gil, CEO of Ferrovial Aeropuertos; and feature a special report on Ireland’s airports.

This issue of Routes News went to press during the Farnborough Air Show, where British Prime Minister, David Cameron, announced that a record $41.9 billion in orders and commitments had been taken on the first day alone, demonstrating huge faith in the future prosperity of commercial aviation.

These are certainly busy times for the aviation industry and for Routes News, which recently bid bon voyage to acting editor, Lucy Siebert, who has left for pastures new after a year in the hot seat.

She previously edited Routes News for three years before leaving for the Travel Trade Gazette, returning to us on a temporary basis when she moved to Australia a year ago.

We would like to wish Lucy well in the next stage of her career and the Routes News team looks forward to working with the new editor and taking the magazine from strength to strength in the years ahead.

We hope you enjoy this issue and look forward to seeing you in Chicago!

KEEP IN TOUCH

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

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

ROUTES NEWS 5, 2014

3

Contents

18

6 World news

28

18 Playing to its strengths

11 On the move

Martin Rivers finds out more about the business strategy, growth and development plans of Cebu Pacific.

13 Airline one2one

23 Going green

9 Cargo news

Nok Air CEO, Patee Sarasin, shares his views on the Thai aviation market and the establishment of new joint venture NokScoot.

15 Airport one2one

Routes News gets up close and personal with Matthew Findlay, Christchurch Airport’s general manager, aeronautical business development.

Jonny Williamson discovers more about how Ireland’s airports are faring after a tough few years.

26 London calling

Jorge Gil, CEO of Ferrovial Aeropuertos, talks to Joe Bates about the challenges and opportunities facing Heathrow and the Spanish group’s global development plans.

38

28 Choose Chicago

Don Welsh, CEO of the official destination and marketing organisation for Chicago, is confident that “the most American city in the US” will wow World Routes delegates.

33 And the winner is…

Having been crowned overall winner of their respective regions, four airports have been automatically shortlisted for the prestigious World Routes 2014 Marketing Awards.

34 Report back: Routes Africa 38 Report back: Routes Silk Road 40 Events essentials

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

routes-news.com

routesonline.com

The programmes have been confirmed for this year’s World Routes Strategy Summit and World Routes Tourism Summit, both of which take place alongside the 20th World Route Development Forum in Chicago.

42 View from the top

ngela Gittens, Airports Council A International (ACI).

ROUTES NEWS 5, 2014

5

World news

Airbus wins order race at Farnborough Airshow Aircraft manufacturers took a total of $130 billion worth of orders from the Farnborough Air Show this year, proving that despite record high production rates, the market for new aircraft is particularly strong, writes Mary-Anne Baldwin.

This year’s total was just off from last year’s larger Paris Air Show, which recorded a total of $134.7bn in sales.

Of this year’s total, $115.5bn was split between the two main OEMs, Boeing and Airbus.

Technically, Airbus won the competition for deals with 496 orders worth $75bn versus Boeing’s 201 orders

totalling $40.2bn at list prices. However, Boeing was quick to highlight that its orders for the year-to-date are higher than its rival’s.

Boeing had 549 net orders before the air show began, which contrasts with Airbus’ comparably meagre 290 orders.

Rather than postpone its orders until the show, Boeing added orders for 22 aircraft to its order book and later revealed the previously unidentified customers at Farnborough. After the show, Airbus stood at 648 firm orders and Boeing won the year-to-date competition with 783 firm orders.

Boeing revealed design aspects for the new 777X and announced that it will build a 200-seat MAX 8 aircraft, while Airbus revealed that it will build the A330neo, which has been hotly anticipated.

Airbus took 121 orders for the new neo aircraft, including deals with CIT and AirAsia X, which stole the show when its lighthearted director, Tony Fernandes, sealed the deal with a kiss from CEO of Airbus, Fabrice Bregier, before turning to John Leahy, its chief operating officer for customers, and saying: “John, where’s yours?”

At nearly $14 billion at list prices, it seems worth it!

Bavarian welcome for Kurdish airline Kurdish carrier, Zagrosjet, launched a weekly service between Erbil, Iraq, and Munch on June 28 as part of its latest phase of expansion.

The inaugural A320-operated flight carried Zagrosjet CEO, Moffak Hamad (centre) to Munich, where its airline relationship manager, Barbara Stadler (second from right), greeted him. Munich is Zagrosjet’s seventh European destination in a network that includes Turkey, Jordan, Lebanon, Netherlands, Iraq, Sweden, Cyprus and the UK.

China Eastern Airlines is considering commencing a three-times-weekly link to Paris Charles de Gaulle, significantly enhancing connectivity to China’s southwest Yunnan province.

Flydubai has continued to expand its network in Central and Eastern Europe

6

ROUTES NEWS 5, 2014

(CEE) with two new routes to Sarajevo in BosniaHerzegovina and Croatian capital, Zagreb. Both services are due to commence in December 2014.

African low-cost airline, fastjet is responding to strong customer demand by increasing the number of

flights on its Mwanza (Tanzania) and Lusaka (Zambia) routes from its hub at Dar es Salaam.

WestJet has released a 2015 plan that includes the start of a weekly non-stop flight between Calgary and Loreto in February and a twice-weekly service between

Toronto and Fredericton in April.

Azerbaijan Airlines (AZAL) is rumoured to have set September 24 as the launch date for its longawaited trans-Atlantic link to North America, a twiceweekly service from Baku to New York JFK.

routes-news.com

Major network expansion for Etihad Etihad Airways has announced plans to launch six new routes in the first half of 2015, including the first direct flight between Abu Dhabi and Brisbane.

Daily services will commence to the European capitals of Madrid (March 29) and Edinburgh (June 8), alongside the capital of the Indian state of West Bengal, Kolkata (February 15), and Entebbe, Uganda (May 1).

The carrier will also operate fourtimes-weekly flights to Hong Kong (June 15) and three-times-weekly to the Algerian capital, Algiers (June 17).

Etihad’s existing daily flights to Brisbane (Australia), currently operated via Singapore, will become a direct service from June 2015.

President and CEO of Etihad, James Hogan, commented: “Our global network development in the first half of 2015 supports a long-term vision to provide travellers with an extensive range of destinations and connections over [our] Abu Dhabi hub.”

Hogan also noted that the expansion would create new opportunities to enhance existing codeshare agreements and align operations with key airline partners the likes of Virgin Australia, Jet Airways, Air Seychelles, Air Europa and Kenya Airways.

The airline also plans to increase frequencies on existing services over the first six months of next year, adding further depth to its network across North America, the Middle East and Indian subcontinent.

ASYJET E is to open a base at Amsterdam Schiphol LYVISTA F new Georgian LCC set to launch operations ICENCE L APPLICATIONS approved for a further six Indian airlines

Take off

or not Hitting the right slot The Civil Aviation Authority of China (CAAC) has given Shanghai Pudong International Airport (PVG) the green light to increase its airfield capacity from 65 to 74 aircraft movements per hour. It announced that its decision was based on the further release of aerospace, an overall evaluation of the airport’s capacity upgrade and PVG’s “support system perfection”. Operator, Shanghai Airports Authority, claims that the additional capacity will contribute positively to its traffic growth.

Copa expansion Copa Airlines has launched non-stop services to Georgetown (Guyana) and Fort Lauderdale from its hub at Panama City’s Tocumen International Airport.

The airline now operates twice-weekly flights to the capital of Guyana and fourtimes-weekly services to the Florida city.

routesonline.com

Fort Lauderdale becomes the tenth destination in the US to be served by Copa and fourth in the state of Florida, joining Miami, Orlando and Florida.

With the addition of Georgetown, the airline now flies to 67 destinations across 30 countries throughout the Americas.

KRAINIAN U AIRSPACE Safety and security concerns following MH17 incident HELL SHOCKED S Libyan Airlines fleet damaged by fighting at Tripoli Airport INAL CALL F Air Uganda suspends all operations

ROUTES NEWS 5, 2014

7

Cargo news Cathay strengthens Canadian cargo presence Cathay Pacific Airways will boost its freighter services to and from Canada with a new twice-weekly scheduled service to Calgary from October 17.

Subject to government approval, the latest addition will bring the carrier’s cargo network in North America to 14 freighter destinations.

Operated by B747-8Fs, Cathay expects to fly machinery and perishables direct from Calgary to Hong Kong to connect with its extensive Asian network.

Cathay Pacific’s director of cargo, James Woodrow, commented: “We will

be operating our largest and most technologically advanced commercial freighter into Calgary and connecting freight through our new cargo terminal in Hong Kong.”

Calgary Airport Authority’s senior vice president and chief commercial officer, Stephan Poirier, said: “We’ve invested extensively in [our] cargo infrastructure over the past 15 years, strategically positioning the airport for airlines such as Cathay Pacific to enter into Calgary’s market, completing our vision of linking Alberta’s businesses with Asia.”

New freighter service for Vietnam Etihad Cargo has launched all cargo flights between Abu Dhabi and Hanoi’s Noi Bai International Airport.

Operated by A330-200 freighter aircraft, the dedicated cargo service will fly via a brief stop in Mumbai en route to Hanoi; the return service to Abu Dhabi will fly direct.

The airline expects the new service to carry raw materials, consumer goods and perishables to the Vietnamese capital, with large quantities of electronics and textiles destined for the Gulf Region, Europe and Africa loaded for the return flight.

Noting that Vietnam is an important market for its freighter airline, Etihad’s chief strategy and planning officer, Kevin Knight, said: “The service will allow us to capitalise on the strong import and export demand to and from Vietnam and the rest of Southeast Asia, while providing our growing customer base with more choice.”

It has been reported that Air France–KLM is considering selling off its cargo airline subsidiary, Martinair.

However, a source from within the airline group has stated that an outright sale is only one of a number of options currently being considered.

Horses for courses LAN Cargo has carried it largest equine cargo of the year – 50 Argentine polo horses from Miami to Madrid. Due to play in the international polo season in Sotogrande, Spain, the animals travelled in groups of three in specially designed stables. CEO of LAN Cargo, Christián Ureta, said: “We face challenges like this on an almost daily basis. We have transported rhinos, giraffes, elephants, dolphins and even wallabies in the past.”

Sponsored by

routesonline.com

During July’s Farnborough International Airshow, Qatar Airways announced its intention to order four B777Fs and options for a further four in a deal worth a combined $2.4 billion (at current list prices).

Air Cargo Germany is alleged to be returning to the skies in the coming months with a new brand, livery and focus. A lack of available finance caused operations to be suspended in April 2013, but new backing from an unnamed Sloveniabased company and a Slovakian operating certificate are thought to be behind the relaunch.

ROUTES NEWS 5, 2014

9

On the

move Ryanair’s CEO, Michael O’Leary has pledged his future to the airline for at least another “three to five years”. His decision is a boost for the airline after the March 2014 departure of operations director, Michael Cawley, and the recent announcement by chief financial officer and deputy chief executive, Howard Millar, of his plans to leave at the end of the year, after 22 years with the airline.

Neil Sorahan (currently Ryanair’s finance director) will succeed Millar as CFO, with effect from October 1.

Airberlin has appointed Götz Ahmelmann as chief commercial officer (CCO) as it looks to restructure its sales organisation.

Ahmelmann joins the airline from Deutsche Lufthansa, where he held various positions since 1996.

CEO of Aer Lingus, Christoph Mueller is to step down in May 2015 after holding the position for five years. The Irish flag carrier’s board is currently in the process of selecting and appointing Mueller’s replacement.

Mbuvi Ngunze has been named as Kenya Airways’ new CEO. The operations officer will take on his new role at the end of the year when current chief executive, Titus Naikuni retires.

Dragonair CEO, Patrick Yeung, has left Dragonair to take on a role overseeing parent company Cathay Pacific Group’s business in Taiwan and Korea. Yeung successfully piloted the airline through route expansion (with 15 new or resumed destinations since April 2012), fleet growth and a redefined mission statement during his threeyear stint with Dragonair.

routesonline.com

Fastjet has announced that Angus Saunders, its CFO and executive director, is leaving the African LCC for personal reasons. Nick Caine, currently CFO of Fiji Airways, has been named as Saunders’ successor, effective from August 11.

There have been several executive changes at Southwest Airlines. Vice president of ground operations, Alfred ‘Jack’ Smith has been promoted to senior vice president of operations, overseeing technical operations, ground operations and cargo and charters. Steve Goldberg is being promoted from managing director of ground operations to vice president, and long-time vice president

of maintenance operations, Jim Sokol has announced his decision to retire in September.

Copenhagen Airports has appointed Peter Krogsgaard as its new chief commercial officer. Krogsgaard, who has a strong background in both the business-to-consumer and business-to-business sectors, will leave his position as managing director of Fujitsu Denmark and Norway to take up the post on September 1.

Airport CEO, Thomas Woldbye, claims that his appointment will help strengthen Copenhagen’s status as “the key hub of northern Europe”.

Datuk Badlisham is the new managing director of Malaysia Airports Holdings Berhad (MAHB) following the retirement of Tan Sri Bashir Ahmad Abul Majid after 11 years in the hot seat. Badlisham, who admits that he has big shoes to fill, was formerly CEO of Multimedia Development Corporation (MDeC).

Nathan Stower is set to join the British Air Transport Association (BATA) as its new chief executive. Currently the head of public affairs at the Association of Train Operating Companies, Stower will take over from Simon Buck on August 18.

Howard Millar

Patrick Yeung

Tan Sri Bashir

Peter Krogsgaard

ROUTES NEWS 5, 2014

11

Airline one2one

Nok Air CEO, Patee Sarasin, shares his views on the Thai aviation market and the establishment of new joint venture NokScoot.

How is the Thai air travel market currently performing and where is growth coming from?

It’s performing well and has benefitted from a huge organic growth from 4 million to 20 million passengers annually. The growth is coming from small-medium-enterprises (SME) business travellers, as well as leisure passengers. As a result, we saw a 44% increase in passengers in 2013.

Can you tell us more about the Myanmar market and why it is Nok’s only international market to date?

Why was a JV the best way for you to enter the medium to long-haul market?

The JV with Scoot was a strategic decision since Scoot has the knowledge of the medium and long-haul market, as well as operating a fleet of widebody aircraft. Nok Air and Scoot will leverage the strengths of both airlines to offer passengers a unique flying experience.

What are your network plans for NokScoot?

NokScoot’s network plan will be primarily focused on North Asia from Bangkok Don Mueang to meet the demands of capacity for both markets.

Myanmar is very close to home, so it was a natural market for us to expand into when the time was right.

We wanted to make travel between the two countries more accessible, as there was a demand for both markets. People from Myanmar were coming to Thailand for work, travel and medical check-ups, and people from Thailand were coming to Myanmar for travel and business.

Which routes are you initially looking at operating?

NokScoot – how did the joint venture come about?

Can you tell me more about Nok Air’s fleet mix and your future plans for the fleet?

The JV with Scoot came about through the common interest of both airlines to expand and grow in the region through the launch of a low-cost carrier for long-haul flights.

routesonline.com

800s and seven 737 MAX 8s, and four Bombardier Q400 aircraft.

Do you plan to stick to the point-to-point, quick turnaround model or would you look at growing ‘hubs’ and increasing transfer traffic (as AirAsia is doing at KLIA?) This is something that we will discuss at a later stage of development.

How has being a publically listed company changed, or impacted, the airline?

Not much has changed for us, except we have more cash flow, which will enable us to expand our services and network.

Our initial focus will be Japan, as there is a high demand for both outbound and inbound flights.

Considering the impact of ASEAN Open Skies in 2015 – will it happen and how will Nok Air be affected?

Are you considering other joint ventures along the same kinds of lines and structure?

With the ASEAN Open Skies, Nok Air will continue to move forward and have greater access to the ASEAN, making travel more accessible to everyone within the region.

Not at the moment, but you never know what could happen in the future.

We currently operate a fleet of Boeing 737-800s and ATR 72-500s. At the recent Singapore Airshow, we committed to order eight Next-Generation 737-

Has there been an impact on travel demand as a result of the political unrest in Bangkok over the past six months?

There has been some impact, but it is something that we have been through many times before and we are confident that travel demand will pick up from where it left off.

ROUTES NEWS 5, 2014

13

Airport one2one

Routes News gets up close and personal with Matthew Findlay, Christchurch Airport’s general manager, aeronautical business development.

How have passenger and cargo traffic respectively performed at Christchurch during 2014?

Each month, our performance has been improving remarkably. We’ve closed out the financial year with approximately 4% growth internationally and 3% growth domestically. That‘s a great result, which echoes the stronger economic performance of the region that is now well under way. Canterbury is New Zealand’s fastest growing region, with recent GDP growth in excess of 6%.

A key focus is to increase our widebody capacity, to meet growing airfreight demand as a result of this robust growth.

In the past 12 months, what has been your biggest air service achievement, or the highlight for your team?

Our greatest achievement has been to see some records broken and some extremely positive comments made by airline executives in respect to their own airlines’ performance in CHC. Nothing speaks more loudly than an airline saying publicly that its performance here is very good. It’s the best marketing we could have.

In recent months, domestic and international load factors have reached record highs; monthly traffic volumes

routesonline.com

have broken records and volumes from core markets have grown at double digit rates. New services have also stimulated the market – the Perth service by 58%, for instance. Oh, and we were named runner up in our category for the Routes Asia Award.

What learnings or experience has your team been able to take from other destinations following a major natural disaster?

Our learnings have largely been our own, since they were from an unusual combination of more than 13,000 earthquakes, three once-in-a-hundredyears snow storms and volcanic ash clouds, all while we were building a new terminal. Probably the biggest learning was what a fantastic team of people we have at the airport – staff and volunteers who put their own issues aside to keep the airport running and our customers comfortable.

That was a truly inspiring experience.

A key learning has also been to demonstrate to the various stakeholders in our catchment economy how vital an airport is to maintain the visitor economy and trans-shipment of freight – two vital factors which are crucial to our local environment.

How do you structure your air services team, and why have you opted for this structure?

We have a small team, focused on key strategic elements to ensure we are growing markets and securing the right capacity from airline partners to meet demand. Being a smaller airport, we have to be creative in both the ways in which we go about engaging with airlines and stimulating the various aspects of the ‘visitor economy’. Ensuring we tap into various niche markets to fill planes results in a better mix of yields from various markets, which we anticipate will maintain route profitability better than just leaving that risk with the airline.

Which route would you most like to see added and why?

How many do you have room for? A connection between North East Asia and the South Island is a key focus. China is an obvious candidate, especially with significant trade growth in food, because Canterbury and the South Island are New Zealand’s food basket; in addition to ICT and manufacturing, putting aside the South Island’s natural beauty, which is a key volume attractor. North America is another obvious candidate, as is doing more ‘business as usual’ – filling in some schedule gaps to points in Australia, etc.

ROUTES NEWS 5, 2014

15

Airport one2one What is your favourite part or attraction of the South Island?

Having lived in the South Island for only three years, my family and I are really enjoying exploring its lesser known places. It’s hard to choose one place, as the really great thing about the South Island is that you don’t have to go far to have a truly wonderful experience. For instance, Hokitika on the West Coast has some wonderful native bush-walk experiences, such as TreeTops, and the town has some fantastic eclectic food offers. Another choice I’ve enjoyed is in a small township south of Lake Tekapo (another amazing location – world famous) called Omarama. There, my kids (aged 6, 4 and 2) helped my wife and I catch a salmon, which we then had cooked for us. We ate it on the lawn of the salmon farm’s restaurant in April – a stunning location and an all-of-family experience we don’t get often enough!

What’s the best piece of advice you’ve ever been given?

What are you most likely to sing at karaoke?

As a traveller – always stay with the crowd; and, when with your host – only do what they would be prepared to do. In business – surround yourself with the best people.

Sing? Me? You’ve got to be joking – but I have learned that Billy Joel’s We didn’t start the fire is one I can always speak – rather than sing – if I’ve been unlucky enough to be caught out.

Sponsored statement

routesonline.com

ROUTES NEWS 5, 2014

17

Playing to its strengths

Martin Rivers finds out more about the business strategy, growth and development plans of Cebu Pacific.

A

fter receiving its fourth Airbus A330-300 in May, Cebu Pacific, the Philippines’ largest airline, was understandably eager to make good on its promise of rolling out long-haul destinations.

The low-cost carrier began operations in 1996 and has historically focused on domestic connectivity across the archipelago plus regional links throughout Asia.

But under the stewardship of Lance Gokongwei, the son of founder and business magnate John Gokongwei, Cebu Pacific has steadily encroached into the challenging yet ever-more popular sphere of low-cost, long-haul flying.

“Our strategy on long-haul is to offer the same affordable, efficient, safe service that we do on the short-haul and regional markets,” the younger

18

ROUTES NEWS 5, 2014

Gokongwei tells Routes News. “Our focus is primarily on routes that can be served by our A330s where there is a large Filipino population.”

The first long-haul destination to enter the network was Dubai, with daily flights launching in October 2013 – four months after Cebu Pacific received its first widebody.

Although the route was initially unprofitable, load factors are now inching towards the mid-80% breakeven point and further expansion in the Middle East is planned. Kuwait will become the next destination, with a thrice-weekly service getting under way in September.

Both markets are attractive to Cebu Pacific because of their large expatriate populations – 930,000 Filipinos work in the United Arab Emirates, and 180,000

in Kuwait – but competition is stiff, with Emirates and Kuwait Airways both serving Manila’s main gateway, Ninoy Aquino International Airport.

Elsewhere, a four-times-weekly service to Sydney will also begin in September, rising to five-times-weekly in December.

VFR traffic

Although Cebu Pacific hopes to attract Australian leisure travellers on the Sydney route – previously duopolised

by Qantas and Philippine Airlines – it is the country’s diaspora that will again fuel much of the low-cost demand.

An estimated 250,000 ethnic Filipinos currently live in Australia.

Indeed, with almost one in ten Filipinos living or working abroad – equivalent to about 10.5 million people – labour traffic and VFR (visiting friends and

routes-news.com

Cebu Pacific relatives) traffic lies at the heart of the airline’s business strategy.

“Our fundamental brand and culture is based on the low-cost carrier model,” Gokongwei explains. “We believe that is a suitable model, especially for a country with the Philippines’ specific characteristics.

“First, the Philippines is a relatively low-income market. Second, there’s a lot of Filipino workers abroad. Philippine traffic is almost 95% worker traffic. That creates a lot of opportunity unique to Cebu Pacific for those workers, as well as friends and family who want to visit them.

“Third, the rapid economic growth in the Philippines has also created an emerging middle class, especially IT and BPO (business process outsourcing) workers, who now have incomes and want to travel.”

Regional appeal

Indeed, rather than utilising Dubai as a hub for onward journeys, the airline is sharpening its focus on other underserved regional points.

Saudi Arabia stands out as the obvious choice for future expansion, with approximately 1.3 million Filipinos working in the country.

Saudia and Philippine Airlines both fly to Dammam and Riyadh from Manila – with Saudia also operating a JeddahManila service – but Gokongwei is confident that Cebu Pacific’s lower fares could catalyse higher demand for these destinations.

“The natural routes that we are expecting to add in the next few months

means the airline could now consider the continent, but “on a practical basis, flying directly to Europe is still a few years away”, admits Gokongwei.

Any such route launches would require the addition of new widebodies, Gokongwei notes, singling out the Boeing 777, 787 and A350 as the “three decent choices”.

Philippine Airlines was also removed from the EU blacklist in July 2013 and has since resumed flights to London Heathrow Airport. The flag carrier is evaluating other western hubs, such as Rome, Paris, Amsterdam and Frankfurt.

“There’s been a clear delineation in strategy, where Cebu Pacific is

Cost conscious

By developing a European-style ultra-low-cost product, Cebu Pacific claims to offer fares that undercut its competitors by as much as 40%.

That gives it an edge in labour and VFR markets dominated by price sensitivity: “cost is critical in the decision-making process,” Gokongwei says of his customers – but it also imposes some limitations for passengers.

The onboard product pushes the concept of no-frills travel to the limit, cramming 436 Economy seats into an aircraft that typically has about 250 when configured with three cabins.

And unlike rival low-cost, long-haul operator AirAsia X, Cebu Pacific has no Business Class. Its standard seat pitch is 30 inches, though passengers can pay extra for 32 inches. Baggage allowances and refreshments are not included in the ticket price.

Stripping down costs to the bare bones also makes partnerships difficult to establish. Cebu Pacific has not signed interline or codeshare deals with other carriers at Dubai, despite a high proportion of its customers requiring onward connections. “We find that our passengers have learned how to selfconnect,” Gokongwei says.

routesonline.com

By developing a European-style ultra-low-cost product, it claims to offer fares that undercut its competitors by as much as 40%

would be primarily in the Middle East, particularly Saudi Arabia,” he confirms.

“The latest data says that 75% of the traffic to Saudi Arabia does not fly direct at this point. So I do think there is a gap in the market.

“If you combine the huge number of non-direct traffic with the stimulation we can provide by offering lower fares, I do think there’s enough room for the Saudi carriers, for Philippine Airlines and ourselves.”

Long-haul market

Asked about other long-haul markets, he notes that the A330’s limited range prohibits him from opening up European routes in the near future.

The EU’s decision to remove Cebu Pacific from its aviation blacklist in April

pursuing the low-cost market … and Philippine Airlines is focused on building their routes towards more high-yield or long-haul markets,” Gokongwei explains.

Fleet

Although recent attention has centred on long-haul expansion, the airline is by no means neglecting its domestic and regional presence.

Widebodies account for just four of the airline’s 52-strong fleet, which also includes 30 A320s, 10 A319s and eight ATR 72s. A further 43 aircraft are on order: two A330s, 11 A320s and 30 A321s.

The turboprop fleet is described by Gokongwei as being a “good workhorse” for island-to-island hops across the archipelago, with runways at airports like

ROUTES NEWS 5, 2014

19

Cebu Pacific

Boracay and Busuanga unable to handle larger aircraft.

Cebu Pacific’s domestic footprint encompasses 34 destinations, while its regional network comprises 23 cities spread across 11 foreign countries.

Both sectors will continue to expand, with Tandag in Surigao del Sur becoming the latest addition inside of the Philippines’ borders.

Overseas routes are more difficult to add because of bilateral restrictions, though progress is steadily being recorded in key markets like Japan.

The airline was at the forefront of lobbying efforts to establish open skies between the Philippines and Japan last year, eventually being rewarded with new designations for Tokyo and Nagoya, as well as higher frequencies to Osaka.

As a consequence of the route launches, the Japan National Tourism Organisation reported that Philippine visitor arrivals to Japan jumped by 129.5% between March and April.

Bilaterals

Bilateral talks continue elsewhere, with the country’s Civil Aeronautics Board (CAB) filing a request on behalf of Cebu Pacific with Myanmar.

CAB is also seeking to renegotiate traffic rights with Malaysia, perhaps mindful that the aim of securing

20

ROUTES NEWS 5, 2014

ASEAN Open Skies by 2015 looks increasingly unlikely to be achieved.

But alongside further organic growth, Gokongwei is also tentatively exploring a partnership with Singapore’s Tigerair.

Cebu Pacific completed its acquisition of loss-making subsidiary Tigerair Philippines in March, lifting its overall domestic market share to 60%. As well as bolstering its presence at home, the deal opens up the potential for a metalneutral agreement with the Tigerair parent in Singapore.

Instead, Cebu Pacific will keep its focus firmly on the Philippines, cementing its first-mover advantage in the rapidly consolidating market.

In March 2013, AirAsia Philippines and Zest Airways agreed a share swap that would later create the merged entity AirAsia Zest. That same month, Philippine Airlines withdrew from the low-cost market by rebranding its subsidiary AirPhil Express as full-service PAL Express.

Synergies

Together with the acquisition of Tigerair Philippines, these moves reduced the number of major domestic players to just three: PAL Group, AirAsia and Cebu Pacific.

Whereas the wider Asia-Pacific region continues to suffer from fragmented competition and rampant over capacity, the Philippines is now setting the standard for a more disciplined tenor of growth.

Little wonder that Maybank, Malaysia’s largest bank, recently concluded that the Filipino “fare war” of 2013 has ended and profitability among the country’s airlines is rising.

Although Philippine Airlines and AirAsia will draw some benefits from this, Cebu Pacific is in prime position to reap the spoils.

“We fly into North Asia, into China, Korea, Japan. Whereas Tiger has real strength going into a lot of Southeast Asian countries: Indonesia, Thailand, Malaysia and particularly into India,” Gokongwei notes.

“We are already selling each other’s tickets on each other’s sites. Now for the routes between the Philippines and Singapore, we are going through the various competition regulators to seek a revenue sharing model.”

The CEO is careful not to overstate his appetite for foreign partnerships, however, stressing that Cebu Pacific has little interest in joint ventures.

“I don’t want to be the fourth or fifth entrant into the market,” he explains when quizzed about the issue.

Acquisitions

routes-news.com

Going green Jonny Williamson discovers more about how Ireland’s airports are faring after a tough few years.

Giant's Causeway Portrush Coleraine

Derry

Larne

Letterkenny Killybegs

Belfast

Donegal

Lough Neagh Armagh

T

echnically speaking, an Irish passport is one of the best in the world to have as it opens the door to visa-free access to an impressive 170 countries.

This is just as well, as the Irish love to travel overseas – more than 10 million flew out of Ireland’s airports in 2013 – and inbound tourism remains one of the country’s largest economic generators.

True, the downturn in the global economy meant that the number of international tourists coming into Ireland either declined or plateaued between 2009 and 2012, hovering around 6.5 million, but the latest figures by Fáilte Ireland (the National Tourism Development Agency) reveal that numbers are returning.

Indeed, the number of international visitors finally surpassed pre-economic crisis levels last year when close to seven million foreign nationals (+7.2%) visited the Emerald Isle.

routesonline.com

Sligo Carlingford

And a spate of air service developments, supported by tourism initiatives such as The Gathering and the Wild Atlantic Way, look likely to make 2014 another year of strong growth.

So how are Ireland’s airports faring in 2014? Routes News takes a closer look at the growth and development plans of the big three gateways – Dublin, Shannon and Cork.

Dublin International Airport

As Ireland’s busiest airport, Dublin is the country’s primary international gateway and has a far-reaching short and medium-haul network.

The airport saw 2% growth in passenger traffic in both 2011 and 2012, and enjoyed a healthy 6% rise in 2013 thanks to strong improvements in trans-Atlantic and European services.

Dublin-London Heathrow is one of the world’s busiest international air routes,

Dundalk

Knock

Westport

Dublin

Cong Clifden

Galway Cliffs of Moher

Enniskerry Kildare

Lahinch Ennis

Shannon

Arklow

Limerick

Enniscorthy

Adare Listowel

Waterford

Tralee Killarney

Blarney

Valentia Island

Cork

Wexford

Youghal

Kenmare Bantry

PASSENGER TRAFFIC 2013 • Dublin: 20.2 million (+5.6%) • Cork: 2.3 million (0%) • Shannon: 1.4 million (+0.4%)

ROUTES NEWS 5, 2014

23

Dublin Airport.

Ireland’s airports and perhaps this is not surprising given Ireland’s close ties to the UK. Dublin’s top ten routes also include London Gatwick, London Stansted, Manchester and Birmingham.

Long-haul traffic to key source markets in North America and the Middle East both grew by 13% in 2013 and overall the year marked Dublin’s third successive year of growth and its busiest year since the downturn five years ago.

“We saw a record 1.9 million people flying between Dublin and North America last year, as our airline customers [particularly Aer Lingus] added extra capacity to existing routes, and we also saw the start of a new daily American Airlines service to New York’s JFK,” reflects the airport’s managing director, Vincent Harrison.

With New York remaining the most popular US destination for Irish travellers, United Airlines began operating a doubledaily service between Dublin and New York’s Newark Liberty International Airport during 2014’s peak summer season.

Several other airlines have recently added new long-haul services, including Air Canada rouge (Toronto); Aer Lingus (Toronto and San Francisco); Emirates (Dubai); and WestJet (Toronto) – the carrier’s first trans-Atlantic route.

Cork Airport

Also operated by Dublin Airport Authority (DAA), Cork Airport has a broad European network, but currently doesn’t serve any destinations further afield.

That might change once the redevelopment plan commences in 2015, with an extension to the main runway allowing it to accommodate long-haul aircraft such as the B747 and A380.

The proposals include extending the main terminal and constructing additional fixed gates, effectively doubling the available aircraft space and enabling the airport to handle the three million annual passengers expected from 2017 onwards.

Serving as a hub for Aer Lingus, the airport saw the national flag carrier’s regional arm (operated by Stobart Air) add a new service from Cork to

24

ROUTES NEWS 5, 2014

Cork Airport.

Newcastle this year and increase frequency on routes to Manchester, Bristol and Rennes, France.

Not one to be left behind, Ryanair is planning to add an additional 18,000 seats to Gran Canaria, Palma de Mallorca, Liverpool, Malaga and Lanzarote from September/October.

Both airlines are increasing services to London, with Aer Lingus upping its Heathrow flights to five-times-daily and Ryanair set to add more flights on its Stansted route next winter.

Many see the restoration of the CorkDublin air link as a key component of the airport’s future growth, having been axed during the height of the recession in 2011.

“Restoring the Cork-Dublin route to feed long-haul connectivity at Dublin Airport is something we have been actively pursuing and pitching to prospective airlines,” says Cork’s managing director, Niall MacCarthy.

Adding: “Direct trans-Atlantic connectivity remains a medium-term objective which would be a major catalyst to the economic and tourism development of the region we serve.”

Shannon Airport

Recent times have not been easy for Shannon Airport, which has seen its annual throughput decline from a 2006 peak of 3.6 million passengers to an all-time low of 1.3 million passengers in 2012.

At the beginning of 2013, the airport separated from the DAA and became

a publicly owned independent facility operated by the Shannon Airport Authority.

Despite a difficult start to 2013, June saw the airport record its first month-over-month increase in five years. It also pulled off a major coup by securing United Airlines’ flights to Chicago, and US Airways introduced summer services to Philadelphia.

The extra services resulted in 1.4 million passengers passing through the airport last year, and the upturn has continued into 2014, with Shannon’s head of aviation development, Declan Power, predicting that his gateway is set to handle an additional 200,000 passengers by year end.

“We’ve had a significant increase from Ryanair, which is now operating to 18 destinations [up from 10],” enthuses Power. “Aer Lingus has replaced the B757s on its now daily trans-Atlantic flights to New York and Boston with A330s, and United Airlines’ Chicago route proved so popular it has added 90 extra flights a year [88% more capacity].”

According to Power, there are two priorities for Shannon as it looks to the future: attracting a Middle Eastern carrier to capture a portion of the traffic currently feeding Emirates’ DublinDubai service, and offering more hub connections into Europe.

Power highlights Frankfurt, Munich and Amsterdam as desirable destinations, though connectivity is the key target, he says, regardless of which airline or city ultimately provides it.

routes-news.com

London calling Jorge Gil, CEO of Ferrovial Aeropuertos, talks to Joe Bates about the challenges and opportunities facing Heathrow and the Spanish group’s global development plans.

W

ithout doubt, Heathrow is the prize airport asset of Ferrovial, which claims to be the world’s leading private investor in transportation infrastructure, having invested €53 billion on its assets.

And it is easy to see why as the UK’s only hub handled a record 72.3 million passengers (+3.4%) in 2013 and was the recipient of a number of awards in the process.

These included being named the ‘Best Airport in Europe handling over 25mppa’ by ACI Europe (won jointly with Amsterdam Schiphol) and Executive Travel magazine’s 2013 Leading Edge Award for ‘Best International Airport’, while Terminal 5 won SkyTrax’s ‘Best Airport Terminal’ award.

Jorge Gill, CEO of Ferrovial Aeropuertos, describes 2013 as a “great year for Heathrow”, and is confident that more accolades will soon be coming its way following the much anticipated June 4 opening of its new €3 billion (£2.5bn) Terminal 2.

Also known as The Queen’s Terminal, Terminal 2 is the new home of the 23 Star Alliance carriers serving Heathrow as well as Aer Lingus, Virgin Little Red and Germanwings, ensuring that it handles around 20mppa.

26

ROUTES NEWS 5, 2014

Gil insists that T2 – one of the largest privately funded infrastructure projects in the UK in recent years – has been designed from the outset with the needs of the individual passenger at its heart, and with sustainability as a guiding principle.

He supports the claim by revealing that T2 will produce 40% less CO2 emissions than the buildings that it has effectively replaced. It will also be the UK’s first airport terminal to be awarded a BREEAM rating for its sustainable building design.

“It is an easy thing to say, but continuous improvement truly is at the core of Heathrow’s heart,” adds Gil. “Every member of the team is committed to making every journey better, every day, and all the time”.

Economic regulation

According to Gil, one of the biggest challenges faced by Heathrow in 2014 will be coming to terms with the impact that new economic regulation will have on the gateway.

He is, of course, talking about the Civil Aviation Authority’s decision that Heathrow can only increase its charges by less than the rate of inflation for the next five years.

It doesn’t sound that bad, but effectively the new ruling means that Heathrow’s per passenger airline charges will fall in real terms from €25 in 2013/14 to €23 in 2018/19.

Heathrow chief executive, Colin Matthews, has already blasted the regulation as ‘draconian’. And Gil agrees, claiming that the findings of the toughest price review the airport has ever faced were based on aggressive operational, commercial and passenger forecasts, requiring Heathrow to reduce its operational expenditure by more than €726 million (£600 million), and stretch commercial revenue targets by in excess of €121 million.

He notes that this makes it very difficult to achieve the already “very low return” approved by the CAA. “We will review our investment plan to see whether it is still financeable in light of the CAA’s settlement,” he warns.

“It means that we will need to achieve a better level of efficiency, increase productivity and reduce cost while competing with other airports in Europe, which like us, are offering better passenger service every day.”

UK capacity crunch

Talking about competition from major hubs around the world, Gil is pleased

routes-news.com

Ferrovial

with the Airports Commission’s recent conclusion that Heathrow has been shortlisted as a viable option for expansion.

So too has Gatwick, although he refuses to accept that it is the main competitor to Heathrow for extra capacity.

Indeed, Gil argues that there is room for growth at both airports, but claims that what the UK needs is extra hub capacity.

“Heathrow and Gatwick are different,” he says. “Heathrow provides regular, direct flights to long-haul business destinations by connecting passengers from all over Europe. Gatwick serves mainly short-haul and holiday destinations.

“The choice is between one hub and none, not two or a split hub. We are working with all stakeholders to support the proposal to build a new runway at Heathrow.

“It is of utmost importance if the UK wants to be part of the race to emerging markets. Long-haul connections from Heathrow have given the UK a competitive advantage for the

routesonline.com

last 50 years, and we want to ensure that we will be able to provide this critical access in the future.”

Gil believes that building a third runway at Heathrow would also support more inward investment that would consequently deliver more jobs, more trade and more economic benefits.

“Continuing to have one of the world’s best-connected hub airports in the UK is vital to supporting the economic growth of the nation,” he adds.

“The Airports Commission’s final report, due out in 2015, will indeed be a significant milestone in Heathrow’s history. We hope the right decision is made and we are given the opportunity to expand Heathrow.”

Global airport operator

Although only operating airports in the UK today, Ferrovial Aeropuertos hasn’t given up hope of rebuilding a global airport portfolio, as its recent participation in tenders for gateways in Brazil testifies.

Indeed, Gil confirms that Ferrovial is actively looking for new investment opportunities. “We are committed to increasing our airport portfolio and our goal is to invest in airports where we are able to bring added value,” he tells Routes News “Our wide range of expertise allows us to add value in the areas of construction, financing or operations, boosting revenues and improving efficiency. This enables us to analyse both existing, mature airports as well as new or CAPEX-intensive airports.”

When it comes to investment opportunities, Gil says that Ferrovial is truly global in its ambitions.

“While we have a preference for Organisation for Economic Co-operation and Development (OECD) countries, we are also open to other markets,” he reveals.

“As investors, we have a preference for being majority shareholders.

Having said that, we are open to considering other alternatives, such as management contracts, if appropriately linked to our core business. That is a decision we take on a project-byproject basis.”

In response to the question of what Ferrovial brings to the table, Gil smiles and says “everything”.

He says: “Thanks to our operational experience, proven financial capabilities and synergies with other divisions in our group, we can deliver a worldclass service, implement operational innovation and attract airlines and new routes, driving growth and improving the passenger experience.”

When you put it like that, I don’t think it will be long before Ferrovial Aeropuertos adds to its list of gateways.

ROUTES NEWS 5, 2014

27

Choose Chicago Don Welsh, CEO of the official destination and marketing organisation for Chicago, is confident that “the most American city in the US” will wow World Routes delegates.

Why is hosting World Routes 2014 good for Chicago?

Tourism is a vital, essential part of Chicago’s economic strategy. Hosting World Routes 2014 is an important component of a proactive strategy to achieve Mayor Emanuel’s goal for increased visitation from across the globe.

What do you hope to gain from the experience?

Working together with the Chicago Department of Aviation, we intend to deliver a successful conference and memorable experience for every delegate. Of course, we also hope that we will secure additional routes from existing airline partners and develop relationships and ultimately new routes with new airlines.

What role does aviation play in Chicago’s economy?

Airlift is critical to Chicago’s economic development efforts. Chicago is North America’s only dual-hub for commercial air travel. Two international airports within miles of downtown Chicago connect the city with the rest of the world. With more than 1,400 non-stop daily flights from O’Hare and Midway, including 127 daily departures to 62 global destinations, Chicago is one of the leading transportation hubs in the world.

a record 18.65 million visitors, a gain of 3.8%. Seasonal, regional marketing campaigns fuelled a leisure visitation record of 36.6 million in 2013, a gain of 5.8%, surpassing 2012’s peak of 34.7 million.

How is Chicago innovating its tourism product?

Through co-ordinated investments and marketing, our new tourism strategy is reaping significant dividends in job creation and economic activity.

Continued investment in neighbourhood tourism strategies, new iconic ventures (like boats for architectural river cruises and most recently the TILT experience at the Hancock Center), and an enhanced global marketing campaign continue to attract more tourists.

What does the city offer as a conference and convention destination?

Chicago offers an incredible variety of unique venues and elite services, as well as unmatched entertainment and cultural options and a Michelin-rated dining scene. Home to McCormick Place, the Western Hemisphere’s largest convention centre, there is no denying that Chicago is the most customerfriendly meeting and convention destination in the US.

What has driven Chicago’s visitor growth in recent years?

What is the biggest misconception about Chicago?

Overnight leisure visitation to the city has increased 37% in the past five years, with 2013 surpassing the 2012 peak at

One of the larger misconceptions I have encountered is that we are a two-food city – pizza and hot dogs. While we

28

ROUTES NEWS 5, 2014

Don Welsh

do both equally well, we have one of the most dynamically diverse culinary communities in the world.

What are your key targets?

In line with Mayor Emanuel’s goals, our targets are to increase visitation to 55 million visitors yearly by 2020; book 2.3 million room nights and 50 new meetings/conventions into Chicago annually; and elevate Chicago to among the top five US cities for inbound international travel by 2020.

If you weren’t CEO of Choose Chicago, what would you be doing?

My management style is largely based on a sports mentality, and I find music to be incredibly important and motivating; so something in either music or sports.

routes-news.com

Chicago destination guide

Inside Chicago Get the most out of your visit with some insider knowledge from those who know the city the best

DON’T LEAVE WITHOUT EXPERIENCING… Without question, the Architectural Foundation River Cruise. The Chicago River is the city’s most striking asset in that it affords us to showcase our amazing and architecturally stunning history

FAVOURITE ATTRACTION O’Hare Airport – it sounds crazy, but it’s exciting, stimulating, and you can get to almost any city in the world, non-stop. I love its energy!

Don Welsh, CEO, Choose Chicago

WHAT PEOPLE DON’T REALISE

Kevin Brown, president and CEO, Lettuce Entertain You Enterprises

Deep-dish and stuffed-crust pizza may get all the headlines, but our thin-crust pizza is amazing!

BEST-KEPT SECRET

Randy Stancik, vice president, Willis Tower/Skydeck Chicago

The Chicago Architecture Foundation, home to a fantastic 3D model of the city

FAVOURITE ATTRACTION

Ted Beattie, president and CEO, Shedd Aquarium

Michigan Avenue – the excitement and energy is unmatched Patrick Donelly, general manager, Hyatt Regency Chicago

FAVOURITE ATTRACTION Millennium Park is truly a must see

DON’T FORGET TO PACK Your camera – you’ll want to capture your visit to share with others Holly Agra, president and CEO, Chicago’s First Lady Cruises

Holly Agra, president and CEO, Chicago’s First Lady Cruises

BEST PLACE FOR COFFEE Beatrix – great people, vibe, coffee and setting Kevin Brown, president and CEO, Lettuce Entertain You Enterprises

routesonline.com

ROUTES NEWS 5, 2014

29

Chicago destination guide

THE BEST THING ABOUT LIVING IN CHICAGO The beautiful lakefront, the diverse neighbourhoods, the cultural institutions, the theatre district, the amazing restaurants and the people Anne Rashford, director of special exhibitions, Chicago’s Museum of Science and Industry

BEST PLACE TO EAT The decadent breakfast at Little Goat, and Ge Pa De Caffe for the best homemade Italian gelato Eileen LaCario, vice president, Broadway in Chicago

BEST-KEPT SECRET Chicago is the cultural capital of the world Eileen LaCario, vice president, Broadway in Chicago

BEST PLACE FOR DINNER Prosecco Restaurant – I’ve been going there for so many years it feels like dining in my own home!

Ted Beattie, president and CEO, Shedd Aquarium

Aviation’s contribution to Chicago •T he largest city in America’s Midwest, Chicago’s unique geography has made it a prime aviation location, particularly for those airlines operating hub and spoke models • Combined, O’Hare and Midway International airports handled 87 million passengers in 2013 (more than the population of Germany)

DON’T LEAVE WITHOUT Talking to Chicago natives – Chicagoans are renowned for their hospitality and their civic pride will really add flavour to your trip Randy Stancik, vice president, Willis Tower/Skydeck Chicago

• O’Hare is United Airlines’ largest hub, accounting for some 45% of all passengers passing through the airport • A key driver of the city’s economy, aviation’s local economic impact is estimated to be $38 billion • Almost 500,000 jobs are thought to be directly associated with the region’s aviation and tourism activities

DON’T FORGET TO PACK Your walking shoes!

Patrick Donelly, general manager, Hyatt Regency Chicago

30

ROUTES NEWS 5, 2014

All images are courtesy of Choose Chicago.

routes-news.com

World Routes 2014 Awards

And the winner is…

Having been crowned overall winner of their respective regions, four airports have been automatically shortlisted for the prestigious World Routes 2014 Marketing Awards.

I

n February, during the networking evening hosted by the Ministry of Tourism El Salvador, Tampa International Airport beat strong competition to be announced winner of the first heat of the 2014 Routes Awards.

In 2013, Tampa saw the launch of new direct Copa Airlines flights to Panama; expanded its Edelweiss Air frequency to Zurich; added several weekly flights to three popular Cuban cities; and brought in new daily flights to Seattle operated

by Alaska Airlines.

Routes Americas was swiftly followed

by Routes Asia, where Abu Dhabi International Airport was named overall winner during a 5-star ceremony held at Malaysia’s world-class Pullman Kuching Hotel.

The capital city gateway of the United Arab Emirates (UAE) handled more

than 16.5 million passengers in 2013, recording double-digit growth for the fourth year in a row.

As well as home-based carrier Etihad Airways launching new services to Washington DC; Amsterdam; São Paulo; Ho Chi Minh; Belgrade; and Sana’a, the airport also welcomed six new carriers, with 40 additional weekly flights operated by foreign airlines.

At a record-breaking evening held at the Marseille Province Cruise Terminal, Bremen Airport – also known as City Airport Bremen – took the title of overall winner of the Routes Europe heat in front of the region’s largest gathering of aviation professionals.

Having already scooped the top prize in 2012, Bremen’s marketing and sales team has worked tirelessly to promote the airport in an increasingly crowded

and competitive region. Though it may fall in the ‘Under 4 Million Passengers’ category, the airport punches well above its weight to hold its own among some of the world’s busiest hubs.

Offering regional access with global reach, Bremen’s 200-plus weekly flights currently serve more than 50 non-stop destinations, as well as the rest of the world, via the major European locations.

Rounding off the list of automatically qualified gateways for the marketing awards is Kilimanjaro International Airport, who took the top spot at Routes Africa for the second year running.

Having achieved an incredible 24% growth in traffic during 2013, the award demonstrates how seriously the African airport takes its network expansion and air services development.

MAKE YOUR VOTE COUNT Voting for the 2014 World Routes Marketing Awards is now open and this year there will be five categories: • Under 4 million passengers • 4 – 20 million passengers • 20 – 50 million passengers • Over 50 million passengers • Destination marketing award After considering which airports and destination’s marketing efforts over the past 12 months have made a real impact on their future network development plans, airline professionals can submit their votes via the Routes Online website.

routesonline.com

Once the airline network community has voted, the votes will be counted and the shortlisted airports and destinations will be announced.

Voting closes on August 21, with the full roster of companies shortlisted being released on August 26.

The winners of these highly regarded awards will be announced during a ceremony that will take place at the World Routes Networking Evening on September 22, held at Chicago’s Field Museum of Natural History.

ROUTES NEWS 5, 2014

33

Routes Africa

Falling for Africa Victoria Falls provided a spectacular backdrop for Routes Africa this year, which attracted over 350 delegates from 40 airlines, 50 airports and 15 tourism authorities, writes Richard Maslen.

T

he pulling power of Routes Africa was clear for all to see this year with the continent’s airlines out in force. The big boys of Ethiopian Airlines, Kenya Airways and South African Airways were joined by a host of low-cost carriers that included Comair, Fly540, FlyAfrica.com and pan-African operator, fastjet.

The addition of global operators such as British Airways, Iberia and Condor Airlines, all of which are potentially looking at expanding their African networks, confirmed the event’s importance.

Taking place over two days, the Routes Africa Strategy Summit drew a number of high-level speakers and participants that included IATA’s vice president for Africa, Edmund Makona, and Zimbabwe’s Vice President, Joice Mujuru.

From her welcome address to the various statements from senior government ministers, including the Honourable Minister of Tourism and Hospitality and the Honourable Minister of Transport and Infrastructural Development, it is clear that Zimbabwe has tremendous potential to develop as a destination.

The discussions were engaging and thought-provoking and debated some

34

ROUTES NEWS 5, 2014

of the key topics impacting the aviation business across Africa, including the continued evolution of the low-cost airline model and how restrictive regulations, high taxes and unfair subsidies and visa issues are stifling true competition in Africa.

This year’s event, which included a keynote address from Tebello Mokhema, ACI Africa’s director, membership, communications and strategy.

Delegates were treated to sessions on ‘Africa, Booming Economy…

Struggling Aviation Section’; ‘Taking centre stage: Africa’s place in global route development’; ‘Pouring Concrete...

Funding Airport Infrastructure’; and ‘ The role of visa facilitation in driving tourism in Africa’.

Incidentally, Victoria Falls is neither the highest nor the widest waterfall in the world, but is classified as the largest based on its width of 1,708 metres and height of 108 metres resulting in what is the world’s largest sheet of falling water.

At roughly twice the height of North America’s Niagara Falls and well over twice the width of Horseshoe Falls, it is rivalled only by Argentina and Brazil’s Iguazu Falls and a visit is one of the world’s most breathtaking experiences.

AFRICAN EXPANSION FOR FASTJET African low-cost carrier fastjet is to continue its international network expansion with the launch of a twiceweekly link between its Dar es Salaam base in Tanzania and the capital of Zimbabwe, Harare.

The new link was announced to coincide with the carrier’s attendance at this year’s Routes Africa forum. It is the budget carrier’s third international route after Lusaka, Zambia and Johannesburg, South Africa.

The carrier’s entry into Zimbabwe demonstrates the Zimbabwe Ministry of Transport’s ongoing commitment to the improvement of the country’s aviation industry and to the development of trade relationships with its neighbours, as was outlined by a number of senior ministers during the opening day of this year’s Routes Africa forum.

Speaking to Routes News at Routes Africa shortly after the route was announced, fastjet’s chief commercial officer, Richard Bodin, said: “We expect to grow frequencies fairly rapidly and have plans to develop further in Zimbabwe, where we see Victoria Falls as a strong potential destination.”

routes-news.com

Report back

On top of the world Tanzania’s Kilimanjaro International Airport retains Routes Africa marketing crown Over 4 million passengers

Winner: Durban King Shaka International Airport (South Africa)

Highly commended: Casablanca Mohammed V Airport (Morocco) Shortlisted: • Addis Ababa Bole Airport (Ethiopia) • Cape Town International Airport (South Africa)

A

irport managing director, Mattijs Smith, claimed he was “delighted and proud” to win the overall Africa award for a second successive year.

Speaking to Routes News in Zimbabwe, he enthused: “This award is a true recognition by our airline customers for strengthening our existing routes and achieving a record growth of 24% in traffic in 2013.”

Katie Bland, director Routes for UBM Live said: “We were delighted with the high level of submissions and congratulate all those that were nominated, those recognised as Highly

Commended by the panel of judges and of course all of the section winners.

“Kilimanjaro International Airport has once again shown how seriously it takes network development and their submission included examples of their marketing material and their dedication to improving routes to their airport.”

Kilimanjaro was also named as the winner from the Under four million passengers category, with Durban King Shaka International Airport honoured from the over four million passengers category and Madagascar Tourism Board ranked top in the destination marketing category.

Tourist challenge Zimbabwe is working hard to attract visitors back to the country and is on track to record its highest level of tourism arrivals this year in more than two decades.

The country welcomed 2.3 million visitors last year, equalling figures from back in 1996 before a slump in arrivals due to adverse publicity in the world’s media about the country.

The arrivals have picked up again since the formation of the inclusive government in 2009 and, with more states lifting travel warnings to Zimbabwe and more aggressive promotion, the country expects to surpass the 2.5 million figure this year.

routesonline.com

Under 4 million passengers

Winner & overall winner: Kilimanjaro International Airport (Tanzania) Highly commended: Antananarivo Ivato International Airport (Madagascar) Shortlisted: • Julius Nyerere International Airport (Tanzania) • Maputo International Airport (Mozambique) • Sikhuphe International Airport (Swaziland) • Windhoek Hosea Kutako International Airport (Namibia)

Destination marketing award

Winner: Madagascar Tourism Board Shortlisted: • Ministry of Tourism of Mozambique • São Tomé and Príncipe Tourism Board • Tanzania Tourist Board • Tourism KwaZulu-Natal

ROUTES NEWS 5, 2014

35

Routes Silk Road

More than

300

DELEGATES

Maximising potential Routes Silk Road gave Georgia an opportunity to demonstrate how it’s leading the region into a new era of air service development, writes Jonny Williamson.

T

he inaugural Routes Silk Road took place in the Georgian capital of Tbilisi between July 6 – 8. Held in the five-star Radisson Blu Iveria Hotel overlooking the Mtkvari River, a packed audience of senior aviation professionals was treated to a full programme of addresses, presentations and discussions.

Whether covering how to balance different airline operating models, how governments influence tourism, or how destinations work with stakeholders to increase air services, the take-home message was that this is a region with ambitious plans and the determination to follow them through.

Giorgi Kvirikashvili, Georgia’s vice prime minister and minister of economy and sustainable development, summed it up when he said: “Although the Silk Road has been serving us for centuries, there is still much to be discovered and developed in the modern era.”

Located on the crossroads of Europe and Asia, Georgia is at the forefront of developments as it seeks to maximise its geographic and historic potential.

Highlighting how the country’s three international airports have established different propositions to suit demand, Kate Aleksidze, CEO of event host United

38

ROUTES NEWS 5, 2014

Airports of Georgia, noted how Tbilisi supports business and tourism demand into the capital; Batumi acts as a gateway to popular leisure attractions in the country’s western region; and the newly opened King David the Builder in Kutaisi is the territory’s first dedicated low-cost airport.

Building on Kvirikashvili’s comments that Georgia’s unique cultural heritage could be drawn upon to promote growth in neighbouring countries, CEO of Georgian Civil Aviation Agency, Guram Jalaghonia, suggested that the country’s investment in its aviation infrastructure could also be replicated elsewhere.

He went on to reveal plans that included bringing two additional facilities up to full international scheduled air service standards in the coming years.

ASM’s senior air service development consultant, Yuliya Crane, chaired a session bringing together the views of some of the region’s prominent airlines and airport operators regarding ‘finding the right balance.’

Georgia has achieved a good balance of legacy and low-cost operators which had enhanced competitiveness, said Aleksandre Gachechiladze, head of the air transport department of the country’s Civil Aviation Agency.

He cited Wizz Air’s arrival and expanding operation at Kutaisi as a major endorsement of Georgia’s potential for growth, revealing that the budget airline’s entrance came about thanks to “very fruitful discussions” at Routes Europe 2012, held in the Estonian capital of Tallinn.

routes-news.com

42

Around

600

Report back

AIRLINES

MEETINGS

53

19

AIRPORTS

Papers, please!

In an engaging and often humorous session, international travel journalist, John Bell, chaired a discussion on how governments influence tourism.

During the debate it was revealed that although an astonishing 73% of the world’s population still needs a visa to enter Silk Road countries, the number has fallen from 87% over the past five years.

Arman Khachaturyan, CEO of the National Competitiveness Foundation of Armenia, stated that tourists have a “critical effect on the economic development of small countries the likes of Armenia,” noting that the Republic is in discussions

Wizz Air update The Hungarian low-cost airline has had an amazing rise since it launched scheduled services from Budapest little over a decade ago. In an absorbing keynote address, it’s head of ground operations and customer service, Davit Mamulaishvili, outlined the carrier’s development and its role in Georgia’s aviation market.

Wizz Air has emerged as a significant player in a region that previously struggled with air connectivity. Operating 17 bases across 10 Central and Eastern European (CEE) countries, almost 14 million passengers a year are carried across a 300-strong route network to 96 destinations in 35 countries.

Mamulaishvili believes that the LCC has found a lucrative niche and developed a

routesonline.com

TOURISM

with several governments to remove visa restrictions, including Australia, Japan and the US. The introduction of a common Silk Road visa, similar to those adopted by other regions, garnered some interesting comments and the subject was taken into the subsequent UNWTO Silk Road Task Force meeting for further debate.

Excessive security-control costs such as those associated with visa and passport issues cost the industry $8.5 billion, added Nicole Boussioti, regional head, member and external relations for IATA. She said the industry “can be smarter in how we work with the processes and ease this pressure.”

network model to help it reap the benefits.

Around 64% of its flights serve secondary airports, where costs are substantially lower; and 36% serve hub airports, supporting larger traffic flow.

In Georgia, Wizz Air serves the purposebuilt, low-cost King David the Builder International Airport in Kutaisi and has already experienced significant growth since arriving in September 2012.

Last year the carrier handled 173,000 passengers, which Mamulaishvili predicted would almost double by year-end 2014.

With six new aircraft introduced in 2013 and a further nine scheduled for arrival through 2014, he concluded that Wizz Air’s strategy is “to remain as flexible as possible as the market continues to change.”

RISING UP

AUTHORITI ES

Sponsor of the Routes Silk Road Strategy Summit, the National Competitiveness Foundation of Armenia (NCFA) treated delegates to an informative presentation describing how the Republic has formed its Open Skies strategy.

CEO of the NCFA, Arman Khachaturyan, explained how Armenia had to rebuild its air connectivity following the collapse of its former national carrier Armavia, noting that a “restrictive aviation policy had been holding the country back for many years.”

Khachaturyan pointed to a recent economic impact study of Armenia’s Open Skies that estimates a GDP gain of between $330 and $410 million by 2016.

A night to remember With Tbilisi’s skyline as its backdrop, delegates came together for a sumptuous network evening hosted by United Airports of Georgia at Mtasminda Park. Incorporating traditional Georgian dancing, music and fine dining, a surprise firework display lit up the night sky and brought proceedings to an impressive close.

ROUTES NEWS 5, 2014

39

Events essentials

FE B

World Routes Tourism Summit

Sunday 21 & Monday 22 September Held in association with ICAO and the World Bank, and sponsored by Oman Airports Management Company.

Monday 22 September Sponsored by Brand USA.

Key names include: Akbar Al Baker, CEO, Qatar Airways; James Hogan, CEO, Etihad Airways; Tim Clark, CEO, Emirates; Jim Compton, vice chairman and chief revenue officer, United Airlines; Scott Kirby, president, American Airlines; Angela Gittens, director general, ACI World; Rosemarie Andolino, Commissioner, City of Chicago Aviation Department; and Tewolde Gebremariam, CEO, Ethiopian Airlines.

Conference topics include: ‘Critical Issues in Air Transport Today – Are we Making Progress?’; ‘Airports – Under Pressure!’; ‘The Three Big Bears – American, United and Delta’; ‘Getting “Smart” About Regulation – The Regions Have Their Say’; ‘New Planes, New Range, New Routes’; and ‘A Multi-Dimensional View on Sustainability in Aviation’.

Key names include: Ricky Skerritt, Minister of Tourism and International Transport for St Kitts and Nevis; Frank Raineri, Founder, Grupo PUNTACANA; Elisa Sainz Ruiz, deputy director general of strategy and tourist services – Turespaña; James Beresford, CEO, Visit England; Amit Rikhy, senior vice president, ADC&HAS Airports Worldwide; and Mario Diaz, Director, City of Houston Department of Aviation.

Conference topics include: ‘Global Tourism – The Rising Stars and Re-Inventors’; ‘Global Tourism II – Where is the Shifting Traveller Demand?’; ‘How Can Infrastructure keep up with Demand?’; and ‘Future Patterns of Travel’.

Both Summits are free to attend for all World Routes delegates.

JUL

World Routes Strategy Summit

JUN

The programmes have been confirmed for this year’s World Routes Strategy Summit and World Routes Tourism Summit, both of which take place alongside the 20th World Route Development Forum in Chicago.

APR

SEP

ts

esse ntial s

MAR

An all-star line-up

even

ROUTES NEWS HIGHLIGHTS A NUMBER OF THOSE EXHIBITING AT WORLD ROUTES 2014 Copenhagen Airport will represent a cross-section of Danish culture with morning pastries, a Joe & The Juice bar and a 3D model of its catchment area made entirely out of Lego.

Beijing Capital International Airport will showcase the benefits of adopting a 72-hour visa-free transit policy and has invited a traditional painter to draw Chinese brush portraits for visitors.

In a stand inspired by the city itself, Prague Airport will promote the many beauties of the Czech Republic through its traditions, wares, and cuisine, with music provided by a DJ. Co-host of World Routes 2013, the Las Vegas Convention and Visitors Authority will bring a touch of the Vegas Strip to Chicago, with a showgirl available for photos.

Swedavia will hold interactive quizzes to raise delegates’ knowledge of the Scandinavian country and what it offers.

Representing more than 300 industry associates, Brand USA will provide a platform for smaller destinations and their partners to elevate their presence in the global aviation arena.

From left: Akbar Al Baker; James Hogan; Tim Clark

40

ROUTES NEWS 5, 2014

routes-news.com

Events essentials World Routes 2014

Routes Americas 2015

Chicago, Illinois, USA 20-23 September 2014

Denver, Colorado, USA 01-03 February 2015

Routes Europe 2015

Routes CIS 2015

Aberdeen, Scotland 12-14 April 2015

Venue TBC Date TBC

Routes Asia 2015

Kunming, Yunnan, China 15-17 March 2015

Routes MENA 2015

The Kingdom of Bahrain Date TBC

Michael Miller, Routes’ newly appointed head of content and industry relations, shares his thoughts on Chicago and hints at what delegates can look forward to at future events.

Before your appointment, did the role already exist within the organisation?

MEET THE

TEAM What are your main responsibilities at Routes?

I have a dual role covering both the conference portion of our events, such as the Strategy Summits, and managing the relationships of all our global partner associations, ranging from the likes of IATA and ACI to more regional organisations.

What do you bring to the role?

Having worked in the industry for more than 20 years, as both a reporter and a consultant, I’ve acquired a large amount of experience and contacts.

As a brand, Routes is already in a very strong position and hopefully the knowledge I bring can only help improve upon where it is today.

routesonline.com

Previously, overseeing industry relations wasn’t one individual’s core responsibility, so my appointment demonstrates our change in focus. I’m looking to make some changes and further improve our conferences over the next 18-24 months, as well as ensuring that the association relationships we have are true partnerships.

What makes Chicago so important, not only to US aviation but the global industry?

Airports and tourist authorities host Routes events for different reasons and in the case of Chicago it already has a fantastically well-developed aviation infrastructure. The city may not need the type of route development that a small airport or lessor-known destination requires, but Chicago is a great example of what can be achieved when you have the support of a committed city behind you.

The redevelopment of Chicago O’Hare and Chicago Midway has created two world-class airports and it’s really worth looking at that infrastructure, experiencing it first hand and seeing how it’s been put together.

What piece of advice would you give to first-time attendees?

Absolutely key to getting the most out of World Routes is to understand what’s going on during each day!

That may sound strange, but there’s always so much happening that it is vital to know the content of each day to make sure you don’t miss out on something of interest to you.

What is the strategy for World Routes moving forward?

A huge amount of work always goes into securing a number of fantastic Strategy Summit speakers.

Our target is to continuously improve the quality of speakers across every Routes event, securing those coveted, high-profile CEOs that everybody wants to hear from.

ROUTES NEWS 5, 2014

41

p o t e h t m o r f w ie V NAME ORGANISATION

ANGELA GITTENS

al (ACI) Airports Council Internation

WEBSITE

www.aci.aero

of the Airport back to the establishment ACI’s roots can be traced gto Washin n in 1948 YEAR FOUNDED Operators Council International (AOCI) in ntries, 1,861 airports in 177 cou 591 members operating and s senger 3 handled 5.95 billion pas MEMBERSHIP which in 201 go car of nes ton 93.6 million

bally Nearly 70% of airports glo can this operate at a net loss. How be turned around? due This phenomenon is primarily are to the fact that small airports most and ble fita pro be to ged challen the of airports are small. Over 60% n tha er few ve ser orts airp world’s 80% one million passengers and have We . loss a at rate ope m of the growing stepped up our training on ng commercial revenue, includi orts airp for g nin trai free ng providi under our from developing countries ions ACI Fund and Developing Nat gramme.

Airport (DNA) Assistance pro guidance We also offer a great deal of aspects of and training on a range of airports airport management to help user find cost efficiencies, develop marketing charges regimens, improve mentally and become more environ instays friendly in addition to the ma of safety and security.

and are and operational efficiency ntly, ere diff gs thin not afraid to do may you le, mp exa to take risks. For a with r tne par ort see a small airp a or g dlin han und gro business like a ver deli to er ord in retail operation ld cou n tha ring offe stronger service “armsbe attracted with a typical regional y, ilarl Sim ch. length” approa ts may rke ma nd bou airports in out s for tion mo pro lty offer special loya n whe larly ticu par il, parking or reta from ition pet com with d they are face other airports.

competing and other technical fields, industries. er with opportunities in oth st ‘shiny late Aviation is no longer the uent freq the object’ and sometimes s ion ulat trib stories of the financial it ke ma y of the airline sector ma s not seem that the industry doe s that nitie have the career opportu w that kno We other industries have. le viab and this remains an exciting be, y ma it industry, cyclical though ry in a and we have to tell our sto . more compelling way

rld?

Is aviation still a man’s wo elop dev and in For us to attract, reta ded in Where is training most nee al glob g, talent in this fast-growin the aviation industry? ’t ignore half the ement is industry, we can For the airport sector, manag ement population. In ACI’s manag growth in the chief concern. With the we see es development programm n of the the industry and the evolutio en wom increasing numbers of no longer airport business model, it is by being ks ran coming up through the airfield; enough just to manage an – ries ust ind recruited from other able es, one has to manage a sustain ntri cou ny ing in ma air service this is happen business in competition for ally ition even those that are trad munity. for the benefit of one’s com al level, male-dominated. At a region is to attract, retain and ge llen cha The from w of dra les we try to help airports Can you give some examp for the develop management talent e ieving ach are t tha s ort airp populations that may not hav r smalle t and modern era. Many of our bes s for nitie ortu traditionally had opp good results? e retired or will shortly hav st hte brig of e aus bec ller airport jobs, whether I won’t name names but sma d to not only replace nee we in and ors t fact er tha se gender, ethnicity or oth airports that do best are tho add many more in the also but m the are orts and airp ial, h eur local society. Althoug are creative and entrepren coming years. al market nities mu com ir the with very local, they are in a glob rate abo coll ide, the concern has ry-w ust Ind t tha e ise hav y and increasingly recogn to nurture the markets the ure that aviation gets its ens to n bee t. res ial. inte t ent diversity is in their bes and develop their growth pot nt in engineering tale of re sha fair vice They focus on customer ser

42

ROUTES NEWS 5, 2014

routes-news.com